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The applicant, namely the Bahtabah Local Aboriginal Land Council ('the Land Council') by its 'non-claimant' application seeks a declaration that no native title exists in relation to all of the land contained in Lot 424 in Deposited Plan 755233 at Pelican, in the Parish of Kahibah, County of Northumberland (formerly known as Portion 424), Crown Plan 8691.2111 ('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 The Land was transferred to the Land Council, as an estate in fee simple on 5 August 2005 subject to any native title rights and interests that existed 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 Land Council on 3 May 2006 records that the 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 Aboriginal Land Council 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 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 notice 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 the 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 requirement 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 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 of native title 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 make the order sought 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 |
She holds a Bachelor of Arts from the University of Melbourne and a Bachelor of Business (Marketing) from the Royal Melbourne Institute of Technology. 2 On 10 December 2004, Ms Iliff went on maternity leave. While on leave, Sterling Commerce engaged Paula Matthews as a contractor to do Ms Iliff's job. Ms Iliff's intention initially was to return to work in April 2005 for one to two days per week and increasing to full time work by the end of December 2005. 3 When Ms Iliff returned from maternity leave, Sterling Commerce was required to appoint Ms Iliff either to the position she held immediately before commencing maternity leave or, if that position no longer existed and there were other positions available for which Ms Iliff was qualified and capable of performing, then appoint her to that position: Sch 1A of the Workplace Relations Act 1996 (Cth) (the WR Act). Breach of Sch 1A is a penalty provision. The maximum penalty is $33,000. 4 Ms Iliff never returned to work. When she tried to return in March or April 2005, Sterling Commerce said her job no longer existed and she was to be made redundant. That statement was wrong. Her job did exist and she should have been reinstated to it. Instead of complying with the provisions of the WR Act, senior management of Sterling Commerce took a deliberate course of conduct to justify their decision to continue to employ Ms Matthews, her replacement, rather than Ms Iliff. Unsurprisingly, Sterling Commerce was found, in proceedings brought by Ms Iliff in the Federal Magistrates Court, to have breached the WR Act. The maximum penalty of $33,000 was imposed. Other consequential orders for interest and costs were also made. 5 Sterling Commerce appeals against the orders made in the Federal Magistrates Court. Sterling Commerce does not challenge the finding by Burchardt FM that it breached Sch 1A of the WR Act and does not challenge any findings of fact. Sterling Commerce submits, however, that the imposition of the maximum penalty for that breach was "manifestly excessive" (Issue 1). Sterling Commerce had contravened the Sex Discrimination Act 1984 (Cth) (the SDA). Ms Iliff was entitled to a severance payment (Issue 3). Sterling Commerce challenges these findings. 7 In the Federal Magistrates Court, Ms Iliff was not wholly successful. Ms Iliff was entitled to reinstatement to her former position and full backpay as a result of the contravention by Sterling Commerce of the SDA (Issue 5). Ms Iliff cross-appeals on each of these issues. As I have noted, Sterling Commerce did not challenge any finding of fact of Burchardt FM. Ms Iliff commenced working part time for Sterling Commerce in March 2002. Her salary was about $50,000 per annum. In April 2003, Ms Iliff was promoted to Marketing Manager. Her job description described the role as "Marketing Specialist-Australia". Her salary was $80,000 per annum. On 1 April 2004, Sterling Commerce increased Ms Iliff's package to $86,400 comprised of a base salary of $82,000 and a target incentive of $4,400. Ms Iliff was also entitled to superannuation at a rate of 9% of her base salary. 2. In mid April 2004, Ms Iliff told Mr Vulcan, her superior, that she was pregnant. Arrangements for her maternity leave were discussed by Mr Vulcan and Ms Iliff on 15 September 2004. After obtaining legal advice, Mr Vulcan replied on 19 October 2004 approving Ms Iliff's proposal saying he would be happy to accommodate Ms Iliff's requests wherever he reasonably could. The approval was, however, qualified. It went on to say that he would need to continue to evaluate the arrangement against the ongoing and changing needs of the business. In particular, Mr Vulcan could not at that time anticipate what, if any, changes would occur to the structure of the marketing operations. Mr Vulcan asked Ms Iliff to contact him at least four weeks before she intended to return to work so that Sterling Commerce could "re-evaluate the situation and discuss a suitable structure for [Ms Iliff's] return to work at that time" . On 26 October 2004, Ms Iliff replied stating that if agreement could not be reached, she proposed to return to work in exactly the same position and for the same hours. Mr Vulcan did not respond. 4. Towards the end of 2004 and the beginning of 2005, Sterling Commerce decided to branch out into the financial services industry in the Asia-Pacific region (APO). Ms Iliff was involved in the early stage of the expansion before she went on maternity leave and, in fact, met Mr Simon Lacey who had been employed by Sterling Commerce as an expert in the financial services industry. The expansion took place in the ordinary course of business and would have occurred regardless of whether Ms Iliff went on maternity leave. 5. In early December 2005, Ms Iliff and Mr Vulcan interviewed Ms Paula Matthews. It was agreed that Ms Matthews would commence as a contractor. Ms Matthews commenced work in early December 2004 pursuant to a contract that was due to be reviewed in April 2005. Ms Iliff went on maternity leave on 10 December 2004 and her first child was born on 10 January 2005. 6. Ms Matthews was perceived by the senior management of Sterling Commerce to be a superior employee. In terms of formal qualifications there was no disparity between them. Ms Iliff did have less experience than Ms Matthews. However, if Ms Iliff had not gone on maternity leave, there is no reason her employment would not have continued. 7. By early February 2005, Mr Visscher (a marketing manager based in Singapore and at that time employed by a Singaporean subsidiary of the global Sterling Group) wanted to employ Ms Matthews and Mr Vulcan agreed. From March 2005, Mr Visscher was formally appointed to be the marketing head of APO. Both Mr Vulcan and Mr Visscher wanted to provide support to Mr Lacey. The need to provide support was both "pressing and present". In late January / early February 2005, Mr Vulcan and Mr Visscher discussed using Ms Matthews in that capacity. 8. By 7 February 2005, Mr Vulcan sought to extend Ms Matthews' hours of work. It was agreed that she would work an extra one to two days per week for about three months. On 25 February 2005, Mr Visscher emailed Mr Vulcan about Ms Matthews' rates and went on to ask "When is [Ms Iliff] coming back? " No response to that email was in evidence. 9. On 15 March 2005, Ms Iliff met Mr Vulcan at his office. She wanted to return to work 4 days per week. Mr Vulcan told her there had been a restructure and the reporting arrangements had altered. Mr Vulcan said Mr Visscher would contact her about her return to work arrangements. 10. On 16 March 2005, Mr Vulcan sent Mr Visscher and the in house legal adviser (Mr Soughan) an email recording his discussion with Ms Iliff. The email records that it was Mr Visscher who was to discuss Ms Iliff's future with her. Nothing further occurred until 30 March 2005 when Mr Vulcan sent another email to Mr Visscher stating he needed to talk to him about Ms Iliff and Ms Matthews. The issues were clearly interrelated in Mr Vulcan's mind. 11. Mr Vulcan was restricted in the number of people he could employ at any one time. The head count was strictly controlled from the United States. He could not employ two people to do one person's work. Some time in early April 2005, Mr Vulcan and Mr Visscher agreed that Ms Matthews would be the person they retained. It was a foregone conclusion that the job would be offered by Sterling Commerce to Ms Mathews and they wanted her to take it. 12. However, as late as 1 April 2005, an organisation chart issued by Sterling Commerce after the restructuring showed Ms Iliff as the marketing specialist for Australia reporting directly to Mr Visscher. The restructuring per se was therefore not the reason her position was made redundant. 13. On 20 April 2005, Ms Iliff sent an email to Mr Vulcan indicating she intended to return to work one day per week in May or June 2005. The email was forwarded to Mr Visscher and Mr Soughan and from the terms of that email it is clear that the further employment of Ms Matthews was seen by Mr Vulcan as directly interrelated with Ms Iliff's return. 14. Sterling Commerce did not contact Ms Iliff until 26 April 2005. On 26 April 2005, Ms Iliff met Mr Vulcan again in his office. Mr Vulcan told Ms Iliff her position was to be made redundant under the proposed restructure. After the meeting, Mr Vulcan sent an email to Mr Soughan, Mr Visscher and others stating that Ms Iliff wanted a copy of the new position description along with information about how she could apply for that position and information about the redundancy of her current position. 15. Mr Vulcan was too busy to deal with Ms Iliff and did not get back to her. 16. By that date, Mr Vulcan had clearly formed the view that he did not want Ms Iliff to return to work but wanted to keep Ms Matthews instead. The reason was that he felt Ms Matthews was better qualified. 17. On 4 May 2005, Mr Vulcan did send an email to Mr Visscher asking him to let Ms Matthews know of Mr Visscher's intentions about further work for Ms Matthews because she was likely to accept a different role. 18. At the same time, Sterling Commerce was preparing a new job description for what was felt to be the new job. The new job description was created first by Mr Visscher. He sent a proposed job description for the position of Marketing Manager-Australia to Mr Vulcan which contained a number of differences to Ms Iliff's previous position description. The minimum qualifications were a degree in marketing or 7 to 10 years of related experience. Ms Iliff possessed both. It also contained requirements relevant to the evolving duties relating to the APO finance sector. 19. Mr Vulcan replied stating "Looks good ... to make this more of a change to the existing do we need to make more of an emphasis including the title around this being a regional role and not just an Australian role ... I know you mention both. " (emphasis added). Burchardt FM found, and I agree, that Mr Vulcan consciously sought to distinguish the new description from Ms Iliff's former position at a time when it was clear to Sterling Commerce that Ms Iliff was likely to take issue with what was happening to her, with a desire to produce a document that would sustain Sterling Commerce against legal challenge and when there was no need for the job description to be different. However, Burchardt FM did not find that the change in job duties was fabricated after the event. 20. On 17 May 2005, Ms Iliff sent Mr Vulcan a further email about her return to work. Ms Iliff complained she had heard nothing for 3 weeks about the proposed restructure. She asserted she wanted to return to work under the original arrangement - 1 day per week followed by 4 days per week from late July. She asked Mr Vulcan and / or Mr Visscher to contact her. 21. Later that day (17 May 2005), Mr Vulcan wrote to Ms Iliff telling her she was redundant with effect from 3 June 2005. The letter said there were no other suitable roles for her. The letter invited her to apply for the new position of "Marketing Manager, Financial Services Solutions APO". However, the letter went on to state that "I [Mr Vulcan] do not consider the role of Marketing Manager, Financial Services Solutions APO to be a suitable alternative position for your current role". Finally, the letter stated Ms Iliff would be paid a redundancy payment of $22,211.54 gross less tax. However, the letter stated that "[t]his offer is conditional upon you signing a release in terms suitable to Sterling Commerce which confirms that you have no further claims against Sterling Commerce and that you have returned all company property". 22. On 18 May 2005, Ms Iliff wrote to Mr Vulcan seeking clarification. She asked whether the position or any other position in the new marketing structure was part time / job share eligible and asked for a break down of the proposed termination payment. The answer to the first question was "no". The proposed termination payment was broken down. It comprised Ms Iliff's statutory entitlement to 4 weeks pay in lieu of notice and a further redundancy payment. 23. On 1 June 2005, Mr Vulcan wrote again to Ms Iliff. He repeated that her position "is to be made redundant". The letter recorded that Ms Iliff had not responded to requests for a meeting and provided a final opportunity for Ms Iliff to meet Mr Vulcan. The letter concluded by stating that "if you [Ms Iliff] elect not to take advantage of this opportunity, I [Mr Vulcan] will have no option but to formally advise you of the fact that your position has been made redundant and effect a termination. Obviously, if this decision is made, you will be paid appropriate termination payments and any statutory entitlements". 24. Ms Iliff was never formally notified that her employment with Sterling Commerce had ceased. Ms Iliff never went back to do any further work for Sterling Commerce. Ms Iliff never executed the release and was never paid any termination payments or statutory entitlements. Ms Iliff did not apply for the new position. 25. Ms Matthews was a contractor. Sterling Commerce was under no obligation to renew her employment contract. In late August 2005, Ms Matthews entered into a formal contract of employment with Sterling Commerce. 26. Sterling Commerce knew of Ms Iliff's maternity leave entitlements. It had sought and obtained legal advice from as early as October 2004. Mr Vulcan and Mr Visscher, senior employees of Sterling Commerce, did not honour Ms Iliff's entitlements for reasons wholly unrelated to any misconduct or inadequacy on the part of Ms Iliff. They made a commercial decision in order to increase profit and to improve their own career prospects. 27. Sterling Commerce did what it did to Ms Iliff deliberately. Ms Iliff's position still existed and she should have been reinstated to it. It was no oversight. Sterling Commerce sought to hide its tracks by the manipulation of the new job description. It showed no contrition and did not submit otherwise. Although this was Sterling Commerce's first contravention of the WR Act, the course of conduct was unattractive and in part dishonest. 28. The effect upon Ms Iliff was dramatic. She has not progressed in her career. 10 It is now necessary to consider each issue. First, the imposition of a penalty for a breach of the WR Act involves the exercise of a discretion: Commonwealth Bank of Australia v Finance Sector Union of Australia [2007] FCAFC 18 ; (2007) 157 FCR 329 at [181] - [182] ; Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65 ; (2007) 158 FCR 543 at [127] . 12 Secondly, an appeal court can only interfere if Sterling Commerce can identify that the exercise of that discretion by Burchardt FM miscarried as a result of a specific error or, in the absence of a specific error, the penalty was so excessive as to manifest an error: House v The King [1936] HCA 40 ; (1936) 55 CLR 499 at 505 and Australian Opthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at [10] . A specific error need not be identified in the reasoning of the primary judge to find that a penalty is either manifestly excessive or inadequate: Australian Opthalmic Supplies at [105] --- [107]. • The circumstances in which that conduct took place. • Whether or not the breaches were deliberate. • Whether senior management was involved in the breaches. • Whether the party committing the breach had exhibited contrition. • Whether the party committing the breach had taken corrective action. But, as was pointed out in Veen v R [No 2] [1988] HCA 14 ; (1988) 164 CLR 465 , this does not mean that a lesser penalty must be imposed if it be possible to envisage a worse case. Ingenuity can always imagine a case of greater heinousness. A sentence which imposes a maximum penalty offends the principle only if the case is recognisably outside the worst category. Broadly speaking the same approach can be applied to the imposition of penalties under the Workplace Relations Act . Whether paid to the Consolidated Revenue or to the employee, they are punitive in character and must be assessed having regard, inter alia, to the gravity of the conduct complained of, the existence of mitigating circumstances and the need to deter repetition of the conduct whether by the employer in question or generally. See also Dinsdale v R [2000] HCA 54 ; (2000) 202 CLR 321 at [6] per Gleeson CJ and Hayne J; Markarian v R [2005] HCA 25 ; (2005) 228 CLR 357 at [31] per Gleeson CJ, Gummow, Hayne and Callinan JJ and R v Tait and Bartley (1979) 24 ALR 473 at 484. 16 How Burchardt FM reached the result embodied in his order is apparent and having regard to the facts upon which the order is based, it cannot be said that the result is so unreasonable or plainly unjust as to indicate that there was some error made in fixing the penalty. Sterling Commerce submitted that "having regard to all the relevant circumstances, a meaningful penalty of some significance should be imposed". In my view, that is precisely what Burchardt FM did do. This ground of appeal fails. The basis of the contravention was limited to Sterling Commerce's refusal to pay Ms Iliff her payments in lieu of notice and any redundancy payment unless Ms Iliff signed a release. 18 Two issues were raised on appeal: first, it was argued that the contention that Sterling Commerce's refusal to pay Ms Iliff her payments in lieu of notice and any redundancy payment unless Ms Iliff signed a release was a contravention of the SDA was not an issue raised on the pleadings, in evidence or in submissions before Burchardt FM; and secondly, it was submitted that, as a result, Sterling Commerce had no opportunity to respond to such an allegation and was therefore denied procedural fairness. 19 In support of these contentions, Sterling Commerce contended that if the issue had been a live issue at trial, it would have led evidence before Burchardt FM to show that Ms Iliff's sex was not the reason, or a reason, that Sterling Commerce required Ms Iliff to sign a deed of release. 20 This ground of appeal also fails. 21 In considering this ground of appeal, "the philosophy of the Federal Magistrates Act and the intention of the Attorney-General at the time of the introduction of the Federal Magistrates Bill" in establishing the Federal Magistrates Court cannot be ignored (per Lander J in Rana v University of South Australia [2004] FCA 559 ; (2004) 136 FCR 344 at [34] ): see also Granada Tavern v Smith [2008] FCA 646 at [106] . In doing so, it has recognised that the Court has been created to offer relatively inexpensive and expeditious justice. It is a court which should proceed without undue formality and should ensure that the proceedings are not protracted: s 42. It has abandoned the formal procedures of superior courts. That course is consistent with the Act and the FMC Rules. It is unnecessary to address the question of whether it needed to be pleaded in this case particularly having regard to the comparative informality created by the legislative scheme governing the Federal Magistrates Court including its Rules. 22 What then did the Federal Magistrate do? Nonetheless, it seems to me that the return to work provisions in the WR Act, involving civil penalties as they clearly do, is more probably than not the reason why the Respondent required a release from Ms Iliff. It relied on what was said in Kioa v West [1985] HCA 81 ; (1985) 159 CLR 550 (at 588 per Mason J, 628 per Brennan J and 634 per Deane J). It may be doubted that the analogy with an administrative decision maker is wholly apt. It is true that a party to proceedings in the Federal Magistrates Court must be put on notice of the case against it and have an opportunity to respond. That obligation is not of the same kind as the obligation of an administrative decision maker to accord procedural fairness. It is a fundamental principle of justice that a Court must not determine an issue that is not raised by the pleadings, or in the evidence or submissions before it. 24 In the end, however, whether one approaches the obligation as one of procedural fairness or as one that turns upon the character of judicial proceedings is immaterial in this case because the issue now in question was a live issue before Burchardt FM about which Sterling Commerce had an opportunity to lead evidence at the trial. 25 It is true that the conditional redundancy payment which his Honour found to be discriminatory conduct in breach of the SDA was not enunciated as a separate ground of discriminatory conduct. It was, however, raised by Ms Iliff's counsel in both written and oral submissions as an act or element of the wider alleged discriminatory conduct of Sterling Commerce. For example, in Ms Iliff's written submissions before the Federal Magistrate, under the heading 'Sex Discrimination Claim', the broad allegation was made that Sterling Commerce discriminated against Ms Iliff in not returning her to her previous position or the asserted new position. Sterling Commerce is correct in its contention that the conditional redundancy payment was not specifically detailed at this point in the submissions. Nonetheless, Sterling Commerce's "failure to pay termination entitlements" was not only referred to but expressly relied upon in Ms Iliff's written submissions when her actual treatment is compared to the treatment that an imagined comparator would have experienced. Further, in the oral submissions, Ms Iliff's counsel submitted that Ms Iliff had been treated less favourably by reason of the failure of Sterling Commerce to pay her termination entitlements. In those circumstances, it was open to the Federal Magistrate to find that only one act or element of the conduct that constituted the general course of the conduct alleged to be discriminatory was in fact discriminatory. 26 Sterling Commerce submitted that if the issue had been raised before the Federal Magistrate, it would have led evidence contrary to his Honour's finding that Sterling Commerce would not have sought a release from any employee with an enforceable entitlement to return to work who had ended up in dispute with the company about that return. As a result, when the Federal Magistrate came to apply the proper comparator test in accordance with the approaches set out in Purvis v State of New South Wales (Department of Education and Training) [2003] HCA 62 ; (2003) 217 CLR 92 (Purvis) and Thomson v Orica Australia Pty Ltd (2002) 116 IR 186 (Thomson), the inevitable conclusion would have been that Sterling Commerce would have sought a release from any employee whose right to return to work had been breached by Sterling Commerce. 27 Burchardt FM's finding that Sterling Commerce's conduct in refusing to pay Ms Iliff any redundancy payment unless she signed a deed of release had contravened the SDA was made on the basis of evidence of the general course of conduct taken by Sterling Commerce in relation to Ms Iliff's dismissal. Sterling Commerce led evidence generally to refute the allegation that it had breached the SDA in dismissing Ms Iliff. Sterling Commerce was well aware that Ms Iliff alleged that a general course of conduct, including the refusal to pay termination payments, was discriminatory. Evidence of Sterling Commerce's practices and policies in relation to redundancy payments was before the Federal Magistrate as was evidence relating to the conditional redundancy payment. Sterling Commerce had an opportunity to lead evidence in relation to any of the points specified in Ms Iliff's Outline of Submissions and his Honour was satisfied on the evidence before him that Sterling Commerce had discriminated against Ms Iliff. Sterling Commerce has appealed against this finding. It claims this was an erroneous finding of law and fact and that the evidence at trial did not support the finding. 29 Having regard to my dismissal of Issue 2, it is unnecessary for me to decide this ground of appeal. I will however make some brief observations. In my view, his Honour erred in finding that Sterling Commerce had a contractual obligation to pay Ms Iliff a redundancy payment, such obligation implied by law into Ms Iliff's employment contract. 30 I do not consider that the requirements for a term to be implied in a contract as laid down in BP Refinery (Westernport) Pty Ltd v Shire of Hastings [1977] HCA 40 ; (1977) 180 CLR 266 at 282-3 were satisfied. In particular, I do not consider that it was necessary to imply the term to give business efficacy to the employment contract. 31 His Honour referred to the comments of Allsop J in Thomson at [146]. However Allsop J does not explicitly state whether he is discussing incorporation by reference of the Family Leave Policy in question into the employment contract or the implication by law of the policy. His comments, being both brief and obiter , relied on the majority judgments in Riverwood International Australia Pty Ltd v McCormick [2000] FCA 889 ; (2000) 177 ALR 193 (Riverwood), both of which deal primarily with incorporation by reference, not implication by law. I do not consider that either case is of great assistance in the resolution of the issues in the present case. 32 In Riverwood , the majority judgments of North and Mansfield JJ explicitly stated that they would not deal with the principles relating to the implication of a term into a contract because they both upheld the decision of the trial judge that the relevant company policy manual was incorporated by reference into the contract at issue. The judge at first instance had found that the policy manual was both incorporated by reference and implied, however, having first decided that incorporation by reference applied, neither North nor Mansfield JJ addressed the question of whether the policy manual was implied by law. Lindgren J dissented in Riverwood . I do not think, for example, that if asked in October 1993 whether the term in question formed part of their contract, both parties would unhesitatingly have said "Of course" or "It goes without saying" or "Obviously": cf Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206 at 227 per Mackinnon LJ; Hospital Products Ltd v United States Surgical Corp [1984] HCA 64 ; (1984) 156 CLR 41 at 121; [1984] HCA 64 ; 55 ALR 417 ; Byrne v Australian Airlines Ltd at CLR 442. Nor do I think it was necessary to give business efficacy to the contract to imply the term in question; the contract operates reasonably and effectively without it: cf BP Refinery (Westernport) Pty Ltd v Shire of Hastings [1977] HCA 40 ; (1977) 180 CLR 266 at 282---3; [1977] HCA 40 ; 16 ALR 363 (PC); Hawkins v Clayton [1988] HCA 15 ; (1988) 164 CLR 539 at 573; [1988] HCA 15 ; 78 ALR 69. A court must not find a term to be implied merely in order to make the contract "reasonable or fair or prudent" and it is important to recall that "[t]he necessary foundation for the creation of contractual rights and obligations is the agreement of the parties": Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24 ; (1982) 149 CLR 337 at 401; [1982] HCA 24 ; 41 ALR 367 per Brennan J. Asking the same questions in the present case can only lead to the same conclusion. At the time the parties entered into Ms Iliff's contract of employment, it is unlikely that the parties would unhesitatingly have assumed that Ms Iliff was entitled to a redundancy payment, over and above her statutory entitlements. Nor do I think that the implication of the term is necessary to give business efficacy to the contract. Whilst it may well be reasonable, fair and prudent to imply such a term, that is not the question before the court. 33 Finally, the evidence of Sterling Commerce's senior management that generally employees of the company being made redundant are paid severance pay is inconclusive. There was no written policy and management sought legal advice in relation to each employee on a case by case basis. At the highest, employees may have had an expectation, based on the custom of the company to pay redundant employees a severance payment, but that does not and cannot give rise to a legal entitlement to receive such a payment should the company make them redundant. 34 I would uphold this ground of appeal. However, as I noted earlier (see [29]), the result does not affect the outcome because Ms Iliff is entitled, in any event, to a redundancy payment. Sterling Commerce relied upon two grounds. First, success in relation to grounds 3 to 5 of the Amended Notice of Appeal (Issue 2). Sterling Commerce's appeal in relation to that issue was dismissed. 37 Secondly, even if grounds 3 to 5 fail (as they have), Sterling Commerce contended that his Honour's order was fundamentally inconsistent with the failure of Ms Iliff's primary claim - that the failure of Sterling Commerce to re-employ Ms Iliff breached the SDA. Sterling Commerce submitted that costs should have followed the event and that the matters relied upon by his Honour to justify an order that Sterling Commerce pay 80% of Ms Iliff's costs of the proceeding did not constitute special circumstances. 38 This alternative argument also fails. An award of costs involves the exercise of a discretion. Consistent with the authorities listed in [12] above, an appeal court can only interfere if Sterling Commerce can identify that the exercise of that discretion by Burchardt FM miscarried as a result of a specific error or, in the absence of a specific error, the order made was of such a kind as to show that there was some error of principle. Neither species of error is made out. In assessing Sterling Commerce's failure to reinstate Ms Iliff to her former position on her return from maternity leave, Ms Iliff contends that his Honour applied the wrong comparator to the question of whether that conduct was discriminatory and in breach of the SDA. 41 Ms Iliff urged the Court to apply the test adopted by Allsop J in Thomson . Allsop J adopted a 2 stage or 2 prong test. First, his Honour chose an appropriate comparator. 42 Adopting this approach, the appropriate comparator to Ms Iliff is a similarly graded Marketing Manager with Ms Iliff's experience at Sterling Commerce who, with Sterling Commerce's consent, took twelve months leave, wanted to return to work and who had a right to return on the same basis as Ms Iliff, that being a right under statute. 43 Next, Ms Iliff submitted I should adopt Allsop J's approach of applying the comparator to the treatment as his Honour did at [138]. There was no evidence that it would do so. Thus the comparison called for does, in point of practical application, reduce to the question of whether [Ms Iliff] was treated unfavourably, but only because of the identification of the person whose treatment is compared to [Ms Iliff's]. She was thus treated less favourably than someone who was not pregnant and who was returning after twelve months leave and with rights of the kind reflected in the [statutory WR Act Return to Work provisions]. 44 It is apparent on the basis of this analysis that Ms Iliff was treated less favourably than the comparator would have been treated. However, the analysis does not stop there. There is a further issue to resolve. The issue is whether Allsop J's finding that the employer would not have treated the comparator contrary to any other company policy was premised on the factual finding in that case that the Orica supervisor was prejudiced against women taking maternity leave. In my view, that factual finding did inform Allsop J's assessment that Orica treated the employee in question contrary to its own company policy (which was the relevant issue in that case) because of the maternity leave. 45 In the present case, there was nothing to suggest that the management at Sterling Commerce had a negative attitude towards maternity leave. On the contrary. His Honour found that Mr Vulcan had been supportive of Ms Iliff taking leave. In that context, I am less likely to find that a reason Sterling Commerce failed to reinstate Ms Iliff was that she took maternity leave. Moreover, the evidence did not suggest that Sterling Commerce would have treated the comparator with an equivalent right to return to work any differently than it did Ms Iliff. This ground of the cross-appeal fails. 46 This finding is by no means an endorsement of Sterling Commerce's conduct. The fact that it submitted in this Court that it would follow the same course of action, to deny an employee his or her statutory right to return to work after a period of legitimate leave, is a remarkable admission of bad corporate responsibility. Nonetheless, in the application of the comparator, it is clear that none of Ms Iliff's sex, maternity leave or family commitments was a reason underlying the company's poor conduct towards her. The reason for the company's poor conduct was driven by (and continues to be driven by) its own commercial interests. 48 The test of discrimination is not whether the discriminatory characteristic is the "real reason" or the "only reason" for the conduct, but whether it is "a reason" for the conduct. The Federal Magistrate found that the "real reason why Ms Iliff was not permitted to return to work was because [Sterling Commerce] wanted Ms Matthews to do the work instead". This may well be the case but that was not the correct question. The correct question was whether Ms Iliff's sex, pregnancy or family responsibilities were a reason that Ms Iliff was not permitted to return to work. 49 Whilst the Federal Magistrate's application of the comparator test impermissibly emphasised the motive or driving reason behind Sterling Commerce's conduct, instead of focussing on whether the conduct occurred because of Ms Iliff's sex, pregnancy or family responsibilities, I do not consider that the outcome his Honour arrived at is affected by the change in emphasis. As I have already said, Sterling Commerce would have treated the comparator similarly because the comparator was on leave at a time when the company's needs were changing and the company was impressed by the temporary replacement leading to a decision to employ the replacement. It was not appropriate conduct but it was not a breach of the SDA. 50 This ground of the cross-appeal also fails. 52 Having dismissed Ms Iliff's wider claim for discrimination under the SDA, I consider that there was no basis for her to be reinstated. The next issue - full back pay - is more complex. 53 Her principal contention was that Sterling Commerce did not actually terminate her employment but treated her employment as ongoing and wrongfully failed to pay her salary. Burchardt FM held that although there was no unequivocal act by Sterling Commerce to terminate Ms Iliff's employment until it filed its defence in the proceeding, the employment had in substance come to an end. As a result, his Honour found that Ms Iliff was not entitled to claim unpaid salary from June 2005 onwards. I agree. 54 Ms Iliff's contract provided that she was not entitled to be paid without doing any work: cll 3(a) and 4 of her last employment contract. On 17 May 2005, Sterling Commerce told Ms Iliff that as of 1 June 2005 her position was abolished. From that point in time, Ms Iliff never did any work for Sterling Commerce. The solicitors for both parties became involved and in September 2005, Ms Iliff lodged her claim with the Human Rights and Equal Opportunity Commission. Subsequently, Ms Iliff had a second child. On any view, during the relevant period Ms Iliff did not do any work and was not, at all times, ready, willing and able to work. 55 Moreover, Ms Iliff's submission is contrary to authority. First, it ignores the distinction between the employment relationship and the contract of employment: Byrne & Frew v Australian Airlines Ltd [1995] HCA 24 ; (1995) 185 CLR 410 at 427. Sterling Commerce repudiated Ms Iliff's contract of employment by refusing to employ her and refusing to provide her work. The contract of employment was at an end. She was not entitled to payment for work she did not do: Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25 ; (1946) 72 CLR 435 at 451-452 and 465; (cf APESMA v Skilled Engineering Pty Ltd (1994) 122 ALR 471). 56 Secondly, none of the other authorities referred to by Ms Iliff supported her contention. Each was concerned with a peculiar or particular factual situation. Australian Workers' Union v Bluescope Steel Ltd [2007] NSWIRComm 1002 and Csomore v Public Service Board of New South Wales (1986) 10 NSWLR 587 involved the application of the "no work, no pay" principle in the context of a stop work meeting and the suspension of an employee. FJ Walker Ltd v Thomas Francis Casey [1989] FCA 409 and Australian Bank Employees Union v National Australia Bank Ltd (1989) 31 IR 436 turned on the construction of particular Industrial Awards. Seymour v Stawell Timber Industries Pty Ltd [1985] FCA 236 ; (1985) 9 FCR 241 involved an industrial award where remuneration was payable in return for employees being ready and willing to work. Finally, Clark v Chief of Defence Force (1999) 59 ALD 506 , concerned a statutory right to remuneration without the need for actual work. This ground of the cross-appeal also fails. 58 That leaves the question of costs in relation to the balance of issues raised on appeal and by way of cross-appeal. Given the outcome of those appeals, the manner in which the appeals were conducted and the extent to which the issues raised overlapped, I consider that the appropriate order is that Sterling Commerce should pay 80% of Ms Iliff's costs of the appeal and that each party should bear their own costs of the cross --- appeal. The appeal be dismissed. 2. The cross appeal be dismissed. 3. The Appellant is to pay 80% of the Respondent's costs of the appeal. 4. There be no order as to costs on the cross-appeal. I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon. | maternity leave failure to reinstate breach of the workplace relations act imposition of the maximum penalty whether penalty is manifestly excessive discrimination on grounds of sex, maternity leave or family responsibilities applying a comparator employment law discrimination law |
Those pictures have been created by artists engaged by the applicant. The applicant has paid the artists for producing the pictures and for an exclusive licence to print the pictures on t-shirts. Since November 2005 the applicant has been aware that certain stalls at the Queen Victoria Market in Melbourne were selling t-shirts which had not been supplied by the applicant but which bore the pictures for which the applicant held exclusive licence. The applicant obtained the names and addresses of the stall holders and, in December 2005, sent letters to those stall holders asserting that they had infringed the applicant's copyright in relation to the pictures and contravened provisions of the Trade Practices Act 1974 (Cth). Various undertakings were sought from the stall holders. They included undertakings that they would cease immediately to manufacture, import, offer for sale, sell or supply t-shirts bearing the particular pictures. Affidavits were sought from the stall holders confirming that the infringing t-shirts had been withdrawn from sale. The applicant sought advice as to the names and addresses of the manufacturers and importers of the infringing t-shirts, the quantity involved and the price for which the t-shirts were purchased and sold. The applicant's solicitors threatened that, unless these steps were taken within 14 days, legal action might be commenced. It appears that no response was received from the stall holders and no follow up action was taken by the applicant. 2 In early May 2006 the applicant was again advised that there were stalls at the market selling t-shirts bearing the pictures. The managing director of the applicant went to Melbourne and purchased t-shirts which bore the pictures. He saw two other stalls selling the same t-shirts. Again the names and addresses of the stall holders were ascertained and letters were sent by the applicant's solicitors to those stall holders in similar terms to the December 2005 letters. Again legal action was threatened but no follow up action was taken. 3 On 27 October 2006 the applicant's managing director again attended the Queen Victoria Market and again found that the same three stalls were still selling the t-shirts emblazoned with the pictures. 4 By an amended application, filed in the New South Wales District Registry of the Court (but subsequently transferred to the Victoria District Registry by Order of Allsop J made on 12 December 2006), the applicant seeks various orders designed to protect its intellectual property rights in the pictures. It also claimed interlocutory relief in the form of an injunction restraining the respondents from selling, importing or causing to be imported garments bearing the pictures. An amended statement of claim was filed asserting causes of action under the Copyright Act 1968 (Cth) against each respondent. 5 This afternoon the applicant made an ex parte application for orders in the nature of Anton Piller orders or search orders. 6 Such orders are only made in exceptional circumstances. In Anton Piller KG v Manufacturing Processes Limited [1976] 1 Ch 55 at 62 Ormrod LJ identified what he described as 'three essential preconditions for the making of such an order'. Secondly, the damage, potential or actual, must be very serious for the applicant. Thirdly, there must be clear evidence that the defendants have in their procession incriminating documents or things, and that there is a real possibility that they may destroy such material before any application inter partes can be made. 8 Having read those affidavits and considered submissions made by counsel appearing for the applicant I have been persuaded that the first precondition identified by Ormrod LJ has been satisfied. The pictures appearing on t-shirts being sold by the defendants appear to be identical with those commissioned by the applicant. 9 The evidence does not, however, satisfy me that the other two preconditions have been satisfied. The action taken by the applicant in the 12 months since it first became aware that the offending t-shirts were being sold at the Victoria Market hardly suggest the need to take urgent remedial action to protect the company from serious economic loss. Solicitor's letters were sent threatening action unless the respondents took certain remedial action. There is no evidence that any attempt was made to ascertain whether the respondents had taken such action and no other steps appear to have been taken by the applicant despite the failure of the respondents to reply to the solicitor's letters. 10 There is absolutely no evidence to suggest that a real possibility exists that any of the respondents might destroy any material before an inter partes application can be made. The respondents have continued to sell the t-shirts openly in the market for over 12 months. The applicant has, from time to time, purchased t-shirts which could be tendered in evidence in any proceeding brought in support of any claimed infringement of its intellectual property rights. There is nothing to suggest that it could not do so again in the near future if it was felt necessary in order to establish ongoing sales. The solicitor's letters have alerted the respondents to the fact that the applicant is aware that the sales are continuing. Despite this, the t-shirts continue to be sold. 11 In these circumstances I do not consider that it is appropriate to make the orders sought on an ex parte basis. The applicant remains free to pursue its rights, should it be so advised, by seeking injunctive relief of the kind foreshadowed in its amended application. 12 The application made ex parte today will therefore be dismissed. I will grant leave to the applicant to file in Court its amended application and its amended Statement of Claim both dated 11 December 2006. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY. | search order prima facie case that defendants selling t-shirts identical with those commissioned by the applicant no urgent remedial action required no evidence that a real possibility exists than any of the respondents might destroy incriminating material before an inter parties application can be made application dismissed practice and procedure |
The applicant has filed no written submissions but appeared at the hearing today to state his case. The applicant was self-represented and assisted by an interpreter. The applicant stated that he had two concerns: first, he did not know the contents of an anonymous letter received by the Refugee Review Tribunal; and, secondly, he feared some sort of danger if he were to return to India. I discuss the first matter briefly hereafter. As I sought to explain to the applicant, the second matter is not one that can be considered by this Court in a proceeding of this kind. The first respondent filed written submissions, which were briefly augmented today. This is the second occasion that the matter has been fixed for hearing. On the first occasion, the hearing was adjourned owing to the applicant's ill-health. In the Federal Magistrates Court, the applicant relied on two affidavits, which he prepared, and the first respondent relied on an affidavit sworn by Ms Stella Koya, an employee solicitor. This latter affidavit provided the procedural background to the case and exhibited relevant documents. The following account is principally derived from this affidavit and its exhibits, although reference is also made to the judgment under appeal and, in so far as relevant, procedural events in this Court. On 8 July 2006, a Ministerial delegate decided not to grant the applicant the protection visa that the applicant sought. On 19 December 2006, the Refugee Review Tribunal handed down a decision affirming the delegate's decision. In summary, the Tribunal accepted that the applicant is an Indian national and a Sikh. The Tribunal was not satisfied that "there is a real chance that he will be persecuted in a Convention sense, if he returns to India in the foreseeable future" and was therefore not satisfied that he has a well-founded fear of persecution in India. The Tribunal stated that, in its view, the applicant was not a reliable witness and it had serious concerns about his credibility. The Tribunal regarded the evidence of one of the witnesses nominated by the applicant as vague and general and noted that another witness was unavailable. The Tribunal discussed briefly the evidence of other persons, including the applicant's sister, as well as the country information. It noted that this information was that Sikh militancy and retaliation by authorities had virtually been eliminated, and that the applicant was unable to give a specific account of his activities or of the harm he had allegedly suffered. The Tribunal specifically rejected the applicant's claims that he was persecuted in the past in India for reasons of his political opinion, real or imputed, or for any other reason. This involved rejection of a claim that, in 2004, the applicant fled from Punjab to Uttar Pradesh and that he was active on behalf of the Mann party, or that he was harmed on this account or because of his father's political involvement. The Tribunal did not accept that there is a real chance that the applicant would face Convention-based persecution if he returned to India. On 11 January 2007, the applicant filed an application in the Federal Magistrates Court for judicial review of the Tribunal's decision, nominating six grounds of review. He amended this application on 3 May 2007 and 28 June 2007. On this latter occasion, the applicant abandoned all his previous grounds of review and substituted one new ground of review. This ground was that "[t]he Tribunal made jurisdictional error in that it took irrelevant matters into consideration while making the decision". In particulars to this ground, the applicant referred to an anonymous letter that the Tribunal had received on 29 September 2006, and which, according to the applicant, the Tribunal had erroneously taken into account. The letter apparently contained certain allegations against the applicant. On 11 July 2007, the Federal Magistrates Court dismissed the applicant's judicial review application, with costs. In substance, the Court held that the Refugee Review Tribunal did not rely on the anonymous letter and that the letter did not form part of the Tribunal's reasons for affirming the decision under review. On 31 July 2007, the applicant filed a notice of appeal in this Court from the judgment of the Federal Magistrates Court. There were two grounds of appeal, namely: The Federal Magistrate erred by not finding that the Refugee Review Tribunal made jurisdictional error in that it took irrelevant matters into consideration while making a decision. Federal Magistrate erred by not finding that the Refugee Review Tribunal made jurisdictional error as it failed to consider whether the applicant would fall under particular social group. A judge of this Court dismissed the appeal, with costs, on 20 December 2007, on the basis that the first ground was not made out and the second ground was unmaintainable since no relevant claim had been made before the Refugee Review Tribunal (or indeed before the Federal Magistrates Court). On 15 January 2008, the applicant filed an application for special leave to appeal from the judgment of the Federal Court to the High Court of Australia. On 16 July 2008, the High Court refused this special leave application, stating that this was because there was no substance in any of the proposed grounds of appeal and nothing in the arguments filed in support showed any error in the reasoning of the Federal Court or the Federal Magistrates Court, or any jurisdictional error on the part of the Tribunal. On 31 July 2008, the applicant filed a fresh proceeding in the Federal Magistrates Court again seeking judicial review of the decision of the Refugee Review Tribunal delivered on 19 December 2006, being the same decision that he had previously challenged. When the applicant's case came before the Federal Magistrate on 10 November 2008, the applicant sought an adjournment of the hearing, saying that he wished to obtain legal assistance. The reasons of the learned Federal Magistrate record that the applicant stated that he wished to argue the same grounds that he had previously run and that he was particularly concerned about the anonymous letter that was sent to the Tribunal. The first respondent opposed the adjournment and further submitted that the proceeding should be dismissed as an abuse of process, referring, amongst other things, to the principle set out in Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45 ; (1981) 147 CLR 589. The Federal Magistrate refused the adjournment application, on the basis that the applicant had not explained how he would go about getting a lawyer and that he already had the benefit of an exhaustive legal process. The Federal Magistrate held that, in all the circumstances, it was appropriate to dismiss the matter as an abuse of process. By an application dated 28 November 2008, the applicant sought leave to appeal from this judgment. In an affidavit also dated 28 November 2008 and a draft notice of appeal, the applicant proposed numerous grounds of appeal, including that the decision of the Refugee Review Tribunal was vitiated by jurisdictional error because the Tribunal irrelevantly took into account the contents of the anonymous letter. This was a proposition considered and rejected by the Federal Magistrates Court in July 2007, the Federal Court in December 2007, and in the special leave application to the High Court. A Full Court of this Court said in Wong v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 146 FCR 10 at 17 [36], "[i]t would be an abuse of process to allow parties to litigate repeatedly matters that have been finally determined by the Court". Here, of course, the proposition was considered by the Federal Magistrates Court, this Court and the High Court. In this circumstance, no error is shown in the Federal Magistrate's conclusion that an attempt to re-litigate the matter of the anonymous letter would amount to an abuse of process. A comparison of the applicant's proposed draft notice of appeal with the applicant's judicial review application as it stood in the Federal Magistrates Court prior to amendment in June 2007 shows that, apart from the anonymous letter ground, the grounds now proposed to be agitated were previously part of the applicant's earlier judicial review application. These grounds were abandoned in the course of the applicant amending his judicial review application in May and June 2007, at which time he was legally represented. Evidently, the grounds that the applicant now seeks to agitate that have not been the subject of a judicial decision were all grounds known to him, or those advising him, in 2007, before the original proceeding was heard and determined. These grounds were properly the subject of this earlier litigation. In this circumstance, no error is shown in the Federal Magistrate's decision that this further attempt to litigate these matters was an abuse of process. The applicant advanced no matter that might constitute some special circumstance that might provide a justification for permitting him to agitate these matters in this proceeding. Furthermore, in the circumstances outlined by the Federal Magistrate, no error is shown in her Honour's decision to refuse the applicant's adjournment application. The parties have characterised the judgment in question as an interlocutory as opposed to a final judgment. In order to appeal from an interlocutory judgment of the Federal Magistrates Court, a litigant requires leave to appeal: see s 24(1A) of the Federal Court of Australia Act 1976 (Cth). For the reasons stated, the decision of the Federal Magistrate was not attended by sufficient doubt to satisfy the accepted test in this Court for the grant of leave from an interlocutory judgment. In the documents filed in support of his leave application and appeal, the applicant did not directly challenge the Federal Magistrate's refusal to grant him the adjournment he sought. Perhaps such a challenge was implicit in the way the applicant put his case. Such a refusal is of an interlocutory character, but, as indicated already, there is no error discernible in this refusal. The applicant's challenge was in substance directed to the dismissal of his judicial review application on the grounds of res judicata or estoppel. For the reasons set out most recently in SBFF v Minister for Immigration and Citizenship [2007] FCA 178 at [6] ---[10], this gave rise to a final as opposed to an interlocutory judgment: compare, recently, Applicant S1494/2003 v Minister for Immigration and Citizenship [2008] FCA 286 at [16] , [22] and Brock v Minister for Home Affairs [2008] FCAFC 165 at [45] - [46] , [53]. It follows that the applicant had an appeal as of right. In this event, I would treat the Notice of Appeal, to which the handwritten word "draft" has later been added, as a Notice of Appeal filed in accordance with O 52 r 15 of the Federal Court Rules . For the reasons stated, I would dismiss the appeal. Accordingly, to the extent necessary, I would refuse leave to appeal from the judgment of the Federal Magistrates Court and, in so far as there is an appeal as of right, I would dismiss the appeal. I would further order that the applicant/appellant pay the first respondent's costs of the proceeding in this Court. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | grounds argued and/or abandoned in previous proceedings application for leave to appeal against the judgment of the federal magistrates court dismissing the second proceeding as an abuse of process application dismissed migration |
2 When the Motion was called on for hearing, Senior Counsel for Mr McCausland sought and was granted leave to amend the Notice of Motion so as to seek in the alternative an order that the whole of the proceedings be stayed " until further order of the Court ". 3 Mr McCausland contends that the causes of action articulated in the Statement of Claim filed in these proceedings are frivolous, vexatious or embarrassing. In the alternative, Mr McCausland contends that the proceedings in this Court are an abuse of the process of the Court. 4 Mr McCausland relies upon O 20 r 5 of the Federal Court Rules and the inherent power of the Court to control its own processes. Although Senior Counsel for Mr McCausland did not specifically seek an order that the whole of the proceedings in this Court be dismissed, he did rely upon O 20 r 5 of the Federal Court Rules as the principal source of the Court's power to deal with Mr McCausland's application. That rule empowers the Court to dismiss proceedings in an appropriate case. 7 For these reasons, I think that no injustice will be caused to the applicants in this Court if I approach the application before me upon the basis that, notwithstanding the fact that, in the Amended Notice of Motion, Mr McCausland does not claim an order dismissing the whole of the proceedings, it is nevertheless open to me to make such an order if I consider that an order for dismissal is the appropriate order in the circumstances of this case. I propose to adopt that approach to the question of relief should I accede to Mr McCausland's application. The Commission in Court Session is now called the Industrial Court of New South Wales . In those proceedings, Mr McCausland claims relief pursuant to ss 105 and 106 of the Industrial Relations Act 1996 (NSW) in respect of his employment by one or other of three corporate entities which were named as the first to third respondents in those proceedings. 9 The corporate respondents in Mr McCausland's IRC proceedings are Surfing Hardware International Holdings Pty Limited ( Surfing Hardware ), SHI Holdings Pty Limited ( SHI Holdings ) and Surf Hardware International Pty Limited ( Surf Hardware International ). These three entities are the applicants in the proceedings in this Court. Two individuals were also named as respondents in Mr McCausland's IRC proceedings. Mr Timothy Bosher, who is said to have been Chairman of the Board of Directors of each of the above corporate entities at all material times, is the fourth respondent in those proceedings. Mr Timothy Ford, who is said to have been the Chief Executive Officer and a Director of each of those corporate entities, is the fifth respondent in those proceedings. Neither Mr Bosher nor Mr Ford is a party to the proceedings in this Court. 10 In his IRC proceedings, Mr McCausland claims orders varying his contract of employment and other associated transactions and contracts and seeks the payment of damages or compensation. 11 Mr McCausland was employed by one or more of the applicants. He complains about the termination of his employment. He was terminated on 28 August 2003. He asserts that that termination was invalid and ineffective. He also complains about various alleged unfair aspects of a Shareholders' Agreement dated 20 December 2002 ( the Shareholders' Agreement ) and seeks compensation in respect of what he contends was a forced sale of his shares in SHI Holdings at an undervalue. The allegations made by Mr McCausland cover many events and transactions involving the applicants in this Court, Mr McCausland and others over a 20 month period between about mid-2002 and February 2004. Mr McCausland contends that he was squeezed out of the applicants' business, losing his employment, his directorships and his shares. According to Mr McCausland, there was a restructure of the Surfing Hardware businesses in early 2003 which led to friction between Mr McCausland and the new investors' representatives. By July 2003, relations between Mr McCausland and the other directors were strained. On 21 July 2003, Mr McCausland was directed to take leave and to stay away from the applicants' business premises. Mr McCausland contends that this directive led to his suffering panic attacks, anxiety and depression. His employment was terminated soon after. He was thereafter excluded from the applicants' business premises and from the management of the applicants' businesses and affairs. 12 The power to declare void or vary unfair contracts and related arrangements pursuant to the provisions of ss 105 and 106 of the Industrial Relations Act 1996 is the exclusive province of the IRC. Absent a valid removal of such proceedings into the Supreme Court of New South Wales pursuant to the provisions of s 8(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW), the Supreme Court has no jurisdiction in respect of such matters. The Supreme Court may exercise a power in appropriate circumstances to make orders of a prerogative nature in order to supervise and control the IRC's assumption of jurisdiction but the present matter does not involve considerations of that kind at the moment. 13 In a separate proceeding commenced in the IRC on 1 September 2005, Mrs McCausland, who is Mr McCausland's wife, brought proceedings on her own account. The respondents in Mrs McCausland's proceedings are the same persons and entities as are respondents in Mr McCausland's proceedings. 14 In Mrs McCausland's IRC proceedings, she seeks relief in respect of her shareholding in SHI Holdings and in respect of the Shareholders' Agreement. That relief is substantially the same as the relief in respect of those matters which is being sought by her husband in the IRC proceedings brought by him. In the proceedings brought by Mrs McCausland, Mrs McCausland seeks to vary the arrangements which she made concerning her shareholding in SHI Holdings with a view to obtaining compensation for what she asserts was a compulsory acquisition of those shares at an undervalue. Mrs McCausland's proceedings are built upon Mr McCausland's contract of employment and the other associated arrangements relied upon by him in his IRC proceedings. 15 The IRC proceedings brought by Mr and Mrs McCausland have not yet been heard. Mr and Mrs McCausland have filed evidence in support of the claims which they make in those proceedings. The respondents to those proceedings have not yet filed any of the evidence to be adduced by them on the final hearing. 16 There have been various interlocutory skirmishes in the IRC. One manoeuvre undertaken by the respondents in the IRC proceedings is to seek to have those proceedings dismissed upon the basis that the IRC has no jurisdiction to hear and determine those proceedings. Various grounds in support of that contention have been notified. 17 As part of their strategy to challenge the jurisdiction of the IRC in relation to both Mr McCausland's IRC proceedings and Mrs McCausland's IRC proceedings, on 10 January 2005, the respondents in Mr McCausland's IRC proceedings filed a Notice of Motion in which they sought an order dismissing the whole of those proceedings. One of the grounds relied upon was that the remuneration earned by Mr McCausland in the 12 months prior to the termination of his employment exceeded the statutory jurisdictional limit provided for in s 108A of the Industrial Relations Act 1996 . Subsequently, a Notice of Motion was also filed in Mrs McCausland's IRC proceedings seeking an order that those proceedings also be dismissed. Essentially the same grounds were propounded in support of that application. Alternative claims for the dismissal of certain parts of the two sets of IRC proceedings were also made. The dismissal applications brought by the respondents in the IRC have not yet been heard. 18 In support of those dismissal applications, the respondents in the IRC have pleaded precise details of the remuneration received by Mr McCausland in the period from 29 August 2002 to 28 August 2003. This is the relevant period for the purpose of s 108A. Those details have been verified on oath in an affidavit filed in support of the dismissal applications. 22 In an affidavit sworn on 6 January 2005 and filed in Mr McCausland's IRC proceedings, the then Chief Financial Officer of Surf Hardware International, David John Hawkins, swore that, in the period from 29 August 2002 to 28 August 2003, Mr McCausland's remuneration included cash advances totalling $2,381.55. He swore to the truth of this assertion based upon his own knowledge, information and belief and also based upon information obtained from the files and business records of the applicants which, so he testified, were in his possession when he swore his affidavit. As at 6 January 2005, Mr Hawkins had been the Chief Financial Officer of the applicants since 8 December 2003. This affidavit was filed in support of the applicants' dismissal Motions in the IRC and is intended to be read at the hearing of those Motions. He is the only respondent in those proceedings. Mrs McCausland is not a party to the proceedings in this Court. 24 In the proceedings in this Court, the applicants allege that Mr McCausland withdrew cash totalling $1,120 by eight separate withdrawals from a credit card account issued in the name of Surf Hardware International; that Mr McCausland has failed to account to any of the applicants in respect of any of those cash withdrawals; and that, in the circumstances, Mr McCausland's failure to account as alleged constitutes breaches of the duties owed by him as a director of each of the applicants embodied in ss 181(1) , 182 (1)(a) and 182 (1)(b) of the Corporations Act 2001 (Cth) and also constitutes a breach of the duties owed by him to the applicants as their employee. In this Court, it is also alleged against Mr McCausland that his failure to account in the circumstances outlined above constitutes a breach of the fiduciary duty said to have been owed to each of the applicants by him. The amount of damages or compensation sought in these proceedings is $1,120 in total. The account of profits, which is claimed as an alternative to damages or compensation, is also limited to the sum of $1,120. 25 In the Application which accompanied the Statement of Claim filed in this Court, the applicants seek relief pursuant to s 1317H of the Corporations Act 2001 . A declaration that the respondent breached the fiduciary duties which he owed to the first applicant. 2. A declaration that the respondent breached the fiduciary duties which he owed to the second applicant. 3. A declaration that the respondent breached the fiduciary duties which he owed to the third applicant. 4. Compensation of $1,120 under s.1317H of the Corporations Act and/or damages for breach of contract. 6. Further or in the alternative, an account of profits in equity. 7. Further or in the alternative, equitable compensation. 8. Compound interest in equity. 9. Alternatively to 8, interest pursuant to s.51A of the Federal Court Act 1976 (Cth). 10. Such further or other order as the nature of the case may require. Mr and Mrs McCausland were both named as defendants in those proceedings. An order that the proceedings commenced by the first defendant against the plaintiffs before the Industrial Court of New south Wales pursuant to s.106 of the Industrial Relations Act (NSW) (1996), being proceeding No. IRC 5174 of 2004, be removed to the Supreme Court of New South Wales pursuant to s.8(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 . 2. An order that the proceedings commenced by the second defendant against the plaintiffs before the Industrial Court of New South Wales pursuant to s.106 of the Industrial Relations Act (NSW) (1996), being proceeding No. IRC 4589 of 2005, be removed to the Supreme Court of New South Wales pursuant to s.8(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 . Costs. 4. Such further or other orders as the Court thinks fit. For example, no claim is made for relief under or in respect of any of the contracts which are to be considered in the two IRC proceedings nor has any claim been made for relief pursuant to the Corporations Act . Nor has any case based upon some alleged claim in equity been advanced. 29 The notion that Mr McCausland may owe to the applicants $1,120 and may have breached contractual, statutory and fiduciary duties owed by him to the applicants in respect of their claim for $1,120 was first raised in a letter dated 16 November 2007 from the solicitors for the applicants to the solicitor for Mr McCausland. In that letter, those solicitors called upon Mr McCausland to provide an explanation and reconciliation in respect of each of the cash withdrawals listed in the letter. The withdrawals listed in that letter are the same withdrawals which are the subject of the proceedings in this Court. 30 It is common ground amongst the parties to the present application that the figure for cash advances of $2,381.55 referred to in par 45 of the respondents' Reply pleading in the IRC proceedings brought by Mr McCausland and par 33 of the respondents' Reply pleading in the IRC proceedings brought by Mrs McCausland includes within it each and every one of the cash advances claimed in the present proceedings in this Court. The same may be said in respect of the amount of $2,381.55 referred to in Mr Hawkins' affidavit. 31 By letter dated 30 November 2007, the solicitor for Mr McCausland responded to the letter dated 16 November 2007. Having said this, we are confident that all of the matters raised by you are capable of explanation, however, we are instructed that our client is currently medically unfit to attend to the tasks of providing the information requested by you at least within the time frame requested. Furthermore, your client ought to explain why it cannot determine these matters from its own records. We are instructed that our client has an appointment with his psychiatrist early next week after which, we shall revert to you in relation to his current medical capacity to assist with the issues raised by you. 32 No reply was ever sent to that letter. As I have already mentioned, the proceedings in this Court were commenced on 30 January 2008. The proceedings in the Supreme Court were commenced a week after that. 33 In a further letter from the solicitor for Mr McCausland to the solicitors for the applicants, which letter was dated 11 July 2008, the solicitor for Mr McCausland purported to address in detail the many queries raised in the letter dated 16 November 2007 from the solicitors for the applicants. The 11 July 2008 letter provides a great deal of detail about many of the transactions which were the subject of the prior letter. However, the explanations offered in respect of the cash advances were somewhat thin. This is not particularly surprising since the withdrawals were made over a period of about nine months beginning in mid-October 2002. The explanations which were sought related to eight separate cash withdrawals, each of which was for a small amount and each of which had been made many years before. None of these withdrawals had ever been the subject of query or complaint prior to mid-November 2007. The transactions appear to have been accepted by the applicants and taken up in the relevant company's accounts. 34 The evidence before me does not suggest that there has been any response from the solicitors for the applicants to the letter dated 11 July 2008. 35 The applicants in the proceedings in this Court read an affidavit of Sheila Margaret Barry sworn on 10 September 2008 upon the hearing of the present application. In that affidavit Ms Barry, upon information and belief, offered an explanation as to why certain codes had been endorsed on the American Express documentation kept by the applicants which recorded the making of the cash withdrawals which are the subject of the proceedings in this Court. The purpose of Ms Barry offering this explanation for the presence of the codes on that documentation was to provide a basis for challenging assertions made by Mr Dunstan (the solicitor for Mr McCausland) to the effect that the endorsement of codes on that documentation signified that the withdrawals had been approved as legitimate expenses of the applicants. On the evidence before me, there is a contest between the respective camps as to the significance of the presence of these codes on the relevant documentation. To my mind, the presence of the codes does tend to suggest that the cash withdrawals have actually been expensed in the accounts maintained by the applicants. However, I do not need to resolve this factual contest for the purpose of deciding the present application. 36 Perhaps more important than the argument concerning the significance of these codes is the absence of any evidence tendered on the present application on behalf of the applicants in this Court to the effect that the cash withdrawals, which are the subject of the proceedings in this Court, remain unreconciled and not properly accounted for. The only support for these fundamental contentions is to be found in the certificates by the solicitor for the applicants which have been attached to the Application and the Statement of Claim filed in this Court. Those certificates have no evidentiary value. In my view, they carry no weight when I come to consider the application presently before me. The absence of any verification of the allegations made by the applicants in the proceedings in this Court is a significant matter. On 7 February 2008, the applicants filed a Summons in the Supreme Court, seeking an order that the IRC Proceedings be removed to the Supreme Court pursuant to s.8(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) first cross-vesting application ). 23. The applicants have further instructed Henry Davis York that, if the first cross vesting application is successful, an application in the Federal Court of Australia should be filed, seeking an order that the Federal Court Proceedings be removed to the Supreme Court pursuant to s.8(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) ( second cross-vesting application ). 24. On the basis of my knowledge of the various proceedings, I am of the opinion that there is a very substantial overlap in the issues as between the respondent's IRC Proceedings and the Federal Court Proceedings. All of the evidence which is to be filed by the applicants in the Federal Court proceedings will be relevant to issues to be determined in the respondent's IRC Proceedings. In particular, if the applicants are successful in substantiating the allegations made in the Federal Court Proceedings, Henry Davis York is instructed to raise those findings of fact in answer to the respondent's claim for payment in lieu of notice in the respondent's IRC Proceedings. 25. I am of the further opinion that it is in the interests of all parties and in the interests of all of the relevant courts, to avoid the confusion which could arise, and the duplication of time and additional costs which would be incurred, in running the respondent's IRC Proceedings and the Federal Court proceedings in separate courts and at separate times. 26. The respondent's IRC Proceedings and Mrs McCausland's IRC Proceedings have not formally been consolidated. However, since Henry Davis York has been instructed on behalf of the applicants, the Industrial Court has deemed it appropriate for the respondent's IRC Proceedings and Mrs Mc Causland's IRC Proceedings to be listed for consideration at the same directions hearings. I am of the opinion that the respondent's IRC Proceedings and Mrs McCausland's IRC Proceedings should be heard by the same court at the same time, to avoid duplication of time and additional expense being generated for all parties. 27. A copy of Mrs McCausland's affidavit filed in the Supreme Court Proceedings is annexed and marked ' SB7 '. The cash withdrawals are relied upon by the respondents in the IRC as payments made to Mr McCausland for the purpose of challenging the jurisdiction of the IRC. He also submitted that they were an abuse of the process of the Court. 40 His first contention was that the applicants in the present proceedings are claiming as due to them monies which they have asserted in both sets of IRC proceedings were monies to which Mr McCausland was legitimately entitled. In the IRC, the respondents in those proceedings have relied upon Mr McCausland's entitlement to those payments in order to argue in the IRC that the IRC did not have jurisdiction because the jurisdictional monetary cap set forth in s 108A of the Industrial Relations Act had been exceeded. Counsel submitted that the stance adopted by the respondents in the IRC was completely inconsistent with the basis of the claim being made in this Court. He further submitted that I should conclude that the true or real facts concerning these payments are those which have been alleged in the IRC because they have been earnestly pressed in a serious context and verified on oath by a responsible officer of the applicants based upon a consideration of the applicants' business records. In the event that I did so conclude, Counsel submitted that the present proceedings should be summarily terminated because they were frivolous, vexatious or embarrassing or an abuse of the process of the Court. 41 The second broad submission advanced on behalf of Mr McCausland was that the proceedings in this Court were brought not in order to litigate a genuine claim but rather were brought for the sole (or, alternatively, for the predominant) purpose of providing a springboard or platform for the removal of both sets of IRC proceedings into the Supreme Court of New South Wales, a result which could not be achieved unless, at the time that an order is made removing the IRC proceedings into the Supreme Court, there were proceedings of the relevant kind pending in this Court. Senior Counsel for Mr McCausland submitted that the claim for an account or the repayment or reimbursement of the sum of $1,120 the subject of the claims in the present proceedings could be litigated in the IRC. He also submitted that the claim was, in effect, dressed up as a Corporations Act claim when in truth it was nothing more than a claim for money had and received on a simple common money count. He also pointed to the long delay in bringing the claim and the circumstances in which the claim was brought as indicating a lack of genuineness in the claim. 42 As to the first point advanced by Senior Counsel for Mr McCausland, Senior Counsel for the applicants submitted that the applicants had not pleaded inconsistent cases. In the alternative, Senior Counsel submitted that, even if the two cases were inconsistent, the remedy was for this Court to put the applicants to their election and to give them an opportunity to choose which of the two cases they would prefer to run rather than have the proceedings in this Court struck out or dismissed. Mr West QC submitted that the applicants " ... had a right to elect ..." which case they would pursue . In particular, he relied upon Palm Springs Limited v Darling [2002] FCAFC 239 ; (2002) 123 FCR 527 and Morningstar Research Pty Ltd v Fiduciary Ltd [2003] FCA 870 ; (2003) 131 FCR 236. 44 Counsel for the applicants went on to submit that the claim which the applicants make in this Court was genuine in the sense that it has been made with a view to having the issues raised by that claim determined by this Court whether or not these proceedings are transferred to the Supreme Court of New South Wales. He said that the applicants were entitled to take the benefit of any advantages that might accrue to the applicants under the cross-vesting legislation by dint of the fact that proceedings were on foot in this Court. When pressed, Mr West conceded that the claim which is made in this Court could have been made in the Supreme Court of New South Wales or in a Local Court. Ultimately, he was driven to concede that the only reason the proceedings were commenced in this Court was to gain the benefit of the cross-vesting legislation. Mr West contended that there was nothing improper or inappropriate in the applicants taking advantage of that opportunity in the way that they have. It is correct, as Mr West QC submits, that the conduct of Mr McCausland may also amount to breaches of the statutory and equitable duties pleaded against him if the applicants succeed in this Court. Therefore, the proceedings in this Court cannot be struck out upon the basis that the pleadings do not disclose a reasonable or arguable cause of action (cf O 11 r 16 of the Federal Court Rules ). 46 Nonetheless, the amount claimed is trifling and the claim is a simple one which could have been brought in a Local Court. 47 The entitlement of the applicants (or one or more of them) to dismiss Mr McCausland summarily from his employment is an issue which can and will be litigated and determined in the IRC. Further, in my view, should it be necessary or important to decide it, the question of whether Mr McCausland's conduct in relation to the relevant cash withdrawals is of such a nature and of such seriousness as to amount to the breaches of duty alleged against him in the proceedings in this Court can also be the subject of findings in the IRC. 48 Whilst I accept that it would be difficult and perhaps impossible for the applicants to obtain an order in the IRC requiring Mr McCausland to refund or reimburse to them the total amount of the relevant cash withdrawals, such a claim can be made in a Local Court or, if the applicants so choose, in the Supreme Court of New South Wales. 49 Therefore, in my judgment, the proposition that the declaratory relief sought in this Court will somehow provide a basis for contentions to be made in the IRC by the applicants, which contentions could not otherwise be made by those parties in the IRC, is incorrect. Furthermore, the money claims made in this Court can be made in a Local Court or the Supreme Court of New South Wales and, if proven, will provide a sufficient basis for recovery of those sums. Those claims are not claims which would ordinarily engage this Court. 50 The applicants' claim has been brought forward for the first time many years after the dates when the cash withdrawals were made. No explanation has been given by the applicants for the delay in bringing the claim so long after the relevant events. The applicants' solicitors have not responded to the letters from Mr McCausland's solicitor dated 30 November 2007 and 11 July 2008. 51 No effort has been made by the applicants to resolve their claim for $1,120. 52 The relevant records concerning the withdrawals and any subsequent accounting therefor are in the possession of the applicants yet no evidence has been tendered by them to the effect that Mr McCausland has failed to provide an adequate reconciliation or accounting in respect of any of those withdrawals. All that I am left with are unverified assertions to that effect made in the letter of 16 November 2007 and again in the Statement of Claim. 53 Notwithstanding the terms of O 10A r 5(1)(b) of the Federal Court Rules which require that the applicants bring forward any application which they intend to make for an order transferring these proceedings to the Supreme Court of New South Wales pursuant to s 5(4) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) " ... as soon as practicable ... " after the applicants form the view that they wish to seek such an order, no cross-vesting application has yet been made in this Court. Mr West QC informed me that the applicants did intend to make such an application. It is quite obvious that the applicants have intended to make such an application since at least November 2007. However, the timing of the making of that application is being dictated by the applicants' strategic aims and not by the requirements of the Rules of Court. It has not yet been brought forward because the applicants first wish to obtain a cross-vesting order from the Supreme Court the effect of which will be to remove the two sets of IRC proceedings into that Court. In the IRC, the respondents in those proceedings rely upon and invoke in their favour the fact that certain monies (including the relevant cash withdrawals) were paid to and receivable by Mr McCausland. They do so in order to support the contention made both in the pleadings in the IRC and in their Notice of Motion filed on 10 January 2005 that the IRC does not have jurisdiction to hear and determine Mr and Mrs McCausland's cases because Mr McCausland received a total remuneration in the 12 months prior to the termination of his employment in excess of $200,000 which, of course, is the jurisdictional cap set by s 108A of the Industrial Relations Act 1996 . The applicants could not rely upon the cash withdrawals in this way if the amount of those withdrawals was subject to a genuine claim for reimbursement. (b) The necessarily implicit assertion to the effect that the total of the cash withdrawals is a sum of money to which Mr McCausland is properly entitled was and is supported by the affidavit of Mr Hawkins who must be taken to know the true position when one has regard to the terms of the affidavit sworn by him. In particular, he must be taken to have known in early 2005 that Mr McCausland had, in fact, made the cash withdrawals and that whatever reconciliation procedures ordinarily required by the applicants to be carried out in respect of such matters had been complied with. Otherwise, the amount of the cash withdrawals ought not to have been included in Mr McCausland's total remuneration for the purpose of the applicants' dismissal Motions in the IRC. (c) The allegations pleaded and relied upon in support of the respondents' dismissal motions in the IRC have not been withdrawn and are being persisted in right up to the present time. They are being seriously pressed. (d) The case pleaded in this Court is founded upon a contention that, in the absence of a proper accounting and reconciliation, the cash withdrawals comprise monies to which Mr McCausland was not and is not entitled and that, no such accounting or reconciliation having been given, his retention of those monies constitutes the pleaded breaches of duty. (e) The pleaded case in this Court is thus wholly at odds with the case being advanced by the respondents in the IRC (three of whom are the applicants in this Court). (f) The applicants should be taken to have made the verified assertions concerning Mr McCausland's remuneration which they have made in the IRC advisedly and after making all appropriate enquiries from all relevant employees of the applicants. They should also be taken to have conducted all appropriate searches for relevant documents and to have read and considered all such documents for the purpose of ascertaining the true position in respect of the eight identified cash withdrawals. The question of whether or not the applicants' reconciliation procedures have been complied with is a question the answer to which must be known to the applicants. The only sensible conclusion to be drawn from the claims made in the IRC in relation to the cash withdrawals is that, by January 2005, the applicants were satisfied that Mr McCausland was not in breach of his duties to them by failing to account to them in respect of these withdrawals. In short, the true position concerning these withdrawals is the position which the applicants have adopted in relation to those withdrawals in the IRC. (g) The claim made in this Court was not raised with Mr McCausland until between four and five years after the cash withdrawals were made. The amount claimed is miniscule. The delay in raising this claim and the small quantum involved are factors which cause me to doubt the bona fides of the applicants in making that claim now. (h) The failure on the part of the solicitors for the applicants to respond to the letters dated 30 November 2007 and 11 July 2008 from the solicitor for Mr McCausland is also some indication of a lack of bona fides on the part of the applicants. (i) Having regard to all of the above circumstances, the claims pleaded in this Court have not been brought forward for the purpose of having this Court adjudicate upon them but rather only for the purpose of providing a platform or springboard for removing the IRC proceedings into the Supreme Court of New South Wales. The claim is plainly being made as part of a strategy to deny to Mr and Mrs McCausland whatever legitimate advantage they seek to gain by suing in the IRC. 55 In light of the above findings, I now move to consider what relief, if any, should be granted to Mr McCausland. 56 In Issitch v Worrell [2000] FCA 477 ; (2000) 172 ALR 586 , the Full Court of this Court considered the question of whether the appellant in that case would be permitted on appeal to conduct her case in a way which was "... factually inconsistent in a radical way ..." with the case which she had conducted at trial. A party can as a general rule plead inconsistent sets of facts in the alternative (cf O 11 r 8(2); Re Morgan (1887) 35 Ch D 492 and Delfino v Trevis (No 1) [1963] NSWR 191 at 196), but not where one of those sets must be known to the party to be false. It has long been recognised that such a pleading is embarrassing and will be struck out. In Brailsford v Tobie (1888) 10 ALT 194 at 195, the defendant pleaded two factually inconsistent accounts in justification for not having paid the moneys claimed by the plaintiff. I think it would be most improper to allow the defendant to plead as she has done. The actual facts must be within her own knowledge, and that being so she has set up two sets of facts inconsistent with one another. If this were allowed it would be permitting a party knowing the facts to deliberately place on the record statements, one or other of which must be known to be a lie. This, in my opinion, ought not to be allowed. The applicants do not plead inconsistent sets of facts in the Statement of Claim in this Court if the pleading is viewed in isolation. However, the principle which underlies the observations made by the Full Court in Issitch [2000] FCA 477 ; 172 ALR 586 is that a litigant ought not to be permitted to advance a pleaded case which is inconsistent with another pleaded case in circumstances where one of those cases is known to the litigant to be a false case. Whilst it must be accepted that inconsistent sets of facts may be pleaded in the alternative in the same pleading, pleadings of that kind need to make very clear that the cases are to be put in the alternative and need also to make very clear what the alternatives are. The principle which permits the pleading of inconsistent sets of facts in the alternative does not authorise the pleading of inconsistent cases where one of the cases is known to the party who pleads it to be false. This is so whether the cases are pleaded in one pleading or in different pleadings. Propounding a case which is known to be a false case is an abuse of process. Doing so solely in order to obtain a strategic advantage by invoking the cross-vesting legislation is a flagrant abuse of process. 59 In the present case, in my judgment, the pleading in this Court is wholly inconsistent with the cases pleaded by the respondents in the IRC proceedings and the contentions which they have made in support of their applications to have the IRC proceedings dismissed. The applicants' position in the IRC is supported by the affidavit of Mr Hawkins. Their position in this Court is not supported by any evidence. In my view, I should find that the case propounded by the applicants in this Court is a case which is known by the applicants to be a false case. In those circumstances, it is not appropriate for the Court to permit the applicants in this Court (who are three of the five respondents in the IRC) to elect whether to pursue the case in this Court or to pursue their jurisdictional defences in the IRC. For the Court to permit such a course would be to ignore the finding which I have made to the effect that the case being advanced in this Court is a case which is known by the applicants to be a false case. I am not prepared to permit the applicants now to elect between the two inconsistent positions which they have adopted. 60 The appropriate remedy is to dismiss the proceedings in this Court with costs and I intend to do so for the reasons which I have already expressed. Mr McCausland has not sought an order for dismissal although he did seek an order that the whole of the proceedings be struck out. As I have already mentioned, O 20 r 5 of the Federal Court Rules was specifically addressed during submissions. I consider that no injustice will be done if the proceedings are dismissed rather than struck out or stayed. 61 However, lest I be wrong in the conclusions which I have just expressed, I will consider the broader ground of challenge. This ground is not unrelated to the first ground. Both grounds depend to some extent on coming to a view about the bona fides of the applicants in bringing the claim which they have brought in this Court. 62 As noted earlier in these Reasons, Mr West QC, Senior Counsel for the applicants, directly confronted this point in his submissions. Mr West submitted that the applicants preferred the Supreme Court of New South Wales as the forum in which the claims made in the IRC proceedings and the claim made in this Court should be determined. He submitted that the applicants were entitled to pursue such an outcome in their own strategic forensic interest. Mr West submitted that the dispute was really a commercial dispute over which the IRC was never supposed to have jurisdiction. 63 Be all that as it may, if the IRC truly lacks jurisdiction in the proceedings brought by Mr and Mrs McCausland, the applicants have their remedies in the IRC and probably in the Supreme Court of New South Wales in due course. In addition, it must be remembered that the strategy being pursued by the applicants owes its existence to the simple and undoubted fact that the IRC has exclusive jurisdiction to hear and determine claims made pursuant to ss 105 and 106 of the Industrial Relations Act 1996 (NSW). Properly constituted claims for such relief are directed by the legislature to be heard in the IRC and nowhere else. 64 After reviewing two authorities in this Court ( Palm Springs [2002] FCAFC 239 ; 123 FCR 527 and Morningstar [2003] FCA 870 ; 131 FCR 236) , Mr West QC submitted that it was a legitimate tactical procedure for the applicants to engage the jurisdiction of this Court so as to enable the proceeding commenced in this Court as part of that strategy to be transferred to the Supreme Court of New South Wales in circumstances where the facts that such proceedings were pending and were related to other proceedings in a State court or tribunal were critical factors in enabling the applicants to have the McCauslands' IRC proceedings removed into the Supreme Court even though no substantive proceedings were on foot in that Court and even though that Court ordinarily had no jurisdiction to hear and determine those IRC proceedings. Mr West said that, expressed in those terms, such a use of this Court's processes was not improper nor did it constitute an abuse of the process of this Court. 65 I disagree. 66 In my view, Mr West's submission expresses the principle too widely and does not pay appropriate regard to the reasoning in the two cases relied upon by him nor does it pay appropriate regard to the facts in respect of which the statements of principle were made in those cases. (2) Where an order is made under subsection (1) in relation to a proceeding, this Act applies in relation to the proceeding as if it were a proceeding pending in the Supreme Court. (3) Where a proceeding is removed to the Supreme Court in accordance with an order made under subsection (1), the Supreme Court may, if the Supreme Court considers it appropriate to do so, remit the proceeding to the court or tribunal from which the proceeding was removed. The contention is that the two sets of IRC proceedings are "... proceedings pending in ... a tribunal established by or under ... " the Industrial Relations Act 1996 (NSW) (see s 8(1)(a)(ii) and that those proceedings "... arise out of, or are related to, another proceeding pending in the Federal Court ... " (viz the proceedings commenced by the applicants in this Court) " ... and, if an order is made under [s 8(1)] in relation to [the IRC proceedings], there would be grounds on which that other proceeding [referring to the current proceedings in this Court] could be transferred to the Supreme Court " (see s 8(1)(b)(i)). 71 There is no cross-vesting application before me at the moment. But it is necessary to bear in mind the precise terms of the above provisions when one comes to consider the true import and relevance to the present case of the authorities relied upon by Mr West QC. It is equally clear however, and his Honour in the passage at [27] obviously accepted, that Palm Springs could not itself determine whether or not the Federal Court would make a cross-vesting order. If such an order were to be refused, Palm Springs' intention, as accepted by his Honour, is to pursue its claim to conclusion in the Federal Court. 27 We do not consider that any abuse of process was, or is, involved. What Palm Springs seeks is relief under the Trade Practices Act and the Corporations Act . If its cross-vesting application succeeds it will seek that relief in the Supreme Court, in the same proceeding . That proceeding will have been lawfully submitted to the jurisdiction of the Supreme Court pursuant to the Commonwealth Cross-Vesting Act. So what Palm Springs hopes to achieve is the very relief the Trade Practices Act and the Corporations Act hold out. The present case is a world away from the kind of collateral benefit that Dr Spautz sought: the acquiescence of defendants to demands which had no connection with his criminal defamation action. Palm Springs is not seeking an object "beyond that which the legal process offers": Williams v Spautz at 523. Seeking one forum in which all issues could be tried is a legitimate advantage for Palm Springs, indeed, as we shall later observe, for both parties: Bell Group (In liq) v Westpac Banking Corporation (1996) 20 ACSR 762 at 774 per R D Nicholson J. 28 Thus, the most that can be said is that the Federal Court proceeding was commenced in this Court, rather than in the Supreme Court, because of the forensic advantage that was perceived to be available under the cross-vesting legislation. There is no basis in the material before the primary judge to conclude, and his Honour did not conclude, that the predominant purpose for commencing the Federal Court proceeding, claiming the relief set out in the application, was other than to obtain that relief. There is no reason to conclude that the claims for relief would not be prosecuted to finality in the Federal Court, if an application for transfer under the cross-vesting legislation is refused, or in the Supreme Court, if such an application is granted. Consistently with the preservation of dual State and Federal Court systems and with the State Courts dispensing justice within the State boundaries in appropriate cases, no longer is it appropriate to view the court of another State as a foreign court. To have all disputes between a set of litigants resolved in the one Australian court which is the most appropriate is a legitimate, indeed self-evidently desirable, objective. If, as in the circumstances of the present case, that involves the Federal Court becoming a "jurisdictional transit point", we do not see that as in any way derogating from the dignity of the Court. The Federal Court will only make a cross-vesting order if, inter alia, it is satisfied that the interests of justice will be served. Determining whether the interests of justice are served by the making of an order for which a Commonwealth Act confers express jurisdiction seems to us to be not remote from the judicial function. 31 If Mr Darling's argument is correct, s 5(4) of the Commonwealth Cross-Vesting Act has a severely limited field of operation, at least insofar as applicants are concerned. Applicants seeking cross-vesting orders would need to show that the idea only occurred to them after their proceeding was instituted. To the extent they had cross-vesting in mind when they commenced the proceeding, they would be at risk of having it struck out as an abuse of process before any cross-vesting order could be obtained. 32 In any case, where litigants institute genuine claims with the hope or expectation that they will not proceed to judgment that, in itself, does not mean there is an abuse of process. Many claims are instituted in the hope, often reasonably based, that a settlement will be reached, but in the realisation that, in the absence of settlement, the matter will have to proceed to trial and final determination. The first of those two sets of proceedings involved a claim for rectification of a share sale agreement. The second set of Supreme Court proceedings was a proceeding in which Palm Springs sought an order removing the IRC proceedings into the Supreme Court and an order that those proceedings then be consolidated with the extant rectification proceedings in that Court. In the Federal Court proceedings in Palm Springs [2002] FCAFC 239 ; 123 FCR 527 , relief was sought under the Trade Practices Act 1974 (Cth) alleging misleading and deceptive conduct in respect of the very same share sale agreement. In the related proceedings in the IRC in Palm Springs [2002] FCAFC 239 ; 123 FCR 527 , orders were sought varying that same share sale agreement based upon substantially the same misrepresentations as were to be litigated in the Federal Court. 74 It is thus quite clear that the observations which the Full Court made in Palm Springs [2002] FCAFC 239 ; 123 FCR 527 were in a setting where there was a substantial overlap in the allegations made in the IRC and in the Federal Court and a very real connection between the claims made in those two sets of proceedings and the subject matter of the Supreme Court proceedings. In every sense, there were genuine disputes raised in each of the three Courts where proceedings were on foot. 75 In Palm Springs [2002] FCAFC 239 ; 123 FCR 527 , the Full Court held that there was no basis for a conclusion in that case that the predominant purpose for commencing the Federal Court proceedings was other than to obtain the relief claimed in those proceedings and that there was no reason to conclude that the claim for relief made in the Federal Court would not be prosecuted to finality if an application for transfer to the Supreme Court under the cross-vesting legislation were refused. The Court also held that there was no reason to conclude that that claim would not be prosecuted to finality in the Supreme Court, if an application for transfer were granted. 76 I have formed the contrary view in the present case. 77 In pars 45---54 and 58---59 of these Reasons, I have made certain observations and findings. The matters to which I have referred in those paragraphs are relevant to the second and broader of Mr McCausland's grounds of challenge to these proceedings. I will not repeat them here. There has been significant delay in bringing forward the claim. Those defences have been supported by affidavit evidence whereas there has been no verification of the claim made in this Court. 80 Mr West also referred me to Morningstar [2003] FCA 870 ; 131 FCR 236. In Morningstar , Hely J succinctly explained the way in which the current cross-vesting legislative scheme is being utilised by litigants (see [2003] FCA 870 ; 131 FCR 236 at [15] ---[18], pp 239---240). 81 In Morningstar [2003] FCA 870 ; 131 FCR 236 , as in Palm Springs [2002] FCAFC 239 ; 123 FCR 527 , there were real disputes in several courts on foot at the same time. The first of those proceedings was a suit in the Equity Division of the Supreme Court brought by the group which Hely J described as " the Rich interests ". The second proceeding was a proceeding commenced in the IRC by the Rich interests seeking relief pursuant to s 106 of the Industrial Relations Act 1996 (NSW). The next important proceeding was the filing by the Morningstar interests against the Rich interests of a significant cross-claim in the Supreme Court proceedings. The last proceedings to be commenced were the proceedings in the Federal Court commenced by the Morningstar interests. The Statement of Claim in the Federal Court proceedings in effect replicated the cross-claim filed by the Morningstar interests in the Supreme Court proceedings. 82 The basis of the contention advanced by the Rich interests in Morningstar [2003] FCA 870 ; 131 FCR 236 to the effect that the Federal Court proceedings were an abuse of the process of the Court was that there were two sets of proceedings substantially seeking the same relief upon the same grounds on foot at the same time. These duplicate actions were the action on the cross-claim in the Supreme Court proceedings and the Federal Court proceedings. The Rich interests contended that the Federal Court should not permit both actions to be prosecuted at the same time and that, in the circumstances of that case, the Federal Court proceedings having been commenced last, those proceedings should be dismissed or stayed. Critical to his Honour's reasoning was the circumstance that the Morningstar interests conceded that they could not prosecute at the same time both the cross-claim in the Supreme Court and their claims in the Federal Court. The Morningstar interests also tendered evidence to the effect that they would never have filed a cross-claim in the Supreme Court proceedings had they been aware at the time that they did so that the Rich interests had commenced their IRC proceedings. His Honour accepted that evidence. 83 In effect, his Honour approached his consideration of the application before him as if the cross-claim in the Supreme Court proceedings was no longer on foot, given the terms of an undertaking provided to the Court by the Morningstar interests to the effect that they would not prosecute the claims articulated in that cross-claim and given the evidence tendered on their behalf as to what they would have done had they known of the existence of the IRC proceedings. However, this is an advantage for which the law provides, and the decision of the Full Court in Palm Springs Ltd v Darling establishes that it is not an abuse of process to commence a proceeding for the purpose of achieving that advantage. The Morningstar interests are not seeking an object beyond that which the legal process offers. If there is a problem for the Morningstar interests it does not lie the fact that they do not genuinely seek to obtain the relief sought in the cross claim and in these proceedings. Clearly they do. If there is a problem, it lies in the fact that the Morningstar interests have asked for that relief twice, and from two different courts. 86 In my judgment, the present case can be distinguished from Morningstar [2003] FCA 870 ; 131 FCR 236. My reasons for doing so are substantially the same as the reasons which I have given for distinguishing Palm Springs [2002] FCAFC 239 ; 123 FCR 527. To use the words of Hely J: The applicants " ... do not genuinely seek to obtain the relief ... " which they have sought in the proceedings in this Court. 87 Accordingly, I am of the view that neither Palm Springs [2002] FCAFC 239 ; 123 FCR 527 nor Morningstar [2003] FCA 870 ; 131 FCR 236 requires me to reject Mr McCausland's application. On the contrary, the reasoning in both of those cases requires that I should accede to it. 88 I have already indicated that I think that the appropriate order is to dismiss these proceedings in their entirety. (2) Order that the applicants in the proceedings pay the respondent's costs of both the respondent's Notice of Motion filed on 5 August 2008 and amended on 12 September 2008 and of the proceedings generally. I certify that the preceding eighty-eight (88) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. | abuse of process cross-vesting proceedings not genuinely commenced in federal court inconsistent pleadings as between the industrial relations court (nsw) and the federal court appropriate remedy o 20 r 5 federal court rules practice and procedure |
The Tribunal affirmed the decision of a delegate of the first respondent (Minister) on 13 December 2004 to refuse to grant the appellant a Protection (Class XA) visa. On 8 November 2004, the appellant lodged an application for a protection visa with the (then) Department of Immigration and Multicultural and Indigenous Affairs. The appellant claimed to have a well-founded fear of persecution due to his membership of the Kammavar Naidu ethnic caste. The appellant made specific claims in a statutory declaration annexed to his visa application. By decision dated 13 December 2004, a delegate of the Minister refused to grant the appellant a protection visa. The appellant applied to the Tribunal for review. On 15 April 2005, the Tribunal affirmed the delegate's decision (the first Tribunal decision). The appellant sought review of the first Tribunal decision in the Federal Magistrates Court and the application was dismissed on 27 April 2006. However, an appeal to the Federal Court was allowed on 28 August 2006 and the matter was remitted to the Tribunal for reconsideration. On remittal the second Tribunal affirmed the decision of the delegate on 3 January 2007 (the second Tribunal decision). The appellant filed an application for judicial review of the second Tribunal decision in the Federal Magistrates Court, which was dismissed on 26 June 2008. The appellant appealed that decision to the Federal Court and on 21 August 2008 the matter was remitted to the Tribunal by consent for reconsideration. The third constitution of the Tribunal affirmed the delegate's decision on 4 December 2008 (the Tribunal decision). It also accepted that difficulties arose from the appellant's sister's marriage and that the appellant's parents and sister died. However, the Tribunal did not accept that the appellant had a well founded fear of persecution in India because it did not consider that the appellant was a witness of truth. The Tribunal gave a series of reasons for so finding, which are set out in the judgment of the learned Magistrate at [10]. In particular, the Tribunal found that the appellant's sister had committed suicide based on the documents he presented, and considered that there was no plausible evidence before it which supported the suggestion that she had been murdered. As the Tribunal did not accept that the appellant's sister was murdered, it correspondingly did not accept that his father or his family had been harmed by a person who may be referred to here simply by the letter, R. The Tribunal considered that the appellant had not provided a plausible explanation for his belief that his father had been murdered. The Tribunal also considered that there was no plausible evidence before it to suggest that the appellant's mother had been beaten or injured as claimed, or that she had died for the reason claimed. The Tribunal noted that the death certificate provided by the appellant did not explain his mother's cause of death. It also considered that if his mother had been beaten, he would have a better recollection of the date of the alleged beating and her subsequent death. The Tribunal considered that it was inconsistent with the appellant's claims that he should have returned to India in 2003 and remained there for a year before travelling to Australia. It did not accept that he was attacked when he returned to India or that his home was damaged. It also did not accept that the appellant moved frequently when he returned to India in 2003, and considered that he had not provided any explanation in respect of these movements. The Tribunal did not consider that it was consistent with the appellant's claims that he was of interest to the Indian authorities but was able to obtain a visa to Australia and leave India without any difficulties. The Tribunal also gave no weight to the document submitted by the appellant from the Tamilnadu Kamma Naidu Community. Accordingly, the Tribunal was not satisfied that the appellant had a well founded fear of persecution for a Convention reason in India. The appellant also relied upon written submissions which contained new grounds of review. The Federal Magistrate dismissed the application on 28 August 2009. His Honour considered all grounds raised by the appellant, including those identified in the appellant's submissions, and concluded that none of them established jurisdictional error on the part of the Tribunal. As a preliminary matter, his Honour found that many of the grounds attempted to cavil with the Tribunal's factual findings and thus engage the Court in impermissible merits review. In rejecting the appellant's grounds of review, his Honour found as follows: The Tribunal did not breach s 425 of the Migration Act 1958 (Cth) (Act). The determinative issue concerned the appellant's credibility and the appellant was clearly on notice that this was in question. It was for the appellant to present the relevant facts to the Tribunal in as much detail as necessary in order to make out his case. The Tribunal was not under any obligation to investigate the appellant's claims. An independent review of the Tribunal's decision indicated that all the issues raised by the appellant were addressed and considered. As such, the Tribunal did not commit an error of the type found in Htun v Minister for Immigration and Multicultural Affairs (2001) 194 ALR 244. The Tribunal did not breach s 430 of the Act, and, in any event, a breach of that provision is not a matter going to the Tribunal's jurisdiction. The Tribunal did not fail to consider whether the appellant might face 'future harm. The Invitation was not given in accordance with ss 424(3)(a) and 424B of the Migration Act : The invitation did not specify the way in which the additional information may be given. The invitation did not specify the period within which the information was to be given. In order to raise a new ground on appeal the appellant must demonstrate that it is expedient and in the interests of justice to allow the ground to be raised: O'Brien v Komesaroff [1982] HCA 33 ; (1982) 150 CLR 310 at 319; see also Coulton v Holcombe [1986] HCA 33 ; (1986) 162 CLR 1 at 7. In NAJT v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 134 ; (2005) 147 FCR 51 at [166] Madgwick J (with whom Conti J agreed) said, by reference to these and other authorities that the questions relevant to whether or not a new ground of appeal may be raised include: Do the new legal arguments have a reasonable prospect of success? Is there an acceptable explanation of why they were not raised below? How much dislocation to the Court and efficient use of judicial sitting time is really involved? What is at stake in the case for the appellant? Will the resolution of the issues raised have any importance beyond the case at hand? Is there any actual prejudice, not viewing the notion of prejudice narrowly, to the respondent? If so, can it be justly and practicably cured? If not, where, in all the circumstances, do the interests of justice lie? It is submitted by the Minister that it is not in the interests of justice that the appellant's new ground now be entertained, particularly because of its lack of prospects of success. The question of prejudice, actual or otherwise (see Hill J in NAJT at [71] and following (in dissent)) is not expressly relied on by the Minister. Just what is intended by the new ground is not entirely clear. It seems the intent of the ground is that by asking questions the Tribunal invited the provision of information the Tribunal then did not have, and so attracted the obligations specified in s 424 of the Act which it did not comply with. The appellant appeared to confirm this intent when provided with the opportunity to make oral submissions at the hearing of the appeal. It also appeared he was not responsible for drafting this ground of appeal but was assisted by another in doing so. By the particulars provided, the appellant complains that the Tribunal member asked him 'questions' at the hearing, calling for information the appellant had not provided. It is not clear what "questions" or "information" the appellant refers to. No transcript of the hearing is before the Court and consequently the only evidence of what took place at the hearing is contained in the Tribunal's decision record. Paragraphs [25] - [44] of the decision record show that the Tribunal allowed the appellant to present his evidence and asked him questions about his claims. Undoubtedly answers to questions put by the Tribunal provided evidence that is set out in those paragraphs of the Tribunal's decision record. Ordinarily, the asking of questions by the Tribunal member at a hearing would not constitute jurisdictional error. It is properly the function of the Tribunal, pursuant to s 425 of the Act, and as an inquisitorial body, to question an applicant about his or her claims. The Tribunal is entitled to control the direction of the hearing, including by asking questions in order to satisfy itself of the merits of the application: NADH v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 328 ; (2004) 214 ALR 264 at [124] - [125] . Also, the Tribunal is not obliged to uncritically accept an applicant's claims: Randhawa v Minister for Immigration, Local Government and Ethnic Affairs [1994] FCA 1253 ; (1994) 52 FCR 437 at 451. If by this ground, the applicant means to suggest that the Tribunal is unable to make inquiries of an applicant during a review hearing and rely on the answers given, then I consider the ground is misconceived and without merit. It goes without saying, however, that in some circumstances issues might arise in the course of a hearing that indeed require the provision of additional information or attract other hearing obligations. But the simple asking of questions and testing of issues that are live before the Tribunal will not ordinarily attract the operation of s 424. This seems clear from the recent decisions of the High Court of Australia, particularly Minister for Immigration and Citizenship v SZKTI [2009] HCA 30 ; (2009) 258 ALR 434. In SZKTI , the High Court (French CJ, Heydon, Crennan, Keifel and Bell JJ) confirmed, at [3], that Pt 7 of the Act provides for administrative review of decisions of the Minister to grant or refuse a protection visa by the Tribunal and that Div 4 (ss 422B --- 429A ) is a code of procedures for the conduct of that review (s 422B). Section 424(2) provides that '[w]ithout limiting subsection (1), the Tribunal may invite a person to give additional information'. As pointed out by Gleeson CJ in SAAP v Minister for Immigration and Multicultural and Indigenous Affairs , this must be additional to information obtained under s 418 , which provides for the supply of the file of the Secretary to the Minister's department (the Secretary), or under s 423 , which provides for the supply of statutory declarations and written arguments. On the facts of this case, 'additional information' also includes information additional to that obtained or provided during the course of a hearing under s 425. In this case nothing turns on whether "additional information" could be read down to mean no more than "additional" to that which has already been given by the person from whom additional information is sought. That section specifies methods of service by which the RRT 'gives documents' to a person. Therefore, an invitation 'to give additional information' under s 424(2) must be in a document to conform with s 424(3). However, if the Tribunal gets such information, the Tribunal must have regard to that information in making the decision on the review. (2) Without limiting subsection (1), the Tribunal may invite, either orally (including by telephone) or in writing, a person to give information. The issue of whether the Tribunal was required to "get any information" by an invitation in writing, was said by the Court to turn essentially upon the construction of the relevant statutory provisions. There was also an issue in this case concerning the application of s 425. As to s 424 , the Court, at [46] held that the general power to "get" information and the specific power to "invite" in writing the giving of additional information are capable of co-existing without the latter being repugnant to the former. Further, an oral request for information would be authorised, not only by s 424(1) of the Act, but also by s 56(1) by reason of the operation of s 415 , which authorised the Minister and the Tribunal respectively to get any information they consider relevant but, having got it, to regard that information in making the decision concerning an application for a visa. The Court, at [47], noted that the requirements of s 424(2) and (3) and s 424B are important provisions in relation to procedural fairness, but stated that nothing in them detracts from the obvious purpose of s 424(1) , the general terms of which enabled the getting of information from a person by telephone. Such a requirement would seem inimical to the RRT's way of operating as 'economical, informal and quick' [footnote omitted]. In relation to s 425 , the Court dealt with a contention by the first respondent that information provided by the recipient of the telephone call from the Tribunal in this case raised new and additional issues and accordingly the Tribunal was obliged to issue an invitation for a second hearing. (3) If any of the paragraphs in subsection (2) of this section apply, the applicant is not entitled to appear before the Tribunal. The Court, at [51], noted that whether an issue must be raised with an applicant for the purposes of a further hearing under s 425(1) will depend on the circumstances of each case. However, that is not the case in the present matter. Here, Mr Cheah's evidence was additional evidence about an extant issue; it did not constitute the raising of a new or additional issue such as to trigger the obligation to give another hearing. This distinguishes the facts here from those in SZBEL. The extant issue was whether the first respondent had been an active Christian in China. Mr Cheah's knowledge of the first respondent's past activities in China deriving from any account given to him by the first respondent was directly related to that issue. Further, s 422B of the Act suggests that there is no residual procedural fairness requirements to give another hearing extraneous to Div 4 of Pt 7. If there were any extraneous right to procedural fairness, as suggested by the first respondent, there is no breach of the obligation here. Importantly, the first respondent had an opportunity to deal with Mr Cheah's information by responding (as he did) to the letter from the RRT conforming with s 424A. This general power is not limited by the s 424(2) power to issue a formal request --- to "invite" a person to give "additional information". In the case now before the Court, there is no evidence to indicate that the Tribunal exercised its powers in s 424(2) to issue a formal request to the appellant to provide such information. I do not consider that the asking of questions of an applicant in the course of a hearing in relation to aspects of his or her claim can relevantly be considered an invitation to provide additional information for the purposes of s 424(2). It would be quite odd if a Tribunal were, in effect, required either to issue questions in writing in advance of a hearing or to suspend a hearing in order to invite the applicant to answer questions delivered to the applicant in accordance with one or other of the means required by s 424(3)(a) and s 441A. The questions asked in this case were obviously in relation to live --- "extant" --- issues raised by the applicant in his application and evidence before the Tribunal. Nothing put by the appellant suggests otherwise. In these circumstances, there was no breach of s 424(2). I note that in Minister for Immigration and Citizenship v SZNAV [2009] FCAFC 109 handed down on 27 August 2009, the Full Court of the Federal Court (Stone, Jacobson and Jagot JJ) dealt with a similar ground of appeal in upholding an appeal against a decision of a Federal Magistrate. The relevant ground of review in the Federal Magistrates Court concerned an acknowledgement letter signed by a Tribunal Officer and sent to the applicant's migration agent as the authorised recipient. The letter contained information about the review process in the form of questions that might be asked by an applicant for review and answers by the Tribunal. Before the Federal Magistrate, the respondent, SZNAV, submitted that the letter constituted an invitation to provide additional information and therefore enlivened the s 424(2) obligation under the Act; namely, that it was necessary for the letter to comply with the requirements for written invitations set out in s 424B. That in turn brought into play reg 4.35 of the Migration Regulations 1994 (Cth) which imposed a 14 day period in respect of information to be provided from Australia and 28 days where the information is to be provided from outside Australia. It was submitted that the acknowledgement letter did not provide for the prescribed period because it specified that the additional information was to be provided "immediately". The Federal Magistrate had accepted this characterisation of the letter. The Full Federal Court, however, referred to SZKTI in the High Court and, at [21], held that it cannot be said that s 424(2) is the only source of the Tribunal's power to obtain information. The Full Court at [23] further stated, although as an unnecessary additional, therefore obiter comment, that it did not accept that the acknowledgement letter was, in the words of s 424(2) at the relevant time, an invitation to a person to give additional information. The Full Court added that the relevant part of the acknowledgement letter, construed in context, was nothing more than advice to a respondent about how to ensure that their application was complete. The Court further stated at [25] that it would also be disposed to find that the appeal should be allowed on the ground that the acknowledgement letter did not fall within s 424(1) because it was not the Tribunal (as constituted under s 421 by the Principal Member to review the respondent's application) "getting" information in the conduct of the review. Rather, it was an administrative exercise preliminary to the review. With respect, I agree with each of these findings and observations. In my view, the analysis provided by the Full Court in SZNAV is consistent with the analysis I have provided above concerning the issue raised in this appeal. Accordingly, the new ground upon which the appellant wishes to rely is bound to fail. For this reason I do not consider it is appropriate, at this late stage of proceedings, to permit the appellant to raise this new ground of appeal, which was not raised in the Court below. The appellant pay the first respondent's costs to be taxed if not agreed. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. | appeal from federal magistrate new ground raised for first time leave refused to rely on new ground new ground bound to fail whether questions asked in review hearing attracted obligations under s 424 of migration act 1958 (cth) appeal dismissed migration |
He was granted a form of visa by the Department entitling him to remain temporarily in Australia. When that visa expired, he applied for a Student Temporary (Class TU) Subclass 572 visa. 2 One of the criteria for the grant of the Subclass 572 visa was that the appellant establish "exceptional reasons" for the grant of that form of visa. 3 The appellant sought to establish the existence of exceptional reasons on a number of different bases. One of them was that he was unable to travel to India because he suffered severe back pain. He said that he should therefore be permitted to remain in Australia to undertake a course of study for which he was enrolled. 4 A delegate of the Minister refused to grant the visa. The Migration Review Tribunal affirmed the decision, finding amongst other things that the report of a physician submitted by the appellant in support of his claim did not establish that he was unable to travel. 5 Federal Magistrate Lloyd-Jones dismissed an application for review of the decision of the MRT. The appellant appeals against the decision of the Federal Magistrate. 6 The essential issue which arises on the appeal is whether the MRT failed to have regard to certain other medical evidence and, if so, whether that constituted jurisdictional error. The statutory framework is set out and explained in the decisions of the MRT and the Federal Magistrate. 8 It is, however, necessary to refer briefly to some of the background material before turning to the decisions of the MRT and the learned Federal Magistrate. 9 On 13 April 2004 the appellant's solicitors wrote to the MRT submitting that there were exceptional reasons for the grant of the visa. The letter stated that the appellant's Doctor had advised him to refrain from lengthy travel because he had, in medical terms, "mild diffuse posterior contained bulge of L4-6, L5-S1 disks --- ". A copy of a CT scan obtained in India by the appellant in 2001 was annexed in support of the statement made by the solicitors. 10 The appellant followed up on the letter from his solicitors by providing a report of Dr Rajesh Dinakar dated 19 May 2004 to the MRT. Dr Dinakar is a medical practitioner in general practice. The Doctor's report stated that the appellant was suffering from lower back pain and that he was being treated with anti-inflammatory medication. 11 On 25 May 2004 a case officer from the MRT wrote to Dr Dinakar in response to the report. The letter stated that the MRT needed to ascertain whether the Doctor could "unequivocally corroborate" that the appellant's condition prevented him from undertaking international travel. 12 On 30 May 2004, Dr Dinakar write to the MRT. The letter was written pursuant to s 359(2) of the Migration Act 1958 (Cth). In particular, whether your condition prevents you from undertaking international travel and any adverse effects that would be sustained by you should you travel to India. The appellant's letter requested the case officer to provide additional time to enable him to see Dr Patapanian. 15 In September 2004, the appellant submitted Dr Patapanian's report to the MRT. The report was dated 23 August 2004. An MRI scan performed India three years ago is quite unremarkable, with well preserved disks and no signs of neuro compromise at any level. He does not have a Medicare card and investigations are very expensive for him and given the duration and stability of his symptoms I'm happy that at this stage we can hold off with additional investigation. I have given him some basic exercises and have emphasised to him the importance of the physical approach in these situations. However, the MRT did not "see this as exceptional and prohibitive in allowing the visa applicant to travel. The learned Federal Magistrate observed that, despite this contention, there was no doubt that the MRT was familiar with all the reports. This was because the exchange of correspondence between the MRT and the doctors led to the preparation of the reports. His Honour observed that in those circumstances it was difficult to accept that the MRT did not have regard to all of the reports. He went on to say that the MRT was not required to record in its decision all the material that it had considered. Reference was made to the decision of a Full Court in MZWBW v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 94. 18 The learned Federal Magistrate also observed at [25] that the appellant knew exactly what he was required to prove and was given the opportunity of obtaining the evidence. His Honour said that Dr Patapanian's clear diagnosis was that there was no substantial medical or clinical basis for any claim of discomfort on the appellant's part. He also said that it was open for the MRT to conclude that the appellant did not have a condition that would prevent him from travelling long distances. The first ground is that the MRT failed to have regard in its reasons to important material going to an essential issue in the case. 20 The second ground is that the MRT failed to take into account relevant considerations, namely the existence of other medical evidence, in particular the report of Dr Dinakar dated 30 May 2004. He drew attention to those parts of the report which stated that the appellant would be unable to travel long distances. 22 Mr Young submitted that the species of error upon which he relied was not co-extensive with errant fact finding. He relied in particular on the decision of a Full Court (Lee, Carr and Tamberlin JJ) in WAFP v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 319. 23 In WAFP their Honours set aside a decision of the Refugee Review Tribunal stating at [19] that the RRT had failed to have regard "to important relevant material going to a central consideration" in the case. 24 Their Honours went on at [21] to say that the RRT failed to have regard to "relevant material, which is so fundamental that it goes to jurisdiction: see Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323 ... at [82]. " 25 The language used by their Honours in WAFP was broad. It might, in one sense, be thought to support the appellant's submission in the present case. However, in my view, the Full Court in WAFP , by referring to "important relevant material", did not intend to elevate a failure to refer to evidence to a ground of jurisdictional error. If it did, the decision in WAFP would be contrary to established principles. 26 This is clear, not only from what the High Court said in Yusuf , but also from other authorities which explain the boundaries between errant fact finding and jurisdictional error. 27 In Htun v Minister for Immigration and Multicultural Affairs (2001) 194 ALR 244 at [42], Allsop J (with whom Spender J agreed) pointed to the distinction between failure to deal with an aspect of the evidence and failure to address a claim or an integer of the claim. 28 Also, in Rezaei v Minister for Immigration and Multicultural Affairs [2001] FCA 1294 at [57] , Allsop J observed that Yusuf does not stand for the proposition that a tribunal has failed to take into account a relevant consideration merely because it has not referred to a piece of evidence which the Court thinks relevant. 29 His Honour supported this proposition by reference to Minister for Aboriginal Affairs v Peko Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24 at 39-42. It is also amply supported by the observations of McHugh, Gummow and Hayne JJ in Yusuf at [73], [74], [82] and [84]. 30 To this may be added the endorsement of the relevant passage in Rezaei by the Full Court in MZWBW (to which Federal Magistrate Lloyd-Jones referred) at [26] and Thirukkumar v Minister for Immigration and Multicultural Affairs [2002] FCAFC 268 at [29] . 31 In Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26 ; (2003) 197 ALR 389, Gummow and Callinan JJ said at [24] that a failure by the Refugee Review Tribunal to respond to a substantial, clearly articulated argument relying upon established facts amounted to a denial of natural justice. However, this does not assist the appellant's argument in the present case because Dranichnikov must be understood as a failure by the tribunal to deal with a claim; see NABE v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) [2004] FCAFC 263 ; (2004) 219 ALR 27 at [63] . 32 Moreover, it is plain from Yusuf at [68]-[69] that s 368 of the Migration Act (and its equivalent in s 430), requires the tribunal to set out only the findings it did make, not the findings it did not make. 33 Thus, as was said by a Full Court (French, Sackville and Hely JJ) in WAEE v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 75 ALD 630 at [46], it is not necessary for a tribunal to refer to every piece of evidence and every contention of an applicant in its written reasons; there is a distinction between failure to refer to evidence and failure to address a contention which constitutes a claim or an integer of a claim. 34 This passage of WAEE was referred to with approval by the Full Court in MZWBW at [27]. It was also referred to by Federal Magistrate Lloyd-Jones in his reference to the relevant paragraph of MZWBW. 35 When the learned Federal Magistrate's reasons are considered in light of these well established statements of principle, they can be seen to be entirely without error. 36 Indeed, his Honour's finding at [21] that the MRT must have had regard to other medical evidence, including that of Dr Dinakar, though not essential to the correctness of the decision, seems to me to be entirely correct. Given the process which led to the production and submission of Dr Patapanian's report, it is difficult to accept the appellant's submission that the MRT failed to have regard to the earlier reports. 37 What is more, the MRT's failure to refer to Dr Dinakar's report is quite understandable. This is because the last sentence of the report of 30 May 2004 specifically deferred to the more expert opinion of a specialist. Dr Patapanian was the very specialist to whom Dr Dinakar referred the appellant for an opinion on the question of whether he was able to travel. Notwithstanding this, Dr Patapanian made no mention of that issue. 38 Dr Patapanian's failure to refer to that issue is not supportive of the appellant's claim. As the learned Federal Magistrate said at [25], given the doctor's diagnosis, it was open for the MRT to make a finding that he did not have the condition he asserted. 40 To the references I have already given, may be added the remarks of Allsop J (with whom Heerey J relevantly agreed), in Paul v Minister for Immigration and Multicultural Affairs [2001] FCA 1196 ; (2001) 113 FCR 396 at [79] . 41 His Honour there observed that whatever the outer boundaries of relevant and irrelevant considerations, they do not encompass a failure expressly to mention part of a competing body of evidence before the tribunal, provided that the elements or integers of the claim are addressed. 42 Here, it is plain that the MRT addressed the appellant's claim that his medical condition prevented him from travelling overseas. The appellant's submission that the MRT was required to expressly grapple with the other medical evidence is outside the boundaries of judicial review. | application for student temporary visa failure to satisfy regulation 572.227 "exceptional circumstances" failure to consider relevant material failure to take into account relevant considerations distinction between failure to deal with evidence and failure to address claim no jurisdictional error migration migration |
For the purpose of such seminars it has developed over the years a detailed manual called the "Original Manual". 2 In early 2006 the second respondent Mr Hans Wallz approached Tenderwatch and offered his services. The parties entered into a retainer agreement dated 29 August 2006 which included provisions that Mr Wallz would keep certain information confidential to Tenderwatch and that copyright in works would vest in that company. Mr Wallz was given access to the Original Manual and used it to conduct three seminars on behalf of Tenderwatch in September and October 2006. 3 In December 2007 Mr Arthur Thompson, the sole director of Tenderwatch, came across a brochure published by a competitor, the first respondent Reed Business Information Pty Ltd, promoting a one day tender response workshop. Reed's brochure stated that it had "teamed up with TBF (Tendering and Business Facilitation) to provide a workshop". TBF was, to Mr Thompson's knowledge, a business name used by Mr Wallz and indeed he was identified in the brochure as a "director" of TBF and as an experienced person in the industry. 4 On Mr Thompson's instructions an employee of Tenderwatch, Ms Shelley Ryder, attended Reed's workshop as a registered participant. It was held on 13 March 2008 at the North Sydney Harbourview Hotel. Ms Ryder and other participants were handed a bound manual entitled "Responding to Tenders Workshop" (the Reed Manual) which appeared to be substantially the same as the Original Manual. 5 As a result of Ms Ryder's report of proceedings at the Reed workshop, Tenderwatch commenced the present proceeding against Reed and Mr Wallz alleging copyright infringement, misleading and deceptive conduct and misuse of confidential information. Only the copyright claim is relevant for present purposes. 6 Tenderwatch has settled with Reed. On 18 April 2008 Mr Wallz consented to various orders including an injunction against reproduction or publishing of the Reed Manual, delivery up of infringing copies and the provision of affidavits and discovery as to profits. 7 Tenderwatch has elected for an account of profits. The application was heard on 27 May 2008. Tenderwatch was represented by Mr Trichardt of counsel. Mr Wallz represented himself. 8 Mr Wallz deposed that 21 copies of the Reed Manual were produced, and 17 people attended the Reed workshop. Each participant received a copy of the document. The remaining copies, and all electronic and paper material relating thereto, have been destroyed. 9 Mr Wallz invoiced Reed, and was duly paid, the sum of $2,711.71 for conducting the workshop. Mr Wallz stated that his minimum daily fee is $500 per day, and that he had "spent twenty one days compiling the (Reed Manual) at a cost of $10,500 ($500 x 21)" and "fourteen days preparing the delivery and presentation of the workshop at a cost of $7000 ($500 x 14)". He also stated he had spent $153.50 on printing copies of the Reed Manual. As a result of these costs, Mr Wallz claimed to have made a loss of $14,942.39. Mr Wallz also stated that $246.52 of the sum received from Reed in payment for his services in presenting the workshop represented GST, which he is obliged to pay to the Australian Tax Office. 10 Tenderwatch claims the whole sum of $2711.71 as profit for which Mr Wallz must account. Mr Wallz disputes this on the basis that the printing costs, and the "cost" of his own time in compiling the Reed Manual and preparing for the workshop, should be deducted from that sum, as well as the GST component. • What costs are properly allowable in calculating the profit for which Mr Wallz is to account? If one man makes profits by the use or sale of some thing, and that whole thing came into existence by reason of his wrongful use of another man's property in a patent, design or copyright, the difficulty disappears and the case is then, generally speaking, simple. In such a case the infringer must account for all the profits which he thus made. Windeyer J had earlier (at 37) drawn a distinction between patent and trade mark infringement (the instant case being the latter). If a patent infringer sells an article made wholly in accordance with the invention and thereby obtains more than it cost him to acquire or make it, he is accountable for the difference as profit because he has "infringed the patentee's monopoly right to make, use, exercise and vend the invention" (that being the statutory test of infringement then applicable). However, the profit for which a trade mark infringer is accountable is not the profit from selling the article itself but the profit from selling it under the trade mark. 13 Dart itself was a case of patent infringement, the patent being for press button seals used to seal plastic kitchen canisters. The trial judge had allowed for the whole profit on the basis that sales of the canisters were attributable to the invention. The Full Court of the Federal Court reached the same result, reasoning that "what characterised the infringing product was the press button lid, without which this particular canister would neve have been produced at all". The High Court majority (at 121) noted that there was "some divergence" between the trial judge and the Full Court but considered nevertheless the "overall approach" of both was correct. 14 Peter Pan Manufacturing Corporation v Corsets Silhouette Ltd [1964] 1 WLR 96 concerned confidential information as to a particular style of brassiere. Pennycuick J at 108-109 rejected an argument that profits should be limited to the amount by which the profit exceeded the profit the defendant would have made if it had manufactured the article without the use of that information. That case seems closely analogous to the present one. 15 In the present case the presentation of Mr Wallz at the Reed workshop involved blatant and wholesale copying of the Original Manual, particularly of its structure and layout. As already mentioned, participants were each given a copy of the Reed Manual which was substantially the same as the Original Manual. Mr Wallz used slides which contained headings and information the same as that contained in the Original Manual and substantially the same as slides produced and used by Tendersearch. Mr Wallz frequently referred to the content of the Reed Manual as a supplement to the projected slides. Twice during the course of the day Mr Wallz handed out documents containing exercises. Attendees broke into groups and worked on these exercises. These had similarities in content and layout to like documents created and used by Tendersearch although the similarities are not as striking as those between the Reed Manual and the Original Manual. 16 While doubtless Mr Wallz made use of his own knowledge and experience in relation to tender responses when he conducted the Reed workshop, he would not have been able to take up the opportunity to do so had it not been for his use of the Original Manual. That use was fundamental to the presentation of the workshop. The case is similar in that regard to Dart and Peter Pan . The gross revenue received by him should be the starting point for the calculation of profit. Under no circumstances can he claim any remuneration to himself, nor under any circumstances can he claim in my opinion any director's fees for carrying on the business. His Honour goes on to say that the only expenses to be deducted are those "solely referrable to the manufacture of the [infringing] machines". The majority in Dart at 115 et seq discuss this latter part of the statement by Harvey CJ in Eq and point out, referring to a number of United States authorities, that the statement does not take account of opportunity cost suffered by an infringer in certain circumstances, as for example, where there is no excess capacity and the infringer would have been able to manufacture alternative products. In the circumstances which arose in Dart the majority at 119-120 held that some proportion of overheads attributable to the manufacture of the infringing products should be taken into account. 18 However, nothing that the majority said in Dart casts doubt on the opening part of Harvey CJ in Eq's statement quoted above. It would be wrong in principle to allow Mr Wallz a deduction for the time he had spent working up his presentation with the aid of Tenderwatch's Original Manual. This would be tantamount to making a copyright owner pay an infringer for the time and effort spent in infringement. As was said in Sheldon v Metro-Goldwyn Pictures Corp 106 F 2d 45 (1939) at 51, "a plagiarist may not charge for his labour in exploiting what he has taken". 19 For the purpose of an account of profits an infringer can only claim costs in fact incurred (including costs attributable to the infringing work: Dart ). The infringer cannot claim costs not actually incurred, even though they might reasonably have been incurred. Thus in LED Builders Pty Ltd v Eagle Homes Pty Ltd (1999) 44 IPR 24 the infringer company had paid salaries to its directors but submitted a report of a consultant purporting to set out a "fair remuneration", which was in the order of three times that actually paid. Lindgren J at [178] rejected this claim, pointing out that the plaintiff must take the business of the infringer as it is. 20 The present case is not precisely on all fours with LED Builders because the infringer Mr Wallz was a sole trader and did not employ anybody. However, as a matter of ordinary business practice the "profit" he made for conducting the Reed workshop was the amount he received from Reed less his actual outlays. If his time spent was truly worth what he says, presumably he would have charged Reed $17,500. By way of example, if a barrister charged $1,000 for an opinion, he or she would not calculate the number of hours spent and determine that there was a "profit" of, say, $300. 21 The cost of printing and GST are properly allowable because they have reduced the actual profit or benefit derived by Mr Wallz from the infringement. 22 Accordingly the profit for which Mr Wallz must account is $2,311.69 being his gross receipt from Reed of $2,711.71 less printing costs of $153.50 and GST of $246.52. I certify that the preceding twenty three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | infringing work used by infringer in delivery of seminar whether there should be an apportionment of revenue whether deduction from profit should be allowed for time spent by infringer in preparation of seminar account of profits |
Barnes FM refused the application: SZCJD v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FMCA 1739. The appellant now appeals to this Court. He claimed that while undertaking a Bachelor of Commerce degree at a university in Bangladesh in 1998 he became involved in the Awami League and participated in "different party programs including anti-government and anti-fundamentalism movement to uphold the party objectives". He became the assistant organising secretary of the branch of the Awami League for 2001-2002 and an "influential leader of (his) area". 3 In October 2001 the new BNP government in Bangladesh, in alliance with the Jamat-e-Islami of Bangladesh, "started oppression against activists and leaders of the Awami League". This became so critical that the appellant went into hiding in July 2002 because the government filed a "false case" against him and the police started searching for him. 4 The "false case" arose from his alleged involvement in a procession which resulted in an outbreak of violence in which one person was killed and many others injured. The appellant was charged with throwing bombs, damaging property, fighting opponents and looting shops. 5 In October 2002 a group of "BNP thugs" tried to kill him. He received a minor injury but the police failed to register his complaint. 6 He obtained a visa to visit Australia and bribed an immigration official when leaving Bangladesh. He arrived in Australia in February 2003. Later his family in Bangladesh had informed him that police were searching for him and had a warrant for his arrest. The appellant had ticked the "no" box. The Tribunal noted that in answering its query the appellant initially claimed that in Bangladesh he was not safe so that he did not want to disclose this when applying for the visa. The Tribunal pointed out that the answer was in his application made after he arrived in Australia. The appellant replied that he did not mention it as it was a false case so that he did not think it important. The Tribunal put it to the appellant that "a case is a case whether there is a legitimate basis to it or otherwise". In reply the appellant then claimed that he did not understand the question. 8 Under the heading "Findings and Reasons" the Tribunal summarised the appellant's claims. 9 The Tribunal accepted that the appellant became a member of the Awami League in 1998 and was selected to be an assistant organising secretary for 2001-2002. However, it did not accept that he held a leadership position of any significance or a position of authority or even that he took a high profile role in his own area. It also noted that the appellant said that he had never stood for parliament, local government or public office. The appellant had stated his duties were arranging processions, inviting new members to join and putting up posters. The Tribunal did not accept that these were the duties of an "influential leader of (his) area". 10 The Tribunal recorded that it had questioned the appellant about his knowledge of the philosophy, goals, manifestos and objectives of the Awami League. The appellant had replied that its main focus was on liberation and independence, making Bangladesh a secular state, and working against fundamentalism. The Tribunal noted that despite two attempts to obtain a more comprehensive answer from the appellant, none was forthcoming. The Tribunal had not been able to satisfy itself that the appellant had a detailed knowledge or understanding of the Awami League. The Tribunal was not satisfied that he was involved in anything other than a most basic way in his immediate local area. 11 The Tribunal found that the appellant had embellished his claims with the objective of enhancing his claim for refugee status, thus raising doubts about his credibility. 12 The Tribunal referred to the appellant's claim about the charge arising from the procession in July 2002. The Tribunal accepted that the appellant as a young Awami League member had participated in that procession. Such charges are not confined to opposition leaders but mere membership of an opposition party would not usually be sufficient to attract such attention. While making charges against opposition political figures may also be politically motivated, there is often also a real basis to the charges as the practice of politics in Bangladesh can be violent. Charges against political activists may stem from their involvement in violent political demonstrations, intimidation and extortion. These included allegations of throwing bombs, damaging property, fighting opponents and looting shops "in regard to an incident in which one person was killed and many more were injured". The Tribunal found that, given the seriousness of those charges, the appellant would be wanted for at least questioning by the appropriate authorities in Bangladesh and that the police there had a legitimate reason to issue an arrest warrant and visit his house immediately after the incident. The Tribunal accepted that because the appellant was wanted in connection with these incidents he paid a bribe to an Immigration Officer of about A$10,000 to leave the country. However, the Tribunal was satisfied that these were properly matters for determination by the courts in Bangladesh. 14 The Tribunal then went on to make findings about the independence of the courts in Bangladesh and what would be the situation if charges, and in particular false charges, had in fact been laid against the appellant. The Tribunal was satisfied that the independent country information showed that the courts were independent in Bangladesh and could be relied upon to provide protection for those falsely charged, even if a governing party's activists persisted in pursuing them. The Tribunal quoted country information stating that all Bangladeshi government since 1974 have used the Special Powers Act for preventative detention and to settle political scores but that most of those detained had been released as a result of orders of courts. A Bangladeshi parliamentary committee in January 2001 had found that 99 per cent of the 69,010 people arrested by governments of the day since 1974 on false charges under the Special Powers Act had been released because the grounds for detention had been judged by the courts to be weak and vague. 15 The Tribunal found that even if the appellant were to face false and politically motivated charges on his return (a claim it did not accept) he could in those circumstances seek legal redress from the courts in Bangladesh. It followed that the Tribunal was satisfied there was not a real chance that in the course of such process he would be subject to serious harm amounting to persecution for a Convention reason. The Tribunal did not accept that he would be put in gaol if he returned and that he could be held for three or four years before he faced a trial or that he would be arrested by the police and would "remain in jail custody and torture without trial". 16 The Tribunal went on to deal with the claim that in October 2002 a group of BNP thugs tried to kill him. For reasons which it gave in detail, the Tribunal found that he had embellished this claim. 17 The Tribunal found that in any event, having regard to his age and education and language skills, it would be reasonable for the appellant to live in another part of Bangladesh if he chose not to live in Dhaka. The one exception is a new ground, namely that the Tribunal failed to comply with the obligation under s 424A(1) of the Migration Act 1958 (Cth) to give to the appellant in writing particulars of any information that the Tribunal considered would be the reason, or a part of the reason, for affirming the decision that is under review. 19 The appellant should be given leave to raise this ground, primarily because, as counsel for the appellant pointed out, the operation of s 424A has been the subject of a recent Full Court decision, handed down on 24 February 2006: SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2. In SZEEU there crystallised for the first time at appellate level what Weinberg J at [121] described as the "unanticipated but potent combination" of the Full Court's decision in Minister for Immigration and Multicultural and Indigenous Affairs v Al Shamry [2001] FCA 919 ; (2001) 110 FCR 27 and the High Court's decision in SAAP v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 24 ; (2005) 215 ALR 162. 20 The arguments on the appeal, including the s 424A point, are discussed below. The Tribunal had failed to consider whether such imprisonment was capable of amounting to persecution . On his own case, the charge against him arose out of his alleged involvement in serious violence which resulted in death, injury and property damage. His guilt or innocence under the ordinary criminal law was a matter for determination by the ordinary courts of Bangladesh, which the Tribunal found, on the basis of independent country information, to be independent. As the Magistrate said at [29], the Tribunal addressed but rejected the specific claims of three to four years gaol before trial or that the appellant would remain in custody without trial. It was not, in these circumstances, necessary for the Tribunal to go on to address specifically the possibility of six to twelve months incarceration prior to a hearing. 23 The Tribunal could not reasonably be expected, as was argued on the appeal, to consider the appellant's possible liability to imprisonment under the Special Powers Act because that might have been within his fear of persecution constituted by, as he claimed, "other unforeseen events". 25 The Tribunal did find that there was criminal violence in Bangladesh, but there was nothing to suggest the government condoned it. No material supplied by the appellant, or the country information, was to the contrary; see the Magistrate's reasons at [34]-[36]. More importantly, the appellant's claim was not that he had a fear of persecution as the target of non-state violence from which the Bangladeshi state was unable or unwilling to protect him. Rather the substance of his claim was that he was a target of persecution by the BNP government itself because of his political opinion. 27 First, it was said the Tribunal made an adverse finding about the appellant's credibility based, amongst other things, on the answer to question 6. 28 Read as a whole, the reasons of the Tribunal do not indicate that it made any findings based on this answer. It simply recorded the questions that it asked the appellant. This was by way of introduction to the discussion of the issue concerning the charge against him. 29 Secondly, it was said that the Tribunal's finding that the appellant was not a significant member of the Awami League was based on his never having stood for parliament, local government or public office. 30 This was by no means the only reason for the Tribunal's finding as to the level of the appellant's involvement with the Awami League. In itself, the point about not standing for public office was relevant to an assessment of the nature of his prominence in the League. The weight to be given to this fact, in the light of all facts bearing on that issue, was a matter exclusively for the Tribunal. 31 Thirdly, it was said that if the appellant were detained he would spend a considerable time in gaol before the courts would deal with the matter and that "all the evidence before it, and the logical inferences, pointed to the possibility that the charges laid against the appellant were false". Therefore, it was said, the Tribunal should have considered whether the time in custody could amount to persecution. 32 The Tribunal made no finding that the charges against the appellant were false. On the appellant's own case they arose out of a seriously violent event at which he was present. Of course he might be acquitted, but this was an ordinary criminal prosecution. To the extent that there might be any detention prior to trial, or failure to grant bail, there was no evidence that that was a result of any persecutory intent as opposed to the ordinary operation of the criminal justice system in Bangladesh. There could be no reasonable inference that such detention meant the charge itself was false. The section does not apply to information that, amongst other things, "the applicant gave for the purpose of the application": subs (3)(b). 35 The "application" in s 424A(3)(b) means the application before the Tribunal. So information which an applicant might have given in the initial protection visa application is not excluded by subs (3) from the requirements of subs (1): Al Shamry . 36 If s 424A(1) applies, the obligation is not met by putting the information orally to the applicant in the course of the Tribunal hearing, it must be put in writing: SAAP . And this is so whether or not failure to provide the information would result in any unfairness, as long as the information formed the reason, or part of the reason, for affirming the decision: SZEEU at [215]. 37 In the present case the appellant submitted that the relevant "information" was information contained in his application for a protection visa. Immediately after this passage the Tribunal goes on to discuss the appellant's joining the Awami League, the position he held in it, the League activities in which he engaged and his knowledge of its philosophy, goals, manifesto and objectives. 38 The appellant submitted that the obligation under s 424A(1) arose at the time the Tribunal received the "information", which in this case was prior to the hearing and at the stage when the Tribunal received from the Department the appellant's file containing his protection visa application. This was before the Tribunal sent a letter of 23 September 2003 to the appellant stating that it had considered the material before it but "was unable to make a decision in your favour on this information alone" and advising of the date, time and place of a hearing, as required by s 425. Thus, so the argument goes, since the Tribunal then had before it the Departmental file, including the protection visa application, the information contained in that application was the reason, or part of the reason, for the Tribunal's affirming the decision under review. The Tribunal should have set out particulars of the information, and explained its relevance, in its letter of 23 September. The Tribunal could not avoid the application of s 424A(1) by asking the same questions at the hearing to elicit the same information. 39 The s 424A argument must fail, primarily because the protection visa application, and its characterisation as vague and general, were not the Tribunal's reason, or part of its reason, for its decision. Read in context, the passage quoted above at [37] above was no more than an account by the Tribunal of the way the hearing took the course it did and why it then proceeded to question the appellant in detail about his involvement with the Awami League. No doubt part of the reason for the Tribunal affirming the decision under review was its assessment of the nature of the appellant's involvement in the Awami League. But that reason was based on questioning of the appellant at the hearing and not in the s 424A(1) sense on "information" from the protection visa application. 40 In any case, I do not accept the appellant's argument that the Tribunal contravened s 424A(1) at the time it sent the 23 September letter. The Tribunal had not then reached a stage where it considered that the information in the protection visa application, or indeed any other information, would be a reason for affirming the refusal of the visa. It had not reached a decision to affirm (or set aside) the decision under review. All that had happened by this stage was that the Tribunal considered that the information then before it did not enable it to make a decision in favour of the appellant. The whole point of fixing a hearing, as required by s 425, was to obtain further information, and in particular information from the appellant himself, which might, or might not, result in a decision to affirm the decision under review. The Tribunal was obliged to consider information which came before it: s 424(1). 41 The obligation under s 424A(1) does not attach at any particular stage of the Tribunal's internal decision-making process. In the course of that process, as the Tribunal member thinks about material which is progressively obtained and considered, some matters will emerge as significant and others will assume less significance. Their respective significance may change again. The only constraint arising from s 424A(1) is that the Tribunal cannot make a decision, that is a final, operative decision, to affirm when it possesses information which would be the reason, or part of the reason, for that decision unless it gives particulars of that information to the applicant, ensures the applicant understands why it is relevant, and invites him or her to comment. 42 Even if the "information" here were caught by s 424A(1), the exception in s 424A(3)(b) would apply. If the "information" is given by the applicant at the Tribunal hearing, it is excluded from the operation of subs (1), even though it might have also been provided to the Tribunal from another source. Thus it was information comprehended by s 424A(3)(b) even though it was information also derived from an alternative source. If an applicant "gave" the "information" for the purpose of the Tribunal review application (in contrast to SAAP , where the Tribunal had obtained the information from a witness other than the applicant) that is something necessarily within the knowledge of the applicant himself. It is not unfair for the Tribunal to then make such use of the information as it thinks fit. 43 To conclude that an applicant "gave" information for the purpose of the Tribunal application it is not necessary that the information was initially volunteered by the applicant. Information is equally given if it comes in response to questioning by the Tribunal. I certify that the preceding forty four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | appeal from federal magistrates court's dismissal of application for review of refugee review tribunal decision bangladeshi national claiming fear of persecution on grounds of political opinion as member of awami league alleged tribunal failed to consider certain matters and made irrational and illogical assumptions alleged tribunal failed to comply with s 424a of migration act 1958 (cth) by relying on vagueness in protection visa application concerning appellant's claimed involvement in awami league migration |
Those arrangements, broadly speaking, involved each retiree selling his or her home to one of the Money for Living entities in return for: In September 2005 administrators were appointed to each of the Money for Living entities. The current representative proceedings brought various claims against the respondents but, with the exception of the seventh respondent, Perpetual Trustee Company Limited ('Perpetual'), all of those claims have since been settled. The claims which remain for determination are by the fifth, sixth, seventh, eighth and ninth applicants against Perpetual, although they concern three separate transactions. Perpetual is a registered mortgagee of each of the properties the subject of the remaining claims. Perpetual made a series of loans to the Money for Living entities and took first registered mortgages over the properties. Perpetual's dealings with the Money for Living entities were organised by Resimac Limited and initiated by a mortgage initiator, Mortgage Ezy Pty Ltd. On the basis of the material before the Court, and as the argument proceeded, the only issue was whether the interests of Perpetual as registered mortgagee of the properties are subject to the retirees' interests as tenants in possession of the properties, pursuant to the land registration legislation in Victoria and Tasmania. The three separate transactions that need to be considered are in respect of the following retirees: In early 2008 Elaine Gainsford passed away and a tutor needed to be appointed for Edward James Gainsford. By consent of the relevant parties, the following arrangements were made: Broadly speaking, the interests claimed by the retirees in their written submissions were as follows: Gainsford and Smith rely on s 42(2)(e) of the Transfer of Land Act 1958 (Vic) ('TLA') and Easterbrook and Gray rely on s 40(3)(d) of the Land Titles Act 1980 (Tas) ('LTA') to claim that Perpetual's interests as mortgagee of the relevant properties ranks behind each retiree's interest as tenant in possession of the relevant properties. Whilst some cross-examination occurred in the course of the trial, no issues of credit arose in relation to any witness and, in the main, the relevant sequence of events was documented. The scheme that was introduced and operated by Money for Living was described by Finkelstein J in Australian Securities & Investments Commission, in the matter of Money for Living (Aust) Pty Ltd (Administrators Appointed) v Money for Living (Aust) Pty Ltd (Administrators Appointed) (No 2) [2006] FCA 1285 , and I adopt that description which accords with the evidence before me. 10 November 2004 Elaine and Edward Gainsford met with Stephen O'Neill, a representative of Money for Living, and discussed the Money for Living scheme. ... In addition to this offer, we are prepared to offer you a lease on the property at the rate of $1 P.A. from the date of settlement until your demise, or until you vacate the property permanently for a continuous period of six months or more, at a rate of $1 P.A. ... It is now appropriate that you consult with a solicitor, and as discussed, we have arranged Diakou Faigen to act on your behalf. 18 November 2004 Elaine Gainsford executed Deed of Agreement with MFLPH. The Company agreed to purchase the Property from the Vendor pursuant to the terms and conditions contained in the Contract of Sale of Real Estate dated ... ... ("the Contract of Sale"). 9 December 2004 Settlement took place. Mortgage entered into between Elaine Gainsford and Perpetual and principal amount advanced by Perpetual. 4 January 2005 Lodgement of Transfer of Land and Mortgage with Titles Office. Transfer of Land and Mortgage registered. 12 October 2005 Caveat dated 12 October 2005 lodged on behalf of MFLPH claiming 'an estate in fee simple ... as registered proprietor not in control of the duplicate certificate of title to prevent any unauthorised or fraudulent dealings with the land. Estell Smith after 31 March 2004 becomes sole proprietor. In addition to this offer, we are prepared to offer you a lease on the property at the rate of $1 P.A. from the date of settlement until your demise. ... It is now appropriate that you consult with a solicitor, and as discussed, we have arranged Diakou Faigen to act on your behalf. 9 December 2004 Estell Smith executed Deed of Agreement with MFLPH. The Company agreed to purchase the Property from the Vendor pursuant to the terms and conditions contained in the Contract of Sale of Real Estate dated 9 December 2004. 10 December 2004 Settlement took place. 14 December 2004 Lodgement of Transfer of Land with Titles Office. Transfer of Land registered. 23 December 2004 Mortgage entered into between Estell Smith and Perpetual and principal amount advanced by Perpetual. 21 January 2005 Lodgement of Mortgage with Titles Office. Mortgage registered. 27 September 2005 Caveat undated lodged on behalf of Estell Smith claiming an '[e]state for life ... [p]ursuant to a Contract of Sale ... between MFL Property Holdings Ltd and Estell Sylvia Smith'. 13 October 2005 Caveat dated 12 October 2005 lodged on behalf of MFLPH claiming 'an estate in fee simple ... as registered proprietor not in control of the duplicate certificate of title to prevent any unauthorised or fraudulent dealings with the land. In addition to this offer, we are prepared to offer you a lease on the property at a rate of $1 P.A. from the date of settlement until your demise ... It is now appropriate that you consult with a solicitor, and as discussed, we have arranged Diakou Faigen to act on your behalf. They will now prepare the necessary contracts, which should be ready for you to sign on Friday at 10.30. 10 December 2004 Athol Easterbrook and Yvonne Gray executed Deed of Agreement with MFLPH. The Company agreed to purchase the Property from the Vendor pursuant to the terms and conditions contained in the Contract of Sale of Real Estate dated 10 December 2004. 22 March 2005 Mortgage entered into between Athol Easterbrook and Yvonne Gray and Perpetual and principal amount advanced by Perpetual. 26 May 2005 Transfer of Land and Mortgage lodged with Titles Office. 27 May 2005 Transfer of Land and Mortgage registered. 27 October 2005 Caveat dated 25 October 2005 lodged on behalf of Athol Easterbrook and Yvonne Gray as the holder of an equitable estate in fee simple. In essence the important facts in relation to each transaction were as follows: Each retiree was registered proprietor of the property at all times until the new registered proprietor (MFLPH) became registered as proprietor. At all times each retiree remained and continued to remain in physical possession of the property. In the case of the Victorian properties, each retiree agreed that the parties would enter an irrevocable lease agreement prior to the settlement entitling the retirees to possession of the property from the settlement. In the case of Easterbrook and Gray, the retirees agreed that the parties would enter into a lease agreement prior to the settlement entitling the retirees to possession of the property from the settlement. Settlement took place on the same day that each retiree executed a Deed of Agreement, and apart from Easterbrook and Gray, a Residential Tenancy Agreement which included the terms as set out above. The mortgage was thus entered into and created after settlement and after registration of the Transfer of Land. The mortgage was thus entered into and created after settlement although before the registration of the Transfer of Land (and Mortgage). First, I find as fact that the mortgages were entered into and created on, and intended to be effective from and on, the date which each mortgage document bears: Anderson v Weston (1840) 133 ER 117; Dillon v Gange (1941) 64 CLR 253. There was no other evidence which would indicate to the contrary, and the principal sums under the mortgage were in fact advanced by Perpetual on these dates. The effect of s 42(2)(e) is that the estate of a registered proprietor of land (including the proprietor of a mortgage) is subject to the rights of a tenant in possession. In this area the relevant principles are clearly established. The first is that the possession of a tenant is notice of any right of the tenant affecting the land: McMahon v Swan [1924] VLR 397 , 406. The second is that, as Dixon J confirmed in Burke v Dawes (1938) 59 CLR 1, 17-18, s 72 of the Transfer of Land Act 1928 (Vic) (which is the forerunner of s 42) was not intended to apply merely to a tenancy as commonly understood. See also Downie v Lockwood [1965] VR 257 , 259 where Smith J said "As appears from the cases the exception in s. 42 (2) (e) is to be widely construed; and it is to be treated as producing the result that "any person in actual occupation of the land obtains as against any inconsistent registered dealing protection and priority for any equitable interest to which his occupation is incident, provided that at law his occupation is referable to a tenancy of sort, whether at will or for years". Thus, for the purposes of the section a purchaser under a contract, who is given possession by the vendor and is only a tenant at will, is protected in respect of his equitable ownership: Robertson v Keith (1870) 1 VLR(E) 11. So, too, is a vendor who remains in possession until the purchase price is paid: he is a tenant "whatever might be the legal denomination of the tenancy": The Commercial Bank of Australia Limited v McCaskill (1897) 23 VLR 10 , 12. It has also been held that an equitable life estate will prevail over a subsequent registered interest: Black v Poole (1895) 16 ALT 155. Put another way, the clients' life tenancies are secure, that is their tenancies are "guaranteed" to survive any adverse claims made by subsequent registered proprietors and mortgagees, provided they (the clients) continue to pay $1.00 per annum by way of rent and do not vacate their home. In my view, his Honour's analysis of the relevant principles of law and their application to the TLA was correct, although in light of submissions made by Perpetual, I will need to return to those principles and their application in this proceeding. I will also need to consider the terms of the LTA. The relevant wording of the LTA is materially different from the TLA and, in relation to the circumstances of Easterbrook and Gray, the question arises as to whether they have the interest of a tenant within the meaning of s 40(3)(d)(iii) or (iv) of the LTA. WERE THE LEASES VOID FOR UNCERTAINTY AND WITHIN THE SCOPE OF THE TLA AND LTA? The focus of the parties was upon the tenancies being for life which, Perpetual submitted, created the fatal uncertainty. I see no reason to depart from the views expressed by Gobbo J in Greco v Swinburne Ltd [1991] 1 VR 304 that a lease for life or lives is not void for uncertainty. Whilst the essential characteristic of a fixed term lease is that it must be of a specified maximum duration, this rule may not apply to periodic leases or leases for life (see Re Midland Railway Company Agreement v British Railways Board [1971] Ch 725 at 731-2; Bradbrook, MacCallum & Moore, Australian Real Property Law (4 th ed, Lawbook Co, 2007) at [14.100]; and Foa's General Law of Landland and Tenant (8 th ed, Thames Bank Publishing Co, 1957) at [150]-[154] although see Prudential Assurance Co Ltd v London Residuary Body [1991] UKHL 10 ; [1992] 3 WLR 279 and Peter Sparkes, Certainty of Leasehold Terms (1993) 109 LQR 93). However, whether this be the correct position or not, unlike the position in Lace v Chantler [1944] KB 368 , which was relied upon by Perpetual, in this proceeding the tenancy agreement can be construed as though it were a grant of a freehold life tenancy. The tenancy agreements in this proceeding are very similar to the agreement in Zimbler v Abrahams [1903] 1 KB 577, where the agreement was construed as a lease for life. Zimbler was treated as being correctly decided by Lord Greene MR in Lace . In fact, Lord Greene MR said in discussing Zimbler that if the contract was construed as an agreement to grant a lease for life, one could understand it being so treated and specifically enforceable (at 372). Further, the authorities show that it is very common to speak of an estate for life created in terms of a lease as a lease (see Australian Maritime Safety Authority v Quirk (1998) NSW ConvR 55-858 per Bryson J). If the lease is not void for uncertainty, one then needs to determine whether this interest of a life tenancy is one encompassed with the notion of tenancy in s 42(2)(e) and s 40(3)(d). Thus, a purchaser under a contract of sale, who at law is in possession as tenant at will of the vendor, has been held protected in respect of his equitable ownership as purchaser ( Robertson v. Keith ; Sandhurst Mutual Permanent Investment Building Society v. Gissing ), a lessee in respect of an option of purchase contained in his lease ( McMahon v. Swan ) and a wife in respect of an equitable life interest claimed under an unsigned separation agreement made with her husband ( Black v. Poole ). a'Beckett J. decided the last named case in deference to previous decisions and against his own opinion, which he stated to be that "those words were intended to refer to a tenancy as ordinarily understood arising out of an agreement under which the person in possession was allowed to occupy in consideration of some kind of rent or service of which the proprietor was to have the benefit. " The cases are collected and criticised by the late Dr. Donald Kerr in his work on The Australian Lands Titles (Torrens) System (1927), at pp. 75 et seq. But the interpretation has stood for nearly seventy years, and it would, I think, be most undesirable now to undertake the re-examination of its correctness. I draw particular attention to the reference to Black v Poole as being an indication that the concept of tenant extends beyond that of a strict 'tenancy' to include the freehold interest of a life interest, obviously equitable or legal. Therefore, I do not regard any lease that may exist as being void and of no effect on the ground of uncertainty of duration as raised by Perpetual. Further, in my view, a lease for life is within the concept of the tenancies referred to in s 42(2)(e) and s 40(3)(d) even if, from a strict point of view, they may be estates for life. In my view, each retiree had an equitable interest in the land by reason of the fact that each was entitled to specific performance of the Contract of Sale or Agreement for Sale of Real Estate or the Deed of Agreement to the possession of the property as a tenant immediately upon settlement. The extent of that interest is to be determined by the form in which specific performance would be granted by a court. The retirees were entitled as against MFLPH to an order requiring MFLPH to sign and deliver to the retirees upon settlement a lease of the property upon the terms agreed, relevantly for life, subject to the condition that the retiree stay in possession for a certain period and pay the nominal rent (see Downie v Lockwood [1965] VR 257; Craddock Bros v Hunt [1923] 2 Ch 136; Chan v Cresdon Pty Ltd (1989) 168 CLR 242; Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315 at 332-333, [53]; Black v Garnock [2007] HCA 31 ; (2007) 230 CLR 438 at 449-450, [32] ). It is not necessary that specific performance be available at the time of the hearing: Bunny Industries Ltd v FSW Enterprises Pty Ltd [1982] Qd R 712. It is important to appreciate that the availability and the nature of specific performance is a precondition to the recognition of an equitable interest and the extent of that equitable interest in the property. Here, as I have said, a court, by reference to the terms of agreement between the retirees and MFLPH, would give each retiree possession of the land upon settlement by making an order that MFLPH sign and deliver a lease of the property to each retiree effective from the moment of settlement. In considering the nature of the interest of the retirees and of their possession of the property, Perpetual submitted that it was not aware of any case in which possession has been by the registered proprietor, the party with the ultimate interest. Rather, Perpetual argued, possession has been with a person other than the registered proprietor who specifically establishes an interest, usually as against the registered proprietor. For example: Perpetual submitted that none of the interests claimed by the retirees created any antecedent interest separate from ownership, capable of creating any tenancy in the retirees which would bind Perpetual. The fact that the retirees were registered proprietors of the properties at the time of entering into the agreement for lease or at the time of the grant of lease is irrelevant. The agreement for lease obliged MFLPH, when it had the ability to do so, to give to the retiree possession of the property upon settlement. In the case of Gainsford and Smith, a lease was in fact granted entitling them to possession on, and from, settlement. If not for such an agreement for lease or the grant of a lease, each retiree would need to vacate the property at settlement, and give possession to MFLPH. However, because of the agreement for lease upon settlement, each retiree would at least have been entitled to the order referred to above, giving to each retiree exclusive possession of the property. From the moment of settlement the retirees remained thereafter in the property as tenants. Again, it does not matter that they also remained registered as proprietors, because they would otherwise have had no right to possession of the property after settlement, if not for the agreement for lease or the lease by MFLPH. MFLPH does not need to be the registered proprietor to effect a lease to the retirees --- MFLPH was entitled to possession on settlement, and leased its right to possession to the retirees. There is nothing unusual in a person with a right to possession only of the land granting a right to exclusive possession of the land, as long as it is for a term less than that which the landlord has in the land. Of course, this would be subject to any superior title of a third person, but this is not the situation concerning us in this proceeding. This is not a case where MFLPH, at the time of the actual grant of the lease, had no legal estate or interest in the land at the time of grant. At settlement MFLPH would have had a right to possession if not for the grant of the lease. This is not a case of needing to rely upon the principle of estoppel, each party being prevented from denying each other's title. As I have said, under the sale contracts, there was an obligation on MFLPH to give exclusive possession at settlement, and at settlement this was effected by the lease. At the time of settlement, MFLPH had the ability to perform the obligation to give exclusive possession as the person otherwise entitled to such possession. A tenancy by estoppel arises most commonly on a fee simple conveyance, where the purchaser actually leases the property to a tenant before the purchaser acquires any interest in the land. In such a situation, if the landlord later acquires the necessary interest, usually the legal fee simple estate, the tenant will then automatically acquire a legal tenancy by question of law under the principle of 'feeding the estoppel'. In this proceeding the purchaser (MFLPH) agreed to enter into a lease at some time in the future (at settlement), and at settlement did actually grant the lease (other than to Easterbrook and Gray), that is, after MFLPH had acquired the possessory interest necessary for it to grant the lease. In the case of Easterbrook and Gray, where no actual lease was entered into, the agreement to lease was enforceable in the way I have previously described. At the time of settlement and thereafter, MFLPH was able to lease the property to Easterbrook and Gray, MFLPH being entitled to possession of the property but for the agreement to lease. I should mention that Perpetual argued that a person could not create a lease over an interest in land which it did not possess, and contended that MFLPH did not have the interest it purported to convey under the tenancy agreements. At best, it was contended, MFLPH could only create a tenancy by estoppel, which was 'fed' (giving legal effect to the tenancy) when MFLPH obtained the legal interest upon registration. It was contended that an equitable interest was inadequate to feed the estoppel. If, contrary to my analysis and the tenancy by estoppel principles are applicable and relevant, then on the basis of the sequence of events I have found occurred, the estoppel would be fed prior to the grant of the mortgage. This is either because the mortgage was registered after the transfer of land, or because upon registration of the transfer of land, the title feeds the estoppel, so that the earlier grant of the lease operates retrospectively as if MFLPH had legal title (if that was required) at the time of the earlier grant of the lease or entry into the agreement for lease (see Hedley v Roberts (1977) VR 282 at 285 per Harris J (and the references mentioned therein)). Perpetual also argued that the retirees were not tenants and that an owner cannot lease land to himself or herself relying on Rye v Rye [1962] AC 496. It was said that prior to registration of MFLPH as proprietor, the retirees were owners of the properties and occupied the properties in this capacity. It was said they could not have an interest in a lease in these circumstances. In Rye v Rye , [1962] AC 496, the appellant and his brother carried on a partnership business, the profits of which were divisible between them in unequal shares. They had purchased in equal shares the premises used for the business and in order to reconcile their inequality as partners with their equal ownership of the premises they agreed orally to grant to the partnership a yearly tenancy of the premises at £500 per annum to be provided out of the partnership assets. The rent, which it was admitted was calculated from January, 1942, was payable on the usual quarter days and the first payment of rent was made and accepted on Lady Day, 1942. No time for the determination of the lease was agreed but, as the tenancy was an annual one, the law provided for its determination. After the brother's death in 1948, the respondent (his son) as an executor of his estate, became one of the owners of the premises. In 1950 the appellant took the respondent into partnership, but later the partnership was dissolved. After the determination of the partnership, the respondent continued to occupy a room on the first floor of the premises and carried on his own business from that room, although the appellant demanded possession of the room. The appellant brought an action claiming possession of the room on the basis that he was the surviving tenant under the yearly tenancy granted to the partnership in 1942 and was therefore entitled to exclusive possession of the premises as against the respondent. It was held, inter alia, that the lease was invalid because it is not possible at law for a man to grant a lease to himself, nor several persons to grant a lease to themselves. 436 , 444) Stuart V-C. describes as fanciful and a whimsical transaction the proposal that a man should grant a lease to himself. He had, no doubt, in mind that a lease is in one aspect contractual. Of things necessary to a lease, says Sheppard's Touchstone Of Common Assurances (see 7th ed, Vol II, p 268), one is that: "There must be acceptance, [actual or presumed,] of the thing demised. " Yet it is meaningless to say that a man accepts from himself something which is already his own. I recognise that a lease not only has a contractual basis between lessor and lessee, but operates also to vest an estate in the lessee. But what sort of estate is in these circumstances vested in the lessee? I will assume that it will not at once merge in the higher estate from which it springs, though I see no reason why it should not. Yet it must be an estate hitherto unknown to the law. Even a bare demise implies certain covenants at law: but to such an estate as this no covenants can be effectively attached. Nor can the common law remedy of distress operate to enable the lessor to distrain on his own goods. Again, at law in the absence of some special provision the lessee is entitled to exclusive possession of the demised premises. What meaning is to be attributed to this where the lessee is also the lessor? My Lords, my mind recoils against an interpretation of the Act which leads to so fanciful and whimsical a result, and it appears to me to be quite unnecessary. or for two persons to grant a tenancy to themselves? At common law it was clearly impossible. Nemo potest esse tenens et dominus. A person cannot be, at the same time, both landlord and tenant of the same premises: for as soon as the tenancy and the reversion are in the same hands, the tenancy is merged, that is, sunk or drowned, in the reversion; see Blackstone's Commentaries (1766 edition) vol II, p 177. Neither could a person at common law covenant with himself, nor could two persons with themselves. Neither could one person covenant with himself and others jointly. Such a covenant, said Pollock CB, is "senseless," see Faulkner v Lowe ((1848) 2 Ex. 595 , 597). Now, if a man cannot agree with himself and cannot covenant with himself, I do not see how he can grant a tenancy to himself. Is the tenancy to be good and the covenants bad? I do not think so. The one transaction cannot be split up in that way. The tenancy must stand or fall with the agreement on which it is founded and with the covenants contained in it: and as they fall, so does the tenancy. And what about notice to quit? If A grants a tenancy to himself A, can he mutter a notice to quit to himself and expect the law to take any notice of it? Or, if A and B grant a yearly tenancy to themselves A and B, can there be a notice to quit unless both agree? Of course not. So that, instead of a yearly tenancy, it becomes a life-long tenancy determinable only by the agreement of both. Which is absurd. The truth is that they cannot grant a tenancy to themselves. Each of the parties still had separate and identifiable legal rights or interests under the arrangements entered into between the parties, and each was entitled to enforce its rights according to their terms. This is not a case of one person granting or purporting to grant a lease to himself or herself. Accordingly, I do not consider that Rye v Rye has any application to this proceeding. The time of the creation of the mortgage is the time the mortgages are entered into, not registered. Once the mortgage is registered, it would take priority over any tenancy, but necessarily only a tenancy entered into after the mortgage was created. Therefore, in this proceeding, if the leases came into existence after the creation of the mortgages, Perpetual would be entitled to priority because the title of the mortgage would prevail over the interests of the retirees, Perpetual not consenting to the leases. If the leases were created prior to the creation of the mortgages, then only if they fell within the exceptions to the indefeasibility principles would the leases be able to take priority in circumstances where the mortgage was subsequently registered. I should say something more about this conclusion I have reached as to the relevant time for considering the competing claims and the creation of the mortgage. It is important to keep in mind that in this proceeding we are concerned with a competition between a lease and a mortgage, which necessarily brings into operation the principles discussed in Baranyay [1993] 1 VR 589, cl 8 of the common provisions of the mortgage, and the provisions of the TLA and LTA dealing with mortgages and leases. If one were dealing with a competition between a lease and, say, a registered proprietor of the property, the relevant time to consider may be the time of lodgement or registration of the relevant interest. This is because the registered proprietor would not be able to rely upon cl 8 of the common provisions, and the statutory provisions relating to mortgages and leases and their priority, and the focus would be only upon the operation of s 42(2)(e) of the TLA and s 40(3)(d) of the LTA. In this proceeding, the sequence of events in relation to the creation of the lease and mortgage, other than in the case of Gainsford, can be easily resolved, because the leases were clearly entered into prior to the creation of the mortgages. In the case of Smith this is apparent, even accepting the arguments of Perpetual relating to the sequence of events. In the case of Easterbrook and Gray, this is so because there was an agreement for lease from the date of the Agreement for Sale of Real Estate, or upon settlement at which time Easterbrook and Gray were entitled to possession pursuant to an actual lease (which events occurred before the mortgage was created and the principal sum was advanced by Perpetual), or because, contrary to the argument of Perpetual (to be dealt with later), there was no simultaneous lodgement or registration of the transfer of land and mortgage. In the case of Gainsford the creation of the lease and the mortgage occurred on the same day as settlement. There was no specific evidence of the exact time during that day when each transaction was entered into between the parties. However, at settlement, MFLPH then and there obtained possession of the property so was able to provide such to Gainsford pursuant to the agreement for lease previously entered into and the actual lease which was to commence on 9 December 2004, the settlement day. The intention of the parties as to commencement of the lease was clear; no presumption or prima facie position as to the commencement of the lease therefore need be applied (cf Forster v Jojodex Australia Pty Ltd (1972) 127 CLR 421 at 440-441 per Gibbs J, and Associated Beauty Aids Pty Ltd v Federal Commissioner of Taxation (1965) 113 CLR 662 at 668). The intention of the retirees and MFLPH was that upon the actual time of settlement, MFLPH would grant a tenancy in possession to the retirees, the retirees no longer being entitled to possession of the property. Of course, each retiree remained in actual possession throughout all the transactions, their actual possession never being disturbed. However, in my view the mortgage was a separate and necessarily later transaction after MFLPH obtained the transfer and possession of the property. I return to this aspect later when dealing with a further argument advanced by Perpetual regarding the timing of the transactions and registrations. In this context, I have considered cl 1.9 of the relevant Deeds of Agreement which it was argued by both parties gave some indication as to the sequence of the lease and mortgage transactions. It was a clause found in the arrangements with each of the retirees, including Smith who, even on Perpetual's argument as to the sequence of events, had entered into a lease prior to the creation of the mortgage and advance of funds by Perpetual (on 23 December 2004) or the lodgement and registration of the mortgage (on 21 January 2005). Therefore, in the case of Smith, the lease was in existence prior to MFLPH's undertaking to use its best endeavours to obtain the consent of the mortgagees to the lease and the terms and conditions contained within the Deed. The failure of MFLPH to obtain the consent in these circumstances may have had no legal consequences; it could certainly not affect the interests of Smith as an existing tenant in possession and the operation of s 42(2)(e) of the TLA. Clause 1.9 did not refer specifically to Perpetual or to any existing mortgagee. I do not consider that cl 1.9 could be construed as a consent by the retirees that a later mortgage could override the interests of the retirees as tenants in possession. Equally, I do not construe cl 1.9 as necessarily indicating that any lease was in existence prior to the mortgage. In my view, cl 1.9 does not affect or impact upon an ascertainment of the factual position of when the mortgage and lease were created in the case of each retiree. If the lease was created prior to the mortgage being given, then cl 1.9, insofar as the retiree's interest was concerned, would have no impact on the issues raised in this proceeding. If the lease was created after the mortgage in any given case then, as the consent of Perpetual was not given, cl 1.9 would have no impact on the issues raised in this proceeding, and Perpetual would be entitled to priority assuming the subsequent arrangement was in fact 'a lease' for the purposes of ss 66 and 77 of the TLA (and the equivalent provisions of the LTA) and comes within the scope of cl 8 of the common provisions of the mortgages. The subsequent transfer it was contended, funded by Perpetual's advance, could not feed that estoppel at Perpetual's expense. Perpetual submitted that the mortgage was registered simultaneously with the transfer, with the result that the purchaser/mortgagor never obtained unencumbered title enabling the creation of a tenancy (referring to Abbey National Building Society v Cann [1991] 1 AC 56 at 93; Allsop v Marshall (1942) 59 WN (NSW) 159 at 161-162; Austin Construction Co (Australia) Ltd v Becketts Holdings Pty Ltd (1958) 75 WN (NSW) 444 at 447; Sogelease Australia Ltd v Boston Australia Ltd (1991) 26 NSWLR 1 at 5-8). Perpetual relied principally on Abbey to argue that the interest of the retirees as tenants in possession was only created upon registration of the transfer. Because a mortgage was registered at the same time, Perpetual argued, the interest of a tenant in possession is only in the registered proprietor's equity of redemption and any such interest of the retirees is subject to the mortgage. MFL paid MFLPH's expenses (including its liability to make up-front and ongoing payments to retirees). It was submitted that each Perpetual payment, secured by a mortgage, was indissolubly linked to the relevant property purchase by reason of the part that each of those matters played in the business model of Money for Living. Accordingly, it was contended, the Perpetual payments were an indispensable part of the business under which the property purchase was made. As in Abbey , it was contended by Perpetual, the relevant registrations were not only simultaneous, but the transactions which gave rise to those registrations were indissolubly bound together. Perpetual submitted that the cases upon which the retirees rely in an attempt to distinguish Abbey have no application in this case (referring to Koompahtoo Aboriginal Land Council v KLALC Property & Investment Pty Ltd [2006] NSWSC 856 ; Barclay's Bank plc v Zaroovabli [1997] Ch 321; HKCB Finance Limited v Yuen Yi Wan [2004] HKEC 1564). Nevertheless, I cannot help feeling that it flies in the face of reality. The reality is that, in the vast majority of cases, the acquisition of the legal estate and the charge are not only precisely simultaneous but indissolubly bound together. The acquisition of the legal estate is entirely dependent on the provision of funds which will have been provided before the conveyance can take effect and which are provided only against an agreement that the estate will be charged to secure them. Indeed, in many, if not most, cases, of building society mortgages, there will have been, as there was in this case, a formal offer and acceptance of an advance which will ripen into a specifically enforceable agreement immediately the funds are advanced which will normally be a day or more before completion. In many, if not most, cases the charge itself will have been executed before the execution, let alone the exchange, of the conveyance or transfer of the property. This is given particular point in the case of registered land where the vesting of the estate is made to depend upon registration, for it may well be that the transfer and the charge will be lodged for registration on different days so that the charge, when registered, may actually take effect from a date prior in time to the date from which the registration of the transfer takes effect: see section 27(3) of the Act of 1925 and the Land Registration Rules 1925...Indeed, under rule 81 of the rules of 1925, the registrar is entitled to register the charge even before registration of the transfer to the chargor if he is satisfied that both are entitled to be registered. The reality is that the purchaser of land who relies on a building society or bank loan for the completion of his purchase never in fact acquires anything but an equity of redemption, for the land is, from the very inception, charged with the amount of the loan without which it could never have been transferred at all and it was never intended that it should be otherwise. The "scintilla temporis" is no more than a legal artifice and, for my part, I would adopt the reasoning of the Court of Appeal in In Re Connolly Brothers Ltd (No 2) [1912] 2 Ch 25 and of Harman J in Coventry Permanent Economic Building Society v Jones [1951] 1 All ER 901 and hold that Piskor's case was wrongly decided. It follows, in my judgment, that Mrs Cann can derive no assistance from this line of argument. As Perpetual points out, it was the purchaser's reliance on mortgage funds in Abbey which demonstrated that the transactions were simultaneous. In many instances concerning the purchase of land, the purchase is entirely dependant on the provision of funds by a lender. In those circumstances, the result in Abbey , with respect, makes sense. I do not consider that MFLPH was in that situation. It appears from the facts that, at least in some cases, MFLPH was able to pay out whatever sum was required at settlement without resort to Perpetual. For example, in the case of Smith and Easterbrook and Gray, the mortgage was created and the associated loan of funds occurred many days after the transfer of funds by MFLPH to the retiree. I see nothing unusual about this for the operation of the scheme. Indeed, it would be unusual if there were not sufficient funds in such an operation to fund the purchases of the properties without resort to lenders in each instance. In the case of Gainsford, the loan amount of Perpetual was in fact not paid to MFLPH but to MFL, and whatever arrangements there were between MFLPH and MFL, the loan amount was still not payable to MFLPH for the purposes of concluding the purchase. In my view, everything will depend upon the facts of each case, and Abbey is not setting down any inflexible rule or principle (see eg Koompahtoo Aboriginal Land Council v KLALC Property & Investment Pty Ltd [2006] NSWSC 856 ; HKCB Finance Limited v Yuen Yi Wan [2004] HKEC 1564 at [61]). The nature of the transactions, their sequence, and the Money for Living scheme indicate that the transactions the subject of the registration of the transfer and mortgage were not indissolubly bound together, and the mortgage should be regarded as a separate and distinct transaction from the transfer and grant of lease, which transactions did occur simultaneously, and prior to the creation of the mortgages in the case of each retiree. If the time of lodgement or registration has any relevance to these proceedings, the evidence supports the existence of a moment in time between registration of the transfer and mortgage. As a matter of record at the Tasmanian Titles Office, Perpetual's Mortgage was shown to have been registered at a time later than the time at which the Transfer of Land was registered. Mr Dihm of the Victorian Land Titles Office gave evidence that the registrations of the Transfer of Land and the Mortgage were not 'simultaneous', in that they were recorded one after the other: '... transfer first and the mortgage second. TASFOL records the time and date of registration. Where only a transfer and mortgage of the same property are presented to the Land Titles Office together, generally the transfer is registered at 12.00pm noon and then the mortgage is registered at 12.01pm. As a matter of principle this seems to me to be the correct approach. One would normally expect the registration of a transfer of land first, then the registration of the statutory charge by the then registered proprietor. It also appears to me that the TLA (s 34) and LTA (s 48) envisage that the registrations of the transfer and mortgage would not be simultaneous, as an 'order' for registration for each dealing lodged for registration seems to be required. Burke v Dawes (1937) 59 CLR 1 at 13, 18 and 25 and Barba v Gas & Fuel Corporation [1976] HCA 60 ; (1976) 136 CLR 120 at 140-141 were referred to by Perpetual in support of the proposition that a comparison of the competing interests is still required to be undertaken by the Court even if the retirees were tenants in possession. I do not consider that the difference in wording of s 40 and s 42(2)(e) affects my conclusion on this contention, and thus both the TLA and LTA can be dealt with together. It is convenient to deal with the competing interests issue by reference solely to the decision in Barba 136 CLR 120. In Barba , by an instrument dated 21 July 1975 C, the registered proprietor of certain land, gave G an option for easement over the land. The purpose of the easement was to enable G to construct a pipeline through the land. The consideration for the grant was expressed to be 'the sum of $10.00 now paid to the Grantor (the receipt whereof is hereby acknowledged)'. On 25 August 1975 C received a letter dated 20 August 1975 from G enclosing a cheque 'for the amount of $10.00 being the Option Fee referred to in the Option for Easement ... '. On 17 December 1975 C signed and sealed an instrument of Creation of Easement over the land, which instrument was lodged at the Office of Titles on 12 January 1976 and subsequently registered, its registration dating from that day. In the meantime, on 15 August 1975, the land was put up for auction. At the sale there was available for inspection a copy of a printed draft of the Creation of Easement, to which copy survey plans were attached showing the area proposed to be subject to the easement. The auctioneer had marked out the measurements of the proposed easement on an outline sketch of the land on his copy of an advertising brochure, which was held up for those present to see; it was doubtful whether what was marked on the sketch could be seen, but the auctioneer described the width and depth of the proposed easement, and read out the substantive part of the draft Creation of Easement. The Vendor has concurred in the granting of the said easement and the Purchaser acknowledges having read a true copy of the proposed creation of easement document prior to the signing of this Contract and IT IS HEREBY ACKNOWLEDGED by the parties hereto that all monies paid or to be paid by [G] by way of compensation in respect of the granting of the easements shall be paid to and shall belong to the vendors herein. On 3 November 1975 B entered into, and thereafter remained in, possession of the land. There was no evidence that when, on 15 August 1975, B purchased the land he had any knowledge or means of knowledge that C had granted the option. On 2 December 1975 B denied and thereafter continued to deny access to G's workmen who sought to work on the land. On 18 June 1976 the Supreme Court of Victoria declared, inter alia, that G was entitled to have registered the Creation of Easement dated 17 December 1975. On appeal to the High Court, Gibbs ACJ, Stephen and Jacobs JJ held, inter alia, that: Their Honours referred at various times in the judgment to Burke v Dawes , which they approved generally. Thus, a purchaser under a contract of sale, who at law is in possession as tenant at will of the vendor, has been held protected in respect of his equitable ownership as purchaser ( Robertson v Keith (1870) 1 V.R. (E.) 11 ; Sandhurst Mutual Permanent Investment Building Society v Gissing (1889) 15 VLR 329) , a lessee in respect of an option of purchase contained in his lease ( McMahon v Swan [1924] VLR 397) and a wife in respect of an equitable life interest claimed under an unsigned separation agreement made with her husband ( Black v Poole (1895) 16 ALT 155). a'Beckett J. decided the last named case in deference to previous decisions and against his own opinion, which he stated to be that 'those words were intended to refer to a tenancy as ordinarily understood arising out of an agreement under which the person in possession was allowed to occupy in consideration of some kind of rent or service of which the proprietor was to have the benefit'. The cases are collected and criticized by the late Dr Donald Kerr in his work on The Australian Lands Titles (Torrens) System (1927), at pp. 75 et seq. But the interpretation has stood for nearly seventy years, and it would, I think, be most undesirable now to undertake the re-examination of its correctness. at p. 8 and by Evatt J. (1938) 59 C.L.R., at p. 24. McTiernan J. agreed with the remarks of Dixon J ((1938) 59 C.L.R., at p.27). The fifth member of the Court, Starke J., was perhaps not so definite in the expression of his opinion but he did not disagree with what the majority of the Court said on this point (1938) 59 C.L.R., at pp. 12-13. This question should therefore be regarded as settled. The interest of the appellants under the contract of sale from Craigie was within the protection given by s. 42(2)(e). However, it was decided in Burke v Dawes (1938) 59 C.L.R., at pp. 17-18 that s. 42(2)(e) does not give to a tenant in possession any greater protection than he would have had if the land were under the general law: see per Dixon J. (1938) 59 C.L.R., at p. 18, and per Starke J. (1938) 59 C.L.R., at p. 13. It follows that, in determining the competition between the tenant and the proprietor of the registered interest, the latter must be regarded as having been stripped of the benefit conferred by the fact of registration and as having been remitted to the position of holding an unregistered interest. It then becomes necessary to consider whether, apart from registration, the interest of the respondent under the Creation of Easement will prevail over that which vested in the appellants by virtue of the contract of sale. This question depends on the effect of special condition 8 of the contract of sale. When an owner of land contracts to sell it to a purchaser there is no reason in principle why he should not reserve the right to grant an easement over the property sold or why he should not make the sale subject to the easement to be granted. If this is done effectively the easement when created will take priority over the equitable interest which was granted subject to it. Under the general law, apart from registration, the right of the owner of the easement will prevail over that of the purchaser, notwithstanding that he is in possession, and the provisions of s. 42(2)(e) will not give the purchaser any greater right. In Chesterfield v Pitisano [1964] V.R. 709 at p.713 , Smith J. said that a mortgage granted pursuant to a right reserved to the vendor by a contract of sale would take priority over the equitable interest of the purchaser, and that the rights of the mortgagee on registration would not be rendered subject by s. 42(2)(e) to the interest of the purchaser as a tenant in possession. I respectfully agree with his conclusion on this point. The question therefore is whether special condition 8 did make the sale subject to the easement to be granted. In my opinion the condition did have that effect. It is true that it did not in terms reserve the right to grant an easement, nor did it state that the sale was subject to the easement to be granted. However, the clause expressly stated that it was proposed to create an easement, and that the vendor should be entitled to the compensation paid when the easement was granted, and in my opinion these provisions plainly implied that the easement when granted was to be effective. The clause would be meaningless if the rights of the purchasers prevailed over the easement when it was created. In my opinion the effect of special condition 8 was that the Creation of Easement---not the option, as I have already explained---prevailed over the rights of the appellants. Section 42(2)(e) did not alter this position. My view is that if the retirees come within the terms of s 42(2)(e) or s 40(3)(d) , then no comparison of the competing interests is required of the type suggested by Perpetual. In Downie v Lockwood [1965] VR 257 , Smith J undertook no comparative examination of the equities, as submitted by Perpetual should occur in this proceeding. Barba , in reliance on comments in Burke v Dawes , merely decided that effect had to be given to special condition 8, and to that extent the application of the general law applied, and the person claiming to come under the exception to indefeasibility could have no greater rights than he or she would have under the general law. It will be recalled that special condition 8 made the sale subject to the easement to be granted, which special condition the High Court gave effect to by applying the general law. In any event, I have come to the view that even if there is to be a comparison of the two competing interests as suggested by Perpetual, the interests of the retirees have priority. They were in fact still registered proprietors. In my view, the retirees cannot rely upon s 40(3)(d)(iv) , as under that provision the tenancy must be granted by the owner of the premises, who must hold legal title to the premises. However, in my view Easterbrook and Gray can rely upon s 40(3)(d)(iii): they had an interest of a 'tenant under ... a lease capable of taking effect in equity' for the reasons previously identified by me. The retirees then contended that the onus is upon Perpetual to show that it falls within the exception 'except as against a bona fide purchaser for value without notice of the lease who has lodged a transfer for registration' and that Perpetual failed to discharge that onus for the following reasons: Perpetual contended that the tenancy agreement alleged by Easterbrook and Gray was, at best, a tenancy capable of taking effect in equity only. However, Perpetual then contended that the exception to indefeasibility created by s 40(3)(d)(iii) of the LTA was subject to an exception of its own. An equitable lease does not dislodge the indefeasibility of a 'bona fide' purchaser for value without notice of the lease who has lodged a transfer for registration. For the purposes of the LTA, 'transfer' means 'the passing of any estate or interest in land under this Act, whether for valuable consideration or otherwise'. It was contended that the word 'purchaser' must be read in its context and in light of the customary common law usage of the phrase 'bona fide purchaser for value without notice' as extending to the taker of any legal interest in property, not just a transferee. Reference was made to Butt, Land Law (5 th ed, 2007 Lawbook Co); Goodright d Humphreys v Moses [1746] EngR 208 ; (1774) 96 ER 599 at 600, and Pearce and Geddes, Statutory Interpretation in Australia (6 th ed, 2006, LexisNexis) at [4.17]. That interpretation was said to be supported by the use of 'transfer' in s 40(3)(d)(iii); if 'purchaser' meant 'purchaser of the fee simple estate', a word other than 'transfer' (which by the s 3 definition, connotes 'the passing of any estate or interest') would have been used, such as 'assignment'. It was contended that the exception does not elevate the interest of a tenant under an equitable lease above those of all others who hold a registered interest in the land; it merely makes clear that a bona fide purchaser without knowledge has priority over a tenant in all circumstances. In the case of Easterbrook and Gray, the mortgage was created on 22 March 2005, well after the creation of any equitable lease, and after settlement when Easterbrook and Gray would have been entitled to possession pursuant to their agreement with MFLPH. The Transfer of Land and Mortgage were lodged for registration on the same day, and were each registered the day after. As discussed previously, the Mortgage was registered after the Transfer of Land. Therefore, Perpetual would be bound by the interests of Easterbrook and Gray, unless the exception found in s 40(3)(d)(iii) applied. As to the operation of this exception, in my view, 'purchaser' does not include a mortgagee. This is for the simple reason that under the LTA (as under the TLA) a mortgage when registered has effect as a security, and is an interest in land, but does not operate as a transfer of the land mortgaged or involve any passing of any estate or interest in land (see s 72 and s 73 of the LTA). It would therefore not be correct to describe a mortgagee as a 'purchaser ... who has lodged a transfer for registration. ' It is never envisaged that a mortgagee would lodge a transfer for registration: the registered proprietor may mortgage his or her interest by a memorandum of mortgage in an approved form but not by transfer for registration. There could never be a lodgement of 'a transfer for registration' by a mortgagee. Therefore, the exception does not come into operation, and no issue of notice arises. I merely outline these claims for completeness. First, the retirees argued that their entering into possession pursuant to an agreement to grant a lease and paying rent will give rise to a common law tenancy, citing Chan v Cresdon Pty Ltd [1989] HCA 63 ; (1989) 168 CLR 242. The retirees contended that the doctrine applied in the context of leasehold interests (see Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1981] 1 All ER 897). The retirees argued that a representation was made by MFL sufficient to raise an estoppel that the retirees would acquire an interest for life in the relevant properties. Another line of argument in certain of the retirees' cases arose because there was an option to repurchase the relevant property in the Deed of Agreement. In London and South Western Railway Co. v Gomm (1882) 20 Ch.D. 562 , at p.581 Jessel M.R. In the ordinary case of a contract for purchase there is no doubt about this, and an option for repurchase is not different in its nature. A person exercising the option has to do two things, he has to give notice of his intention to purchase, and to pay the purchase-money; but as far as the man who is liable to convey is concerned, his estate or interest is taken away from him without his consent, and the right to take it away being vested in another, the covenant giving the option must give that other an interest in the land. See also Wright v Dean [1948] Ch. 686 , at 693; In Re Button's Lease; Inman v. Button [1964] Ch. 263 , at p.271; and Commissioner of Taxes (Q. ) v. Camphin [1937] HCA 30 ; (1937) 57 C.L.R. 127 , at pp.132-4. The equitable interest so created is a contingent interest which will become an absolute interest when the contingency is fulfilled: Griffith v. Pelton [1958] Ch. 205, at p.225; Du Sautoy v. Symes [1967] Ch. 1146 , at p.1163. It was held in Morland v. Hales and Somerville (1910) 30 N.Z.L.R. 201 , that the equitable interest which passes to the grantee when an option is granted prevails over the rights of a person who, after the grant of the option but before its exercise, has contracted to purchase the land without notice of the existence of the option. It may be assumed that the principles stated in those cases apply to the case of an option to acquire an easement. However, until the option is exercised the interest which it confers remains contingent and the grantee cannot call for a conveyance or demand to exercise any of those rights to which he is contingently entitled. It arises by operation of law, under a doctrine of equity "as part of a scheme of equitable adjustment of mutual rights and obligations" ... A vendor's lien for unpaid purchase money has been said to be founded on the principle that "a person, having got the estate of another, shall not, as between them, keep it, and not pay the consideration. The interest, according to the retirees, was an ' equitable interest to which [the retirees'] occupation is incident', relying on Burke v Dawes 59 CLR 1 at 17. At the time the retirees entered into the sale contracts, or alternatively on settlement, it was contended that they acquired an equitable interest in the relevant properties by reason of an equitable lien. Specifically, they contended, the lien subsisted in respect of any unpaid portion of the purchase price after completion of a sale contract (together with default interest) as contemplated by conditions of the sale contracts. I should make some comments in relation to the argument relating to the vendor's lien. For the retirees to succeed on this point they must still rely upon the operation of s 42(2)(e) and s 40(3)(d), and be within the concept of tenants in possession as explained by the authorities. It was accepted by Perpetual that an interest as a tenant in possession includes 'every interest in the land of ... a tenant which grows out of, and is not disseverable from, his right to continue in occupation as a tenant ...': Sandhurst Mutual Permanent Investment Building Society v Gissing (1889) 15 VLR 329 at 331; Burke v Dawes 59 CLR 1 at 13 per Starke J, or 'any equitable interest to which his occupation is incident, provided that at law his occupation is referable to a tenancy of some sort ....': Burke v Dawes 59 CLR 1 at 17 per Dixon J (McTiernan J concurring). However, Perpetual submitted that the interest of an unpaid vendor does not arise out of, and is not an incident of, or referable to, any right of occupation or tenancy because a vendor's lien, like other equitable liens, is a species of equitable charge, not dependent upon possession (referring to Hewett v Court 149 CLR 639 at 645 per Gibbs CJ and at 663 per Deane J). The vendor's lien arises because the unpaid vendor has parted with the legal title by way of conveyance. It is 'created by equity as part of a scheme of equitable adjustment of mutual rights and obligations applying ... to every ordinary contract for the sale of land': Davies v Littlejohn (1923) 34 CLR 174 at 185 per Isaacs J, and as part of the broader scheme whereby the equitable interest in land passes to the purchaser upon execution of the contract of sale: Tyler, Young and Croft, Fisher & Lightwood's Law of Mortgage (2 nd Aust. ed, 2005) at [2.24]. Perpetual submitted that any vendor's lien flows from a separate document to that creating the right of occupation (alternatively, from a severable provision of the same document). The two rights are entirely severable, as each is capable of standing without the other. In each case, if the lease was terminated, the vendor's lien (if it then existed) would stand. Perpetual contended then that the right of occupation and the vendor's lien are not referable to or incident upon the other. I accept Perpetual's submissions. Most commonly, a lien arises where a vendor no longer has legal title but is owed some or all of the purchase money. Whether the vendor's lien is seen as charge or not, it remains a security. A vendor's lien does not grow out of, and is severable from, the retiree's right to continue in occupation as a tenant; it is not an interest to which the retiree's occupation as a tenant is incident. In all instances, the interest of the retiree came into existence prior to the creation and registration of the mortgage, and the interest of Perpetual was subject to the interest of each retiree as tenant in possession. Separate declarations should be made in relation to each retiree by reference to the relevant property. I propose to order that the parties confer, and thereafter on or before 4.00pm on 30 October 2008 file and serve minutes of orders sought (including as to costs), or in the event of no agreement, submissions on the orders sought, in light of the above reasons. I certify that the preceding one hundred and nine (109) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton. | torrens title whether mortgagee has indefeasible title whether applicant is 'tenant in possession' for purposes of s 42(2)(e) of transfer of land act 1958 (vic) whether applicant's interest falls within s 40(3)(d) of land titles act 1980 (tas) whether lease for life void for uncertainty of duration whether certainty of duration rule applies to periodic leases or leases for life time of creation of lease and mortgage whether applicant has equitable lease competing equitable interests application of principle that extent of equitable interest is commensurate with availability of specific performance nature of unpaid vendor's lien tenancy by estoppel "purchaser" "life estate" "vendor's lien" "feeding the estoppel" real property real property real property equity words and phrases |
It involved an application by GRD Building Pty Ltd ('GRD') to wind up Total Development Supplies Pty Ltd ('Total') on the grounds of insolvency under the provisions of the Corporations Act 2001 (Cth) ('the Act'). Shortly prior to the commencement of that hearing, the Court was informed that Mr Stephen Duncan and Mr Christopher Powell had been jointly appointed as administrators of Total, pursuant to Part 5.3A of the Act. The resolution to appoint Mr Duncan and Mr Powell as joint administrators was passed during a meeting of the sole director of Total held at 6 pm on 6 October 2008. The sole director of Total is Mr Stephen John Stirrup. In the circumstances where an administrator has been appointed to a company, s440A(2) of the Act requires the Court to adjourn the winding-up application filed by GRD if it is satisfied that it is in the interests of the company's creditors for the company to continue under administration as an alternative to proceeding with the winding-up. Mr McConnel appeared for Mr Duncan and Mr Powell. He submitted that, taking into account the short period of time that the administrators have been in office, there is sufficient evidence to satisfy the Court that the winding-up application should be adjourned for a short period of time in order to allow the administrators to continue to investigate the company's affairs. Mr McConnel has proposed the winding-up application be listed again before the expiry of the 20 day period, during which time the administrators are required to hold the second meeting of creditors pursuant to s439A of the Act, which Mr McConnel has informed me is due to be held on 30 October 2008. Mr McConnel has submitted that this course was taken by Greenwood J in Deputy Commissioner of Taxation v Q Bridge Pty Ltd [2008] FCA 1300 (' Q Bridge' ). In Q Bridge , Greenwood J was satisfied that a short adjournment of eight working days was in the interests of the creditors of Q Bridge , where that company was trading and there was some evidence to suggest that allowing the administration to continue would provide a better outcome to the creditors than proceeding with the winding-up. First, Total ceased trading on 26 September 2008 on the advice of its solicitors, as evidenced by an email of that date from Mr Stirrup to a Mr Pedro Zarimis, the contract administrator of a contract that Total had entered into in relation to aspects of the construction of a 50 apartment residential building in Darwin. Secondly, the only evidence that there may be additional funds made available through the administration as opposed to winding-up the company, is an affidavit by Mr Stirrup in which he says that his wife has sold a residential unit she owns in Darwin and that $190,000 from the proceeds of that sale can be made available to reduce the debt of the secured creditor, Bank of Western Australia Ltd, which is currently owed approximately $1.2 million. Mr Stirrup also says that he and his wife will not prove any debt that arises as a result of them paying any of the company's debts. The problem I have with this evidence is that there is no evidence from Mrs Stirrup that she agrees to the course proposed by Mr Stirrup above. I note that she is not a director of Total. In this context, it is worth noting that I have already adjourned this winding-up application for short periods on two previous occasions. On the first occasion, the purpose of the adjournment was to allow both GRD and the administrators to file materials in relation to the question: whether I should be satisfied that it was in the interests of the creditors of Total for the company to remain in administration. The second adjournment was to allow the administrators to file further materials directed to that same issue, when it emerged that Mr Stirrup's affidavit, that had been filed after the first adjournment, lacked details about the funds that he and his wife were apparently willing to make available to pay the debt due to the Bank of Western Australia Ltd. No further materials were filed. Thirdly, there is evidence before me that raises serious doubts in my mind as to whether Mr Stirrup has misled Mr Duncan, one of the joint administrators, and as to whether he may be trying to use the administration to allow him to gain access to assets of the company. If the respondent is wound up before this contract can be completed, any potential return for the respondent's creditors and members is likely to be significantly less than if the administration were allowed to proceed. It is dated 26 September 2008. Mr Day, a director of GRD, has annexed a copy of this email to his affidavit, sworn on 9 October 2008. I am confident that if Mr Duncan had been aware of the fact that Total had ceased trading and, as a result, that Total's involvement in the contract related to the 50 apartment residential building in Darwin had been terminated, he would have stated this in his affidavit of 7 October 2008. I infer from the lack of any mention of this matter in that affidavit, that Mr Duncan had not been told by Mr Stirrup that these two significant events had occurred prior to his appointment. It follows that Mr Stirrup had not told the administrators that he, as the sole director of Total resolved to appoint, that Total had ceased trading before their appointment and that Total had terminated the contract it had in relation to aspects of the 50 apartment residential building in Darwin. In Mr Day's affidavit of 9 October 2008, he also states that he had spoken to Brian Wang, who is a director of Shanghai Metal Corporation, and that Mr Wang supports a winding up of Total. Again, I am confident that if Mr Duncan knew about this claim he would have mentioned it in his affidavit, because a debt of $1.4 million, if eventually proved in those Supreme Court proceedings, would be a significant debt for the company he was appointed to administer. I infer from the absence of any mention of this significant claim in Mr Duncan's affidavit that Mr Stirrup had not told him about it. In Mr Stirrup's affidavit of 8 October 2008, he gives evidence about the stock owned by Total. I was informed in or about September 2008 by the manager of the bank, Mr Stephen Purkis, and verily believe, that the "fire sale" value of the stock is approximately $200,000. Mr Robinson is a person who was apparently interested in purchasing the stock of Total. There was a deal put to me by Steve Stirrup and Steve Purkis, in which they suggested there was more than $1 million of stock which I could buy for about $500,000 if they could prove the stock to me. They have not done so to date. In light of the evidence I have detailed above, I have serious doubts about whether Mr Stirrup has made full and frank disclosure to the administrators. I also have doubts about whether he has misled them about the true financial position of Total and about whether he may be trying to use the administration to his personal advantage and to the disadvantage of the company's creditors. For these reasons, I am not satisfied that it is in the interests of the creditors to adjourn the winding-up application, even for a short period. I do not consider there is probative and persuasive evidence that allowing the administration to continue will result in a better outcome for the company's creditors. I consider that the evidence before me is vague, speculative and, insofar as it comes directly or indirectly from Mr Stirrup, unreliable. I will therefore proceed to hear GRD's winding up application. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Reeves. | application for winding up administrators appointed after winding up application filed adjournment of winding up application under s 440a(2) of the corporations act consideration of whether the interests of creditors are properly served by adjourning the application for a limited time where the company has already ceased trading and there is evidence of misconduct by the sole director adjournment refused corporations |
2 The Act provides for prescribed classes of visas and the prescription of criteria, by regulations, for a visa or visas of a specified class (s 31 of the Act). By Regulation 2.01 of the Migration Regulations ('the Regulations') prescribed classes of visas are those set out in Schedule 1 to the Regulations. Schedule 2 to the Regulations is divided into 'Parts' which identify a number of 'Subclasses' of visa within a Schedule 1 class so set out. A 'Part' or 'Subclass' within Schedule 2 is 'relevant to' a particular class of visa set out in Schedule 1 if that Part of Schedule 2 referring to the particular Subclass is 'listed' under the item 'Subclasses' in Schedule 1 in connection with the primary 'class' of visa to which it relates. 3 In this case, Schedule 1 and Part 2 of that Schedule sets out, by class, a number of 'Temporary visas (other than bridging visas)' and one class of such a visa, set out at clause 1223A of Schedule 1, is a 'Temporary Business Entry (Class UC)' visa. Under Item 4 of clause 1223A of Schedule 1, two 'Subclasses' are 'listed' and the relevant one for present purposes is a Subclass described as 'Business (Long Stay)', being Subclass 457. 4 Schedule 2, at clause 457.21, sets out the criteria to be satisfied by an applicant for such a visa at the time of application. Clause 457.22 sets out the criteria to be satisfied at the time a decision is made on the Application. Subclause 7 of clause 457.223 addresses criteria applicable to an applicant who is an 'independent executive' and who proposes to develop in Australia a business activity that will be conducted by the applicant as a principal and will be of benefit to Australia. Subclause 7 sets out a number of criteria (a) to (f) and those criteria include criterion (d) that the applicant has net assets of not less than $AUD250,000 to conduct or establish the business or alternatively a lesser amount that the Minister considers to be adequate to conduct or establish the business. Subclause (7A) of clause 457.223, the subclause relevant in this appeal, is concerned with a person who holds a subclass 457(7) visa under the Act and who has been conducting a business as principal in Australia for at least 15 months and the Minister is satisfied of a number of things including that the applicant has net assets of not less than $AUD250,000 to conduct the business or alternatively, a lesser amount that is adequate to conduct the business. 5 In this case, the applicant as the holder of a subclass 457 visa granted on the basis that the applicant met the requirements of subclause (7) applied for a further or extension visa under subclause (7A). Clause 457.511(c) provides that a visa granted under clause 457.223(7A) entitles the holder to remain in Australia for a period of two years from the date of the grant. 6 The Minister's Delegate refused the appellant's application under clause 457.223(7A) on a number of grounds including a ground that the Delegate was not satisfied that the visa applicant had net assets of $AUD250,000 and therefore did not satisfy clause 457.223(7A)(c)(iv)(A). In the Application for Review before the Tribunal, the appellant simply asserted that the Delegate's decision was wrong. The Tribunal considered both limbs of subclause (7A)(c)(iv), namely, whether the appellant had net assets of not less than $AUD250,000 to conduct the business or, alternatively, net assets of a lesser amount adequate to conduct the business. A statement that clearly lists the net personal assets of you and your wife. A statement that clearly lists the net assts of your business and your share of those net assets. Balance sheet and profit and loss statement [prepared by chartered accountant or Certified Practising Accountant (CPA)] for the financial year 2004-05 for your business. A list of current directors for your business. Copies of your income tax statements provided to the ATO and subsequent ATO assessments since your arrival in Australia. If you have not paid income tax, please explain why no income tax was paid. An explanation of what businesses you have been involved with in Australia since your business visa was granted on 30 March 2000. An extension of time was sought by the appellant's lawyers on 12 August 2005 of 30 days on the footing that those lawyers were consulting with the appellant's accountant and were obtaining further forensic accounting evidence and the process would take time 'as it was highly technical'. On 15 August 2005, the Tribunal agreed to the requested extension. However, no further material was submitted by the appellant to the Tribunal and on 18 October 2005 the Tribunal advised the appellant's lawyers that a decision would be handed down on 4 November 2005. In so doing, the Tribunal proceeded, consistent with s 359C of the Act, to make a decision on the review without taking any further action to obtain the additional information. Since the appellant had failed to provide the foreshadowed additional information requested under s 359 with the result that the Tribunal was entitled to act under s 359C(1) of the Act, no obligation arose in the Tribunal to invite the appellant to appear before the Tribunal to give evidence and present arguments concerning the issues relating to the decision under review (s 360(1) and s 360(2) of the Act). 11 Accordingly, the Tribunal proceeded to conduct a review of the Delegate's decision on the information before it. The Tribunal noted that the appellant had not provided the Tribunal with any additional financial information since lodging the review application in April 2005 and the Tribunal further observed that there was no current financial information before it demonstrating the appellant's net assets. The visa applicant initially conducted the business of Faulkner Technologies as a sole trader and in July 2004 incorporated the business to become Faulkner Technologies Pty Ltd. Faulkner Technologies Pty Ltd is wholly owned by Faulkner Technology Holdings Pty Ltd and the visa applicant indicated he had a 42.5% ownership in Faulkner Technology Holdings Pty Ltd. Faulkner Technology Holdings Pty Ltd does not trade. Also in June 2004, Faulkner Technology Holdings Pty Ltd issued $200,000 of convertible notes and then on-lent this sum to Faulkner Technologies Pty Ltd. Documents show that the $200,000 was raised through two investors which each put in $100,000. ... In a submission dated 20 December 2004 [to the Department] the visa applicant indicated that [his] interest in Faulkner Technology Holdings Pty Ltd was conservatively valued at $1,637,000. The visa applicant obtained this figure from a 'Forensic Accountant's Report' dated 22 December 2004, which he provided to the Department. It was not in the scope of my engagement to audit, verify or provide my opinion as to the reasonableness of the financial information provided. However, I have noted various points regarding the reasonableness of the forecasts as detailed at section 7 below. Should the assumptions underline the financial forecasts, eg. sales, prove to be incorrect, then the financial forecasts are also likely to be incorrect. This would have a direct impact on my valuation. The evidence concerning the actual financial circumstances of Faulkner Technologies Pty Ltd is limited. The most recent outline of the financial circumstances of Faulkner Technologies Pty Ltd is a profit and loss statement for 1 July to 31 October 2004 and a balance sheet as of October 2004. It is unclear who prepared the profit and loss statement and the balance sheet. The accountant appears to indicate that the financial information supplied to the accountant had not been audited, verified or a reasonableness assessment performed by an external accountant. The profit and loss statement shows that in four months the business made a net profit before tax of $14,904.96. The balance sheet shows that the net assets of the business were $180,727.49 (of which $160,388.50 was indicated to be 'trade debtors'). The total liabilities were $273,137.14. The net assets were indicated to be negative ($92,410.14). The financial information appears to show that the visa applicant advanced a loan of $12,500.00 to Faulkner Technologies Pty Ltd. Nonetheless, the available financial information does not show that the visa applicant has net business assets. The 'Forensic Accountant's Report' dated 22 December 2004 has largely been based upon limited financial information and in particular four months of trading in 2004, and projections. There is no evidence that those projections have been realised. The Tribunal invited the visa applicant to provide a balance sheet and profit and loss statement, prepared by a chartered accountant or (CPA), for the financial year 2004-05 for the business. However, this evidence was not provided. The financial information provided to the Department shows that the relevant business has negative assets. The financial information provided to the Department does not show that the visa applicant has net business assets. 15 The Tribunal concluded that it could not be satisfied that the visa applicant had net assets of not less than $250,000 to conduct the business. That conclusion was dispositive of the Tribunal's consideration of whether it could be satisfied that the first limb of clause 457.233(7A)(c)(iv) was made out. It was not so satisfied. 16 The Tribunal then considered the second limb of the clause, namely (7A)(c)(iv)(B), whether it could be satisfied that the applicant had net assets of a lesser amount [than $AUD250,000] adequate to conduct the business. The Tribunal gave emphasis to these considerations. First, the evidence put to the Department demonstrated that the business had made a net profit before tax for the trading period July to October 2004 although it was not clear to the Tribunal who had prepared the financial information for that period. Secondly, the appellant had provided the report of 22 December 2004 which contained projections for the business to 2009. However, the Tribunal, although requests were made of the appellant, was not provided with any evidence to show whether the projections were being realised. The Tribunal noted that 'the current circumstances of the visa applicant's business assets are unclear'. Thirdly, the Tribunal again noted that although requests had been made of the appellant to produce income tax statements, ATO assessments and details of businesses the appellant had been involved in within Australia since the initial granting of his visa, no such information was provided. On the basis of the information available to the Tribunal, it could not be satisfied that the appellant had net assets of a lesser amount than $250,000 adequate to conduct the business. 17 The appellant says Federal Magistrate Baumann erred by failing to find jurisdictional error on the part of the Tribunal in the discharge of the review function on grounds that the Tribunal failed to appreciate and apply the proper test established in Lukac v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 1641 of whether the appellant had net assets adequate to conduct the business and instead applied a test of whether the net assets of the business demonstrated adequacy to conduct the business. Secondly, the Tribunal failed to identify the nature of the business; was distracted by the negative balance sheet of Faulkner Technologies Pty Ltd ('Technologies'); and failed to appreciate that the appellant's shareholding Technologies and Faulkner Technology Holdings Pty Ltd ('Holdings') was an asset of the appellant and ought to have been considered in applying the test of whether the appellant had net assets adequate to conduct the business. Thirdly, the Tribunal failed to consider the relevant material going to the appellant's 42.5% interest in the business of Technologies through Holdings and the relationship between the balance sheet asset values of $180,727.49 and the dominant liability of the business (Technologies) in the form of a director's loan of $212,500.00. Fourthly, as a subset of the earlier grounds, the Tribunal failed to take into account the nature of the business as a technology software business in which the intellectual property is an essential component thus suggesting that the level of net assets of the appellant adequate to conduct the business would not be high. 18 The first question is whether the Tribunal appreciated and then applied the correct legal test in both assessing the facts and reaching a decision on the facts as an applied expression of the formulated test. If the wrong test has been applied, a federal court such as the Federal Magistrates Court in the exercise of original supervisory jurisdiction conferred upon it by statutory provisions like s 476(1) of the Act, in terms of the High Court's jurisdiction under s 75(v) of the Constitution , might quash the decision as an error going to the discharge of the review jurisdiction. The exercise of the supervisory jurisdiction might result in remedial intervention if the Tribunal has exhibited failures of the kind identified in Craig v South Australia [1995] HCA 58 ; (1995) 184 CLR 163 at 179 per Brennan, Deane, Toohey, Gaudron and McHugh JJ; Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323 at 351 [82] , per McHugh, Gummow and Hayne JJ; Lobo v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 168 ; (2003) 132 FCR 93 at 106, [42] and [43] per French, Sackville and Hely JJ; R v Australian Stevedoring Industry Board Ex parte Melbourne Stevedoring Co. Pty Ltd [1953] HCA 22 ; (1953) 88 CLR 100 at 120 per Dixon CJ, Williams, Webb and Fullagar JJ; Australian Broadcasting Tribunal v Bond [1990] HCA 33 ; (1990) 170 CLR 321 at 356-357 per Mason CJ; Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21 ; (1999) 197 CLR 611 at [130] , [137] and [145] per Gummow J and [40] per Gleeson CJ; Minister for Immigration and Multicultural and Indigenous Affairs v SGLB [2004] HCA 32 ; (2004) 207 ALR 12 at 20 [37] and [38] per Gummow and Hayne JJ; Re Minister for Immigration and Multicultural Affairs Ex parte Applicant S20/2002 (2003) 198 ALR 59 at 61 [5] and [9] per Gleeson CJ and Plaintiff 157/2002 v Commonwealth of Australia [2003] HCA 2 ; (2003) 211 CLR 476 at 506 [76] per Gaudron, McHugh, Gummow, Kirby and Hayne JJ. 19 In this case, the Tribunal asked itself whether it could be satisfied that the visa applicant had net assets not less than $250,000 to conduct the business or, secondly, whether the visa applicant has a lesser amount adequate to conduct the business [17]. There is therefore no failure on the part of the Tribunal to isolate the test required by clause 457.223(7A)(c)(iv)(A) and (B) to be applied by the Tribunal in conducting the review. 20 The next step however is to determine whether in the analysis of the facts and an assessment of the process of reasoning adopted by the Tribunal, it, in fact, applied a different test or misconceived the elements of the test. The appellant says the Tribunal's discussion under the heading 'Net business assets' of the financial circumstances of Technologies; the profit and loss statement for 1 July 2004 to 31 October 2004 and the October 2004 balance sheet for Technologies led to two conclusions at [28] and [29] of the Tribunal's reasons that betray error in the test actually applied by the Tribunal. In this appeal, the only question is the application of limb (B) of subclause (7A)(c)(iv). 23 However, the following things should be noted. First, the Tribunal's discussion at [25] --- [31] of its reasons under the heading 'Net business assets' addresses, in terms, the first limb (A) and the question of whether the Tribunal could be satisfied that the appellant had net assets of not less than $250,000 to conduct the business (7A)(c)(iv)(A)). Secondly, the only information before the Tribunal going to either limb of subclause (7A)(c)(iv) as a result of the appellant either electing or failing to respond to the Tribunal's invitation to submit further information (notwithstanding an extension of time to enable accounting information said to be highly technical, to be submitted) was earlier submitted information going to the business assets as no current information was put to the Tribunal concerning the personal assets of the appellant or his wife. Thirdly, since the appellant had, through Holdings, a significant relevant interest in Technologies, an assessment of the net business assets of Technologies represented the only available proxy for an assessment of the visa applicant's net assets to conduct the business, there being no evidence of other assets to consider. Fourthly, however, in conducting that assessment the Tribunal considered the Accountant's Report (Mr John Thynne) dated 22 December 2004 which contained a valuation of the business of Technologies; a valuation of Technologies as a company; a valuation of Holdings and a valuation of the appellant's 42.5% shareholding interest in Holdings assuming both no conversion of the convertible notes to equity and a dilution of the appellant's interest in Holdings to 35.06% on the assumption of a conversion of those notes to ordinary shares. The Tribunal also considered the financial information contained in the report including the loan by the appellant to Technologies and the arrangements between Holdings and Technologies arising out of the convertible note issue. It is clear therefore that the Tribunal took into account the shares held by the appellant and the implications of the loan transactions, in reaching its conclusion in relation to the first limb of subclause (7A)(c)(iv)(A)). 24 It is clear from the reasons of the Tribunal [32] to [38] that the Tribunal also had regard to these considerations and particularly Mr Thynne's report in reaching its conclusion on the second limb that it could not be satisfied that the appellant had net assets of an amount less than $250,000 to conduct the business. 25 Mr Thynne's report dealt with these matters. 26 Mr Thynne was requested to prepare a report valuing the appellant's interest in Holdings and sought to strike a market value as between a notional willing but not anxious buyer and a notional willing but not anxious seller acting at arms-length. Mr Thynne relied upon four months of actual trading results for Technologies, financial forecasts for the years ending 30 June 2005 to 30 June 2009, a breakdown of sales to 31 October 2004 and nominated new customers of Technologies as at 30 November 2004. The report arising out of that task was prepared solely in reliance upon those documents and discussions with the appellant. Mr Thynne identified the limitations upon the scope of his work (para 3) and particular disclaimers (para 8). Mr Thynne noted that Technologies is an online knowledge management and distribution entity using software described as 'knowledge engines' which are 'web based, knowledge capture, presentation, assessment and reporting platform[s]' (Appendix 1, para 2.2). The knowledge engine is modelled to assess business processes and is programmed to interact with existing client databases. The report notes the incorporation of Technologies and Holdings in April 2004; the transfer of the business to Technologies as a wholly owned entity of Holdings in June 2004; the issue by Holdings of convertible notes to two investors, Timani Holdings Pty Ltd and Coppabella Investments Pty Ltd of $200,000 in June 2004; the conversion terms for the convertible notes to ordinary shares; and the loan by Holdings to Technologies of $200,000. The report also analyses the forecast of sales and at Appendix 2, Mr Thynne sets out the valuation methodology adopted to determine the value of the appellant's interest in Holdings. Mr Thynne elected to value the business of Technologies by applying an orthodox discounted cash flow methodology applying a discount factor recognising the type or nature of the business, the business environment, the management structure and the level of risk associated with the investment in the business. In addition, Mr Thynne elected to apply a premium in the discount rate due to reliance upon 'unproven financial forecasts' (Appendix 2, para 3.6). The application of that valuation methodology resulted in a value of $4,460,000 for the business of Technologies; a value of $4,427,500 for the company, Faulkner Technologies Pty Ltd, taking account of the loan liabilities to Holdings of $200,000 and to the appellant of $12,500; a value of $4,427,500 for Holdings and a net value for the appellant's 42.5% interest in Holdings (taking account of a further discount by reason of the appellant's minority interest) of $1,624,500; and a value of the appellant's 35.06% interest in Holdings assuming conversion of the convertible notes to ordinary shares, of $1,403,000. Having regard to the loan of $12,500 repayable to the appellant, the appellant's total interest was either $1,637,000 or, assuming conversion, $1,415,500. 27 It is clear from the Tribunal's reasoning that the Tribunal had regard to the report. It is not correct to say therefore that the Tribunal did not consider the type and nature of the business, the essential intellectual property character of the software assets or 'knowledge engines', the shareholding of the appellant in Holdings and postulated values of that interest as an asset of the appellant. The Tribunal concluded that having regard to the limitations on the scope of the report and the limited sources of information recited at Part 4 of the report, the Tribunal could not accept the valuation of $1,637,000. 28 It was open to the Tribunal to reach that conclusion. 29 In considering whether the appellant had net assets of a lesser amount than $250,000 adequate to conduct the business as described by Mr Thynne, the Tribunal necessarily had regard to the information contained in Mr Thynne's report addressing the actual trading results for the period 1 July 2004 to 31 October 2004, the postulated financial forecasts prepared by the appellant and broader projections for the period 30 June 2005 to 30 June 2009. The Tribunal noted that the appellant had failed to provide information in response to the Tribunal's invitation and therefore the 'current circumstances' of the appellant's business assets was unclear and there was 'no current evidence before the Tribunal which shows the current circumstances of the visa applicant's personal assets, if any, and whether he has any financial and logistical support from his family' [34]. The Tribunal noted that the business is conducted from the appellant's residence and that the appellant had indicated the business would employ two employees. The Tribunal noted the appellant's failure to provide copies of his income tax statements, subsequent ATO assessments and other information that the Tribunal thought would reasonably show the appellant's earnings and whether the appellant had been active in a successful business or businesses since residing in Australia. The Tribunal further noted that the appellant had provided some Business Activity Statements for Technologies which demonstrated that the company was active in 2002 and 2003. However, the Tribunal noted that those statements did not inform the Tribunal as to whether the business conducted by Technologies had been successful. 30 The Tribunal concluded that having regard to its analysis of the business assets and the financial information in relation to the activity of Technologies, Holdings and the appellant's interest in Holdings and through it, beneficially, the activities of Technologies, the Tribunal could not be satisfied that 'the visa applicant has a lesser amount that is adequate to conduct the business' and thus the Tribunal found that it could not be satisfied of the requirements of clause 457.223(7A)(c)(iv)(B). 31 In reaching that conclusion, the Tribunal had regard to not only the report of Mr Thynne generally but gave specific attention to the information contained in the balance sheet of Technologies as at October 2004 forming part of Appendix 3 to Mr Thynne's report. The balance sheet shows total current assets of $179,389.36 and taking account of fixed assets, total assets of $180,727.49. Current liabilities (including loan repayment obligations to Holdings and the appellant of $212,500), constituted $273,137.63 resulting in a deficiency in net assets of $92,410.14. 32 The appellant contends that a deficiency in net assets is not decisive of criterion (7A)(c)(iv)(B). A corporation such as Technologies may well be capable of conducting a business notwithstanding that the value of the net assets deployed in that business have a negative value. In circumstances where a visa applicant has a substantial interest (although a minority interest) in an entity owning all of the shares in the company conducting the business in question, the deficiency in the value of the assets deployed in the business is undoubtedly a necessary part of the analysis of whether the visa applicant has net assets adequate to conduct the business. In the absence of any evidence as to personal assets or net assets of the appellant and having regard to the Tribunal's rejection of Mr Thynne's valuation of the appellant's shareholding interest in Holdings, it was open to the Tribunal to conclude that the appellant did not have net assets in an amount less than $250,000 adequate to conduct the business. 33 As Spender J observed at [15] in Lukac v MIMIA (supra), 'the test is not whether, in fact, the asset position is positive or negative; the test that is relevant in the present case is whether the applicant had "net assets ... adequate to conduct the business". ' In Lukac , the applicant had provided the Tribunal with a body of financial information including tax returns for the years ending 30 June 2002 and 2003, profit and loss statements, statistics on trading performance and information concerning income receipts upon which it was open to conclude that the applicant had net assets adequate to conduct the cleaning business. In Lukac , the Tribunal purported to require the applicant to satisfy the Tribunal of 'special circumstances' that formed no part of the statutory test and thus error arose in the conduct of the review resulting in jurisdictional error. In this case, the Tribunal has examined the balance sheet asset values 'in context' in the sense that the Tribunal has considered Mr Thynne's report which analyses all of the matters previously discussed in these reasons and the Tribunal was not provided with any response from the appellant to the invitation to submit material on the six topics identified at [9] of these reasons in the Tribunal's letter of 6 July 2005. The decision in Lukac simply restates the statutory test and recognises that whether the asset values are positive or negative, the Tribunal must be satisfied (s 65 of the Act) on the information or evidence before it that the visa applicant has net assets adequate to conduct the business. In this case, the Tribunal identified the correct legal test derived from the Act, applied it to the facts as found or accepted and reached a conclusion open to it on the material. 34 The appellant says that the Tribunal failed to have regard to the loan by Holdings to Technologies of $200,000 and the loan by the appellant of $12,500 to Technologies as a significant component of the liabilities of Technologies. The appellant says that since the loans are provided by related parties and not simply obligations to external parties, the true cash position of Technologies is $200,000 more favourable than the balance sheet statistics reveal. The appellant says the true assets available to conduct the business 'would be in excess of $100,000'. The difficulty with this submission is that the Tribunal did consider the loans to Technologies and the impact of those loans in the liabilities of the company and had before it and considered the relevant information submitted by the appellant going to that factual question. The conclusions the Tribunal reached were open to it. It is not part of the function of a federal court such as the Federal Magistrates Court exercising conferred supervisory jurisdiction of review, to substitute its own view for that of the Tribunal. 35 It is clear that the Tribunal identified and applied the correct test and took into account all of the matters reflected in the report from Mr Thynne in the context of applying the identified test to the facts found or determined. Accordingly, the Tribunal has not fallen into error in the manner contended for by the appellant and Federal Magistrate Baumann has not fallen into error by failing to find error on the part of the Tribunal. In the result, the appeal must be dismissed with costs. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of whether the migration review tribunal fell into jurisdictional error in identifying and applying to the facts as found a test of whether an applicant for a visa had net assets of an amount less than $aud250,000 adequate to conduct a particular business, for the purposes of subclause 457.223(7a)(c)(iv)(b) of schedule 2 of the migration regulations made pursuant to the migration act 1958 (cth) migration |
The Respondent exceeded her jurisdiction and/or constructively failed to exercise jurisdiction. Applications in this Court in relation to a matter of this kind are governed by O 54B of the Federal Court Rules . Mr Yalniz is represented in this proceeding by Victoria Legal Aid, which apparently overlooked this circumstance in commencing the proceeding. The respondent said nothing of any failure to comply with O 54B. I disregard the deficiencies in the application and amended application that perusal of the Order discloses and treat the application and amended application filed on behalf of Mr Yalniz as having been duly made. 4 The Minister's decision is a "privative clause decision" within the meaning of s 474 of the Act. This Court cannot set it aside except for jurisdictional error: see Plaintiff S157/2002 v Commonwealth of Australia [2003] HCA 2 ; (2003) 211 CLR 476 at 506-508 and 511 per Gaudron, McHugh, Gummow, Kirby and Hayne JJ. 5 For the reasons I am about to state, I would dismiss this application. He arrived in Australia on 18 July 1984. He has been married three times and has nine children from two of these marriages. 7 On 11 November 2002, in the County Court in Melbourne, Mr Yalniz was convicted and sentenced to six years and six months imprisonment, with a non-parol period of four years on charges of rape, reckless conduct endangering life, intentionally causing injury (two counts), making a threat to kill and common law assault. 8 On 20 September 2005, Mr Yalniz was given a 'Notice of Intention to Consider Cancelling a Visa Under Subsection 501(2) of the Migration Act 1958 ', which was dated 20 September 2005. That notice specified ss 501(2) and 501 (6)(a) as containing the particular grounds on which his visa was liable to cancellation: that is, it was said that he did not pass the "character test" due to his "substantial criminal record". Mr Yalniz was also given various other documents, including a copy of s 501 , his criminal history and the sentencing remarks of the County Court trial judge (Judge Hart), and the Minister's 'Direction under section 499 --- Visa Refusal and Cancellation under Section 501 of the Migration Act 1958' ('Direction 21'). 9 Mr Yalniz was invited to respond, and was given the opportunity to provide information regarding his personal circumstances. By letter dated 18 May 2006, Victoria Legal Aid made submissions on his behalf. It also provided statutory declarations from Mr Yalniz and his uncle, as well as a report dated 5 May 2006 from a psychiatric registrar at Thomas Embling Hospital and a report dated 26 October 2005 from an occupational therapist at the Melbourne Assessment Prison. In essence, Mr Yalniz's case was that his offences took place "in the context of a relationship breakdown" and were "due to Mr Yalniz's considerable distress and agitation at the prospect of losing residence of two of his children". With regard to the best interests of Mr Yalniz's children, it was submitted that "they have the right to not be separated from their parents". Mr Yalniz declared that he loved his children and did not want to be separated from them. Amongst other things, his uncle declared that, if Mr Yalniz were sent back to Turkey, it would be "terrible" for him and his children; and that Mr Yalniz was a good father and responsible for his children. 10 On 28 July 2006, an officer of the Minister's Department contacted Victoria Legal Aid to seek further information concerning Mr Yalniz's children. Victoria Legal Aid provided a response by letter dated 1 August 2006 advising that Mr Yalniz had wanted to contact his children whilst in prison, but he had not been able to contact his former wives. It further advised that he had engaged a solicitor to commence Family Court proceedings but the solicitor had advised him that he should wait until he was no longer in prison in order to do so. Hence he had at that stage no contact with his children. 11 An officer of the Minister's Department prepared a document entitled 'Issues for Consideration of Possible Cancellation of a Visa Under s 501(2) of the Migration Act 1958' ('the Issues Paper'), for the Minister's consideration. On 29 September 2006, the Minister exercised her discretion to cancel Mr Yalniz's visa. The Minister provided a written statement of her reasons for the decision. Mr Yalniz was provided with a 'Notice of Visa Cancellation Under Subsection 501(2) of the Migration Act 1958 ' dated 17 October 2006. Section 501(7)(c) provides that a person has a substantial criminal record if "the person has been sentenced to a term of imprisonment of 12 months or more". 13 It is common ground that Mr Yalniz does not pass the character test because, for the purposes of s 501(6)(a), he has a substantial criminal record, having been sentenced to imprisonment for more than twelve months. In this circumstance, Mr Yaniz's complaint concerns the way in which the Minister exercised her discretion under s 501(2) as to whether or not she would cancel his visa. While not bound by Ministerial Direction No. 21 --- "Direction Under s. 499 Visa Refusal and Cancellation Under section 501 of the Migration Act " ("the Direction") --- following my usual practice I proceeded in accordance with this Direction. I determined whether each of the relevant considerations weighed in favour or against exercising my discretion to cancel Mr YALNIZ's visa under section 501(2). A concomitant of this was that the Minister was bound to consider the hardship they would suffer "by reason of the cancellation and/or the impact the cancellation would have on their development and the consequences for them of the applicant being forced to leave Australia, with the children staying in Australia with their respective mothers". Counsel argued, in the alternative, that the Minister was bound to consider the best interests of Mr Yalniz's children because this consideration fell within the "subject matter, scope and purpose" of s 501 of the Act. Referring to the Minister's statement of reasons, counsel for Mr Yalniz submitted that the Minister failed to consider the best interests of Mr Yalniz's children and, in so doing, associated matters (e.g., hardship and the children's development). Counsel also relied on the failure to consider "the factor of hardship" as a "freestanding obligation". In counsel's submissions, this amounted to jurisdictional error. 17 Counsel for the respondent contended that Direction 21 did not bind the Minister in the personal exercise of the discretion under s 501 and that, in choosing to apply the Direction, the Minister did not turn the considerations mentioned in Direction 21 into considerations that she was bound to take into account in making her decision. In any event, so counsel submitted, although the Minister was not bound to take into account the best interests of Mr Yalniz's children, she had in fact done so. Counsel submitted that the Minister not only had regard to the children's best interests, but also specifically concluded that the information relevant to the best interests of the children was a factor against cancelling the visa, and she gave that consideration considerable weight. For present purposes, I am prepared to assume that, if the Minister failed to have regard to the interests of his children, her decision would have been affected by jurisdictional error. This assumption may rest on any one of a number of bases: see, for example, Minister for Immigration and Multicultural and Indigenous Affairs v Lorenzo [2005] FCAFC 13 at [57] per Wilcox, Sackville and Finn JJ. The difficulty faced by the applicant is in showing that the Minister failed to have regard the best interests of the children as a primary consideration in a manner the law accepts. 19 Although not bound to apply Direction 21, being a direction under s 499(1) of the Act (see Le v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 84 ALD 17 at 28 per Jacobson and Bennett JJ), the Minister specifically stated, in her reasons for decision, that she "proceeded in accordance" with the Direction. Direction 21 relates to the application of the character test and the exercise of discretion in determining whether or not to cancel a visa. Direction 21 provides that a decision-maker should have regard to three "primary considerations", one of which is "in all cases involving a parental or other close relationship between a child or children and the person under consideration, the best interests of the child or children". I noted Ms Sowerine's statement that Mr YALNIZ has desperately wanted to contact his children and that he was advised by his solicitor that he should wait until he is released from prison before commencing proceedings in the Family Court. There is no evidence of any current Parenting Order in force imposing parental responsibilities on Mr YALNIZ for any of his nine children. I gave this consideration considerable weight. Indeed, the Minister's signature was endorsed at the conclusion of this document. In relation to the best interests of Mr Yalniz's children, the Issues Paper referred to art 3.1 of the Convention on the Rights of the Child and to par 2.16 of Direction 21, which set out factors to be taken into account when considering a child's best interests. The Issues Paper referred to the ages of Mr Yalniz's children and to the fact that there was "no indication that the children would accompany Mr Yalniz if his visa were cancelled". The Issues Paper also referred to his incarceration, his desire to see his children and his solicitor's advice. The Issues Paper emphasized Mr Yalniz's feelings for his children and referred to the submissions made by Victoria Legal Aid and the declaration made by Mr Yalniz's uncle. It is open for you to find that should Mr Yalniz's children leave Australia, they may be separated from their mothers and would face a period of readjustment as they become accustomed to a new school and attempt to establish new social networks. It is open for you to find that it would be in the best interests of the children to remain in Australia and not to experience the disruptions involved in relocating to Turkey. In the event of his removal, the children would be deprived of a continuing relationship with their father. The Issues Paper recognized the hardship that the cancellation of Mr Yalniz's visa might occasion, and referred to other matters bearing on her decision. It is clear that the Issues Paper (and the Minister) proceeded on the assumption that it was in the children's best interests to remain with their parents, as asserted in Direction 21. Further, in making her decision, the Minister specifically said that she gave primary consideration to the best interests of Mr Yalniz's children, recognizing that this consideration weighed against the cancellation of his visa. She stated that she gave considerable weight to this consideration. There is no reason to doubt the Minister's statement in this regard. 23 There was no need in this case for the Minister to go through a list of factors that might have informed her conclusion with regard to Mr Yalniz's children. Sometimes this may be appropriate but in other cases it may be sufficient, as in this case, to adopt an approach that assumes the relevant factors point to one conclusion --- that it will be in the best interests of children to remain with their parents: compare Sebastian v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 31 at [15] per Tamberlin, Kiefel and Emmett JJ; Kaur v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 70 at [20] - [22] per Nicholson, Jacobson and Lander JJ; and Re Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Palme [2003] HCA 56 ; (2003) 216 CLR 212 at 221 per Gleeson CJ, Gummow and Heydon JJ and 238 per Kirby J. The fact that she did not make a list of factors (e.g., hardship and children's development) does not in this case make good the proposition that she did not direct her mind to the matters that arose on the information before her. Having regard to what I have already stated, I think it plain enough that she discharged her obligation fully in this regard. 24 There was in this case no obligation to make further inquiries concerning the children. There was nothing to create such an obligation: compare Djalic v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 151 ; (2004) 139 FCR 292 at 314 per Tamberlin, Sackville and Stone JJ; and Taylor v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 208 at [19] per Marshall, Mansfield and Siopis JJ. Although the information about the best interests of the children was limited, it made out Mr Yalniz's case, by explaining his relationship with them and the loss they would suffer if deported. Mr Yalniz might have provided more detailed information had he wished, but he did not do so. As I have said, the Minister plainly took account of the information that she had been given. 25 There is thus no evidence that the Minister failed to regard the best interests of the children as a primary consideration. On the contrary it seems patent that she did have appropriate regard to their interests. She formed the view, however, that, although a primary consideration to which she gave considerable weight, it was outweighed by other considerations, which warranted the cancellation of Mr Yalniz's visa. 26 For the reasons stated, I would dismiss the application with costs. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | cancellation of visa on character grounds whether respondent failed to take into account best interests of applicant's children migration |
The Tribunal's decision rejected the appellant's application for a protection visa under the Migration Act 1958 (Cth). 2 The ground of appeal is that the Federal Magistrate erred in not finding that the Tribunal's decision was affected by jurisdictional error. The alleged error, it is said, is manifested in three ways which can be described compendiously in the following manner. In light both of the findings the Tribunal made and of what it was prepared to accept of the appellant's account of events, its conclusions that the appellant did not have "a well-founded fear of being persecuted for reasons of ... political opinion" indicated that it incorrectly interpreted and applied the constituent elements of that formula in the Refugees Convention as incorporated by s 36 of the Migration Act . The appellant, nonetheless, accepts that the Tribunal's initial formulation of the law relating to who is a "refugee" --- it was contained in the now almost boilerplate version given in Tribunal decisions --- is unobjectionable. 3 My own view is that to the extent that the Tribunal is alleged to have misinterpreted or misapplied the terms "well-founded fear" and "persecution", the appeal does no more than invite me to enter upon questions of fact and degree which, as is well accepted, are for the Tribunal to determine. The alleged error in interpreting or applying the terms "for reasons ... of political opinion" involves a misreading of the decision. In any event the Tribunal had a separate reason for disposing of the application and this was that State protection was available. 4 The application for leave to amend the Notice of Appeal arises in an unusual way. After both the decisions of the Tribunal (of 3 December 2003) and of the Federal Magistrate (of 13 April 2005), the appellant became aware of an article jointly authored by the Tribunal member who heard and rejected his application, in which it was argued that torture may be licit in certain circumstances. That article, jointly authored by Mirko Bagaric (the Tribunal member) and Julie Clarke, is entitled "Not Enough Official Torture in the World? The Circumstances in which Torture is Morally Justifiable" and was published in the University of San Francisco Law Review in Spring 2005 (see (2005) 39 USFL Rev 581). The new ground of appeal for which leave is sought alleges in consequence of what is said in the Article, that (a) it should be inferred that the Tribunal member did not properly interpret the protection given against persecution under the Migration Act ; and (b) there is a reasonable apprehension that the Tribunal was or may have been biased. 5 I have refused leave to amend because I am satisfied that in the particular circumstances of this matter having regard (i) to the nature of the claims made by the appellant in his application to the Tribunal and (ii) to the particular burden of the article in question, the proposed ground does not have a reasonable prospect of success. A delegate of the respondent Minister having refused to grant a protection visa, he sought review of that decision by the Tribunal. 7 The following account of his claims before the Tribunal is in précis form and is taken from the brief statement of those claims in the appellant's written submissions to this Court. 8 The appellant is a strong supporter of the Sri Lanka Freedom Party ("SLFP"). He therefore experienced discrimination, as did his family, from the rival United National Party ("UNP"). 9 The appellant became a member of the Sri Lanka Police Force and was eventually transferred to the anti-terrorist unit attached to the Criminal Investigation Department. In 1994 he became an officer in the Search Unit of the President's Security Division ("the PSD") and in 1995 was an officer in charge of the Search Unit. This involved him in daily contact with and responsibility for the security of the President of Sri Lanka. On one occasion he discovered a suicide bomb jacket in the Parliament and hand grenades close to the President's house. 10 The appellant also campaigned on behalf of the People's Alliance ("the PA") in the 1989 and 1994 elections. 11 During the 1994 election campaign he received threatening calls from his political enemies. Stones were thrown at his house and windows broken. His father was attacked and assaulted and received serious injuries to his head and hands which put him in hospital for more than a week. 12 During the 2001 election the UNP came to power. Persons involved with the UNP made threatening calls and wanted to take revenge on the appellant for an attack on UNP supporters for which they believed he was responsible. 13 In May 2002 the appellant was severely assaulted by 3 masked people who beat him with clubs close to his home and made political threats to him at the time. He reported the matter but the police not having any evidence as to identity could not do anything about the assault. Threats against the appellant continued for political reasons. 14 The appellant came under pressure from one of his superiors to make changes in the police records in order to clear the name of that superior. The appellant was reluctant to do that but was in fear of consequences the senior officer could cause him. That senior officer was arrested but is at present released on bail. 15 The appellant decided to leave the country "in order to escape from the hands of my enemies and to save my life and my family". His chief sources of fear were political opponents who were behind threats and the assaults upon his father and himself and the former superior officer in Security, though he claimed as well that he also feared the LTTE (the Liberation Tigers of Tamil Eelam) because he apprehended some of their members when working in the police force before his transfer to the PSD in 1994. These conclusions are not in issue in this appeal. 17 It was accepted that the appellant was a supporter of the SLFP and had been relatively active and quite prominent since 1983. The Tribunal also accepted "that he has experienced some level of mistreatment and harassment because of his political activities, the most serious incident being the assault in May 2002 ...". This provides me with a strong foundation for confidence that the threats are not a true indication of what may happen to the applicant. Rather they are attempts to unsettle the applicant. 19 The Tribunal concluded also that the appellant could receive "adequate protection from the police". Although RRT accepted that if the applicant returned to political activities upon returning to Bangladesh he could be harmed by members of other political parties, if that occurred, it would be in the context of acts of violence committed by members of all Bangladeshi political parties, and not as a result of persecution. The fact that all political parties are from time to time involved in armed clashes with the police and with each other, as part of the political milieu of Bangladesh, does not mean that there is persecution within the meaning of the Convention, because the violence lacks the selective or discriminatory quality which is inherent in the notion of persecution, and because it lacks the requisite 'official' quality in the sense that it is official, or officially tolerated, or uncontrollable by the authorities of Bangladesh. The grounds of that application are replicated in the grounds of appeal of this Court. 25 Accepting that a jurisdictional error can be inferred from a conclusion reached despite factual findings, this is not a matter in which such an inference can be drawn. Before indicating why this is so it is appropriate to refer to some well accepted principles that are applied when challenging on grounds of jurisdictional error determinations that a person does not satisfy the definition of a refugee for the purposes of the Migration Act. (ii) Whether threats of future harm are genuine and are sufficiently serious as to be capable of amounting to persecution (if intended to be acted upon and not merely to intimidate) are likewise questions of fact and degree for the Tribunal: VBAS v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCA 212 ; (2005) 216 ALR 307 at [20] - [28] . (iii) Where the Tribunal has correctly formulated the test to be applied, a court should not take the view that the Tribunal did not apply the correct test unless this appears clearly from what it has written: Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 271. (iv) The ultimate question for the Tribunal looks to the future and requires it to consider whether the fear of persecution upon return to the country in question is well founded: M66 of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 112 at [13] . (v) The Tribunal is not required, as an essential part of reaching its conclusion on whether a person has a well-founded fear of persecution, to characterise past acts complained of as persecution: Ratnayake v Minister for Immigration & Multicultural Affairs [1998] FCA 1141. What has happened in the past may explain a present subjective fear and be a matter to be taken into account in the predictive exercise of determining whether there is a "real chance" of persecution for a Convention reason if that person is returned: Ratnayake ; Applicant A233 of 2003 v Refugee Review Tribunal [2004] FCA 666 at [20] . It equally is the case that the Tribunal made no finding that threats could not amount to persecution. Rather, having evaluated the threats actually made, it determined that even when coupled with the past harms, these did not sustain a well-founded fear of persecution. 27 These conclusions fell well within the Tribunal's proper province. It made its judgment of the significance, seriousness and, in the case of the threats, the purpose of the conduct in question. As Sundberg J said in Das v Minister for Immigration & Multicultural Affairs (2004) 208 ALR 229 at [23]: "That the Court might not itself have taken the same view of the facts as the Tribunal does not establish error". No reviewable error has been disclosed. 28 Distinctly, the appellant claims that the Tribunal misunderstood the "official quality" that may be required in the course of persecution such as to constitute a person a refugee under the Convention. I already have indicated that the Tribunal's understanding of what was comprehended by the "official quality" requirement as expressly explained in its Reasons, was orthodox and unobjectionable. Before referring again to this matter towards the end of its reasons, the Tribunal found that despite his fears of harm at the hands of UNP supporters, the appellant could access and be provided with adequate State protection. It is in this context that its comments on "official quality" are to be considered when it indicated that the harm the appellant fears from UNP supporters did not have an official quality. 29 On a fair reading of the Tribunal's reasons, it is apparent that the Tribunal was intending to signify that such violence as occurs between members or supporters of political parties (which was the essence of the appellant's claims about the UNP supporters) did not amount to persecution, first because such violence was not official, or officially tolerated or uncontrollable by the State and secondly, because it lacked the selective or discriminatory quality which is inherent in the notion of persecution. While each of these reasons was sufficient to justify a conclusion adverse to the appellant, the latter, the State protection finding, was independently dispositive of the appellant's entire claim in the circumstances: Minister for Immigration & Multicultural & Indigenous Affairs v Respondent S152/2003 (2004) 205 ALR 487; SZBOT v Minister for Immigration & Multicultural & Indigenous Affairs [2006] FCA 411 ; Applicant VFAH v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 1018. 30 I do not consider that the reasons betray the misunderstanding alleged. 31 The ground relied upon in the Notice of Appeal is rejected. They relate to the significance to be attributed to publication in the United States in early 2005 of a law journal article jointly authored by the Tribunal member and another person which argued that, in certain circumstances, State-sanctioned torture was morally justifiable. It will be necessary to refer below to the burden of that article, a copy of which has been put in evidence for the purpose of the leave application. 33 The appellant was not aware of the existence of this article at the time of the Tribunal hearing (which pre-dated its publication) or of the Federal Magistrate's decision (which was given at about the time of publication). It is not, in consequence, a case of evidence not being called before the Federal Magistrate which was then accessible to the appellant. 34 The appellant's purpose in relying upon that article is not to enhance further the basis of his claims to refugee status. Rather it is to impugn both the Tribunal hearing itself (on grounds of apprehended bias) and the Tribunal member's understanding of the term "persecution" for the purposes of the Convention and of the Migration Act . 37 The respondent opposes leave primarily on the basis that the proposed grounds have no reasonable prospects of success. A subsidiary basis for opposition --- based on comments made in the joint judgment in Re Minister for Immigration and Multicultural Affairs; Ex parte Epeabaka [2001] HCA 23 ; (2001) 206 CLR 128 at [29] concerning the significance of lapse of time --- is to the following effect. Given the member's views were published more than a year after the decision in question, it cannot be determined what the member's views may have been at the time of decision. This latter contention is not, in my view, of particular consequence. The article was published in a law journal in a foreign country. Inevitably that process would have involved delay. It is equally clear from the structure of the article, the sources relied upon, and the nature of the debate with which it was engaging, that time was spent in its research and writing. It is improbable that its central thesis was not entertained by the Tribunal member, if only in rudimentary form, at the time when the appellant's review application was determined. There are two comments I should make about it by way of preface. The first is that the article's concern is not with torture at large (i.e. the infliction of severe pain, suffering or torment as such). Rather it is with a particular sub-species of State-sanctioned or officially authorised torture (i.e. the State-sanctioned infliction of bodily pain etc for the purpose of persuading a person to provide information to avert a grave risk of loss of life). I note in passing that the definitions of "torture" in The Oxford English Dictionary , vol XVIII, 278 (2 nd ed) reflect the above differences to the extent of recognising that torture may or may not be inflicted purposively and with State authority. 39 The second comment is that the background to the article are the contemporary prevalence of State-sanctioned torture in many countries and its use by States for interrogative purposes. 40 The following extracts are sufficient to convey the article's tone and tenor. The harm minimization rationale is used to supplement our argument. The pejorative connotation associated with torture should be abolished. A dispassionate analysis of the propriety of torture indicates that it is morally justifiable. As a community, we are willing to accept this principle. Thus, although differing in degree, torture is no different in nature from conduct that we sanction in other circumstances. It should be viewed in this light. Therefore, the debate must turn to the circumstances when torture is morally appropriate. This is the topic of this Article. Consequential moral theories claim that an act is right or wrong depending upon its capacity to maximize a particular virtue, such as happiness. Non-consequential (or deontological) theories claim that the appropriateness of an action is not contingent upon its instrumental ability to produce particular ends, but rather follows from the intrinsic features of the act. Thus, the notion of absolute (or near absolute) rights, which now dominates moral discourse, is generally thought to sit most comfortably in a non-consequentialist ethic. This section proves that torture is permissible pursuant to both of these ethical theories. It is only consequentialist theories, however, that provide a logical framework within which it is possible to demarcate the circumstances in which torture is permissible. Once we come to grips with the fact that our decisions in extreme situations will be compartmentalized to desperate predicaments, we do, and should, though perhaps somewhat begrudgingly, take the utilitarian option. In the fact of extreme situations, we are quite ready to accept that one should, or even must, sacrifice oneself or others for the good of the whole. In such circumstances, there are five variables relevant in determining whether torture is permissible and the degree of torture that is appropriate. The variables are (1) the number of lives at risk; (2) the immediacy of the harm; (3) the availability of other means to acquire the information; (4) the level of wrongdoing of the agent; and (5) the likelihood that the agent actually does possess the relevant information. Where (1), (2), (4) and (5) rate highly and (3) is low, all forms of harm may be inflicted on the agent --- even if this results in death. Thus, torture should be confined to situations where the right to life is imperiled. First, the floodgates are already open --- torture is widely used, despite the absolute legal prohibition against it. It is, in fact, arguable that it is the existence of an unrealistic absolute ban on torture that has driven torture "beneath the radar screen of accountability" and that the legalization of torture in very rare circumstances would, in fact, reduce the instances of torture because of the increased level of accountability. There is a need for measured discussion regarding the merits of torture as an information gathering device. This would result in the legal use of torture in circumstances where there are a large number of lives at risk in the immediate future and there is no other means of alleviating the threat. While none of the recent high profile cases of torture appear to satisfy these criteria, it is likely that circumstances will arise in the future where torture is legitimate and desirable. A legal framework should be established to properly accommodate these situations. That is my own view. 43 First, reasonably apprehended bias . The test of whether the Tribunal member was disqualified from hearing the appellant's application for review on this basis is not in issue between the parties. Both are content for present purposes to rely upon that of Deane J in Webb v R [1994] HCA 30 ; (1994) 181 CLR 41 at 67-68. In a case such as the present involving the significance to be attributed in the circumstances to expressed views, it is insufficient to demonstrate merely "a sense of unease or a feeling that conventions of discretion and prudence have been breached": Re Minister for Immigration & Multicultural Affairs; Ex parte Epeabaka , at [90]. What needs to be established is a reasonable suspicion that an unprejudiced mind might not be brought to the determination of the appellant's case because of "preconceptions existing independently of the case": Re JRL; Ex parte CJL [1986] HCA 39 ; (1986) 161 CLR 342 at 372 - because of prejudgment or predisposition: Ex parte Epeabaka , at [21]. I will for convenience refer to this as "issue bias". 44 It is unnecessary here to enlarge at any length upon the rationale and purpose of the rule against bias as it applies to officers and agencies of public government. I need only note that, as with some number of other rules, it serves within its province to maintain public trust and confidence in our officials and agencies by imposing a standard of official conduct aimed at securing disinterested, impartial and unprejudiced official decision-making. In so doing it imposes constraints and limitations on the freedoms and privileges of an official to which he or she would not be subject as of course as a private citizen. 45 Turning to the present matter, I do not accept that the article in question was capable of firmly establishing the reasonable apprehension contended for. As I earlier noted, its concern was limited and particular. It dealt with State-sanctioned torture for interrogative purposes with the object of averting likely loss of life. It did not advocate more generally torture in its multifarious possible forms. And while it advocated the legalizing of torture within a narrow province, it acknowledged that the infliction of torture beyond that province would continue to involve "a violation of fundamental rights". 46 The argument so put is doubtless apt to engender a hostile response. The subject of torture, understandably, touches deeply the belief system of many members of the community and, hardly for some (particularly amongst holders of protection visas), their own experience. The present case, though, is not about the acceptability or otherwise of the argument propounded. Neither is it about the issue of the general suitability of the Tribunal member to be appointed to, or to continue to discharge, the function of a Tribunal member given that despite their confined scope, his expressed views nonetheless are related to the more general subject of torture which arises regularly in Tribunal proceedings. In my view the publication was imprudent and indiscrete for a person occupying the member's position on the Tribunal. But that, as I have noted, is not enough to make out issue bias. 47 For the bias rule to avail the appellant there must be such a connection between the views expressed in the article and the issues determined by the Tribunal member in the appellant's case as to firmly establish the possibility of an operative preformed judgment in the determination of those issues. I do not consider there to be such a connection. The particular sub-species of torture with which the article was concerned was not in issue in the appellant's case. There is nothing in the article to suggest that the authors condoned the infliction of torture beyond the discrete area that they would wish to privilege. They continue to accept that torture beyond that area would involve a violation of fundamental rights. Accordingly, while expressing the views contained in the article may itself engender a sense of unease in the fair minded observer, the article is not capable in my view of satisfying the bias test. The member is not to be disqualified, absent some proper connection between the article and the issues determined by the Tribunal, simply because the burden of the article is likely to attract criticism and condemnation. The rule curtails freedom of speech, but only measuredly so for its own purposes. 48 Secondly, a different notion "of persecution" from that required by law. The appellant's contention here involves little more than a re-packaging of the issue bias submission. There is, moreover, nothing to indicate that the views of the member expressed in the article, are reflected in some demonstrable error of the Tribunal in interpreting or applying the definition of "refugee" in this matter. The article was not relevant to the interpretation and application of the definition given the case before the Tribunal. 49 Accordingly, I refuse leave to amend the Notice of Appeal. | appeal from decision of federal magistrate jurisdictional error appellant claimed fear of persecution for political activities refugee review tribunal accepted some claims of assault, property damage and threats tribunal found no fear of future harm amounting to persecution tribunal held state-protection available whether tribunal misinterpreted the terms "well-founded fear" and "persecution". leave to amend notice of appeal journal article joint authored by presiding tribunal member article published after decisions of tribunal and federal magistrate article argued that state-sanctioned torture was morally justifiable in some circumstances reasonable apprehension of bias different notion of persecution than that required by law whether new grounds of appeal had reasonable prospect of success. migration application |
The Federal Magistrate's decision was given on 16 July 2009 ( SZNOR v Minister for Immigration & Anor (No 2) [2009] FMCA 726). The notice of appeal to this Court was filed on 6 August 2009. On 8 September 2009 the Registry of this Court wrote to the appellant and the Minister's legal representative notifying them that the appeal would be heard at 9.30 am on 5 November 2009. On 2 November 2009 the solicitors for the Minister forwarded a letter by Express Post to the appellant noting that the matter was listed for hearing on 5 November 2009 at 9.30 am and stating that if the appellant did not attend the hearing, either in person or by a legal representative, the solicitors for the Minister were instructed to have the matter dismissed with costs. This letter also enclosed a copy of the outline of submissions for the Minister which were filed in the Court on 2 November 2009. When the matter was called for hearing this morning Ms Dinihan, solicitor, appeared for the Minister but there was no appearance for the appellant. Ms Dinihan informed me that yesterday she received a telephone call from the appellant indicating that he did not propose to appear today because he was ill. According to Ms Dinihan, when she asked the appellant about the nature of his illness he simply repeated that he was ill, and did not provide any further information. Ms Dinihan said she informed the appellant that unless the appellant was able to provide information explaining the nature of the illness and the reason he could attend the Court, her instructions would be to the effect that the Minister would proceed on the basis that the appeal should be dismissed by reason of the appellant's failure to appear and that the Minister would be seeking an order for costs. Ms Dinihan received no further communication from the appellant before the matter was called for hearing this morning. Insofar as the Court is concerned, I am not aware of any communication by the appellant to the Court explaining the appellant's failure to appear this morning. In these circumstances, Ms Dinihan seeks an order that the appeal be dismissed for the failure of the appellant to attend the hearing relating to the appeal, relying on s 25(2B)(bb)(ii) of the Federal Court of Australia Act 1976 (Cth). In the circumstances of this case, I am satisfied that I should make an order dismissing the appeal by reason of the appellant's failure to appear. My reasons are as follows. First, the appellant was notified of the hearing date and was made aware of the Minister's position that the matter should proceed today absent some proper explanation from the appellant as to a reason for his failure to attend. There has been no proper explanation provided by the appellant for his failure to attend the hearing. A telephone call to the Minister's representative the day before the hearing asserting illness is an insufficient reason to justify the failure to attend today. Second, and insofar as may be relevant, I have read the notice of appeal, the decision of the Federal Magistrates Court and the first respondent's outline of submissions. From that material, I am unable to discern any proper basis for the appeal. The comprehensive written submissions filed by the Minister explain why each asserted ground of appeal cannot amount to a jurisdictional error capable of vitiating the decision of the Tribunal. Accordingly, I am not able to see the merit of any of the purported grounds of appeal on which the appellant relies. In these circumstances, I consider that it is a proper exercise of discretion and in the interests of justice that I should make an order that the appeal be dismissed by reason of the appellant's failure to attend the hearing of the appeal, and I so order. The Minister seeks a fixed costs order in the amount of $2,224.00, relying on an affidavit of Ms Dinihan sworn 4 November 2009. I am satisfied that such an order is appropriate. Accordingly I order the appellant is to pay the first respondent's costs of the appeal fixed in the amount of $2,224.00. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. | appeal dismissal on the basis of non-appearance by the appellant migration |
2 At all material times Mr Fowler owned all of the issued shares in DK Consulting Pty Limited (the Company) and was its only director and employee. The Company's core business was that of supplying Mr Fowler's computer consultancy services to third parties. The Company paid Mr Fowler a salary. 3 During the period in question, the Company supplied Mr Fowler's services to three labour hire firms. Of the contracts between them and the Company, only one was in evidence before the Tribunal. However, it was not in dispute that under all of the contracts the Company charged the labour hire firms fees expressed as an hourly rate, and that the labour hire firms paid those fees to the Company. 4 The respondent (Commissioner) assessed Mr Fowler on the basis that the amounts paid to the Company were assessable income of Mr Fowler. The assessments were for the years ended 30 June 2001, 2002 and 2003. 5 Mr Fowler objected to the assessments. The Commissioner was taken under s 14ZYA of the Taxation Administration Act 1953 (Cth) to have made decisions disallowing his objections. 6 Mr Fowler applied to the Tribunal for review of the objection decisions, which were affirmed by the Tribunal on 21 September 2006: Re Fowler and Commissioner of Taxation [2006] AATA 808 ; (2006) 64 ATR 1113. 7 Mr Fowler applied in this Court for an extension of time in which to appeal against the Tribunal's decision. On 3 April 2007 that application was granted and Mr Fowler filed his notice of appeal on 12 April 2007. 8 In general terms, Mr Fowler submits that the various provisions in Pt 2 - 42 of the Income Tax Assessment Act 1997 (Cth) (the Act), under which the Commissioner treated the assessable income of Mr Fowler as including the amounts paid to the Company, are not independent provisions but are subject to constraints that are to be found by implication in Pt 1 - 3 of the Act. In particular, Mr Fowler submits that the use of the concept of derivation of income in Pt 1 - 3 signifies that it is only income of which a person becomes the beneficial owner that is assessable income, and that in the present case it was the Company, not Mr Fowler, that derived and became the beneficial owner of the amounts paid by the labour hire firms to the Company (the amounts in question). 9 The Commissioner, on the other hand, submits that the Act's special provisions dealing with alienation of personal services income had the effect of making the amounts in question part of Mr Fowler's "statutory income", and therefore part of his "assessable income", even though, according to ordinary concepts, they were income derived by the Company. 11 Part 1 - 3 is headed "Core provisions". Within that Part, s 4-1 provides that "[i]ncome tax is payable by each individual and company, and by some other entities". Division 9, starting at s 9-1, lists the entities that must pay income tax. Section 960-100 of the Act defines "entity". It suffices to say that "entity" means, inter alia , an individual such as Mr Fowler and a body corporate such as the Company. 12 Section 4-5 provides that where a provision of the Act uses the expression "you", "it applies to entities generally, unless its application is expressly limited". Note 1 to s 4-5 states that the expression "you" is in fact not used in provisions that apply only to entities that are not individuals. Accordingly, the note foreshadows that the word "you" will be found to refer to an individual either alone or with others. 13 Section 4-10(2) provides that income tax is worked out by reference to a person's "taxable income" for the "income year". Section 4-10 also provides that an "income year", generally speaking, refers to each year ending on 30 June, called the "financial year". Section 4-15 provides that "taxable income" is "assessable income" minus deductions. The present case is concerned with "assessable income". 14 Division 6 within Pt 1 - 3 is headed "Assessable income and exempt income". Section 6-5(1) provides: "Your assessable income includes income according to ordinary concepts, which is called ordinary income " . Section 6-5 also includes in subss (2) and (3) respectively, provisions covering the situations in which an entity is and is not an Australian resident. Those two subsections used the word "derived". Section 6-5(4) provides that in working out whether and when ordinary income is derived, "you are taken to have received the amount as soon as it is applied or dealt with in any way on your behalf or as you direct". 15 In the present case, the Company received the amounts in question, which were its ordinary income, so there is no issue as to whether and when the Company derived it. 16 Section 6-10(1) provides that an entity's assessable income also includes some amounts that are not ordinary income. (Footnote omitted. (Footnote omitted. 18 The word "derived" is absent from s 6-10. Mr Fowler relies on s 6-10(3) to suggest that in the present case, in order for the amounts in question to be part of his statutory income, since they were not received by him, they would have had to be applied or dealt with on his behalf or as he directed. I reject this submission below. 19 Part 1 - 4 is headed "Checklists of what is covered by concepts used in the core provisions". Only one provision within that Part need be noted, namely s 10-5. Relevantly, that section sets out in a table, as a guide, provisions of the Act that include in assessable income amounts that are not ordinary income. As will be seen below, in my opinion s 86-15 does have that effect, and did so in the case of Mr Fowler. 20 I turn now to Pt 2 - 42 of the Act which is headed "Personal services income". Section 84-1 provides a guide to Pt 2 - 42 . Division 85 limits the entitlements of individuals to deductions relating to their personal services income. Division 86 sets out the tax consequences of individuals' personal services income being diverted to other entities (often called alienation of the income). These Divisions do not affect individuals or other entities that conduct personal services businesses. Division 87 defines personal services businesses. 21 I will not need to discuss in detail the definition of a "personal services business" in Div 87, but s 87-10, which states the object of Div 87, is illuminating in this respect. That section refers to "genuine business but not situations that are merely arrangements for dealing with the personal services income of individuals" (footnote omitted). Section 87-15 sets down the circumstances in which a "personal services entity" conducts a "personal services business". Although the Company was a personal services entity (see s 86-15(2) set out below), it is common ground that it was not conducting a personal services business because the criteria of s 87-15 were not met. 22 I turn now to Divs 84 and 86. Ltd. provides computer programming services, but Ron does all the work involved in providing those services. Ron uses the clients' equipment and software to do the work. NewIT's ordinary income from providing the services is Ron's personal services income because it is a reward for his personal efforts or skills. 25 Division 86 is headed "Alienation of personal services income". Section 84-5(1) (set out above) contemplates the same possibility. 26 Section 86-10 provides that the object of Div 86 is "to ensure that individuals cannot reduce or defer their income tax (and other liabilities) by alienating their personal services income through companies, partnerships or trusts that are not conducting personal services businesses" (footnotes omitted). 28 Subsection (4) of s 86-15 has the effect that s 86-15 does not apply to the extent that the personal services entity promptly pays the amount to the individual as an employee, as salary or wages. In the present case the Company did not promptly pay the amounts in question to Mr Fowler as salary or wages. It did not pay them to him at all. 29 Section 86-30 prevents double taxation. It provides that ordinary income or statutory income of the personal services entity is neither assessable income nor exempt income of that entity, to the extent that it is personal services income included in the individual's assessable income under s 86-15. Accordingly, if, as the Commissioner contends, s 86-15 operated to include the amounts in question in Mr Fowler's assessable income, they are not assessable income of the Company. The question is, of course, whether that intended scope has manifested itself properly within the words of section 86-15 read in the context of section [sic] 84-5 and 86-30 of that Act. It is difficult to conceive of circumstances that fall more clearly within Div 86 in Pt 2-42. Mr Fowler's submission is that the provisions fail to achieve the object that the legislature intended them to achieve. 32 Mr Fowler submits, firstly, that the Tribunal erred in its unqualified acceptance of para 32 of the Commissioner's submission that there is no doctrine of law which would suggest that the taxation of income depends on ownership: see Re Fowler and Commissioner of Taxation [2006] AATA 808 ; (2006) 64 ATR 1113 at [32] . Mr Fowler elaborates on this submission by referring to the following cases in support of the proposition that income that is derived by a taxpayer beneficially is included in the taxpayer's assessable income: Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 at 424; MacFarlane v Commissioner of Taxation (1986) 13 FCR 356 at 367; Windshuttle v Commissioner of Taxation [1993] FCA 553 ; (1993) 46 FCR 235 ; 93 ATC 4992 at 5000; Zobory v Commissioner of Taxation [1995] FCA 1226 ; (1995) 64 FCR 86 at 89; Reiter v Commissioner of Taxation [2001] FCA 1068 ; (2001) 113 FCR 492 at [24] ; Service v Commissioner of Taxation [2000] FCA 188 ; (2000) 97 FCR 265 at [73] ; Case 1/2006 [2005] AATA 1251 ; 2006 ATC 101 ; ABB Australia Pty Ltd v Federal Commissioner of Taxation (2007) 162 FCR 189 at [64]. In the present case, it was the Company, not Mr Fowler, that derived and became the beneficial owner of the amounts in question. 33 Secondly, Mr Fowler submits that s 84-5(1) is to be construed as referring to income that is beneficially derived by the individual. Similarly, he submits that the opening words of s 86-15(1), "Your assessable income", refer to income derived by the individual beneficially. 34 Mr Fowler contends that the drafting of ss 84-5 and 86-15 "has fundamentally miscarried" because the drafter, like the Tribunal, has overlooked the import of the authorities, which insist that assessable income be income derived by a taxpayer beneficially --- that is to say, be income of which the taxpayer becomes the beneficial owner. Mr Fowler submits that "the defect in the drafting of sections 84-5 and 86-15 is so fundamental that it is not open to a Court to cure by, as it were creative construction" . 35 Thirdly, Mr Fowler submits that there are fundamental problems concerned with the source and timing of the derivation of the income, if the construction supported by the Commissioner and accepted by the Tribunal is correct. Mr Fowler submits that the question of timing is dealt with in s 6-10(3) and that of source in subss 6-10(4) and (5) (both set out above). In substance, he submits that these provisions cannot work if there is an automatic attribution of income of the kind that the Tribunal accepted Pt 2-42 brings about. 36 For his part, the Commissioner submits that, subject to any constitutional constraints, it is open to the legislature to tax as a person's assessable income any amounts it may choose to identify, and that it has unambiguously specified the amounts in question in the present case as included in the statutory income of Mr Fowler. The Commissioner submits that on the assumption that there was a general principle contended for by Mr Fowler, it has been overtaken by the introduction of the Act, which evinces a clear intention to include in a person's assessable income, in the circumstances identified in the Act, amounts of income that the individual did not beneficially derive. 38 The Commissioner submits that ss 84-5 and 86-15 work satisfactorily together, and, in response to Mr Fowler's submissions concerning timing and source, that there is no difficulty in these respects. 40 The terms of the Act are clear and leave no scope for a reading down of the kind for which Mr Fowler contends. 41 All of the integers of Mr Fowler's liability to tax are clear. 43 I need not discuss the extent to which, under the Income Tax Assessment Act 1936 (Cth), there was any "doctrine of law" or "interpretative presumption" that that Act brought to account as assessable income only amounts of income that the taxpayer derived as "beneficial owner". I note, however, that with the exception of Case 1/2006 [2005] AATA 1251 , which is not presently relevant, all of the authorities cited by Mr Fowler (see [32] above) relate to income according to ordinary concepts (called "ordinary income" in the Act). 44 Section 86-15 does not include in the individual's assessable income, income according to ordinary concepts that he or she derives. Income of that kind is the subject of s 6-5, noted earlier. If the amounts in question were income according to ordinary concepts derived by Mr Fowler, s 86-15 would be irrelevant to his circumstances. Part 2-42 must be construed in the light of its purpose. There is not. 46 I do not see any difficulty in the inter-relationship of ss 84-5 and 86-15. Section 84-5 had the effect that these items of the ordinary income of the Company were Mr Fowler's personal services income, because they would have been mainly a reward for his personal efforts or skills if in fact they had been his income rather than that of the Company. Subsection 86-15(1) then had the effect that Mr Fowler's assessable income included so much of the ordinary income of the Company as was Mr Fowler's personal services income, being, in fact, the whole of the amounts in question. 47 As noted earlier, within Div 6, s 6-10 had the effect that Mr Fowler's assessable income included amounts that were included in his assessable income "by provisions [of the Act] about assessable income", the latter being called statutory income. Section 10-5 correctly identifies s 86-15, dealing with "alienated personal services income", as one of those provisions about assessable income, because, as I have just held, that section is a provision that includes in an individual's assessable income certain income that is not his or her ordinary income. 48 Mr Fowler points out that, contrary to what was foreshadowed in the Explanatory Memorandum for the Bill for the Act, s 84-5(1) uses the word "income" alone and without a qualifier in two places. However, both of those instances clearly refer back to earlier uses of the word with qualifiers. 49 Mr Fowler's reliance on s 6-10(3) is misplaced. That provision applies only where receipt is a necessary element of an amount becoming statutory income of an entity. Examples are to be found in ss 15-3, 15-5, 15-10, 15-20, 15-25 and 15-30 of the Act, in all of which the word "receive" appears. However, receipt may be made such a necessary element without the use of that word or its derivatives. Section 86-15 does not require that Mr Fowler receive or derive the personal services income in question in order for that income to be included in his statutory income. Indeed, the section assumes that it will be received or derived by the alienee. Section 86-15 operates to include the amounts to which it refers in the statutory income of an individual without the necessity of his or her receiving them, and s 6-10(3) has no scope for operation. 50 I am also not persuaded to accept Mr Fowler's timing and source submissions. His submission seems to be that because there is an artificial attribution to the individual of amounts that constituted income of the personal services entity according to ordinary concepts, there is some complexity that would not otherwise exist in terms of identifying the time when the income becomes part of the individual's income and the source of the income. 51 In relation to timing, as noted above, s 6-10(3) has no application. By the operation of s 86-15(1), the individual's (Mr Fowler's in this case) personal services income becomes part of the individual's assessable income when it becomes part of the ordinary or statutory income of the personal services entity (the Company in this case). 52 Similarly, there is no difficulty as to the source of the items of statutory income in the present case. Mr Fowler was an Australian resident (see s 6-10(4)). Although it therefore does not matter, Mr Fowler's statutory income came from an Australian source, and the Company was incorporated in Australia, carried on business in Australia and supplied Mr Fowler's services to the labour hire firms within Australia. 53 Mr Fowler posed several hypothetical examples designed to show that Pt 2-42 might be thought to operate unjustly in particular sets of circumstances if the construction supported by the Commissioner were to find favour. I do not propose to say anything about them because, in my view, the statutory provisions in question clearly bear the construction that I have outlined above, and I do not find in the examples any reason to doubt the correctness of that construction. Certainly the circumstances of the present case provide a straightforward example of circumstances to which the legislature intended Pt 2-42 to apply, as Mr Fowler accepts. 54 The fact that Pt 2-42 would operate unjustly in circumstances that can be hypothesised may be a case for amendment, but it is no reason to defeat the legislative intention in the circumstances of the present case. If there has been any oversight by the drafter, it has been an oversight of the effect that the provisions might have in certain sets of circumstances, not of a fundamental principle that frustrates the drafter's intention (see [34] above). I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. | part 2 42 of the income tax assessment act 1997 (cth) "personal services income" taxpayer, a computer consultant taxpayer's services were made available to labour hire firms by a company of which taxpayer was sole shareholder, director and employee whether amounts paid by labour hire firms to taxpayer's company were made part of taxpayer's "statutory income" by pt 2 42 of act whether overriding principle that there must be derivation by an entity beneficially, so that entity becomes the beneficial owner of the income, in order for income tax to be imposed held : there is no such overriding principle to which the statutory income provisions were subject, and the act made the amounts received by the company from the labour hire firm "statutory income" and therefore "assessable income" of the taxpayer. income tax |
The plaintiff submitted that costs should follow the event. 2 The examinee submits that any decision in relation to costs should await the outcome of the examinee's application for leave to appeal to the Full Court and if leave is granted, the examinee's appeal. It was submitted that there are conflicting lines of authority as to whether solicitors acting for themselves are entitled to recover their costs. The ' Chorley exception' (from London Scottish Benefit Society v Chorley (1884) 13 QBD 872) is an exception - in the case of solicitors - to the general rule that successful litigants are not remunerated for the time spent in achieving success in the litigation. 3 On the one hand there is the view expressed by Parker J in the Full Court in Dobree v Hoffman (1996) 18 WAR 36 that the Chorley exception does not apply. On the other, a number of cases take the contrary view that there is no impediment to solicitors recovering their costs when acting for themselves. These cases follow the judgment of the High Court in Guss v Veenhuizen (No 2) [1976] HCA 57 ; (1976) 136 CLR 47. 4 Dobree 18 WAR 36 was decided 20 years after Guss v Veenhuizen [1976] HCA 57 ; 136 CLR 47. Parker J with whom Rowland and Steytler JJ agreed, pointed out in Dobree (at 45) that the High Court in Guss v Veenhuizen was concerned with a limited point. His Honour considered that 'no issue was raised for the decision of the Court whether a solicitor litigant in person is entitled to recover profit costs for his or her own time and effort'. 5 The contrary conclusion has been reached in A & D Douglas Pty Ltd v Lawyers Private Mortgages Pty Ltd [2006] FCA 690 at [10] per Dowsett J. At [9] his Honour observed that since Cachia v Hanes [1994] HCA 14 ; (1994) 179 CLR 403 , three State appellate courts had addressed the issue with varying outcomes. His Honour then went on to conclude that the law in Australia had followed Chorley 13 QBD 872 and Guss v Veenhuizen [1976] HCA 57 ; 136 CLR 47. In his mind the matter had been settled. (at [10]). 6 This year the Court of Appeal in Queensland in Worchild v Petersen [2008] QCA 26 followed A & D Douglas [2006] FCA 690 as did, last year, the Supreme Courts of New South Wales in McIlraith v Ilkin [2007] NSWSC 1052 and Victoria in Winn v Garland Hawthorn Brahe (A Firm) (No. 1) [2007] VSC 360. In particular, I would question the proposition, which underlies the Chorley exception, that as a solicitor can employ another solicitor to do the work he or she should be entitled to recover the costs of doing the work him or herself. To the contrary, there seems to me a substantial reason to do so. Where a solicitor represents a litigant, the court is entitled to expect the litigant to be impartially and independently advised by an officer of the court. Indeed, where the court concludes that a solicitor is not in a position to give impartial and independent advice to a party, because of the solicitor's own interest in the outcome, the court has restrained the solicitor from continuing to act [see, for example, Kallinicos v Hunt [2005] NSWSC 1181 ; (2006) 64 NSWLR 561]. Where a solicitor acts for himself or herself there cannot be independent and impartial advice, and this is in principle a strong reason for holding that a solicitor litigant should not be entitled to costs of acting for him or herself. 26 However, I do not believe that it is open to me to follow the Supreme Court of Western Australia, or to discard the Chorley exception. First, I have already explained that Guss v Veenhuizun has decided the question, and has not been overruled by Cachia v Hanes. Secondly, in Atlas Corporation Pty Ltd v Kalyk [2001] NSWCA 10 , the Court of Appeal held that, despite Dobree, Guss was an authoritative endorsement by the High Court of the Chorley exception, that the statements of the majority on that issue were not obiter dicta, and that it had not been overruled in Cachia, and so was binding; accordingly the court followed Guss. Thirdly, in Khera v Jones [2006] NSWCA 85 , a Court of Appeal constituted by Mason P and Ipp JA (who, it will be remembered, had given the first instance judgment in Dobree), while indicating a preference, if the matter were uncluttered by authority, for the approach adopted in Dobree, refused leave to appeal on the basis that there was little reason to think that the court would depart from its "firm and comparatively recent decision" in Atlas. For this court, the decisions of the Court of Appeal in Atlas and in Khera are conclusive. The Chorley exception is the law in New South Wales. Subsequently, in the Federal Court of Australia, Dowsett J in A & D Douglas Pty Ltd v Lawyers Private Mortgages Pty Ltd [2006] FCA 690 , has agreed (at [10]) that Guss and Cachia state the law in Australia, and that the Chorley exception applies. There has now been a longstanding rule of practice that a solicitor who is admitted to practice in a jurisdiction is entitled to an award of costs where that solicitor has acted for himself or herself as a litigant and succeeds in the litigation. See for example London Scottish Benefit Society v Chorley, Crawford and Chester, Guss v Veenhuizen (No.2). 5 On the other hand, it is well established that a litigant in person other than a solicitor is not entitled to costs including costs arising from time spent in preparing for the case. See Buckland v. Watts, Cachia v Hanes. 6 I should say that the rule which was stated by the High Court in Guss in 1976 has been seriously doubted by the High Court in Cachia v Hanes. As a result, that rule has no longer been followed by the Full Court of Western Australia: see Dobree and Ors v Hoffman. However, in Brott v Almatrah, Batt J held that he was bound by the rule and therefore held that the solicitor who represented himself in the Magistrates' Court with success should have been entitled to an order for costs. 7 The same view has been adopted by the New South Wales Court of Appeal in Atlas Corporation Pty Ltd v Kalyk. Like Batt J, I consider that I too am bound by the statement of the rule in Guss' case, notwithstanding the well justified criticisms of that rule stated by the High Court in Cachia's case. Notwithstanding this, another single judge interlocutory decision will not add a great deal to the debate. Particularly bearing in mind that the application for leave to appeal and appeal is imminent and as the Chorley exception is the only basis raised for opposing costs, I consider that it would be appropriate to reserve the question of costs of and incidental to the application for determination by the Full Court on the application for leave to appeal and if leave is granted, on the appeal. 10 I will make that order. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. | solicitor litigant chorley exception whether solicitor litigant entitled to costs of acting for himself or herself costs |
It is an application to vacate by consent the hearing of an outstanding aspect of a proceeding which has previously been heard in part ( Motor Trades Association of Australia Superannuation Fund Pty Ltd v Rickus [2007] FCA 1878 ; Motor Trades Association Superannuation Fund Pty Ltd v Rickus [2007] FCA 2117 and Motor Trades Association of Australia Superannuation Fund Pty Ltd v Rickus (No 3) [2008] FCA 1986 , 69 ACSR 264) and to fix an alternative date to hopefully suit the convenience of all counsel. The existing date fixed for hearing is 30 October 2009. That date was fixed on 14 August 2009. This Court has long prided itself on its ability to hear and resolve all matters falling within its jurisdiction in a timely and expeditious manner. Its ability to continue to do so in the New South Wales District Registry of the Court is, however, coming under an increasing constraint. That constraint arises as a direct result of the failure to appoint new Judges to replace those who have either retired or resigned. The New South Wales District Registry has had the loss of four such Judges --- His Honour Justice Wilcox, a Judge of this Court from 1984 to 2006; His Honour Justice Sackville, a Judge of this Court from 1994 to 2008; Her Honour Justice Branson, a Judge of this Court from 1994 to 2008 and His Honour Justice Tamberlin, a Judge of this Court from 1994 to 2009. The loss to this Court as a whole, and especially the New South Wales District Registry, of such eminent and distinguished jurists who have served the Court and the community for a combined judicial period of about 65 years could not in any circumstances be easily addressed. Advertisements were placed in newspapers by the Attorney-General's Department in about April 2009 inviting applications from members of the profession who wished to express an interest in appointment to this Court. Members of the profession have applied. The fate of all applications remains undetermined. The continuing and unexplained non-appointment of Judges to replace those who have retired or resigned places serious constraints upon the ability of the Court to continue to provide the just resolution of disputes in as timely a manner as it has in the past. Access to justice is not promoted by the provision of renovated court rooms without also the appointment of an adequate number of Judges to sit in them. The failure to make appointments has been the subject of observations made as recently as last Friday by His Honour Justice Lindgren at the conclusion of the hearing before His Honour in Mark Alan Whittaker & Anor v Child Support Registrar & Anor (NSD204/2008). Concurrence is expressed with the views His Honour then expressed. In the present matter it is fortuitous that a commercial dispute in another proceeding which had been set down for hearing for a period of four weeks has recently been adjourned to April 2010. A window of opportunity thus presents itself to the present parties to accommodate their wishes. But for the vacation of the other proceeding, there would have been very little ability to do so. The ability to accommodate other litigants in a like position in the future remains questionable. Within the constraints presently imposed, every effort will nevertheless be given to continue to grant such expedition as is appropriate to the hearing of every proceeding. The concerns expressed remain my own views and I make them for myself alone. The matter is set down for hearing in Sydney on 28 October 2009 at 9:30 am. The costs of the present application are reserved. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | application to vacate hearing date ability of court to accommodate the wishes of the parties practice and procedure |
It is accepted by counsel for the applicants that the stay application arises for consideration only in the event of leave to appeal being granted. 2 The application is supported by an affidavit sworn 30 May 2008 by Giacomino Fazio, who is a director of each of the applicants. 3 The substantive proceeding was commenced by the respondents ("the Trustees"), as trustees in bankruptcy of the bankrupt estates of Arthur John Andony and Joan Elizabeth Andony ("the Andonys"). Devere and Packham are the first and second respondents to those proceedings. The third respondent, Castleworld Pty Ltd, is not a party to this application. 4 The Trustees seek orders voiding certain transactions between Devere, Packham and the Andonys and vesting certain property, held by Packham and Castleworld, in the Trustees. The property comprises an undivided one-third interest in land in Dongara (the "Land") and 1,111,113 shares in Devere. 5 The Trustees allege that the transfer by the Andonys of their interest in the Land to Devere and the transfer by them of 1,111,113 shares in Devere to Packham, are each void by virtue of s 120(1) of the Bankruptcy Act 1966 (Cth) ("the Act "). The Trustees also allege, in respect of some transfers of the Andonys' shares in Devere, that these were not authorised by one or both of the Andonys. 7 The proposed appeal concerns a point of practice and procedure. There is an important distinction between the exercise of the discretion to grant leave to appeal in such a case and one which involves determining a substantive right: Décor Corporation at 400. In so finding, the Court was reflecting the warning reaffirmed by the High Court in Adam P Brown Male Fashions Pty Ltd v Phillip Morris Inc (1981) 148 CLR 170 at 177 that a tight rein should be kept on such appeals. That warning has been echoed many times by this Court. 9 It is trite that particulars constitute the details of a statement of a party's case sufficiently clear to allow the opponent a fair opportunity to meet it: Dare v Pulham [1982] HCA 70 ; (1982) 148 CLR 658 at 664. Paragraph 5 of the defence denies this allegation but then pleads that the consideration comprised the benefits accruing to the Andonys under and pursuant to what are described as the First Agreement or alternatively the November 2000 Agreement. 13 The applicant submits that it is the Trustees who bear the onus of proving each of the elements of s 120(1) of the Act which renders void, relevantly, a transfer of property where "the transferee gave consideration of less value than the market value of the property". It merely puts in issue, the applicants say, the threshold element to the Trustees' claim by asserting, in effect, that the transaction was wider than is alleged by the Trustees in para 18 of the statement of claim. In summary, the applicants' defence is that there was additional consideration, not that there was additional consideration of some particular value. Accordingly their complaint, properly understood, is directed at the order that they particularise the monetary value of each "benefit". 16 The applicants submit that the monetary value of each of the items of the consideration, and the other particulars ordered, properly understood, are not particulars of the applicants' case, because they are not particulars of the material facts that are pleaded in para 5. They also submit that it is open to the Trustees to amend their statement of claim to plead, in the alternative, that the consideration for the transfer of the Andonys' interest in the Land comprised the consideration pleaded in para 5 of the defence but which still had less value then the market value of the Andonys' interest. If the Trustees do not do this, and proceed at trial on the sole basis that the consideration was $45,000, the applicants submit that they will fail if the Court finds that additional consideration was provided irrespective of the value of that additional consideration. 17 They submit that the primary Court erred by reversing the onus of proof in respect of the elements of s 120(1). They say that trustees in bankruptcy cannot simply select part of the consideration provided for a transfer of property and then shift the onus to the transferee to prove that additional consideration was provided and that the total consideration was equal to or greater than market value; or conduct a free standing and wide ranging inquiry in relation to matters of interest to the Trustees but which are not pleaded by the applicants. 18 In my opinion, the applicants have adopted an unduly narrow view of the relevant pleadings. Paragraph [18] of the statement of claim requires to be considered in the context of the discrete claim pleaded in paragraphs [17]-[20] of the statement of claim. The effective allegation found within those paragraphs as a whole is that the consideration given was at most at a value of not more than $45,000 which was less than the market value and therefore void against the Trustees in the applicants bankruptcy by reason of s 120 of the Act . The concepts of "consideration", "value" and "market value" are essential to the statutory provision. The Trustees case is that the relevant undervalue was the difference between at least $236,606, being the minimum market value of the Andonys' undivided one-third share of the Land and $45,000 being the value of the consideration agreed to be paid. The applicants themselves plead the matter of "market value" in the context of the two alternative agreements in para 4 of the defence in answer to para 17 of the statement of claim. 19 The applicants, by para 5 of the defence, positively plead that the consideration was not merely $45,000 but also comprised the benefits accruing to the Andonys under either the First Agreement or the November 2000 Agreement. The effect of that plea, in context, is to allege that the value of the consideration was not merely $45,000 but was more than that and "comprised the benefits accruing to them under and pursuant to the First Agreement alternatively the November 2000 Agreement". In my opinion, that is the only sensible way of understanding the pleadings concerned and the issues raised by them. 20 Where, as here, the applicants have pleaded a positive case then they have an evidentiary onus in that respect. In my opinion, the positive pleading constitutes material allegations and the Court below was correct to order that particulars, in terms of those requested, be given. This includes, relevantly, particulars as to the monetary value of the benefits pleaded. This adopts a common sense approach and ensures that the core issues directed to s 120 of the Act are fully ventilated. That paragraph is the culmination of preceding paras 41-44 which concern a Deed dated 1 April 2003 which the Trustees allege constitutes an invalid transfer to Packham of Mrs Andony's interest in the shares in Devere held jointly with her husband. In any event, in my view, the Court below was correct in ordering the entirety of the particulars. 27 The applicants submit that the value of a benefit is not relevant when determining if conduct was ratified, and that what is important is the adoption or acceptance of the validity of an act done: Custom Credit Holdings Ltd v Creighton Investments Pty Ltd (Unreported NSWSC, 7 March 1985, BC8500943) at 25 per Clarke J. They also submit that a detriment that gives rise to an estoppel does not need to be valued: Hornsby Shire Council v Yifta Pty Ltd (Unreported, NSWSC, 17 March 1993, BC9301992) at 24 per Young J. 28 There can be no doubt, in my view, that the Court below was correct in ordering particulars as to what were the benefits alleged. Indeed the applicants have no difficulty with this aspect of the orders. They submit, however, that it is not, as a matter of law, necessary that the benefits be valued, or at least, not by them, as part of their case. However, ordering particulars of those values was, in effect, a way of ordering particulars of whether the alleged benefits were actually benefits. The benefits specified under para [15] above, apart from the sum of $45,000 are not self-evidently "benefits". The issue of detriment is not strictly relevant to the question of the particulars. It arises under para 10.7.2 of the defence but is said to be the same as the benefits pleaded in that paragraph. These in turn are the same benefits pleaded under paragraph 10.6 of the defence. 29 For these reasons I am of the opinion that the decision of the Court below to order the particulars which it did is not attended by sufficient doubt to warrant the grant of leave to appeal. The provision of the particulars will ensure that the case which the Trustees have to meet in respect to the applicants' defence is fully articulated. 31 The applicants' submissions, in this respect, reiterate their arguments as to why leave should have been granted. They say that they will have to prove the value of the consideration for the transfer of the Andonys' interest in the Land to Devere at possibly significant cost in obtaining expert valuation evidence. I do not consider this to be a substantial injustice. It is a matter which, should the applicants succeed in their defence on that issue, will likely be the subject of an award of costs. This would wholly indemnify them in respect to that cost. There is no suggestion that the Trustees could not meet such a costs order. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour . | application for leave to appeal orders to provide further and better particulars of defence related application for stay particulars related to positive pleading in defence evidentiary burden decision below not attended with sufficient doubt no substantial injustice would result if leave not granted, supposing the decision to be wrong application dismissed. practice and procedure |
The appeal concerns priority dates in relation to Patent Applications concerning an adjustable light reflector device, and a consideration of the issues calls for an understanding of the somewhat complicated history surrounding the applications and various amendments. On 24 May 1995 Patent Application Number 244116/95 was filed for an adjustable reflector device. It was accepted on 2 March 2000 and became Patent Application (PA) Number 716550. This application was opposed by Sunnyfield on the basis that it lacked novelty and because the application was anticipated, having regard to PA Number 64800/94 filed on 20 June 1994 by Mr Cronk. Sunnyfield also claimed that the application was not novel by reason of prior use. On 1 August 2003 it was decided to uphold the Opposition, but time was given for amendments to be filed to overcome the objections raised by Sunnyfield. On 3 September 2003 a Statement of Proposed Amendments was filed by the respondent. These Amendments were opposed by Sunnyfield but allowed, and there was no appeal. The relevant consequence of the amendments was that if the Amended Claims in relation to PA 716550 were fairly based on matters disclosed in the specification of PA 64800/94 as filed, those claims would have the earlier priority date of PA 68090/94, which was filed on 20 June 1994 and which had a priority date of 18 November 1993. In the first decision of 25 January 2007, the delegate decided that the relevant amended claims were fairly based on matter disclosed in the earlier specification and therefore had the priority date of PA 64800/94, namely 18 November 1993. The delegate held that the amendments filed on 3 September 2003 with respect to PA 716550 overcame the lack of novelty objections, and decided that that application should proceed to sealing in the absence of an appeal. However, on 15 February 2007 the present appeal was filed. The history in relation to the second decision of the delegate on 25 January 2007 is as follows. On 17 April 2000 PA 759725 was filed by Mr Cronk as a Divisional Application of PA 716550. The former application was opposed by Sunnyfield. Amendments to PA 759725 were filed on 17 February 2003, with further amendments filed on 4 March 2003. These Amendments were made prior to acceptance of PA 7569725. As a consequence of the amendments the question was raised whether the first amended claims of PA 759725 were fairly based on matter disclosed in the application PA 716550 as filed. On 25 January 2007 the delegate decided that the amended claims were fairly based on matter disclosed in and entitled to the priority date based on PA 716550 of 18 November 1993, and that therefore the invention as claimed in PA 759725 was not anticipated by the alleged prior art and was novel. The delegate also rejected Sunnyfield's submission that s 114(1) of the Patent Act 1990 ("the Act") applied so as to result in a priority date of 4 March 2003, which was the date of the amendment. This determination in relation to the amended claims is referred to as the "second decision. " Set out below is a Table provided by the applicant which summarises the relevant history of applications, amendments and proceedings. PM 2504 Filed on 18/11/93 2 PA 64800/94 AU 199464800 A1 Filed on 20/06/94 3 Patent 679737 AU 199464800 B Accepted on 10/07/97 4 PA 716550 PCT/AU/00303 (also known as Application No. If this is answered in the affirmative then the claims of PA 716550 are entitled to the priority date they would have if included in PA 64800/94. If the question is answered in the negative then the claims are conceded to be invalid for lack of novelty. In relation to PA 759725 the question is whether the claims in PA 759725 as amended on 4 March 2003 are fairly based on matter disclosed in the Specification of PA 716550 as filed . If these claims are found to have been fairly based then it is common ground that the claims of PA 759725 are entitled to a priority date based on PA 716550 as filed. In relation to s 114(1) of the Act the relevant amendments are those made to PA 759725 on 4 March 2003. Section 114(1) of the Act requires a consideration of these amendments and the complete specification before amendment, that is to say, between the claims as amended and the Specification filed on 17 April 2000. Under s 105 the Court has power to direct the amendment of the patent application to afford an opportunity to the applicant to propose amendments to overcome any objections which may be found have been made out. As a hearing de novo the evidence to be considered is that adduced by the parties during the hearing and admitted by the Court, but it is appropriate that the Court give due attention to the views expressed by the Commissioner's delegate where the issues call for the exercise of technical knowledge and experience on the part of the delegate: see EI Dupont De Nemours & Co v ICI Chemicals & Polymers Ltd [2003] FCA 291 ; (2003) 128 FCR 392 at [28] . The burden of proof rests with the opponent to satisfy the Court that the patent, if granted, would not be valid. The relevant construction principles in relation to patents are set out in Décor Corporation Pty Ltd v Dart Industries Inc (1988) 13 IPR 385 at 391. It is common ground that it is appropriate for drawings or diagrams, where they form part of a specification, to be taken into account in construing the specification and when considering the claims: see CCOM Pty Ltd v Jiejing Pty Ltd [1994] FCA 1168 ; (1994) 51 FCR 260 at 284. In that decision there is a detailed consideration of the principles relating to fair basing and the necessity for real and reasonably clear disclosure. Drawings are important in the present case because the specifications direct attention to the accompanying figures to assist with an understanding of the general disclosures made in the body of the document. A helpful discussion as to the use which may be made of drawings when considering whether there is a fair basis for claims is to be found in Leonardis v Sartas (No 1) Pty Ltd (1996) 67 FCR 126 at 137. Under the Patents Regulation 1991 ("the Regulations") r 3.12(b), the priority date of a claim in a specification is the earliest of a series of dates and where the claim is fairly based on matter disclosed in a priority document the date of filing of the priority document in which the matter was first disclosed is the applicable priority date. The expression "fair basis" as used in the Act and in the Regulations does not refer to notions of equity or fairness in the general sense but rather refers to the extent of disclosure. There are some differences pointed to by the parties in the language of s 40 of the Act and that of reg 3.12 in relation to "fair basis. " Section 40 is concerned with internal "fair basing" and calls for a consideration of matter described in the particular specification. The language of reg 3.12 on the other hand directs attention to the claim being fairly based on what is disclosed in one or more other documents. In addition, s 40(3) refers to matter described in the specification, whereas reg 3.12 refers to matter disclosed in one or priority documents, which Mr Cronk submits is less restrictive and supports the view that it is only necessary to consider whether the matter is in the specification and not so much the way it is used. In Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 58 ; (2004) 212 ALR 1 the High Court at 300 identified the correct approach when applying s 40(3) of the Act as being whether there has been "a real and reasonably clear disclosure" and importantly the Court pointed out that those words did not limit disclosures to preferred embodiments. The observations of Gummow J in Rehm point to a broader rather than a narrow approach in considering the question of real and reasonably clear disclosure. In CCOM the Full Federal Court warned against seeking to resolve the issue of fair basing by an overly meticulous verbal analysis as if the question was whether one statute operated in the same field as another and it confirmed, as well as established, that a claim may be fairly based on matter in a specification which is not a verbal description but can be disclosed by accompanying drawings as read by a skilled addressee. See also Anaesthetic Supplies Pty Ltd v Rescare Ltd (1994) 50 FCR 1 at 20; ICI Chemicals & Polymers Ltd v Lubrizol Corp [1999] FCA 1417 at [35] - [36] and Gambro Pty Ltd v Fresenius Medial Care South East Asia Pty Ltd [1999] FCA 1848 ; (1999) 48 IPR 625 at [25] - [30] . I now turn to consider the appeals. If there is no sufficient disclosure then the claims of PAS 716550 are conceded to be invalid for want of novelty. It is therefore first necessary to consider PA 64800/94 to ascertain what is disclosed, taking into account the evidence adduced before the Court by the parties and by their expert witnesses in particular. PA 64800/94 gives the Invention Title as "Adjustable Reflector. " The invention is stated to relate to improvements and devices for reflecting light emitted by artificial sources. It is pointed out that previous reflector devices associated with artificial illumination of industrial spaces have all required a fixed shape or lamp mounting position or a fixed mounting position which is precisely specified to create optimal light distribution for a particular purpose. For example, a "Chinaman's hat" reflector might commonly be used in situations where a wide uniform spread of light is required, and in such a case the spread of light is largely dependent on the fixed internal angle of the cone shaped "Chinaman's hat" reflector and the uniformity of the light emitted is largely dependent on the non-adjustable lamp position with the reflector. There is a disadvantage in that such small rigid non-adjustable designs limit efficient use to a small range of applications. The said sheet members join together so that one edge and associated skirt of one sheet member fits neatly inside the corresponding skirt and edge of the other, forming a substantially orthogonal alignment between sheets. The sheets are then fixed together and flexed back against the newly created reinforced central spine to achieve a double parabolic shape that is secured at each end by attaching lengthwise adjustable retainers, which in a preferred form of the invention, comprise links of chain that hook to the said skin. This form of the invention is silent as to any need for orthogonal alignment or skirts but emphasises the need for a double parabolic shape. The retainers used to secure this skin in a double parabolic shape may comprise chain, wire or any like means, optimally adjustable in length. To assist with understanding the invention reference is made to accompanying drawings Figures 1, 2 and 3, which are expressed to show one example of the invention. Throughout the specification the term "double parabolic" is defined and used to describe the shape of the device when it is in its flexed position and retained against the bias of its normal resilience as for example shown in Fig 1 of the drawings. The specification states that when considering this definition it should be appreciated that any size, shape or width of double parabolic shape should be considered to fall with in the scope of this definition. Figure 2 is stated to show a disassembled view of the skin of the reflector device depicting the substantially orthogonal protruding skirts present on sheet members, and Figure 3 is said to show an assembled view of the skin prior to flexing, again depicting a substantially orthogonal alignment. The first question is whether the matters disclosed in PA 64800/94 limited to a device which has substantially orthogonally projecting skirts, or where there is a substantially orthogonal alignment between sheets. Those requirements, as the specification makes clear, are directed to only one form of the invention and Figures 2 and 3 relate only to one example of the invention. In my view, the disclosure is not confined by concepts of substantially orthogonal alignments or positions. There is a broader reasonably clear disclosure in the specification of an adjustable reflector device comprising single or multiple sheets of resilient reflective skin that can be flexed back against a central or common spine to create what is described as an essential feature, namely the flexing back against a spine to create an "adjustable double parabolic shape. " There are numerous references to the double parabolic shape in the body of the application. This reference to double parabolic shape is used to describe the shape of the reflector when flexed and retained against the bias of its normal resilience, and this is shown in Figure 1. The specification states that the adjustments are designed to achieve many and varied desirable conditions of artificial illumination so that the need to employ more than one reflective device to service a range of discrete tasks may be reduced. This indicates that the reflector is designed to operate over a wide range of illumination requirements and points to a broader disclosure of a range of parabolic shapes. The definition of "flexible double parabolic shape" is a description of the shape of the device when it is in its flexed position and is retained against the bias of its normal resilience. Sheets of any size or shape are specifically stated to be the scope of the definition. So the angle between sheet members for example in their unflexed state is not critical, but it is necessary that, on flexing, the sheet members should achieve a shape falling within the definition of double parabolic. Dr Watson agreed that this result would be achieved where the pair of sheets were disposed at an angle falling within a large range, from acute to obtuse, and that the size, shape or width of the curved shape would vary depending on the angle between the sheets in their unbiased state, provided that each shape would be a double parabolic one. The reference to "predefined shape" is a reference to the position before flexing and achieving the required shape, and not the earlier reference to the one form of the invention which refers to substantially orthogonal. The resultant shape shown in Fig 1 after flexing and retaining the sheets said to be joined at a substantially orthogonal angle is only one form. Reference to predefined shape is not limited to particular shape or embodiment. Having regard to these considerations I do not accept that PA 64800/94 requires the substantially orthogonal alignment. Accordingly, on its proper construction I do not consider that PA 64800/94 is confined by the concept of "substantially orthogonal. " Accordingly, I do not accept the submission that PA 64800/94 requires that in all forms of the invention the sheet members should have substantially orthogonally protruding skirts or that there should be a substantially orthogonal alignment between sheets. The requirement of the orthogonal positioning is not a limiting consideration. In considering the disclosure of PA 64800/94 it is necessary to take into account the evidence of Mr Rogers, who was called by Sunnyfield, and that of Dr Watson, who was the skilled addresses witness for Mr Cronk. In summary, the evidence of Mr Rogers was given on the basis that the "substantially orthogonal" requirement was a limiting factor on the disclosure, and that the references to "substantially orthogonal" must be understood as a reference to "90 degrees within normal engineering tolerances as best as can be produced in the production process. " He considered that the expression "substantially orthogonal" would encompass angles which are within a few degrees only of ninety degrees, from around say 88 degrees to 92 degrees. He said that there was no evidence that the expression "orthogonal" or "substantially' carried any specialised meaning in the lighting industry at the relevant dates and that therefore those words were to be given their ordinary meaning in that "substantially" means according to the Australian Concise Oxford Dictionary having substance and something which includes "the real essence or meaning of a thing. " There is no dispute that "orthogonal" in ordinary usage means at a right angle. On the evidence of Mr Rogers the proper construction of substantially orthogonal, consistent with the ordinary English meaning, is that it meant essentially 90 degrees, subject to manufacturing tolerances. Dr Watson's view was that an angle may be "substantially orthogonal" when it is, for example, at a 30 percent variation from 90 degrees. Dr Watson expressed the generalised view that large variations and tolerances in the lighting industry were not unusual. However, the applicant submits that this explanation should be rejected as having no specific relevance when considering the connection required between two physical members. The evidence disclosed that Dr Watson's view as to the meaning of the words "substantially orthogonal" was formed on the basis of his interpretation of the Figures in the Specification. These figures, in his opinion, depicted 120 degree angles, which would mean substantial variances from the dictionary meaning of "orthogonal" to the extent of between 60 degrees to 120 degrees. There was no evidence that the figures contained any definition of the term. In relation to the three Figures, it is submitted for Mr Cronk and I accept that Figures 2 and 3 are not accurate or dimensional and were not intended to denote specific angle drawings, but were general references to show where positions were located, and further that they could not portray the correct angle of the skirts because there was no indication of the view from which the Figures were drawn. This is in keeping with the view of Aldous J in Vax Appliances Limited v Hoover plc [1991] FSR 307 at 313, where his Honour stated that "patent drawings are not designed to be used to denote precise measurements unless so stated. They are there to illustrate the concept and the overall relationship of the parts. " Mr Rogers gave evidence of a view of a rectangular sheet with orthogonal skirts. Dr Watson would not accept the assumption that the skirts shown to him were orthogonal. He also considered that Figure 3 was not an accurate representation of any angle since the view from which it is made was not stated. Dr Watson considered that an angle of 90 degrees could appear to the eye to be greater than 90 degrees depending on the angle of inclination. The applicant submits that the Figures in the drawings were not intended to be accurate as to detail and were expressly drawn as in effect general indicators to illustrate a general arrangement of the parts and could not be used to measure or expand the expression "substantially orthogonal. " There was no dispute between the parties that each of the two expert witnesses qualified as "skilled addressees. " On the specific question of the meaning to be given to the expression "substantially orthogonal" in PA 68400/94 I prefer the evidence of Mr Rogers to that of Dr Watson. On the plain ordinary meaning of the words "substantially orthogonal" the language is simply not wide enough to encompass a thirty percent variation. Nor do I consider that the proffered explanation by Dr Watson that there are large measurement variations tolerated in the lighting industry provides any satisfactory explanation when determining the connection of two physical members. Moreover, the understanding of Dr Watson as to the meaning of "substantially orthogonal" was taken from preconceived ideas based on his view of the Figures in the Specification, which to his eye depicted 120 degree angles. I do not accept that these drawings were intended to be accurate as to angles but were included to illustrate simply all features of one embodiment of the arrangement. They are not engineering drawings and they are not dimensional. In addition, Dr Watson admitted under cross-examination that, before receiving the letter requesting expert advice, he had a conference with representatives and was shown patent documents and the particular figures. Also, I consider that his refusal to accept the assumption that the skirts were orthogonal, when in fact they were shown by a set square to be so, demonstrated a predetermined approach to the specification. For the above reasons, I do not consider that the requirement of orthogonal alignment is a limiting consideration on the specification. The use of the expression "substantially orthogonal" in the specification is merely one possible form of the invention, and does not confine the specification in any way. The draftsman of the specification has intentionally refrained from making the "substantially orthogonal" requirement an essential element of the specification. It is not limited to any particular shape or embodiment. In Flexible Steel Lacing Co v Beltrecco Ltd [2000] FCA 890 at 130, Hely J observed that where drawings or figures are given as examples of an invention, this would suggest that "the drawings may only show one embodiment, alternative embodiments being available. " Similarly, the High Court in Lockwood (at [93]) referred to the many examples of cases "in which courts have refused to construe the specification as disclosing an invention limited to the preferred embodiment because of statements that it is not so limited. " See also Clorox Australia Pty Ltd v International Consolidated Business Pty Ltd [2006] FCA 261 at 47; PhotoCure ASA v Queen's University at Kingston [2005] FCA 344 at 139; and Gambro Pty Ltd v Fresenius Medical Care Australia Pty Ltd [ 2004] FCA 323 at 128. However, if I am wrong in this conclusion I do not consider the expression "substantially orthogonal" sufficiently broad to encompass a significant departure from the requirement that there should be a right angle alignment. I do not accept the submission on behalf of Mr Cronk that the Specification can be interpreted by examining the figures in such a way as to show that the requirements as to "substantially orthogonal" would be read by a skilled addressee to allow anything other than a relatively small departure from a 90 degree right angle relationship. In particular, I do not consider that the relevant Figures in the Specifications can be construed to contradict or substantially modify the clear, simple and unambiguous expression "substantially orthogonal. Claim 1 of PA 716550 as Amended is for a lamp reflector with adjustable curvature in which unflexed sheet members are transverse to each other but are adapted to be flexed from an unflexed position to a fully flexed position. It is common ground that the expression "transverse to" means "cross wise" or "running" or "lying across" and that it does not mandate any particular angle or intersection. Sunnyfield submits that because the expression "transverse to each other" is broader than "substantially orthogonal" therefore this claim is not fairly based on the matter described or disclosed in the grandparent as filed. In construing the expression "transverse to each other" as used in the context of the specification of the amended Claim considered as a whole the expression means that in the unflexed state the reflective surfaces of the "pair of resilient sheet members" lie across each other in such a way that they are adapted to be flexed from the unflexed position to a fully flexed position. There is no necessity for the relationship to be substantially orthogonal. PA 68400/94 makes it clear that the invention is not confined to a reflector where the sheet members in the unflexed state are aligned at any particular angle (see the reference at [39] above. ) In cross-examination (T 82) Dr Watson agreed that a range of different lighting effects could be achieved if the angle of the predetermined shape were varied, and that the angle at which the arrangement commences would determine the nature of the particular shape and hence would produce varied lighting effects. Having regard to the above matters I consider that there is a substantial disclosure of material which could fairly, reasonably and clearly provide a basis for the claims in PA 716550 as amended. PA 759725 as filed is entitled "A Shielding Device" and the background of the invention is that it is said to relate to improvements in devices for reflecting light emitted by artificial sources. Sunnyfield first submits that, having regard to the fact that the applications is for a "shielding device," there is no fair and reasonable disclosure in relation to the "Luminaire" reflector, which is the device the subject of the amended application. The independent claims in the amended PA 759725 are confined to a reflector, described in PA 759725 as filed, as being prior art. The invention disclosed in Claim PA 759725 as filed is said to be expressly confined to the "heat shield" that was described to have a function totally separate from that of the reflector device. In my view, notwithstanding that the title of the application as filed related to a "shielding device" it was capable of providing sufficient disclosure, and it contained matter which was sufficient to constitute a substantial disclosure of the "Luminaire" reflector device claimed in the amendment. The description and numerous references to the adjustable reflector device used in conjunction with the shielding device, when considered in the light of Figures 3, 4 and 5, is a sufficient disclosure for the claim made in relation to the reflector device in the amended claim. Extensive references are made in the body of the application as filed to the reflector device, the non-limiting nature of the Figures, and the flexing required to create a double parabolic shape. This disclosure cannot be said to be in any way "loose or stray" remarks. Accordingly, the amendment did not claim matter that was not in substance disclosed in the application as filed, so that s 114 of the Act has no application. Next, Sunnyfield submits that the claims of amended PA 759725 are not fairly based on PA 716550 as filed because the Independent claim 1 in First Amended PA 759725 refers to a luminaire having a reflector device comprising a pair of resilient sheets positioned one to either side of a spine in the manner of the pages of a book so that the sheets, when in a unbiased condition, lie substantially in two planes intersecting at an obtuse angle. Sunnyfield submit that these expressions travel beyond the requirements that there be a substantially orthogonal alignment. They also rely on Claim 22 which refers to a pair of sheets positioned one to each side of spine in the manner of the pages of a book so that the sheets, when in an unbiased condition lying substantially in two planes, intersect at an obtuse angle . There is no dispute that the term "obtuse" means an angle greater than 90 degrees and it is common ground that the reference to "in the manner of the pages of a book" is not a term which has any specialised meaning to a person skilled in the art. Mr Roger's evidence was that the term meant that the reflector sheets were separated by "an angle. " Sunnyfield submits that it is necessary to have the sheets of resilient reflective skin disposed at an angle substantially orthogonal to each other so as to create a double or parabolic shape. Sunnyfield refers to the references in PA 716550 to an angle substantially orthogonal. In my view, for the reasons given earlier I do not consider that there is any limitation that the sheets should be disposed at an angle "substantially orthogonal," and that provided essential features are met so that the parabolic shape is formed the angle of the sheets flexing is not essential, and there is therefore a real and reasonably clear disclosure. Accordingly I reject the submissions of Sunnyfield on this point. In its Particulars of Opposition Sunnyfield alleges that the invention claimed in PA 716550 as filed limited the reflector to being adjustable whereas the invention claimed in PA 759725 extended to luminaires which were not adjustable, and that therefore Claim 1 in the latter application was not disclosed and therefore was not entitled to an earlier priority date under s 79B. The question is raised whether there was a real and reasonably clear disclosure of the invention as claimed. When the earlier application refers to an adjustable reflector device it is drawing a distinction between devices such as a "Chinaman's hat" reflector and the reflector device which is the invention with a resilient reflective skin which can be flexed to form a double parabolic shape. In one preferred form there is provision for a retaining chain or wire which is optionally adjustable and in another form the lighting means is adapted to be attached when in the retained position by an optionally adjustable attachment means. It is, however, not an essential feature of the invention that the fastening device is adjustable. It is the ability of the sheet members to be flexed and retained against their normal resiliency which makes the reflector adjustable. As Mr Rogers agreed, what is essential is that the reflector device is made of suitable material to enable it to be flexed back against a spine or crease to create an adjustable double arch configuration and this is what is meant by the expression that the adjustability of the reflector is effected by the fact that the sheets are resilient members. Claim 1 of the Luminaire application claims a reflector device comprising resilient sheets capable of being flexed and retained to create the required configuration. Accordingly, the invention as claimed does not travel beyond the disclosure made in the Application for the reflector device application as filed. I certify that the preceding sixty-five (65) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. | patents appeal from a determination of the commissioner of patents what constitutes 'fair basing' for the purpose of determining priority dates whether the claims are invalid for lack of novelty interpretation of patent applications the use that may be made of accompanying drawings when interpreting a patent the meaning of 'substantially orthogonal'- whether the inclusion of a particular embodiment or preferred form of an invention in a patent acts as a limiting consideration to confine the specification, or whether alternative embodiments are available divisional application prior to the grant of a patent what amendments of a specification are allowable under the patent act 1900 whether sufficient disclosure has been provided intellectual property |
The application together with a supporting affidavit of the applicant was filed on 15 December 2006. The affidavit, however, does not exhibit a notice of appeal setting out the grounds of appeal thus identifying the applicant's contentions as to an arguable error in the judgment appealed from. 2 On 7 December 2006, her Honour Collier J made orders that proceedings QUD130 of 2006 commenced by application filed on 7 April 2006 by the applicant be dismissed and that the applicant pay the costs of and incidental to the proceedings to be taxed if not agreed ( Rogers v Asset Loan Co Pty Ltd [2006] FCA 1708). Those orders were made consequent upon an application by the respondents by notice of motion that the applicant's proceedings be dismissed or alternatively that the proceedings be permanently stayed. 3 In support of the application for an extension of time to file and serve a notice of appeal, the applicant deposes to these matters. On 7 December 2006, Collier J published judgment at 4.30pm. The parties were present by telephone. The reasons for judgment were posted to the parties and the applicant received the reasons on Monday, 11 December 2006. On 11 December 2006, her Honour amended the reasons for judgment and the amended reasons were posted to the applicant on or about 12 December 2006. The applicant says he 'discovered' the new material in his post office box on 14 December 2006. The applicant says that his statement of claim in the principal proceeding is 67 pages, her Honour's judgment is 37 pages, the judgment of her Honour is a 'final judgment' and thus he has 21 days from publication of the judgment to file a notice of appeal. 4 The applicant further says that alternatively, her Honour's judgment may be an 'interlocutory judgment' in which event, he says, he has 'seven days to file a notice of appeal'. The applicant contends that because the judgment was first published at 4.30pm on the relevant day; the reasons were posted to the applicant thus deferring access to the reasons; the reasons are lengthy and receipt of the reasons on 14 December 2006 on the cusp of the Christmas/New Year holiday period made it impossible for the applicant to prepare a notice of appeal and supporting documents within either 7 days or 21 days from the date of publication of the judgment, a discretion ought to be exercised to extend time to enable the applicant to formulate a notice of appeal precisely identifying the proposed grounds of appeal. In the interests of fairness, having regard to the length of the judgment and the holiday period at this time of year I have applied for an extension of time to file a notice of appeal. I seek an order that time be extended to 22 January 2007. An extension of time to 22 January 2007 will obviate the need for arguments as to whether I am entitled to 7 days or 21 days to appeal from the orders of her Honour. It is ordinarily necessary to attach a proposed Notice of Appeal for an application for an extension of time. In this case, I am applying before the expiration of the appeal period so that I can seek advice, prepare and then file a final version of my Notice of Appeal. There is no proposed Notice of Appeal available because it does not yet exist. The applicant further says that he will need to gain access to some material in the possession of the Queensland Police Service as part of his appeal preparation and that having regard to the complexity of the issues, the applicant seeks an extension of time to file and serve a notice of appeal. 7 The applicant is unrepresented. 8 Accordingly, in formulating these reasons, I principally address the applicant in setting out the principles governing the determination of the application although, of course, the reasons are addressed to all parties. 9 By s 24(1) of the Federal Court of Australia Act 1976 (Cth) ('the Act') the court has jurisdiction to hear and determine appeals from judgments of the court constituted by a single judge. By s 24(1A) an appeal shall not be brought from a judgment that is an interlocutory judgment unless the court or a judge gives leave to appeal. Section 25 of the Act sets out the manner of exercise of the appellate jurisdiction of the court. Section 25(2) provides that applications for leave to appeal to the court or for an extension of time within which to institute an appeal to the court may be heard and determined by a single judge or by a Full Court. 10 Order 52, rule 10 of the Federal Court Rules provides that an application for leave to appeal from an interlocutory judgment may be made by notice of motion, relevantly in this case, within seven days after the date on which the interlocutory judgment was pronounced or within such further time as the court or a judge may allow. 11 Order 52, rule 15(1) of the Federal Court Rules provides for the timeframe within which a notice of appeal must be filed and served (compliance with both of which constitutes properly instituting an appeal). 12 Alternatively, the notice of appeal is to be filed and served within such further time as the court allows, upon application made by notice of motion filed within the period of 21 days mentioned previously. Notwithstanding the time periods contemplated by Order 52, rule 15(1) , Order 52, rule 15(2) provides that the court or a judge for special reasons may at any time give leave to file and serve a notice of appeal. An application made under Order 52, rule 15(2) is to be in accordance with Form 54A which contemplates that an applicant will seek not just leave to appeal but an extension of time to file and serve the notice of appeal. Such an application is to be supported by an affidavit which is to set out the relevant facts informing the exercise of the discretion conferred upon the court and, most particularly, the proposed grounds of appeal should leave be given. 13 Because Mr Rogers has failed to formulate a proposed notice of appeal and exhibit the document to his affidavit or depose in the body of the affidavit to the proposed grounds of appeal, it is impossible to identify from the papers the contended arguable error on the part of her Honour. Mr Rogers did not seek an adjournment of the application and sought to have the application determined on the return date supported by oral submissions as to the contended arguable error and thus the proposed grounds of appeal. 14 The essential contentions of the respondents before Collier J (who were then the applicants on the motion) were these. Firstly, that Mr Rogers has no standing to maintain the claims to be drawn from the statement of claim because none of those claims falls within the exemption contained in s 116(2)(g) of the Bankruptcy Act 1966 (Cth) as a claim properly characterised as any right of the bankrupt to recover damages or compensation for personal injury or wrong done to the bankrupt, the spouse of the bankrupt or a member of the family of the bankrupt. Secondly, that to the extent Mr Rogers relies upon conduct in contravention of s 60 of the Trade Practices Act 1974 (Cth) ('the TPA') as the source of the legal right giving rise to a claim for damages or compensation for personal injury or a wrong done to Mr Rogers, serious doubt surrounds whether s 60 can properly ground such a claim. Thirdly, the statement of claim formulated by Mr Rogers comprehensively fails to plead material facts demonstrating conduct on the part of the respondents within the scope of s 60 of the TPA giving rise to particularised personal injury in Mr Rogers in any particularised quantum notwithstanding a general claim for damages of $45 million. Mr Rogers also relied upon contraventions of s 52 and s 51AA of the TPA as the source of an exempted right for the purposes of s 116(2)(g) of the Bankruptcy Act . 15 Her Honour comprehensively addressed each of the claims formulated by Mr Rogers within the statement of claim which contains an introduction to all of the respondents, a description of a sequence of property transactions affecting Mr Rogers and in respect of which one or more of the respondents were participants, 29 specific claims or 'counts' said to be within the scope of s 116(2)(g) , a 'special pleading' identifying facts said to be particularly relevant to the grant of relief pursuant to s 87(1D) of the TPA, a claim for $45 million for 'personal injury, harm or wrongs' and 32 contentions at paragraph 706 of the statement of claim said to demonstrate 'special aggravating circumstances'. 16 Having examined all of these matters, her Honour concluded that the statement of claim wholly fails to plead material facts demonstrating relevant conduct on the part of the respondents, the attraction and enlivening of ss 52 , 51AA and 60 of the TPA, a contravention of any of those sections or other tortious conduct on the part of the respondents, damage or injury arising out of the contended contravening conduct, the scope and character of the personal injury or wrong alleged to fall within the exemption and proper particulars of the quantum of the damage. However, it is difficult to sort through what is essentially a written tirade by the applicant accompanied by extensive repetition and a large volume of irrelevant information, to find anything of substance or relevance which the court can properly consider. Moreover, her Honour concluded that the defective parts of the pleading are so inextricably intertwined with offending material, an oppressive burden is necessarily cast upon the respondents in identifying the causes of action to which they must respond. Because of these difficulties, her Honour took the view that the statement of claim ought to be struck out in its entirety and in so finding, her Honour relied upon Australian Competition and Consumer Commission v Fox Symes & Associates Pty Ltd [2005] FCA 1071 per Lander J and Trade Practices Commission v Australian Iron and Steel Pty Limited (1989) 22 FCR 305 per Lockhart J. 19 Her Honour then considered the question of whether leave ought to be given to deliver a further amended statement of claim. In considering that matter, her Honour had regard to the previous attempts on the part of Mr Rogers to formulate a claim properly falling within the scope of s 116(2)(g) of the Bankruptcy Act . The particular matters of relevance were these. Mr Rogers previously sought various orders against the present respondents including interlocutory relief restraining the respondents from exercising a power of sale and relief in respect of a number of loan agreements, deeds of settlement, mortgages and other instruments relating to various properties ( Rogers v Asset Loan Co Pty Ltd & Ors [2006] FCA 434 ; particularly note paragraphs [8] to [27] of the reasons). In that decision, the court determined that the majority of the claims made by Mr Rogers for final relief involved claims relating to the legal or beneficial interests of Mr Rogers in property which vested in his trustee in bankruptcy and accordingly, the applicant had no standing to institute proceedings for relief in respect of those matters ([2006] FCA 434 at [35]). However, Mr Rogers also contended that he sought to assert a claim for final relief arising out of conduct on the part of the respondents which, properly formulated, fell within the exemption contemplated by s 116(2)(g) of the Bankruptcy Act . Although the majority of the claims made by Mr Rogers were dismissed, the court made it clear ( Rogers v Asset Loan Co [48]), that the task confronting Mr Rogers was to formulate a statement of claim which in terms of its material facts, properly identified a claim to recover damages or compensation for personal injury or wrong done to the bankrupt arising out of conduct in contravention of the relevant provisions of the TPA upon which Mr Rogers relies. 20 Accordingly, the applicant filed and served a statement of claim on 15 June 2006. An amended statement of claim was filed on 19 June 2006. In the context of the application by the respondents before Collier J, the respondents consented to an adjournment of their application in order to allow Mr Rogers an opportunity to re-plead the amended statement of claim. The application was then adjourned until 4 August 2006 and Mr Rogers was given leave to file and serve a further amended statement of claim by 21 July 2006. Mr Rogers filed a further amended statement of claim on 10 July 2006 and a further further amended statement of claim on 20 July 2006 although the further further amended statement of claim of 20 July 2006 apparently was not served on the respondents until the resumption of the application before Collier J. 21 Having regard to this chronology, her Honour concluded that this is a case where the applicant so misconceives the cause of action open to him and in respect of which relief is sought that the action ought to be brought to an end. Accordingly, her Honour refused leave to deliver a further further further amended statement of claim. 22 In so concluding, her Honour relied upon the observations of Mason CJ and Brennan and Toohey JJ in Munnings v Australian Government Solicitor [1994] HCA 12 ; (1994) 120 ALR 586 at 589. 23 Her Honour then turned to the dispositive orders that ought to be made. Her Honour relied upon s 31A of the Act and Order 20, rule 2 of the Federal Court Rules and concluded that the application of the applicant filed on 7 April 2006 ought to be dismissed in accordance with either s 31A of the Act or, alternatively, on the footing that the requirements of Order 20, rule 2 of the Federal Court Rules were satisfied. Her Honour made an order that the application be dismissed and ordered the applicant to pay the respondents' costs of the proceeding. In relying upon s 31A of the Act, her Honour 'gave judgment' (s 31A(2)) for the respondents. In concluding that Order 20, rule 2 of the Federal Court Rules was satisfied, her Honour concluded that the proceeding ought to be dismissed generally on the footing, having regard to other conclusions, that no reasonable cause of action is disclosed by the statement of claim and that the applicant so misconceived the cause of action available to him that the proceeding is an abuse of the process of the court. 24 Mr Rogers says the arguable error on the part of her Honour is this. The respondents conceded in argument that a contravention of the TPA may give rise to a claim for personal injury. Her Honour observed at paragraph 120 of the judgment that: 'It is arguable that the applicant was coerced. ' Having regard to those two matters, her Honour was in error it is said, in concluding that the statement of claim does not disclose any connection or nexus between conduct on the part of the respondents and a claim for personal injury on the part of the applicant. This error is described by Mr Rogers as the 'main ground of my application for a notice of appeal'. Mr Rogers says that it is quite clear from his pleading that allegations of coercion on the part of the respondents towards Mr Rogers occurred, that such conduct occurred only by reason of the provision of services by relevant respondents to Mr Rogers and that coercive conduct in contravention of s 60 gave rise to the present claim for damages or compensation for personal injury or the wrong done to him. Mr Rogers says that the coercion is clear or at least clearly arguable; it occurred in the context of a contravention of s 60 of the Act; and, the contravening conduct gave rise to the injury. 25 Mr Rogers says that the only arguable error on the part of her Honour is in relation to the matters said to be in contravention of s 60 of the TPA. 26 The second ground of appeal identified by Mr Rogers is that her Honour having found arguable coercion of the applicant, the offending parts of the statement of claim ought to have been dismissed leaving those paragraphs reliant upon s 60 extant. Mr Rogers says that 'this little precious gem' was 'good and it shouldn't have been thrown out and that's why I'm here today' . Further, Mr Rogers says that having struck out the statement of claim, her Honour ought not to have dismissed the application because she ought not to have found that there was no prospect of success in the proceeding having identified an arguable case of coercion. 27 As to the concession on the part of the respondents, the respondents say that they simply recognise the proposition of law that a claim for personal injury might properly arise out of a contravention of a provision of the TPA but no such claim is properly raised on the statement of claim in this case. In the event that the consumer becomes bankrupt, it follows that any legal action arising from the contractual relationship between the consumer and the corporation vests in the trustee in bankruptcy . The method of pronouncement adopted was to publish the dispositive orders made by her Honour that day and to post the reasons for judgment to the parties. The date of 'pronouncement' of a judgment must necessarily be informed by the method selected by the judge to effect communication of the dispositive orders and particularly the reasons for judgment to the parties. Mr Rogers contends that notwithstanding the pronouncement of the dispositive orders on 7 December 2006 at 4.30pm by means of a telephone conference, the reasons were not received until 11 December 2006 and then by reason of the changes, the final reasons were received on 14 December 2006. It seems to me that if the judgment of her Honour is an interlocutory judgment, an application for leave to appeal ought to have been made within seven days of 14 December 2006 or, alternatively, within 7 days of 11 December 2006. 30 The application by Mr Rogers was filed on 15 December 2006 and is thus within time. If, however, the publication of the dispositive orders by means of a telephone conference and the selection of a method of communication of the reasons to the parties by post constitutes a 'pronouncement' of the judgment on 7 December 2006, the applicant is out of time by one day. However, having regard to the chronology of events, I am satisfied that the applicant has sufficiently explained any failure to file an application for leave to appeal from the orders of her Honour within the time required by the rules on the assumption that the operative date of pronouncement is 7 December 2006. 31 The more fundamental question is whether the applicant has established an arguable error on the part of her Honour. 32 The respondents contend that her Honour's judgment is an interlocutory judgment and although her Honour's order finally disposes of the particular proceedings, an order staying an action on the ground that it is frivolous, vexatious or an abuse of process or an order striking out an action on the ground that the proceeding does not disclose a cause of action, has always been treated as an interlocutory judgment. Such an order does not finally dispose of the rights of the parties ( Tampion v Anderson (1974) 3 ALR 414; Hall v Nominal Defendant [1966] HCA 36 ; (1966) 117 CLR 423; Little v Victoria (1998) 4 VR 596; Wickstead v Browne (1992) 30 NSWLR 1; and Platypus Leasing Inc & Ors v Commissioner of Taxation [2005] NSWCA 399 [24] --- [30]). The rationale for such an approach seems to be that no final disposition of rights occurs because there has been no adjudication of the controversy of fact nor a dispositive application of the law to the facts as found. A question might arise as to whether the order has 'the practical effect' of determining the claim of an applicant to a remedial order ( Johnston v Cameron [2002] FCAFC 251 ; (2002) 124 FCR 160). One difficulty, however, is the respondents also contend that should the applicant commence fresh proceedings (assuming, as appears to be the case, the limitation period has not expired), Mr Rogers would be met with a contention of res judicata . If that contention is good, it seems to me that the order must necessarily be a final order consistent with the observations of Gibbs, Mason & Murphy JJ in Port of Melbourne Authority v Ashun Pty Limited [1980] HCA 41 ; (1980) 147 CLR 35 at 38. 33 If the judgment is an interlocutory judgment, Mr Rogers must demonstrate that in all the circumstances the decision of her Honour is attended by sufficient doubt to warrant its being reconsidered by the Full Court and secondly, that substantial injustice would result if leave was refused supposing the decision to be wrong ( Décor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397; Ogawa v University of Melbourne (No. 2) [2004] FCA 1275). 34 If her Honour's order is a final order, the court must be satisfied that special reasons have been made out in order to grant leave to file and serve a notice of appeal out of time. The expression 'special reasons' describes a flexible discretionary power conferred upon the court in those cases where some distinguishing or differentiating feature about the case justifies departure from the orthodoxy of filing and serving a notice of appeal within the time expressly limited by the rules. The flexibility of the discretion conditioned by the interests of justice is not constrained in its amplitude by any narrow approach to the expression ( Jess v Scott and Others (1986) 12 FCR 187 at 195 per Lockhart, Sheppard and Burchett JJ). Nevertheless, an applicant seeking leave must demonstrate some feature about the case which persuasively warrants departure from the orthodox position (see also Jess v Scott per The Court at 195). 35 In this case, however, Mr Rogers has sought to bring an application within Order 52, rule 15(1)(b). In other words, Mr Rogers has made an application within 21 days of pronouncement of the judgment by which Mr Rogers seeks further time or an extension of time to file and serve a notice of appeal. Order 52, rule 15(1)(b) does not in terms require an applicant to demonstrate 'special reasons' in seeking an allowance of further time by the court. The reference in Order 52, rule 15(2) to 'notwithstanding anything in the preceding sub-rule', is intended to make clear that the scope of the discretion is not in any way limited by the terms of Order 52, rule 15(1). It seems to me that an application made within 21 days of the date of pronouncement of judgment by which an applicant seeks further time for the filing and serving of a notice of appeal is not to be subsumed within a requirement to establish special reasons as if an application had been made beyond the 21 day period at the outset. 36 Nevertheless, there must be some demonstrated circumstances upon which the court might act in allowing further time. The particular circumstance advanced by Mr Rogers is that during the period between pronouncement of the judgment and the hearing of this application in February 2007, Mr Rogers has not been in a position to prepare a notice of appeal and therefore he proceeded on the footing that an application ought to be made within 21 days seeking an extension of time within which to prepare, file and serve a notice of appeal. At the date of filing the application (15 December 2006), Mr Rogers anticipated that he would be in a position by 22 January 2007 to have obtained advice and formulated, filed and served a notice of appeal. 37 Because the application was listed for determination in February 2007, Mr Rogers has not taken steps to prepare a notice of appeal by 22 January 2007 or at all. Rather, Mr Rogers seeks to identify by oral submissions grounds going to an arguable error on the part of her Honour, secure an allowance for such further time as the court determines and then file and serve a notice of appeal within such time as might be allowed. 38 I propose to determine the application on the following basis. 39 Since the respondents contend that the effect of her Honour's order would be to bring about a res judicata in respect of the claims Mr Rogers has sought to agitate in his further further amended statement of claim, I propose to treat her Honour's judgment as a final judgment. In determining the question of whether further time ought be allowed to file and serve a notice of appeal for the purposes of Order 52, rule 15(1)(b) , I propose to determine whether the applicant has demonstrated an arguable error on the part of her Honour and, if so, whether substantial injustice would arise should an extension of time be refused. In that sense, I propose to essentially apply the test identified in Décor Corp Pty Ltd v Dart Industries Inc (supra). 40 In applying this test, I have had regard to not only the judgment of her Honour but also the further further amended statement of claim filed on 20 July 2006. The matters to be considered are set out hereafter. 41 The applicant contends that the respondents engaged in conduct in contravention of s 60 of the TPA. 42 The applicant thus contends that the corporate respondents by their officers, servants or agents engaged in physical force and undue harassment or coercion in connection with the supply of services to the applicant as a consumer of the relevant services, or, that such conduct occurred in connection with the payment for such services. 43 The applicant contends that the third and fourth respondents were the authors of the conduct, with others, and were persons 'involved in the contravention' for the purposes of the TPA. 44 The statement of claim fails to plead facts which establish the service supplied or to be supplied by the corporate respondents for the purposes of s 60 of the TPA; the conduct on the part of the relevant respondents 'in connection with' that supply or possible supply relied upon by the applicant; the price of the relevant services; or any facts that establish supply or possible supply to the applicant as a consumer for the purposes of s 4B(1)(b) of the TPA (see generally Australian Competition and Consumer Commission v Maritime Union of Australia (2001) 114 FCR 427 [44] --- [66], per Hill J). Moreover, if the services relied upon by Mr Rogers for the purposes of s 60 of the TPA are financial services as the pleading seems to suggest, s 51AF(1) provides that Part V of the Act within which s 60 falls 'does not apply to the supply, or possible supply, of services that are financial services' . The relevant statutory instrument regulating financial services is the Australian Securities and Investments Commission Act 2001 (Cth). Rather, the claim asserts harassment and coercion as a fact. The true character of the claim and its relationship with s 116(2)(g) of the Bankruptcy Act is not pleaded and nor is any particularisation given of the estimated quantum of the claim, that is, $45 million. In truth, Mr Rogers seeks to recover the lost value of the rights and entitlements he says he ought to have enjoyed by reason of the fulfilment of the promises of the relevant respondents in respect of each of the various property transactions pleaded in the statement of claim. Any such claim is vested in the trustee of the estate of Mr Rogers. 46 A contravention of s 60 of the TPA is the only cause of action relied upon by the applicant as the foundation 'right of the bankrupt' for the purposes of s 116(2)(g) of the Bankruptcy Act . 47 Accordingly, the statement of claim wholly fails to plead any claim that might be open to Mr Rogers. 48 As to the standing to maintain a claim arising out of conduct in contravention of s 60 of the TPA, it seems to me that a contravention of s 60 , properly pleaded, may give rise to rights, claims and entitlements vested in the trustee of Mr Rogers and also a claim in Mr Rogers where the damages are to be estimated by immediate reference to any pain felt by the bankrupt and without regard to his rights in property. The mere fact that a contravention of s 60 necessarily involves a transaction of supply or possible supply of services to a consumer does not have the effect of vesting all claims arising out of the contravention in the trustee. In that regard, I would, with respect, disagree with the conclusion reached by her Honour at [32] of her Honour's reasons for judgment. 49 The question seems to be whether any part of the damages arising out of the contravention 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. In Cox v Journeaux (No. 2) [1935] HCA 48 ; (1935) 52 CLR 713 at 721, Sir Owen Dixon in formulating the accepted test had regard to the test formulated in similar terms by Earle J in Beckham v Drake (1849) 2 HLC 579 at 604 although Earle J adopted a qualification on the estimation of the damages by use of the phrase 'and without immediate reference to his rights of property' whereas Dixon J qualified the estimation of the damages by reference to the phrase 'and without reference to his rights of property' . 50 Accordingly, if the estimation of any part of the damages claimed by the bankrupt involves a reference to the bankrupt's rights of property, the common law exception adopted in the Bankruptcy Act and reflected in s 116(2)(g) , may not be enlivened. His Honour Dixon J also had regard to the decision of the House in Wilson v United Counties Bank Ltd (1920) AC 102 in which a bankrupt claimant, Major Wilson, was held entitled to maintain a claim for damages for defamation (personal injury to his credit and reputation) by reason of the bank's negligent management of Major Wilson's financial affairs whilst he was out of England engaged in war service during the course of the 1 st World War. That claim arose out of the same cause of action vested in the trustee of Major Wilson who properly maintained a claim for the benefit of the creditors for damages for economic loss due to the negligent management of Major Wilson's financial affairs. 51 In Faulkner v Bluett (1981) 52 FLR 115, Lockhart J described the common thread running through the cases as establishing a proposition that where the primary and substantial right of action is direct pecuniary loss to the property or the estate of the bankrupt, the right to sue passes to the trustee. In that case, Lockhart J also concluded that any damages to which the applicant may be entitled would be ' estimated ' by ' immediate reference to her rights of property and not to pain felt by her in respect of her body, mind or character' [emphasis added]. In Bryant v Commonwealth Bank of Australia (1997) 75 FCR 545, O'Loughlin and Merkel JJ described the exemption as 'limited to those cases where it has been considered appropriate to sever the personal interests of the person subsequently made bankrupt from his property and to reserve to him the prosecution of and benefits derived from such litigation as not being legitimately entitlements of the creditors' [emphasis added]. 52 In Bryant's case, the wrong complained of by the bankrupt, said by the bankrupt to be severable from the legitimate entitlement of the creditors, was found to be the 'very source of the financial problems which have led to his bankruptcy' which could not be 'classified' as an exempted wrong. Such a claim was the 'very essence' of property divisible among the creditors and vested in the trustee (s 58(1) , s 116(1)). 53 In this case, although Mr Rogers contends with real difficulty that conduct in contravention of s 60 occurred and is properly pleaded, it seems to me that a theoretical claim for damages estimated by reference to anxiety and stress arising out of the contended contravention is not the 'very essence' of matters that might be agitated by the trustee but is, in principle, severable. 54 In Mannigel v Hewlett Phelps BC9101907 , the Full Court of the Supreme Court of New South Wales considered a claim by two bankrupt appellants against their solicitors for damages for physical and mental stress said to arise out of the negligence of the solicitor's conduct in connection with a property transaction. The claimants admitted that the damages although to be estimated by reference to physical and mental stress and anxiety were 'a consequence of' the economic loss they suffered arising out of the conduct of the transaction. The Full Court in reliance upon Daemar v Industrial Commission of New South Wales & Ors (1988) 79 ALR 591 concluded that because the claims were consequential upon alleged breaches of duty owed by the solicitors in relation to the purchase of the land, the claims for distress and injury to the physical and mental health of the claimants were not claims 'without reference to their rights of property' as contemplated by Dixon J in Cox v Journeaux (No. 2) (supra). 55 Damages for anxiety or stress may, however, be consequential but severable in the sense of being capable of estimation without regard in the estimation , to the bankrupt's rights of property. The claim by Major Wilson considered by Dixon J was emblematic of a consequential but severable claim which was capable of agitation by the bankrupt. If the damages are capable of estimation in such a way and are capable of being understood as severable from any claim on behalf of the trustee, it seems to me that the decision of the Full Court of the Federal Court of Australia in Bryant v Commonwealth Bank of Australia applying Cox v Journeaux (No. 2) contemplates that such a claim resides with the bankrupt even though it may be properly described as a consequential claim. 56 Although I would not ordinarily canvass these authorities in any detail in an application of the kind brought by Mr Rogers, I have elected to do so having regard to Mr Rogers's capacity as self-represented and because I have, with respect, taken a different view about this aspect of the matter to that of her Honour Collier J. In any event, it seems to me that there is at least sufficient doubt in relation to the standing question. 57 However, the decisive matter is the inadequacy of the applicant's statement of claim by reason of the matters set out at [41] to [47]. I am not satisfied that there is any arguable error on the part of Collier J in concluding that the entirety of the statement of claim should be struck out. The statement of claim fails to adequately plead any claim for damages which might be severable in the manner previously described. I am not satisfied that there is, to use the language of Mr Rogers, a demonstrated 'precious gem' of a claim in the various factual allegations assembled in the statement of claim. 58 The statement of claim is 'embarrassing' in the technical sense in which lawyers use that term in connection with a pleading not merely because of inadequacy in the lay crafting of the document but more importantly because the statement of claim comprehensively fails to address any claim that might be open to Mr Rogers as a matter of law or plead or set up the material facts going to each element of such a claim. The ultimate order was not that the statement of claim be struck out but rather that because the statement of claim wholly failed in the manner described that leave to re-plead ought not to be given and, as a result, the proceeding ought to be dismissed with costs. Mr Rogers took objection to the description by her Honour of the pleading as essentially 'a written tirade by the applicant accompanied by extensive repetition and a large volume of irrelevant information' . Although Mr Rogers contended in oral submissions that her Honour's observation reflected a pre-judgment of issues, Mr Rogers accepted that her Honour's observation was a description of a failure on the part of Mr Rogers to plead disciplined sequential material facts establishing conduct, a contravention, a wrong, loss or injury contemplated by s 116(2)(g) of the Bankruptcy Act arising out of the relevant conduct, and a particularisation of the damages said to have been suffered. 59 The further question is whether her Honour arguably erred in refusing leave to deliver a further further further amended statement of claim wholly re-pleading any claim in respect of which Mr Rogers might demonstrate standing and whether her Honour arguably erred in dismissing the proceedings pursuant to s 31A of the Act and also in reliance upon Order 20, rule 2 of the Federal Court Rules . Recently, French J in Fortron Automotive Treatments Pty Ltd v Jones (No. 2) (2006) FCA 1401 observed that s 31A is not a vehicle for simply striking out parts of a pleading that are deficient. His Honour observed that alternative remedies arise under the Federal Court Rules to deal with deficient pleadings and that, in principle, recourse ought not to be had to s 31A of the Act which deals with entering summary 'judgment' in 'a proceeding'. His Honour, in consequence, respectfully disagreed with the approach adopted by Heerey J in Duncan v Lipscombe Child Care Services Inc [2006] FCA 458 in which Heerey J observed that s 31A of the Act was introduced to establish a lower standard for 'strike outs'. The question, relevantly in this case, the court asks, for the purposes of s 31A of the Act, is whether it can be satisfied that the applicant in the proceeding has no reasonable prospect of successfully prosecuting the proceeding. That state of satisfaction will rarely be achieved (except in the most transparent of cases) on the strength of a conclusion that the applicant's statement of claim is deficient either in whole or in part because, as French J observes, leave to re-plead might reveal material facts within a properly identified legal framework that, upon proof, gives rise to a recognised remedy. 60 Section 31A(3) recognises that in determining whether a proceeding has no reasonable prospect of success, the proceeding need not be hopeless or bound to fail. A court might conclude that a proceeding grounded upon a statement of claim which wholly fails is a proceeding which has no prospect of success as formulated even though the statement of claim suggests that a proceeding taken to trial and thus adjudication of the controversy is not hopeless or bound to fail. However, such a finding would be unlikely to result in a conclusion that the proceeding has no prospect of success. Cases may well arise and this is one of them where the court reaches a state of satisfaction not just by reference to the inadequacies in the pleading but having regard to those inadequacies and other factors such as the history of the previous applications, the sequence of amended pleadings already filed by an applicant, the nature of the rights asserted by the applicant, the standing of the applicant to assert the particular claim or claims or in other words all of the matters identified at [40]-[58]. 61 Order 20, rule 2 contemplates that a proceeding may be stayed or dismissed generally in circumstances where the court is satisfied that the proceeding discloses no reasonable cause of action; the proceeding is frivolous or vexatious; or the proceeding is an abuse of the process of the court. In reaching the relevant state of satisfaction, the court will examine the claims and allegations of the applicant to determine whether the contentions are so clearly untenable that they cannot possibly succeed in the sense contemplated by Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 at 130 recognising that the principles stated by the Chief Justice ought not to be given 'canonical force' ( Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27 ; (2006) 227 ALR 425 at 437, per Gleason CJ, Gummow, Hayne and Crennan JJ) and the test to be applied by the court is whether the court can be satisfied of a 'high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way' ( Agar v Hyde [2000] HCA 41 ; (2000) 201 CLR 552 at 575-6 [57] per Gaudron, McHugh, Gummow and Hayne JJ) in determining whether the issues in the proceeding should be decided 'in a summary way' . 62 Having regard to the matters discussed at [40] --- [58], I am satisfied that there is no prospect of the applicant succeeding in the proceeding if it were allowed to go to trial in the ordinary way and thus there is a high degree of certainty of the ultimate outcome. That degree of certainty is informed not just by deficiencies in the pleading but by reason of the weight to be given to all of the factors discussed at [40] --- [58]. In addition to the chronology identified at [20] of these reasons, the applicant has agitated these same matters previously and the history of those steps is identified at [26] and [27] in the Reasons for Judgment in Rogers v Asset Loan Co Pty Ltd & Ors [2006] FCA 434 , which also deals with the legal standing of Mr Rogers to maintain the collection of claims set out in his application in the present proceeding (see [28] --- [53]). Accordingly, it seems to me that there is no arguable error on the part of her Honour in concluding that the statement of claim must fail in its entirety and that the appropriate order pursuant to Order 20, rule 2 of the Federal Court Rules is that the action be dismissed generally. 63 It should also be remembered that an order dismissing the statement of claim coupled with an order for leave to re-plead and a compensatory order for costs in favour of the respondents (applicants before Collier J) is no compensation as the applicant in the proceeding is an undischarged bankrupt. 64 Having regard to all of those matters, it seems to me that no arguable error on the part of her Honour has been identified in the making of an order pursuant to s 31A of the Act in dismissing the proceedings. Perhaps the test in determining a reasonable prospect of successful prosecution of a proceeding is whether there is a demonstrated 'real (as opposed to fanciful) issue of fact to be decided' ( Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 , per Rares J [31] --- [48]). However, the 'real issue of fact' must be framed within a comprehensible cause of action (in respect of which the applicant has standing) so that findings of fact in favour of the applicant give rise to a recognised remedy . 65 Accordingly, the application before me for an extension of time in which to file and serve a notice of appeal from the judgment of her Honour Justice Collier given on 7 and 11 December 2006 must be dismissed with costs. I certify that the preceding sixty-five (65) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of an application to extend time for the filing and service of a notice of appeal consideration of whether the judgment appealed from is an interlocutory or final judgment consideration of an application for summary dismissal of the proceedings under both s 31a of the federal court of australia act 1976 (cth) and order 20, rule 2 of the federal court rules consideration of the relationship between approaches to the striking out of a pleading and entering summary judgment pursuant to either s 31a of the act or order 20, rule 2 of the federal court rules . consideration of the nature of a claim falling within the exemption contained in s 116(2)(g) of the bankruptcy act 1966 (cth) and whether the applicant in the proceedings has standing to maintain the particular claim. s 24(1) , s 24(1a) , s 25 federal court rules order 52, rule 10; order 52, rule 15(1) ; order 52, rule 15(2) bankruptcy act 1966 (cth) s 116(2)(g) trade practices act 1974 (cth) ss 52 , 51aa , 60 , 82 , 87 (1d) practice and procedure bankruptcy federal court of australia act 1976 (cth) |
Highstoke was the successor to Hayes Knight as the trustee for the debenture holders of Performance Finance Ltd (Performance Finance). Receivers had been appointed to Performance Finance by Hayes Knight as trustee shortly before its removal from that office on the application of two of the debenture holders. On 2 September 2005 Lee J made an ex parte order on the application of Highstoke for a summons to issue for the examination of John O'Brien, a director of Hayes Knight, in relation to the examinable affairs of that company. 2 The purpose of the examination was to ascertain, inter alia, the level of insurance cover carried by Hayes Knight at the relevant time so that Highstoke could assess the prospect of satisfying any judgment it might obtain in a damages action commenced by it against Hayes Knight on behalf of the debenture holders. Hayes Knight applied to the Court in those proceedings (the Examination Proceedings) for an order discharging the summons on the basis that the power of the Court to conduct an examination in connection with the examinable affairs of a company did not extend beyond companies under external administration, and if the power did extend to a company not under such administration, it involved the exercise by the Court of non-judicial or executive power beyond the competence of the Parliament to confer upon it. 3 Hayes Knight also sought judicial review of the ASIC decision to authorise Highstoke to apply for the summons (the Judicial Review Proceedings). Hayes Knight first raised the constitutional point at the commencement of the hearing before Siopis J on 18 November 2005. The point having been raised, the hearing was adjourned so that notices could be issued under s 78B of the Judiciary Act 1903 (Cth) to the Attorneys-General of the Commonwealth and the State s . On 8 February 2006, ASIC filed a notice of intervention pursuant to s 1330 of the Act. 4 The Examination Proceedings and the Judicial Review Proceedings were heard together. At the hearing ASIC, as intervenor, supported Highstoke's construction of the power under s 596A as extending beyond corporations subject to external administration. It also argued for the constitutional validity of the section thus construed. ASIC opposed the judicial review application in which it was named as a respondent along with Highstoke. 5 On 16 January 2006 I delivered judgment discharging the examination summons and quashing the decision made by ASIC on 3 August 2005. ASIC and Highstoke were directed to pay the costs of the judicial review proceedings. Costs were reserved until today on the application to discharge the summons. The parties were given an opportunity to make submissions as to the costs in the Examination Proceedings --- Highstoke Pty Ltd v Hayes Knight GTO Pty Ltd [2007] FCA 13. 6 Hayes Knight seeks an order that ASIC pay two-thirds of its costs in the Examination Proceedings from 8 February 2006, which was the date upon which ASIC intervened. It submits that if there is any differentiation to be drawn then ASIC should bear two-fifths of the costs and Highstoke three-fifths. Highstoke, in effect, accepts that any costs order, as against ASIC, should apply to costs incurred after 8 February 2006, the date of ASIC's intervention. 8 ASIC argues that the ordinary rule that costs follow the event, does not apply to interveners. It says that there should be no order as to costs against it and its reasons for that are set out in summary in par 15 of its submissions. It is not necessary, for present purposes, to expound any general rules for the imposition of a costs order on an intervener under that provision. In my opinion if special circumstances are required to support such an order and I am inclined to think that they are not, albeit there may be a restraint principle which emerges from the very nature of intervention, they are made out here. ASIC was the decision-maker, which, in a sense, precipitated the proceedings by authorising Highstoke, as an eligible applicant, to apply for a summons for a purpose which, as I have held, was beyond power. ASIC took a substantive and not merely an assisting role in the proceedings. The public interest dimension of that role did not have any special features about it and was closely related to the particular interest of other parties, as well as the legitimate interest of ASIC in the scope of the powers, which are conferred by the particular provisions with which the Court was concerned. 10 In my opinion ASIC should bear some, but not all, of the costs of the Examination Proceedings from the date of its intervention. I do not consider that they should be limited to the costs of the constitutional matter. ASIC put in substantive submissions in relation to the constructional issue, which was, of course, of equal importance to it as a matter of principle, it being one of the classes of eligible applicant who may apply for a summons under s 596A. I will order that ASIC pay one-third of the respondents' costs of the application from 8 February 2006 and that Highstoke pay two-thirds of the costs from that date. Highstoke is to bear the costs of the application up to that date. 11 While Highstoke argued for an equal apportionment from that date, I consider it had the principal carriage of the proceedings and occasioned the litigation by its application. | intervenor examination proceedings under corporations act 2001 (cth) powers of court constitutional validity intervention by australian securities and investments commission whether intervenor liable to costs substantive participation costs awarded against asic and apportioned with other respondents costs |
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules . 2 A number of witnesses called by Cadbury produced various market research documents. The makers of such documents were not called. I ruled that these documents were admissible as going to the reasons why Cadbury's officers caused the company to take certain courses of action in the marketing and packaging of its products. However, I held that such documents were not proof of the truth of their contents, for example what various respondents to market surveys had said to the persons who conducted them. In other words, the documents were received on a non-hearsay basis and not as evidence of the truth of what they asserted. 3 Whether right or wrong, I think it is clear that that is the basis on which I admitted the documents. Nevertheless some uncertainty has arisen. Accordingly further argument took place in which, amongst other things, more informative reference was made to s 60 of the Evidence Act 1995 (Cth) (the Act) and its application by the High Court in Lee v The Queen [1998] HCA 60 ; (1998) 195 CLR 594. For example, in the last-mentioned report there are reported statements in relation to Cadbury's peppermint chocolate "The green ooze is coming out" and "The green writing that says peppermint you usually associate green with peppermint". • Does s 77 have the effect that opinions expressed in the documents are admissible? • If yes to either question, should use of the documents be restricted under s 136 so as to make them proof only of the fact they were relied on by Cadbury? Except as otherwise provided in the Act, evidence that is relevant is admissible and evidence that is not relevant is not admissible: s 56. In that part s 76 provides that evidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion was expressed. Lee and another man came into her shop. One of them produced a gun and demanded money. In an episode no less dramatic than scenes in some of her videos, Mrs Jones threw a cast iron tape dispenser at the man with the gun, picked up the stool on which she had been sitting and jabbed at him across the counter. The gun discharged. The man who had fired the gun picked up the cash register but Mrs Jones hit him again with the stool. The men fled empty-handed. 13 Shortly afterwards police officers saw Lee and another man, one Romeo Calin, in Kings Cross Road. The police arrested both men. Calin told the police, both orally and in a written statement, that he had seen Lee (although he did not know his name) and asked him to repay an $80 debt. He said Lee was walking fast and was sweaty. I have just done a job. I fired two shots. The other guy bailed out. 14 When called as a witness at the trial, Calin said that he could not recall any conversation with Lee apart from a request to repay the debt. The prosecution was given leave to cross-examine him about his statement. In the High Court's view at [12] the trial judge's charge to the jury would have been understood as an instruction that if they were satisfied that Lee had said those words to Calin, they were a confession by Lee. 15 The High Court quashed the conviction. Their Honours held that police evidence of what Calin had said to them about Lee's statement to him (Calin) could not be used as proof of the truth of what Lee had said. 16 There appears to be both a narrow, case-specific, basis and a broader basis for their Honours' conclusion. 17 The narrow basis (the asserted truth basis) was that Calin did not intend to assert as a fact that Lee had "done a job", only that Lee had told him this and (perhaps) that Calin believed this. Calin's belief in what he was told was of no relevance to the issues which arose at the trial: [23]-[24]. Perhaps it could be said that on this basis, Calin's statement as to what Lee had said was simply not relevant under the s 56 test --- one does not get to the s 59 hearsay exception or the s 60 exception to that exception. 18 The broader basis (the secondhand hearsay basis), founded on historical principles underlining the law of evidence and the retention of common law which is not inconsistent with the Act (s 9) , was that secondhand, or double, hearsay is per se inadmissible: [32]-[41]. The [hearsay] rule's operation requires consideration first of why it is sought to lead evidence of something said or done out of court (a previous representation). What is it that that "previous representation" is led to prove? In particular, is it sought to lead it to prove the existence of a fact that the person who made the representation intended to assert by it ? The fact that the statement or the conduct concerned might unintendedly convey some assertion is not to the point. The inquiry is about what the person who made the representation intended to assert by it . The previous representations made by Mr Calin that it was sought to adduce in evidence could be seen as being of two kinds: statements of what he had done or seen, and statements of what he had said or heard. Again it is convenient to treat the matter by reference to the written statement signed by Mr Calin. There can be little doubt that Mr Calin intended to assert that he had done the things recorded in the statement, that he had seen the things that were recorded in it and that he had said and heard the words set out in it. But there is no basis for concluding that Mr Calin intended to assert as a fact that the appellant had 'fired two shots', had just done 'a job' or that the 'other guy' had 'bailed out'. Calin had no way of knowing these facts. All Mr Calin intended to assert was that the appellant had told him these things and (perhaps, on one view of the matter) that Mr Calin believed (or at least did not disbelieve) what he had been told. Mr Calin's belief (or lack of disbelief) in what he was told was of no relevance to the issues that arose at the trial. Accepting that Mr Calin believed what the appellant had told him would not, directly or indirectly, rationally affect the assessment of the probability of the existence of the facts in issue in the proceeding. Knowing that Mr Calin had said out of court that the appellant had confessed to the crime was relevant only to the question whether he, Mr Calin, should be believed. No doubt, an assertion by the appellant that he had fired two shots, had done 'a job' and that the the 'other guy' had 'bailed out' would be relevant to the issues at the trial. But Mr Calin's statement contained no such assertion; it contained only an assertion that the appellant had said these things. Even if the trial judge was right to conclude, as he did, that Mr Calin could be cross-examined about his prior inconsistent statements and was right to conclude that evidence could be given of those prior statements, it was necessary to identify how those prior statements might properly be used by the jury. There are several steps in that process of identification. They can be described in these terms. Evidence that Mr Calin had seen what was recorded in his statements was relevant to the issues in the case. Mr Calin's representation out of court that he had seen these things was hearsay. Because his representation out of court (that he had seen these things) was relevant for the purpose of showing that he had made a prior statement that was inconsistent with his evidence in court, the hearsay rule did not apply and the representation was admissible to prove the existence of the fact that Mr Calin intended to assert by his earlier representation. By contrast, Mr Calin did not , in his out of court statements, intend to assert any fact about his conversation with the appellant other than that he had said certain words and that he had heard the appellant say the words he attributed to him. The nature of what Mr Calin said in his statements to the police was such that evidence of those statements was evidence both of representations made by Mr Calin to the police (about what Mr Calin had seen and heard) and of representations made to Mr Calin by the appellant (about what the appellant had done). By virtue of s 59 , the evidence was not admissible to prove the existence either of the facts which Mr Calin intended to assert to the police or of the facts which the appellant intended to assert to Mr Calin. Section 60 operated only upon the former representations; it had nothing to say to the representations made by the appellant to Mr Calin. It was only the representations made by Mr Calin to the police that were relevant for a purpose referred to in s 60: the purpose being to prove that Mr Calin had made a prior inconsistent statement and that his credibility was thus affected. The hearsay rule was rendered inapplicable to Mr Calin's representations, but not to the representations allegedly made by the appellant. And, of course, the representations allegedly made by the appellant were not admissible under the confession exceptions to the hearsay rule created by s 81 because the evidence of these confessional statements was not first hand. To put the matter another way, s 60 does not convert evidence of what was said, out of court, into evidence of some fact that the person speaking out of court did not intend to assert . And yet that is what was done here. Evidence by a police officer that Mr Calin had said, out of court, that the appellant had said that he had done a job was treated as evidence that the appellant in fact had done a job - a fact which Mr Calin had never intended to assert . (Of course, it would be different if Mr Calin had said in evidence in court that the appellant had said he had done a job. Then the representation made out of court would be the appellant's, not Mr Calin's. It follows that evidence that Mr Calin had earlier reported that the appellant had confessed was not evidence of the truth of that confession. It should not have been received at the trial of the appellant, as it was, as evidence establishing that the appellant had committed the offence. Their Honours note at [32] that one very important reason why the common law set its face against hearsay evidence was because otherwise the party against whom the evidence was led could not cross-examine the maker of the statement. Confrontation and the opportunity to cross-examination was "of central significance to the common law adversarial system of trial". The provisions for these exceptions are to be understood in light of the view expressed by the Law Reform Commission that "secondhand hearsay is generally so unreliable that it should be inadmissible except where some guarantees of reliability can be shown together with a need for its admissibility". As the Commission went on to point out, where A gives evidence of what B said that C had said, the honesty and accuracy of recollection of B is a necessary link in the chain upon which the probative value of C's statement depends. Estimating the weight to be attached to what C said depends on assessing B's evidence about it. Section 9 of the Act says that the common law in relation to evidence in a proceeding is to operate "except so far as this Act provides otherwise expressly or by necessary intendment". To hold, as was held by the trial judge and by the Court of Criminal Appeal, that the statements made by Mr Calin out of court could be admitted as evidence that the appellant had committed the crime with which he was charged because, in the evidence he gave in court, Mr Calin had denied making statements that the appellant had confessed, leads to a result that not only is sharply at odds with the other provisions of the Act to which we have referred but is at odds with the common law in relation to evidence in a proceeding. It is at odds with the common law because it shifts the focus of the process of proof away from what witnesses say in court that they have seen or observed to what a witness reports that another person earlier said had been heard. And the contention was that the evidence of the reports might be led in evidence, not because the person who was alleged to have heard the words was called to give evidence, but because that person denied that they had been said. The curiosity of the result can then be seen in stark relief. It is then clear that s 60 was intended to work a considerable change to the common law. But there is no basis, whether in the considerations which we have mentioned as having influenced the Commission or otherwise, for concluding that s 60 was intended to provide a gateway for the proof of any form of hearsay, however remote. As has been indicated earlier in these reasons, that that was not intended is made plain by the terms of s 59 to which s 60 is an exception. He said that the true key to the case was to be found in [29] of the judgment (quoted at [20] above). The representation in Lee was not one that a certain thing had happened, but rather that someone had said it had happened. 27 With respect, I do not agree with this reading of Lee . As appears above, their Honours make it clear that, quite apart from the asserted truth basis, secondhand hearsay per se is not admissible under s 60: see also Ligertwood, Australian Evidence , 4 th ed, 2004, at 495. In a recent joint report on the Act published in December 2005, the Australian Law Reform Commission, in association with the New South Wales and Victorian Law Reform Commissions and after a consultative relationship with law reform bodies in Tasmania, the Northern Territory, Western Australia and Queensland, appears to accept (albeit reluctantly, and with a recommendation for change) that Lee decides that secondhand and more remote hearsay does not fall within s 60: ALRC Report 102, NSWLR Report 112, VLRC Final Report at 7.96, 10.147. 28 Where A in evidence states what B has said out of court that C has said to him (B), if B's intention to assert the truth of C's statement is the sole criterion then the result presumably will turn on the court's finding as to the subjective intention of B. Members of the general populace, unburdened with the laws of evidence, will often assert the truth of something said to them, just as often they will pass on something said for what it is worth. To hypothesise a variation on the facts of Lee , what if Calin was not just a casual acquaintance and creditor of Lee but a close criminal companion of long standing. In the light of that Calin believed, and had every reason to believe, that Lee was telling the truth when he said that he had "done a job". It was the sort of thing which, to Calin's knowledge, Lee habitually did. The hypothetical Calin, unlike the real life Calin, was convinced that Lee had committed the crime; he told the police as much and provided convincing detailed reasons. In other words, Calin asserted to the police that what Lee had told him was true. Would the confession by Lee to Calin have been admissible as truth of its contents? On the asserted truth basis of Lee perhaps yes, but on the secondhand hearsay basis, no. 29 Moreover, where A tenders evidence of a statement out of court by B as to what C had said, and if what C said is admissible if B intended to assert the truth of it, then if C had said what D had said what E had said, E's statement would be admissible as truth of its contents as long as there was an assertion of intention to convey truth by everybody along the chain. 30 I think therefore that the safer ground on which to decide the issue in the present case is that what various study participants (the equivalent of Lee) said to the authors of the reports (the equivalent of Calin) given to the Cadbury officers (the equivalent of the police) is inadmissable as being secondhand hearsay. If Dr Gibbs' direct opinion evidence is not admissible, still less could hearsay opinions of the same kind be received. The documents in question can be contrasted with the evidence of another Cadbury witness, Ms Caroline Shelton, who conducted a survey of persons' reactions to various colours associated with chocolate. Her evidence was admitted over Darrrell Lea's objection: Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 2) [2006] FCA 364. Ms Shelton was cross-examined, as was Professor Layton who had designed the methodology. The strengths and weaknesses of the survey were explored in evidence and can form the basis of rational submissions by the parties. By contrast, with the documents in question there is no witness equivalent to Ms Shelton or Professor Layton. They are of much less probative value, the absence of the authors is prejudicial to Darrell Lea and their admission for all purposes would add length and confusion to the trial; see Quick v Stoland Pty Ltd (1998) 87 FCR 371 at 378, 382. As senior counsel for Darrell Lea accepted, they will be received on the same basis. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Ruling herein of the Honourable Justice Heerey . | hearsay market research reports whether received as proof of truth of contents whether discretion under s 136 of evidence act should be exercised evidence |
The application was not specifically opposed by the respondents, however it was also not by consent. In the circumstances I gave leave for the proceedings to be discontinued, subject to resolution of the issue of costs. 2 Mr Kelso conceded this morning that, as a general proposition, costs follow the event, and that the applicants in discontinuing the proceedings would be liable for the costs of the respondents. Dr McGrath for the second, third and fourth respondents has however submitted that the costs should be awarded on an indemnity basis. 3 In relation to this matter I note that it is not in dispute that the first respondent, Ms Booth, has not been served in these proceedings. Accordingly Ms Booth has not been represented in Court during the course of these proceedings and is not entitled to the benefit of any costs order. 4 Further, I understand that the respondents were first made aware of the applicants' notice of discontinuance this morning immediately prior to the hearing. The proceeding was an abuse of the process of the Court. I note four relevant decisions: Booth v Frippery Pty Ltd [2005] QPEC 095 , Booth v Frippery Pty Ltd [2006] 2 QdR 210, Booth v Frippery Pty Ltd [2007] QPEC 99 and Frippery Pty Ltd v Booth (unreported, Queensland Court of Appeal 123/08, 15 and 25 February 2008). • The proceedings in this Court were an abuse of process because they were frivolous and vexatious in the sense that there was no real question of law or fact to be determined, and the applicants had no real reasonable prospect of successfully prosecuting the proceeding. I note in particular claims by the applicants with respect to alleged criminal offences by the respondents pursuant to the Criminal Code 1995 (Cth), the Criminal Code (Qld) and the Summary Offences Act 1989 (Qld) (in relation to which this Court has no jurisdiction), and for orders for certiorari and prohibition despite the fact that the respondents against whom these orders were sought were not officers of the Commonwealth. • The proceedings in this Court were an abuse of process because they were frivolous with no arguable foundation and had no prospects of success. This was particularly the case in relation to the applicants' claim that, by undertaking the normal work of solicitors for the first respondent in the Queensland Court proceedings, the second, third and fourth respondents were liable for criminal and civil sanctions. • The Court could infer that the proceedings were vexatious, in the sense that they were brought to harass and intimidate the first respondent and her solicitors at a time when judgment at the re-trial of the Queensland Planning and Environment Court proceedings was reserved. 8 Mr Kelso for the applicants submitted that his instructing solicitors were acting as town agents and had only been instructed last week; and that there had been some attempts by the applicants' solicitors to resolve the proceedings before Court today. I understand that there is no longer any claim by the applicants with respect to alleged criminal conduct by the second, third and fourth respondents. The jurisdiction to award costs is at the discretion of the Court: s 43 Federal Court of Australia Act 1976 (Cth). The overriding consideration is the justice of the particular case. This includes the recognition that there are circumstances which justify the order of indemnity costs, including when a party unreasonably causes another party to incur costs; see Colgate-Palmolive at 233 and Leahy Petroleum at [17]. They are not awarded as a means of deterring litigants from putting forward arguments that might be attended by uncertainty. Rather, they serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the Court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs. 12 As Sheppard J said in Colgate-Palmolive Company , the question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis. Circumstances where it is appropriate that indemnity costs should be awarded however clearly include whenever an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success: Woodward J in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd [1988] FCA 202 ; (1988) 81 ALR 397 at 401, Gray J in ACCC v Leahy Petroleum at [18], Sheppard J in Colgate-Palmolive Company at 231. 13 In this case it is appropriate that indemnity costs be awarded. While I note that as a general rule, the Court will not award costs on an indemnity basis, the Court will do so if the justice of the case requires or some special or unusual feature justifies the Court departing from the usual course. It is clear in my view that the claims of the applicants in these proceedings had no chance of success, in view of the known facts and the clearly established law. The matter has been fully litigated in the State Courts; significantly, the jurisdiction of the Federal Court to entertain the claims in the applicants' statement of claim has not been established. From the Court file it is clear that the applicants have not lacked legal representation during the course of these proceedings and indeed are represented today by counsel and the town agents of their current solicitors. I agree with the submissions of Dr McGrath which I have summarised earlier in this judgment as to the frivolous and vexatious nature of the applicants' claims in this Court. In this case it is clear that the second, third and fourth respondents have incurred costs which they ought not to have been required to incur in these proceedings. To paraphrase comments of the Full Court in Hamod , I take the view that it was unreasonable for the applicants to have subjected the respondents to the expenditure of costs in this case. 14 Accordingly, I order that the applicants pay the costs of the second, third and fourth respondents of the proceedings up to and including 16 April 2008 such costs being assessed on an indemnity basis. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. | notice of discontinuance application by respondents that costs be awarded on indemnity basis whether circumstances give rise to awarding of costs on basis other than party-party basis whether justice of the case requires costs be paid on indemnity basis costs |
The marks are registered under the Trade Marks Act 1995 (Cth) in relation to entertainment activities. Mr Kardas uses the marks to promote dance parties, which offer a unique style of modern Greek music, to the Greek community. The respondents are Mr Kardas' competitors. They promoted three dance parties (held on 24 and 31 May 2008 at the Alluva night club and on 8 June 2008 at the Billboard night club) by reference to the marks. Mr Kardas commenced this action to restrain the respondents' alleged trademark infringement and to recover damages or an account of profits. 2 On 6 June 2008 I made an interim order restraining the respondents from promoting any dance party by reference to the word "MYKONOSXPERIENCE" (or a similar word). At that time the first respondent, Mr Kalliakoudis, was represented by a legal adviser but the second respondent, Mr Missailidis, appeared in person. 3 By agreement of the parties the action was referred to a mediation which took place on 25 June 2008. At the mediation Mr Kalliakoudis agreed to submit to a permanent injunction restraining him from promoting any dance party by reference to the word "MYKONOSXPERIENCE" (or a similar word). Accordingly, on 28 July 2008, formal orders were made disposing of the proceeding against Mr Kalliakoudis. 4 The action against Mr Missailidis did not settle. He consented to the imposition of a permanent injunction (in the same terms as the injunction imposed on Mr Kalliakoudis) but no agreement could be reach with respect to the account of profits claim. Accordingly, I ordered that Mr Missailidis' accountant file an affidavit setting out the profits Mr Missailidis derived from the three dance parties held in May and June 2008. That affidavit was filed on 27 August 2008. The accountant, Mr Sianas, deposed that Mr Missailidis had: (a) lost $1,284 on each Alluva event; and (b) made a profit of $500 on the Billboard event. Mr Kardas asserts that the accountant's calculations are deficient in a number of critical respects. 5 The action ultimately settled when the parties returned to court on 3 October 2008 for directions. It was agreed that Mr Kardas would discontinue his action against Mr Missailidis without any prejudice to any claim for costs. It was agreed that the costs would be determined by me. 6 Mr Kardas asks that I fix the costs rather than ordering that they be taxed. Mr Kardas filed a schedule showing his total costs in the actions to be $65,363.77. However, he seeks only $45,500 in costs. This amount represents 70% of his total costs and, according to Mr Kardas, is a proper estimate of his costs if taxed on a party-party basis. A better rule of thumb is that taxed costs usually amount to 60% of total costs. 7 There is no doubt I can make an order for costs notwithstanding that an action has not gone to trial. (2) It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a Court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial. This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue. (3) In determining the question of costs it would be appropriate, however, for the Court to determine whether the applicant acted reasonably in commencing the proceedings and whether the respondent acted reasonably in defending them. (4) In a particular case it might be appropriate for the Court in its discretion to consider the conduct of a respondent prior to the commencement of the proceedings where such conduct may have precipitated the litigation. (5) Where the proceedings terminate after interlocutory relief has been granted, the Court may take into account the fact that interlocutory relief has been granted. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. ... If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. 9 In Gribbles Pathology Pty Ltd v Health Insurance Commission (1997) 80 FCR 284 , 287 I suggested that "in the absence of a hearing on the merits it is difficult to see how any order, other than an order that each party bear its own costs, can be made except in special circumstances". In Champagne View Pty Ltd v Shearwater Resort Management Pty Ltd [2000] VSC 214 , [47] Gillard J suggested that my requirement for "special circumstances" was too strict. He went on to say that "[e]ach case must depend upon its own circumstances". I agree with that approach. 10 There is an underlying policy reflected in the rules of the Federal Court (and most other superior courts) that a discontinuing party should be liable for the other party's costs unless the court otherwise orders. But, it does not necessarily follow that a defendant should have his costs merely because a plaintiff wishes to discontinue his action. The conduct of the parties in the matter and the reasons for the discontinuance can bear heavily on the exercise of the discretion as to costs. See also Fordyce v Fordham [2006] NSWCA 274. 11 Returning to the case at hand, one can start with the proposition that on the facts, which were not in dispute, Mr Kardas' case for an injunction was strong. This does not mean that Mr Kardas should have his costs. Mr Missailidis says he was not aware that Mr Kardas was the owner of the marks. He only became aware of the claim on 6 June 2008 (when Mr Kardas' solicitors called him and advised him that he must attend court immediately). Mr Missailidis asserts that if Mr Kardas (or his solicitors) had contacted him before commencing the action and told him to stop using the marks he would have done so immediately. He says this contention is confirmed by his conduct: immediately after discovering that Mr Kardas was the owner of the marks Mr Missailidis agreed to: (a) submit to a permanent injunction; and (b) undertake corrective adverting. 12 Accordingly, Mr Missailidis says that Mr Kardas should not get his costs. He relies on Melbourne University Publishing v Williamson [2005] FCA 1910. On 26 June 2008 Mr Missailidis offered to pay Mr Kardas $7,500 in full settlement of his claim. At that time Mr Kardas' costs totalled $37,800. According to the conventional approach one half of those costs (being $18,900) would be attributed to the action against Mr Missailidis (with the other half being attributable to the action against Mr Kalliakoudis). When taxed on a party-party basis, the costs attributable to the action against Mr Missailidis would have been approximately $11,340. 14 Mr Kardas also made offers of settlement. Each offer was to discontinue the action if he received payment of a specific amount. The first offer, made on 3 July 2008, asked for payment of $19,250. At that point Mr Kardas' total costs were about $40,354. The second offer, made on 13 August 2008, sought payment of $27,500. By then Mr Kardas' total costs were around $54,100. The final offer, made on 23 September 2008, requested payment of $20,000. At that stage Mr Kardas' total costs had reached $58,000. 15 I have some sympathy for Mr Missailidis. He quickly agreed to stop using the registered marks. Moreover, I suspect that if he had prior notice that Mr Kardas was the registered owner of the marks it is likely that Mr Missailidis would have given undertakings not to use the marks thus making the claim for injunctive relief unnecessary. This does not, however, change the fact that Mr Kardas' rights had clearly been infringed and he had a good claim to protect those rights. The usual rule is that costs normally follow the event. I do not accept that, in this case, the successful party should be deprived of his costs simply because he failed to write a letter of demand. 16 Mr Kardas' total costs to date are $65,363. Of that amount approximately $18,900 is attributable to the action against Mr Kalliakoudis. The balance, when discounted by 40%, results in a rough and ready estimate of party-party costs of approximately $27,878. I do not believe that Mr Kardas should have this entire sum. While his pursuant of the action was reasonable, it was always going to be the case that the claim for an account of profits was likely to produce a small return in relative terms. In my view, parties should be discouraged from prosecuting, in a superior court, a money claim which on any view will be disproportionate to the costs of pursuing the action. I think it is therefore appropriate to reduce the costs to $15,000, being the party-party costs attributable to the claim against Mr Missailidis until 28 July 2008 (the date the injunction was granted) plus additional costs incurred by Mr Kardas over a relatively short period to consider his position. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. | breach of trademark respondent agrees to permanent injunction but not an account of profits costs not agreed whether costs should be paid by respondent factors to be taken into account costs |
The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs (the first respondent as he was then known) to refuse to grant Protection (Class XA) visas to the appellants. The appellants are husband, wife and daughter. The appellant husband (the first appellant) was born on 1 March 1961 and is a citizen of South Africa. The appellant wife (the second appellant) was born on 10 May 1962 and is a citizen of South Africa. The appellant daughter (the third appellant) was born on 1 October 1989 and is also a citizen of South Africa. The first and second appellants have a son who was born on 14 October 1984 and, although he is a citizen of South Africa, he is an Australian Permanent Resident. The first appellant arrived in Australia on 15 October 1996. The second and third appellants both arrived in Australia on 12 September 1996. The appellants lodged applications for protection visas on 7 November 1996 (the first protection visa applications). These applications were refused by the delegate on 15 May 1997. On 20 October 2005 the appellants lodged applications for protection visas with the Department of Immigration and Multicultural and Indigenous Affairs. All of the appellants made claims under the Refugees Convention. On 9 January 2006 a delegate of the first respondent refused the applications for protection visas. On 31 January 2006 the appellants applied to the Tribunal for a review of those decisions. The Tribunal found that the first protection visa applications lacked critical information relating to the reasons why the appellants claimed to be refugees. The Tribunal was satisfied that the application forms lodged in 1996 did not substantially comply with statutory requirements. The Tribunal accordingly found that the first protection visa applications were not valid and that the later application, lodged on 20 October 2005, was valid. It found therefore that the appellants were not barred from lodging the later application. The first appellant claimed that in 1994 he had become involved with the Minority Front (MF) in South Africa, a group which represented Indians in Parliament, and became interested in the party's election campaign. The first appellant claimed he attended a meeting of the African National Congress (ANC) when asked to do so by the MF. He stated that he spoke up at the meeting in support of South Africans of Indian descent. The first appellant claimed that "one black approached [him] and told [him] to leave for [his] own safety. " The first appellant stated he began to work for the MF, including distributing pamphlets. The first appellant claimed that he was attacked one day while distributing pamphlets and, out of fear, relinquished his duties with the MF. However, despite no longer being involved with the MF, the first appellant claimed that in December 1995 he was approached by a group of four black men, one of whom stated that he remembered him from the ANC political meeting. One also stated to him "that if [he] was to live, [he had] to pay for [his] life and [he] had to pay straight away. " The first appellant handed over his wallet. He reported the incident to police. The first appellant claimed that some time later a group of men attended the family home, threatened him and ordered him not to report them to the police again. The first appellant again was forced to give them money. He did not report this incident to the police as he knew he "was being watched and targeted. " He claimed he was approached on further occasions and payment was demanded from him. The first appellant claimed that in May 1996 his home was robbed and his son was held at gunpoint. Later he received anonymous phone calls. He reported both these incidents to the police but was told that they were unable to act as they were understaffed. Consequently, he said the second appellant left her job; they removed their children from school; and made arrangements to leave South Africa. The second appellant claimed that Indians in South Africa were mistreated. The second appellant made claims about three particular incidents. First, in May 1996 she was robbed whilst at a bank. This incident was reported to the police. Secondly, a few weeks later, whilst driving a car, she was followed and the car following her attempted to drive her off the road. She was convinced at that stage that she was being targeted. Thirdly, the second appellant stated that her home was robbed in August 1996. The second appellant also stated that returning to South Africa would not be in the best interests of particularly herself and her young daughter because "[b]eing females it [was] extremely dangerous in view of the high incidence of kidnap and rape and in most incidents murder in South Africa. " The third appellant claimed that she feared she would be raped in South Africa because of her Indian origin. Two witnesses supporting the appellants also gave oral evidence. The Tribunal expressed concerns about the veracity of the appellants' claims but elected to give them the benefit of the doubt. Although the Tribunal accepted that the first appellant was a member of the MF, it did not accept that he had an organising role. The Tribunal found it difficult to accept that the appellants had been targeted due to the first appellant's political activities or at all, given the extent of his activities and the cessation of his participation in the MF after the alleged incidents. The Tribunal found the first appellant's evidence of several of the incidents to be confused and found that there was no evidence that the South African authorities had tolerated or condoned the alleged persecution. The Tribunal outlined that even if it did accept as plausible that the family were threatened, the police acted appropriately by taking the August 1996 incident seriously and doing whatever they could in relation to various other incidents. The Tribunal said that if it it were to accept that there were further incidents of harm, looking at the evidence as a whole, it was satisfied that the incidents were essentially and significantly related to the generalised violence and civil disturbances that prevailed in South Africa. The Tribunal was not satisfied that the first appellant's involvement in MF or the Indian ethnicity of the family were the essential and significant reasons for any harm suffered. The Tribunal noted that persecution by private individuals or groups did not bring a person within the Convention unless the State either encouraged it or appeared to be powerless to prevent that private persecution. The Tribunal accepted as being plausible that the family had experienced incidents that would amount to serious harm, albeit by non-State agents but for which they received appropriate State assistance. The Tribunal then considered whether there was a real chance of Convention-related harm occurring to the appellants in the reasonable future. The Tribunal addressed both the second and third appellants' claims to fear rape but found that the claims were speculative. Whilst accepting the second and third appellants were of Indian ethnicity and that the third appellant was a "beautiful young lady" as asserted in her protection visa application, and accepting independent country information that rape remained a serious problem, the Tribunal was satisfied the claims were "speculative". The Tribunal was not satisfied that, without more, there was a real chance that the second and third appellants would be raped. The Tribunal noted that the first appellant had not continued his activities with MF and was satisfied that he would be able to continue his involvement in MF if he so chose. The Tribunal considered independent country information and while it was clear that there were racial tensions involving the Indian community and discrimination, the Tribunal was satisfied that there was no systematic ill-treatment of Indians by "black" South Africans. The Tribunal acknowledged that if the family were to return to South Africa they may experience difficulties in finding employment, accommodation and resettling generally. While the Tribunal said that it felt for the circumstances of the family, the Tribunal was not satisfied that any difficulties which may be faced by the family would constitute persecution as contemplated by the Convention. The Tribunal constructively failed to exercise jurisdiction when finding as "speculative" the claim of applicants 2 and 3 to fear being raped in South Africa in circumstances where the Tribunal was required to consider whether the applicants claim was genuine and well-founded. 2. The Tribunal's finding on effective state protection is vitiated by jurisdictional error in circumstances where the evidence accepted by the Tribunal was that the police were powerless in preventing private persecution and/or sexual violence against women. 3. The Tribunal committed jurisdictional error by not dealing with an integer of the applicant husband's claim and/or making findings of fact that were not open to it. In addressing ground 1, the Federal Magistrate stated that the appellant's first complaint was that by the use of the word "speculative", the Tribunal made no finding as to whether the fear of persecution was well-founded or genuine. The Tribunal's use of the word "speculative", on a plain reading and in its context, did not reveal error on the Tribunal's part. The words preceding the use of this term revealed that the Tribunal was seized of the need to address the question of whether the fear of persecution was well-founded or not. His Honour decided that describing the appellant's claims as "speculative" was distinct from engaging in a process of speculation itself in answering that question and, for this reason, there was no jurisdictional error. The use of the word "speculative" to describe the claims did not reveal that the Tribunal employed a lesser or different test. Nor did it reveal any analytical or logical flaw in its reasoning process. It took into account all relevant evidence and claims before it and, based on this, found that it could not reach the level of satisfaction that the appellants had a well-founded fear of persecution as contemplated by the Convention. In relation to the appellants' second ground relating to effective State protection, his Honour found that there was nothing in the evidence before the Tribunal to suggest that the police were powerless to prevent harm to the appellants in all the circumstances relevant to them or that the Tribunal ignored such evidence. The appellants' third ground was that the Tribunal failed to deal with an integer of the first appellant's claim or, in the alternative, made a finding which was not open to it. The first appellant was attacked and robbed by a group of "black men". However, the Tribunal towards the end of its reasons referred to "a black man" instead of "a group". The appellants also argued that this error also affected the Tribunal's subsequent finding that it had doubts about the veracity of the appellants' claims. The Federal Magistrate found that the Tribunal had made a factual error in regard to inexplicably translating a group of men into the singular and in its finding that the appellant was distributing pamphlets as part of a group on that occasion. Whilst these errors could not be simply explained away as "inelegant presentations", the issue was whether these mistakes could amount to jurisdictional error. In Abebe v Commonwealth [2004] HCA 32 ; (1999) 197 CLR 510 , the Tribunal made a wrong finding of fact on its own. His Honour found that in this case the Tribunal's mistaken finding did not lead to a failure in the exercise of its jurisdiction, relying on Abebe v Commonwealth [2004] HCA 32 ; (1999) 197 CLR 510. Ultimately, the Tribunal accepted that the appellant had been assaulted and robbed, and whether the appellant was on his own or a part of a group, or whether the assailant was one or part of a group, did not affect what the Tribunal accepted, which was that the appellant had been assaulted and robbed whilst distributing pamphlets on behalf of the MF. Furthermore, the Tribunal accepted that the appellant had reported the incident to police. His Honour also refused to accept that the errors were part of the Tribunal's adverse credibility findings in relation to the appellants in total. No jurisdictional error was found. However, the appellant has expressly abandoned ground 3. His Honour committed an error of law in dismissing the appeal from the decision of the Second Respondent in circumstances where his Honour construed the reasons for the Second Respondent beneficially, notwithstanding the use by the Tribunal of an inappropriate and ambiguous term. (b) The "speculative" finding made by the Tribunal was vital to the appellants' claim of fear of persecution by reason of rape. (c) [The Federal Magistrate] agreed that the term "speculative" on its own could give rise to ambiguities. His Honour also erred in upholding the Second Respondent's decision in circumstances where the Second Respondent committed jurisdictional error in making findings about effective state protection. (b) However, the Tribunal failed to make a finding about whether or not the authorities are powerless to prevent such incidents from occurring in the future. (c) Again, [the Federal Magistrate] expressed "sympathy" with the appellants' submissions and noted that the Tribunal's findings could have been "expressed in a clearer fashion". The Tribunal's use of the word "speculative" was not intended, on a fair reading of the Tribunal's decision, to erect a test for a claim for a well-founded fear of persecution other than that contained in the Refugees Convention. The Tribunal said that the fundamental question for it "is whether there is a real chance of Convention-related harm occurring to the applicants in the reasonably (sic) future. " It then addressed the second and third appellants' fear of being raped in South Africa. It is clear that the Tribunal posed for itself the appropriate test, notwithstanding that the Tribunal answered it by saying that the claim was speculative. That is made even clearer by what the Tribunal said after making that finding. It said, "... the Tribunal is not satisfied that those factors, without more, mean that there is a real chance that they would be raped. " Both before and after the use of the word "speculative" the Tribunal identified for itself the correct test for a well-founded fear of persecution: Chan Yee Kin v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379 at 429. I agree with the Federal Magistrate that the Tribunal's reasons, considered as a whole, show that the Tribunal posed for itself the correct test. The second ground of appeal, even if successful, would not mean that the Tribunal had committed jurisdictional error. The question of State protection did not arise in this case because the Tribunal found that the appellants' fear of persecution was not well-founded. That being the case, the question of State protection did not arise. Even if it did, however, in my opinion, the ground has not been made out. Whilst the Tribunal found that rape remained a serious problem in South Africa, the Tribunal raised with the appellants the proposition that they would be able to receive protection from the authorities if they were to return to South Africa. In the end result, it is not entirely clear whether the Tribunal made a decision of that kind but, in my opinion, they were not bound to do so having regard to the conclusion that the appellants' fear of persecution was not well-founded. Insofar as the Tribunal considered the question of State protection, no error has been demonstrated. That disposes of the two grounds. Other matters were referred to in the appellants' written and oral submissions. In those submissions, the appellants contended that the Tribunal should have found that the second and third appellants' claims of fear of rape were well-founded. The Tribunal found that rape was a serious problem in South Africa. However, the ultimate finding as to whether or not the second and third appellants' fears were well-founded was a matter for the Tribunal. This Court is not entitled to embark upon a merits review: Wu Shan Liang [1996] HCA 6 ; 185 CLR 259 at 272. In the appellants' written submissions, the appellants suggested that the Tribunal failed to assess the second and third appellants as members of a particular social group in considering their claims of fear of rape. The Tribunal did assess their claims on the footing that they were females and beautiful young Indian women. No other particular social group was propounded by the appellants. In that regard, the Tribunal assessed their claims appropriately. In any event, the Tribunal found that their claims of fear of rape were not well-founded. During the hearing, the appellants' counsel contended that the Tribunal had fallen into error by saying that it was "no systematic ill-treatment of Indians by 'black' South Africans". It was put to counsel that the appellants' notice of appeal did not make such a claim. Nor did the appellants' application to the Federal Magistrates Court make such a claim. The Court adjourned for a short time to enable the appellants' counsel to consider whether to apply to amend the notice of appeal to include a further ground. On resumption, the appellants' counsel said no such application would be made. Presumably, in doing so, the appellants had regard to s 91R of the Migration Act 1958 (Cth). In any event, for the reasons given, the appeal must be dismissed. The first and second appellants should pay the first respondent's costs of the appeal. | where the tribunal found the appellants' fears of persecution were not well-founded whether by the tribunal's use of the word "speculative" it identified the correct test to determine whether the appellants' fears were well-founded whether the tribunal made adequate findings on the question of state protection appeal dismissed. migration |
2 The proceeding is an application by way of appeal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth). The applicants applied to the Administrative Appeals Tribunal (the AAT) to review a decision of the first respondent determining under the Australian Wine and Brandy Corporation Act 1980 (Cth) the extent of what the AAT called the King Valley wine region in Victoria. The decision appealed is a decision of the President of the AAT of 18 October 2006. The appeal must be heard by the Full Court: s 44 of the AAT Act. 3 Both the applicants' application to the AAT and this application were instituted in the South Australia District Registries of the AAT and of this Court respectively. The second respondent is described in the application as a "joined party", but its status is a little more complicated than that. 4 Both the applicants and the second respondent are, or represent, groups of grape growers in the area of the King Valley wine region, as now named by the AAT. The second respondent also separately applied to the AAT to review the same decision of the first respondent. That application was instituted in the Victoria Registry of the AAT. 5 The AAT heard both applications together. The President of the AAT did not formally order that the matters should be consolidated or that they should be heard together, although they proceeded to be heard together by general consent. On 30 March 2005, the President directed that the applicants should file their documents in the South Australia Registry of the AAT and the second respondents (as applicants in their review application) should do so in the Victoria Registry of the AAT. There is nothing to suggest that process caused any difficulty. His Honour declined to make any direction as to which registry a consolidated proceeding should be conducted from. On that occasion, his Honour also declined to make any formal order as to where the hearing should take place. He indicated that there should be flexibility, including allowing for evidence in the King Valley area and in Adelaide and Melbourne, depending upon convenience and cost. 6 His Honour also indicated that one decision would be given in relation to both applications. His Honour was true to his word. His decision of 18 October 2006 is headed with the title of both applications. 7 The interlocutory hearings of both applications to the AAT took place in various locations. The first directions hearing of the applicants' application took place in Adelaide. The hearing at which the President declined to order that the two applications to the AAT be consolidated and transferred to the Victoria Registry of the AAT, and subsequent directions hearings, apparently took place with the applicants in Adelaide, the second respondents in Melbourne, and the President either in Melbourne or Sydney. In my view, the directions hearings in the AAT therefore took place in Adelaide, Melbourne and Sydney. 8 The hearing of evidence before the AAT lasted some 11 days. That evidence was given at Wangaratta and in Melbourne. After the evidence, there was a final directions hearing which took place with the President in Melbourne with the second respondents' representatives, and with the representatives of the applicant in Adelaide appearing by video link. It is unclear what transpired on that occasion. I assume that it was a hearing as part of the process of the AAT finally determining the orders which it should make. It was, therefore, part of the hearing. The delivery of judgment and pronouncing of orders is also a step in the hearing of the matters. Order 53 of the Rules deals with appeals from the AAT. Order 53 r 2(2) provides for a notice of appeal to be filed "in an appropriate Registry", and O 53 r 2(3) permits the Court to later order that a nominated Registry is the appropriate Registry for a particular appeal (my emphasis). Order 53 r 1 defines "appropriate Registry" as a "District Registry in the State or Territory in which the Tribunal heard the matter. 12 In Australian Telecommunications Corporation v Lambroglon (1990) 12 AAR 515 at 519 Ryan J indicated that because O 53 was not qualified in any way by reference to the other Rules, it should in the first instance determine the practice and procedure applicable to appeals from the AAT. The parties made no submission to the contrary. 13 Indeed, the second respondent stressed that the Court should apply O 53 in its terms, rather than direct that the venue of the hearing of the appeal be changed to the Victoria District Registry under s 48 of the Federal Court of Australia Act 1976 (Cth), or under O 30 r 6(1), or that the proceeding be transferred to that Registry under O 10 r 1(2)(f), having regard to the definition of the "proper place" in O 1 r 4 of the Rules. 14 In Hadid v Lenfest Communications Inc (1996) 70 FCR 403, Hill J at 407 pointed out that, for the purposes of enlivening the Court's power to control access to certain documentation under s 50 of the Federal Court of Australia Act 1976 (Cth), the "hearing of a proceeding" could extend to a directions hearing or an interlocutory process. See also E v Australian Red Cross Society (1991) 27 FCR 310. That view is reflected in, and consistent with, the definition of "hearing" in O1 r 4 of the Rules, namely that "hearing includes any hearing before the Court, whether final or interlocutory, and whether in open court or in chambers". Order 10, referring to the Court's powers at a directions hearing, apparently uses the term "hearing" in r 1(2)(c) in a somewhat more confined sense as a hearing in which the Court proposes to perform an adjudicative function (not necessarily a final adjudication). Order 30 r 1(2)(a) uses the term "trial" to include any interlocutory hearing. In Martin v Abbott Australasia Pty Ltd [1981] 2 NSWLR 430, Hunt J at 434-436 regarded an appeal "after a trial or a hearing on the merits" as including to an appeal from an interlocutory hearing. A similar conclusion was reached by Anderson J in Melbourne & Metropolitan Board of Works v Bevelon Investments Pty Ltd [1977] VR 473 at 475-477. 15 Whilst those cases deal with the scope of the term "hearing" in the Court, I see no reason why a different meaning should be given to that term in O 53 r 1 because it refers to a hearing by the AAT. 16 Section 20(4)(b) of the AAT Act empowers the President to give directions as to the places at which the AAT may sit. Section 20A provides for sittings from time to time at places at which there are Registries established, but that the AAT may sit at any place in Australia or in an external Territory. It is unclear whether, if in the case of a District Registry established under s 64 of the AAT Act, s 20A refers to the physical location of the Registry as established or the general area of the State itself. Section 35A provides that the AAT may, at either a directions hearing or at the hearing of a proceeding, allow a person to participate by telephone or by video. 17 Clearly the AAT sits where the member hearing the matter sits, although it is not so clear, where the AAT is comprised of more than one member and they are in different locations and conduct the hearing by video, whether the AAT sits only in the location of the presiding member or in those locations where its members are sitting. Also, it does not follow that where an AAT member sits to give directions or to hear evidence or submissions in a matter is the Registry in which the AAT hears the matter. The matter may be heard in the Registry in which it is instituted and conducted, even though the member may sit in different physical locations around Australia. 18 The starting point is to identify the matter which the AAT heard. Order 53 r 1 does not expressly refer to the District Registry of the AAT in which the matter was heard. If it did so, the first contention could be simply determined. The AAT decision now the subject of the appeal was made in a matter in the South Australia District Registry of the AAT, notwithstanding that the actual hearing of the matter took place largely in Victoria. Because the AAT may sit in various locations, it would then be sensible to treat O 53 r 1 as referring to the District Registry of the AAT in which the matter was conducted. In this instance, the AAT heard two matters together. One was conducted in its South Australia District Registry and one in its Victoria District Registry. It would then follow that the appeal may have been properly instituted in the South Australia District Registry of the Court. It might equally have been properly instituted in the Victoria District Registry. 19 However, O 53 r 1 directs attention not to the District Registry of the AAT in which it heard the matter but to the geographical place, namely the State or Territory, in which the AAT heard the matter. The hearing must be the hearing of the issue in the matter which led to the decision the subject of the appeal. In the present appeal, that issue was the definition of, and extent of, the King Valley wine region. The President sat only in Victoria apart from giving his decision, which he gave in Sydney (so the hearing of the matter may be said to have taken place both in Victoria and New South Wales). The application does not complain of the orders made, or declined, at directions hearings. However, I do not consider it is possible to divorce the location of the directions hearings from "the matter" referred to in O 53 r 1. The hearing to which O 53 r 1 refers is that of the matter itself, and not a particular issue or issues, or a particular step or steps in the process. The term "matter" of course conveys the whole of the controversy before the AAT: South Australia v Victoria [1911] HCA 17 ; (1911) 12 CLR 667 at 675; Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd [1981] HCA 7 ; (1981) 148 CLR 457 at 507-509. 20 As the first directions hearing took place in Adelaide, in my view, the hearing of the matter by the AAT extended across South Australia and Victoria, as well as New South Wales, where at least one directions hearing was held and judgment was given. I note that the President directed also that documents in the two proceedings were to be filed in either the South Australia or the Victoria Registries of the AAT. 21 I conclude therefore that the present appeal was properly instituted in the South Australia District Registry. It is then necessary to address the second contention referred to in [9] above. 22 There is no indication in the Rules, or so far as I can determine, including from the researches of counsel, as to the considerations relevant to making an order under O 53 r 2(3) that a Registry other than an appropriate Registry in which an appeal has properly been instituted is the appropriate Registry. 23 Order 53 r 2(3) provides, at least, for circumstances such as the present where (for the reasons I have given) there are three appropriate Registries in which the appeal might have been instituted. The discretion to make such an order no doubt exists because, amongst other things, the identification of appropriate Registries may be the consequence of costs considerations or the convenience of the AAT for a particular sitting. For example, although the decision of the AAT was given in Sydney in this matter, there was no other connection of the matter with Sydney. 24 The parties did not seek to rely on the jurisprudence concerning the transfer of proceedings or the determination of the "proper place" of proceedings under s 48 of the FCA Act, or O 10 r 1(2)(f) of the Rules. However, their submissions focussed upon the connection of the subject of the AAT proceedings and this appeal to Victoria and the respective convenience of the parties. Their submissions therefore in fact centred upon the sort of considerations discussed in National Mutual Holdings Pty Ltd v Sentry Corporation (1988) 19 FCR 155 and subsequent decisions concerning s 48 of the FCA Act and O 10 r 1(2)(f). 25 In this matter, there is no circumstance relevant to the efficient administration of the Court to be weighed. The appeal will be heard following the next Full Court callover with equal facility in Adelaide or Melbourne. 26 Clearly, the subject matter of the appeal is in Victoria. Nothing more need to be said on that point. The application to the AAT in its South Australia District Registry appears to have been made because the applicants were South Australian based, and had relevant interests in or in the vicinity of the King Valley area. 27 The further conduct of this appeal, whether in the South Australia District Registry or in the Victoria Registry, will cause some but, in my view, not great inconvenience to one or other of the applicants or the second respondent. The appeal book must be settled. That can be done by a Registrar in either Registry with the parties attending in person or by telephone. It is not likely to be seriously contentious. There should then be a callover which can again be attended by one or other of the parties' representatives by telephone and without inconvenience. Finally, there will be a hearing. Either the applicants (or some of them) or the second respondent (or some of its representatives), and their legal teams, will need to attend interstate for the hearing. In the case of the second respondent, its solicitor in any event will have to travel to Melbourne or Adelaide from Wangaratta (and I accept it is more convenient and faster for him to attend in Melbourne) and their counsel is based in Melbourne. Despite the concerns of the parties, I do not consider that the further conduct of the application --- wherever it is to take place --- will require the appointment of fresh solicitors interstate. 28 In my judgment, I should determine that the Victoria District Registry is the appropriate Registry for the appeal. I do so because, in essence, the appeal concerns the identification of a vineyard region in Victoria. The nature of the issue, and its connection with Victoria, is confirmed by the fact that ultimately all the evidence was heard in Victoria. As I have noted, there is no particular consideration relevant to the efficient administration of the Court, and I do not regard the convenience of the parties or their proper interests as pointing firmly in any particular direction. 29 In my view, generally speaking, little weight should be given to the fact that counsel or the solicitors for a party are in a particular location. Principally, that is because the selection of counsel and solicitors is a matter for the parties. Their choice should not be of significance to the identification of the proper place of a matter. The Court is a national Court, with Registries in each State and Territory and can sit anywhere in Australia. However, to an extent, there is a tendency for parties to institute proceedings in a Registry of the Court convenient to counsel or the solicitors for the parties rather than in a Registry which has a real connection with the subject matter of the dispute, or indeed with the parties themselves or the witnesses. I do not think that the Registry where proceedings are instituted should be dictated by that consideration. Further, where that is the case, it may well be appropriate to transfer the proceeding to a proper place, having regard to the considerations discussed in Sentry and other cases. 30 For those reasons, I order that the Victoria District Registry is the appropriate Registry for this appeal and that the proceeding be transferred to the Victoria District Registry of the Court. 31 In my view, as the second respondent has succeeded on its motion, but only on one of the two matters it argued, the appropriate order is that the costs of the second respondent on the motion should be its costs on the appeal. The intention of that order is that, if the appeal is successful, there will in effect be no costs of the motion, but if the appeal is dismissed and the second respondent gets its costs of the appeal, those costs will include its costs of and incidental to the motion. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. | federal court rules 1979 (cth), o 53 r 1, o 53 r 2(2), o 53 r 2(3) appeal from decision of aat determination of "appropriate registry" where appeal from matter heard in multiple states whether proceedings instituted in a registry to suit convenience of counsel or solicitors where no real connection with that registry consideration of "proper place" practice transfer of proceedings |
2 The Notice of Motion filed yesterday was listed for hearing in circumstances of some urgency at 3.30pm yesterday having regard to the following events. 3 This action is a complex piece of commercial litigation which has a long history. The action was commenced on 5 December 1996, proceeded to trial and was the subject of a judgment by Justice Spender on 11 March 2003: Expectation Pty Ltd v PRD Realty Pty Ltd & Anor [2003] FCA 175. The Full Court of the Federal Court set aside, in part, his Honour's judgment ( Expectation Pty Ltd v PRD Realty Pty Ltd & Anor per Carr, Emmett and Gyles JJ [2004] FCAFC 189 ; (2004) 140 FCR 17), and ordered a new trial in relation to a part of the Applicant's claim. 4 The Applicant's claim which is the subject of the new trial is a claim that PRD Realty Pty Ltd, a real estate agent carrying on business on the Gold Coast in Queensland and Mr Douglas, a director of PRD Realty, engaged in conduct in contravention of the Trade Practice Act 1974 (Cth) and the Fair Trading Act 1989 (Qld) or alternatively, each of them engaged in conduct constituting negligence, breach of fiduciary duty and breach of contract concerning an agreement entered into by the Applicant for the purchase of a commercial shopping complex described as the Benowa Gardens Shopping Centre ("the Benowa Centre") located on the corner of Ashmore Road and Benowa Road at the Gold Coast in Queensland. 5 The Applicant in the proceedings is a Western Australian corporation. For a considerable part of the proceedings, the Applicant has been represented by Mr Wayne Martin QC ("Mr Martin"). Mr Martin is retained to appear on behalf of the Applicant at the trial commencing on Monday, 10 April 2006. 6 The proceeding has been the subject of a series of Directions Orders designed to ensure that no outstanding interlocutory questions might put the trial of the action at risk in any way having regard to the history of the litigation and the allocation of significant Court time to the conduct of the trial. The parties have been engaged in extensive preparation of the matter for trial. 7 On 4 April 2006, my Associate received a letter from Mr Martin a copy of which was provided by Mr Martin to the solicitors and counsel for the Respondents. I have been retained to appear as Counsel on behalf of the Applicant. This course has been chosen because, by the time the decision of the Government of Western Australia was known to me, it was too late for my client to engage alternative Senior Counsel to appear at the trial commencing on 10 April 2006. I would mention in this connection that I have been heavily engaged in the preparation of this case for trial, having appeared on behalf of the Applicant at the Appeal which led to the retrial. 9 The Respondents take the position that, contrary to the view expressed by Mr Martin in the third last paragraph of his letter, the course proposed by him does pose a difficulty and the difficulty is this. Because Mr Martin has been offered an appointment to the position of Chief Justice of the Supreme Court of Western Australia and has accepted the appointment notwithstanding that a Commission has not yet issued and nor will the taking of oaths of office occur until 8 May 2006, Mr Martin is now clothed with the standing within the administration of justice of a judicial officer. That being so, the Respondents say that for all relevant practical purposes, one judge will be representing a party before another judge. That result, it is said, necessarily has the appearance of unfairness and tends to undermine public confidence in the fair and impartial administration of justice. 10 The fair and impartial administration of justice is said to be undermined because a fair-minded lay observer might reasonably apprehend that a trial judge might not bring an impartial and unprejudiced mind to the resolution of the various questions the trial judge is required to decide if senior counsel retained by one side carries the imprimatur and standing of such an appointment into the conduct of the trial. The Respondents say that the very fact of the appointment is the circumstance that unfairly weighs the scales against the Respondents at least in a way which would constitute a reasonable apprehension of bias. 11 Mr Moore deposes upon information and belief in his affidavit in support of the motion to a conversation he had with the Second Respondent, Mr Gordon Douglas. Mr Douglas articulates his concern in the following way. Mr Douglas feels very uncomfortable with the Applicant being represented by counsel with an accepted appointment as Chief Justice of a Supreme Court. Mr Martin's appointment confers extra credibility upon the Applicant's case so as to place PRD Realty and Mr Douglas in a position of disadvantage. The Respondent's feel aggrieved by what has occurred. The process is unfair. Mr Douglas is extremely disappointed about the timing of the announcement of the appointment on the eve of the trial. Mr Martin carries the authority of the Chief Justice of Western Australia into the trial. The Respondents have the odds stacked against them unfairly and Mr Douglas feels the Respondents have been put through enough without having to face the concern of the Applicant now being represented in Court by a person who has received an appointment as Chief Justice of a State Supreme Court. Mr Douglas and PRD Realty will always believe that the trial judge was influenced to find for the Applicant by the authority which Mr Martin's position as State Chief Justice gives to the Applicant's case. The most recent turn of events is awkward and embarrassing. 12 Accordingly, the Respondents' submission is that the trial judge upon whose docket the action is listed or any judge of the Federal Court of Australia is not capable of conducting a trial of the action should Mr Martin appear for the Applicant, in a way which is consistent with a perception in the mind of a fair-minded lay observer acting reasonably of the judge bringing a fair, independent and impartial mind to bear on the issues. The very presence of Mr Martin raises the possibility of a failure to afford independence and impartiality in the exercise of judicial power. 13 There is no basis for such an apprehension. 14 Mr Martin is a senior member of an Australian Bar who is retained to appear as counsel in a matter before the Federal Court of Australia. He is not the Chief Justice of the Supreme Court of Western Australia although plainly enough the announcement of the appointment to be made ultimately the subject of a Commission and the taking of oaths of office is an expression of confidence by the Government of Western Australia in the professional standing and skills of Mr Martin. He is to be appointed to the Supreme Court of a State. He is not appointed as Chief Justice of the Federal Court of Australia nor as a Justice of the High Court of Australia or a Justice of the Federal Court of Australia. Appeals from decisions of the Federal Court of Australia do not lie to the Supreme Court of Western Australia. There is, therefore, no tenable conscious or unconscious influence or apprehended influence which might affect the mind of a Federal Court judge in the conduct of a case, in the present circumstances, as an incident of existing structural jurisdictional arrangements. 15 The second question then is whether a fair-minded lay observer might reasonably apprehend conscious or unconscious influence in a way which would undermine the impartial and unprejudiced determination of the issues by reason of Mr Martin's proposed appointment to take effect at the conclusion of the trial. 16 Three preliminary observations should be made. The first is that the action forms part of my docket and the trial will be conducted before me. Although I have been engaged in the conduct of commercial litigation for over 30 years, I have never met Mr Martin nor been involved in any commercial litigation with or against him. I simply know of him by reputation in the way in which any experienced person knows of leaders of the Bar. 17 Secondly, the conduct of the case on behalf of the Respondents is undertaken by not one but two senior counsel. The conduct of the case for the Respondents will be lead by Mr Brian O'Donnell QC and Mr Peter Applegarth SC leading Mr Pomerenke all instructed by Mr Moore who is an experienced litigation solicitor. It is not suggested that Mr Martin will conduct the case on behalf of the Applicant in an unprofessional way or in any way inconsistent with the proper discharge of all obligations to the Court. To the extent that Mr Martin might seek to put propositions that are thought by the Respondents to be or are in fact unsustainable, the Respondents seem to be in a position to add their own gravitas through their advisers so as to ensure the balance and proportionality required to properly protect their interests. 18 Thirdly, although I accept that a natural response of a lay litigant to the notion that counsel representing an adversary is a person who has acquired what might be perceived to be elevated standing, is to raise a concern as to the implications for that litigant in the conduct of the case, the question is whether in all the circumstances a fair-minded lay observer acting objectively and reasonably would perceive a possibility of an absence of an impartial mind on the part of a judge. The question is not determined by the views expressed by Mr Douglas [11] unless it is said that those views are emblematic of the view a fair-minded lay observer acting objectively and reasonably might take. The role of experienced counsel in advising the lay litigant in the face of particular articulated concerns is to reflect informed opinion as to whether the presence in the conduct of a trial in the Federal Court in Brisbane for a party represented by senior counsel from Western Australia facing appointment to the Supreme Court in that State raises fairly and objectively, assessed from the standpoint of a fair-minded lay observer a possibility (that is, a real and not remote possibility) of impartiality. Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge (or other judicial officer or juror), as here, the governing principle is that, subject to qualifications relating to waiver ... or necessity ..., a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. The apprehension of bias principle may be thought to find its justification in the importance of the basic principle, that the tribunal be independent and impartial. So important is the principle that even the appearance of departure from it is prohibited lest the integrity of the judicial system be undermined. There are, however, some other aspects of the apprehension of bias principle which should be recognised. Deciding whether a judicial officer might not bring an impartial mind to the resolution of a question that has not been determined requires no prediction about how the judge will in fact approach the matter. The question is one of possibility (real and not remote), not probability. The apprehension of bias principle admits of the possibility of human frailty. Its application is as diverse as human frailty. Its application requires two steps . First , it requires the identification of what it is said might lead a judge to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. The bare assertion that a judge has an 'interest' in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision-making, is articulated. Only then can the reasonableness of the asserted apprehension of bias be assessed. 22 Traditionally, apprehended bias connoting an absence of impartiality has been examined against the background of whether a judge has an "interest" in the cause to be determined before him (whether the interest is a financial interest or, in more recent times, a non-economic interest), an "interest in a party" of a sufficient threshold (such as shares in an entity being a party in the proceeding before the judge), an "association" with a party or counsel, knowledge of particular "information" or "some other circumstance": Ebner v Official Trustee in Bankruptcy (supra) at paragraph [33]. Those factors reflect the identification of what might lead a judge to decide a case other than on its legal and factual merits. Having identified those factors, there must be an articulation of the logical connection between that matter and the feared deviation from the course of deciding the case on its merits. That analysis determines whether the apprehension is reasonably held. 23 In this case, the proposition is that the standing of Mr Martin is the matter which might lead a judge of the Federal Court of Australia to decide a case other than on its legal and factual merits. It seems to me that the offer made to Mr Martin of an appointment and the proposal to accept such an appointment to the Supreme Court of Western Australia does not identify a matter which might be said to lead a judge of the Federal Court to decide the case other than on its merits both as to the facts and the legal issues. But even if it is thought that Mr Martin's elevated status provided the foundation for an identified matter giving rise to such a concern, the Respondents have not articulated a "logical connection" between that matter and the fear held of a deviation from the course of deciding the case on its merits which is a duty of the trial judge in exercising judicial power. 24 The submission of the Respondents is essentially a "bare assertion" which is of "no assistance" until the true nature of the "asserted connection with the possibility of departure from an impartial decision-making", is articulated [20]. It seems to me that the Respondents have not been able to demonstrate the "reasonableness of the asserted apprehension of bias". 25 These principles are consistent with the observations of their Honours Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ in Johnson v Johnson [2000] HCA 48 ; (2000) 201 CLR 488. The notion that the test is an objective one to be assessed by reference to a fair-minded lay observer acting reasonably having regard to a real and not remote possibility is consistent with the views of Callinan J and Heydon J in Antoun v The Queen [2006] HCA 2. 26 The Respondents place particular emphasis upon an exchange which occurred in an application before their Honours Gleeson CJ, McHugh J and Gummow J in an application for special leave in three matters S296, S297 and S298 of 2004 the first of which is described as Batterham v Maylord Equity Management Pty Ltd , (22 April 2005). Mr Rothman SC appeared for the applicant for special leave. Yesterday, it was announced you were going to be appointed to the Supreme Court and it is very difficult, no doubt, in the circumstances to get another counsel to do these cases, but the tradition in New South Wales, Victoria and Western Australia, at least to my knowledge, is that counsel do not appear in cases after they have been appointed to the bench. That tradition has been breached on at least another occasion in recent times. 28 Mr Rothman responded by apologising to the Court if his appearance in the case caused any embarrassment. Mr Rothman observed, however, "I have to say, I did seek some indication from the Chief Justice of New South Wales who indicated that it was appropriate so I had that in mind and I apologise if it has caused any embarrassment, your Honours" . The Chief Justice then said, "Anyway, go ahead with your argument ... and congratulations on your appointment" . McHugh J said, "Yes" . 29 Counsel for the applicant in the proceeding and the respondent to the motion point out that Chief Justice Spiegelman seemed to take the view that it was appropriate for Mr Rothman to appear and, therefore, it seems minds might legitimately differ about the "tradition". Further, Chief Justice Gleeson did not embrace the observations of McHugh J and seemed. notwithstanding those observations, to immediately invite Mr Rothman to go ahead with his argument, without further comment. 30 The applicant respondents say that the respondent to the special leave application did not object to Mr Rothman's appearance and that is the end of the matter and, secondly, Mr Rothman was appearing before the High Court. Since Mr Rothman's appearance was before the highest Court in the Australian appellate structure, there could be no embarrassment in the sense in which apprehended bias arises in the present proceedings. In the course of argument, I invited counsel for the Respondent to the motion (the Applicant in the proceeding), Mr Sofronoff QC to say whether he accepted that there is a "tradition" consistent with the views expressed by McHugh J and, if so, what principle provides the foundation for such a tradition. Mr Sofronoff was not able to say whether there is a "tradition" although the views of Justice McHugh must, of course, be given great weight and regard. Since Mr Sofronoff can not say whether there is a practice elevated to a tradition, he is not able to identify a principle out of which such a tradition might have evolved. 31 It seems to me that there is an analogous position in the present proceeding in the sense that Mr Martin is appointed to the State Supreme Court of Western Australia. There is no structural constitutional impediment conscious or unconscious to a robust conduct of the trial in a fair and balanced way by reason of Mr Martin's appointment to that Court. The question would be different if Mr Martin's appointment was to the Federal Court or, more specifically, as Chief Justice of the Federal Court. 32 I am not satisfied that any basis has been established for apprehended bias. 33 The order sought is not one of disqualification of a trial judge but adjournment of the proceeding and adjournment would have the effect of displacing the conduct of the trial until possibly September or more probably October 2006 since I am advised by counsel for the Respondents that one cannot be assured the trial will conclude in the period 10 April to 4 May 2006. That adjournment would have the effect of displacing Mr Martin from his role as counsel for the Applicant. The Respondents say that if the proceeding is so adjourned, the Applicant would have sufficient time to retain alternative counsel. When the application was initially foreshadowed yesterday, the order to be sought was one restraining the Applicant from engaging the counsel of its choice in the conduct of the trial. That order has not been sought. The order now sought is an order that the trial be adjourned and the Applicant pay the costs of the motion. 34 Having regard to the history of the matter and recognising that this proceeding was commenced on 5 December 1996, it is important that the controversy between these parties is resolved as soon as possible. I am not persuaded that it is in the interests of justice that the matter be adjourned. The Respondent Applicant relies upon an affidavit of Mr Andrew Charles which identifies the history of the matter, the preparation of the matter for re-trial, the analysis of the documents in preparation, the arrangements in relation to witnesses and the consequences of any adjournment. I am satisfied that the adjournment of the matter will inflict significant dislocation on the Applicant as it no doubt will upon the Respondents. It is important that the matter proceed to trial as soon as possible. There is a real need or necessity to determine the controversy by trial without any further delay having regard to the history and the field of the issues raised by the litigation. In that regard see Expectation Pty Ltd v PRD Realty Pty Ltd & Anor [2006] FCA 360, 4 April 2006. 35 In Ebner v Official Trustee in Bankruptcy (supra), Justice Gaudron at paragraphs [79] to [82] observed that the notions of impartiality and the appearance of impartiality are so fundamental to the judicial process that they are defining features of judicial power and form part of the exercise of the judicial power of the Commonwealth by Chapter III Courts. Accordingly, Chapter III operates to provide a constitutional guarantee that matters of Federal jurisdiction are determined by a Court constituted by a judge who is impartial and who appears to be impartial. A question might then arise as to whether, in the face of a failure to act consistently with the constitutional guarantee, there is any role for a doctrine of necessity. I have formed the view that in the circumstances of this case there is no apprehension of bias. If, however, the relevant circumstances give rise to an apprehension of bias, it seems to me that there is a real necessity to conduct the trial and not postpone it. Consistent with the views of their Honours, Gleeson CJ, McHugh, Gummow and Hayne JJ in Ebner v Official Trustee in Bankruptcy (supra), it may be that the doctrine forms part of the qualification upon the content of the constitutional guarantee. 36 Notwithstanding these observations in relation to the doctrine of necessity, I am not satisfied that there is any basis demonstrated in the circumstances of the present case of apprehended bias. Although Mr Sofronoff asserts in his submissions that "the proposition that the court could be seen to bring a less than impartial mind to bear on the determination of the issues is preposterous" , I am content to conclude that there is no basis made out for a submission of apprehended bias. 37 I propose to dismiss the motion. 38 As to the question of costs, I propose to reserve the costs of the motion until the parties have had an opportunity to consider these Reasons and make submissions in relation to 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 Greenwood. | application to adjourn the trial of an action on the ground of apprehended bias consideration of the impact upon the conduct of the trial by reason of a party retaining senior counsel who has been offered and accepted an appointment to act as chief justice of the supreme court of western australia consideration of whether a fair-minded objective lay observer might reasonably apprehend a possibility of a lack of impartiality. practice and procedure |
The sentences were imposed concurrently. The appellant was remanded into custody following her conviction on 30 June 2006. On 5 July 2006 the appellant was granted conditional bail after she lodged an appeal against the severity of her sentence. The appellant has spent five days in custody referable to this matter. Note: A corporation may be fined up to 5 times the amount of the maximum fine. See subsection 4B(3) of the Crimes Act 1914 . Possess device for infringing copyright on work: s 132(3) Copyright Act On summary conviction: 5 years imprisonment and/or a fine of $60,500: section 132(6A) Copyright Act . Possess goods with falsely applied trade marks: s 148(e) Trade Marks Act . On summary conviction: 12 months imprisonment and/or fine of $6,600: s 4J Crimes Act 1914 (Cth). (2) The jurisdiction of the Federal Court to hear and determine appeals against decisions, directions or orders of the Registrar is exclusive of the jurisdiction of any other court except the jurisdiction of the High Court under section 75 of the Constitution . (3) A prosecution for an offence against this Act may not be started in the Federal Court. (2) The jurisdiction conferred by subsection (1) extends to jurisdiction to hear and determine an appeal from a judgment of a court so far as it relates to a matter that is associated with a matter in respect of which an appeal from that judgment, or another judgment of that court, is brought. The appellant asks that the sentence the subject of appeal be set aside and that this Court substitute its own sentence in lieu: Kovac v The Queen (1977) 15 ALR 637. a. In this regard, the appellant relies on sentencing statistics published by the Judicial Commission of New South Wales in 2007 and annexed to her written submissions which illustrate that over the period October 2002 to September 2006 in the case of 90 offenders convicted of breaching s 132 of the Copyright Act and in respect of 102 offenders convicted of breaching s 148 of the Trade Marks Act , none were imprisoned. Any that were given a custodial sentence were immediately released pursuant to s 20(1(b) of the Crimes Act . This, the appellant submits, provides a measure for this Court to assess the objective criminality of the offence and thus a guide as to what level of punishment is adequate. Given the magnitude of the publicity and the inevitable consequence that the appellant is now publicly known and identified for this case, interactions of the appellant with her friends and the community almost always now raise the subject of the offence and her subsequent incarceration. With this unique factor in mind, the appellant submitted that specific deterrence has to some extent been achieved by the media publicity over the incident, as the appellant will continually be reminded of the imprisonment that was given to her. The appellant further submitted that the weight that ought to be attributed to the need for specific deterrence in light of her prior sentence for a similar offence on 15 May 2002 (resulting in $1,520 in fines and a recognizance to be on good behaviour for two years) should be discounted because of the subsequent media publicity surrounding the case, the manner in which it clearly identified the appellant and the ensuing effect on the identity of the appellant and how she is now known amongst her friends and the community. Finally, it was submitted that general deterrence has also to some extent been achieved by the prominence of the media publicity, and thus in the appellant's submission should be factored into the final sentence that this Court is being asked to substitute. The appellant is a 53 year old unemployed pensioner mother of two children, aged 20 and 27 years of age. The youngest of these children, Angelo Polese, was born in 1986, and since that time has had severe autism. The appellant has thus been required to provide full-time care for her severely disabled child with little assistance from other persons. She has done this at home for 20 years, and this has required her to be ever present at home with her disabled child, giving her full-time attention. (2) That the appellant was required to be constantly at home is the root cause for the psychological state which resulted in the offences for which she is presently before this Court. Her instructions are that collecting of videos began as a need to keep occupied when housebound caring for her child, resulting in a library. Lending of her personal collection led to copying for loan, and this behavior formed the basis of her social interaction with the outside community, which would otherwise have been non-existent due to her child's needs. (3) At the beginning of 2006, Angelo attacked the appellant and substantially injured her. He was subsequently placed in the care of the Department of Ageing, Disability & Home Care, where he remains to this day. It is feared that he is unstable and may attack people in his vicinity again, including his mother, and so he is to remain in the care of the Department indefinitely. (4) Since the beginning of 2006, the appellant has regained a liberty that she has not known for more than 20 years. That she is no longer housebound means that the psychological state which resulted in the offences before the Court is less likely to recur. She is now able to actively partake in the community as "normal" people who are not housebound do. She thus now has a support network that she did not have for some 20 years, including regular church attendances with her daughter. She has also expressed a desire to work part-time. (5) The appellant has taken active steps to address the psychological trauma caused by the full-time care she provided to her severely disabled child for 20 years and the consequent psychological state attendant upon the commission of these offences, by attending a clinical psychiatrist where she has commenced a course of medication. There was annexed to the appellant's written submissions a letter from a Dr Thomas Luong dated 8 February 2007 concerning the appellant's depressive disorder, and the treatment that she is receiving for it. (6) All of these changes have only recently become possible and should give prominence to the need to rehabilitate the appellant to be a positive participant in the community. A full-time custodial sentence would be counter-productive to the unique hardship endured by the appellant and the renewed opportunity that is now present before the Court to redress the causes of the offences being committed in the first place. A full-time custodial sentence would also unjustly burden the community with its expense. (7) As prison is a measure of last resort, full-time custody for the appellant, in the ultimate, is unjust and inappropriate, given the unique changed circumstances before the Court and the unique opportunity to rehabilitate the appellant: s 17A Crimes Act . (2) The governing principle under s 16A(1) is the imposition of a sentence which is of a "severity appropriate in all the circumstances of the offence". (3) The Court must consider the matters adverted to under s 16A(2) , together with the important consideration of general deterrence: R v El Karhani ; R v Paull (1990) 20 NSWLR 427, per Hunt J. The Court (Kirby P, Campbell & Newman JJ) at 377H also cited Street CJ (writing for the Court) in Rushby [1977] 1 NSWLR 594 at 597 --- 598. (6) General deterrence is of particular importance in sentencing for Copyright Act and Trade Marks Act offences. It is important in these types of offences, which are not always easy to detect and that have the potential to interfere with important rights in the community, that the penalty fixed be sufficient to deter others that might be minded to engage in similar conduct. That is a matter which I must take into account here. In particular, the Copyright Act offences stipulate a maximum penalty of five years imprisonment on summary conviction: s 132(6AA) Copyright Act . (9) In the present case the appellant's high level of criminality is reflected in her role of infringing copyright and affixing false trade mark labels on a large number of pirated video cassettes, before renting these copyright-infringed items to the general public. (12) The appellant traded in the pirated videos by renting them to the public for monetary gain. The presence of the television and extensive video equipment in her home and the large quantity of copyright-infringed video cassettes (over 35,000) demonstrates the high volume commercial extent of her criminality. The fact that the appellant has previously been convicted of similar offences also negates any suggestion that this was an isolated or "one-off' offence. (13) The Court is entitled to take into account the context and surrounding circumstances of the crime. Although 11 representative charges were ultimately prosecuted and the appellant pleaded guilty to these, this Court is not limited to only considering the facts arising from just these charges. While this Court cannot rely on the surrounding circumstances to aggravate penalty and increase the sentence, it is entitled to take these factors into account in reaching the conclusion that this was not an isolated incident so there is no warrant to extend leniency: see Holyoak (1995) 82 A Crim R 502 (at 509 --- 511) per Allen J (Handley JA and Hulme J agreeing). (15) Prior to the search warrant being executed, undercover representatives of the copyright holder rented copyright-infringed videos from the appellant on three occasions. (16) This course of conduct serves to further demonstrate that the purpose of the appellant's possession of the copy-infringed items was to achieve a commercial gain for her own benefit. On 14 March 2006, the appellant was arrested and charged. After two court dates (27 April 2006 and 8 June 2006), the appellant entered pleas of guilty and was convicted and sentenced on 30 June 2006 at Liverpool Local Court. (18) The Crown acknowledges that the appellant's pleas of guilty to the charges occurred at a relatively early stage. By her plea, the appellant can be said to have "facilitated the course of justice" (otherwise referred to as the utilitarian effect): R v Ellis (1986) 6 NSWLR 603 at 604; R v Winchester (1992) 58 A Crim R 345. • The objective gravity of the offence. • The need for general deterrence. • The need for a strong subjective deterrence aspect. In relation to these offences, the appellant was placed on a good behaviour bond for two years with a self-surety of $500 and fined various amounts. Accordingly, the appellant cannot claim to be a person of good character. (23) In any event, the Courts have repeatedly held that less weight is accorded to good character for "white collar" or fraud-related crime where the need for general deterrence is strong: R v Thompson (1975) 11 SASR 217 (per Bray CJ at 222); R v El-Rashid (unreported, Court of Criminal Appeal, NSW, 7 April 1995); R v Williams [2005] NSWSC 315 ; R v Ronen and Ors [2005] NSWSC 991 ; R v Cooper [2006] NSWSC 609. She is a single mother aged 53 with two children, one being an autistic son now aged 20 who is living at a residential home and away from the appellant (see (26) --- (27) below). (25) At the time of the preparing of these reports the appellant was unemployed and receiving social security benefits. She does not suffer from any physical or mental health conditions. At the time of execution of the search warrant, the appellant was living in her mortgaged home. The applicable test is whether the family members will suffer "exceptional hardship" as a result of any sentence imposed when evaluated against the objective criminality of the offences: R v Maslen & Shaw (1995) 79 A Crim R 199 at 209. (27) The appellant has a son aged 20 years old who has been diagnosed as having a "severe level of Intellectual Disability ... Autism Spectrum Disorder and a Mood Disorder. " According to a report provided by the Department of Ageing, Disability & Home Care dated 23 January 2006, the appellant's son had received treatment and accommodation from several residential health care centres. As at June 2006, the appellant reported in her pre-sentence report that "her son is currently residing in hospital care due to associated problems with having autism. " (at page 1). In doing so a court should avoid taking a mathematical approach in which there are increments to or decrements from a predetermined range of sentences. Such an approach departs from principle because it does not take into account the fact that there are many conflicting and contradictory elements which bear upon sentencing an offender. It is also wrong because singling out a circumstance and attributing to it a specific numerical or proportionate value distorts the difficult balancing exercise which the sentencing judge must perform: Markarian v The Queen [2005] HCA 25 ; (2005) 215 ALR 213 (per Gleeson CJ, Gummow, Hayne and Callinan JJ at [37] --- [39]); and Wong v The Queen [2001] HCA 64 ; (2001) 207 CLR 584 (at [74] --- [76]). (30) However, in a simple case where the circumstances of the crime have to be weighed against one or a small number of other important matters, some "indulgence" in an arithmetical process (legislative requirements apart) may be permitted. But as a general rule courts should no longer add or subtract item by item passages of time in order to fix the time an offender must serve in prison: Markarian at [39]. (e) the subjective features of the appellant, including the medical condition of her son. (34) While the penalties for the Copyright Act offences may be at the higher end of the scale, the Crown submits that they are not manifestly excessive, given that the allowable maximum penalty for offences under ss 132(6AA) and (6A) of the Copyright Act is five years imprisonment on summary conviction. Basically all associated with infringing copyright in one way or another, the possessing the devices for infringing copyright, selling items etcetera. You are a person who has at this point a previous conviction for offences in the same area or previous convictions. You were dealt with extremely leniently on that occasion This is a large scale operation by you aimed at obviously making money for yourself at the expense of persons who are entitled to receive money from these goods. There is little that can be said in your favour in terms of the operation that you were involved in. It was obviously a large scale commercial operation. The matters you rely upon in terms of hardship were basically hardship for your son. Matters I have some doubts about in terms of just how truthfully based they are and if they do have, I accept your son at nineteen is a person who is, with his medical problem, his autistic problem, is a person who needs permanent help and assistance but there is a system within our community that adequately addresses that and I do not consider the hardship type issues you have put to me here today are matters that I am going to place any great weight on. Taking into account your previous matter and previous conviction in this area, the large scale operation involved that is reflected by these charges, I consider that gaol is the only option. I have considered all other appropriate penalties and I consider nothing other than full time gaol is the appropriate penalty and I note from the presentence report my options are fairly limited in relation to the type of penalty anyway if it is going to be gaol it cannot be periodic detention. The court held that it would not interfere with a sentence of imprisonment imposed unless it was satisfied that the discretion exercised by the court imposing the sentence miscarried or was unsound or unreasonable in its exercise. In a joint judgment, Dixon CJ, Fullagar, Kitto and Taylor JJ cited with approval a passage from the decision of the High Court in Cranssen v R [1936] HCA 42 ; (1936) 55 CLR 509. In the latter case, after pointing out that an appeal against sentence is an appeal from a discretionary act of the court responsible for the sentence, Dixon, Evatt and McTiernan JJ (at 519) said: 'The jurisdiction to revise such a discretion must be exercised in accordance with recognized principles. It is not enough that the members of the court would themselves have imposed a less or different sentence, or that they think the sentence over-severe. There must be some reason for regarding the discretion confided to the court of first instance as improperly exercised. This may appear from the circumstances which that court has taken into account. They may include some considerations which ought not to have affected the discretion, or may exclude others which ought to have done so. The court may have mistaken or been misled as to the facts, or an error of law may have been made. Effect may have been given to views or opinions which are extreme or misguided. But it is not necessary that some definite or specific error should be assigned. The nature of the sentence itself when considered in relation to the offence and the circumstances of the case, may be such as to afford convincing evidence that in some way the exercise of the discretion has been unsound. In short, the principles which guide courts of appeal in dealing with matters resting in the discretion of the court of first instance restrain the intervention of this court to cases where the sentence appears unreasonable, or has not been fixed in the due and proper exercise of the court's authority;' Following this citation their Honours (at p 656) in Harris' Case added: 'It is not enough in applying those principles that the judges of this court should regard the sentence as greater than they themselves would have imposed'. It interferes only if it be shown that the sentencing judge was in error in acting on a wrong principle or in misunderstanding or in wrongly assessing some salient feature of the evidence. The error may appear in what the sentencing judge said in the proceedings, or the sentence itself may be so excessive or inadequate as to manifest such error (see generally, Skinner v R [1913] HCA 32 ; (1913) 16 CLR 336 at 339-40; R v Withers (1925) 25 SR (NSW) 382 at 394; Whittaker v R [1928] HCA 28 ; (1928) 41 CLR 230 at 249; Griffiths v R (1977) 15 ALR 1 at 15-17). The first was said to be a failure to consider all possible alternatives to full-time imprisonment, contrary to the provisions of s 17A of the Crimes Act . In prefacing the imposed sentence, his Honour did refer to the appellant's guilty plea and was obviously mindful of it. It is just not possible to know to what extent, if any, his Honour took it into account in the exercise of his sentencing discretion. I would not be prepared to interfere with the sentence his Honour imposed on the basis of this alleged error. In my view, the only real question raised by this appeal is whether the nature of the sentence imposed, when considered in relation to the offences and the circumstances of the case, is so excessive as to manifest "convincing evidence" that in some way the exercise of the discretion has miscarried or is unsound. As the authorities to which I have referred make clear, it is not enough that I might regard the sentence as greater than what I would have imposed. It appears to be common ground between the appellant and the Crown that no person convicted of the offences for which the appellant pleaded guilty and was convicted has been incarcerated in prison. Custodial sentences have been imposed but invariably have been effectively suspended by orders made pursuant to s 20(1)(b) of the Crimes Act directing the immediate release of the offender sentenced to imprisonment upon giving security, by recognizance or otherwise, to the satisfaction of the court, for compliance with the conditions referred to in para (a) of s 20(1). However, those facts themselves do not lead to the conclusion that the sentence imposed on the appellant was so excessive as to manifest "convincing evidence" that the exercise of his Honour's discretion miscarried. Any such conclusion could only be reached by weighing those comparative facts against the maximum penalties as a measure of the seriousness with which the legislature views such offences --- five years imprisonment for the Copyright Act offences --- having regard to the principle of general deterrence, the need for specific deterrence particularly in the face of conviction for a past similar offence, rejecting as I do, the appellant's submission for discounting this factor for the media publicity this case received, and the scale of the illegal commercial operation carried on by the appellant. So weighed and measured, the sentence imposed by his Honour does not, on its face, exhibit the character of being so excessive that the exercise of the discretion is put in doubt. I have come to the conclusion that I should not interfere with the term of imprisonment of 12 months for each offence to be served concurrently, however, I reduce the non-release period from eight months to three months on the same recognizance. | conviction for offences under copyright act 1968 (cth) and trade marks act 1995 (cth) appeals against severity of sentences imposed for custodial sentence with non-release period the court's jurisdiction whether errors in sentencing principle against interference with exercise of sentencing discretion copyright & trade marks |
On 12 July 2001, the appellant married an Australian citizen, Karishma Kumari. On 1 August 2001, he applied for a spouse visa (a subclass 820 temporary visa leading to a subclass 801 permanent visa) and Ms Kumari lodged a nomination in support of the application. 2 The Department of Immigration and Multicultural and Indigenous Affairs ("the Department") granted the temporary visa on 13 November 2001. On that day, an officer of the Department found that Mr Hassan and Ms Kumari were living in a genuine and continuing relationship. Mr Hassan was advised that after two years the Department would contact him and might require more evidence that his relationship was then continuing. 3 On 27 September 2003, evidence was forwarded to the Department in the form of declarations from Mr Hassan and Ms Kumari stating that their relationship was continuing. Other documents were also sent as supporting evidence such as utility bills, tax assessments, bank statements and Medicare letters. 4 By 14 April 2004, the Department had not contacted the appellant and no decision had been made regarding the permanent spouse visa. On that day, Ms Kumari contacted the Department and stated that she wished to withdraw her sponsorship. After receiving the withdrawal of sponsorship from Ms Kumari, a delegate of the Minister invited Mr Hassan to comment on the information received, and to put forward any evidence that might suggest that there were any exceptional circumstances. Mr Hassan did not reply. On 19 October 2004 a delegate of the Minister refused to grant Mr Hassan a permanent visa. 5 On 3 November 2005, the appellant applied to the Migration Review Tribunal ("the Tribunal") for review of the delegate's decision. At the 5 May 2005 hearing, the appellant confirmed that his relationship with Ms Kumari had ceased. In a decision dated 10 June 2005, the Tribunal affirmed the delegate's decision, finding that the appellant was not entitled to a spousal visa. 6 Pursuant to s 483 of the Migration Act 1958 (Cth) ("the Act "), the appellant applied to the Federal Magistrates Court for review of the Tribunal's decision. The appellant did not provide any particularised claims of error or written submissions. At the hearing of 25 October 2005, the appellant noted that, although he and his former wife were separated by the time of delegate's decision, his marriage lasted longer than the two years required for a permanent visa. The learned Federal Magistrate held that there is no point of time at which a decision is required to be made after the relevant two years have elapsed. Therefore, his Honour reasoned that, as Mr Hassan was not married at the time of decision, he was not entitled to a visa. The appellant now appeals from that decision. The delegate failed to consider that the applicant will face difficulties to stay in Australia without his spouse visa. The applicant explained his situation and limitation to continue the relationship with his partner but the Tribunal failed to consider that issue. At the hearing he emphasized that he was not responsible for the breakdown of his marriage; that he had not sought to end his relationship with his wife; that his parents were incapacitated and had sacrificed a great deal to enable him to study in Australia, with a view to making a decent life for himself and his family here; and that his studies and work had been seriously affected by the breakdown of his marriage and subsequent legal proceedings. The applicant made his case with dignity and sincerity. 9 The first ground challenges the primary decision which is not the subject of the current appeal. Moreover, the appellant has provided no reason to conclude that the delegate should have considered his difficulties in staying in Australia without a spouse visa. 10 The second ground appears to challenge the Tribunal's failure to consider the reasons behind the appellant's separation from his spouse. The appellant has not shown how this is a relevant consideration under the regulations. Regulation 801.221 of the Migration Regulations 1994 (Cth) ("the Regulations ") outlines the criteria to be met for a permanent spouse visa at the time of decision. Under this regulation, the circumstances behind a separation are only relevant if they involve domestic violence: see reg 801.221(6). There is no suggestion that there was domestic violence in this case. Rather, the appellant simply notes that he was not responsible for his separation from his wife. That, however, was not a relevant consideration for the Tribunal. 11 Before the Federal Magistrate and again today the appellant suggested that he should have received a permanent visa because he remained married for more than two years after he applied for the visa. Under regulation 801.22, the criteria in reg 801.221 must be "satisfied at the time of the decision". It is uncontested that Mr Hassan was separated from his wife at that time and therefore did not satisfy the criteria of 801.221. Therefore, the only question is whether the decision was properly made on 19 October 2004 or should have been made earlier. 12 The delegate was not required to make the decision sooner. Any delay was consistent with the Act and the Regulations and did not deny procedural fairness. The Regulations do not require that the delegate's decision be made immediately after two years have passed since the original application. 13 In Minister for Immigration; ex parte Miah [2001] HCA 22 ; (2001) 206 CLR 57 the High Court held, when dealing with ss 52 to 63 of the Act , that there was no intention to exclude the operation of common law rules of procedural fairness. In Nais v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 77 (" Nais" ), Gleeson CJ referred to Bastarache J whom, for the majority in Blencoe v British Columbia (Human Rights Commission) [2000] 2 SCR 307 at 367 [102], said that it was "accepted that the principles of natural justice and the duty of fairness include the right to a fair hearing and that undue delay in the processing of an administrative proceeding that impairs the fairness of the hearing can be remedied". There was, however, no infringement of this principle in this case. 14 Much of the delay in this case can be attributed to the Department's efforts to allow Mr Hassan an opportunity to respond to Ms Kurami's letter of 14 April 2004. Also, the delay must be considered within the context of an application for a spousal visa. Marriage is intended to be a life-long commitment. Thus, a delay of a few months should not prejudice an applicant for a spouse visa. The delay in this case was significantly less than that considered in Nais (41/2 years) where the High Court did find a breach of procedural fairness. In all the circumstances, I do not find that the delay in this case involved a denial of procedural fairness. 15 As the appellant has identified no error in the decisions of the Tribunal or the Federal Magistrate, I would dismiss the appeal with costs. 16 It is open to the appellant to make application to the Minister pursuant to s 351 of the Act , which enables the Minister to make a more favourable decision notwithstanding the decision of the Tribunal. There would be no impediment to him so doing. His would appear to be an appropriate case for making such an application. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | spouse visa failure to comply with mandatory criteria migration |
Orders were made for the filing of further submissions in relation to costs and additional submissions were made by the parties in relation to the potential application of the reasoning of the Full Court in PAC Mining Pty Ltd v Esco Corporation (No. 2) [2009] FCAFC 52 to the resolution of the present issues on costs. In the principal proceeding the applicant ("Uniline") sought a declaration that threats of patent infringement proceedings made by the respondent ("SBriggs") were unjustifiable; an injunction restraining SBriggs from making further threats of such proceedings; and damages arising out of those threats. The threats were contained in a letter dated 4 April 2007 from the solicitors for SBriggs to Uniline and a letter dated 16 July 2007 from those solicitors to Uniline's patent attorneys. SBriggs contended that the threats were not unjustified as Uniline had sold and offered for sale a product described in the principal judgment as the Uniline spring clutch which was said to contain each and every essential integer of claim 13 of the patent in suit. By an amended cross-claim, SBriggs sought a declaration of infringement of claim 13 by Uniline; an injunction restraining continuing infringement; an order for delivery up of all infringing products; and damages and related relief. By its defence, Uniline in response to the amended cross-claim, contended that claim 13 of the patent claimed as an essential integer of a spring clutch the subject of the patent, a particular component described as a helical spring wound according to any one of claims 1 to 12 of the patent in suit which, properly construed, described a helical spring of unitary construction, that is, a single unitary spring. Uniline contended that since the spring clutch it sold and offered for sale did not embody a single unitary helical spring but operated by reason of a section of the clutch device engaging, in a particular manner, separate helically wound springs, an essential integer of claim 13 was not present in the Uniline spring clutch and thus no infringement of claim 13 arose. Uniline conceded, subject to its amended further cross-claim, that if claim 13 of the patent described, as a matter of construction, a spring clutch that comprised three separate springs assembled within a spring clutch in the manner assembled within Exhibit 1 in the proceedings, infringement of claim 13 of a patent would be made out. By its amended further cross-claim, Uniline contended that claims 1 to 13 of the patent in suit were invalid on grounds of lack of novelty; lack of sufficient clarity; failure to fairly base each claim on matters disclosed in the specification; lack of utility; obtaining the grant of the claims by false suggestion or misrepresentation; and obtaining on 23 March 2007 by false suggestion and misrepresentation, an amendment to claims 13 and 14 of the patent and the deletion of claim 15 of the patent. Uniline also contended that claims 1 to 13 of the patent were invalid on the ground that the claims did not disclose any inventive step when compared to the prior art base. This allegation was withdrawn by Uniline at a directions hearing on 26 March 2008. Uniline also sought relief in respect of contended unjustified threats of infringement proceedings of Australian Registered Design No. 131578. The proceeding as initially framed also sought relief in respect of misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth). The contentions in relation to misleading and deceptive conduct were withdrawn by Uniline by consent at a directions hearing on 26 March 2008. A declaration that threats of infringement of the Registered Design were unjustified, was made by the Court on 17 April 2008. The costs of that part of the proceeding were reserved. SBriggs was the exclusive licensee of the patent in suit. The second cross-respondent, Mr Carmelo Di Stefano, was the patentee of the patent in suit. In the result, the following orders were made. 706458 is unjustifiable. The threat made by SBriggs Pty Ltd by a letter from its solicitors to Uniline Australia Ltd, by its patent attorneys, on 16 July 2007 of bringing infringement proceedings against Uniline Australia Ltd for infringement of claim 13 of Australian Patent No. 706458 is unjustifiable. 706458 by Uniline Australia Ltd is dismissed. The Amended Further Cross-Claim of Uniline Australia Ltd by which it seeks revocation of Australian Patent No. 706458 is dismissed. The costs of the proceeding are reserved for determination upon receipt of further submissions. The application is adjourned generally for the making of further directions in relation to those claims for relief to be determined separately. It can be seen therefore that Uniline succeeded in the principal application and obtained declarations in relation to the unjustified threats of 4 April 2007 and 16 July 2007 and an injunction restraining SBriggs or its agents or otherwise from making further threats. Uniline successfully resisted SBriggs's cross-claim of infringement of the patent. Uniline's amended further cross-claim asserting invalidity of the patent was dismissed. In support of its submissions on costs, Uniline relies upon the affidavit of Mr Bentley Coogan, a member of the firm of solicitors acting for Uniline. Mr Coogan exhibits a notice of offer of compromise made to SBriggs through its solicitors on 20 March 2008. For the avoidance of doubt, it is noted and agreed that the dismissal of the Cross-Claim as provided for in paragraph 1.1 above will operate as a bar to any fresh proceedings against the Applicant for infringement of the Patent based upon the use, manufacture or supply by the Applicant of the UNIdrive spring clutch assembly, the subject of these proceedings. This offer will remain open to be accepted for a period of 14 days beginning on the day after it is made. This offer of compromise is made under Order 23 of the Federal Court Rules and is made without prejudice. In doing so, SBriggs contended that Uniline's offer was not one constituting a "real compromise for a consideration of real value". SBriggs's lawyers contended that no real concession was made by Uniline and the monetary component of the proposal was minimal and thus offered no real financial incentive for compromise. Secondly, SBriggs's lawyers contended that the proposal was to be rejected on the footing that the position adopted by SBriggs in the litigation was reasonable in all the circumstances, and in the event that SBriggs's contentions were ultimately unsuccessful, no reliance could reasonably be placed on the offer of compromise as a basis for an award of indemnity costs. On 1 April 2008, Uniline by its solicitors made a further offer of compromise which reasserted the former offer in the same terms in the context of certain propositions Uniline's lawyers put to SBriggs's lawyers. On 10 April 2008, SBriggs's lawyers responded rejecting the second offer. In that letter, SBriggs's lawyers sought to demonstrate that authorities relied upon by Uniline's lawyers which suggested that an offer in the quoted terms was, in all the circumstances, a "genuine offer", did not support that conclusion. SBriggs's lawyers also sought to demonstrate that rejection of the offer was not in all the circumstances unreasonable and that the proposition put by Uniline that it would forego its claim for relief arising out of contended unjustified threats did not elevate the proposal to an offer of a "genuine compromise". The discretion to award costs under s 43 of the Federal Court of Australia Act 1976 is unfettered but must not be exercised arbitrarily: Trade Practices Commission v Nicholas Enterprises Pty Ltd (1979) 28 ALR 201 at 206-207. Ordinarily costs follow the event in the absence of special circumstances: Ruddock v Vadarlis (No. 2) (2001) 115 FCR 229 at 234. The power invested in the Court under s 43 is a wide power to select an appropriate basis for allocating the burden of the costs of the proceedings including the payment of costs on an indemnity basis. The Federal Court Rules however may affect the exercise of the discretion. Order 23 does so in two respects. First, Order 23, rule 11(4) provides that if an offer is made by an applicant and not accepted by the respondent and the applicant obtains judgment on the claim to which the offer relates not less favourable than the terms of the offer, then, unless the Court otherwise orders, the applicant is entitled to an order against the respondent for costs incurred in respect of the claim up to and including the day of the offer on a party and party basis and after that day, on an indemnity basis. Second, Order 23, rule 11(6) addresses offers made by a respondent. It provides that if a respondent makes an offer not accepted by the applicant and the respondent obtains an order or judgment on the claim to which the offer relates as favourable to the respondent or more favourable to the respondent than the terms of the offer, then unless the Court otherwise orders, the respondent is entitled to an order for party and party costs of the claim up to 11.00am on the day after the day of the offer, and thereafter costs of the claim on an indemnity basis. Uniline says it made its offer in its capacity as an applicant and as a respondent to a cross-claim and as a further cross-claimant. It says its offer of 20 March 2008 contained a number of elements. First, its application seeking relief in relation to the unjustified threats be dismissed. Second, the SBriggs's cross-claim for relief in respect of infringement be dismissed. Third, Uniline's cross-claim for invalidity be dismissed. Fourth, Uniline pay SBriggs $1,000.00 and fifth, each party pay its own costs of the proceeding. The offer containing each of those integers was capable of acceptance or rejection in the aggregate. Uniline says that it was wholly successful on its application for relief based on claims of unjustified threats of patent infringement proceedings. An unopposed declaration was made on 17 April 2008 that threats of registered design infringement proceedings made by SBriggs were unjustified and the costs of that aspect of the proceeding were reserved. Uniline says that it should have the benefit of an order for the costs of and incidental to that part of the proceeding. Moreover, Uniline says that it should have its costs on an indemnity basis in relation to the whole of the application on the footing that SBriggs elected to defend the proceeding on the ground that its threats were justified because Uniline was engaging in conduct which infringed the patent and the registered design in circumstances where SBriggs ought to have known that it had "no chance of establishing infringement". In other words, SBriggs maintained a defence to the proceeding with a corresponding cross-claim for relief in circumstances where the defence and cross-claim were doomed to fail. Thus, the discretion ought to be exercised so as to impose an order for costs which indemnifies Uniline. As to Order 23, rule 11(4), Uniline says that its offer involved the dismissal of its application and the abandonment of any claim for costs. Uniline says that at trial it obtained two declarations and an injunction. Those orders represent success on the application which is no less favourable than the terms of its offer. Thus, Uniline ought to have its costs of the application up to 20 March 2008 on a party and party basis and after that day on an indemnity basis, by operation of Order 23. Uniline says that once Order 23, rule 11(4) is enlivened, it gives rise to a presumptive entitlement to indemnity costs from the date of Uniline's offer which, although a prima facie entitlement, will only be dislodged if SBriggs is able to demonstrate a sufficient reason for the Court to "otherwise order" in terms of Order 23, rule 11(4). Uniline says that even if SBriggs acted reasonably in rejecting Uniline's offer based upon its assessment in conjunction with its lawyers and experts of the strength of the infringement case, such a basis for rejecting the offer would not constitute a "sufficient reason" for displacing the presumptive prima facie entitlement to indemnity costs from the date of the offer. Therefore, even if the unsuccessful party's case is considered an arguable one, that circumstance does not displace the operation of the rule , whatever the position might be in relation to the exercise of the discretion in the context of a Calderbank offer. Secondly, Uniline contends that "it should have been obvious to SBriggs, if properly advised, that its infringement action (and consequently its defence to the claim in respect of unjustified threats) was so manifestly untenable that it was bound to fail". Thus, Uniline asserts an entitlement to an order for indemnity costs from the date of its offer of 20 March 2008. As to the cross-claim for infringement, Uniline says costs should follow the event in relation to that claim and Uniline ought to obtain its costs on an indemnity basis for the whole of the costs of the cross-claim on the footing that SBriggs maintained that claim "in circumstances where SBriggs, if properly advised, should have known that it had no chance of establishing infringement". Uniline says that the construction of claim 13 of the patent advanced by SBriggs was flawed, ignored the natural and plain language of claim 1 and its dependent claims including claim 13, was not supported by the language of the specification or the claims defining the monopoly and was inconsistent with the understanding conveyed by the patent to a "skilled reader". That understanding could only have been, it is said, that the patentee as author intended that strict compliance with the primary meaning of the language of the claims was an essential requirement of the invention such that a single spring rather than a plurality of springs was an essential integer of claim 13. The point then is that it should have been obvious to SBriggs that the Court would construe claim 13 in the manner it did, yet SBriggs brought its infringement proceeding (and persisted in its defence of the unjustified threats claim) by contending for a construction of claim 13 which was "so manifestly untenable and unreasonable" that SBriggs should have realised that its infringement cross-claim was "bound to fail" and thus the discretion ought to be exercised so as to order SBriggs to pay indemnity costs in respect of the cross-claim. Uniline says that apart from that consideration, the operation of Order 23, rule 11(6) needs to be considered. Uniline as a respondent to the cross-claim put its offer that the cross-claim be dismissed and that Uniline pay SBriggs an amount of $1,000.00. The offer was rejected. The cross-claim was unsuccessful. Uniline succeeded on the cross-claim in terms as favourable to Uniline as, or more favourable to Uniline than, the terms of its offer. Thus, Uniline is entitled, it says, to orders that SBriggs pay its costs of the cross-claim incurred up to 11.00am on 21 March 2008 on a party and party basis and after that time, on an indemnity basis, under Order 23. Uniline says it has a prima facie entitlement to an order for indemnity costs which ought only be displaced in the face of compelling and exceptional circumstances identified by SBriggs. None are said to exist. Uniline says that although that part of the offer of $1,000.00 referable, it says, only to the cross-claim for infringement was a minor amount, it was nevertheless, "sufficient to constitute a genuine offer to settle, particularly where it was made as part of an offer which included the dismissal of the proceedings for unjustified threats and revocation brought by Uniline". Finally, as to the Uniline further cross-claim for revocation, Uniline says that although it was unsuccessful in the cross-claim, costs ought not to follow that event. Uniline says that the dispute or overall controversy needs to be properly characterised. In substance and effect, it says that SBriggs was the aggressor or prime mover for relief which would have had the effect of preventing Uniline from engaging in the sale and offer for sale of the Uniline spring clutch. It follows therefore, it is said, that the cross-claim for revocation of the patent was essentially defensive because it put in issue, in effect, the title of SBriggs to maintain any claim. If the patent was shown to be invalid irrespective of any question of whether the article sold and offered for sale reflected each of the integers of claim 13, SBriggs would necessarily fail in its proceedings. The second step in the argument is that had SBriggs not made its unjustified threats of legal proceedings and supported the justification of the threats by bringing what Uniline describes as "baseless infringement action" then Uniline would not have brought a cross-claim for revocation of the patent. Thus, it was the conduct of SBriggs that provoked the challenge to the validity and thus made necessary the incurring of legal costs. Further, Uniline says that had SBriggs accepted the offer of 20 March 2008 it could have put itself in the same position in which it now finds itself after trial, without having incurred the expense of the revocation proceedings. It follows, it is said, that the discretion should be exercised against awarding SBriggs any part of its costs in respect of the amended further cross-claim as it has brought the burden of those costs upon itself. Uniline says that because the costs of the revocation proceeding were necessarily bound up in a defence to the infringement claim which was ultimately unsuccessful, Uniline ought to be awarded part or all of its costs of that claim. 2) [2008] FCA 601) and a successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered to pay the other party's costs of them: Ruddock v Vadarlis (No. 2) . Thus, costs, it is said, should be allocated according to each party's success on their respective claims or alternatively in relation to issues arising in particular claims. An allocation of costs according to issues is said to be particularly appropriate in complex commercial litigation and particularly in patent suits: Stena Rederi Aktiebolag v Austal Ships Sales Pty Ltd [2007] FCA 1141. This approach is said to be particularly important in intellectual property cases: Windsurfing International Inc. v Petit (1987) AIPC 90-441; Doric Products Pty Ltd v Lockwood Security Products Pty Ltd [2002] FCA 282; Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No. 2) [2007] FCAFC 172; and JVMB Enterprises Pty Ltd v Camoflag Pty Ltd (No. 2) [2007] FCAFC 6. In JVMB , the Full Court considered that the appropriate order for costs in respect of a proceeding at first instance involved an order for a proportion of Camoflag's costs (60%) which took account overall of Camoflag's success in its challenge to a registered design and a challenge on the ground of lack of entitlement whilst also taking into account the patentee's success on other questions concerning validity and infringement. One difficulty is that where substantial costs have been incurred in relation to particular questions or particular issues, it may be difficult to deconstruct the body of costs referable to different issues with any real precision. SBriggs contends that the conduct of the case overall involved these discrete parts. First, an infringement case concerning the construction to be given to claim 13 of the patent, the function of the claimed invention and the function of Uniline's spring clutch device. Second, issues of clarity and fair-basing which involved an analysis of the internal structure and content of the patent. Third, a challenge to validity on the ground of novelty which relied upon two prior art patents only one of which was pressed at trial. Fourth, a case based on false suggestion. Fifth, a claim of lack of utility in respect of which the evidence relating to the purpose of the invention overlapped with that led in the applicant's case on infringement. Sixth, an obviousness case which was ultimately withdrawn by the applicant after the parties had exchanged their evidence in chief and eight days before the exchange of evidence in answer. What flows from this dissection, it is said, is that with the exception of the issue of lack of utility, there was no overlap between the evidence led or the arguments made on infringement and validity and therefore, for the purpose of costs, the issues are separate and distinct. As to the question of the cross-claim for revocation for invalidity, SBriggs says that the cross-claim was not simply defensive. The true defence related to the construction of the patent and whether the integers of claim 13 were present in Uniline's spring clutch device. Although the cross-claim for invalidity was a "fall back" defence, the issues raised involved a conscious election by Uniline to put in controversy separate and discrete claims of invalidity by reference to particular grounds of invalidity thus raising particular issues of invalidity. As to Order 23, rule 11, SBriggs says that the presumptive entitlement to indemnity costs under Order 23 is only enlivened where one party makes a genuine offer to compromise the proceedings and that in this case, Uniline's offer was not genuine because it offered no real concession on Uniline's part. That principle applies whether the offer is made for the purposes of a Calderbank letter of offer or an offer of compromise under the rules of Court. SBriggs analyses in its submissions the authorities on the question of those circumstances which suggest whether particular offers might be treated as genuine or otherwise, especially in relation to offers where the concession by the offeror is simply framed in terms of the costs of the proceeding rather than any concession in relation to an aspect of the claim the subject of the proceedings. In the context of that analysis, SBriggs concludes that the offers of 20 March 2008 and 1 April 2008 made by the applicant were such that the offers "involved no 'significant compromise'" and "gave up nothing of substance to the applicant". SBriggs further contends that the particular formulation of the offer involved an aggregated collection of proposals which made it difficult for SBriggs to "unravel all aspects of the offer before it [could] determine whether [the] offer [was] genuine". Accordingly, the offer framed in accordance with Order 23, rule 11(4) ought not to attract an order for indemnity costs of the claims for unjustified threats the subject of the application because the offer did not entail "any aspect of genuine compromise". As to the elements of the offer framed by the applicant as a respondent to the cross-claim by SBriggs and thus framed under Order 23, rule 11(6), SBriggs says that Order 23, rule 11(6) has no application as it was inserted in the Federal Court Rules by Schedule 1, s 2 of the Federal Court Amendment Rules 2008 (No. 1) (Select Legislative Instrument 2008 No. 159) made on 30 July 2008 which commenced on 2 August 2008. SBriggs says that since the rule was not in force at the date of Uniline's offers, the provision does not apply to either offer made by the applicant. It follows therefore, it is said, that since the rule does not give rise to a presumptive entitlement to indemnity costs, an order for costs on the cross-claim on an indemnity basis can only arise in the exercise of the discretion at large; and since the rejection of Uniline's offer was neither imprudent nor unreasonable, no basis is demonstrated for an order for indemnity costs. As to the question of whether SBriggs prudently or reasonably rejected the offer, SBriggs says that the body of evidence in relation to the functionality of the spring clutch the subject of the patent and the functionality of the Uniline spring clutch against the background of the evidence of Mr Hunter suggests that SBriggs acted reasonably in agitating its claims and the contentions it made in the course of the proceedings in relation to those claims and issues within the claims. It involved the proposition that Uniline would give up its claim to a declaration (subject to discretionary factors) that each letter constituted an unjustified threat of patent infringement proceedings. It offered to give up a claim to an injunction (similarly subject to discretionary factors) restraining SBriggs from making further threats, howsoever, of patent infringement proceedings. Those claims to remedial intervention by the Court were, at the time of the offers, important claims to relief in addressing in the context of Uniline's business, threats made by SBriggs that it would commence infringement proceedings if Uniline did not give undertakings that it would give up selling and offering for sale its spring clutch device. The offer invited SBriggs as a necessary corollary of the proposition that the threats were unjustified, to give up the cross-claim for relief based upon contended infringement. The offer further invited SBriggs to absorb its own costs incurred to the date of the offer and offered not to press SBriggs for costs recovery of Uniline's costs in dealing with the unjustified threats of infringement proceedings and in responding to the claim that it had infringed claim 13 of the patent. It is true that Uniline sought to reserve the right to bring further proceedings but that reservation, it seems to me, was in relation to any fresh cause of action that might arise should further unjustified threats be made or further proceedings be commenced in which it might be said by SBriggs that Uniline infringed claim 13 of the patent by selling or offering for sale its Uniline spring clutch. The offer put by Uniline was not simply one in which SBriggs was invited to capitulate and pay Uniline's costs to the date of capitulation. That was, in effect, the nature of the offer put in Sydney Markets Limited v Sydney Flower Market Pty Limited [2002] FCA 283. It is also true that the offer contained within it a proposal by Uniline to discontinue its amended further cross-claim for relief arising out of the contended invalidity of the patent. That element of the proposal involved an offer to discontinue an unmeritorious claim. However, the conduct of the case makes it plain that Uniline advanced an arguable question in relation to that matter. In any event, the offer overall provided SBriggs with an opportunity to foreclose the litigation, avoid further costs being incurred and avoid the payment of costs incurred to the date of the offer, to Uniline. In the modern world of commercial litigation and various subsets of that litigation such as intellectual property litigation, costs are a very real and quantifiable concern. It would be extremely odd to think otherwise. Costs are incurred in a recoverable inter-parties sense from the moment the proceedings issue and they continue to be incurred at every point along the continuum of the litigation. Litigants who are required to pay these costs in order to assert or resist a claim, regard them as a very real and present expense, if not a real and present danger. Very often these costs are a significant business expense. They invariably require a commitment of significant resources and separate budget allocations. An offer to compromise which is framed in terms of a party's willingness to abandon the recovery of costs so incurred along that continuum through the preparation and analysis of statements, disclosure, analysis of documents and the preparation and review of expert reports, is undoubtedly considered by the litigant as an offer that involves giving up something meaningful, real and measurable. This is particularly so after the completion of case managed preparatory steps at various phases of the litigation which may have the effect of front-end loading significant costs in order to save trial costs. In many cases although not in all cases, the notion that a party is giving up nothing by inviting another party to discontinue a claim on the footing that the offeror will not make any claim for payment of its costs incurred to the date of the offer, is a fundamentally abstracted notion from the practical perspective of the engaged litigant confronting the management of the proceeding and the appropriation of expenditure to conduct it. An offer, on the other hand, that invites discontinuance of a claim on the payment of the offeror's costs to date offers not very much at all other than the stemming of future costs which in a particular case may nevertheless be very real. In this case however the offer did more than that. It delivered SBriggs of the opportunity to foreclose all of the claims and cross-claims in the proceeding at no additional cost to it beyond its own costs notwithstanding the costs to which it had put Uniline. That proposal presented for SBriggs the opportunity of ending all claims without any declarations as to the making by SBriggs of unjustified threats of infringement proceedings or an injunction to restrain the making of future threats. It abandoned all of Uniline's costs incurred to the date of the offer. Having regard to those matters, the proposal was a genuine one. I do not accept that the claims made by SBriggs were doomed to failure or such that SBriggs should have known, if properly advised, that it had no chance of establishing infringement. Mr Hunter contended that even if claim 13 of the patent was construed, contrary to his views and that of the legal advisers to SBriggs, so as to require the presence of a single unitary spring as an integer of that claim, the inclusion of a plurality of springs would enable the spring clutch of the patent to function in precisely the same way and thus a single unitary reverse wound spring might be regarded as an inessential integer. The question in issue was, whether persons with practical knowledge and experience in the subject matter addressed by the invention would understand that strict compliance with a particular descriptive word or phrase appearing in a claim was intended by the patentee to be an essential requirement of the invention so that any variation would fall outside the monopoly claimed even if it could have no material effect upon the working of the invention. Those questions raised the issue of the functionality of the spring clutch the subject of the patent and the functionality of the Uniline spring clutch. Those issues were addressed by extensive expert evidence by those skilled in the relevant art, namely the discipline of mechanical engineering, in the explanation of the way in which a mechanical device translates rotational forces from one shaft to another by the particular mechanisms in issue. Although the approach to the construction of the claims of the patent and in particular claim 13 having regard to the construction principles identified at [42] to [47] of the principal judgment was rejected by the Court, I am satisfied that it was not unreasonable for SBriggs having regard to its representation by experienced intellectual property lawyers and the expert advice from Mr Hunter available to it on the various questions in issue, to frame claims of infringement and advance the various contentions it made during the course of the proceeding. Although those claims were shown to be unmeritorious, I do not accept that the formulation of the claims and supporting contentions were so manifestly misplaced that SBriggs, if properly advised, ought to have realised that those claims had no prospect of success. Uniline contends that because SBriggs ought to have known that it had no chance of establishing infringement, the costs incurred by Uniline in being put to protecting its position by bringing the threats proceeding and resisting the cross-claim for infringement ought to be the subject of an order for costs on an indemnity basis. Since I do not accept that SBriggs had no chance of establishing infringement, I do not accept that the discretion should be exercised so as to order costs on an indemnity basis, in the general exercise of the discretion. However, Uniline contends that Order 23, rule 11(4) brings about a different result. It contends that once the rule is enlivened Uniline has a presumptive entitlement to indemnity costs from the date of its offer unless there is sufficient reason for the Court to "otherwise order", in terms of the rule, and moreover even if SBriggs believed it had at least an arguable case and thus acted reasonably in relying on that view in rejecting the offer, that would not provide a sufficient reason to displace the prima facie entitlement to indemnity costs from the date of the offer. An offeree ought only to be relieved of the consequences of the rule in support of an order "otherwise" if the offeree can demonstrate compelling and exceptional circumstances to support a different form of order: Wills & Anor v Bigmac Pty Ltd (Heerey J, Federal Court of Australia, 9 December 1994, unreported, BC9400210; VG59 of 1992). That position was adopted in Smith v 600 Machinery Australia Pty Ltd (Mansfield J, Federal Court of Australia, 19 November 1996, BC9605672; SG3201 of 1995; cf Hillier v Sheather (1995) 36 NSWLR 414. It is clear that if the rule operates, the plaintiff will be significantly disadvantaged, but that disadvantage flows naturally from the risks of litigation. The idea behind the rule is to encourage settlement or compromise of proceedings, and more specifically, to encourage litigants to give serious consideration to the settlement of proceedings. Where an offer is made by a defendant to a plaintiff, the latter is put on notice that unless he or she accepts that offer, there is a significant risk that the order provided for by the rule may follow. In declining to accept the offer, the plaintiff undertakes the risk and the consequences that flow naturally from that risk. However, I do not read Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 720 as authority for the proposition that a discretion should be exercised against making an order for indemnity costs in any case in which it was reasonable for the defendant to take the view that it had a good chance of successfully defending the action. The prima facie consequence, which will apply in the ordinary case, is that in the circumstances postulated by the rule an order for indemnity costs will be made. For this reason, the ordinary provision is expected to apply in the ordinary case ... The mere fact that it was reasonable for the litigant to take the view that he or she did in rejecting the offer is not enough to displace the rule. In that case, it was common ground between the parties that the offer of compromise was not made in accordance with Order 23. However, the parties accepted that the Court nevertheless had a discretion to make a special order for costs having regard to the defendant's non-acceptance of the offer in the light of Calderbank principles. Hely J considered those principles and their relationship with Order 23. Such a view would be mistaken. Where a moving party (including a cross-claimant) offers to settle for a sum which is less than he or she eventually achieves at trial, there is a presumptive entitlement to indemnity costs under O 23 r 11(4) of the Federal Court Rules . However, where recourse is not had to the O 23, but reliance is placed upon the court's general discretion, it is necessary for the party seeking indemnity costs to demonstrate that the other party's refusal of the Calderbank offer was unreasonable: Black v Lipovac (1998) 217 ALR 368, 432; Maniotis v JH Lever & Co Pty Ltd (No 2) [2006] FCAFC 28. It is not sufficient that the offer was a reasonable one: Alpine Hardwoods (Aust) Pty Ltd v Hardys Pty Ltd (No 2) (2002) 190 ALR 121, 128 [35]; Dais Studio Pty Ltd v Bullet Creative Pty Ltd [2008] FCA 42, [11]. In considering this question in a particular case, the matter of unreasonableness will be judged by reference to the circumstances facing the offeree at the time of the offer. While the eventual outcome in the case may go part of the way in this regard, there is no presumption that ultimate success in the proceeding for the offeror necessarily renders the offeree's rejection unreasonable. It follows that SBriggs ought to be ordered to pay the costs of Uniline's claim arising out of the unjustified threats of patent infringement made by SBriggs and the unjustified threats of registered design infringement on a party and party basis up to 20 March 2008 and thereafter on an indemnity basis. Uniline asserts an entitlement to indemnity costs in respect of the cross-claims by SBriggs for infringement generally and specifically in reliance upon Order 23, rule 11(6) from the date of its offer. For the reasons indicated earlier I do not accept Uniline's proposition that SBriggs's cross-claim was doomed to fail from the outset, and thus the discretion ought not to be exercised generally to order indemnity costs in respect of the cross-claim. As to Order 23, rule 11(6), it is clear that the rule commenced operation on 2 August 2008 and did not form part of the legislative machinery ( Federal Court of Australia Act 1976 (Cth), s 59(4) ; Legislative Instruments Act 2003 (Cth), s 12(2)) in relation to costs under the Federal Court Rules at the time Uniline made its offer. Therefore, SBriggs could not have been conscious of any presumptive entitlement that might arise in Uniline as an offeror respondent to SBriggs's cross-claim upon rejection of the offer. The rule simply cannot apply to the offer: Review 2 Pty Ltd v Redberry Enterprise Pty Ltd (No. 2) [2008] FCA 1805. Accordingly, in considering for the purposes of s 43 of the Federal Court of Australia Act , the appropriate order to be made in the disposition of costs, no presumptive entitlement to indemnity costs arises in respect of Uniline's costs incurred in answering the cross-claim for infringement. However, the offer to compromise ought to be taken into account because it provided SBriggs with an opportunity to foreclose the litigation without any obligation to pay any costs to Uniline. In exercising the broad discretion conferred by s 43 , it seems to me appropriate to take the offer to compromise into account and frame an order which does justice between the parties and serves the public interest in encouraging the settlement of disputes and thus the avoidance of costs. Accordingly, the appropriate order is that Uniline is entitled to its costs of and incidental to the cross-claim on a party and party basis with those costs uplifted by 12%. As to the cross-claim for revocation, Uniline sought to agitate invalidity of the patent as an answer to the infringement claim on the assumption that its position on the construction of infringement questions was unsuccessful. It is true that in the general sense a cross-claim asserting invalidity goes to title and thus provides a defensive answer to an infringement proceeding. However, plainly enough grounds of invalidity might be raised which broaden the scope of the controversy and go beyond the substratum of fact, issue and law raised by the threats claim and a corresponding infringement claim. Although it may have been prudent and reasonable for Uniline to introduce a cross-claim for invalidity within the controversy, its failure on those additional matters ought to be the subject of an order for costs in favour of the successful party. Moreover, there seems to be a degree of inconsistency in Uniline's position that SBriggs's cross-claim for infringement was so manifestly misconceived that failure was obvious, on the one hand, and a need to bring a cross-claim, in those circumstances, asserting invalidity. That principle needs to be considered in the context of the scope of the issues raised by the cross-claim to determine whether any of the grounds of challenge to validity simply reflects legal consequences arising out of analyses made necessary by the threats claim and corresponding cross-claim for infringement. The ground of challenge that relied upon a contended failure to fairly base each claim on matter disclosed in the specification was reliant upon a construction question based on a consideration of the specification and the claims. It seems to me that once a body of costs was incurred in connection with the threats claim and corresponding infringement claim which necessarily involved a detailed analysis of the language of the specification and the claims, there are no new matters raised by the cross-claim for invalidity on that ground beyond an analysis of the specification of the patent. The grounds of lack of novelty and obviousness plainly raised additional matters. The claim based on a lack of clarity is in the same category as the fair basis contention. The ground based on inutility is in the same category. The claims based upon false suggestion raise additional matters. It seems to me that SBriggs ought to have the benefit of an order that Uniline pay SBriggs's costs of and incidental to the issues of novelty, obviousness and false suggestion on a party and party basis. The parties have made submissions in relation to the implications of PAC Mining Pty Ltd v Esco Corporation (No 2) [2009] FCAFC 52. I have considered those submissions. The proposed orders in the disposition of costs in this matter are entirely consistent with the observations of their Honours in PAC Mining . Accordingly, orders will be made in the above terms. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of the disposition of costs in a proceeding which involved success by the applicant in a claim to relief based upon unjustified threats of patent infringement and infringement of a registered design, a cross-claim by the intellectual property owner for relief based upon infringement and a further cross-claim by the applicant asserting invalidity of the patent on a number of grounds consideration of an offer to compromise consideration of order 23, rule 11 of the federal court rules and the principles guiding the exercise of discretion in the disposition of costs as to either the claims or issues within the claims consideration of an offer to compromise consideration of order 23, rule 11 of the federal court rules and the principles guiding the exercise of discretion in the disposition of costs as to either the claims or issues within the claims consideration of whether an offer to compromise which foregoes a claim to a recovery of costs incurred to the date of the offer is a genuine offer of compromise intellectual property practice and procedure |
The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs ('the Minister') of 7 June 2002 to refuse to grant a Protection Visa to the appellant, SZBII. 2 The appellants are husband and wife. From the decision of the Nicholls FM it appears that only the husband, SZBII, made specific claims for a Protection Visa under the terms of the Migration Act 1958 (Cth) ('the Act'). The claims of his wife, SZBIJ, depend on the claims of her husband. For the purposes of this judgment I shall refer to the first appellant SZBII as 'the appellant'. 3 The appellant, a citizen of the People's Republic of China ('PRC'), claimed to have a well founded fear of persecution because he was a practitioner of Falun Gong. He said that Falun Gong was banned by the Chinese government and that he was afraid of being arrested. 4 The Tribunal found that the appellant had provided insufficient information to it to enable it to make a decision in his favour. The Tribunal accordingly wrote to the appellant informing him of this fact on 23 May 2003 and invited the appellant to attend a hearing before the Tribunal on 18 June 2006. On 28 May 2003 the Tribunal was advised in writing that the appellant did not wish to attend the hearing. The matter was therefore decided by the Tribunal on the material before it and the appellant's application was refused. Before Nicholls FM the appellant claimed that he was denied the right to attend the hearing before the Tribunal and was denied procedural fairness. The appellant claimed that he was ' deceived, ill-informed and misled ' by his migration agent. The appellant alleges that he did not attend the hearing because his migration agent had told him that he would attend, and that there was no need for the appellant to do so. On this basis he signed the 'Response to Invitation' form indicating that he would not attend the hearing. 6 Before Nicholls FM Counsel for the appellant tendered a decision of the Migration Agents Registration Authority ('MARA') of 7 June 2004. Such decision disqualified the migration agent for a period of 5 years as a result of his failure to comply with the Code of Conduct prescribed pursuant to the Act ('the MARA Notice'). Nicholls FM found that none of the matters reported in the MARA Notice related directly to the appellant. 7 Before Nicholls FM the appellant sought to lead evidence from a witness who could testify as to the propensity of the migration agent to engage in behaviour which was fraudulent (or akin to fraud) by preventing applicants from attending hearings before the Tribunal. Nicholls FM concluded that none of this evidence could demonstrate any error on the part of the Tribunal and accordingly its admission was refused as being not relevant under s 55 of the Evidence Act 1995 (Cth) (' Evidence Act '). 8 Nicholls FM considered whether avenues are available in judicial review applications for appellants who allege that they have been denied procedural fairness as a result of the allegedly fraudulent conduct of persons disassociated with the decision-making tribunal. That the Federal Magistrate erred in refusing leave to the appellant to call additional evidence as to the fraudulent conduct of the migration agent. 11 The third ground was not relied upon at the hearing before this Court. 12 At the hearing of the appeal before me the appellant submitted that he completed the 'Response to Hearing Invitation' form indicating that he did not propose to attend, only on the basis of the migration agent's statement that he would represent the appellant at the hearing. The appellant submitted that the migration agent's conduct in failing to attend the hearing was so reckless as to constitute fraud. The appellant also relies upon the fact that the migration agent was fraudulent in his dealings with other parties. The appellant submits that the evidence of disqualification of the migration agent should have been considered as evidence of the migration agent's propensity for fraud. The appellant claimed to be a Falun Gong practitioner and that he was not allowed to practise his beliefs openly in the PRC. According to the appellant, he did not practise Falun Gong openly for fear of persecution. The appellant's wife claimed that she was required to report daily to the Neighbourhood committee and was forced to write confession letters. She says that she was arrested by the police on one occasion and was released only when her family paid a large sum of money to persons who had close relations with the local police. 14 By letter dated 7 June 2002 the Minister advised the appellant that his application for a Protection Visa had been refused. Such letter referred to inconsistencies in the appellant's claims that he was a Falun Gong practitioner and that the claims were vague and lacking in detail. Minister concluded that she was not satisfied that the appellant had ever had any involvement in Falun Gong and that the appellant did not have a genuine subjective fear of persecution if he returned to the PRC. 15 On 9 July 2002 the appellant lodged an Application for Review of the decision of the Minister to the Tribunal. By letter dated 23 May 2003 the Tribunal forwarded an invitation to the appellant to attend a hearing on Wednesday 18 June 2003 at 12.30 pm. The invitation was posted to the address of the appellant's migration agent, as contained in the application, and enclosed a 'Response to Hearing Invitation' form. 16 On 28 May 2003 the Tribunal received the completed Response to Hearing Invitation form dated 27 May 2003. In answer to the question ' Do you want to come to a hearing? ' the box was ticked ' No, I/we do not want to come to a hearing '. It was signed by the appellant. Accordingly the Tribunal proceeded to deal with the Application for Review and delivered its decision on 5 August 2003. It found that the appellant was not a person to whom Australia has protection obligations under the Convention Relating to the Status of Refugees as amended by the Protocol Relating to the Status of Refugees , and concluded that the appellant did not satisfy the criterion for a Protection Visa set out in s 36(2)(a) of the Act. 17 The appellant then unsuccessfully sought judicial review of the Tribunal's decision before Nicholls FM as detailed above. In this Court the appellant raises two issues as considered hereunder. ISSUE 1 --- Could fraud by the migration agent give rise to jurisdictional error? The appellant claims that there was a failure to comply with s 425 of the Act because he was not provided with a ' real and meaningful invitation ', as considered in Minister for Immigration and Multicultural and Indigenous Affairs v SCAR [2003] FCAFC 126 ; (2003) 128 FCR 553 at [37] , because of the conduct of the migration agent. 19 Numerous authorities have held that, absent any default by the Tribunal in the fulfilment of its statutory obligations relating to the provision of an invitation to attend a hearing, no ground of procedural unfairness arises because of some default on the part of an agent retained by an applicant. In NBAJ v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FMCA 1668 , Barnes FM at 33, adopting the observations of Lord Bridge in Regina v Home Secretary; Ex parte Al-Mehdawi (1990) 1 AC 876 at 898, rejected the submission that fraud by an agent constituted jurisdictional error. In SZBSZ v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 779 Bennett J considered the circumstance in which an applicant claimed his migration agent had acted without consultation or instructions and in consequence an invitation to attend a Tribunal hearing was declined. Her Honour concluded that since the Tribunal's letter was forwarded in accordance with the relevant statutory requirements, there was no failure to give the applicant the opportunity to appear before the Tribunal, even though the applicant claimed that he had never received it. Accordingly the Tribunal was entitled to make a decision on the application for review in the absence of the applicant. The same conclusions were made in Applicant M172 v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FMCA 23. In SZBBL v Minister for Immigration [2004] FMCA 185 , Driver FM rejected the submission that there had been a denial of natural justice because of default on the part of the migration agent. His Honour's decision was upheld on appeal in this Court by Tamberlin J: see SZBBL v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 834. 20 In NASF v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 162 , the Full Court considered an appeal in circumstances in which a Response to Invitation form signed by the appellant's migration agent was returned to the Tribunal stating that the applicant did not wish to attend the hearing. The Tribunal proceeded to make the decision without taking any further steps to invite the appellant to appear before it. The Court, having heard evidence from both the appellant and the agent, was satisfied that the appellant had appointed the agent and that the agent had acted in accordance with her actual authority in signing a response to the invitation to attend the hearing. The Court also held that since the requirements contained in s 425A and s 441A for the giving of notice to the appellant had been satisfied, the Tribunal had complied with its obligations under s 425(1) of the Act, even though the appellant was unaware of the invitation. The appellant had appointed the agent who ' ... acted in accordance with her actual authority in signing a response to the invitation to attend the hearing '. The Tribunal complied with its obligations to give the appellant notice of the hearing, notwithstanding the appellant's assertions that she did not receive the notice. Accordingly there was no legal error in the primary Judge's decision which is consistent with the decision of the Full Court in NADK of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCAFC 184. Shortly before the hearing date the Tribunal changed the date. A further invitation was provided to the agent, who responded stating that the appellant did not wish to attend. However evidence established that in fact the appellant, being unaware of the date change, had attended at the hearing on the day and had always wished to provide further evidence in support of her case. Further, cross examination of her agent satisfied the Court that the agent's evidence that he received instruction from the appellant was unreliable. The Full Court found that the appellant had not authorised her agent either generally or specifically to complete the second Response to Invitation form. It concluded that s 441G of the Act had no operation if the agent for the appellant acted beyond the scope of his authority in returning the Response to Invitation contrary to the instructions provided by the appellant. The Full Court confirmed the finding of the Federal Magistrate that where there was no effective consent submitted to the Tribunal by an appellant concerning the hearing, the appellant was not bound by the conduct of the agent. 22 The facts of the present case do not raise this issue. The appellant acknowledges that he signed the Response to Invitation form. He did not speak English but he knew that the form related to an invitation to attend the hearing, and he signed the form knowingly indicating that he would not be attending the hearing. His complaint is that he was given the wrong advice by his migration agent, namely that the migration agent would attend the hearing. Unlike the unique circumstances in SZFML, the appellant does not claim that he wanted to attend the hearing. Rather, he was content for the migration agent to attend. 23 I consider that the circumstances now before the Court are indistinguishable from those considered in NASF . The appellant has not been denied an opportunity to attend the hearing and the Tribunal complied with the requirements of s 425, in the same way as was found by Bennett J in SZBZL . The Court therefore concludes that there was no jurisdictional error on the part of Nicholls FM. The decision itself was made, without the benefit of the participation of the respondents, but unaffected, and certainly not induced, by fraud. There has been no fraud of the executive department. There was an invitation to attend a hearing. That invitation was declined. That decision to decline the invitation was influenced by the dishonesty and fraudulent purpose of the agent of the applicants. I do not see the basis for a conclusion that there was any denial of procedural fairness or that those circumstance [sic] denied the Tribunal the authority to decide the review given the terms of ss 425, 426A and s 422B. Such invitation had been provided, and the decision not to attend resulted from the dishonest conduct of the agent. However, such conduct did not corrupt the decision or the statutory process. The majority considered that authorities which have upheld challenges to orders made against a party by a court in their absence through no fault of their own, such as Taylor v Taylor [1979] HCA 38 ; (1979) 143 CLR 1 and Cameron v Cole [1944] HCA 5 ; (1944) 68 CLR 571, are distinguishable because of the absence of the statutory scheme provided by the Act. 26 In SCAR the Full Court recognised that under certain circumstances the invitation process prescribed by s 425 of the Act may not have been fulfilled (see also SZFML ). However, in SCAR the Full Court found that the Tribunal innocently provided unfair treatment to the appellant in circumstances where the appellant was ill. In Tobasi v Minister for Immigration and Multicultural Affairs [2002] FCA 1050 ; (2002) 122 FCR 322, the Tribunal provided a translator who was unable to speak the appellant's language. In VBAB v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 804 ; (2002) 121 FCR 100, the appellant was misled by statements of the Tribunal. In Applicant NAHF of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2003) FCR 359, the Tribunal declined to grant an adjournment of the hearing, knowing that the appellant was incapacitated. Although the requirement of s 425 had been followed, the invitation was held to be 'an empty gesture and a denial of procedural fairness'(see Hely J at 366 [36]). 27 In each of the above cases there was some error or omission or conduct on the part of the Tribunal which led to the hearing being infected with jurisdictional error. I am satisfied that the factual circumstances existing in those instances have no application to the present facts. The invitation was issued under s 425 and a response was provided by the appellant. In these circumstances the invitation process was carried out in accordance with s 425. It follows that in light of s 422B of the Act, natural justice has been afforded to the appellant. 28 In SZFDE French J dissented, finding that the fraud did affect the decision because it resulted in the non-appearance of the appellant before the Tribunal. As a consequence the Tribunal was deprived of the opportunity of exploring certain issues with the appellant. French J concluded that the Tribunal's decision ' was not one made under the Act, and therefore not a privative clause decision protected by s 474 '. French J's decision recognises the possibility that where, through no fault of their own, an appellant is deprived of a hearing, circumstances may exist to vitiate the decision despite compliance with the requirements of the statutory scheme. This possibility was also recognised by the Full Court in SZFML . It is apparent that the facts in each case will be critical in determining whether consent by the appellant to the agent in fact existed. 29 This Court considers that it is bound to follow the majority in SZFDE , and to conclude that fraud, even if proved by the appellant, does not vitiate the decision of the Tribunal. ISSUE 2 --- Evidence relating to the alleged fraudulent conduct of the migration agent. However, the Court will nevertheless state its observations. 31 The appellant also challenges the finding of Nicholls FM that the MARA Notice would not establish fraudulent conduct by the agent and that the evidence before the Tribunal was not sufficient to establish fraud. The appellant sought to rely upon the MARA Notice as demonstrating a ' propensity ' for the migration agent to have misled the appellant by conduct amounting to fraud, or conduct akin to fraud. 32 The MARA Notice referred to specific complaints made against the migration agent. Such conduct included lodging Protection Visa applications which showed false residential addresses, providing false statements on behalf of his clients to the Tribunal relating to their refugee claims and falsely representing himself as a solicitor. 33 In written submissions provided after the hearing, the appellant relied upon the dissenting judgment of French J in SZFDE wherein his Honour stated that ' the common law proposition that fraud may vitiate an administrative decision ' extends to cover ' reckless conduct ', and sought to establish that the evidence of the migration agent's wrongful conduct in the MARA Notice is relevant to the question of whether the agent's conduct was reckless. The appellant submitted that the MARA Notice would show a 'system' or 'pattern' and a repetitiveness of conduct which would strengthen the inference to be drawn from such evidence within the meaning of s 97(1) of the Evidence Act . Nor on the basis of what the Full Court said in NASB where fraud is given as one specific example which could be relevant, does this material go to show fraud or even any other irregular conduct on the part of a Minister or those associated with the Minister. Nor does this material go to show fraud, perjury or other misconduct of a witness before the Tribunal. Nicholls FM concluded that the details in the MARA Notice and the prospective witness' proposed statement did not ' bridge the gulf between the agent's conduct which led to his deregistration and the elements necessary to prove fraud (or for that matter 'something akin to fraud' whatever that may be) . Section 55 of the Evidence Act establishes the parameters of the evidence which is admissible. His Honour was also entitled, pursuant to s 97(1)(b) of the Evidence Act to conclude that the evidence had no significant probative value. The evidence of the MARA Notice and of the proposed witness would do no more than establish a suggestion of misleading conduct between the migration agent and other parties. It does not establish any link between the conduct of the migration agent and the appellant in these proceedings. The Court is unable to find any jurisdictional error on the part of Nicholls FM, and the subsequent Full Court decision in SZFDE now conclusively determines that fraud by an agent does not result in jurisdictional error by a Tribunal. It follows that the appeal must be dismissed. The Court finds such amount to be reasonable and will make the order sought. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy. | protection visa alleged fraud of migration agent whether conduct of migration agent vitiates decision of tribunal no jurisdictional error. migration |
The respondent is an English corporation. The proceeding arises out of an employment relationship between the applicant and the respondent. The originating process consists of an application and a statement of claim. The claims include: statutory entitlements pursuant to the Workplace Relations Act 1996 (Cth) ("the Workplace Relations Act "), both before and after major amendments were made to the Workplace Relations Act by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) ("the Work Choices Act"); damages for misleading and deceptive conduct, pursuant to s 52 of the Trade Practices Act 1974 (Cth) ("the Trade Practices Act "); and various breaches of contract, said to fall within the accrued jurisdiction of the Court, the employment relationship being the substratum of fact common to all causes of action. The application for leave to serve the respondent outside Australia came before me originally on 23 January 2009. At that time, the applicant relied only on the terms of the application and statement of claim. There was a short affidavit by a solicitor, which dealt with correspondence relating to an attempt to have Australian solicitors who had acted on behalf of the respondent accept service, and with the practicalities of service on the registered office of the respondent in England. In other words, there was no affidavit evidence verifying any of the facts alleged in the statement of claim. When it became apparent that the applicant would be in difficulty proceeding in that manner, because the facts alleged in the statement of claim did not enable the Court to determine whether all of the causes of action fell within any of the provisions of the table in O 8 r 2 of the Federal Court Rules , counsel then appearing for the applicant sought an adjournment. The application was adjourned to 3 February 2009. On that occasion, an affidavit was filed in Court, affirmed by a solicitor and based on information and belief, dealing with some factual matters. This did not resolve all of the difficulties in the applicant's way. Counsel for the applicant sought a further adjournment. The application was adjourned until 23 February 2009. On that day, after further hearing counsel for the applicant, I reserved judgment. On 25 February 2009, the applicant filed an amended application and amended statement of claim. The applicant was entitled to make this amendment without leave, pursuant to O 13 r 3 of the Federal Court Rules . Also on 25 February 2009, the applicant filed an affidavit sworn by himself, giving evidence of matters on which he apparently wished me to rely. A second, corrected version of this affidavit was sworn on 27 February 2009 and filed on 5 March 2009. Since then, the applicant has filed a further affidavit on 27 April 2009, along with written submissions additional to those provided to the Court on 3 February 2009. It is unfortunate that the applicant has chosen to proceed in this piecemeal fashion. I have considered all of the material filed. In many respects, the filing of material after submissions were made has created confusion. There are inconsistencies between the facts pleaded in the amended statement of claim and those to which the applicant has sworn in his subsequent affidavits, particularly that filed on 27 April 2009. The resultant lack of clarity does not work in the applicant's favour when there is a need to provide sufficient facts to demonstrate that all causes of action fall within criteria by reference to which the Court can order service on a person outside Australia. In addition, the filing of affidavit material after the Court has drawn attention to deficiencies in material filed previously can give rise to the suspicion that affidavits have been drafted more with an eye to filling the gaps than to presenting a truthful picture. I have not rejected any of the affidavit material on this basis, but have found that it needs to be approached with caution in some respects. Order 8 r 2 of the Federal Court Rules is undoubtedly made in the exercise of this power. Some caution must be exercised with respect to some aspects of what the Full Court said about the provisions of O 8 of the Federal Court Rules in that case, because O 8 has been amended significantly since Bray was decided. At the time when Bray was decided, the provision equivalent to that now found in O 8 r 2 was in O 8 r 1 and was in terms different from the current provision. At that time, O 8 r 1 provided that "originating process may be served outside the Commonwealth in the following cases". There followed a series of paragraphs, each commencing with the words "where the proceeding". In some instances, these words were followed by the words "is founded on", followed in turn by a reference to a particular cause of action or factual circumstance. In other paragraphs, other descriptions of the kind of proceeding contemplated were set out. The focus was thus on the nature of the proceeding. Order 8 r 1 now contains nothing more than definitions of four terms used elsewhere in O 8. The form of O 8 r 2, which appears from the extracts from the rule that I have set out in [5] above, has been changed, so that the reference is to "a proceeding which consists of, or includes, any 1 or more of the kinds of proceeding mentioned in the following table". The focus is no longer on whether a proceeding is of a kind mentioned in the list, but whether the proceeding consists of or includes a proceeding of any of the relevant kinds. The provisions that were in O 8 r 2 at the time of Bray are now found in O 8 r 3. There have been some changes. The requirement, formerly appearing in O 8 r 2(2)(b), that "rule 1 applies to the proceeding", is now in O 8 r 3(2)(b) as "the proceeding is of a kind mentioned in rule 2". The relevant criterion has broadened, to apply to a proceeding that is not only of a kind mentioned in the relevant list, but one which "consists of, or includes" any one or more of the kinds of proceeding in the relevant list. It follows that, for the purposes of the application of the present O 8 r 3(2), the proceeding may also include proceedings of kinds not mentioned in r 2, so long as it also includes one or more proceedings that are of such a kind. Significantly, O 8 r 3(2)(c) is in terms identical to the former O 8 r 2(2)(c), the meaning of which was considered by the Full Court in Bray . The Court was divided on the issue whether this requirement should be construed as a requirement that the applicant have a prima facie case in respect of every cause of action in the proceeding, or only a prima facie case in respect of the relief sought in the application, even if that relief were sought by reference to alternative causes of action which did not bring the proceeding within one of the kinds referred to in the then O 8 r 1. The majority, Carr J at [36]-[55] and Branson J at [171]-[193], held that it was sufficient that there was a prima facie case for the relief sought on the basis of any of the causes of action relied upon. Finkelstein J dissented. In construing O 8 r 3(2)(c), I am bound to follow the view of the majority in Bray . It is also necessary to point out that the power given by O 8 r 3(2) is clearly a discretionary power. Even if the Court achieves a state of satisfaction as to all of the elements in the paragraphs of subr (2), it is not bound to give the leave sought. Some respect must be paid to the principle of comity between the courts of different countries. Litigation between parties in different countries will be expensive and inconvenient for one of those parties in whichever of the countries it takes place. It is undesirable for a court to seize jurisdiction too readily, simply because a small aspect or small aspects of a proceeding fall within the kinds of cases contemplated in which service outside the jurisdiction of that court may be ordered, while the major elements of the proceeding do not. I do not take the amended form of the words in O 8 r 2 to amount to a requirement that, in every case in which it is possible to find the slightest element of a kind of case found in the table in that rule, it should follow that the power to order service outside Australia should be exercised. The tail should not always be allowed to wag the dog. By s 86(1) of the Trade Practices Act , jurisdiction is conferred on the Court in any matter arising under the Trade Practices Act in respect of which a civil proceeding has been instituted under Pt VI. Part VI of the Trade Practices Act includes s 82. By s 82(1) a person who suffers loss or damage by conduct of another person in contravention of a provision (among others) of Pt V may recover the amount of the loss or damage by action against that other person. In the present proceeding, there is a claim for damages pursuant to s 82 , based on an alleged contravention of s 52 of the Trade Practices Act , which prohibits a corporation, in trade or commerce, engaging in conduct that is misleading or deceptive or is likely to mislead or deceive. Section 52 is found in Pt V of the Trade Practices Act . The definition of the former includes the Australian Fair Pay and Conditions Standard. The definition of the latter term includes the Court. The question of standing to apply for penalties is dealt with in s 718 , where there is a table setting out various types of applicable provisions and lists of persons who may apply in respect of them. Item 2 relates to a term of the Australian Fair Pay and Conditions Standard, and makes it clear that an employee whose employment is subject to the standard may apply for a penalty. Provisions relating to the Australian Fair Pay and Conditions Standard are found in Pt 7 of the Workplace Relations Act . By s 227 , Div 4 "applies to all employees other than casual employees. " The entitlement to accrue annual leave is found in s 232 , where there is a formula for calculation of the entitlement, the details of which need not be canvassed for present purposes. Section 318(1) imposes an obligation on an employer not to contravene a term of the Australian Fair Pay and Conditions Standard contained in, among other provisions, Div 4 of Pt 7 , in relation to an employee of the employer to whom the term applies. Section 318(2) provides that section 318(1) is "a civil remedy provision. " That term is defined by reference to s 4(1) of the Workplace Relations Act , which in turn refers to s 727. The definition of "civil remedy provisions" in s 727 includes a provision of the Workplace Relations Act that is declared to be a civil remedy provision: see s 727(1)(b) and (2). To determine standing to apply for a civil remedy in relation to a contravention of Pt 7 , it is necessary to go to s 319(1) of the Workplace Relations Act , para (a) of which confers on "the employee concerned" the entitlement to apply to "the Court" for an order under Div 7 of Pt 7. Section 317 defines "Court" to mean the Federal Court of Australia or the Federal Magistrates Court. The definitions of "employee" in s 5 and "employer" in s 6 do not deal with the issue at all. By s 6(1)(a) , "a constitutional corporation, so far as it employs, or usually employs, an individual" is included in the definition of "employer". Section 4(1) defines a "constitutional corporation" as a corporation to which s 51(xx) of the Constitution applies. Section 51(xx) of the Constitution confers on the Parliament of the Commonwealth of Australia legislative power with respect to, among others, "foreign corporations". Specific provisions of the Workplace Relations Act dealing with extraterritorial application, such as s 13 and s 174 (which is in Div 1 of Pt 7) appear to be designed to extend the operation of the Workplace Relations Act to cover employees who are actually performing their contracts of employment outside the territorial limits of Australia. They therefore appear to be based on the assumption that, if the employee is performing his or her contract of employment within the territorial limits of Australia, the employer will be bound by the terms of the Workplace Relations Act in relation to that employment. At the very least, the applicant's claim pursuant to the Workplace Relations Act can be taken to include a contention to this effect, which the Court would have to resolve. The applicant's claim for unpaid annual leave, pursuant to the Workplace Relations Act , therefore answers at least one of the descriptions of: a proceeding based on a breach of a provision of an Act that is committed in Australia, within the meaning of item 11 in the table in O 8 r 2 of the Federal Court Rules ; or a proceeding based on a breach of a provision of an Act (wherever occurring) seeking relief in relation to damage suffered wholly or partly in Australia, within item 12 of that table; or a proceeding in relation to the construction, effect or enforcement of an Act, within item 13 of that table. There is also a claim for unpaid annual leave by reference to the Workplace Relations Act , as it stood prior to the amendments introduced by the Work Choices Act. The Workplace Relations Act in that form governed the employment of the applicant during the pre-amendment period of that employment. Section 500(1) provided that minimum terms and conditions of employment for employees in Victoria were contained in Sch 1A. Section 506(2) contained a similar provision with respect to a contract of employment other than an employment agreement. Section 527(1) then provided that the Workplace Relations Act applied in relation to an employment agreement in the same way as it applied in relation to a certified agreement. By s 178(1) , where a person bound by a certified agreement breached a term of the agreement, a penalty could be imposed by the Court. By s 178(5A)(c) , among the persons entitled to sue for and recover a penalty was a person bound by the agreement concerned. Section 178(6) empowered the Court to order an employer to pay to the employee concerned an unpaid amount that the employer was required to pay under an agreement. To the extent to which it is based on these earlier provisions of the Workplace Relations Act , the applicant's claim for unpaid annual leave falls within the three items in the table in O 8 r 2 of the Federal Court Rules , to which I have referred in [17]. The claim for damages, in reliance on s 52 of the Trade Practices Act is also a claim falling within items 11 and 12 of the table in O 8 r 2 of the Federal Court Rules . I have considerable doubts as to whether all of the causes of action alleging breaches of contract constitute proceedings of one or more of the kinds mentioned in the table in O 8 r 2 of the Federal Court Rules . To the extent to which there are claims for payments due under a contract, it could be said that those are proceedings based on breaches of contract that occurred in Australia, for the purposes of item 2. In those circumstances, the causes of action would also arise in Australia, within the meaning of item 1. I have difficulty with the notion that any contract on which the applicant relies was made in Australia, within the meaning of item 3(a) or is governed by the law of the Commonwealth or of a State or Territory, within the meaning of item 3(c). It seems to me most likely that there was a contract, originally made in England, pursuant to which the applicant agreed to be assigned to Australia. Subsequent variations of the time for which that contract was run would not produce a change of the place where the contract was made. Although the applicant's performance of the contract was to be largely (but by no means entirely) in Australia, there are many features of the contract, so far as its nature is discernible from the evidence, that suggest that the proper law of the contract is the law of England. It is unnecessary to determine these questions, however, because the presence of the claims made pursuant to the Workplace Relations Act and the Trade Practices Act ensure that the proceeding includes at least one of the kinds of proceeding mentioned in the table in O 8 r 2 of the Federal Court Rules . For the purposes of the application of the requirement in O 8 r 3(2)(b), that is sufficient. For the reasons given in [12]-[19], the claims made pursuant to the Workplace Relations Act are within the jurisdiction of the Court and make the proceeding one of a kind mentioned in O 8 r 2 of the Federal Court Rules . As I have said in [11], the claim made pursuant to s 52 of the Trade Practices Act is also within the jurisdiction of the Court. That claim also contributes to the proceeding being of a kind mentioned in O 8 r 2. The claims in contract are within the jurisdiction conferred on the Court by s 32(1) of the Federal Court Act in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Court is invoked. Alternatively, because all of the claims made in the proceeding arise out of the employment of the applicant by the respondent, there is a sufficient substratum of facts common to all the claims to bring the claims in contract within the accrued jurisdiction of the Court. See Fencott v Muller [1983] HCA 12 ; (1983) 152 CLR 570 at 607 per Mason, Murphy, Brennan and Deane JJ. The requirements of O 8 r 3(2)(a) and (b) of the Federal Court Rules are therefore satisfied. See State of Western Australia v Vetter Trittler Pty Ltd (In liq) (Receiver and Manager appointed) (1991) 30 FCR 102 at 110. The relief sought in the proceeding is set out in six numbered paragraphs of the amended application. Two of those numbered paragraphs are each divided into two subparagraphs and another is divided into six subparagraphs. Each paragraph, and each subparagraph, involves a separate claim for specified relief. Some of the claims are cumulative, some stand alone, and others are alternative. Each claim for relief makes specific reference to one or more paragraphs of the amended statement of claim. To determine whether there is a prima facie case for the relief sought, it is necessary to examine separately each claim for relief by reference to the relevant paragraph or paragraphs of the amended statement of claim, and by reference to the affidavit evidence filed in support of the application. To the extent to which there are alternative claims for the same relief, it will be sufficient if there is a prima facie case for that relief on either of the bases claimed, in accordance with the principle from Bray to which I have referred in [9] above. The claim is specifically based on paras 58 to 60 of the amended statement of claim. In fact, it is necessary to look at other paragraphs of the amended statement of claim to understand paras 58 to 60. Paragraph 54A alleges that from around 6 February 2002 until 23 May 2007, the respondent represented to the applicant that his assignment to Australia was long-term and secure. The representations were on-going until 23 May 2007 as the Applicant continued to serve as the CEO of the Australian business up until being told of the termination of the assignment on 23 May 2007, without the Respondent ever withdrawing or resiling from the representations. In para 56, the applicant alleges that he acted in reliance upon the representations. Its effect is to provide the applicant with a prima facie case of the element of his claim in respect of misleading and deceptive conduct pleaded in paras 57 and 58 of the amended statement of claim, with the exception of the reference in para 58 to ensuring that they would be honoured. Section 51A says nothing about ensuring that representations will be honoured. There is no evidence to suggest that the respondent lacked reasonable grounds for ensuring that any representations made to the applicant would be honoured. Such an allegation appears to come close to an allegation that the respondent lacked the intention of ensuring that the representations would be honoured, which is in effect an allegation of fraud. Such an allegation would require specific pleading, including particulars of the facts on which the applicant relies in pleading any condition of mind. See O 12 rr 2 and 3 of the Federal Court Rules . Paragraph 59 of the amended statement of claim is formulaic in nature. It alleges that "In the premises, the conduct was misleading or deceptive or likely to mislead or deceive" in contravention of s 52 of the Trade Practices Act . Presumably "the conduct" is a reference to the representations referred to in para 54A. The reference to "the premises" is probably intended to include the allegations made in para 36 of the amended statement of claim that, on or about 1 October 2007, the respondent terminated the applicant's employment. That allegation is particularised by reference to a telephone call and an email from David Scott on behalf of the respondent on 23 May 2007, advising the applicant that the Australian assignment was being terminated and would expire on 1 October 2007. Paragraph 60 of the amended statement of claim contains the allegation that, by reason of the respondent's contravention of the Trade Practices Act , the applicant has suffered loss and damage, in reliance upon "the conduct". Accordingly, the loss and damage suffered by the Applicant equates to 15 years' of salary and benefits (adjusted in line with his expected promotion in that period) that he would have earned with an employer other than the Respondent. The Applicant is now unemployed and, as the head of the family, feels an enormous weight of responsibility for the disruption and dislocation caused to his family's life. This has caused the Applicant great stress and vexation. In addition, I have been made aware that in order for us to have the opportunity to remain in Australia permanently, which is a possibility, I must apply for citizenship/residency before the age of 45 years being attained. Guess what! I am 45 in July 2002 thus I need to be aware of yours and the Company view on that step. It is obviously difficult timing in view of the upcoming spin-off, however, I want to gain some certainty to being able to remain in Australia, as an Employee of the Group past my current visa, I do also need to consider the possibility that the Company will not wish for me to continue here. I have obtained some advice and will bring that with me to London next week. Alternately, you may wish for me to return to London upon expiry of the assignment. The terms of the email of 19 April 2002 do not suggest that the applicant was relying on this representation as affording him any likelihood of staying in Australia beyond the expiry of the assignment, to which he referred in the last sentence I have quoted. Reliance on that representation is also inconsistent with the statement in the first paragraph of the email that the applicant wished to gain some certainty of being able to remain in Australia as an employee of the respondent's group, but that he was considering the possibility that the respondent would not wish for him to continue there. The respondent assisted the applicant in his application for a further visa, to entitle him to remain in Australia on a permanent basis with his wife and daughter, by lodging an employer nomination in 2003. The applicant alleges that a representation was made by Mr Powell between 5 December 2002 and February 2003 to the effect that his assignment to Australia was permanent. Nevertheless, when the assignment was extended, it was extended only until the end of October 2003. Before that extension had expired, there was a further extension of the Australian assignment until the end of February or into March 2004. These extensions were in writing, dated 3 April 2003 and 8 September 2003 and were inconsistent with any representation of permanency at that time. The other representation of permanency is alleged to have been made on 23 September 2003. Those discussions comprised face to face discussions in Australia and England, telephone discussions (primarily between Australia and England) and email communications (primarily between Australia and England). We have taken legal advice on the employment implications. We have been advised that there will be a need for a new contract to be signed by ourselves (Employer) and you (Employee). If we both agree to the terms within the contract your UK contract will no longer be legally binding and you will be protected by Australian and the state [ sic ] of Victoria's employment rights. We therefore need to formalise a legally binding contract of employment. It does not appear that that draft contract was ever the subject of further negotiations, or was ever formalised by signing. The opening words of the letter are consistent with the proposition that it was the applicant expressing a wish to remain in Australia on a permanent basis, and the respondent reacting to that request, rather than the applicant relying on representations of the respondent and being induced thereby to take steps to remain permanently in Australia. The acts that the applicant contends constituted his reliance on the representations, detailed in the particulars to para 56 of the amended statement of claim, are more consistent with this latter characterisation of the facts than with the characterisation the applicant seeks to give to them. Seeking written confirmation of representations made orally seems inconsistent with reliance on the oral representations. The picture presented by the evidence is one of the applicant having made a decision to plant himself permanently in Australia, with his wife and family, and seeking the cooperation of the respondent in this endeavour. The form of the representations alleged, and the circumstances in which they were made, also pose difficulties for the applicant. It is plain that the parties were attempting to negotiate a position that would assist the applicant in his desire to become a permanent resident of Australia. Representations made in the course of such negotiations sometimes lead to agreement, in which case it is the terms of the agreement to which reference must then be made in order to ascertain what obligations the parties have undertaken towards each other. Where, as appears to have been the situation in the present case, no concluded agreement seems to have resulted, representations made in the course of incomplete negotiations do not assume the character of obligations, as if they were themselves the agreement. No doubt representatives of the respondent were happy to assist the applicant in his endeavours to establish himself permanently in Australia, to the extent to which the respondent could do so. No doubt there were expressions of support for this endeavour from time to time. No doubt these conveyed to the applicant the impression that his employment would be ongoing. In the circumstances in which the expressions were given, they could not be held to amount to absolute representations. As his evidence shows, the applicant was well aware that the financial position of the respondent's subsidiary in Australia, which he was assigned to manage, was shaky. No reasonable person would take, and the applicant almost certainly did not take, any representations about his ongoing employment as giving him any greater assurance than a contract of employment of an ongoing kind would have given him. Permanent employment is not understood to be permanent literally. It is understood to be ongoing but dependent on other circumstances. It could not have been the case that the respondent was representing to the applicant that, in all circumstances, he was to be employed to manage the Australian subsidiary for as long as he wished. Questions of his performance and commitment to the task, and other potential variables, inevitably would be seen to be inherent in any such representation. The applicant was not being told, and would not have understood that he was being told, that his employment would continue for as long as he wanted even if he ceased to give any attention at all to the affairs of the business he was supposed to manage. A contract for ongoing employment that does not specify a fixed term or provide for termination is taken to contain an implied term that it is terminable upon reasonable notice. When representations were being made to the applicant about ongoing employment, they could not have conveyed to him anything greater than the proposition that he would continue to be assigned to Australia, to manage the respondent's business there, without any further fixed limit to the assignment, but on the basis that the assignment could be terminated upon reasonable notice. Indeed, as will be seen, elsewhere in the amended statement of claim, the applicant alleges that his contract of assignment was subject to just such a term. He also alleges that the permanent employment about which representations were being made to him was regarded by the respondent as lasting no longer than the applicant would wish it to last. The applicant cannot have relied on any of the representations about permanent assignment to Australia on any basis other than that such assignment would be terminable on reasonable notice. For these reasons, I am of the view that the applicant has not made out a prima facie case in respect of his claim for damages on the basis of misleading and deceptive conduct. If the evidence remains as it is after a trial, the applicant would fail in his attempt to demonstrate that he relied on some literal construction of the representations made to him and that he suffered detriment in so doing. In para 2, there is a claim for $53,803, based in the alternative on s 178(6) of the Workplace Relations Act as it stood prior to the amendments introduced by the Work Choices Act, or s 320 of the Workplace Relations Act as it stood following those amendments. In para 3, there are alternative claims for a penalty, either pursuant to s 719 of the Workplace Relations Act as amended by the Work Choices Act (with an application for the penalty to be paid to the applicant pursuant to s 841), or pursuant to s 178(1) of the Workplace Relations Act as it stood before the Work Choices Act amendments (with an application for the penalty to be paid to the applicant under s 356(b)). The relevant provisions of the Workplace Relations Act , both before and after amendment by the Work Choices Act, are dealt with in [12]-[19] above, apart from ss 841 and 356(b). Sections 841 and 356(b) constitute and constituted respectively the grant of a discretionary power to the Court, normally exercised where an individual applies for a penalty, to order the payment of the penalty to that individual. Each of paras 2 and 3 of the amended application refers to para 52 of the amended statement of claim. Paragraph 52 itself refers to obligations pleaded in paras 25(s), (u) and (w), or alternatively paras 27 or 29, of the amended statement of claim. Paragraphs 25(s), (u) and (w) plead implied terms of the contract of employment. That pleaded in para 25(s) is an implied term that, upon termination of the contract, the respondent would pay to the applicant a sum equating to any annual leave that accrued under a term pleaded in para 25(r), which pleads an express term of entitlement to five weeks' paid annual leave. Paragraph 25(u) pleads a term, said to have been implied by item 1A(2)(e) of Sch 1A and s 506(1) of the Workplace Relations Act , as it stood prior to the amendments introduced by the Work Choices Act. The term is that the respondent would pay to the applicant a sum equating to any annual leave that accrued under the term pleaded in para 25(t) owing to the applicant at termination. Paragraph 25(t) pleads an implied term of entitlement to paid annual leave, said to have been implied by virtue of items 1(1)(a) and 1A(1) of Sch 1A to the Workplace Relations Act as it stood prior to the Work Choices Act amendments. Paragraph 25(w) pleads a term similar to that pleaded in para 25(u), but said to be implied from s 235(2) of the Workplace Relations Act , and relating to a term pleaded in para 25(v), said to have been implied by virtue of ss 232(2) , 234 (1) and 234 (4) of the Workplace Relations Act , similar to that pleaded in para 25(t). Paragraphs 27 and 29 of the amended statement of claim plead statutory obligations, in the same terms and having the same origins as those pleaded in para 25(u) and (w), with respect to statutory obligations pleaded in paras 26 and 28 respectively, which are similar to the terms pleaded in paras 25(t) and (v) and are said to have the same origins. The applicant has sworn in one of his affidavits that, at the termination of his employment with the respondent on 1 October 2007, he had accrued statutory annual leave amounting to 62 days that he had not taken. Although the calculations he has set out in a spreadsheet exhibited to that affidavit are difficult to follow, his averment is sufficient for the purposes of determining whether a prima facie case for the relief sought is made out. Based on the statutory entitlements to annual leave, I am of the view that a prima facie case is made out for the claims in paras 2 and 3 of the amended application. If it were necessary to be so, I would not be so satisfied with respect to the claims based on express or implied terms of the contract. In the case of express terms, there is no evidence of outstanding annual leave at 1 October 2007. The difficulty of converting express statutory entitlements into implied terms of contracts of employment was the subject of considerable discussion in Byrne v Australian Airlines Limited [1995] HCA 24 ; (1995) 185 CLR 410 , especially at 418-423 per Brennan CJ, Dawson and Toohey JJ and 440-453 per McHugh and Gummow JJ. It is unlikely that the statutory entitlements became terms of the contract of employment in the present case. This issue need not be pursued any further, however, because a prima facie case with respect to the relief claimed in paras 2 and 3 of the amended application exists on the basis that the applicant has enforceable statutory entitlements. In para 4(a) of the amended application, a claim is made for damages for breach of contract, pursuant to para 38 of the amended statement of claim. Paragraph 38 contains an allegation that the applicant has suffered loss and damage, pursuant to a breach of contract referred to in para 37 of the amended statement of claim. The breach referred to in para 37 was termination of the contract of employment (alleged in para 36 to have occurred on or around 1 October 2007), in breach of a term pleaded in para 32 of the amended statement of claim. In para 32, it is alleged that the applicant's assignment to Australia "was extended on a secure, long-term ongoing basis" from (at the latest) 23 September 2003. The particulars to para 32 state that the assignment was extended in accordance with para 54A of the amended statement of claim. As I have said in [26] above, para 54A alleges that the respondent represented to the applicant, between 6 February 2002 and 23 May 2007, that his assignment to Australia was long-term and secure. I have already set out the particulars to para 54A in [26] above. Those particulars merely contain allegations of representations alleged to have been made to the applicant. Any notion that there was a variation of the contract, so as to incorporate a term to the effect that the assignment to Australia was extended on a secure long-term basis comes from para 33 or para 34 of the amended statement of claim. The former of these alleges that the Australian assignment contract was varied and that the terms of the variation became terms of that contract. The latter alleges that the Australian assignment contract as varied replaced the original contract. The result appears to be that there is an allegation that the original contract under which the applicant was assigned to work in Australia was varied, or substituted, by the inclusion of a term to the effect that his assignment was on a secure, long-term and ongoing basis. There is some recognition in para 35 of the amended statement of claim that any term of this nature would be balanced by an implied term requiring reasonable notice before the Australian assignment was terminated. In para 35, it is alleged that in the circumstances, and having regard to the nature and responsibilities of the applicant's employment, a reasonable period of notice of the applicant's employment was 24 months. The evidence discloses that the respondent is part of a world-wide group of companies, carrying on business as an insurer for the provision of extended warranties. I assume that this means that the respondent and other members of the group received income from premiums paid by consumers who were prepared to purchase warranties on items for periods greater than the periods offered by the manufacturers or dealers of those items, and from the investment of those premiums. The Australian subsidiary, the management of which constituted part of the duties of the applicant, was treated for administrative purposes as falling within the Asian division of the group. The Australian subsidiary had its office at level 2, 74 Doncaster Road, Balwyn North. There is no evidence as to the size of that office, the number of staff the applicant was required to supervise or the extent of the turnover or profit that it generated. The applicant's base salary at the time of the termination of the contract was said to have been $269,013. He also had entitlements to the provision of a car, private health cover, a rental subsidy of up to $5,633 per month and reimbursement of any costs associated with renting premises, all his telephone expenses and three business class and one economy class airfares to the United Kingdom and return each year. Having regard to the range of executive remuneration common in business in Australia, it is difficult to sustain the proposition that the applicant was remunerated at high levels. The proposition that the applicant would have continued in the employment of the respondent until retirement is speculative. The fact that the respondent had assisted the applicant to satisfy his desire, and that of his family, to settle permanently in Australia would not translate readily into the proposition that the respondent thereby brought upon itself the burden of a greater period of notice than would otherwise have been reasonable. In many respects, however, the question of what would have been reasonable notice of termination of the applicant's employment altogether is irrelevant. The evidence is inconsistent with the proposition in para 36 of the amended statement of claim that the respondent terminated the applicant's employment on 1 October 2007. What occurred was that, in a telephone conversation and an email on 23 May 2007, David Scott, to whom the applicant was by then reporting, informed the applicant that his assignment to work in Australia would be terminated on 1 October 2007. By reference to the terms of the contract on which the applicant relies, the effect of this was to trigger an obligation on the part of the respondent to return the applicant to his original position in England and an obligation on him to return to England and take up that position. The real question is whether, in those circumstances, notice of more than four months of the termination of the assignment to Australia (as distinct from the termination of the employment altogether) was reasonable. It is difficult to say that it was not reasonable. In addition to the factors to which I have referred in [44], it is necessary to recognise that, throughout his assignment to Australia, the applicant was in a subordinate position. He was required to report, first to Mr Powell and subsequently to Mr Scott. Part of his remuneration was in respect of his duties as a director of the respondent, which were presumably to be discharged, at least in part and most likely predominantly, by attendance at board meetings in England. The termination of the contract came about in a way that is concealed, rather than revealed, by the amended statement of claim. It is clear that the applicant was very unwilling to return to England. He engaged in correspondence with the respondent about exactly what position he was to occupy if he were to return. He advanced arguments such as that a position in the Harrow office would not be his original position, because he had worked out of the Kingston office for the most part, in circumstances in which the respondent was indicating an intention to close both the Harrow and the Kingston offices and to consolidate its operations in one office somewhere else. The applicant and the respondent argued about what the title attached to the applicant's original position had been. After 20 June 2007, the correspondence was on a without prejudice basis, so that its contents are not in evidence. That repudiation is now accepted and the contract in so far as future performance of service by our client is now terminated. It is now the intention of our client to sue both in respect of the obligations under the contract, which your client has failed to perform and, further, in respect of damages arising from the repudiation of the contract of employment by your client. In the circumstances, the applicant has not made out a prima facie case of the allegation that the respondent terminated the contract of employment in breach of a term that the contract was to be extended on a secure, long-term and ongoing basis. The existence of such a term has not been established. In any event, an extension in those terms would be subject to an implied term that it could be brought to an end on reasonable notice. It is not possible to say that the notice actually given was less than reasonable notice. It is not possible to resolve any controversy as to whether the respondent repudiated the contract of employment by refusing to perform its obligations after 30 September 2007. There is no prima facie case for the relief sought in para 4(a) of the amended application. Paragraph 4(b) of the amended application contains a claim for damages for breach of contract, said to be pursuant to para 40 of the amended statement of claim. Paragraph 40 alleges that the applicant suffered loss and damage as a consequence of the breach of contract referred to in para 39. Paragraph 39 alleges termination in breach of a term pleaded in para 25(q). That was a term alleging that "in the event of the Applicant's employment under the Australian assignment contract being terminated, the Applicant would be given a reasonable period of notice by the Respondent". It is clear from the particulars to para 40 that the applicant relies on the assertion in para 35 of the amended statement of claim that a reasonable period of notice was 24 months. That is the period particularised as the basis for calculation of the applicant's alleged loss and damage. For the reasons I have already given in [43]-[45] and [47], the applicant has not established a prima facie case that a reasonable period of notice for the termination of the Australian assignment was 24 months, or that the notice actually given to him of more than four months was less than what was reasonable in the circumstances. The applicant has failed to establish a prima facie case for the relief sought in para 4(b) of the amended application. In para 4(c) and para 5(a) of the amended application, there are alternative claims for the same sums of $269,013 and £79,523. The claim in para 4(c) is said to be pursuant to para 46 of the amended statement of claim and is a claim for damages for breach of contract in those sums. The claim in para 5(a) is said to be pursuant to para 45 of the amended statement of claim and is a claim for those two sums as debts. Paragraph 45 of the amended statement of claim refers to the matters pleaded in paras 43 and 44, and alleges that the respondent is indebted to the applicant in the sums specified. Paragraph 46 alleges that the applicant has suffered loss and damage as a consequence of the respondent's breaches referred to in paras 43 and 44. Paragraph 43 of the amended statement of claim alleges that, pursuant to a term pleaded in para 25(n), the respondent was required to pay to the applicant a sum calculated in accordance with the "enhanced redundancy package" and 12 months' salary. Paragraph 44 alleges that, in breach of a term pleaded in para 25(o), upon termination of the applicant's employment, the respondent did not pay the applicant 12 months' salary or any redundancy payments. Even before he came to Australia, the applicant was stipulating for what he called a "safety net" in the event that the assignment was terminated and it was not possible to return him to his original position in England, or if his employment should be terminated for any reason. The safety net he sought consisted of a compensation payment of 12 months' salary if his original position in England was not available for him, and what he described as an "enhanced redundancy package" in the event of termination of his employment, consisting of statutory government redundancy pay, an ex gratia payment and payment in lieu of notice. Between late 1999, before the applicant came to Australia, and the middle of 2003, well after he had come to Australia, there were still exchanges of drafts of the terms of his contract of assignment, but no document was ever signed. In early 2003, there was correspondence between the applicant and a person called Kath McVeigh, who was anxious to ascertain what the terms of the assignment were, for the purposes of satisfying the taxation authorities in the United Kingdom and the respondent's internal auditors. There was some confusion over which draft was the correct one. In the end, negotiations appear to have petered out without anyone pressing for a signed document. The applicant relies on the fact that he continued in employment with the respondent during these discussions as being sufficient to establish that he had entered into a contract the terms of which included terms in accordance with his proposal for a safety net. If, after three months, this is not possible because of the prevailing Economic or Commercial circumstances, LGH will pay nine months salary as compensation over and above an enhanced redundancy package. This set out a redundancy package consisting of statutory government redundancy pay, with a formula for its calculation, an ex gratia payment based on one week's salary for each completed year of service, with no maximum, and a payment in lieu of notice of one week's salary for each completed year of service, with a maximum of 12 weeks. Based on this evidence, I am prepared to accept that these terms were part of the contract under which the applicant was assigned to carry out duties in Australia. The difficulty the applicant has is in satisfying the requirement of a prima facie case that the occasion for payment of a year's salary or for any payment in respect of redundancy has arisen. The evidence does not enable me to determine whether there is a prima facie case that the respondent did not make every attempt to return the applicant to his original employment position upon successful completion of the assignment. Nor does it enable me to say that there is a prima facie case that such return was not possible because of prevailing economic or commercial circumstances. On the case put by the applicant, there was no redundancy involved in respect of his former position in Australia. Indeed, when notice was given that his assignment to Australia would be terminated, one of the things he was instructed to do was to assist in finding a replacement. For the same reason that it is not possible to make findings about the return of the applicant to his original employment position, it is not possible to make findings about whether there was a redundancy in respect of that position in England. The applicant has failed to establish a prima facie case for the relief sought in para 4(c) and para 5(a) of the amended application. Paragraph 4(e) and para 5(b) contain claims for the sum of approximately $80,000. The former is a claim for damages for breach of contract in that sum. The latter is a claim for that sum as a debt. The former is said to arise pursuant to para 51 of the amended statement of claim and the latter pursuant to para 50 of the amended statement of claim. Paragraph 50 of the amended statement of claim alleges that the respondent is indebted to the applicant in the sum of $80,000 (particularised as an approximate figure) because of breach of the term pleaded in para 25(i) in failing to compensate the applicant in respect of the introduction of the goods and services tax in Australia. In the alternative, in para 51, the applicant pleads that he suffered loss and damage as a result of the breach of contract pleaded in para 49. This means that during the assignment, you will pay hypothetical "UK" income tax to LGH. LGH will, in turn, pay your Australian taxes. It is recognised that the introduction of GST in July 2000 may have impact of [ sic ] you, the Company will jointly review the introduction of this tax with you and ensure that this has no "cost to you". Ernst & Young will provide you with a departure briefing and take responsibility for all UK and Australian tax returns to include the year of your departure from the UK, and return. What the clause required in relation to the introduction of GST was that both parties engage in a review to ensure no cost to the applicant. There is no evidence as to whether any such review ever took place. There is no evidence that either the applicant or the respondent ever sought to engage in such a review, or what the outcome of such a review was if it occurred. There is no evidence that the respondent did not pay anything to compensate the applicant for the introduction of GST, or as to how much it might be liable to pay if it did so. In short, there is no evidence to establish a prima facie case for the relief sought in para 4(e) or para 5(b) of the amended application. By para 4(f) of the amended application, pursuant to para 54 of the amended statement of claim, the applicant seeks damages for breach of contract in the sum of $53,803. Paragraph 54 contains, in conjunction with the allegation of failure to fulfil a statutory obligation in respect of accrued annual leave, a claim based on breach of contract in that respect. In turn, by reference to paras 52 (to which I have referred in [37]) and 53, a claim is made in respect of the term of the contract alleged in para 25(s) of the amended statement of claim. It is unnecessary to determine whether there is a prima facie case for the relief sought in respect of this alleged breach of contract, because I have already found that there is a prima facie case for the identical relief sought by virtue of statutory entitlement. The final claim, in para 6 of the amended application, is a claim pursuant to para 25(m)(ii) of the statement of claim for a declaration that the applicant and his family are entitled to be indemnified by the respondent in respect of any present or future taxation obligation or penalties relating to his employment with the respondent. The term pleaded in para 25(m)(ii) is alleged to be an implied term. Or alternatively, the term is implied on the basis that it is necessary for the reasonable or effective operation of the contract. It is not obvious how the implied term alleged in para 25(m)(ii) of the statement of claim can be derived from the express term, whether to give it business efficacy or otherwise. There is no other material concerning this. There is no evidence suggesting that the respondent refuses to provide, or even whether the applicant has sought, an indemnity of the kind suggested. The applicant has failed to make out a prima facie case for the declaratory relief. With respect to the relief sought on the basis of contravention of s 52 of the Trade Practices Act , and on the basis of contract, the applicant does not have a prima facie case for that relief. This being the case, my view is that I should refuse the leave sought to serve the amended application and the amended statement of claim on the respondent in England. To serve those documents in their present form would be to visit upon the respondent a proceeding in Australia involving a significant number of claims, with only a small number of those claims justifying the grant of leave for such service. Although technically the proceeding as a whole might fall within O 8 r 2 of the Federal Court Rules , because of the presence of the small number of claims, this is not enough to persuade me to exercise the discretion to permit service out of the jurisdiction in respect of the whole proceeding. To do so would be to allow the tail to wag the dog. There are possible courses open to the applicant. One is to seek leave to amend the application and statement of claim a second time, so as to confine it to the statutory claims for accrued annual leave. A further application for leave to serve such originating process on the respondent in England could then be made. Alternatively, the applicant could make another application in relation to the amended application or the amended statement of claim, or some further proposed amended version of both, on such material as might make out a prima facie case where the material is presently lacking. The refusal of leave should be accompanied by an order that there be no order as to the costs of the application for it. I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray. | service outside australia proceeding including claims for misleading and deceptive conduct, statutory entitlements to accrued annual leave and breaches of contract whether court has jurisdiction in the proceeding whether proceeding consists of or includes any one or more of the kinds of proceeding required whether prima facie case for relief sought prima facie case for only a small part of relief sought whether discretion to allow whole of amended application and amended statement of claim to be served outside australia should be exercised annual leave whether statutory regime binds foreign employer of employee performing contract of employment in australia misleading and deceptive conduct representations as to ongoing employment whether binding whether absolute whether subject to implied term as to termination on reasonable notice whether prima facie case of reliance on representations employment terms whether implied term of termination on reasonable notice whether 24 months' notice reasonable whether contract terminated employee given 4 months' notice that his assignment to work in australia would be terminated whether prima facie case of breach by employer in failing to comply with obligations on termination of assignment to australia civil procedure workplace relations trade practices contract |
2 The applicant is a citizen of the People's Republic of China who arrived in Australia on 23 October 2003. On 1 December 2003 the applicant lodged an application for a Protection (Class XA) visa with the Department of Immigration and Multicultural Affairs under the Migration Act 1958 (the Act). 3 On 4 December 2003 a delegate of the Minister for Immigration and Multicultural Affairs refused to grant a Protection visa. 4 On 7 January 2004 the applicant applied for a review of that decision to the Refugee Review Tribunal (the RRT). 5 On 7 June 2004 the RRT determined the matter on the papers. The applicant had advised the RRT in writing that she did not wish to give oral evidence and consented to the RRT proceeding to make a decision on the review. She speaks, reads and writes Mandarin. She was divorced in June 2003. The applicant left the PRC on 22 October 2003, and arrived in Australia on 23 October 2003. Her Australian visa was issued in Beijing on 4 September 2003. Between August 1970 and October 2003 she lived at the same address at Tie Xi District, Shenyang. She has completed eight years of education. She claims that she got married to her ex-husband in 1993, and her son was born in 1994. After her marriage her ex-husband tormented her both mentally and physically without any reason. She (sic) insulted and beat her, and she therefore became the victim of domestic violence. This was because the Chinese government does not pay any attention to domestic violence. The applicant suffered domestic violence for nine years before she could get a divorce in June 2003. Even after the divorce her ex-husband often approached her and threatened the applicant and her son. She had to leave her hometown and her nine year old son. The applicant claims that the government provides no help to victims of domestic violence. However, in particular, the RRT rejected as implausible her claims that she was a victim of serious domestic violence. 8 The applicant took no action in relation to the RRT's decision until, on 18 April 2006, she applied to the Federal Magistrates Court for a review of the RRT's decision made on 7 June 2004. 9 The applicant had been taken into detention about one month earlier on 21 or 23 March 2006. She said she had delayed in bringing the application to the Federal Magistrates Court because it took time to obtain a copy of the RRT's decision. 10 The applicant's application to the Federal Magistrates Court was out of time. Section 477 of the Act, as amended by the Migration Litigation Reform Act 2005 (the Reform Act), provides that any application to the Federal Magistrates Court in its original jurisdiction in relation to a migration decision must be made to the Court within 28 days of the actual notification of the decision. 11 By virtue of Clause 42 of Part 2 of Schedule 1 of the Reform Act, where a decision was made prior to the commencement date, s 477 of the Act applies as if the actual notification of the decision took place on the commencement date of the Reform Act, namely 1 December 2005. The applicant, therefore, should have brought her proceedings within 28 days of 1 December 2005. 12 Section 477(2) allows the Court to extend the time within which an applicant may commence proceedings up to 56 days provided the criteria in that subsection are satisfied. That would have meant that the applicant needed to bring her proceedings within 84 days of 1 December 2005, namely 23 February 2006. 13 The application was therefore out of time. Section 477(3) prevents the Court making any order allowing, or having the effect of allowing, an applicant to make an application outside the 28 day period except to extend it by 56 days under s 477(2). 14 The Federal Magistrate, therefore, dismissed the applicant's application and entered an order on 25 May 2006. 15 On 20 June 2006 the applicant sought to file a notice of appeal in this Court but the notice of appeal was out of time: O 52 r 15(1)(a). Accordingly, the applicant has sought further time to file and serve a notice of appeal. I will assume without deciding that an appeal would lie from the Federal Magistrate's order and that leave to appeal is not required. an order that a writ of certiorari be issued quashing the decision of the Tribunal. 18 The notice of appeal appears to be an application to this Court for relief at first instance. The applicant is not entitled to bring proceedings in this Court at first instance in relation to the subject matter of the proceedings brought in the Federal Magistrates Court. 19 There was no explanation as to why the applicant did not bring her notice of appeal within time. That may not, having regard to her status, be of itself enough to refuse the application for leave to file and serve a notice of appeal outside the time prescribed in O 52 r 15. However, the notice of appeal does not, as I say, identify any error on the part of the Federal Magistrate or seek any appropriate relief on appeal. The applicant appeared in person today. She did not address the reasons why her application was dismissed by the Federal Magistrate. There appears to be no error in the Federal Magistrate's reasons. 20 In those circumstances, the appeal is bound to fail and the application for the extension of time should be dismissed. 21 The application is therefore dismissed. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. | application to extend time to file and serve notice of appeal from decision of federal magistrate appeal bound to fail application dismissed. migration |
In substance, the orders sought are that judgment be entered for the payment of monetary amounts claimed against the Sixth and Tenth Defendants in the proceeding. The orders are sought on the ground that those defendants have failed to file a defence to the allegations made against them in the plaintiffs' statement of claim. In that statement of claim dated 31 July 2009, the plaintiffs allege - and I here refer to paragraphs 50 to 57 of the statement of claim --- that over a period of time, the First, Second and Third Defendants caused the Second Plaintiff to pay to the Sixth Defendant an amount of some $2.23 million. The money was obtained by the Second Plaintiff from a secured creditor of the Plaintiffs, ABL Nominees Pty Ltd to support fictitious loans allegedly granted to various individuals to purchase motor vehicles. In fact, there were no such individuals and there were no such loans. The Sixth Defendant was effectively controlled by the First Defendant, Mr Denis Angeleri, and Mr Angeleri has admitted in his defence that he controlled the Sixth Defendant's account into which payments were made in the course of a drawn-out series of fraudulent transactions. It may readily be inferred that Mr Angeleri controlled the flow of funds from the Second Plaintiff's account to that of the Sixth Defendant and that he well knew that the Sixth Defendant was not entitled to the funds which had been transferred in the manner I have described. The amount sought in the amended application is $2,143,176.32, that being the result of adding the monies transferred and not recovered and interest due thereon. The calculations are explained in schedule C to the Statement of Claim. In the case of the Tenth Defendant, the claims made in paragraphs 58 to 65, inclusive, of the Statement of Claim are for a considerably lesser sum. The moneys involved were obtained by the Tenth Defendant in substantially the same way as the funds obtained by the Sixth Defendant, namely the creation of fictitious loans which led to the drawing down of funds from the Second Plaintiff and the transfer of those funds, under Mr Angeleri's supervision, to the Tenth Defendant, of which he was one of three directors. Mr Angeleri admitted that he controlled the Tenth Defendant's account into which the payments were made. The amount involved is $53,663.46, which represents the amount outstanding from the funds transferred in the manner I have described, plus interest, having taken account of some refunds which the Tenth Defendant had earlier made. Order 35A of the rules provides for the entering of a default judgment in circumstances such as the present. By O 35A, rule 2, subrule (2) and paragraph (b) a respondent is in default if that respondent fails to file a defence within the appropriate time and by rule 3, subrule (2), paragraph (c), the Court, in such circumstances, is empowered to give judgment against the respondent for such relief as the applicant appears to be entitled on the statement of claim, and the Court is satisfied it has power to grant that relief. I am satisfied that both the Sixth and Tenth Defendants have been served with the Plaintiffs' amended application, the Statement of Claim and the notice of motion seeking default judgments against them. In the circumstances that I have explained, in the absence of defences, and in the absence of appearances by either the Sixth or Tenth Defendant this morning, I propose to make orders under O 35A of the Rules in substantially the terms sought by the Plaintiffs. There will also be a direction that the time prescribed by O 19, rule 3 for the service of the Plaintiffs' Notice of Motion be abridged to 11 September 2009. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY. | default judgments freezing orders abridgement of time for service practice and procedure |
2 That application was refused and the Applicant again applied for an exercise of the discretion in November 2007. Again the application was unsuccessful. Your letter has been referred to me for reply. Mr Trinh's case was previously brought to the attention of the Minister and he decided not to consider the exercise of the public interest powers. The Minister has directed that, if a case has previously been brought to attention because of a request to exercise the public interest powers, he does not wish it to be brought to attention again unless additional information is provided that, in combination with the information known previously, brings the case within the Ministerial guidelines for consideration. Mr Trinh's case has been reassessed by the Department in light of your recent letter. However, the additional information you have provided, in combination with the information known previously, does not bring the case within the ambit of the Minister's guidelines for consideration and accordingly it has not been referred to the Minister. No further action will be taken in respect of your request. Mr Trinh should now contact the nearest regional office of this Department to discuss his status in Australia. 3 Proceedings were thereafter commenced in the Federal Magistrates Court seeking review. Those proceedings were dismissed: Trinh v Minister for Immigration & Citizenship [2007] FMCA 2115. 4 The present proceedings are an Application for Leave to Appeal from that decision of the Federal Magistrates Court. Leave is required by reason of the decision of the Federal Magistrate being an interlocutory decision: s 24(1A) of the Federal Court of Australia Act 1976 (Cth). The present Application for Leave to Appeal was heard concurrently with an Application for Leave to Appeal from the decision of the Federal Magistrates Court in SZLJM v Minister for Immigration & Citizenship [2007] FMCA 1945. The legal representatives for the Applicant in both proceedings and the Respondent Minister were the same and there was no opposition to the two Applications proceeding together. 5 The proceedings in SZLJM , supra , involved decisions made under s 417 of the Migration Act 1958 (Cth), whereas the present proceedings involve decisions made under s 351. There is no distinction between the two provisions of relevance to the present application, and no relevant distinction was sought to be advanced by either the present Applicant or the Respondent Minister. 6 In the present Application it is considered that leave to appeal should be refused. The decision of the Federal Magistrate was correct. There is no relevant distinction between either ss 351 or 417 and no distinction between the present case and the decision in Raikua v Minister for Immigration & Multicultural & Indigenous Affairs [2007] FCA 370 , 158 FCR 510. It is considered that the application has no prospects of success for the reasons given in SZJLM v Minister for Immigration & Citizenship [2008] FCA 300. 7 The Respondent Minister seeks costs, being those estimated in an Affidavit on a party-party basis to be $1,800. In the event that the Application for Leave to Appeal was to be dismissed, Counsel for the Applicant neither opposed the making of an order for costs nor an order in the sum estimated. The Application for Leave to Appeal be refused. 2. The Applicant to pay the costs of the First Respondent in the sum of $1,800. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | application for ministerial intervention interlocutory decision leave to appeal refused no prospects of success migration |
The Tribunal had affirmed a decision of a delegate of the Minister to refuse the grant of a protection visa to the appellant. 2 The appellant is a citizen of Bangladesh. He entered Australia on a tourist visa with his wife and two children on 12 November 2001. He had come from Singapore where he was an employee in the Bangladeshi High Commission. On 21 November 2001 he applied for a protection visa on the ground that he feared persecution should he return to Bangladesh by reason of his active membership of the Awami League --- then the major opposition party in the Bangladeshi Parliament. The application also sought visas for members of his family. 3 The appellant told the Tribunal that he feared persecution from persons associated with the Bangladeshi Nationalist Party ('BNP') which was the largest party in a coalition government which came to power on 1 October 2001. He claimed that soon after the BNP was elected his home was damaged and some members of his family had been attacked by BNP supporters. He also said that he had received threatening telephone calls from Bangladesh in Singapore commencing in October 2001 and continuing until he left for Australia. He claimed that the BNP had engineered the laying of criminal charges against him. He told the Tribunal (but not the Minister's delegate) that, while in Singapore, he had become aware of attempts by certain Bangladeshis to procure arms in Singapore. He suggested that they were being supported by a military officer attached to the High Commission. He said that he had clashed with the Army officer over this and had been threatened by him. Reference was also made to an incident in 1992 when the appellant was stabbed in the arm in Bangladesh by unknown assailants. The appellant said that their motivation was political. 4 The Tribunal affirmed the decision under review. It rejected most of the claims made by the appellant finding that he 'was not a credible witness' and that, on numerous occasions during the hearing, his evidence appeared to be concocted. The Tribunal criticised the appellant's evidence as being vague and inherently unconvincing. Numerous examples of such inconsistencies were provided in the Tribunal's reasons. The Tribunal's analysis of the appellant's credibility extended over some three pages of its reasons. Immediately thereafter the Tribunal said that it had assigned 'little evidential value' to certain documentary evidence which had been tendered by the appellant in support of his application to the Tribunal. The Tribunal then specifically rejected the appellant's claims that he had been or was perceived to be a significant or leading supporter of the Awami League, that politically motivated criminal proceedings had been commenced against him by reason of his support of the Awami League, that the breaking in at his home and the assault of family members occurred for political reasons, that the 1992 stabbing was politically motivated or that he had been recalled to Bangladesh from Singapore for political reasons. Furthermore, the Tribunal rejected the claims relating to the arms deals and fear of persecution by two government ministers. 5 In his application for judicial review the appellant contended that the Tribunal had failed to consider all of his claims, that it had failed to take into account the documentary material which had been tendered at the hearing, that the Tribunal had misdirected itself and misinterpreted some of the appellant's evidence, that the Tribunal had failed to accord him procedural fairness by not putting to him matters which were adverse to him and that the Tribunal's findings were not supported by any probative material or logic. The learned Magistrate rejected all of these contentions. 6 On appeal to this Court the appellant only alleges that the Magistrate erred in dealing with two of these grounds, those dealing with the documentary material and procedural fairness. The two appeal grounds were not clearly stated. However I had the benefit of written submissions prepared on the appellant's behalf by counsel who acted pro bono. She did not appear on the hearing of the appeal. As the appellant's argument was developed in the submissions the two grounds were related. The appellant contended that the Tribunal effectively found that the documentary evidence was fabricated and had ignored it. To so find was irrational and illogical. The related contention was that procedural fairness required the Tribunal to alert the appellant to its concerns relating to the authenticity of the documents so as to provide him with the opportunity to make submissions on the point. 7 In my view both grounds must fail. The Tribunal rejected the material claims made by the appellant on credibility grounds; it did not accept that the incidents which he described had occurred for political reasons or that he had a political profile which attracted persecution. It did not find that the documentary material was fabricated; nor did it ignore the material. As it was entitled to do, it did not accord the documentary material any great weight. One of the documents, for example, was from the President of a district branch of the Awami League. It described the appellant as an 'ardent student leader' and an 'active member and leader of the ... Awami League. ' When the Tribunal had questioned the appellant about the nature and extent of his participation in the affairs of the Awami League, his evidence went little further than suggesting that, at the time of certain elections, he had given some advice to the League at a local level and had undertaken some modest campaigning on behalf of the League. It was, therefore, hardly surprising that the Tribunal should accord little weight to the assertions in the document. A second example is provided by the contents of an affidavit from a fellow Bangladeshi who deposed that the appellant had been 'directly involved' with the Awami League in a particular district and that, in the deponent's opinion the appellant's life would be in danger if he returned to Bangladesh. No attempt was made in the affidavit to provide detail of the extent of the appellant's 'direct' participation in the affairs of the Awami League or as to the period over which such service was rendered. Again, it was open to the Tribunal to attribute little weight to the material in the affidavit. 8 The related ground must fail at the threshold because, as has already been noted, the Tribunal did not find that the documents had been fabricated. The occasion did not, therefore, arise for the Tribunal to alert the appellant to the possibility that it might make such a finding. I say nothing as to whether or not such an obligation would have arisen in the circumstances of this case had the Tribunal formed the opinion attributed to it. I note, however, the terms of s 422B of the Act and the construction placed upon it by the Full Court in Minister for Immigration and Multicultural Affairs v Lay Lat [2006] FCAFC 61 at [64] - [70] . 9 At the hearing, the appellant suggested that the Tribunal's views as to his credibility may have been influenced by his mental condition at the time at which he appeared before it. He said that he was under stress and that this may have caused him to give what the Tribunal considered to be inconsistent or vague answers to its questions. It was pointed out that the appellant, having been asked about the matter, told the Tribunal that his evidence had not been affected by confusion or memory loss. The Tribunal had so found and that finding had not been challenged before the Magistrate. Nor had it been raised in the notice of appeal to this Court. 10 No error is shown in the Federal Magistrate's decision. The appeal will be dismissed with costs. | application for protection visa appeal from federal magistrates court where application of review dismissed authenticity of documentary evidence whether federal magistrate erred in finding documentary evidence was fabricated and subsequently ignored this fact whether there was a failure to accord procedural fairness when federal magistrate failed to make known to the appellant that the documentary evidence was fabricated migration |
2 The Applicants, who are husband and wife, arrived from India in May 2007. They applied to the Department of Immigration and Citizenship for Protection (Class XA) Visas in June 2007 and those applications were refused in July 2007. The Refugee Review Tribunal affirmed the decision to refuse the visas by its decision in October 2007. 3 The First Applicant appeared before the Court this morning unrepresented, although he did have the benefit of an interpreter. He also appeared on behalf of his wife. 4 In its reasons for decision published on 26 March 2008, the Federal Magistrates Court dismissed the application made to that Court pursuant to r 44.12(1)(a) of the Federal Magistrates Court Rules 2001 (Cth). 5 The Application for Leave to Appeal was filed in this Court on 28 April 2008. That Application also sought an order dispensing with compliance with O 52, r 5(2) of the Federal Court Rules. An extension of time is also required. Although there is no rule providing for the time within which an appeal is to be brought in respect to an interlocutory decision of the Federal Magistrates Court, there is an implied time limit of 21 days: SZDGN v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 1543 at [9] per Lindgren J. See also: Applicant M171/2003 v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 220 at [32] per Moore J; SZLRL v Minister for Immigration & Citizenship [2008] FCA 716 at [6] . The Application as filed in this Court was outside the period of 21 days. 7 It is not considered that any extension of time should be granted and, even if an extension of time were to be granted, leave to appeal would have been refused. 8 An order extending time is " not automatic " and a " discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties ": Gallo v Dawson [1990] HCA 30 ; (1990) 64 ALJR 458 , 93 ALR 479 at 480 per McHugh J. It has further been said that "[s] ome good reason should ... be shown to dispense with the requirement to file an application for leave to appeal within 21 days ": Nguyen v Minister for Immigration & Citizenship [2007] FCAFC 38 at [23] per Moore, Bennett and Buchanan JJ. 9 In the present proceeding no explanation was provided as to why there was non-compliance with the required 21 day period, other than the statement this morning by the First Applicant that he was not aware that there was any time limit. In such circumstances, no extension of time is warranted. The discretion to extend time within which to appeal from an interlocutory decision is that conferred by O 52, r 15(2) of the Federal Court Rules and not O 52, r 5(2). And that discretion, as r 15(2) expressly provides, may be exercised " for special reasons ". It is that there be shown a special reason why the appeal should be permitted to proceed, though filed after the expiry of twenty-one days. In that context, the expression "special reasons" is intended to distinguish the case from the usual course according to which the time is twenty-one days. But it may be so distinguished (not necessarily will, for the rule gives a discretion) wherever the Court sees a ground which does justify departure from the general rule in the particular case. Such a ground is a special reason because it takes the case out of the ordinary. We do not think the use of the expression "for special reasons" implies something narrower than this. ... It should not be overlooked that r 15(2) enables leave to be given "at any time"; the "special reasons" relevant to such a power cannot but describe an elastic test, suitable for application across a range of situations, from an oversight of a day to a neglect persisted in during a prolonged period. 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. See also: SZLAF v Minister for Immigration & Citizenship [2008] FCA 219 at [11] . 10 In the present proceeding, the extension of time which is sought may be for a limited period of time, but there is no " special reason " to justify an extension being granted. Irrespective of the absence of any explanation for non-compliance, it is further considered that the Draft Notice of Appeal raises no issue which should now be entertained. Indeed, the attempt being made in the Draft Notice of Appeal to raise issues substantially different to those resolved by the Federal Magistrates Court only provides a reason to refuse an extension of time rather than granting one. 11 Even had an extension of time been granted, leave to appeal would have been refused. 12 Section 24(1A) of the 1976 Act confers on the Court " an unfettered discretion " in " unqualified terms ": Decor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 655 ; (1991) 33 FCR 397 at 399; [1991] FCA 655 ; 104 ALR 621 at 622 per Sheppard, Burchett and Heerey JJ. The requirement for leave to appeal is thus not a requirement that a particular test be satisfied: Lomas v Winton Shire Council [2002] FCAFC 413 at [15] per Cooper, Kiefel and Emmett JJ. See: Harrington v Rich [2008] FCAFC 61 at [25] per Sackville, Emmett and Jacobson JJ; Telstra Corporation Ltd v AAPT Ltd (1997) 38 IPR 539 at 542 per Lockhart, Beaumont and Hill JJ. No question sought to be raised in the present appeal would raise any question of importance beyond the concerns of the parties to the present proceeding. Contrast: Australian Securities & Investment Commission v P Dawson Nominees Pty Ltd [2008] FCAFC 123 at [10] . 13 In the present proceeding it is not considered that the decision of the Federal Magistrates Court is attended by sufficient doubt to warrant it being reconsidered. The Refugee Review Tribunal concluded that the factual account given by the Applicants was " lacking in detail and implausible ". All arguments were rejected. 15 If the final proposed Ground is presently left to one side, other than the fourth proposed Ground, these were not arguments advanced before the Federal Magistrates Court. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so. No explanation was forthcoming as to why those arguments were not advanced before the Federal Magistrates Court. 16 The course apparently now being pursued by the Applicants in seeking leave to appeal is the course of substantially abandoning the arguments that they unsuccessfully advanced before the Federal Magistrates Court and, without explanation, to now seek to advance completely new arguments on appeal. The discretion conferred by s 24(1A) to grant leave to appeal may be accepted as being conferred in " unqualified terms ". But however wide that discretion may be, it would be a surprising exercise of that discretion should leave be granted in such circumstances. 17 The arguments sought to be raised by the Draft Notice of Appeal are, in any event, each without substance. There is no reason why leave to appeal could not be confined to a particular proposed ground -- as opposed to leave being granted in respect to the Draft Notice of Appeal in its entirety. But none of the grounds in the Draft Notice of Appeal warrant leave being granted. 18 The " Particulars " provided in relation to the first proposed Ground are but an impermissible invitation to revisit the merits of the decision as made by the Tribunal. Those " Particulars " thus state that "[t] he Tribunal failed to appreciate " the matters thereafter set forth. The reliance sought to be placed by the Applicants upon V v Minister for Immigration and Multicultural Affairs [1999] FCA 428 , 92 FCR 355 is misplaced. Views were there expressed as to what constituted " political opinion " for the purposes of art 1A(2) of the Convention Relating to the Status of Refugees done at Geneva on 28 July 1951. And the obligation of the Tribunal to make findings on material questions of fact imposed by s 430(1) of the 1958 Act was also recounted. But, in the present proceeding, there could not be said to be any non-compliance by the Tribunal with s 430(1). It made its findings on those matters material to its decision. 19 Parts of the first proposed Ground of Appeal are, in any event, in direct conflict with the manner in which the claim was advanced before the Refugee Review Tribunal and the evidence then given. But, before the Tribunal, his evidence was that he did not complain to the police. Asked why he didn't report the threats and beating to the police, the applicant claimed that the police wouldn't do anything unless they were bribed. The Tribunal put to the applicant that it was not possible to know for sure that the police would not act on his behalf without a bribe unless he actually reported the incidents to them. The applicant claimed that he had experience with the traffic police and knows that they ask for money for any reason and will beat you if you do not pay them. Not only is there a divergence between the manner in which the proceeding was conducted before the Federal Magistrates Court and this Court, there is also a divergence between the factual account now sought to be advanced for determination by this Court and the factual account advanced before the Tribunal. In the absence of an explanation, leave to appeal to raise such a ground should not be granted. 20 The same conclusion may be expressed in respect to the second proposed Ground of Appeal . The reliance in that ground upon Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26 , 197 ALR 389 and C v Minister for Immigration and Multicultural Affairs [1999] FCA 1430 , 94 FCR 366 is again equally misplaced. This proposed Ground also suffers from a further difficulty -- it purports to set forth as " Particulars " matters of evidence. They knew that he was being targeted for money in his business. But it was submitted on behalf of the Respondent Minister that there was no such evidence before the Tribunal. The Tribunal's exposition in its reasons for decision of the " Claims and Evidence " does not refer to any such evidence. This would be a further reason for not granting leave to appeal -- at least in respect to this proposed Ground. The findings as made by the Tribunal were all open to it. 22 The proposed fourth Ground is again without substance. Relocation within India was not a basis upon which the Tribunal proceeded. The Tribunal, in fact, did not address issues of relocation in the present case, and was not required to do so on the path of reasoning it followed. 23 The final proposed Ground proceeds from a misconception as to the role of the Federal Magistrates Court. The task of that Court was to determine if the Tribunal had committed jurisdictional error ( Migration Act 1958 (Cth), s 474 ; Plaintiff S 157/2002 v Commonwealth [2003] HCA 2 , 211 CLR 476). Its task was not to " go into the merit of the case ". See: O'Donnell B, ' Jurisdictional Error, Invalidity and the Role of Injunction in s 75(v) of the Australian Constitution ' (2007) 28 Aust Bar Rev 291; Beaton-Wells C, ' Judicial Review of Migration Decisions: Life After S157' (2005) 33 FL Rev 141. 24 It is thus considered that an extension of time should be refused and the proceeding should be dismissed. The Applicants should pay the costs of the First Respondent. The application to extend time within which to seek leave to appeal is refused. 2. The proceeding is dismissed. 3. The Applicants are to pay the costs of the First Respondent. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | interlocutory decision of federal magistrates court application filed out of time no explanation for delay extension of time refused leave to appeal substantially new arguments sought to be raised draft grounds without substance migration |
Those orders of 2 November 2006 dismissed an application for judicial review of a decision of the Migration Review Tribunal (the Tribunal) dated 28 August 2006. These are my reasons for dismissing the appeal. On 29 December 1995, the appellant lodged and application for a protection visa, which was refused on 22 May 1996. He then appealed to the Tribunal which, on 19 September 1996, affirmed the primary decision to refuse his application. On 15 October 1996 his solicitor wrote to the then Minister requesting an exercise of his discretion under s 417 of the Migration Act 1958 (Cth) (the Act), but that was refused on 28 February 1997. 3 On 13 April 1997 the appellant departed Australia to return to Sri Lanka, where he married on 22 May 1997. He returned to Australia on 2 June 1997 on a Sri Lankan (Temporary) (Class TT) visa (subclass 435) (subclass 435 visa), which had been issued in Melbourne and which expired on 31 July 1997. 4 On 31 July 1997 the appellant applied for a further subclass 435 visa, which was refused on 12 August 1997. The appellant subsequently lodges an application for review with the then Migration Internal Review Office (MIRO), which affirmed the primary decision. 5 On 11 August 1998 the appellant applied to the Department for a further protection visa, which was refused on 27 October 1998. He then appealed that decision to the Tribunal which, on 15 November 2000, affirmed the primary decision. 6 The appellant filed a series of applications for judicial review relating to the Tribunal's decision of 15 November 2000, all of which were unsuccessful. The consequence is that it cannot be relied upon in the present circumstances to deem the letter to have been received ... so that the application for review to the Tribunal was out of time. The Tribunal in its decision correctly finds that although Chan [2003] FCA 1292 ; 134 FCR 308 was concerned with s 66 of the Act, rather than s 343, its principles are equally applicable given the parallel roles the provisions perform. 9 MIRO and the IRT were abolished by the Migration Legislation Amendment Act (No 1) 1998 (Cth) and replaced by the Tribunal. Section 40(1) of that Act provided that an outstanding MIRO application (that is, an application for which a decision was yet to be notified) was deemed to be an application properly made to the Tribunal on 1 June 1999. Accordingly, the decision to refuse the subclass 435 visa is reviewable by the Tribunal and the application taken to have been made on 1 June 1999. 10 On 22 March 2006 the appellant lodged an application with the Tribunal to review a decision by a delegate of the first respondent to refuse to grant a Sri Lankan (Temporary) (Class TT) subclass 435 visa. On 8 June 2006 the Tribunal wrote to the appellant inviting him pursuant to s 359(2) of the Act to provide additional information in support of his claim for a subclass 435 visa. The appellant responded with submissions which were received by the Tribunal on 17 July 2006. 12 On 19 July 2006 the Tribunal again wrote to the appellant inviting him pursuant to s 359(2) of the Act to comment on information which indicated that he did not enter Australia on 1 November 1993 as the holder of an entry permit or an entry visa which had effect as if it were an entry permit. The Tribunal enclosed a copy of the appellant's movement records and a printout of the relevant provisions of the Regulations that were operative at the relevant time. The appellant did not respond to the invitation and, accordingly, on 28 August 2006 the Tribunal affirmed the primary decision. Pursuant to (the then) cl 435.21 of Sch 2 to the Regulations, the appellant must satisfy (the then) cl 435.213 at the time of application. At the time of the filing of the application for review, the Federal Magistrates Court registry listed the matter for a first court date on 2 November 2006 at 9.30 am. 15 At the first court date on 2 November 2006 the appellant did not appear and Federal Magistrate Reithmuller exercised his discretion and dismissed the application under r 13.03A of the Federal Magistrates Court Rules 2001 (Cth) (the FMC Rules). 16 Subsequently, on the same day, the appellant filed an application for reinstatement together with an affidavit in support. The application for reinstatement was listed for hearing on 6 December 2006 at 9.30 am. 17 At the hearing of the reinstatement application, the learned Federal Magistrate found that the appellant was able to bring himself within r 16.05 of the FMC Rules. However, that notice has since been withdrawn and the first respondent accepts that that judgment is a final judgment. 19 The grounds of appeal filed by the unrepresented appellant are directed to matters not in issue on the hearing of the appeal. Like brief oral submissions which he made at the hearing of the appeal, they were addressed to the merits which are not before the Court on the appeal. 20 It is apparent that the Tribunal's decision was open to it on the evidence before it and that the Tribunal squarely and properly applied the law as it stood at the time of application on 31 July 1997. The language used in the then cl 435.213 of Sch 2 of the Regulations is neither ambiguous nor unnecessarily complex. Specifically, at the time of the application, cl 435.213 required the appellant to have entered into Australia on or before 1 November 1993. The appellant in fact arrived in Australia on 17 July 1995. 21 Whilst the subclass 435 visa has since been repealed by item 23 of the Migration Regulations (Amendment) 1998 (Cth), which came into operation on 1 August 1998, it is necessary to apply the legislation as it stood at the time and there is no discretion on the part of the Tribunal to make an alternative determination (s 349(1) of the Act). 22 Furthermore, the appellant, in his submissions filed in this proceeding, claims that it would be unsafe for him to return to Sri Lanka because of the resurgence of violence. Unfortunately, this has no bearing on whether the Tribunal's decision was the correct decision in the circumstances. 23 Finally, there is no error in the Tribunal having failed to invite the appellant to attend at a hearing before it. Having failed to receive a response from the appellant to its request for information of 19 July 2006, the Tribunal was entitled under s 360(2)(c) of the Act, to make a decision on the review without taking any further action to obtain the appellant's views on the information, including extending an invitation to the appellant to attend the hearing. Accordingly the appeal was dismissed. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholson. | appeal subclass 435 visa tribunal found ineligibility because appellant had not entered australia on or before 1 november 1993 no error of law in dismissal of appeal by federal magistrate migration |
A delegate of the respondent refused to grant the protection visa on 30 April 1998. The applicant applied to the Refugee Review Tribunal ('the Tribunal') for a review of that decision on 10 May 1998. On 11 March 1999 the Tribunal affirmed the decision not to grant the applicant a protection visa. 3 The evidence before the Federal Magistrates Court was that on 11 March 1999 the Tribunal sent a letter to the applicant at his address notifying him of the Tribunal's decision to affirm the decision of the delegate which enclosed a copy of the Tribunal's decisions and reasons. The letter informed the applicant that he had 28 days within which to appeal to the Federal Court. It noted that if the letter were posted he would be taken to have received it seven days after the date of the letter. (Presumably this was in reliance upon reg 5.03 of the Migration Regulations which so provided. However, in Minister for Immigration v Singh [2000] FCA 377 ; (2000) 98 FCR 77 at 91 [51] O'Connor and Mansfield JJ held that regulation to be invalid to the extent it sought to impose such time constraints. 5 It does not appear that his Honour invited the applicant to give evidence to support his assertion of non receipt of the letter of 11 March 1999. Instead, his Honour proceeded to consider the matter but did not determine whether the applicant had been notified in accordance with the Migration Act 1958 (Cth) under regulations in force on 11 March 1999. Rather, his Honour said that even if the Tribunal had made a jurisdictional error 'the lengthy and poorly explained delay would be sufficient to persuade the court to exercise its discretion not to grant relief by way of a constitutional writ' ([2006] FMCA 175 at [24]). 6 If there were evidence that the applicant had not in fact received the letter of 11 March 1999, then he had a reasonable explanation for his delay. 7 When the matter came before me for hearing, I inquired of Ms Radich, who appeared for the respondent, as to what the relevant law was regarding notification by the Tribunal of its decision to an applicant for review on 11 March 1999. Ms Radich was not in a position at that time to assist with that material and asked for time to put in a written submission. I granted her leave to do so and gave directions for the applicant to provide written submissions in response. On 20 March 2006, written submissions were received from counsel for the respondent, Ms McNaughton. On 27 March 2006 I received written submissions from the applicant. The applicant had given evidence before the Tribunal on 25 February 1999 as to his assertions of persecution. In essence, the applicant claimed to have been a practicing Catholic for over twenty years and that he feared persecution were he to return to China. He claimed to have been part of an underground church in his town in 1987. He also claimed in his written application to the Tribunal to have studied the Bible. The Tribunal did not accept his claims for reasons which do not reveal any jurisdictional or other error. 11 The Tribunal, in its detailed reasons, set out an exchange with the applicant in which it questioned him about fundamental and well known aspects of Catholicism and the Christian faith. It gave the applicant until 8 March 1999 to address in writing those inconsistencies that had been referred to during the hearing. The Tribunal found that at the hearing the applicant was unable to give any explanation for a number of the inconsistencies and his explanations for the rest were not reasonable. It found 'in his written submission to the Tribunal the applicant has not addressed these inconsistencies. It was also not satisfied as to the credibility of his claim to have been arrested because of activities involving his Catholic faith in which he claimed to have been involved. The applicant was given the opportunity to clarify the contradictions regarding the various claims that he has made, but was unable to do so in any meaningful way either at his hearing or in the subsequent written submission. Given the significant adverse findings on credibility in relation to the applicant, the Tribunal cannot be satisfied that the applicant has a real chance of being persecuted for a convention reason in China in the foreseeable future, and is therefore not satisfied that the applicant's fear of persecution for a convention reason is well founded. He claimed to have been affected by that in the hearing before me even though he had been present in court for about one and a half hours before his matter was called on for hearing. He said that the motion sickness affected his ability to think and to respond. He said that a similar affliction had occurred when he gave his evidence to the Tribunal, and that had affected the fairness of the process both before the Tribunal, the Federal Magistrates Court, and presumably before me. I put to the applicant that he would always be affected by this at any hearing to which he had been brought, such as to the Court, and he appeared to agree with that proposition. So that there is no problem of carsick[ness] for attending [the] Magistrate Court hearing this time. He was able to read from and refer to notes which he had prepared in his own language. Moreover, for example, when I asked him about whether he had received notification from the Tribunal by reference to the letter of 11 March 1999 contained in what had been the Green Book before his Honour, he was able immediately to pull the Green Book out of his bag and look up the relevant document, without any apparent problem at all. 16 And, his Honour noted that the applicant had at no time informed the Tribunal member that he had had any difficulty relating to his car or motion sickness ([2006] FMCA 175 at [18]). In his written submission the applicant said that he had not understood the Tribunal's procedures and that the Tribunal had not mentioned that if he were very sick another hearing date could be arranged. This was, he submitted, why he did not tell the Tribunal that he was sick and, so he argued, this is why the Tribunal made an error. 17 On the applicant's argument, he did not tell the Tribunal of the sickness he claims to have been suffering. That being so, there is no basis for an argument that the Tribunal committed any jurisdictional error in failing to deal with the carsickness claim. I am satisfied that this ground does not raise any sufficient doubt as to the correctness of the decision of the trial judge on it. It was open to his Honour to reject it, inter alia , because there was no evidence to support it. 18 Moreover, the applicant's complaints as to his motion sickness and any effect that may have had upon him at the hearing before the Tribunal have not been verified. The assertions which the applicant made about this matter both before his Honour and myself, were made as a submission not on oath. They were unsupported by any medical evidence. There is no suggestion in the reasons of the Tribunal, the trial judge or in the observations which I made of the applicant in court, which would enable a conclusion to be drawn that reliance upon this ground in an appeal would enjoy any prospect of success. In the judgment below, his Honour makes reference to the fact that there had been some tardiness on the part of counsel who had been appointed to give advice the applicant ([2006] FMCA 175 at [13]-[15]). As his Honour there noted, he had been informed by the counsel that had he provided advice to the applicant which was required under the scheme and that he, counsel, would not be appearing at the hearing. 20 The applicant complained that the relevant counsel had not obtained the tapes of the hearing before the Tribunal or had not listened to the tapes and that his case had been decided by his Honour without the applicant having been able properly to prepare it. Again, those complaints appear to be ones which would have no prospects of success. First, they are, again, new assertions which are not the subject of evidence on oath. In his written submission the applicant acknowledged that he had received legal advice, albeit late. His Honour made the finding that he was satisfied that the applicant had received the advice to which he was entitled under the scheme ([2006] FMCA 175 at [15]). Secondly, when I pressed the applicant to identify what was wrong with his Honour's decision, he said he was not able to identify any legal error because, understandably, he was not a lawyer. He said that he wanted a lawyer who would not charge and who could help him. Again, none of these complaints by the applicant raise any matter which would enjoy any prospect of success were leave to appeal granted. Item 8 repealed the former s 430(2) and Item 9 inserted ss 430A-430D. All these amendments commenced on 1 June 1999. 22 In the Migration Regulations 1994 (consolidated as in force on 10 December 1998; n.b: regulations 4.38-4.41 or 5.03 were not relevantly amended until 1 July 1999) ('the Regulations'), reg 4.40(1) provided that a notice or statement to be given to an applicant in relation to a decision of the Tribunal was to be taken to be duly given if it was posted to his or her last address for service which he or she provided in connection with the application. Regulation 4.41 provided that if a document was to be given to or served on a person for the purposes of a review by the Tribunal and no other provision in regulations allowed for service, then the document could be given or served on the address for service provided by the applicant by posting it to him or her at his or her last known place of residence. 23 Regulation 5.03 made provision for deeming a document to be served 7 days after its date. It also permitted the document to be sent on the seventh day so that, in fact, it could not have been received until after the seventh day. A Full Court of this Court held that Regulation 5.03 was ultra vires the regulation making power ( Minister for Immigration and Multicultural Affairs v Singh [2000] FCA 377 ; (2000) 98 FCR 77). 24 Subsequently, in Chan Ta Srey v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 1292 ; (2003) 134 FCR 308 at 319 [39] Gray J held that s 29 of the Acts Interpretation Act 1901 (Cth) and s 160 of the Evidence Act 1995 provided that the calculation of any relevant period by reference to which a document may be presumed to have been served under either of those enactments was to be addressed by reference to the date of posting, and not the date borne by the document. Thus s 29 of the Acts Interpretation Act 1901 provides that there is a presumption, unless the contrary is proved, that a letter addressed to a person for which the postage was prepaid and which is posted, is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of the post. Moreover, s 29(2) preserves the operation of s 160 of the Evidence Act 1995 (Cth). The latter provision creates a presumption, unless evidence sufficient to raise a doubt about the presumption is adduced, that a postal article, sent by pre-paid post addressed to a person at a specified address in Australia, was received at that address on the fourth working day after it having been posted. 25 Gray J did not refer to, nor was I referred to, s 163 of the Evidence Act 1995 which makes special provision for the proof of letters sent by Commonwealth agencies. The effect of s 163 is that the letter is presumed to have been received on the fifth business day after the date it bears (which, in practical terms, is likely to be seven days after the date). As Gray J pointed out (134 FCR 308 at 323-324 [54]) the letter of notification in that case did not comply with s 66(2)(d)(ii) of the Act because it failed to state accurately the time within which the application for review might be made. Accordingly, the Tribunal's obligation to notify the applicant, in that case, of the decision not to grant the substantive visa he sought, which was imposed by s 66, had never been discharged. It may be that, coincidentally, the statement is accurate by force of s 163 of the Evidence Act 1995 (Cth). The Minister has foreshadowed that she would be applying to tender fresh evidence of the postal records of the Tribunal seeking to prove that the letter of notification had been, in fact, posted to the applicant on 11 March 1999. 32 The fact that the applicant put the date of receipt of the Tribunal's decision in March 1999 in his application to the Federal Magistrates Court, and has given no evidence or other explanation which is capable of being tested for the delay, until he filed his application in Federal Magistrates Court on 6 June 2005, means that there has been a delay of over six years between the time at which the decision was handed down and when the applicant first came to challenge it. 33 In his written submission the applicant asserted that the letter of 11 March 1999 '... did not tell me clearly how long the time limit is, such as how many days, how many months or how many years ...'. The letter of 11 March 1999 is clear and in my opinion this submission has no prospects of success. There has been no suggestion of delay, waiver, acquiescence or other conduct of the appellants said to stand in their way. The applicant did not put evidence before his Honour or this Court, to support the fact that he had not been notified of the decision of the Tribunal, contrary to the statement in his application to the Court below, until he learnt of it in 2005. That explanation, had it been made on oath could have been tested and his Honour could have made findings about it. 36 Although there may be some arguable issue, based on what Gray J said in Chan Ta Srey v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 1292 ; (2003) 134 FCR 308, I am satisfied that no sufficient doubt has been raised to warrant a grant of leave from his Honour's finding set out at [5] above that the lengthy and poorly explained delay justified his Honour's exercise of discretion in refusing to grant prerogative relief. I am of opinion that there has been no substantial injustice shown. Rather, the draft notice of appeal concentrates on what are said to be errors as to the merits of the applicant's claim for a protection visa which concentrate on findings of fact, including the findings as to the applicant's credibility. There is no jurisdictional error made by a decision maker in the position of the Tribunal simply because it found facts in a way which may be erroneous. Its jurisdiction was to find the facts and for that purpose it could do so rightly or wrongly: Parisienne Basket Shoes Pty Limited v Whyte [1938] HCA 7 ; (1938) 59 CLR 369 at 390-394 per Dixon J, with whom Evatt and McTiernan JJ agreed; NAAP v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 76 at [37] . 39 The applicant has at no point identified any basis for claiming that the Tribunal fell into error either in his application filed in the Federal Magistrates Court or in his submissions made to his Honour below, or in the submissions which he made to me. 40 Accordingly, there is no sufficient reason to doubt that the Tribunal's decision would not be set aside were leave to appeal granted. 41 The application should be refused with costs. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. | application for leave to appeal review of protection visa decision time when applicant received notification of refugee review tribunal's decision consideration of evidentiary requirements for notification where unreasonable delay in responding to decision of refugee review tribunal application dismissed migration |
It owns and operates both Bosnian State radio and television. JRTS has also been referred to in the evidence before the Court in the subject interlocutory proceedings as the Public Broadcasting Service of Bosnia and Herzegovina ('PBS'). It may therefore be described as a resident corporation of Bosnia and Herzegovina. 2 On or about 25 September 2006, the applicant United Broadcasting International Pty Ltd (' UBI '), being an Australian resident company, entered into an agreement in writing with JRTS for the conferral upon UBI of what are asserted by UBI as the sole and exclusive broadcasting rights in relation to Australia appertaining to that television channel BHT-1, and their programming content, in whole or in part, along with all associated rights including transmission and copyright. It is the broadcasting of the television channel BHT-1 that gives rise to the controversies the subject of the present proceedings. Thereafter on 10 October 2006, UBI commenced broadcasting the BHT-1 television channel in Australia purportedly on the basis of that agreement, and of a class license for subscription television narrowcasting services, the conditions whereof are set out in Schedule 2 of Part 7 of the Broadcasting Services Act 1992 (Cth). In order to acquire such a license, it appears that the operator must have the capacity to broadcast and to abide by the conditions of the relevant category of the license. That commencement of television broadcasting in Australia by UBI occurred at a time when the respondent TV Plus companies were undertaking television activity in Australia, which originated also in Bosnia and Herzegovina, and thus competitively with the television activity of UBI in Australia. The matrix of background circumstances thus outlined has however a more complex origin. (iii) a screen-dump of the UBI website showing active members connected with JRTS listed under Bosnia and Herzegovina. UBI thereupon uplinks the signal to its space on the Optus B3 satellite in order to provide access thereto by Australian viewers by means of small satellite dishes. That BHT-1 Channel is said to be part of UBI's so-called World TV's Balkan Bouquet, which currently consists of eleven (11) television and radio channels operating in and from the Balkans region by means of a service, and which in turn is encrypted and made available in Australia purportedly and from UBI's perspective only to UBI subscribers, and upon payment of monthly fees to UBI . 5 The first respondent TV Plus Int Pty Limited (' TV Plus '), being also an Australian company, is the holder of twenty narrowcasting subscription broadcasting licenses issued by the Australian Broadcasting Authority ('ABA'), numbered 2694 to 2713, and it transmits a number of ethnic satellite television and radio channels in Australia and in countries surrounding Australia. It is the policy of TV Plus that if there is a sufficient market demand for a particular segment of Balkan's originating television content, the related third respondent TV Plus Operations Company Pty Limited (' TV Plus Operations ') enters into negotiations and ultimately agreements with the relevant content provider for the exclusive rights to broadcast those so-called ethnic channels in Australia. Once having acquired such rights, TV Plus Operations advertises, markets, distributes and broadcasts the content of the programmes so 'fed' to TV Plus (I henceforth use the term TV Plus as referable generally to the respondents or any one or more of them unless otherwise stated), in return for payment of subscriptions on a monthly basis. The channels which TV Plus broadcasts to the Australian public are made available on a subscription service, which encompasses the installation of a set-top box and satellite dish in the customer's home and the provision of a 'unique' smart card which permits the decoding of the TV Plus signal by the customer. The present dispute arises in circumstances whereby TV Plus continues to broadcast by television, to its subscribers resident in Australia, notwithstanding that the exclusive right to do so is asserted by UBI to be held now by UBI pursuant to the said 25 September 2006 agreement in writing. 6 There was litigation commenced earlier in 2005 in this Court and concluded in that year, which involved UBI and TV Plus as opponents, as well as certain operators of other Serbian and Bosnian television channels who joined with TV Plus as applicants against UBI and other entities as respondents. As a consequence TV Plus sought injunctions from this Court in 2005 to prevent UBI and other associated companies from broadcasting those channels. No distinction need be drawn hereafter for present purposes between each of the three TV Plus respondents, which may hereafter be included jointly and/or severally within the description TV Plus. Following the grant of interlocutory injunctions, the proceedings were apparently finalised on the day preceding the scheduled Federal Court hearing, upon the basis of orders described by TV Plus as restraining UBI and other associated companies from broadcasting the channels in question for so long as TV Plus held the exclusive rights to broadcast the same in Australia. Since that time the agreement in writing abovementioned was entered into between JRTS and UBI, pursuant to which UBI has been broadcasting in Australia the BHT-1 Channel. 8 It is presently unclear or uncertain as to what bearing the earlier 2005 litigation may have upon the consideration and determination of the issues which fall for ultimate and final determination of the present litigation. My preliminary impression from evidence presently placed before the Court and observations and submissions of counsel is that at least in relation to evidentiary issues presently arising, the circumstances of that earlier litigation will have more than merely a contextual bearing upon the resolution of the issues here arising. The nature and extent of that bearing is too early to delineate with any precision. Senior counsel for TV Plus indicated that '[i]t's [a] background matter at this stage so your Honour doesn't need to read it unless we take your Honour to it', which senior counsel for TV Plus in fact did at least on occasion in relation to the 'general nature' of the litigation. 9 The circumstances whereby UBI obtained the asserted sole and exclusive rights from JRTS are said by UBI to be of such scope that TV Plus no longer has any entitlement to broadcast in Australia the BHT-1 signal originating from JRTS. That disentitlement is contested by TV Plus , though the consequential controversy between UBI and TV Plus was preceded in a temporal sense with TV Plus broadcasts being adversely affected by incidents of 'blank screens, frozen still pictures' and repeated 'TEST patterns'. Yet TV Plus indicated that coincidentally, so it would seem, with UBI's subsequent commencement of broadcasting of BHT-1 in Australia, that it experienced a so-called 'reliable' signal from JRTS , in that the immediately prior difficulties have no longer occurred. It is within the foregoing context that TV Plus is said to presently broadcast the BHT-1 channel from Bosnia and Herzegovina for about 18 hours each day, in contrast to its immediately prior broadcast of approximately 2 hours per day. 10 It is the case of UBI that irrespective of the assertion of TV Plus to the effect that the 'feed' is being taken by TV Plus from overseas, the coincidence of what was described by UBI as the 'greatly increased broadcast time of BHT-1', said to have occurred at about the time of commencement of BHT-1 broadcasts by UBI , reflects or tends to reflect the existence of breach of copyright on the part of TV Plus directly referrable to UBI's entitlement to broadcast BHT-1 signals conferred by JRTS. UBI averred that at the time it entered into its present exclusive license agreement with JRTS on 25 September 2006, it was aware that TV Plus had previously broadcast BHT-1 between May and October 2005, but that at least by December 2005, TV Plus had ceased at least directly broadcasting that channel. The cessation of entitlement of TV Plus to broadcast the BHT-1 television channel was said by UBI to have been confirmed by a person described as a prominent leader in the Australian Bosnian community. In his opening explanation of the UBI case, counsel for UBI drew attention to the factor that whilst TV Plus submitted that it had 'acted in good faith throughout their dealings with JRTS ', there was present a 'highly suspect nature' of TV Plus's case, in that Mr Jeremic, the director of each of the respondents, stated under cross-examination that 'we had to pay some serious money to some people' in the context of the acquisition by TV Plus of access to the BHT-1 signal. Mr Jeremic appears to have been the director of all three respondents at all material times. 11 It was to my understanding part of the case of UBI that whatever may have been UBI's shortcomings in scope of comprehensive license authority derived from JRTS at the time of the earlier litigation in 2005 involving TV Plus as an adversary, those shortcomings had been overcome by the nature and extent of the contractual rights conferred by JRTS upon UBI by the more recent agreement of 25 September 2006 between those entities relating of course to the BHT-1 channel. Evidence tendered by UBI would appear to be prima facie to that effect. The present dispute between UBI and TV Plus was said to have arisen on 29 November 2006, when the TV Plus respondent companies, or one or more of them, broadcast television signals of the BHT-1 television channel, whereof UBI contends to have been the exclusively authorised provider in Australia since the formation of the said agreement in writing of 25 September 2006 between itself and JRTS . 12 Mr Sam Bilge, the chief executive officer of UBI , explained in his affidavit evidence that Globecast Australia is the technical operator that provides the fibre optic link to bring the BHT-1 channel to TV Plus in Australia, and additionally provides all technical service facilities in distributing the signal across Australia. Speaking in his jargon of international television broadcasting, it is the situation prevailing in the complexity of present circumstances that each of UBI and TV Plus are 'getting performance', in the sense of 'taking feed' from the JRTS television signals by satellite from Bosnia. In relation to that controversy, it appears that JRTS has joined forces with UBI litigiously (in the sense of providing evidence) as well as contractually. 13 Prior to assembly of the affidavit evidence in the context of the present interlocutory proceedings, there had taken place controversial email communications between TV Plus and JRTS which may be conveniently reproduced in order to exemplify the nature and extent of aspects of the context in which the present interlocutory proceedings came to be structured. I have been advised that Public Broadcasting Service of Bosnia and Herzegovina (PBS) may have by accident permitted UBI to enter into a test transmission of the BHTV1 channel in Australia. Our advice for you would be to research within your company all written correspondence between us and Mr John Jeremic for the period as of december 2006 --- april 2005. Besides that we made many phone calls. Above all of that we had mediator company ABH line which initiated this agreement, so you can contact them too. For you information - we have signed the contract on 24 th December 2004 and till now we have not received the counter signed copy as the confirmation that the agreement is valid. You will find that PBS BiH suffer a great damage as well as our citizens from Bosnia and Herzegovina living in Australia. Our records also show that we commenced distribution of your channel in Australia early 2005. ... again I request that you instruct UBI to cease transmitting and marketing the BHTV signal. Any claims by your side that BHTV was broadcast over Australia on a continuous basis are completely unsubstantiated since we know that this [did] not occur. Furthermore we remind you that the failure to broadcast BHTV on a continuous basis during this period caused tremendous damage to the image and reputation of BHTV, which as a public broadcaster, has an obligation to service all Bosnian citizens, irrespective of where they live. The lack of professionalism on the part of TV Plus, the complete disregard of your obligations under our contract dated 24 th December 2004 and your failure to broadcast BHTV prior to the cancellation of the contract (and whatever sporadic transmissions which may have occurred after we cancelled the contract only added to increased antagonism by Bosnians in Australia) is the reason why we declared the contract null and void on the 26 th of April 2005. TV Plus demanded of JRTS by email of 25 November 2006 that 'you instruct UBI to cease distributing the [BHT-1] Channel otherwise we will be forced to commence legal proceedings, for which you have fully indemnified us in our agreement'. TV Plus did not thereupon institute legal proceedings against UBI or JRTS. The term of the Agreement is until 1 December 2009 and the Agreement remains on foot. 21 It appears from the evidence that TV Plus had been accepting Australian resident subscribers during the preceding 18 months on the basis of its ongoing comprehensive coverage of JRTS televised signals, which according to UBI's case was nevertheless not available for longer than about two hours daily. Subsequently on 5 December 2006 the head officer of the Satellite Department of JRTS emailed Globecast Australia, and after pointing out that JRTS owned and operated '... all rights to the public TV channel named BHT-1', and that it had become aware that ' TV Plus , one of your PAS8 satellite space customers in Australia, is distributing [BHT-1] without our authorization', and further that '... Globecast Australia is providing the satellite space, uplink and related technical services for TV Plus and is acting as an accessory to infringement', JRTS demanded that Globecast Australia 'stop transmission of BHT-1 on PAS8 satellite without any further delay'. That has not apparently occurred, or at least has not effectively and satisfactorily occurred from UBI's perspective. 22 It was broadly in the context of the foregoing evolution of disputation between two Australian companies (or Australian corporate groups) claiming conflicting entitlements to an overseas source of television signals emanating from Bosnia and Herzegovina, yet in the further context of that overseas source asserting an ongoing relevant contractual relationship solely in favour of UBI , that the present interlocutory proceedings were commenced by UBI against TV Plus and came on for interlocutory hearing on the second last day of the Federal Court's 2006 term, followed thereafter by comprehensive written submissions furnished by the respective parties over the following four weeks or thereabouts, and in the case of TV Plus by two successive sets of written submissions provided on consecutive occasions, the last being the most comprehensive and lengthy. 24 The originating application and statement of claim in the present proceedings were filed by UBI on 6 December 2006, the relief sought by UBI being damages for breach of subss 115(2) and (4) of the Copyright Act , and orders, injunctions and further consequential relief concerning the engagement by TV Plus in broadcasting or re-broadcasting (as the case may be) the JRTS television channel BHT-1 in Australia. Issues in relation to broadcasting the radio channels did not feature, or at least prominently, in the course of the single day's hearing made available on short notice on 21 December 2006. Relief was also sought by UBI for contravention of the TP Act based on alleged misleading and deceptive conduct, each in the context of trade and commerce. The misleading and deceptive conduct alleged were the representations by TV Plus that it held the right to broadcast the BHT-1 channel in Australia, and further that the actions of TV Plus in so broadcasting that channel were authorised by PBS . In short, the circumstances said to give rise to the latter cause of action were essentially the same as those giving rise to the former. 25 The principal affidavit evidence of UBI was provided by Mr Sam S. Bilge, sworn on 6 December 2006, and which was supplemented by his further affidavit evidence of 15 December 2006. That evidence outlined the extensive nature of UBI's operations in Australia undertaken since December 2004 in relation to a range of ethnic language pay television and radio services licensed from suppliers operating from outside of Australia, and its claim of reach to more than 200,000 television viewers across Australia and in Asia-Africa per medium of 120 television and radio channels broadcast in 12 languages and in 26 countries. The cost of broadcasting individual channels being presently incurred by UBI was said to be $60,000 per channel per month. 27 Mr Bilge further testified, by affidavit sworn on 15 December 2006, to a conversation '[i]n about September 2006' with the general manager of UBI's Macedonian operation to the effect that JRTS did have previously an agreement with TV Plus to broadcast BHT-1, 'but that agreement was cancelled and BHT-1 hasn't been aired in Australia for over a year', and moreover that ' UBI had been granted the exclusive right to broadcast BHT-1 in Australia ...'. He spoke of his awareness that 'between May and October 2005, TV Plus sporadically broadcasted BHT-1 in Australia', but that as I have just indicated, BHT-1 ceased being broadcast in Australia since October 2005. Moreover he spoke of UBI having received ' ... over a hundred calls from UBI subscribers as well as individuals', which were said to have expressed 'their confusion as to why there were now two BHT-1 signals in Australia'. Mr Bilge further testified in particular as to important international soccer games having been very recently broadcast by TV Plus on BHT-1 in Australia, but to his having been informed by JRTS nevertheless that it had not provided TV Plus with any smartcards to access the relevant BHT-1 signal. 28 Generally as to UBI having sustained already loss and damage by the recent conduct of TV Plus complained of, Mr Bilge further testified that ' UBI has been very successful since its establishment in 2004, however since TV Plus [re]commenced broadcasting BHT-1 in late October 2006, there has been an increase in confusion expressed to UBI by customers, prospective customers and the Bosnian community at large'. He testified further as to an initial substantial increase in subscriptions to the 'Balkan Bouquet' package since UBI began broadcasting BHT-1 in 2006, and of the basis for his then expectation of 'a continual and steady growth in the number of subscriptions of the Balkan Bouquet package for the next 3 to 6 months', but then explained that the rates of UBI subscriptions 'suddenly began to plateau' in November 2006, coincidentally with UBI being 'inundated with queries and concerns from subscribers, prospective customers and individuals from the Bosnian community about the situation regarding BHT-1 ' . 29 UBI procured from overseas, at least for the purpose of the present interlocutory proceedings, affidavit evidence from Mr Hadzijamakovic of JRTS completed on 14 December 2006 in Sarajevo, he being as I have earlier stated the head of the Satellite Department of the Public Broadcasting Service of Bosnia and Herzegovina (the anglicised version of JRTS as already indicated in [1] above). Mr Hadzijamakovic recounted in detail the circumstances concerning the original grant to TV Plus of exclusive rights to broadcast BHT-1 in Australia. On 24 December 2004, Mr Drago Maric, Director General of JRTS, entered into an agreement with TV Plus, which amongst other things, granted TV Plus the exclusive right to broadcast BHT-1 in Australia. The Agreement was forwarded to TV Plus that day ...'. Controversy on the subject of smart cards was said to have continued between him and Mr Jeremic, Mr Hadzijamakovic apparently demanding that TV Plus commence broadcasting immediately on the basis that smart cards were not needed to broadcast 'app.85% of our programmes on BHT-1... [and therefore] did not need to be decoded'. Because of this we declare null and void this contract. Our Broadcast Agreement is based on the laws of Australia, we have been forefilling [sic] our obligations under the Broadcast Agreement so there is no valid reason for your below email, hence I request you immediately withdraw it. I request you immediately reply within 24hrs revoking your below email. All the time we were patient enough, waiting for you and after the FOUR months of doing nothing you dare to impose the term of 24 hours for my reply. The promise from your e-mail of 23 rd March after three months is not enough in professional cooperation between two companies. Whether you like it or not it is completely unprofessional by your side and above all we haven't received the contract after four months of being signed on our side that is why we declare it null and void. I have never had such an experience with one company in my 28 years long career spent in broadcasting on the different positions. ... As far as I could remember, after 18 months since that time, I did not have any contact with Mr Jeremic after this date. Even if I have it I would never have recall the termination. Especially I will not do it orally. I am TV professional for almost 30 years and if I am terminating the agreement in written form for sure I will recall it in the same form. I remained on the position of 27 April 2005 what confirm the fact that I have never sent the smart cards to TV Plus. I received no further correspondence from TV Plus until 19 October 2006. I am aware that between May 2005 and October-November 2005, TV Plus broadcasted BHT-1 in Australia. JRTS did not provide its permission for these broadcasts. JRTS had not provided TV Plus any smart cards therefore TV Plus could only have broadcasted programmes that were not encrypted, for example, news programmes and dramas. JRTS did not receive any payment from TV Plus under the Agreement or for their broadcasts of BHT-1 in Australia, between May and October-November 2005. I am aware that in September 2006, JRTS was approached by Ms Senada Softic, the President of the Australian Council of Bosnia Herzegovina Organisations, who requested that JRTS make arrangements to resume broadcasting BHT-1 in Australia. Shortly after, JRTS commenced negotiations with United Broadcasting International Pty Ltd ('UBI'), regarding an exclusive license to broadcast BHT-1 in Australia. On 25 September 2006, JRTS and UBI entered into an agreement whereby amongst other things, UBI was granted the sole and exclusive rights to broadcast BHT-1 in Australia. The agreement with UBI states the service is "television channel BHT". It is the same channel as BHT-1. On 10 October 2006, UBI commenced broadcasting BHT-1 in Australia. Before further addressing that evidence of Mr Jeremic, I should record that part of his testimony was directed to the interlocutory application of TV Plus largely and prominently for security for costs sought by TV Plus to be provided by UBI in the sum of $200,000.00. A notice of motion for that purpose was filed on 15 December 2006 pursuant to s 1335(1) of the Corporations Act 2001 (Cth) or alternatively under Order 28 rule 2 of the Federal Court Rules . TV Plus has not brought any present claim for injunctive relief, ostensibly because as senior counsel for TV Plus explained, '[w]e are getting our feed ...'. In that regard, Mr Jeremic explained ' TV Plus has continued to this day to broadcast, distribute, advertise and offer for sale the channels which were the subject of the previous proceedings in Australia'; I have of course already made reference to those proceedings involving JRTS and TV Plus (or their respective principals or other related companies) which took place and were finalised in 2005. Nevertheless it is not without significance that TV Plus has withheld from joining JRTS as cross-respondent to the present proceedings for the principal relief sought by UBI , notwithstanding the position adopted by JRTS adversely to the claims of TV Plus , and in support of the position of UBI as I have already recorded. 35 The basis of the TV Plus application for security for costs was set out in the first affidavit of Mr Jeremic sworn on 13 December 2006 (see paras 76 to 80 thereof). Given however the relatively short Court hearing of time available to the parties on the second last day of term for 2006 for any interlocutory proceedings, my consideration of UBI 's objection to that segment of the principal affidavit evidence of Mr Jeremic was deferred for the time being. The affidavit evidence adduced by TV Plus on that occasion was said to be at least partly in response to the principal affidavit of Mr Bilge sworn on 6 December 2006, to which I have already made reference. At the outset of reading the affidavit evidence of Mr Jeremic of 13 December 2006, senior counsel for TV Plus indicated that TV Plus is the holder of twenty narrowcasting subscription broadcasting licenses issued by the ABA numbered from 2694 to 2713, and that it transmits a number of ethnic satellite television and radio channels in Australia and 'surrounding countries'. As foreshadowed, the practice of TV Plus is that once TV Plus has acquired exclusive rights to broadcasting, it sets in train the advertising, marketing, distributing and broadcasting of the television content, the obtaining of subscriptions from new customers and the collection of monthly subscription fees. The channels of TV Plus are offered to the public on the basis of a subscription service, and TV Plus installs a set-top box and satellite dish in each customer's home and issues a so-called unique smart card which permits the decoding of TV Plus ' signals by the customer. 36 TV Plus indicated to my understanding that it did not presently intend to pursue causes of action against UBI (apart from the security for costs application), but would put in issue the claims which UBI has sought to bring against TV Plus arising out of the matters raised by UBI in the context of the present proceedings. It was said by UBI in the course of submissions that '... the evidence is quite clear , ... there was a failure on the part of [ TV Plus ] to make any challenge to the purported termination' by JRTS of the broadcasting rights of TV Plus , and moreover that '... there was no true broadcasting of this channel, certainly not in the way that we're broadcasting now, until we commenced the broadcast two months ago... they're riding on the back of us, who are prepared to pay for a service [and] we've entered into an agreement with' JRTS . Moreover UBI contended that TV Plus is asserting an entitlement '... now to challenge commercially [its] competitor to take that feed, [yet] not pay for it, and just broadcast it effectively to spoil [its] competitor and that's the issue ...'. 38 As to the absence of joinder by TV Plus of JRTS to the present proceedings as additional respondent, notwithstanding the substantial contractual issues foreshadowed already as between TV Plus and JRTS , senior counsel for TV Plus sought to explain that TV Plus has '... in good faith, broadcast this channel for the last 18 months ... we have a continuing contract and a continuing right to the feed ... and over that 18 month period, we've taken up thousands of subscribers for the feed'. Moreover TV Plus emphasised that the applicant has conceded '... there's no obligation to make any payment until next January', being of course January 2007, that payment being 'only of the order of $10,000 for the first year', and in any event in relation to the claim for injunctive relief, that there had been laches on the part of UBI 'in the sense that they have been sitting on their rights', yet significantly, so the TV Plus position was emphasised, UBI '... freely contracted... knowing that the other party ... was holding itself out to the world, and continuing to hold itself out to the world, as the authorised publisher, or as a publisher of this material'. TV Plus argued further that UBI '... went into this with their eyes open and didn't cover all necessary situations for their security', and accordingly UBI must continue 'to run with that risk until the matter is decided'. To keep an accurate record of all new subscription agreements entered into by the respondents which provide access to the Bosnian language channel BHT and to provide a regular summary report in confidence to the solicitors for the applicant. To maintain an accurate record of all monies received from new and existing subscribers who receive access to the Bosnian language channel BHT from the respondents. To not enter into any new subscription agreement or to review any existing subscription agreement which provides access to the Bosnian language channel BHT-1 other than on a monthly basis. ' TV Plus signalled its intention to require production of the minute book of UBI and of its financial statements. Formal call was made by a notice to produce bearing date 20 December 2006 (that is, on the day preceding the hearing of the subject interlocutory proceedings), but no material was produced by UBI in answer, it being pointed out in that regard by counsel for UBI that the notice had only been served at 3:16 pm on the previous day. It would be correct to conclude that the financial circumstances of UBI , to the extent disclosed in the evidence, present apparent concerns in terms of UBI's present financial standing. 41 As to the significance or otherwise of the prior Federal Court proceedings involving the parties which concluded in 2005, counsel for UBI contended that there was '... little if any relevance to the behaviour of the parties in late 2006, and that what was in dispute in the Melbourne proceedings [of the Federal Court] in 2005 is unlikely to assist'. That television license is said by UBI to constitute a class license for subscription to television narrowcasting services, the conditions whereof being set out in Schedule 2 to Part 7 of the Broadcasting Services Act 1992 (Cth). TV Plus disputes that claim and denies the existence of any prima facie case at the instance of UBI , and hence of any serious question of copyright infringement on the part of TV Plus to be tried. Alternatively TV Plus contends that if the Court is minded nevertheless to grant any interlocutory relief in favour of UBI , then the usual undertaking as to damages required of UBI should be personally guaranteed by a director of UBI in view of the so-called apparent 'frailty' of UBI financially. In that regard, TV Plus put on evidence purportedly to the effect that there would be extensive damage to its existing subscription base, and hence to its business generally, if the injunctive relief sought by UBI was to be granted. 43 UBI pointed out that TV Plus had been obtaining for 18 months up until October 2006 commitments from members of the public by way of subscriptions to TV Plus , on the basis in reality of merely two hours or so of televised material each day (or so UBI contended). UBI contended further that there was a genuine risk to members of the Balkan community in Australia that they may subscribe to the television broadcasting services of TV Plus , yet not receive what they would have thought they had paid for. TV Plus has continued in any event to take or endeavour to take the BHT-1 signal and broadcast it in Australia. The case of UBI is further that TV Plus has not as yet paid JRTS any moneys for taking and broadcasting that signal. Leaving aside the matter of payment (or offer of payment) by TV Plus to JRTS of any outstanding license fees, it was contended by UBI that there exists '... a serious matter to be tried in relation to the Copyright claim, the Trade Practices claim and the anticipated breach of contract claim'. In that regard UBI asserted that it '... is not getting what it is paying JRTS bona fide , because part of [ UBI's ] prospective audience is being dissipated by the actions of [ TV Plus ]'. As I have elsewhere indicated in these reasons, virtually the same circumstances are relied upon by UBI for the establishment of its TP Act claims as in the case of its copyright claim. 45 As to the standing of JRTS and its absence as a party to the proceedings, it was mutually acknowledged by the parties that the joinder of JRTS as a party to the proceedings would be required at least by the time the proceedings for final relief would fall to be litigated and resolved. UBI acknowledged that whether JRTS should be joined as a respondent in the context of the resolution of issues as to breach of contract, as well as breach of copyright, needed to be addressed and determined before the granting of any final orders. The restraints which UBI is seeking against TV Plus were said to be justifiable on each of those footings. UBI pointed additionally to what it claimed to be the absence of empirical evidence in support of Mr Jeremic's testimony as to TV Plus sustaining losses in the prevailing contextual arrangements. 48 TV Plus submitted that it would be an untenable proposition of law in any event for UBI to advance that TV Plus , or any other entity inclusive of UBI , should not be entitled to re-broadcast or otherwise communicate the BHT-1 Channel originating from Bosnia and Herzegovina to the public in Australia. TV Plus contended in that regard that since at the centre of the dispute there is an issue as to Australian copyright, founded as it must therefore be from the making of a broadcast from a place in Australia as required by s 91 of the Copyright Act , the so-called provenance of the subject broadcast in Bosnia and Herzegovina prior to it being bought into Australia by UBI is 'quite irrelevant'. That was said to be because there is no provision for the protection of broadcasts made from that overseas country to Australia under the Copyright (International Protection) Regulations 1969 (regs 3 and 4(6)), that country not being a member of the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations 1961. Therefore so the TV Plus submission continued, it will only be the broadcast of the subject television channel from within Australia that can receive protection under Part IV of the Copyright Act , and s 22(5) thereof in particular, unless of course that broadcast may be proscribed as misleading and deceptive conduct under Australian legislation, as is UBI's additional or alternative case in any event. 49 The yet further matter advanced by TV Plus in the context of the copyright issues, in sequence of presentation, was that broadcast copyright is 'distinct' from copyright in other works in relation to what may constitute the taking of ' a substantial part ' of the copyright work within s 14(1) of the Copyright Act . I was referred in that regard to the decision of the High Court in Network Ten Pty Ltd v TCN Channel Nine Pty Ltd [2004] HCA 14 ; (2004) 218 CLR 273, and in particular at 299-303. The particular copyright work there established by the High Court consisted essentially of identified televised programmes or certain segments of televised programmes, as established by a majority of the High Court, rather than merely single images. In the course of the reasons for judgment of the majority of the High Court, it was explained that television broadcast copyright concerns broadcasts ' made from a place in Australia ', and so made ' under the authority of a license...or class license ' issued under the Broadcasting Services Act 1992 (Cth), and thereby involved the notion that the maker of the broadcaster is taken to be ' the person who provided the broadcasting services by which the broadcast was delivered '. The statutory scope of ' provide ' or ' provision ' may therefore be seen to be comprehensive. TV Plus did not appear to explain at the present stage of the proceedings why the notion of ' substantial part' was not susceptible to satisfaction in the particular circumstances of the present proceedings. 50 TV Plus next advanced the submission that in order to establish infringement here on the part of any one or more of the TV Plus companies, it would be necessary in any event for UBI to establish interception and thereafter broadcast (or what may conceivably be termed as 're-broadcast') within Australia, and it would not be enough in that regard for UBI's copyright cause of action to demonstrate interception from a place outside of Australia. Given the complexity of the modern technology involved in television transmission of televised programs originating offshore, and the apparent need for TV Plus to comprehensively establish the circumstances as to interception etc, it would be inappropriate to resolve any such complex as well as apparently controversial issues at this interlocutory stage. In that regard I refer to what I have earlier merely outlined in [4] above of these reasons. Mr Jeremic testified broadly and in a sense imprecisely as to the signals being transmitted 'in part from within Bosnia and Herzegovina', and the signals thus supposedly standing outside any notion of an Australian broadcast. TV Plus also pointed to the need for UBI to demonstrate copying in a television context, explaining that '[s]imilarities alone, or even complete identity, between the parties' works or their subject matter, are not enough in the absence of copying, as copyright is not a monopoly right such as a patent'. It is enough from a practical perspective to merely record and not resolve any such issues at the present stage of the proceedings, particularly given that more evidentiary precision, and further expert evidence, would appear to be required. Nothing in the advertising or promotional activity otherwise of TV Plus was said by it to have suggested any association with UBI , and therefore no issue with respect to ss 52 or 53 of the TP Act arose adversely to TV Plus , so TV Plus further asserted. Essentially or largely, the same circumstances pleaded by UBI for breach of copyright were relied upon to support those pleaded causes of action. Damages and injunctive relief were similarly or correspondingly sought by UBI , in line with the relief sought for breach of copyright. 52 As to the issue of contractual entitlement, TV Plus submitted that there could be no misrepresentation relevantly to be imputed to TV Plus , in view of the fact (being a fact in issue from UBI's perspective) that there was a subsisting agreement between TV Plus and JRTS reached earlier on 4 January 2005 and which, among other things, constituted TV Plus Operations in particular as an exclusive licensee of the BHT-1 Channel along with 'its programming contents together with all associated rights ...'. While the purported grant of broadcast rights in the nature of copyright to TV Plus may have been nugatory because broadcasts from Bosnia and Herzegovina are not protected in Australia under the Copyright (International Protection) Regulations 1969 , so that TV Plus submission continued, so much was said to indicate that there was in any event a pre-existing contractual relationship between JRTS and TV Plus . Moreover TV Plus asserted that although it was said by UBI to have been acknowledged by TV Plus that there had been an earlier rejection by JRTS of any subsisting contractual obligation on its part in favour of TV Plus , nevertheless that any such rejection had occurred otherwise than within the terms of the TV Plus/JRTS contractual arrangements, and had not been in fact accepted by TV Plus . In that context it was further said by TV Plus to be beside the point for UBI to assert that TV Plus had never made payments under those arrangements, since TV Plus had always acknowledged its contractual liability to make such payments, though it maintained that the time for making even the initial payment falling due to JRTS has not yet crystallised for payment in favour of JRTS . In that regard, TV Plus asserted that no payment was due and payable under that TV Plus/JRTS agreement during the first six months of its term, yet the purported termination by Mr Hadzijamakovic on behalf of JRTS took place before the end of that six months period. 53 The foregoing circumstances propounded by TV Plus were therefore said by TV Plus to provide a firm basis for its asserted continuing belief that TV Plus was entitled to take the broadcast signals from JRTS originating in Bosnia and Herzegovina, and to distribute the same in Australia, and that accordingly the representation said to arise from the conduct of TV Plus was not misleading. Hence TV Plus submitted therefore that there was no prima facie case or serious question arising at least as to the first misrepresentation pleaded by UBI against TV Plus. Once again there needs to be pointed out the difficulties as to giving expression to the TV Plus case in circumstances where it has (at least thus far) withheld from joining JRTS as a third party to the proceedings. 54 As to the second misrepresentation on the part of TV Plus pleaded by UBI pursuant to ss 52 and/or 53 of the TP Act, it was apparently the contention of TV Plus that it had proceeded with its present course of taking television signals from JRTS in the purported belief as to the continued existence of a valid and subsisting contractual arrangement with JRTS in operation in Bosnia and Herzegovina, irrespective of the concession by Mr Jeremic at least to the effect that there may have been some 'ill feeling' between he and Mr Hadzijamakovic. Nevertheless Mr Jeremic claimed to have always believed that the purported termination had not been validly effected by JRTS , and had not been in any event accepted by TV Plus , and that accordingly TV Plus remained under a continuing contractual liability to make payments to JRTS upon receipt of an invoice issued in accordance with the relevant contract. Moreover Mr Jeremic testified that in the course of his most recent telephone conversation with Mr Hadzijamakovic, it had been indicated by him to Mr Jeremic that if the agreement between TV Plus and JRTS had not been terminated, then 'TV Plus Operations should do whatever it considered was appropriate'. It was submitted by TV Plus , in my opinion at least controversially, that there was insufficient evidentiary material presently provided on the part of UBI in order for UBI to maintain a prima facie case for the existence of a serious question to be tried as to contraventions of ss 52 and 53 of the TP Act on the part of TV Plus . UBI's submissions in reply, filed on 6 February 2007, contended that '[h]aving regard to [the] evidence, it is not open to the respondents to say that they believe they have a right to broadcast the BHT-1 signal'. Counsel for UBI further contended that '[i]f such a "right" to broadcast had existed, and the respondents considered they were entitled to exercise that "right", the Court is entitled to ask why no action was taken for eighteen months to assert that right by challenging JRTS ' s termination of the contract'. UBI submitted rhetorically that if TV Plus were 'genuinely at risk of... heavy financial loss, why was nothing done for some 18 months to put the "unreliable" broadcast right'. It was further contended by UBI that 'the fact that nothing was done by [ TV Plus ] for so long casts huge doubt on the genuineness, not only of their argument, but of the evidence that has been provided by Mr Jeremic'. It was further submitted by TV Plus to be an inadequate answer to the case for security that UBI has already met a substantial award for costs in previous proceedings involving TV Plus ; that factor alone was said by TV Plus to be suggestive of the opposite conclusion, namely that UBI would now be less able to meet any award for costs hereafter made in the present proceedings in favour of TV Plus than might otherwise have been the case, seemingly an elusive proposition even in the extraordinary context of the present litigation at least as presently structured. 60 It was said by TV Plus that its solicitors had provided a solid basis for their estimate of $200,000 for TV Plus' likely costs of the subject proceedings, by reference to the applicable costs scale identified in the evidence; it was further said in that regard that the actual cost of the prior litigation between the same parties, which was settled before trial, amounted to $332,000 (presumably attributable to TV Plus alone), but of course it is not feasible to gain sufficient assistance per se from the nomination of that monetary figure in isolation. In any event as I have foreshadowed, TV Plus indicated that it would accept that the minimum that should be provided at this present stage of the proceedings is $60,000, subject however to liberty to apply being granted to increase that amount as the proceedings subsequently progressed. The written submissions presented by the respective parties, following upon a brief interlocutory hearing on the second last day of the 2006 law term, have addressed the implications of what are largely untested and controversial issues. The issues actually or potentially arising have not become as yet the subject of mutually agreed and definitive description in all aspects. However, it was agreed to my understanding that at least a five day final hearing is needed to unravel and resolve the issues arising between the parties. 62 The respective parties to the proceedings appear to derive or else seek to derive the television signals the subject of present controversy from the same overseas source in Bosnia and Herzegovina. Issues confronting the Court in appraising the case of UBI for the grant of interim relief have crystallised in the context of the claims advanced by TV Plus as to contractual entitlement to television copyright to the JRTS signal. That alleged entitlement is denied by JRTS (as well as by UBI ) in favour of what JRTS appears to regard as at least the contractual entitlement of UBI more recently derived from JRTS as ongoing producer of course of the subject television signals. The existence of any such contractual entitlement of UBI as the prevailing basis for valid broadcast copyright in Australia is challenged by TV Plus. TV Plus has not thus far formally cross-claimed against JRTS in the present proceedings with a view to establishing what TV Plus contends to be an entitlement on its part continuing from prior to that time to broadcast the subject television signals so originating from and produced by JRTS in Bosnia and Herzegovina. 63 There is no reason that I can presently identify why this Court should not ultimately resolve on a final basis the issues arising as to contractual entitlement and breach of any such entitlement, subject to the provision of any expert evidence as to the principles applicable of the governing law of contract and its operation, if that governing law be that of Bosnia and Herzegovina instead of Australia. Resolution of that contractual issue seemingly requires in my opinion the joinder by TV Plus of JRTS as a cross-respondent to a TV Plus cross-claim in the context of the present proceedings. 64 As foreshadowed, TV Plus has to date withheld from joinder of JRTS , yet TV Plus seeks to obtain from UBI a not insignificant extent of security for costs, being interlocutory relief which at least seems to me to be inappropriate to award, at least at the present time and until such circumstances can be addressed in an appropriately established context. JRTS has made known to TV Plus explicitly for some time its stance as to cessation of any contractual entitlement of TV Plus to broadcast in Australia television signals sourced from JRTS . It would be seemingly inappropriate to the exercise of the Court's discretion in its favour in the somewhat unique context presently prevailing, if not also inequitable, on the present state of the evidence, for TV Plus to gain the benefit of security for its costs provided by its Australian competitor UBI , in circumstances where it has withheld, at least for the time being, from joining to the proceedings the very entity from whom it claims controversially to derive its source of broadcasting entitlement or authority. In that regard, the present state of the evidence is that JRTS has maintained the position (and has done so in the context of its comprehensive affidavit material) of denial of any present entitlement, contractual or otherwise, of TV Plus to broadcast the television signals of JRTS in Australia, and for TV Plus to seek to do so to the competitive detriment of UBI as JRTS's asserted exclusive appointee in Australia. The commercial reality of the stance adopted by TV Plus may be described as being at least equally aggressive to that of UBI : Amalgamated Mining Services Pty Ltd v Warman International Ltd (1988) 19 FCR 324. 65 Assuming that an early final hearing is reasonably achievable, the making of final procedural orders should obviously be addressed by the parties and the precise formulation of those orders should be resolved as early as feasible. Of course the presently prevailing circumstances may change in the context of further steps that may be taken by any of the parties in order to resolve this complex as well as volatile dispute, being steps which may conceivably justify a re-opening of interlocutory issues. For the time being however, the status quo is that TV Plus is continuing controversially to utilise the television signals of JRTS in circumstances where UBI alone, and hence to the exclusion of TV Plus , is said by JRTS to be authorised. In the meantime in the context of the presently somewhat deficiently structured proceedings not yet fully and formally pleaded, and from which there has been thus far absent the critical off-shore source (ie JRTS ) of the subject television signals, I am of the view that I should defer the consideration of the grant of any interlocutory relief at least until there has been further clarification of the critical issues inherent to the dispute, including issues as to joinder of all necessary parties. 66 I direct that UBI provide to the Court draft orders to give effect to these reasons within three clear hearing days. I further direct that TV Plus respond with any changes required within a further two clear hearing days. The proceedings should then be listed for mention, hopefully with a view to fixing the date for a final expedited hearing to take place, and as early as possible having regard to all the circumstances for the time being prevailing, and in any event in order to resolve any remaining disputes in relation to the context of interim orders required to be put in place. An indication should be provided as to the nature and scope of what evidence (if any) remains to be adduced by each party, and of any additional issues of law still intended to be pursued. The costs of the present interlocutory proceedings would normally be ordered in terms merely as to costs of the proceedings generally, but I will entertain nevertheless any contrary submissions from either party so long as the same are furnished in writing within the next seven days. Of course there must be liberty to either side of the record to apply on seven days' notice to the other, that time taking into account the overseas elements of the proceedings. I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. | television channel broadcast content derived from bosnia and herzegovina (bh) public broadcaster earlier transmission arrangement with broadcaster in operation in australia following dispute with australian broadcaster bh broadcaster contracted with different australian broadcaster dispute between original australian broadcaster and newly appointed australian broadcaster contractual and copyright issues arising between the two australian broadcasters as to which broadcaster valid appointee bh broadcaster not joined as party to proceedings copyright issues arising for resolution conflicting representations made in australia in trade and commerce as to lawful broadcaster of television images of bh broadcaster issue arising as to which broadcaster's representations not misleading or deceptive whether respondent competing broadcaster entitled to security for costs significance of absence of that respondent's joinder of bh public broadcaster in context of conflicting claims of two broadcasters as to contractual source of television signals copyright and trade practices trade practices security for costs |
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 |
The respondent's application be dismissed with costs. 2. The respondent have leave to file and serve an amended defence on or before 27 October 2006. 3. The applicant file and serve any reply on or before 10 November 2006. 4. The proceeding be adjourned for further directions on 15 December 2006. Various particulars of that claim are contained in the notice of motion with varying degrees of clarity. They include a number of allegations that have been agitated before another judge of this Court earlier in the year, but also include a novel complaint that the proceeding was brought unconstitutionally because, so it is said, it seeks and/or provides for the acquisition of the property of the respondent by the applicant or the Commonwealth of Australia without just terms, contrary to the provisions of section 51(xxxi) of the Constitution . Justice Merkel dealt with these matters on 30 March 2006 and his reasons for judgment appear as Australian Prudential Regulation Authority v Siminton (No 2) [2006] FCA 336. The application to his Honour to strike out various orders made earlier by Sundberg J, Gray J and himself were all rejected, as too were a strike out application in relation to the statement of claim and an application to stay the proceeding until after the determination of what were described as 'criminal activities', alleged to appear in the statement of claim. His Honour rejected all of these grounds. The allegation was based on alleged misconduct on the part of APRA at various interlocutory stages of the proceeding. That conduct, in the main, involved the seeking of interim and interlocutory orders from the Court, which applications were granted. I do not sit this morning on appeal from his Honour's decision. When counsel for the respondent was pressed as to what had changed since 30 March 2006, he responded by drawing attention to the constitutional argument that he wishes to maintain and contended that there was, in fact, no evidence to support the principal claims made by the applicant in its statement of claim. However, I am told that notices under s 78B of the Judiciary Act 1903 (Cth) have been served on the various Attorneys-General and that they have, in each case, indicated that those who have thus far responded have, do not wish to intervene in the proceeding, at least at this stage. 6 I say nothing as to the merits of the constitutional argument. It remains to be framed and developed. However, its existence cannot assist in the determination of the strike out application which is the subject of the notice of motion before me. If the respondent wishes, in due course, to raise the constitutional argument as a defence or, indeed, any other arguments as defences that do not already appear in the defence as filed, then the respondent will need to apply for leave to amend his defence prior to trial. I will return to that issue shortly. 7 As to the 'no evidence' issue, the same claim was made before Merkel J, and failed. What is said is that APRA has not, in the intervening period, supplied evidence to the respondent to fill the void that allegedly existed on 30 March 2006. I do not accept that APRA was under any obligation to supply such evidence. The time for it to be supplied will be when the matter is being readied for trial and I propose shortly to give directions to that end. These directions will also provide for leave to file an amended defence if the respondent is so advised. That is a matter that must remain for future consideration. It is not a basis for striking out the proceeding. Accordingly, in my opinion, the notice of motion that has been filed by the respondent should be dismissed. | abuse of process application to strike out application and statement of claim whether evidence of collateral purpose effect of submissions being ruled on in an earlier judgment whether lack of evidence before trial is sufficient to strike out proceeding constitutional challenge whether acquisition of property on just terms effect of constitutional challenge on strike out proceeding practice and procedure constitutional law |
In April or May 2007 he applied to the Department of Immigration and Citizenship for a Protection (Class XA) visa. A delegate of the Minister refused to grant that visa on 29 May 2007 and an application for review of that decision was filed on 19 June 2007 with the Refugee Review Tribunal. By way of a decision signed on 19 September 2007 the Tribunal affirmed the decision not to grant the visa. An application for review of the Tribunal's decision was dismissed by the Federal Magistrates Court of Australia on 14 April 2009: SZMPF v Minister for Immigration and Citizenship [2009] FMCA 273. There is nothing to suggest that those who have reported the death or followed any investigation into it have in anyway been adversely of interest to military authorities. While there may be legitimate questions about how that investigation will proceed in the current environment, the Tribunal does not believe that any interest the applicant may have in this matter would put him at risk of harm on return. Notably, members of the applicant's family have remained in Fiji without further difficulties. The Federal Magistrate then proceeded to conclude that the Tribunal had committed no jurisdictional error and dismissed the application. The Appellant appeared before this Court on 6 August 2009. He was then represented by a solicitor. The distinction is well-recognised: WAEE v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 184 , 75 ALD 630. If the Tribunal fails to consider a contention that the applicant fears persecution for a particular reason which, if accepted, would justify concluding that the applicant has satisfied the relevant criterion, and if that contention is supported by probative material, the Tribunal will have failed in the discharge of its duty, imposed by s 414 , to conduct a review of the decision. This is a matter of substance, not a matter of the form of the Tribunal's published reasons for decision. It may be that some evidence is irrelevant to the criteria and some contentions misconceived. Moreover, there is a distinction between the Tribunal failing to advert to evidence which, if accepted, might have led it to make a different finding of fact (cf Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323 at [87] - [97] ) and a failure by the Tribunal to address a contention which, if accepted, might establish that the applicant had a well-founded fear of persecution for a Convention reason. The Tribunal is not a court. It is an administrative body operating in an environment which requires the expeditious determination of a high volume of applications. Each of the applications it decides is, of course, of great importance. Some of its decisions may literally be life and death decisions for the applicant. Nevertheless, it is an administrative body and not a court and its reasons are not to be scrutinised 'with an eye keenly attuned to error'. Nor is it necessarily required to provide reasons of the kind that might be expected of a court of law. But that is an inference not too readily to be drawn where the reasons are otherwise comprehensive and the issue has at least been identified at some point. It may be that it is unnecessary to make a finding on a particular matter because it is subsumed in findings of greater generality or because there is a factual premise upon which a contention rests which has been rejected. Where however there is an issue raised by the evidence advanced on behalf of an applicant and contentions made by the applicant and that issue, if resolved one way, would be dispositive of the Tribunal's review of the delegate's decision, a failure to deal with it in the published reasons may raise a strong inference that it has been overlooked. SZMHL v Minister for Immigration and Citizenship [2009] FCA 581 at [18] per Perram J; SZMDB v Minister for Immigration and Citizenship [2008] FCA 1937 at [40] , 105 ALD 499 at 506 per Graham J; MZXCL v Minister for Immigration and Citizenship [2008] FCA 1770 at [13] per Buchanan J; Jayasinghe v Minister for Immigration and Multicultural Affairs [2006] FCA 1700 at [39] per Middleton J; Applicant M31 of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 533 at [22] per Weinberg J. Those claims have their origin in a letter dated 30 April 2007 from the now Appellant's migration agent to the Department. There is a family history and one cousin has been killed already and that investigation is still ongoing in Fiji today. FURTHER INFORMATION WILL FOLLOW SHORTLY. FIJI POLICE ARE REFUSING TO RELEASE IT NOW! The applicant claims his cousin has been killed and that the investigation into his death is still ongoing. The now Appellant was invited to attend the hearing before that Tribunal on 28 August 2007. The hearing took place on that date and the now Appellant did in fact attend. A transcript of at least part of that hearing was available for the consideration of the Federal Magistrate. Not surprisingly, an issue pursued by the Tribunal with the now Appellant was the death of the cousin and the interest of the army in further pursuing the now Appellant. The following exchanges thus occurred during the hearing on 28 August 2007. What do you think might happen and why do you think it might happen? And I fear that I don't have any other place to go to for protection as the army is taking over the leadership of the police, and the army are all around the embassies around the world, looking up as being ambassadors to a few embassies around the world. So, I don't have any other places to go to for protection. That's some of the reason I fear of going back to Fiji. They were called because your cousin was in a fight with members of this family. That's how the army even came across your cousin. It doesn't sound like the army was looking for him. So, I don't quite understand why you think the army is looking for members of your family. That's where the army started to think of that. It's going to be continuing to. Whoever tell anything about army. They were just quiet. And because of the police and of the --- I don't know what's happened to the filing of his --- for my cousin's file. A detailed response was provided on 10 September 2007. The Tribunal thereafter proceeded to make its decision. He explained that there were files which were currently under police control and he did not know what had happened with that. He had not been involved in his cousin's case while in Australia because he did not want to say anything because of the army. The Tribunal accepts that this death tragically occurred in Fiji, but does not believe that it can reasonably give rise to any fear that the applicant himself could come to similar harm on return to Fiji. In the Tribunal's view, the available evidence supports a conclusion that this death occurred shortly after the coup when the Army took the applicant's cousin into custody after a dispute with the [X] family. This was a period when the army was being reported to be taking a hard line against those transgressing the law. There is no evidence, in the Tribunal's view, that the Fijian Army retains any ongoing interest in those associated with the land, such that one could conclude there is a real chance the applicant may come to harm on this basis. In particular, after the initial detention of the applicant's cousin and another person, there has been no ongoing interest in those who have control of the land which it claimed the army has an interest in. There is nothing which suggests that those who have reported the death or followed any investigation into it have in anyway been adversely of interest to military authorities. While there may be legitimate questions about how that investigation will proceed in the current environment, the Tribunal does not believe that any interest the applicant may have in this matter would put him at risk of harm on return. Notably, members of the applicant's family have remained in Fiji without further difficulties. A decision that involves jurisdictional error is a decision that lacks legal foundation and is properly regarded, in law, as no decision at all: Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11 at [51] , [2002] HCA 11 ; 209 CLR 597 at 614 to 615 per Gaudron and Gummow JJ (McHugh J agreeing at [63]). A failure on the part of the Refugee Review Tribunal to consider " a substantial aspect or integer " of a claim being advanced may likewise amount to a constructive failure to exercise its jurisdiction: SZGUW v Minister for Immigration and Citizenship [2008] FCA 91 at [68] to [69] per Jacobson J. If one thing is abundantly clear, it is that the Tribunal must, if an application has properly been made as it was here, review the Minister's decision. This means that the Tribunal must exercise the jurisdiction of reviewing the Minister's decision: that is to say, it must make a decision on the application and any documents properly submitted by an applicant, with, as part of, or relevant to it. To fail, or refuse to receive and consider such a document, and to make a decision without regard to it, is a failure to exercise jurisdiction. This is more than a failure to give a party a hearing. It is to proceed on a false basis that such a document simply does not exist or has not been communicated to the Tribunal. The Tribunal would in these circumstances no more be exercising its jurisdiction than a court would be in deciding a case in favour of a defendant without looking at the plaintiff's initiating document and pleading, or even knowing that they had been filed in the registry of the court. This is not merely one aspect of evidence not being touched. It is not a failure to find a "relevant" fact. The Tribunal failed to address and deal with how the claim was put to it, at least in part. The requirement to review the decision under s 414 of the Act requires the Tribunal to consider the claims of the applicant. To make a decision without having considered all the claims is to fail to complete the exercise of jurisdiction embarked on. The claim or claims and its or their component integers are considerations made mandatorily relevant by the Act for consideration ... It is to be distinguished from errant fact finding. The nature and extent of the task of the Tribunal revealed by the terms of the Act ... make it clear that the Tribunal's statutorily required task is to examine and deal with the claims for asylum made by the applicant. So, too, is a decision of the Administrative Appeals Tribunal vitiated by jurisdictional error if it fails to have regard to " important material ": Martinez v Minister for Immigration and Citizenship [2009] FCA 528 at [37] to [52], 256 ALR 32 at 44 to 47 per Rares J. But it is not considered that the Refugee Review Tribunal in the present proceeding failed to resolve the claim being advanced before it. The specific claim that the present Appellant contends did sufficiently emerge and which the Tribunal allegedly failed to resolve, namely the claim regarding his expressed intention to take legal action against the army upon his return to Fiji and his interest in the investigation, was not independently articulated in the claim as initially lodged with the Department in April 2007, nor was it a claim resolved by the delegate. The claim as advanced in the application for a Protection (Class XA) visa was only expressed in the most general terms. There nevertheless was contained within that claim a concern as to whether the now Appellant would face harm if he returned to Fiji by reason of claims that his cousin had been killed by the military and that the investigation into his death was still ongoing. That claim was further pursued by the Refugee Review Tribunal during the course of the oral hearing conducted on 28 August 2007 and again in the letter inviting further comment dated 29 August 2007. And that claim was addressed and findings of fact made and reasons provided when rejecting the claim. There was no more specific claim raised as to the risks faced by the now Appellant by reason of any intention to take " legal action " against the army, such that the Tribunal was required to go on and make further findings of fact or provide further reasons in relation to that particular claim. There may be cases where the Tribunal is not confined to the " case " as expressly articulated by a claimant: Paramananthan v Minister for Immigration and Multicultural Affairs [1998] FCA 1693 ; (1998) 94 FCR 28 at 63 per Merkel J. In properly discharging the jurisdiction entrusted to it, the Tribunal must also consider a claim that emerges from the materials presented to it for consideration. How clearly a claim that has not been expressly raised must emerge from the materials has been variously expressed. The Tribunal is required to deal with the case raised by the material or evidence before it ... There is authority for the proposition that the Tribunal is not to limit its determination to the 'case' articulated by an applicant if evidence and material which it accepts raise a case not articulated ... By way of example, if a claim of apprehended persecution is based upon membership of a particular social group the Tribunal may be required in its review function to consider a group definition open on the facts but not expressly advanced by the applicant ... It has been suggested that the unarticulated claim must be raised 'squarely' on the material available to the Tribunal before it has a statutory duty to consider it ... The use of the adverb 'squarely' does not convey any precise standard but it indicates that a claim not expressly advanced will attract the review obligation of the Tribunal when it is apparent on the face of the material before the Tribunal. Such a claim will not depend for its exposure on constructive or creative activity by the Tribunal. An asylum claimant does not have to pick the correct Convention "label" to describe his or her plight, but the Tribunal can only deal with the claims actually made. It is not obliged to deal with claims which are not articulated and which do not clearly arise from the materials before it. Those expressions have included the phrases " squarely " raised; " sufficiently raised " and " clearly arise ". There thus remains legitimate room for debate as to how " squarely " an alternative case need be raised before it need be considered: SDAQ v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 120 at [19] , [2003] FCAFC 120 ; 129 FCR 137 at 146 per Cooper J. Whatever may be the threshold before the Tribunal is required to give consideration to a claim other than that expressly raised, it is not considered that there arose for resolution the more specifically formulated claim now advanced on behalf of the Appellant as to his expressed intention to take " legal action ". Irrespective of whether or not the now formulated claim was expressly raised or whether it was " squarely " raised, the Appellant further contends that the Tribunal itself nevertheless accepted that the claim as now formulated did emerge from the materials before it. No question arises, so the Appellant contends, for the Court to review those materials and for the Court to form any view as to whether in its opinion the newly formulated claim emerged from the materials. Indeed, the Appellant contends that the Tribunal's acceptance and formulation of the claim is conclusive such that the Court should not itself look at the evidence and other materials and go behind the finding of the Tribunal. By failing to resolve the claim, the Tribunal committed jurisdictional error --- or so the argument runs. Notwithstanding the conviction with which the argument was advanced, it is rejected. Rejected is the contention that the Tribunal had acceded to a formulation of the claim as now sought to be advanced and that thereafter the Tribunal was required --- if it was properly to discharge its jurisdiction --- to resolve that claim. It can in no way be construed as either a " finding " or an attempt to formulate a claim which the Tribunal considered emerged from the evidence. The Tribunal provided findings and reasons, being those set forth under the heading " Findings and Reasons "; it also referred to the evidence, being that set out under the heading " Claims and Evidence ". The extract from the evidence relied upon by the Appellant no more supports a conclusion that the Tribunal was attempting to formulate a claim for resolution not articulated by the Appellant than it does a conclusion that the Tribunal itself accepted that such a claim was " squarely " or " sufficiently raised ". It is not considered that the Tribunal as failed to exercise the jurisdiction entrusted to it. Once this conclusion is reached any remaining argument is essentially an impermissible challenge to the factual conclusions reached by the Tribunal. 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 (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | review of reasons of refugee review tribunal jurisdictional error no failure to consider a contention resolution of claim as advanced no requirement to resolve an alternative claim not squarely raised migration administrative law |
It has three major divisions, a food and beverage division, a water care division and an institutional division. 2 The first and second respondents are part of a group of companies known as the Klen Group. These companies also manufacture and supply cleaning and sanitation products. They are a competitor of the applicant. The third respondent was until April 2007 an employee of the applicant in the food and beverage division in Western Australia. In April 2007, the third respondent resigned from his employment with the applicant. In May 2007, he commenced employment with Klen Group. 3 On 22 June 2007, the applicant commenced a proceeding against the respondents seeking to restrain the third respondent from committing breaches of his employment contract with the applicant; and from making use of, or disclosing the confidential information of the applicant. In that proceeding, the applicant also seeks relief restraining the first and second respondents from, in general terms, inducing the third respondent to breach his employment contract with the applicant, and from using, or inducing the third respondent to disclose the applicant's confidential information, or from benefiting from such disclosure or use of confidential information. The applicant also seeks relief for the delivery up of any confidential documents in the possession of the respondents. In addition, the applicant claims damages. 4 The applicant sought interlocutory injunctive relief pending trial. The applicant's claim for interlocutory injunctive relief was first listed for hearing on 27 June 2007. At that hearing, the third respondent provided undertakings pending a contested hearing of the applicant's application for interim injunctive relief. The contested hearing was held on 8 August 2007. 5. The third respondent was issued with a laptop computer and the third respondent thereby had access to the applicant's network and to a database of a large number of the applicant's confidential documents. 7 In late February 2007, the third respondent participated in an audit of the Challenge Dairy site, together with Mr Antonio Orlando and Mr Wesley Savage of the applicant. The Challenge Dairy is a customer of both the applicant and the Klen Group. However, the Challenge Dairy has been a longstanding customer of the Klen Group and it has a larger share of the Challenge Dairy's work. The object of the audit was to identify areas of the operation of the Challenge Dairy in respect of which the applicant could provide improved services, and thereby enhance the amount of work that it obtained from the Challenge Dairy. A report was prepared of the audit by the applicant, which outlined the areas the audit group identified as being areas of potential improvement at the Challenge Dairy. On 25 March 2007, a presentation was made to the Challenge Dairy by the applicant. In April 2008, each of the applicant and the Klen Group will be required to tender for the Challenge Dairy work. 9 During the annual conference of the Dairy Industry Association of Australia held in Busselton on 23 and 24 March 2007, Mr Peter McGuire, the sole director and beneficial owner of all of the shares of the first and second respondents, met with the third respondent and Mr Savage, another employee of the applicant. 10 On 26 March 2007, Mr Peter McGuire telephoned the third respondent to arrange for an interview for the purposes of considering employment with the Klen Group. Between 26 March 2007 and 9 April 2007, the third respondent was interviewed by Mr Peter McGuire and later by Mr Gregory Peisley at the Klen Group's Wangara offices. 11 On 9 April 2007, the third respondent commenced his annual leave from the applicant. On 10 April 2007, the third respondent accepted an offer of employment with the second respondent in a telephone conversation with Mr McGuire. Also on 10 April 2007, the third respondent copied from his laptop computer onto two CD-ROMs, a large number of the applicant's confidential documents along with some personal photographs and other materials. 12 The third respondent was due to return to work on 17 April 2007 at the conclusion of his annual leave. On the evening of 16 April 2007, the third respondent forwarded by email a resignation letter to Mr James McKew of the applicant. 13 On 17 April 2007, the third respondent returned to work. Mr Scott Nelson, of the applicant, performed an exit interview with the third respondent. The third respondent returned to the applicant his motor vehicle and the laptop computer which had been issued to him by the applicant. The third respondent signed a document confirming that he had returned all the applicant's property and equipment. The third respondent was not required to work during his period of notice expiring on 3 May 2007. 14 On 17 April 2007, Mr James McKew, of the applicant, spoke to the first respondent by telephone and reminded him of his obligations regarding the applicant's confidential information. On 19 April 2007, during a telephone conversation with Mr McKew, the third respondent informed Mr McKew that he would not be "out in the field" in his role with the second respondent. 15 On 19 April 2007, the third respondent entered into an employment contract with the second respondent. The contract provides that the third respondent is to be engaged in the position of "technical representative". It also provides for a salary package and in addition an entitlement to earn a commission of 2.5% of gross profit on sales. The commission was estimated to account for approximately 20% of his salary package. 16 On 3 May 2007, the third respondent's employment with the applicant ceased. 17 Between 3 May and 21 May 2007, the third respondent informed Mr Carlos Mendes of Talloman, a customer of the applicant, with whom the third respondent dealt, that he was leaving the applicant and joining the Klen Group. 18 On 7 May 2007, Mr Peter McGuire interviewed Mr Savage for the purpose of offering him employment with the respondents. There is a dispute in the affidavits as to what was precisely said at the meeting between Mr McGuire and Mr Savage. However, it is common cause that Mr Savage advised Mr McGuire that there were clauses in his employment contract which placed post employment restrictions on him. The ambit of the dispute between Mr McGuire and Mr Savage centres on the extent to which Mr Savage identified the content of the restrictions contained in his employment contract. On 21 May 2007, the third respondent commenced employment with the second respondent. 19 Between 21 May and 25 May 2007, the third respondent telephoned on behalf of the Klen Group the following customers: Mundella Foods, Gage Road Brewery and Casa Dairy. Each of these customers had been customers with whom the third respondent had dealt whilst employed by the applicant. 20 Between 21 May and 29 May 2007, the third respondent again spoke to Carlos Mendes of Talloman and visited the Talloman site at the invitation of Mr Mendes for a meeting. 21 Before 11.40 am on 29 May 2007, the third respondent visited the Challenge Dairy site with Mr Rory McGuire, of the Klen Group. Later that day Mr Scott Nelson, a district sales manager in the water care division of the applicant also attended the Challenge Dairy site as part of a "regular relationship call". He met with Mr Michael Tiernan, Challenge Dairy's purchasing officer for the site, who said that Mr Nelson had just missed seeing the third respondent and Mr Rory McGuire who had been at the site for a meeting 10 minutes before Mr Nelson arrived. 22 Also on 29 May 2007, the applicant's solicitors wrote a letter of demand to the third respondent. The letter referred to s 183 of the Corporations Act 2001 (Cth) and to the third respondent's obligations to keep information of the applicant confidential and not, for his benefit, or for the benefit of any other person, to make use of, or to disclose the confidential information. The letter went onto refer to the requirement to comply with cl 6 of the employment contract with the applicant. During your employment you were provided with various documents including a list of the Food and Beverage Division's customers and target customers. You were also provided with documents recording confidential pricing and marketing information. Our client is concerned that you may have retained a copies [sic] of these documents or created other documents derived from those documents and failed to return those documents to Ecolab at the conclusion of your employment. Accordingly, we are instructed to demand that you immediately return all documents in your custody or control that record confidential information disclosed to you during your employment with Ecolab, whether those documents were created during or after your employment with Ecolab. 24 On the same day, the applicant's solicitors also sent a letter of demand addressed to Mr Peter McGuire of Klen International Pty Ltd, enclosing a copy of the letter to the third respondent. The letter asked that Mr McGuire on behalf of the first respondent, undertake not to use any confidential information of the applicant which was acquired by the third respondent during his employment; and not to induce the third respondent to solicit, or attempt to solicit business from any customer of the applicant with whom the third respondent had dealt during his employment with the applicant. 25 On 30 May 2007, the applicant engaged Ferrier Hodgson Forensics to examine the laptop computer which had been returned by the third respondent, and to report on their findings. The third respondent denied that he had misused, or disclosed to any party any confidential information and he refused to give the undertakings requested. He said that he did not have a copy of his employment contract and that at no time prior to his resignation was there any mention of any form of restraint which would prevent him from pursuing his livelihood. Mr McGuire denied having induced, assisted, or encouraged the third respondent to breach his employment contract, nor having received, requested or used any information from the third respondent that the applicant "may consider to be confidential". He refused to give the undertakings requested. Mr McGuire concluded by saying that the third respondent was "employed to service existing customers of our group and target the food and beverage market". 28 On 19 June 2007, a final report was received from Ferrier Hodgson Forensics which found that on 10 April 2007, the third respondent had copied from his laptop computer a large number of the applicant's documents onto CD-ROMs. 29 On 22 June 2007, the applicant commenced this proceeding. The application and accompanying affidavits were served on the third respondent. Among the affidavits served was an affidavit of Mr Nigel Carson of Ferrier Hodgson Forensics, which detailed the basis for its findings that the third respondent had copied a large number of the applicant's documents onto CD-ROMs on 10 April 2007. The application for interlocutory relief was first listed for hearing on 27 June 2007. On 27 June 2007, the third respondent filed an affidavit admitting that he had copied the applicant's documents onto two CD-ROMs. He went on to say that on receiving the letter of demand from the applicant's solicitors on 29 may 2007 he had destroyed the two CD-ROMs containing the files which he had copied. 30 At the hearing on 27 June 2007, the third respondent gave undertakings to the Court that he would not use or disclose the applicant's confidential information; nor solicit or assist in soliciting business from any customers of the applicant with whom he had dealt, during the period of his employment with the applicant. Until we get it sorted out please do not ask Craig for assistance where you might be chasing an Ecolab account. This is particularly relevant if it is an account that was serviced by Craig in the past. It is very important that we do not compromise Craig in this process. Once we get through this period things will be back to normal and we will continue to kick their arse all around the country --- JUST LIKE AT TATURA!!!!! The principles governing the grant or refusal of interlocutory injunctions have recently been confirmed in Australian Broadcasting Corporation v O'Neill [2006] HCA 46 ; (2006) 229 ALR 457 (" O'Neill "). These are the organising principles, to be applied having regard to the nature and circumstances of the case, under which issues of justice and convenience are addressed. We agree with the explanation of these organising principles in the reasons of Gummow and Hayne JJ, and their reiteration that the doctrine of the court established in Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1 ; (1968) 118 CLR 618 should be followed. At [71] their Honours emphasise that the governing consideration is that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought. Clause 5 is a negative stipulation which precludes the third respondent from using, or disclosing confidential information belonging to the applicant. In Dalgety Wine Estates Pty Ltd v Rizzon [1979] HCA 41 ; (1979) 141 CLR 552 at 573, Mason J observed that the statement of Lord Cairns LC in Doherty v Allman [1878] 3 App Cas 709 that a court of equity has no discretion to exercise when a party seeks an injunction to enforce a negative contractual stipulation, was inaccurate. Nevertheless, it is the case that, generally speaking, a court of equity will be inclined to grant an injunction to enforce negative stipulations to keep parties to their bargains ( Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 at 348-349). 35 Mr McKew has given evidence in support of the applicant's case that the items of information identified in paras 1(b) to 1(h) of the application, comprise confidential information. There was no challenge to that evidence, nor was it an issue before me. I accordingly find, that there is a serious issue to be tried, that the items of information in respect of which the injunction is sought, comprise confidential information within the meaning of cl 5 of the employment contract. 36 The applicant relies upon the following facts and matters in support of its contention that there is a serious issue to be tried that it will obtain injunctive relief at trial restraining a breach of cl 5 of the employment contract. 37 Firstly, after the third respondent had accepted a position with the Klen Group on 10 April 2007, he acted in deliberate breach of cl 5 of his contract of employment by secretly copying the confidential information of the applicant onto two CD-ROMs. 38 Secondly, when returning the laptop computer the third respondent signed a document confirming that he had returned all of the applicant's property, but did not disclose to the applicant that he had retained two CD-ROMs which contained copies of a substantial number of the applicant's confidential documents. 39 Thirdly, the third respondent disclosed to Mr Rory McGuire, the sales representative of the Klen Group with responsibility for the Challenge Dairy, items of information regarding potential improvements for the Challenge Dairy operations, which, on the unchallenged evidence of Mr Antonio Orlando, were part and parcel of the items for improvement identified by the audit undertaken by the applicant. 40 Fourthly, after receiving the letter from the applicant's solicitors on 29 May 2007, the third respondent responded falsely to the applicant's solicitors' letter of 29 May 2007, by saying that he returned all of the applicant's documentation that he had acquired during the period of his employment with the applicant. Further, the third respondent refused to give undertakings not to disclose, or use the applicant's confidential information. 41 Fifthly, the third respondent only admitted copying the applicant's confidential information when the evidence that he had done so, was overwhelming. Even now, the third respondent still opposes providing an undertaking not to use, nor disclose the applicant's confidential information. 42 Further, the evidence showed that the third respondent had been deployed by the first respondent, within a very short time of the commencement of his employment, in visiting the Challenge Dairy site and in assisting the salespersons assigned to servicing the Challenge Dairy. 43 All of these factors, said the applicant, supported the inference that, unless restrained, the third respondent would breach his employment contract by disclosing, or using the confidential information of the applicant. 44 The respondents submitted that the third respondent's copying of the applicant's information onto the CD-ROMS had to be assessed by reference to the explanation that he gave for doing so. Further, said the respondents, in assessing whether there was a serious issue to be tried, the threat of the third respondent breaching his contract of employment, must be assessed by reference to the position as it currently prevailed. In that regard, it was said that the evidence was that the third respondent had destroyed the two CD-ROMs and that it was not envisaged by the Klen Group, that the third respondent would participate in the activities relating to the tender in April 2008 for the Challenge Dairy work. The respondents also referred to the affidavits of each of the third respondent, Mr Peter McGuire and Mr Peisley, who each denied that the third respondent had passed any of the applicant's confidential information to any employee of the respondents. Accordingly, said the respondents, there was no evidence on which to conclude that there was a serious question to be tried that the applicant would obtain injunctive relief to restrain a threatened breach of contract by the third respondent. 45 The respondents also submitted that the position of the third respondent was not dissimilar to Mr Korchinski in the case of Australian Administration Services Pty Ltd v Korchinski [2007] FCA 12 ( Korchinski ). In that case Mr Korchinski, an employee, and the managing director of the applicant, had copied the applicant's confidential information onto a portable hard drive shortly before leaving the applicant's employment. The applicant requested Mr Korchinski to return the portable hard drive to them and he failed to do so by the date specified. Eventually when Mr Korchinski did return the portable hard drive, he had deleted all information that was on the portable hard drive and reformatted the portable hard drive. The applicant sought an injunction precluding Mr Korchinski from taking up employment with a competitor on the basis that he was still in possession of confidential information that had been deleted from the portable hard drive - because he had copied it onto another computer. The applicant was not able to produce any evidence to that effect. 46 Stone J declined to grant interlocutory relief on the basis that "in the absence of any evidence that Mr Korchinski retains some or all of the confidential information of the applicants, the applicants have not succeeded in presenting a prima face case in support of the relief they seek". 47 In my view, the submissions of the respondents are not to be accepted. 48 Firstly, I have serious doubts as to the weight that can be placed on the third respondent's explanation that he copied the applicant's files to assist him in dealing with any queries relating to his work during the period of his notice. On 19 April 2007, the applicant completed a form in which he declared that he had not retained any of the applicant's property, without making any disclosure of the fact that he had nine days earlier copied the information and that he retained the CD-ROMs. Further, he had a telephone conversation with Mr McKew of the applicant, after he had copied the confidential information, during which Mr McKew reminded him of his confidentiality obligations; but the third respondent did not mention the copying of the two CD-ROMs. On the face of it, the failure by the third respondent to disclose on these occasions the copying of the information, is inconsistent with an innocent copying of the confidential information. Further, the third respondent did not return the two CD-ROMs to the applicant at the end of his notice period on 3 May 2007. It was only after he had commenced employment with the Klen Group, and after he received the letter of demand, that he destroyed the two CD-ROMs. This was almost four weeks after the expiry of his notice period. 49 Secondly, this case is distinguishable from the Korchinski case. In that case, the applicants sought injunctive relief on the basis that the respondent had retained the documents, or information which he had copied on to the portable hard drive. In this case, the applicant accepted, at least for the purposes of the interlocutory hearing, that the third respondent had destroyed the two CD-ROMs and no longer retained the information in digital or physical form. However, the applicant contended that on the basis of the matters it referred to above, the applicant, in any event, would be entitled to injunctive relief at trial. 50 Thirdly, in my view, the matters relied upon by the applicant do comprise evidence demonstrating a serious issue to be tried, that the third respondent threatens, unless restrained, to breach his employment contract. The evidence demonstrates a serious issue to be tried that the third respondent has breached his employment contract by copying the applicant's confidential information, that he has made false or misleading statements in relation to that copying, and that he has disclosed confidential information regarding the audit of the Challenge Dairy operations. In addition, the third respondent refuses to continue his undertaking not to breach the provisions of his employment contract precluding him from using, or disclosing confidential information. These factors give rise to a serious question to be tried that the applicant will obtain injunctive relief at trial to restrain a threatened breach of cl 5 of his employment contract. 52 The applicant submitted that evidence of the threatened breach by the third respondent of cl 6 of his employment contract was to be found in the following facts and matters. 53 Firstly, within the first week or so of commencing employment with the Klen Group, the third respondent had approached a number of customers with whom he had dealt whilst in the applicant's employ. He had visited the Challenge Dairy site twice. He had attended the Talloman site and visited with Mr Carlos Mendes; and he had contacted by telephone Mundella Foods, Gage Roads Dairy and Casa Dairy. 54 It did not matter, said the applicant, that the third respondent attended the Talloman site at the invitation of Mr Mendes. There was authority, said the applicant, that even when a former employee visits a former customer at that customer's request for the purpose of obtaining business, the former employee is to be regarded as having solicited that customer ( Barrett v Ecco Personnel Pty Limited [1998] NSWSC 545). 55 Secondly, said the applicant, it is to be inferred that the reason that the third respondent contacted each of the customers referred to, was because it was the role of the third respondent to assist the Klen Group's sales representatives to obtain business from customers who were wholly or partly the customers of the applicant. There were two bases, said the applicant, upon which that inference is founded. Firstly, it is apparent from the tenor of the email of 29 June 2007 that it was the Klen Group's business strategy to make use of the services of the third respondent to win further business from existing customers of the applicant. Secondly, there was an incentive for the third respondent to win business for Klen Group because 20% of his salary was based upon commission. 56 Thirdly, said the applicant, the third respondent refused to give undertakings not to solicit or assist in soliciting customers of the applicant when requested to do so by the applicant's solicitor's letter of 29 May 2007; and the third respondent persisted in that refusal by opposing the application for injunctive relief. 57 The respondents submitted that the third respondent was employed as a technical representative and not a salesperson. The respondents also contended that the employment contract did not preclude the third respondent from "dealing with" his former customers. There was no evidence that the third respondent's dealings with the named customers amounted to "soliciting or assisting in the soliciting of business". 58 The respondents also said that the customers of the applicant, which had been approached by the third respondent, were also customers with whom the Klen Group had done business. 59 In my view, the matters referred to by the applicant in [52] to [56] above, comprise evidence demonstrating that there is a serious issue to be tried that the applicant is entitled to injunctive relief restraining the third respondent from breaching cl 6 of his employment agreement. It is open on the evidence to conclude that, notwithstanding that the third respondent's title was "technical representative", it was part of his function to assist the sales representatives to win further business for the Klen Group from the applicant's customers and shared customers. The role that the third respondent is intended to play in the business operations of the Klen Group emerges from the email which was sent to salespersons in the Klen Group on 29 June 2007. The clear inference from the email is that one of the third respondent's functions is to assist a sales representative in "chasing an Ecolab account" --- in other words, to assist in soliciting new business. It is also significant that the third respondent declines to continue his undertaking not to breach cl 6 of the employment agreement; and opposes the grant of the interlocutory injunction. 60 Accordingly, in my view, there is on the evidence, a serious question to be tried that the applicant will obtain at trial an injunction restraining the third respondent from soliciting, or attempting to solicit, or assisting in soliciting business from customers of the applicant in breach of cl 6 of his employment contract. 62 The respondents submitted that there was no evidence that the first and second respondents have, or ever have had in their possession any confidential information of the applicant; nor that the first and second respondents have sought to induce the third respondent to breach the terms of his employment contract; nor that there was a threat of that occurring. The respondents pointed to the evidence of Mr Peter McGuire to the effect that it was not contemplated that the third respondent would form any part of the team which would work on the 2008 Challenge Dairy tender. They also referred to the evidence denying that there had been any disclosure of confidential information to the first and second respondents by the third respondent. Further, the respondents referred to the evidence of Mr McGuire and Mr Peisley that the Klen Group had its own documents which dealt with the topics the subject of the applicant's claim, with the consequence that the information would be of no interest to them, and they would derive no benefit from a disclosure to them of the contents of the applicant's documents. 63 In my view, the respondents' submission should not be accepted. 64 Firstly, there is the evidence of the third respondent that he has already disclosed to Mr Rory McGuire, a salesperson responsible for the Challenge Dairy account, information in relation to storage and handling, which on the unchallenged evidence of Mr Orlando, was part of the improvements identified in the audit of Challenge Dairy's business conducted by the applicant. 65 Secondly, as previously mentioned, it is open to conclude from the tenor of Mr Peisley's email of 29 June 2007, that it is the Klen Group's strategy to use the third respondent to target and win business from customers of the applicant; and to increase their share of the business from joint customers. Such a conclusion is consistent with the fact that within the first week or so of his employment with them, the Klen Group chose to deploy the third respondent in making two visits to the Challenge Diary. 66 Thirdly, it is relevant in assessing the threat of the respondents inducing the third respondent to breach his employment agreement, that the first and second respondents have refused, and persist in their refusal, to give undertakings not to engage in that conduct. 67 In my view, there is sufficient evidence to support a finding that there is a serious question to be tried that the applicant would obtain an injunction at trial restraining the first and second respondents from inducing, or procuring the third respondent to breach his employment contract, and from using the applicant's confidential information disclosed to them by the third respondent. Insofar as it is a factor, it favours the applicant. 69 In my view, therefore, interlocutory injunctions should issue restraining the third respondent from breaching cll 5 and 6 of his employment contract and the first and second respondents from inducing him to do so; and from using the applicant's confidential information disclosed to them by the third respondent. 70 In light of these conclusions, it is unnecessary to consider the applicant's contentions insofar as they were based on s 183 of the Corporations Act 2001 (Cth). I will hear the parties on the precise terms of the injunctions. I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. | interim injunction employment contract copying of confidential information onto cd-roms by employee employee resigning to join competitor injunction to restrain disclosure of confidential information and solicitation of former customers whether evidence supports serious question to be tried injunction granted practice and procedure |
The application is not based on any contention that there is a danger that WVL will misuse confidential information belonging to the first, second or third respondents or upon any contention that WVL previously acted as their solicitor. The application is founded on the Court's inherent jurisdiction to control the conduct of its own officers so as to ensure the due administration of justice and the integrity of the judicial process. 2 These proceedings, and the present application for injunctive relief, arise out of the breakdown of a joint venture relationship that previously existed between the second applicant, Landmark School Supplies Pty Ltd ('Landmark') and the fourth respondent, Gee Dee Investments Pty Ltd ('GDI'). GDI is the trustee of the Dean family trust. The joint venture business was previously conducted through GSS. Landmark and GDI agreed to establish a new company and trading trust which would be owned 50 per cent by the Dean family trust and 50 per cent by Landmark. The joint venture business involved the sale and distribution of text books and stationery, principally to schools, students and parents of students, in the Geelong region. Pursuant to the joint venture agreement, new products were supplied and sold by Landmark to GSS for on sale to GSS' customers. GSS also acquired and resold second hand text books in the Geelong region. 4 GSS has two issued shares and a paid up capital of $2. One share is held by Russell Porch, a director of Landmark, in trust for Landmark. The other share is held by Geoffrey Dean on trust for GDI. At all relevant times GSS has had four directors: Russell Porch and Sandra Porch ('the Porchs') are the directors appointed to represent Landmark; and Geoffrey Dean and Maria Dean ('the Deans') are the directors appointed to represent the Dean family trust. 5 GSS is the trustee of a unit trust known as the Geelong School Supplies Unit Trust ('the GSS Unit Trust') which was established by a trust deed entered into on 19 November 1992. There are only two issued units in the GSS Unit Trust. One unit is held by Landmark; and the other unit is held by GDI in its capacity as trustee of the Dean family trust. 6 GSS carried on business as a seller and distributor of educational products in the Geelong area from about 23 September 1992 until about 1 June 2005. The business was managed by Geoffrey Dean. It appears that in 2004 various disputes arose between the joint venture partners. On 28 October 2004, Landmark, the Porchs, GDI and the Deans participated in a voluntary mediation with a view to resolving their differences. The mediation resulted in a settlement agreement under which the parties agreed that the joint venture business would be terminated by 1 June 2005 and GSS would be wound up as soon as practicable after that date. The terms of settlement are set out in a handwritten document entitled 'Heads of Agreement'. 7 The joint venture business has come to an end and the joint venturers have gone their separate ways. The evidence contains a set of financial statements for GSS and the GSS Unit Trust for the 12 months ended 30 June 2006 which were prepared at the instigation of Landmark. Not surprisingly for a bare trustee company, the accounts show that GSS has total equity of $2. The profit and loss statement for the GSS Unit Trust shows that it made a net loss after trading and the sale of its assets of $6005 for the year ended 30 June 2006. There were no distributions to beneficiaries in the year ended 30 June 2006. The balance sheet shows that the trust has a net deficiency in assets of $6004. In the previous year, the trust made a net loss of $346 350. The accounts therefore show that GSS has no funds of its own to finance its participation in this litigation. 8 The statement of claim indicates that the proceedings arise from events that occurred after Landmark, the Porchs, GDI and the Deans agreed to terminate the joint venture business in October 2004 and during the course of winding up the business. The statement of claim alleges that the Deans breached duties which they owed to GSS as directors by, inter alia, providing confidential information pertaining to the operation of GSS' business to the fifth respondent, Hedley Educational Book Centre Pty Ltd ('Hedley'), and by assisting Hedley to obtain the business of former clients of GSS. The statement of claim also alleges that the Deans owed a fiduciary duty to Landmark as one of the two unit holders in the GSS Unit Trust. It is alleged that the Deans breached this fiduciary duty by the same course of conduct. The applicants seek an account of profits, alternatively damages, from the Deans. It appears that by about March 2006 Vogrig had become a partner of WVL whose offices were located in Drouin, Victoria. Since at least 1 August 2005, Vogrig has acted as solicitor for Landmark and its two directors, the Porchs, in relation to disputes between them and the Deans, including the disputes which are the subject of these proceedings. 10 By a letter dated 1 August 2005, which bears Vogrig's reference, OHD advised the solicitors acting for the Deans, Harwood Andrews Lawyers ('HAL'), that they had received instructions to act on behalf of the Porchs in their capacity as members of GSS. The letter alleged that Geoffrey Dean had improperly used his position as a director of GSS to gain an advantage for himself and in the process had caused a detriment to GSS. The letter threatened that proceedings would be commenced against Mr Dean in the Supreme Court of Victoria based on alleged breaches of director's duties. 11 I infer from other correspondence which is in evidence that OHD wrote a second letter dated 1 August 2005 on behalf of GSS that was in substantially similar terms and made the same allegations against Mr Dean. This letter was not exhibited to Mr Anderson's affidavit of 29 September 2006. In its response dated 15 August 2005, HAL referred to two letters dated 1 August 2005 from OHD: one written purportedly on behalf of GSS and the other on behalf of the Porchs. In their letter, HAL denied the allegations against their client. In addition, they informed OHD that it did not have authority to act on behalf of GSS. It stated that the Deans were not consulted by their fellow directors of GSS in relation to any appointment of OHD and that, in any event, OHD had a clear conflict of interest in acting on behalf of GSS when it had previously acted, and still acted, on behalf of the Landmark interests. 12 Counsel for the first to fourth respondents ('the Dean interests') submitted that Vogrig and OHD had also acted for the Landmark interests at the voluntary mediation on 28 October 2004. There is, however, nothing in the affidavit material to support that submission. So far as the evidence before me goes, there is no evidence, one way or the other, as to whether OHD or Vogrig acted for the Landmark interests at the time of the voluntary mediation in October 2004. However, nothing turns on this as it is clear that Vogrig and OHD were acting for the Landmark interests and the Porchs from at least 1 August 2005. 13 The fact that OHD was purporting to act for GSS in August 2005 is confirmed by its letter of 9 August 2005. In this letter, it advised HAL that unless Mr Dean immediately takes certain steps the only option the company and its directors will have is to issue the proposed proceedings. OHD also sent a letter dated 8 September 2005 to Walter L Carr & Sons Pty Ltd, a firm which conducted a clearing sale of GSS' plant and equipment, which explicitly stated that OHD acted for GSS. In its letter of 9 September 2005 to OHD, HAL referred to this letter and again pointed out that OHD had no authority to act for GSS. The letter added that OHD appeared to be purporting to act for GSS on instructions from Mr Porch without any authority from the Deans. 14 By letter dated 30 September 2005, OHD responded to HAL. The letter bears Vogrig's reference. Throughout October 2005, HAL continued to complain to OHD that OHD had purported to act on behalf of GSS when it had no proper authority to do so. The next development occurred on 7 June 2006 when WVL wrote to HAL enclosing a notice of a meeting of directors of GSS. The notice stated that the meeting would be held at 9.30am on 16 June 2006 at Warragul and stipulated that the business of the meeting would be '[t]o consider a resolution that the Directors approve the company commencing legal proceedings in the Federal Court of Australia forthwith, in the form of the attached Statement of Claim and Application'. The notice of meeting was signed by Russell Porch in his capacity as a director of GSS. The attached statement of claim was in substantially the same form as the statement of claim filed in these proceedings. Although the notice of meeting was forwarded on 7 June 2006, the attached draft statement of claim was dated March 2006. 16 By letter dated 14 June 2006, HAL responded to WVL on behalf of the Deans. They advised that the appointed time for the meeting of Friday 16 June 2006 at Warragul did not give the Deans sufficient time to arrange their attendance, especially as Mr Dean was interstate and would not be returning before approximately 20 July 2006. They requested that the meeting be adjourned until 20 July 2006 or soon after. The letter also noted that the statement of claim attached to the notice of meeting was dated early March and had clearly been under consideration for some time and the Deans needed time to consider it. 17 On 15 June 2006, WVL wrote to HAL rejecting the request to adjourn the meeting. Their letter asserted that the fact that the institution of proceedings against the Dean interests had been under consideration by Landmark for some time was irrelevant. 18 HAL immediately responded by letter dated 15 June 2006. They objected that the Deans were entitled to reasonable notice of the meeting and the proposed meeting allowed inadequate time for them to attend. HAL also drew attention to the fact that the Heads of Agreement had provided that GSS would be wound up as soon as practicable after 1 June 2005. They said that the Deans had been pressing for the appointment of a liquidator but this had been resisted by the Landmark interests. HAL concluded by saying that, in the event the meeting proceeds, they anticipated receiving instructions to apply to the Court for an order restraining any party from acting on any purported resolution of GSS to the extent that it enables GSS to institute the foreshadowed proceedings, and for a further order that GSS be wound up. 19 On 19 June 2006, WVL forwarded a notice pursuant to s 237(2) of the Corporations Act 2001 to HAL. The notice was directed to the Deans and was signed by the Porchs. The notice said that the Porchs intended to apply to the Federal Court for leave to issue proceedings on behalf of GSS in the form tabled at the directors' meeting conducted on Friday 16 June 2006. The letter forwarded minutes of the meeting recording that the resolution was put to a vote and carried unanimously by the two directors in attendance. 21 The contradictory nature of WVL's letters of 19 and 26 June raises questions as to what actually transpired at the meeting and why the earlier notice under s 237(2) of 19 June 2006 was signed by the Porchs and forwarded to HAL. 22 By letter dated 28 June 2006, HAL wrote to WVL and drew attention to the conflicting explanations given in the letters of 19 June and 26 June. The letter also objected that WVL faced a position of inherent conflict in acting for the Landmark interests and GSS as the dispute was in substance one between the Deans and the Porchs. The letter concluded with a statement that HAL anticipated being instructed to make application to the Court to stay the proceeding pending an application to wind up GSS in accordance with the mediation agreement. 23 Despite the position adopted in its various letters, the Deans have not made any application, as yet, to restrain GSS acting on the resolution of 16 June 2006. Nor have they made any application to the Court to stay the proceedings pending an application to wind up GSS in accordance with the mediation agreement. Instead, the Deans have filed the present motion. These three grounds represented the orthodox legal position in Australia prior to the decision of the House of Lords in Prince Jefri Bolkiah v KPMG (a firm) [1998] UKHL 52 ; [1999] 2 AC 222 ( 'Bolkiah' ) which held that the duty of loyalty did not survive the termination of the relationship with the client. Brooking JA's analysis in Spincode has been consistently followed and applied in Victoria: see Sent v John Fairfax Publication Pty Ltd [2002] VSC 429 ; Pinnacle Living Pty Ltd v Elusive Image Pty Ltd [2006] VSC 202 ; and Adam 12 Holdings Pty Ltd v Eat & Drink Holdings Pty Ltd [2006] VSC 152. But it has not been followed in New South Wales. 25 In Belan v Casey [2002] NSWSC 58 ( 'Belan' ) at [15]-[21], Young CJ in Eq held that since the House of Lords decision in Bolkiah the overwhelming weight of authority establishes that the jurisdiction of the court to intervene at the suit of a former client to restrain a solicitor from acting is founded solely on the real risk of disclosure of confidential information, and is not connected with some principle of conflict of interest. The decision in Belan has been followed and applied in New South Wales: British American Tobacco Australia Services Ltd v Blanch [2004] NSWSC 70 (Young CJ in Eq) at [97]-[104]; Asia Pacific Telecommunications Ltd v Optus Networks Pty Ltd [2005] NSWSC 550 (Bergin J) at [51]-[55]. 26 Although the Supreme Court of New South Wales has declined to follow Spincode , insofar as Brooking JA held that the equitable obligation of loyalty owed by a solicitor to his or her client survives the termination of the retainer, the decisions in New South Wales do not cast any doubt upon the court's inherent power to restrain solicitors from acting in a particular case having regard to the interests of the administration of justice. Similarly, the court's inherent supervisory jurisdiction over solicitors and counsel was not relevant to the House of Lords decision in Bolkiah . 27 For the purposes of this case, the controversy concerning the duty of loyalty, and whether it extends beyond termination of the retainer, can be put to one side. Counsel for the Dean interests does not contend that his clients were formerly clients of Vogrig or WVL. No question arises of confidential information or its potential misuse. As I have already mentioned, the sole ground for injunctive relief is the third ground identified in Spincode , namely the inherent power of the court to restrain its officers from acting for a particular client in litigation when such a restraint is required by the interests of justice. There is, accordingly, no need for me to consider whether the weight of authority in the Federal Court supports the Victorian approach rather than that adopted in New South Wales: see Wan v McDonald (1992) 33 FCR 491 at 512-513; PhotoCure ASA v Queen's University at Kingston (2002) 56 IPR 86 ( 'PhotoCure' ); Waiviata Pty Ltd v New Millennium Publications Pty Ltd [2002] FCA 98 at [10] ; Bureau Interprofessionnel Des Vins De Bourgogne v Red Earth Nominees Pty Ltd (t/as Taltarni Vineyards) [2002] FCA 588 at [18] ; and Lincoln v Holmesglen Institute of TAFE [1999] FCA 601 ( 'Lincoln' ). The objective test to be applied in the context of this case is whether a fair-minded reasonably informed member of the public would conclude that the proper administration of justice required that counsel be so prevented from acting, at all times giving due weight to the public interest that a litigant should not be deprived of his or her choice of counsel without good cause. There was no question of the plaintiff being a client or former client of the senior counsel. In what Mandie J described as unique, extraordinary and highly exceptional circumstances, he made an order restraining senior counsel from acting in the civil proceedings. He did so on the basis that there was a real and sensible risk of a lack of objectivity by the first defendant which not only gave rise to an undue risk of unfairness or disadvantage to the plaintiff but also gave rise to a substantial concern that a fair trial would not be had: at 455. Landmark relied on Goldberg J's judgment in PhotoCure and the New South Wales decisions to which I have referred. This argument is misconceived. It is based on the false premise that the authorities that have rejected Brooking JA's view that a solicitor's duty of loyalty survives termination of the solicitor's retainer also rejected the third ground for judicial intervention. This is not the case. A long line of authorities makes it very clear that the third ground for judicial intervention remains in full force and effect, both in New South Wales and elsewhere in Australia. 30 In Kallinicos v Hunt [2005] NSWSC 1181 ; (2005) 64 NSWLR 561 ( 'Kallinicos' ), Brereton J undertook a comprehensive examination of the authorities concerning the court's supervisory jurisdiction over solicitors. His Honour concluded that there are many authorities which maintain the same view of the court's supervisory jurisdiction as that which had been expressed in the cases prior to Bolkiah : see eg McVeigh v Linen House Pty Ltd [1999] VSCA 138 ; [1999] 3 VR 394, Oceanic Life Ltd v HIH Casualty & General Insurance Ltd (1999) 10 ANZ Ins Cas 61-438; Newman v Phillips Fox (a firm) (1999) 21 WAR 309; Bowen v Stott [2004] WASC 94 (Hasluck J) ( 'Bowen v Stott' ); see also Westgold Resources NL v St Barbara Mines Ltd [2002] WASC 264. 31 In the course of his examination of the authorities, Brereton J referred to the observations of Bergin J in Mitchell v Pattern Holdings Pty Ltd [2000] NSWSC 1015 ( 'Mitchell' ), Heenan J in Holborow v MacDonald Rudder [2002] WASC 265 ( 'Holborow' ) and Hasluck J in Bowen v Stott . In Mitchell , Bergin J stated that, as an incident of its inherent jurisdiction, the court may decide upon the propriety of a legal practitioner representing a party in a particular case to ensure justice and the appearance of justice: at [34]. In Holborow , Heenan J said that this power had been invoked in cases where there was a potential that the legal practitioner might be a witness; where the subject matter of the litigation was likely to involve an evaluation of the conduct of the solicitor; and where the efficacy of documents prepared by the solicitor was likely to be in issue: at [23]. In Bowen v Stott , Hasluck J said that it may be appropriate to invoke the inherent power in cases where the solicitor had some direct pecuniary interest in the outcome of the case, where the solicitor might feel impelled to justify or defend his conduct in representing a client, or where the practitioner's credibility is at stake as a potential witness: at [47], [53] and [55]. Prince Jefri Bolkiah does not address this jurisdiction at all. Belan v Casey and British American Tobacco Australia Services Ltd are not to be read as supposing that Prince Jefri Bolkiah excludes it. Asia Pacific Telecommunications Ltd appears to acknowledge its continued existence. The instances in which courts have prevented chosen counsel or solicitors from acting have involved misconduct, potential use of confidential information and a real risk of lack of objectivity and of conflict of interest and duty: Grimwade v Meagher . The present case is only another example of situations in which the "integrity of the judicial process", the "interests of justice", and the "need to preserve confidence in the judicial system", to use some of the notions that lie behind the inherent jurisdiction to exclude counsel or solicitors, may override the public interest that a litigant be able to be represented by the lawyer of its choice. That public interest is "an important value": Black v Taylor at 408. His Honour did not doubt that this Court has inherent jurisdiction in an appropriate case to prevent practitioners appearing for a particular party in order that justice should not only be done but should be seen to be done. This is not surprising because there is no conflict between the two decisions. PhotoCure concerned an application by a former client based primarily on the risk of misuse of confidential information. His Honour's discussion of Bolkiah , Belan v Casey and Spincode was directed to the question whether a former client was confined to the ground of misuse of confidential information, or whether the client could also rely upon the ground of breach of a duty of loyalty as suggested by Brooking JA in Spincode . Goldberg J did not express any concluded views concerning the Court's supervisory jurisdiction. In my opinion, nothing in PhotoCure should be read as foreclosing this Court's power to exercise inherent jurisdiction over the conduct of solicitors and counsel in litigation in this Court. In answering this question it must be borne in mind that this is an application for a permanent injunction: Yunghanns v Elfic Ltd (unreported, Supreme Court of Victoria, Gillard J, 3 July 1998). It must also be borne in mind that the Court's jurisdiction is an exceptional one; it is to be exercised with appropriate caution and due weight must be given to the public interest in a litigant not being deprived of the solicitor of its choice without due cause. The dispute erupted in about August 2005 as the business operations of the joint venture were being wound down. Under the Heads of Agreement, it was agreed that the jointly owned land would be sold and that GSS would be wound up. But there was no express agreement between the joint venturers about what would happen once GSS ceased to operate concerning GSS' business records or its former clients. The nub of the dispute concerns what happened to these records and clients. 37 At that time that GSS' business was being shut down, Vogrig personally acted for Landmark and the Porchs. He also purported to act for GSS when he must have known that he had no proper authority from the board of directors of GSS to do so. When HAL protested on behalf of the Deans that he had no authority to act for GSS, he gave the disingenuous response that his then firm had never received instructions to act for GSS in any capacity. That proposition is denied by the correspondence which is in evidence in these proceedings. 38 I infer from the evidence that in about March 2006, Vogrig instructed counsel to draw a statement of claim on behalf of GSS and Landmark. He gave those instructions at a point of time when he must have known that he had no authority to act for GSS. Of course, it may be that instructions were given to him by Landmark or the Porchs that asked him to assume that instructions would also be forthcoming from GSS. 39 By June 2006, Vogrig had joined the firm of WVL. I infer that Vogrig advised the Porchs in relation to the meeting of the board of directors of GSS that was notified for 16 June 2006. WVL forwarded the notice of meeting which allowed only one week's notice for the convening of the meeting. He rejected, or on his advice the Porchs rejected, the Deans' request for an adjournment of the meeting until 20 July 2006 or a mutually convenient date thereafter. The articles of GSS do not prescribe any time for the convening of directors' meetings. In such a case, the law requires that the period of notice for the convening of the meeting be fair and reasonable: Re Homer District Consolidated Gold Mines; Ex parte Smith (1888) 39 Ch D 546; Toole v Flexihire Pty Ltd (1991) 6 ACSR 455 at 461 ( 'Toole' ); Bell v Burton (1993) 12 ACSR 325 at 329. In deciding what is fair and reasonable, the nature of the company and its practices are important factors. So too is the nature of the business to be transacted at the meeting: Toole at 461. Proper notice is a prerequisite of a validly constituted meeting: Barren v Potter [1914] 1 Ch 895. 40 On the limited evidence before me, there is a serious question as to the validity of the meeting and the resolution passed at it. The proposed resolution involved a grave matter and required consideration of a detailed set of allegations in the draft statement of claim. The correspondence does not disclose any compelling reason why the request for an adjournment until 20 July was not acceded to or any difficulties that would arise for the Porchs if the meeting were to be adjourned as requested. In their letter of 15 June 2006, HAL drew the relevant legal requirements to the attention of WVL, pointing out that reasonable notice must be given of any directors' meeting, and that what is reasonable must be determined in the light of the company's particular structure, practice and affairs (citing Petsch v Kennedy [1971] 1 NSWLR 494). 41 The letter from HAL to WVL of 15 June 2006 foreshadowed that an application may be made to the Court for an order restraining any party from acting on any purported resolution of GSS passed at the meeting of 16 June 2006. No such application has been made. At this stage, the Deans' defence in these proceedings does not contain any allegation that the resolution that purported to authorise the institution of these proceedings by GSS was invalid. There is no counterclaim to that effect by the Deans. However, counsel for the Deans foreshadowed that the claim would be raised in these proceedings. He also said that his clients proposed to take separate proceedings to apply for a winding up order against GSS. 42 In these circumstances, the question arises whether I should assume that the proceedings will be extended to include allegations that the meeting and resolution were invalid, as foreshadowed by counsel for the Deans. In Bowen v Stott , Hasluck J confronted a similar situation. In that case, the proposed amendment raised issues concerning the alleged settlement of earlier proceedings. Hasluck J said that if the pleadings were amended as proposed and the matter proceeded to trial, there would be an evidentiary issue as to whether a settlement was effected, and on that issue it was likely that evidence would be required from the solicitor and counsel involved in the negotiations. In his Honour's view, it would be almost inevitable that they would be challenged about the relevant events. In these circumstances, Hasluck J proceeded on the basis that the pleadings would be amended as proposed, and granted an injunction restraining the relevant counsel and solicitors from acting in the matter. The position in Kallinicos was not dissimilar. The application for an injunction was made at an early stage of the proceedings before a defence had been filed. The evidence before Brereton J indicated, nonetheless, that the solicitor was likely to be a material witness on issues of substance which appeared to be controversial: at 584 [84]. Brereton J took these matters into account in granting the injunction. 43 As to what transpired on 16 June 2006, the evidence shows that on 19 June 2006 the Porchs signed a notice of intention to apply to the Federal Court of Australia for leave to issue proceedings under s 237(2) of the Corporations Act as the directors failed to reach agreement on the resolution put to the meeting of directors on 16 June 2006. This notice was forwarded to HAL by WVL on 19 June 2006. Having regard to the contents of the notice, I infer that it was prepared by, or on the advice of, WVL. One week later, WVL advised HAL that the meeting of directors had proceeded on 16 June 2006 and that the two directors present, the Porchs, had unanimously passed a resolution that GSS commence proceedings in the Federal Court. 44 In the event that the Deans file a counterclaim as foreshadowed, the events that transpired on 16 June 2006 will be put directly in issue. Likely evidentiary issues include the following: did the directors fail to agree and did the two directors decide to make a leave application to the Federal Court as suggested by the notice of 19 June 2006; or did the directors pass a resolution as described in WVL's letter of 26 June 2006? If these matters are put in issue, Vogrig will almost certainly be a material witness. 45 The application for injunctive relief also raises more general issues. Having acted for the Porchs and the Landmark interests throughout the dispute since about August 2005, I am satisfied that a fair-minded, reasonably informed member of the public would conclude that Vogrig, and his firm WVL, are not in a position to give objective and dispassionate advice to GSS in the interests of both its unit holders in relation to the conduct of these proceedings. This affords a sufficient basis for the grant of injunctive relief. In addition, I have had regard to the submissions made to me by counsel for the Dean interests as to the foreshadowed challenge to the validity of the 16 June 2006 meeting and resolution in these proceedings. If this challenge proceeds as foreshadowed, Vogrig's position is further compromised by the fact that he is likely to be a material witness in relation to foreshadowed counterclaim challenging the validity of the resolution of 16 June 2006. 46 The position of Vogrig and WVL is rendered more difficult by GSS' deadlocked board of directors and the insolvency of the GSS Unit Trust. GSS has four directors, the Deans and the Porchs. The board is effectively deadlocked. As GSS does not have a functioning board of directors, WVL cannot obtain properly authorised instructions as to the conduct of these proceedings on behalf of GSS. Counsel for the Dean interests illustrated the point by asking what would be the position if a settlement proposal were to be put to GSS. From whom would WVL take instructions? Counsel for Landmark submitted that WVL can properly take instructions from the Porchs as to the ongoing conduct of the proceedings and any settlement thereof. However, two directors do not have authority to give instructions of that kind against the wishes and without the approval of the other two directors. Past history suggests that WVL would take their instructions from the Porchs, just as counsel for Landmark submitted. But that would be to act improperly and in a manner that is not consistent with the due administration of justice in this Court. 47 There is also the question of how GSS is funding its participation in this action. Neither GSS nor the GSS Unit Trust has any funds. I have no evidence before me on the issue, but one possibility is that it is being funded by Landmark. The board resolution of 16 June 2006, assuming it to be valid, did not authorise GSS to borrow any funds to finance its share of the costs of the proceedings. 48 It is also material that, by participating in this proceeding, GSS is not only exposing itself to the costs incurred by its own solicitors, which it cannot meet out of its own funds, but if the action fails it also has potential costs exposure to the respondents (including the fifth, sixth and seventh respondents who have no interest in GSS). Costs liabilities of these kinds would ultimately fall on the unit holders of the trust, in circumstances where two directors did not approve the institution and prosecution of the proceedings. 49 These difficulties stem from the deadlocked position of GSS and the insolvent position of the unit trust. The difficulties would be ameliorated, at least to some extent, if a liquidator were to be appointed to GSS, as the parties intended at the time of the Heads of Agreement. This course was foreshadowed in the course of correspondence between the solicitors for Landmark and the Deans. As matters stand, the Deans and GDI have not as yet made any application to wind up GSS, whether on the just and equitable ground or otherwise, but propose to do so. 50 The present application to restrain WVL from acting for GSS will not resolve the unsatisfactory position of GSS. If WVL is restrained from acting for GSS, GSS may not be in a position to retain new solicitors. If a liquidator is appointed to GSS, the liquidator would be able to consider, independently and objectively, whether the proceedings should continue. If the liquidator is so minded, he or she would then have to secure appropriate arrangements to fund the action. 51 The inherent jurisdiction of this Court is discretionary. Appropriate weight must be given to the exceptional nature of the jurisdiction and to the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause. I have also taken into account Brereton J's reminder in Kallinicos that the cost, inconvenience or impracticality of requiring lawyers to cease to act may provide a reason for refusing to grant relief. Here, the consideration that I must bear in mind is that if WVL is restrained from acting for GSS, it may not be able to obtain replacement lawyers because of its deadlocked and insolvent position. That circumstance may, of course, hasten an application for the winding up of GSS. Bearing these factors in mind, I have nonetheless concluded that this is an exceptional case that warrants intervention. 52 On the whole, I am satisfied that a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires that WVL be restrained from acting for GSS. In view of Vogrig and WVL's past conduct and their retainer to act for Landmark and the Porchs, there is a fundamental difficulty in WVL continuing to act for GSS against the Dean interests, when GSS represents the beneficial interests of both Landmark and the Dean interests. These matters warrant the grant of injunctive relief even if no account is taken of WVL's position in relation to the meeting and resolution of 16 June 2006. 53 Accordingly, the order of the Court will be that WVL be restrained from acting as solicitor for the first applicant in these proceedings. | application to restrain solicitor from acting for party to the proceedings relevant legal principles inherent jurisdiction of the court to restrain solicitor from acting if it is in the interests of justice whether fair-minded, reasonably informed member of the public would conclude that proper administration of justice requires that solicitor be restrained where solicitor acting for joint venture company and interests of certain directors where proceedings involve disputes between various interest-holders in joint venture legal practitioners |
Upon consideration of the factors set out in s 32AB (6) of the Federal Court of Australia Act 1976 (Cth) (the Act) and O 82 r 7 of the Federal Court Rules , I deem that it is an appropriate matter to be transferred, assuming that there is jurisdiction to do so. I also need to take into account the opposition of the applicant, which has been put very forcefully, if I may say so, this afternoon. 2 First of all, there would have been a good deal to be said for the applicant's submissions prior to the enactment of s 32AB of the Act which now, it seems to me, makes quite clear that there is first of all, jurisdiction to transfer the proceeding, and secondly, if it is transferred, then the Federal Magistrates Court has the same jurisdiction as does this Court to resolve the matter. 3 It seems to me that an application of this kind under the Administrative Decisions (Judicial Review) Act 1977 (Cth), and any pendant jurisdiction which will be involved in it, is appropriate to be heard by the Federal Magistrates Court. It has been put that the Federal Magistrates Court is an inferior court and that, even if it has jurisdiction, it is best exercised by the Federal Court as a superior court. Federal Magistrates are Federal judicial officers governed by Ch III of the Constitution although, in a sense, judges of an inferior court. Both the qualifications for appointment and the characteristics of those individuals who have been appointed, fit them to undertake jurisdiction which might not previously have been thought appropriate. Even though I must pay regard to the opposition of the applicant, in one sense the applicant may be gaining another level of appeal to this Court. 4 Taking all those things into account, I propose to transfer the proceedings to the Federal Magistrates Court. I can indicate that my associate has been in touch with the Registry. The matter will be called on before Smith FM who, I may say, has well recognised qualifications in Administrative law, on Friday 10 November next at 9.30 am at the John Maddison Tower. The costs to date are costs in the cause. I should indicate that the solicitor for the respondents has indicated a problem with parties, which needs to be resolved. It seems to me that that, and other procedural aspects, should be dealt with by the learned Federal Magistrate when the matter comes on before him. | transfer of proceedings to federal magistrates court power of court to transfer proceedings on own motion under s 32ab of the federal court of australia act 1976 (cth) (the act) jurisdiction of federal magistrates court to hear transferred matter brought under the administrative decisions (judicial review) act 1977 (cth) practice and procedure |
The application before the Federal Magistrates Court was dismissed on the ground that the appellant as applicant failed to appear at the hearing of the proceeding set down for determination on 19 June 2008. The application was dismissed under rule 13.03A(c) of the Federal Magistrates Court Rules which confers a power on the Federal Magistrates Court to dismiss a proceeding if the applicant fails to appear. The decision to dismiss the proceeding did not involve any consideration of the merits of the principal application. The proceeding was dismissed consequent upon an application at the hearing to exercise the discretion conferred by rule 13.03A(c) to dismiss the application for a procedural reason although, of course, a failure to appear is properly regarded as a fundamental procedural failure. An application was then made by the appellant to set aside the orders of 19 June 2008 on the footing that the applicant had suffered an injury to his right patella in April 2008 and had been unfit for work until 2 May 2008 and by reason of stress and injury, had forgotten that the application was listed for hearing on 19 June 2008; that the application arguably had merits; and, that the applicant would be prejudiced if the dismissal order was not set aside. Federal Magistrate Cameron found that the explanation for the failure to appear was unconvincing especially since the appellant contended that he held a well-founded fear of being killed should he return to his country of origin, Bangladesh. Therefore, the prosecution of the application to demonstrate jurisdictional error on the part of the Tribunal was presumably a matter of very great moment to the appellant. Federal Magistrate Cameron also concluded that notwithstanding the question of whether the appellant's failure to attend the hearing of the application was satisfactorily explained, an analysis of the grounds of challenge to the Tribunal's decision set out in the appellant's amended application before the Federal Magistrates Court (treated by FM Cameron as the relevant document rather than the initial application) and outline of submissions both dated 31 May 2008, demonstrated that the appellant's contentions as to jurisdictional error on the part of the Tribunal did not give rise to an arguable case of jurisdictional error. Federal Magistrate Cameron concluded therefore that the discretion ought to be exercised against setting aside the dismissal order. Although FM Cameron embarked upon a consideration of whether the amended grounds and supporting submissions raised an arguable ground of error in the exercise of the Tribunal's statutory jurisdiction, the Federal Magistrates Court did not determine the merits of the principal application filed on 19 November 2007 in any dispositive or final sense. There was no final adjudication of the merits. The decision to refuse to set aside the dismissal order was an interlocutory decision of the Federal Magistrates Court: Bienstein v Bienstein (2003) 195 ALR 225 at 230 per McHugh, Kirby and Callinan JJ; Thomas Borthwick & Sons (Pacific Holdings) Ltd v Trade Practices Commission (1988) 18 FCR 424 per Bowen CJ, Lockhart and Sheppard JJ; Re Luck (2003) 203 ALR 1. Therefore, leave is required in order to appeal from the decision of the Federal Magistrates Court to refuse to set aside the dismissal order: s 24(1A) Federal Court of Australia Act 1976 . Accordingly, I propose to treat the notice of appeal filed by the appellant on 5 August 2008 as an application for leave to appeal and I will henceforth describe the appellant in these reasons as the applicant. The principles governing granting or withholding leave to appeal are well known: Décor Corporation Pty Ltd and Anor v Dart Industries Inc (1991) 104 ALR 621 at 622 per Sheppard, Burchett and Heerey JJ; MZXPW v Minister for Immigration and Citizenship [2008] FCA 689 per Tracey J; MZXPF v Minister for Immigration and Citizenship [2007] FCA 1765 per Spender J; SZDWE v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1498 per Jacobson J at [4] and [5]. There are two questions. First, whether in all the circumstances the decision is attended with sufficient doubt to warrant its being reconsidered by the Full Court. Second, whether substantial injustice would be done if leave were refused supposing the decision to be wrong. In the present case, the question is whether the exercise of the discretion by the Federal Magistrates Court conferred by rule 16.05(2)(a) of the Federal Magistrates Court Rules to set aside (or not) orders made in the absence of a party, miscarried. The exercise of the discretion was informed by three considerations: whether the absence of the applicant from the hearing was satisfactorily explained; whether arguable grounds of jurisdictional error were demonstrated; and whether any prejudice might arise to the respondent in setting aside the dismissal order. The final question did not arise in the opinion of FM Cameron having regard to his findings in relation to the first two questions which were that the failure to appear was not satisfactorily explained and arguable grounds of jurisdictional error were not demonstrated. The applicant is a male citizen of Bangladesh who arrived in Australia on 23 June 2004. The applicant applied for a protection visa (class XA) on 2 August 2004. The application was refused by a delegate of the Minister on 29 November 2004. The appellant applied to the Tribunal for review of that decision on 22 December 2004. The Tribunal published on 31 May 2005 its decision affirming the decision of the delegate to refuse the grant of a protection visa to the applicant. By consent orders of the Federal Magistrates Court made on 12 October 2006, the decision of the Tribunal was quashed. The application for review of the delegate's decision was remitted to the Tribunal for further consideration and determination according to law. On 15 March 2007, the Tribunal published its decision affirming the decision under review. The Tribunal's decision was quashed by orders of the Federal Magistrates Court by consent on 6 August 2007 and the application was remitted to the Tribunal for reconsideration and determination according to law. On 28 August 2007, the Tribunal invited the applicant to appear at a hearing before it on 25 September 2007. On 28 August 2007, the Tribunal wrote to the applicant inviting him to comment in writing on particular information pursuant to s 424A of the Act and to provide information in accordance with s 424 of the Act. The applicant responded to both letters. The applicant gave oral evidence before the Tribunal at a hearing on 25 September 2007. On 3 October 2007, the Tribunal reached a decision published on 23 October 2007 to affirm the decision of the Minister's delegate to refuse the grant of a protection visa to the applicant. In addition to that ground of a well-founded fear of persecution, the applicant contended that he feared persecution should he return to Bangladesh, due to his belief in and practice of the Hindu religion. The Tribunal noted that the applicant had told it that these "two issues are interrelated" and the Tribunal was requested to consider the issues together. The Tribunal conducted an analysis of the oral evidence given before it and documents submitted in support of the applicant's claims in order to reach findings of fact concerning the content of each allegation upon which the applicant relied in supporting the claims of a well-founded fear of persecution by reason of his political activities and religious beliefs. The Tribunal identified a number of inconsistencies in the applicant's evidence which caused it to conclude that the applicant was not a credible witness and not a witness of truth. The matters which the Tribunal thought reflected inconsistencies in the claims made by the applicant are set out at AB254 to AB257 of the Tribunal's decision. The inconsistencies included these things. The applicant said that he had been an active member of the Awami League yet he was unable to identify with any precision the philosophies or policies of the Awami League. The Tribunal was concerned about the applicant's apparent lack of knowledge on these topics and concluded that a person who claimed to hold a senior position such as "party General Secretary" would be expected to be familiar with the party's policies notwithstanding that the party might operate at a distributed or local level and the applicant may also have been involved at a level which he described as a "grass roots level" of the party. The applicant claimed to have received threats in 1997 but did not leave Bangladesh until December 1998. The Tribunal concluded that explanations about the time differential between serious threats having been made and action being taken by the applicant well after the threats, were incoherent and inconsistent with a claimed fear of persecution and harm. The Tribunal was concerned that the applicant gave evidence that he was in hiding throughout 1998. The Tribunal noted that this claim had not been made in any of the applicant's evidence to the earlier two Tribunals and had not formed any part of any of the applicant's several written submissions to the three Tribunals. This inconsistency caused the Tribunal to question the authenticity of the particular claim which had the effect of calling into question, in the Tribunal's view, the overall credibility of the applicant. The Tribunal was concerned that although the applicant had left Bangladesh in 1998 because of a fear of persecution he returned to Bangladesh in May 2001. The Tribunal was not satisfied with the explanations offered by the applicant as to that matter. The Tribunal noted that the applicant had not stated in his primary application that he had been attacked and injured in Bangladesh. The claim was first raised before the Tribunal at a hearing. The Tribunal considered the explanation for the failure to raise the factual matter of an attack in September 2001 and was not persuaded that the explanation was satisfactory. The applicant told the Tribunal that he had been attacked on 21 September 2001, and supported that contention by reference to medical certificates. However, the certificates presented to the Tribunal showed medical treatment and hospitalisation on 30 October 2001 well after the contended attack. The Tribunal was concerned about the explanation for the inconsistency. The applicant claimed in oral evidence to the Tribunal as initially constituted that he had been attacked in Dhaka. However, that claim had not been made nor pressed in evidence before the Tribunal as constituted to make the decision the subject of the present application before the Federal Magistrates Court. These matters are mentioned simply to illustrate some of but not all of the matters which caused the Tribunal to conclude that there was inconsistency in the claims made over time by the applicant. The Tribunal rejects the applicant's claim that he was an active Awami League member or a General Secretary of the party, that the applicant was actively involved in party work, including campaigning for the elections and other work and that he was threatened, targeted, assaulted or otherwise persecuted for that reason. The Tribunal rejects the claim that the applicant was attacked or tortured, that his house was ransacked or burned or that he was prevented from voting. The Tribunal also rejects that the applicant had been falsely accused or that he left Bangladesh on two occasions to avoid persecution. Having reached that conclusion, the Tribunal considered that statements from third parties including the "Bangladesh Hindu-Buddu-Christian Oikkho Parishad" indicating that the applicant was an active worker or real believer and a target to extremists, were fabricated and that no weight ought to be attributed to them. Once the Tribunal concluded that the applicant was not a witness of truth having regard to the range of inconsistencies discussed in its reasons and considered that the applicant was not a credible witness, reliance on third party letters and statements was not, in the opinion of the Tribunal, redemptive of the applicant's credit. Thus, the corroborative material was given no weight. However, in assessing the scope of the applicant's engagement in religious activities, the Tribunal acknowledged that the applicant may have been committed to religious activities in Bangladesh and that he was involved in the work of the group known as the "Shree Shree Ramkrishna Ashram". The Tribunal also recognised that independent country information suggested an increase had occurred since the 2001 elections in Bangladesh of harmful activities directed against religious minorities including Hindus. However, the Tribunal thought that recent independent country information in an United States State Department report suggested that freedom to practice religion had emerged and the government had taken steps to protect religious minorities including the provision of financial support for Hindu welfare activities. The applicant put evidence before the Tribunal that he had been engaged in activities with the Australian Forum for Minorities in Bangladesh, in Australia. The Tribunal considered the nature of that activity but was unable to be satisfied that the applicant had engaged in those activities other than for the purpose of strengthening his claims to be a refugee within the meaning of the Refugees Convention as amended by the Refugees Protocol. For all these reasons, the Tribunal concluded that the applicant faced no real chance of persecution by reason of his activities in Bangladesh and thus his contended fear of persecution by reason of his political activities and the practice of his religious beliefs did not give rise to a well-founded fear of persecution. The applicant applied to the Federal Magistrates Court on 19 November 2007 and sought orders for the grant of the constitutional writs in relation to the Tribunal's decision. The applicant formulated an amended application dated 31 May 2008 and an outline of written submissions in support of the grounds upon which he relied. On 19 June 2008, the applicant failed to appear at the hearing and the order dismissing the application was made. On 5 August 2008, the applicant filed a notice of appeal by which the applicant, as earlier discussed, seeks to set aside the order of 18 July 2008 refusing the application to set aside the dismissal order of 19 June 2008. The grounds recited in the notice of appeal are precisely the same grounds as those recited in the amended application before the Federal Magistrates Court. There are three grounds. Each ground asserts error on the part of the Tribunal. In the notice of appeal, the applicant does not identify any error on the part of FM Cameron in the exercise of the discretion in refusing to set aside the dismissal order. The grounds are these. Although the grounds of appeal do not identify any contended error on the part of FM Cameron, I will treat the notice of appeal as asserting error on the footing that the Federal Magistrates Court fell into error by failing to identify arguable error on the part of the Tribunal for the three reasons identified. As to the first of those reasons, FM Cameron concluded that an assertion that the Tribunal had failed to attribute weight to a document was an attempt to call into question the merits of the Tribunal's decision in the treatment of the evidence. Plainly enough, the weight or emphasis to be given to oral evidence, an explanation or a letter or other document is entirely a matter for the Tribunal. A finding of fact might be challenged on the footing that there is no evidence to support the finding. The question of whether there is evidence to support a finding of fact or whether an inference might be drawn from facts is a question of law. The contention here is that the Tribunal failed to exercise the statutory jurisdiction of review because it failed to give weight to particular documents put to the Tribunal by the applicant. The documents recited at ground 1 of the notice of appeal are discussed in the decision of the Tribunal and in particular at AB257 and AB258. The Tribunal discussed the hospital discharge certificate which stated that the applicant was hospitalised with injuries to his hand and forehead in the period October to November 2001. The Tribunal had discussed the medical certificate earlier in its reasons. The Tribunal noted that the date of hospitalisation was considerably later than the date when the applicant claimed to have sustained injury. The Tribunal took the certificate into account and considered the implications of the certificate in the context of the claims made by the applicant. The Tribunal concluded that it could not accept the medical certificate "as probative evidence that the applicant was attacked or injured due to his political or religious activities". The Tribunal accepted that the applicant may have been hospitalised by reason of his injuries. However, the Tribunal, against the background of all the evidence, was not willing to accept that the injuries relating to the certificate were sustained "for the reasons claimed by the applicant". The other documents referred to in ground 1 were taken into account by the Tribunal and are discussed at AB258. The reasons of the Tribunal demonstrate that the Tribunal turned its mind to the documents and reached the views discussed in these reasons. The conclusions the Tribunal reached were open to it and its election to deal with the documents in the way it did was open to it. The Tribunal was entitled to attribute no weight to the documents discussed at AB258 once the Tribunal was satisfied that the applicant's claims were to be rejected on the footing that he was not a witness of truth. Since the applicant had failed to satisfy the Tribunal on that central question and thus his creditworthiness was in doubt, the Tribunal was not prepared to treat the letters and third party documents as a source of redemption of that fundamental adverse view. As to the second ground, the Tribunal noted that the applicant had requested that the issue of his Hindu religion as a ground for a well-founded fear of persecution be considered in conjunction with the ground relating to his political activities, as the facts in relation to both grounds were "interrelated". The Tribunal formed the view reflected at AB257 already quoted in these reasons. An examination of the reasons demonstrates that the Tribunal did take into account as part of its integrated assessment of the two grounds of challenge, the facts and circumstances going to the question of the religious beliefs and practices of the applicant. An assertion that the Tribunal failed to consider the applicant's contention of a well-founded fear of persecution for reasons of Hindu beliefs held or Hindu practices adopted by the applicant, is inconsistent with the decision-record of the Tribunal. As to the third ground, the applicant contends that the Tribunal did not undertake its function of statutory review by applying proper procedures, in two respects. First, the Tribunal disregarded the applicant's Australian activities in connection with the Australian Forum for Minorities in Bangladesh; and second, the Tribunal simply adopted evidence from previous Tribunal hearings and, in effect, replicated earlier decisions which were set aside, and thus the Tribunal did not bring an independent mind to bear on the determination of the merits of the application. In that sense, the applicant contends that the Tribunal either acted in bad faith or fell into jurisdictional error by failing to discharge the statutory role of conducting a review of the delegate's decision, by simply applying the earlier decisions again. The present Tribunal has just adopted its decision from the previous Tribunal. ... Not only that[,] the present Tribunal made the above comment in bad faith. The Tribunal did not take into consideration my religion and the true fact that I was a member of the minority group in Bangladesh that inspired me to get involved with the Australian Forum for Minorities in Bangladesh. Accordingly I submit that I was denied natural justice. The extensive analysis of the material shows that the Tribunal considered the claims of the applicant against the background of earlier evidence, documents and the oral evidence of the applicant given to the Tribunal as reconstituted. The Tribunal analysed all of the evidence going to the claims and isolated what it perceived to be a range of inconsistencies in the evidence which led to the conclusions already discussed. There is no basis for concluding that FM Cameron fell into error in his treatment of the material in relation to that ground. FM Cameron was correct in concluding that no arguable ground of challenge based on the contentions going to ground 3 had been made out. Counsel for the first respondent accepted that the Tribunal examined the evidence arising out of the earlier hearings and compared it with the evidence later given by the applicant to the Tribunal as reconstituted. The consideration of the body of evidence put before the Tribunal was an appropriate course for the Tribunal to take. The examination of that material in the context of additional oral evidence given by the applicant and a comparison of the claims made and the content of those claims was appropriate to the determination of whether the Tribunal could be satisfied that the applicant held a well-founded fear of persecution for the two grounds identified. I am satisfied that the decision of FM Cameron on that ground is not attended with any doubt. The second limb of ground 3 concerns the determination by the Tribunal to disregard conduct on the part of the applicant in Australia in relation to the activities of the Australian Forum for Minorities in Bangladesh. There is no basis for contending that the Tribunal acted in bad faith in disregarding that conduct. The Tribunal examined the conduct and formed a view that the conduct was to be disregarded by operation of s 91R(3) of the Act because the Tribunal was not satisfied that the applicant had engaged in those activities other than for the purpose of strengthening his claim to hold a well-founded fear of persecution on the ground of his political activities in Bangladesh and on the further ground of his Hindu religion. That conclusion was open to the Tribunal and no question of bad faith arises simply because the Tribunal formed that view. A view adverse to the applicant on that question does not give rise to any inference of bad faith. Accordingly, I am not satisfied that any of the three grounds identified in the notice of appeal suggest that the decision of FM Cameron is attended with sufficient doubt to warrant reconsideration by the Full Court of the Federal Court on the assumption or construct that the essential contention is that FM Cameron fell into error by failing to find arguable error on the part of the Tribunal. As to the decision of FM Cameron in the exercise of the discretion under the Federal Magistrates Court Rules , which is the decision, in truth, in respect of which error must be demonstrated, I am not satisfied that the decision is attended with sufficient doubt to warrant reconsideration. I am satisfied that the decision is not attended with any doubt. Federal Magistrate Cameron properly identified the considerations informing the exercise of the discretion. Federal Magistrate Cameron correctly determined that no arguable question of error on the part of the Tribunal arose based on the grounds identified by the applicant in the amended application supported by his written submissions. I am also satisfied that it was open to FM Cameron in the exercise of the discretion to conclude that the applicant had failed to satisfactorily explain his failure to attend at the hearing having regard to the applicant's contended fear of persecution and death on the grounds of his former political activities and religious beliefs should the applicant return to Bangladesh. Thus, the incentive for the applicant to appear before the Court and demonstrate error on the part of the Tribunal must have been a matter of great significance to him. The explanation put forward was that he had simply forgotten the hearing date. Accordingly, I am satisfied that in the circumstances the decision of the Federal Magistrates Court of Australia of 18 July 2008 refusing the application to set aside the decision of 19 June 2008 dismissing the application made to the Federal Magistrates Court on 19 November 2007 is not attended with sufficient doubt to warrant reconsideration of the decision by the Full Court of the Federal Court and that leave to appeal must be refused. For all of these reasons, the notice of appeal filed by the applicant appellant on 5 August 2008 must be dismissed with an order that the applicant appellant pay the first respondent's costs of and incidental to the appeal. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of a notice of appeal from a decision of the federal magistrates court of australia refusing an application to set aside orders dismissing an applicant's application for relief in relation to a decision of the refugee review tribunal affirming a decision of the first respondent's delegate consideration of whether the order appealed from is an interlocutory or final order consideration of whether the notice of appeal should be treated as an application for leave to appeal consideration of whether leave to appeal should be granted consideration of whether the grounds of appeal should be treated constructively as a contention that the federal magistrate fell into error by failing to find error on the part of the tribunal migration |
The NCC exists primarily to assess progress made by State and Territory Governments in opening up to competition their agencies undertaking business activities. It also provides advice and recommendations to the designated Minister, usually the Federal Treasurer, regarding the declaration of services under the essential facilities provisions of Pt IIIA of the TPA. 2 Hamersley, a wholly owned subsidiary of Rio Tinto Limited, operates various mines in the Pilbara region in Western Australia. It owns and operates a rail track service used to transport iron ore for export. One of its competitors, the Pilbara Infrastructure Pty Ltd (TPI), a wholly owned subsidiary of Fortescue Metals Group Ltd, seeks access to that rail track service. 3 On 16 November 2007 TPI made an application to the NCC under s 44F(1) of the TPA requesting it to recommend to the designated Minister "that a particular service be declared". The application identified Hamersley as the provider of the service and owner of the facility to which the application related. 4 Hamersley claims that, by reason of certain orders made by Kenny J in Hamersley Iron Pty Ltd v National Competition Council [1999] FCA 867 ; (1999) 164 ALR 203) ( First Hamersley Iron ), the NCC should be prevented from considering or otherwise dealing with TPI's application. 5 In First Hamersley Iron , a similar application was made by Robe River Mining Co Pty Ltd and a group of associated joint venturers (hereafter described for convenience as Robe River). Kenny J held that the NCC did not have power to recommend declaration of Hamersley's rail track under Pt IIIA of the TPA because it was not a "service" within s 44B. That was because the rail track involved "the use of a production process" and therefore fell within the exclusion to the definition of "service" in that section. 6 TPI's application to the NCC, which lies behind this proceeding, involves the same rail track as that featured in First Hamersley Iron, though it extends beyond it. Hamersley claims that the NCC remains permanently bound by her Honour's orders in First Hamersley Iron , and therefore has no power to consider TPI's application or recommend declaration of the service. That is so despite the fact that TPI was not a party to the earlier proceeding. 7 Hamersley invokes the doctrine of res judicata as the central plank of its case. It also relies upon what it says were undertakings given to the Court by the NCC in First Hamersley Iron , which it submits prevent the NCC from entertaining TPI's application. Introduced in 1995, this regime allows the designated Minister, usually the Federal Treasurer, to "declare" a particular "service" pursuant to s 44H. The Minister cannot proceed without a recommendation from the NCC. This means that all declarations must be filtered through the NCC. 9 A declaration of a service overrides what would otherwise be the exclusive rights of the owner of a "monopoly" facility to determine the terms and conditions upon which that owner will supply its services to others. In essence, the focus is upon facilities of national significance, which it would be uneconomic to duplicate and which supply a service, access to which would promote competition, efficiency and the public interest. 10 The first stage of this process is to determine whether the facility is essential. Section 44F(1) provides that the designated Minister, or any other person, may apply to the NCC in writing, asking it to recommend that a particular service be declared. Section 44F(2) states that after receiving the application, the NCC must inform the provider of the service of its receipt, and subsequently recommend to the designated Minister that the service either be declared or that it not be declared. Section 44F(4) provides that in deciding what recommendation to make, the NCC must consider whether it would be economical for anyone to develop another facility that could provide part of the service. 11 Section 44B defines "service" for the purposes of Pt IIIA. Relevantly, it states that "service" means a service provided by means of a facility and includes "the use of an infrastructure facility such as a road or railway line". However, the section provides that the term "service" does not include "the use of a production process" except to the extent that it is an "integral but subsidiary part of the service". 12 The NCC cannot recommend and the relevant Minister cannot declare a service to be open to access by a third party unless they are satisfied of all of the matters set out in s 44G(2). Reviews are undertaken by the Australian Competition Tribunal. Likewise, when a Minister rejects a recommendation for a declaration, the unsuccessful applicant may apply to the Australian Competition Tribunal to have that decision reviewed. 14 In general terms, a service cannot be declared unless to do so would promote competition. Competition will be promoted if access to the relevant service creates the conditions for the improvement of competition. 15 The provisions of Pt IIIA are complex and have given rise to difficulty. For example, judges of this Court have differed as to the meaning of the term "the use of a production process" in s 44B. Recently, in BHP Billiton Iron Ore Pty Ltd v National Competition Council (2007) 162 FCR 234 , a Full Court, by majority, disapproved Kenny J's reasoning in First Hamersley Iron. In March this year, the High Court granted special leave to appeal from that decision of the Full Court. 16 It is well established that the doctrine of res judicata will apply whether or not the decision which is said to give rise to that form of estoppel has itself been overruled. It makes no difference whether the initial judgment was wrong. It follows that I need not concern myself with whether First Hamersley Iron represents good law. The only question is whether it operates in the way for which Hamersley contends. 18 The facts may be briefly stated. In September 1998 Robe River applied to the NCC under s 44F(1) to recommend that the designated Minister declare the Hamersley rail track to be a "service". The application identified Hamersley as the provider of the service and the owner of the facility to which it related. This should be distinguished from any rail haulage service which may be available in relation to this facility. [Robe] will provide its own locomotives, rolling stock, hi-rails and all necessary operational personnel. [Robe] will also provide all hi-rails, other vehicles and personnel for maintenance and support of [Robe's] trains and rolling stock using the rail maintenance support road. [Robe] will provide its own train control system for all [Robe] trains travelling on [Robe] rail track, and does not seek access to the [Hamersley] train control system in that regard. Each mine produced ore of different grades, which contributed to a particular "batch" of the export product. With the assistance of the rail track service, each mine operated as if it were a pit within a larger mine. Her Honour found that each step in that process, including the use of the rail track service, was part of a highly integrated operation designed to bring the product to port after blending and stockpiling operations had occurred. That led her to conclude that the rail track involved "the use of a production process" and therefore fell within the exclusion to the definition of the term "service". 24 Kenny J delivered her reasons for judgment on 28 June 1999. Before me, Hamersley sought to tender the transcript of what took place on that day. The NCC and the TPI objected to the tender of that transcript. They submitted that whatever might have transpired when judgment was delivered could not be relevant to any issue in the proceeding before me. I indicated that I would have the transcript marked for identification and rule upon its admissibility when I delivered judgement in this matter. Having now considered the way in which Hamersley puts its case, the transcript is plainly relevant. I therefore accept its tender. 25 The transcript shows that when her Honour delivered her reasons for judgment, she indicated to counsel that she had prepared a draft of the orders which she proposed to make. She made that draft available to counsel so that the proposed orders could be considered and submissions made about them. I say in substance because they don't replicate it exactly. The Rail Track Service, as defined in Part 3 of the application for a declaration recommendation made pursuant to s 44F(1) of Part IIIA of the Trade Practices Act 1974 Cth (the Act) by the second to sixth respondents, is not a service within the meaning of s 44B of the Act. The first respondent does not have power to make a recommendation regarding declaration of the Rail Track Service to the designated Minister pursuant to s 44F(2)(B) of the Act. 28 Her Honour then proceeded to address counsel present in Court. In that regard, Hamersley was represented by Ms Melanie Sloss, the NCC by Mr Robin Brett QC, and the Robe River respondents by Mr Norman O'Bryan. As presently drafted I would propose that the first respondent be permanently restrained from making a recommendation regarding declaration of the rail track service to the designated minister pursuant to section 44F(2)(b) of the act. As I understand the submissions which were made to me, the real difficulty arose in relation to any injunction I might wish to make in relation to the protected contractual rights issue. That reflects the second part, if you like, of my reasons for judgement. I have already spoken to you about the matter of costs. In relation to an injunction we would simply submit that it's not necessary, that having regard to the fact that a declaration is going to be made, the [NCC] would act accordingly. That's really all we have to say about it, your Honour. As I understand it the council is saying what one would [expect] of any reputable and responsible public body, that the court having made a declaration, it has not power. It will not take the matter any further. Ms Sloss? That position is slightly different from the positions we understood it in the outline that was filed in the proceeding. Perhaps I should take instructions on that. While Ms Sloss takes instructions on that, is there anything anyone else wishes to say? " [Emphasis added. Turning then to the orders on page 2, in light of my learned friend Mr Brett's assurances to the court this morning, it would be unnecessary to grant the injunction in paragraph 1. That requires a consequential change to former paragraph 2. " [Emphasis added. 31 One further matter in relation to First Hamersley Iron should be noted. Hope Downs Management Services Pty Ltd (Hope Downs), a company unconnected with Robe River, was granted leave to intervene in the proceeding before Kenny J. This was on the basis that it intended in the near future to make its own access application regarding the Hamersley rail track to the NCC. However, during the course of the trial, Hope Downs filed a motion seeking to be joined as a party to the proceeding, rather than merely appearing as an intervener. Presumably, it did so in order to be able to take the benefit of any judgment that might be given in favour of the NCC and Robe River. Hope Downs' application was granted and it was duly joined to the proceeding. The significance of that fact will become apparent later in these reasons for judgment. However, on 22 November 1999 when the appeals came on for hearing, the Full Court was informed that Robe River had withdrawn its application for access to the Hamersley rail track. Counsel for Hamersley then submitted that the appeals should not proceed because they were moot. 33 However, counsel for the NCC submitted that there was still a live issue in relation to costs to be determined. Counsel also argued that it would be in the public interest for the appeals to proceed. Hope Downs joined in that submission and also submitted that its appeal should be heard because, otherwise, her Honour's orders might operate as an estoppel against any future application it might make for access to the Hamersley rail track. 34 In response, Hamersley offered certain undertakings to the Full Court. Some of those undertakings related to costs. However, the fourth undertaking specifically addressed Hope Downs' concerns regarding issue estoppel or res judicata. Counsel for Hope Downs took the same stance and indicated that it wished to proceed with the appeal. 36 Ultimately, the Full Court held that, having regard to the undertakings offered by Hamersley, no purpose would be served in proceeding to hear the appeals: Hope Downs Management Services Pty Ltd v Hamersley Iron Pty Ltd [1999] FCA 1652 ; (2000) ATPR 41-733 at [14] . Any possible prejudice to Hope Downs resulting from issue estoppel or res judicata was removed by those undertakings. Accordingly, the Court ordered (at [15]) that the appeals be forever stayed. It added that it should not be taken to have expressed any view as to the correctness or otherwise of the judgment appealed from. 37 Transcript of the proceedings before the Full Court was tendered before me. In that transcript, senior counsel for Hope Downs expressed concern that any future application his client might make for a recommendation in relation to the Hamersley railway track would be met with a claim of issue estoppel or res judicata. Mr Neil Young QC, on behalf of Hamersley, responded by submitting that the appeal had become academic. That was because the issue in the case depended entirely upon the definition of "rail track service" in Robe River's application which was now defunct. 38 Chief Justice Black commented that everything turned upon "the particular application". The appeal is this: the rail track service as defined in part 3 of the application for a declaration recommendation made pursuant to s 44F(1) is not a service. There couldn't be. One need only turn back to the pleadings to see that the entire issue as pleaded is whether the rail track service as defined by Robe's application was or was not a service within the meaning of s 44B of the Act. That [new] application would presumably define a service. It may be a bare bones service that Robe sought. It may have freight aspects as well. Indeed it may be an application as against BHP because their railway terminus is much closer to Hope Downs' proposed mine than Hamersley's. He pointed out that the evidence in any such proceeding would be likely to be different, as would the facts surrounding the operation of the rail track service. He submitted that Kenny J's judgment could not, as a matter of practical reality, operate as an issue estoppel against Hope Downs. 44 Notwithstanding Mr Young's submissions, Goldberg J, a member of the Full Court, expressed his concerns as to whether an issue estoppel might arise. It's our submission that it doesn't arise. If the court is of a different view and thought it was a possibility, we would be prepared to proffer a second undertaking not to take an issue estoppel point. The NCC and TPI rely upon Mr Young's analysis of the position in his argument to the Full Court as encapsulating their submission as to why Hamersley cannot rely upon any form of estoppel in the proceeding before me. 2 to Rosella Siding, including all points in between ( Hamersley Service ). 50 After TPI lodged its application, the NCC notified Hamersley in accordance with the requirements of s 44F(2)(a). Hamersley responded by submitting that the NCC was bound by First Hamersley Iron and, as a consequence, not permitted to receive, consider, or make any recommendation in respect of the TPI application. 51 The NCC, however, rejected Hamersley's submission. It made clear that it intended to consider the TPI application, call for submissions regarding that application, and, by implication, in due course make a recommendation to the designated Minister as to whether the service should be declared. 53 In its particulars, Hamersley initially relied upon issue estoppel as well. Indeed, its case seemed to focus upon issue estoppel rather than res judicata or any breach of undertaking. However, during the course of argument before me, Hamersley expressly abandoned any reliance upon issue estoppel. 54 I shall deal with Hamersley's three contentions in turn. It is said that a final judgment by a competent tribunal may affect subsequent proceedings between the same parties in three ways. 56 First, the judgment extinguishes any cause of action which is the subject of the decision. If the cause of action is established, it is said to merge in the judgment. If the cause of action is rejected, the parties are estopped from claiming that it continues to exist. Consequently, no further proceedings may be brought as between the parties (or their privies) to enforce that particular cause of action. This effect is sometimes described as cause of action estoppel or res judicata: Chamberlain v Deputy Commissioner of Taxation [1988] HCA 21 ; (1988) 164 CLR 502. 57 Second, the judgment of the court represents a conclusive determination not only of the ultimate finding in the case but also of all issues of fact or law necessary to the decision. This is generally described as issue estoppel: Blair v Curran (1939) 62 CLR 464 at 531-2 and Jackson v Goldsmith [1950] HCA 22 ; (1950) 81 CLR 446 at 466. 58 Third, the decision may preclude the parties from raising in future proceedings causes of action or issues which they could and should have raised in the former proceeding. This extension of res judicata and issue estoppel is generally known in Australia as Anshun estoppel: Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45 ; (1981) 147 CLR 589. 59 In Spencer Bower, Turner and Handley, Res Judicata (3 rd ed, 1996) (Spencer Bower), the term "res judicata" is used more broadly. Spencer Bower (at 2) speaks of res judicata as the rule which precludes a party, as against the other, from denying in subsequent litigation the correctness of the decision in the earlier litigation. Spencer Bower describes this as "res judicata estoppel" and says that it encompasses both "cause of action estoppel" and "issue estoppel". The second consequence --- the merger of the original cause of action in a judgment in favour of the plaintiff --- is referred to as "merger in judgment". 60 On either view, res judicata can arise only from a final judgment of a competent tribunal given on the merits. It cannot arise from a proceeding that was discontinued, or resolved by way of dismissal for want of prosecution, or non-compliance with court orders. In order to establish res judicata, it must be shown that the cause of action in the later proceeding is identical to that which was litigated in the former proceeding. The identity of the causes of action is determined as a matter of substance rather than form. Res judicata binds only the parties and their privies. 61 Res judicata was formerly regarded as a rule of evidence but is now generally considered to be a rule of public policy. When the doctrine applies, it constitutes an absolute bar to a subsequent suit for the same cause of action. As previously indicated at [16], the correctness of the decision is not relevant. If it is a final decision by a court having jurisdiction as to the same question and between the same parties , it will be binding on them unless and until overturned on appeal. It was unqualified. It did not say that the NCC lacked this power only in relation to the Robe River application. It did not say that the declaration would last only for so long as conditions did not materially alter. It said that the NCC lacked this power in relation to this particular service and would do so for all time and in respect of any applicant who might wish to gain access to it. 65 The NCC and TPI challenge this interpretation of her Honour's declaratory orders. They submit that it is wrong to focus solely upon the second of the two declarations that her Honour made and to ignore the first. They say that when the second declaration is read together with the first, as her Honour plainly intended, it becomes immediately apparent that the second declaration does not have the effect for which Hamersley contends. 66 In considering these competiting contentions, it is useful to set out again the first of her Honour's two declarations. The second declaration uses the term "Rail Track Service", which is capitalised and can only be understood by reference to the definition of that expression in the first declaration. The first declaration, in turn, links both declarations to the definition of "Rail Track Service" in part 3 of the Robe River application. 68 It follows, so the NCC and the TPI submit, that the second declaration does not bear the meaning for which Hamersley contends. It is to be read in a more limited manner. It was, along with the first declaration, intended to quell the particular controversy that gave rise to First Hamersley Iron. It must therefore be understood as preventing the NCC from dealing with the Rail Track Service as defined in the Robe River application and as having no greater scope. 69 The debate between the parties gives rise to the need to consider how a court goes about construing orders, particularly declaratory orders, of another judge. 70 Hamersley submits that when an order made by one judge comes before another judge for consideration, "... [t]he Court construes it just like any other document. It does not delve into the subjective intention of the judge pronouncing the order": Radmanovich v Nedeljkovic [2002] NSWSC 212 at [7] . That submission is plainly correct. 71 Hamersley next submits that the process of construction must be faithful to the meaning of the order as originally pronounced. A later court cannot make the order it considers the original court should have made. See generally P W Young, "Construing Court Orders" (1998) 72 ALJ 117. Nonetheless, it is now tolerably clear, and Hamersley accepts, that in construing an order, regard may be had to the reasons for judgment and to other extrinsic material where appropriate: Athens v Randwick City Council (2005) 64 NSWLR 58 at [131]-[140] per Santow JA with whom Tobias JA agreed. Moreover, in construing an order, it may be relevant to know what the successful plaintiff or applicant sought by way of relief. I shall return to this issue shortly. It submits that had Kenny J intended the narrow construction for which the NCC and TPI now contend, her Honour would have said so. It argues that the ordinary meaning of the words used in the second declaration is that the Court declared, once and for all, the position in respect of any recommendation regarding declaration of Hamersley's rail track service. 74 Hamersley says that such a construction is not surprising. On the NCC's construction, the Robe River parties would not have been inhibited by the declarations made by Kenny J from making a further application, even the very next day, for a recommendation regarding the same rail track service. That is because a second application by Robe River would not be "the Robe declaration application the subject of those orders". 75 Hamersley argues that on the NCC's construction, Hope Downs would have been free, immediately following First Hamersley Iron, to apply for a recommendation in exactly the same terms as Robe River had done. It says that would be contrary to principle. It would mean that the declarations made by Kenny J would not have quelled the controversy between the parties. The Court would therefore not have discharged its judicial function. 76 Hamersley says that if regard is had to extrinsic material, the result is the same. Although the rail track service was defined in Robe River's application for a recommendation, the scheme of Pt IIIA of the TPA provides that declaration of that service would have been for everyone, not just Robe River. To have a sensible field of operation, the declaratory orders must have been intended to prevent someone else seeking a recommendation for declaration of precisely the same service. Moreover, Hamersley's application, which was the subject of Kenny J's declarations, sought both a narrower declaration that the NCC lacked power to deal with any submission in relation to the Robe declaration application , and a broader declaration that it lacked power to make a recommendation to the designated Minister for declaration of the Hamersley Rail Track Service. The first of the declarations sought was limited to the Robe declaration application. The second was not so limited. Hamersley submits that the second declaration reflected the terms of the broader declaration sought. 77 Finally, Hamersley submits the fourth of its undertakings to the Full Court makes it clear that the parties to the proceeding, including the NCC as well as the Full Court itself, assumed that Kenny J's orders related not just to the Robe declaration application, but also to any subsequent application that might be brought by Hope Downs. Had Kenny J's orders been regarded as limited to the Robe River application, no such undertaking by Hamersley would have been necessary. 78 The NCC and TPI challenge this interpretation of Kenny J's orders. They submit that the starting point when construing a judicial order must be to consider precisely what was needed to quell the justiciable controversy that gave rise to the proceeding. They say that it would go beyond the proper boundaries of the judicial process to determine rights by applying the law to facts, which are neither agreed nor determined, without regard to the evidence led in the particular case. 79 The respondents say that the controversy before Kenny J plainly did not extend to all possible future times and circumstances. Her Honour's orders should not be interpreted as though it did. They say that resort may be had to contextual matters, such as the reasons for judgment and the pleadings, in order to identify the subject matter of the controversy as an aid to interpreting the orders. They refer in that regard to: Yates Property Corp Pty Ltd v Boland (1998) 89 FCR 78 ; Owston Nominees No 2 Pty Ltd v Branir Pty Ltd [2003] FCA 629 ; (2003) 129 FCR 558 at [49] - [51] ; Athens v Randwick City Council (2005) 64 NSWLR 58 at [27]-[29] and [129]-[140]; Newcastle City Council v Leaway Pty Ltd [2005] NSWLEC 619 at [28] - [36] ; Polyaire Pty Ltd v K-Aire Pty Ltd (No 4) (2007) 147 LSJS 65. 80 The respondents also refer to a recent article, J Tarrant, "Construing undertakings and court orders" (2008) 82(2) Australian Law Journal 82. In that article, it is suggested that the courts have taken two different approaches as to whether reference may be made to the reasons for judgment when construing court orders. On one view, this may be done only where a court order is ambiguous. On this view, the reasons for judgment are considered to be extrinsic material. However, a more recent line of authority has emerged, which holds that court orders must always be examined in the context of the reasons for judgment. 81 A number of the authorities cited by Tarrant are instructive. This would include pleadings and affidavits. 83 Tarrant cites in support of the traditional, and more constrained, view that there must be ambiguity in a court order before the reasons for judgment can be considered: McNair Anderson Associates Pty Ltd v Hinch [1985] VR 309 at 312; Repatriation Commission v Nation (1995) 57 FCR 25 at 33; and Blanch v British American Tobacco Australia Services Ltd (2005) 62 NSWLR 653 at 655. He notes, however, that in relation to contracts, there has been a movement away from the requirement that there be ambiguity before extrinsic material can be examined: Pacific Carriers Ltd v BNP Paribas [2004] HCA 35 ; (2004) 218 CLR 451. There has been a similar movement in relation to the interpretation of corporate constitutions: Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd [2006] FCAFC 144 ; (2006) 156 FCR 1 at [51] , [100] and [238]. 84 That movement was anticipated in relation to court orders in Yates Property Corp Pty Ltd v Boland (1998) 89 FCR 78 , in which a Full Court of this Court held that in interpreting an order of a court framed in unambiguous language, regard should still be had to the reasons given by the court for making the order because they formed part of the context in which the order was made. See also Australian Energy Ltd v Lennard Oil NL (No 2) [1988] 2 Qd R 230. This second, and more flexible, line of authority was preferred by the Court of Appeal in Athens v Randwick City Council where Santow JA explained (at [129]) that the "purpose of a court order is, ordinarily, to give effect to a judgment". See also Polyaire Pty Ltd v K-Air Pty Ltd (No 4) (2007) SASC 36 ; Kwikspan Purlin System Pty Ltd v Federal Commissioner of Taxation (1987) 93 FLR 263. 85 In my view, the weight of authority now favours the view that ambiguity is not required before going beyond a court order. Such orders should always be interpreted in the context of the reasons for judgment. That is the position taken by Tarrant, with whose conclusions I agree. 86 Indeed, I would go further. In my opinion, it is permissible when construing court orders (irrespective of whether they be ambiguous) to have regard to, at least, the pleadings which defined the issues to be resolved: Owston Nominees No 2 Pty Ltd v Branair Pty Ltd [2003] FCA 629 ; (2003) 129 FCR 558 and Athens v Randwick City Council. See also Blacktown Concrete Services Pty Ltd v Ultra Refurbishing & Construction Pty Ltd (in liq) (1998) 43 NSWLR 484 and Australian Energy Ltd v Lennard Oil NL (No 2) at 232. 88 The NCC and TPI argue that a fair reading of First Hamersley Iron makes it clear, as does the legislative regime in Pt IIIA of the TPA, that Kenny J was engaged in making a determination which was entirely dependent on the evidence led in that case as to the then current state of facts. They refer to [15]-[25] of her Honour's reasons for judgment. They submit that Kenny J was not asked, and did not purport, to make orders expressed to extend to all possible future times and circumstances. They submit that her Honour's orders should not be interpreted in that way. 89 The respondents say that Hamersley has sought to interpret Kenny J's orders as having some ambulatory effect by artificially and impermissibly isolating the second declaration from its context. They say that [8] of her Honour's reasons for judgment makes clear the contextual relationship between the declarations ultimately made. There, Kenny J stated explicitly that what became the second declaration was sought "in consequence of" the first. 90 Finally, the NCC, in particular, says that Hamersley's attempt to rely upon paragraphs 3(a) and (b) and 5(a) and (b) identified in its Details of Claim in First Hamersley Iron as revealing a dichotomy between a specific form of declaration and an ambulatory form of declaration, thus leading to the inference that her Honour intended the second declaration to have ambulatory effect, should be rejected. Each of paragraphs 3(a) and 5(a) deals with process before the NCC, and each of paragraphs 3(b) and 5(b) deals with the outcome of the process before the NCC. Each of paragraphs 3(b) and 5(b) is specific, not ambulatory, because it incorporates the definition of "Hamersley rail track service" first set out in paragraph 1 by reference to the particular [Robe River] application. It submits that her Honour's orders should not be read in any other way. 92 TPI joins in the NCC's submissions. However, it adds that apart from the fact that Kenny J used the term "Rail Track Service", which her Honour had carefully and narrowly defined in her first declaration, it was not open to her to make a declaration in any wider terms. That was because there was no matter before the Court other than the amenability of the Rail Track Service, as defined, to a declaration recommendation by the NCC. Accordingly, the Court had no jurisdiction to make a declaration about anything more than it did: Bass v Permanent Trustee Ltd [1999] HCA 9 ; (1999) 198 CLR 334 at [45] - [47] . TPI also cites Ainsworth v Criminal Justice Commission [1992] HCA 10 ; (1992) 175 CLR 564 at 582 in support of the proposition that, where the underlying factual subject matter of a proposed declaration is uncertain or hypothetical, the Court lacks jurisdiction to make a declaration. 93 The NCC and TPI do not rely solely upon the need to construe Kenny J's orders in context. They also rely upon the policy that underlies Pt IIIA of the TPA. They submit that the very notion of a "service" that may be declared imports into the process, which is to be conducted by the NCC, elements that are dynamic. Each access application must turn upon its particular facts. These include not merely what the provider of the service does, or has available, but also what the person seeking access actually desires. Unless read in this manner, the criteria set out in s 44G cannot be sensibly applied. 94 Hamersley responds by pointing out that Kenny J made it clear when she delivered her reasons for judgment that she was prepared to grant permanent injunctive relief against the NCC in the terms that she foreshadowed. It submits that, but for the assurance given by Mr Brett, her Honour would have granted that relief. It says that there would then have been no basis upon which any later court could properly have read down those terms. If, for whatever reason, circumstances changed so dramatically that the injunction as originally granted was no longer appropriate, application could be made to have it discharged or varied. However, failing such application, the injunction would stand and operate for all time according to its terms. 95 There are a number of difficulties with this aspect of Hamersley's submissions. In the first place, I am far from satisfied that Kenny J would have granted an injunction in the terms foreshadowed but for Mr Brett's assurance. The transcript reveals that her Honour was prepared before pronouncing final orders to hear submissions from the parties as to the form that any injunction should take. It is entirely speculative as to whether any such submissions would have been made. It is a further matter of conjecture as to whether, having heard such submissions, her Honour would have granted the injunctive relief foreshadowed in exactly those terms. 96 Next, there is obviously force in Mr Young's submission to the Full Court regarding the effect of any changed circumstances. That was said mainly in the context of issue estoppel. However, it applies with equal force to res judicata. 97 There is no evidence before me that the "Rail Track Service", as defined in First Hamersley Iron, operates today as it did nine years ago. Indeed, there is evidence to suggest that it does not. That means that there must be a question as to whether it still constitutes "the use of a production process", irrespective of whether the test used by Kenny J is held to be correct. 98 The evidence as to the current position regarding the Rio Tinto Ltd group of companies, of which Hamersley is a wholly owned subsidiary, is that Rio Tinto holds interests in and operates eleven mines and associated iron ore treatment facilities. As a result of Rio Tinto's acquisition of North Limited in 2000, it acquired a majority interest in what had previously been the Robe River Joint Venture. Following that acquisition, Rio Tinto integrated the operations of Hamersley and Robe River. In that context, Pilbara Iron Pty Ltd, a wholly owned subsidiary of Hamersley, operates and maintains the combined infrastructure assets, including the rail assets. 99 This means that the existing dedicated and integrated rail system, which carries ore from the Rio Tinto mines to the ports at Dampier and Cape Lambert, includes a number of lines that were not part of the Hamersley Rail Track System at the time of First Hamersley Iron. There is now a dual-track system between Emu Siding and Rosella, whereas in 1998 there was only a single track. In addition, there are now spur lines from the West Angelas Mine to Juna Downs and from the Hope Downs mine to the West Angelas spur line, which were not part of the Hamersley Rail Track Service at that time. The current, and past, rail networks are set out in annexures A and B to this judgment, and are marked JM1 and JM3 respectively. 100 The TPI application seeks a recommendation for a declaration in respect of the railway line from Paraburdoo to Dampier which is approximately 385 kilometres long, the railway line from Yandicoogina to Rosella Siding (on the Paraburdoo to Dampier railway) which is approximately 195 kilometres long, and the railway line from Brockman No 2 to Rosella Siding which is approximately 45 kilometres long. 101 The access that TPI seeks includes that part of the Hamersley rail track service sought by Robe River. However, TPI seeks greater access as well. Hamersley, not surprisingly, submits that the greater includes the lesser. Accordingly, if part of that which TPI now seeks is excluded because of what was determined in First Hamersley Iron, it must follow that TPI's application as a whole cannot proceed. 102 Logically, Hamersley's submission is correct. However, there is more to be said. The evidence suggests that the configuration of that part of the rail track, now sought to be the subject of a declaration, is broadly similar to that which was the subject of the earlier proceeding. However, putting such questions to one side, there is nothing to suggest, and no evidence to support, the conclusion that material circumstances as to its usage have not changed. That is significant given that the facility, which is the subject of the current application, is clearly not the same as that considered in First Hamersley Iron. It is clear from the evidence before me that there have been major developments in the Pilbara iron ore industry during that time. The rapid rise of China to become the world's largest steel producer and importer of iron ore has presented the industry with an opportunity to grow at a rate and a scale not contemplated a decade or so ago. According to Building Prosperity --- The Australian Iron Ore Industry in the 21 st Century (May 2006) by Malcolm Gray, an economic consultant commissioned by Rio Tinto to write the report, iron ore production in Australia grew 80 per cent faster than total world production in the ten years to 2005. In the same period, Australian iron ore exports grew 25 per cent faster than total world exports. 104 Mr Gray says that the Pilbara iron ore rail systems are regarded as among the best heavy haul railways in the world. He says that they form a vital part of a closely integrated iron ore production process. Innovations have included the introduction of the 'One Mine' integrated production process by Hamersley Iron, and the Pilbara Rail Company and now Pilbara Iron initiatives by Hamersley Iron and Robe to combine and, through integrated management, secure more efficient operation of their infrastructure assets. He points out that both Hamersley and Robe River have made major investments in this area, including the construction of rail extensions to new mines at Yandicoogina and West Angelas. These rail extensions now form part of the overall rail network. 106 Mr Gray refers specifically to the construction of dual tracks in the most heavily congested parts of the rail system in order to accommodate increased production. He also notes that concrete rail sleepers are replacing timber ones along the track from Brockman Mine to Rosella Siding. He refers to new projects that are under construction or have been completed in response to China's demand for iron ore imports. These include dual tracking 145 kilometres of railway north of Rosella to link with existing dual track and providing further dual track for the whole of the section of rail between Rosella and the Robe-Hamersley Iron crossover. He refers to the extension of the railway track system to Hope Downs to service the new mine, which is to commence production in 2008. 107 Mr Gray's report regarding the changes that have taken place over the past decade or so in relation to the Hamersley rail infrastructure were not challenged before me. His findings support the respondents' contention that the TPI application relates to access to a rail track system that differs in material respects from that which was the subject of First Hamersley Iron . There are minor differences in configuration but, more importantly it would seem, significant differences in usage. The fact that there have been such changes makes it difficult to assert, as Hamersley does, that the issues raised in the TPI application are identical to those in the Robe River application. 108 I am mindful of TPI's submission that there is a further distinction between the rail track service that was considered in the Robe River application and that to which access is sought in the TPI application. The Robe River application was for a "point to point" service; that is, a service enabling the running of trains from a point near Emu Siding to a point of intersection with the proposed Robe River rail line. The aim was to allow the development by Robe River of its West Angelas Mine and the transport of iron ore to Port Walcott. The use of the Hamersley rail network contemplated by TPI is for "an all-points" service; that is, one that would permit access at any point along that network. 109 There may be some logic in the distinction between a "point to point" and an "all-points" service. However, its significance, as a practical matter, and in the context of this case, eludes me. A "point to point" service need not necessarily preclude a train from stopping along a particular route, allowing access to be gained along the way. I therefore reject this aspect of the NCC's submission. 110 I accept that the track under consideration in First Hamersley Iron lies squarely within the Hamersley rail network and that therefore that track would be encompassed within any recommendation made in response to the TPI application. My difficulty with Hamersley's submission lies in the premise that nothing of any consequence has changed and its somewhat bold submission that, even if it has, Kenny J's orders are, to put the matter colloquially, "frozen in time". 111 It is of the essence of any estoppel that it involves identity of subject matter . The party seeking to set up an estoppel must establish that the opponent is seeking to re-agitate some question of law or issue of fact, which has been the subject of a final decision between the same parties by a court of competent jurisdiction. 112 In Turner v London Transport Executive [1977] ICR 952, a plea of issue estoppel failed because "the findings of the industrial tribunal were not sufficiently clear and precise". It is for the party who seeks to rely on the estoppel to establish this identity. " [Emphasis added. It has been held that a party, against whom judgment has been given when suing in a representative capacity, is not estopped from suing in a different representative capacity. That is because the subject matter of the litigation is not the same in the two proceedings. See generally Hacking v Lee (1860) 9 WR 70. Similarly, an acquittal on a charge of wilfully making a false tax return has been held not to be a bar to a civil claim brought by the Commissioner alleging that the return was fraudulent or wilfully misleading. The issues were not identical. In addition, the onus of proof differed: Maxwell v IRC [1962] NZLR 683. 114 There are cases in which a change of circumstances has led to the rejection of a claim of estoppel. In Ord v Ord [1923] 2 KB 432, a wife sued for maintenance under a deed of separation. The husband sought to have the deed set aside on the basis that she had fraudulently concealed her adultery. In the first action, the husband failed to prove adultery. In a later action for further instalments, it was held that he could rely upon other acts of adultery of which he had no knowledge at the time of the first action. 115 Similarly, in Richards v Richards [1953] P 36 , it was held that where a wife's charge of cruelty had been dismissed by justices, there was no estoppel preventing her from leading the same evidence, together with other evidence covering a later period, to establish cruelty at a later date. In Burman v Woods [1948] 1 KB 111, it was held that a decision refusing an order for possession based on hardship would not bar later proceedings. That was because the factors relevant to hardship might change. To the same effect is Mills v Cooper [1967] 2 KB 459, where it was held that a decision that the defendant was not a gypsy did not bar proceedings alleging that he was a gypsy on a later date. 116 Spencer Bower (at 199) considers these cases to support the principle that issue estoppel "does not apply in a changing situation". In the earlier action here the only relevant issue was as to the true construction of the only bond then sued upon; ... The issue of construction in the second action could indeed be proved in the second action to be similar to that decided in the first; but it related to a different cause of action based on other bonds and could not be asserted to be the same issue. Moreover, it is a matter of common knowledge that such bonds are often issued at different dates and in different countries, matters which might well have a possible bearing on their true construction. " [Emphasis added. In my view, the TPI application raises different issues to those that confronted the NCC at the time of First Hamersley Iron. The orders that Kenny J pronounced must be construed in the light of her Honour's reasons for judgment as a whole, as well as in the context of the issues which presented themselves at the time. 119 I should, for the sake of completeness, deal with Hamersley's alternative submission. It argues that even if its rail track today is not the same in all relevant respects as that of 1998, its claim of res judicata should still succeed. It submits that no matter how great the differences there may be between the two track systems, Kenny J's orders still speak for themselves, and must stand unless and until they are varied. 120 Hamersley recognises the implications of this submission. It accepts that, over time, conditions may change to such a degree as to warrant reconsideration of whether its railway system still involves "the use of a production process". It says that in that event, it would be open to the NCC to make application, pursuant to O 37 r 6 of the Federal Court Rules, for a variation of Kenny J's orders. This would be on the basis of "matters occurring after judgment". 121 It has been held that O 37 r 6 does not authorise the Court to set aside a judgment regularly passed and entered because new facts and circumstances have arisen. See Gamser v Nominal Defendant [1977] HCA 7 ; (1977) 136 CLR 145 , which concerned a similar rule of the Supreme Court of New South Wales. If an injunction has been granted, however, an order may be made under this rule suspending the operation of the injunction from the date of the changed circumstances. See generally Permewan Wright Consolidated Pty Ltd v Attorney-General (NSW) (1978) 35 NSWLR 365. 122 I am unable to accept this variant of Hamersley's submission. If, as the NCC and TPI submit, Kenny J's orders related specifically to the Hamersley rail track service as it then stood, and if either the configuration or use of that track now differs significantly, there is no basis for any estoppel. Moreover, there is no question of the NCC having to establish changed circumstances. It is Hamersley which must establish that the earlier judgment gives rise to an estoppel. 123 I doubt that O 37 r 6 was intended to provide a mechanism by which a party could escape from an established estoppel merely because circumstances have changed. Rather, as previously discussed, its purpose seems to have been to enable a judge to vary or discharge an injunction granted previously where the circumstances giving rise to that injunction have changed. 124 I am fortified in my conclusion that there is no res judicata by the nature of the legislative scheme under which the NCC exercises its statutory duties. The NCC is not an ordinary litigant. It does not seek to vindicate its own private rights. Prima facie, duties conferred by statute are intended by Parliament to be exercised from time to time as occasion arises. See generally s 33(1) of the Acts Interpretation Act 1901 (Cth) and the well-known observations of Gummow J in Minister for Immigration and Ethnic Affairs v Kurtovic (1990) 21 FCR 193 at 211 and 218-9. 125 It follows that Hamersley's claim of res judicata is not made out. 127 It may be that counsel had in mind some notion akin to abuse of process as the basis for this contention. If so, the argument fails. The doctrine of abuse of process, as distinct from various forms of proprietary estoppel, ordinarily operates as a shield rather than a sword. In addition, it is generally confined to curial proceedings and does not operate to prevent investigative or other like processes from being carried out. See generally Papazoglou v Republic of the Philippines (1997) 74 FCR 108 at 131-2. 128 I reject Hamersley's submission that some notion akin to abuse of process can be used to obtain prohibition or injunctive relief of the kind now sought. 130 An undertaking is a formal promise to the Court to act or refrain from acting in a particular manner: see generally O 35 r 11 of the Federal Court Rules . 131 Undertakings are often given to a court by one or more parties to a dispute. In many cases, the undertakings do not form part of any court order. Nonetheless, an undertaking has the same effect in law as an injunction. Breach of an undertaking is a contempt of court. Self-evidently, the principles that apply to interpreting court orders also apply to interpreting undertakings: S & M Motor Repairs Pty Ltd v Caltex Oil (Australia) Pty Ltd (1988) 12 NSWLR 358. 132 It is quite common when injunctive relief is sought against the Commonwealth for the court to inquire of its own motion whether an injunction is really necessary or whether an appropriate undertaking will be forthcoming. Typically, in such circumstances, undertakings are readily proffered. The need to grant injunctive relief is thereby avoided. 133 It is less common, though still not unusual, when declaratory and injunctive relief are sought against the Commonwealth for an assurance to be given that it will abide by any declaration and that no injunction is therefore necessary. In such cases, formal undertakings are not normally proffered. It is assumed that the Commonwealth will act in accordance with the law as declared by the Court. The Commonwealth is expected to act as a "model litigant". It is assumed that it will comply with the spirit as well as the letter of the law. 134 Hamersley submits that the assurance given to Kenny J by Mr Brett on behalf of the NCC, which is set out at [28] above, and her Honour's statement that she was "content to accept that", amounted to a formal undertaking to the Court, and was therefore tantamount to a permanent injunction. 135 Hamersley notes that the NCC's costs submission to Kenny J, after judgment was delivered, (which referred to Mr Brett's assurance to her Honour that the NCC "would act in accordance with the declaration of the Court") had been accepted "as making injunctive relief unnecessary". It is not necessary for the word "undertake" to be used. Some undertakings are merely implied. See for example: Harman v Secretary of State for the Home Department [1983] 1 AC 280 at 304. As with an injunction, the terms of an undertaking must be strictly observed: Lade & Co Pty Ltd v Black [2006] 2 Qd R 531 at [36]. 137 Hamersley submits that the Court should treat what Mr Brett said on behalf of the NCC as an undertaking to Kenny J reflecting the terms of the permanent injunction which her Honour had stated that she proposed to grant. In other words, the undertaking was equivalent to an injunction preventing the NCC from making a recommendation regarding declaration of the Hamersley rail track service to the designated Minister. The statements made by Mr Brett were given in lieu of such an injunction. Absent those statements, an injunction would have been granted. Mr Brett put forward no reason why the proposed injunction was inappropriate other than that it was "not necessary". Nor did he qualify his assurance that the NCC would "act accordingly" by stating, for example, that it would do so only for a particular period of time, or until the situation changed materially. 138 Hamersley's submissions in this regard have some force. The indication by Kenny J that she would "accept" what was proffered on behalf of the NCC reflects the usual terminology employed by a court that accepts an undertaking from a party in lieu of an injunction. See Thomson Australian Holdings Proprietary Limited v The Trade Practices Commission [1981] HCA 48 ; (1981) 148 CLR 150 at 164. 139 Having given this matter careful consideration, I have concluded that Mr Brett's statements to Kenny J should not be regarded as amounting to a formal undertaking. The words that he used seem to me to have been casually expressed and spoken without any attention to formality. His "assurance" cannot properly be understood as constraining the NCC forever from entertaining any application made by a different applicant for a declaration recommendation in respect of what might have become a different service. 140 To construe Mr Brett's statements in the manner for which Hamersley contends would also be contrary to the NCC's statutory functions and duties under Pt IIIA. Moreover, his words could scarcely form the basis of any application against the NCC for contempt of court. Injunctive orders must be expressed in unambiguous language so that a person subjected to an injunction is entirely clear what conduct is expected of them: McNair Anderson Associates Pty Ltd v Hinch. The fact that none of the respondents made any submission to that effect suggests that they did not view Mr Brett's statements as tantamount to an undertaking equivalent to a permanent injunction going beyond the bounds of the declarations actually made. 142 If, contrary to my conclusions set out above, Mr Brett's words are to be understood as an "undertaking", rather than as a statement of deference to the declaratory orders foreshadowed, the question remains, what was the NCC undertaking to do? If, as I have indicated, the declarations made by her Honour concerned a specific service defined in a particular application to the NCC, and resolved a controversy that was to be determined on the then current facts, the "undertaking" was surely intended to operate no more broadly than the declaratory relief. Mr Brett's statement was made in response to the foreshadowed declarations and not just the foreshadowed permanent injunction. His statement was that the NCC "would act accordingly". That means, in context, in accordance with the declarations proposed. It does not mean in accordance with any injunction of the kind her Honour might put forward for consideration. 143 In any event, the terms of the foreshadowed injunction employed the expression "rail track service" in a context where that expression had to be understood as defined in the first of the declarations ultimately made. 144 I accept, of course, that an assurance of the kind given by Mr Brett might, in some circumstances, give rise to an estoppel. In Halsbury's Laws of Australia, the doctrine of estoppel by representation is discussed at [190-240]-[190-270]. The doctrine precludes a party who, by representation, has induced another party to adopt or accept a state of affairs, and consequently to act to that other party's detriment, from asserting a right inconsistent with the state of affairs upon which that other party acted. 145 At common law, an estoppel by representation arises only as a result of words or conduct reasonably likely to be understood as a representation of fact and not a mere expression of opinion. Moreover, the circumstances must be such that a reasonable person would accept the representation as an invitation to act upon it in a particular way. It must be causally linked to the decision of the party to whom it is made to act upon it to that party's detriment. See generally Commonwealth v Verwayen [1990] HCA 39 ; (1990) 170 CLR 394. 146 If a representation is to found an estoppel, it must be clear and unambiguous. See Legione v Hately [1983] HCA 11 ; (1983) 152 CLR 406 at 436 per Mason and Deane JJ and Minister for Immigration and Ethnic Affairs v Kurtovic . See also the cases discussed at footnotes 10 and 11 to [190-245] of Halsbury's . 147 There are several difficulties with Hamersley's submission that Mr Brett's "assurance" gives rise to such an estoppel. First, Mr Brett's statements were scarcely expressed in clear and unambiguous language. He said what he did in response to an indication by Kenny J of the terms of an injunction that her Honour might be prepared to grant. However, there was nothing definite about the terms of that injunction, and it was made entirely clear that no injunction of any kind would be granted until the parties had been given the opportunity to be heard regarding its terms. 148 Next, it might be thought that any representation embedded in that "assurance" involved a promise as to future conduct and not a statement as to an existing state of affairs: Legione v Hately ; Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 398 per Mason CJ and Wilson J, at 415 per Brennan J, at 459 per Gaudron J; and Commonwealth v Verwayen at 499-500 per McHugh J. Of course, a statement as to whether a present intention exists may itself be a representation as to an existing fact. However, that is hardly a proper characterisation of Mr Brett's language. 149 It is well recognised that statements as to future conduct may ground equitable estoppel. Equity will come to the aid of a party, who has acted to his or her detriment on the basis of some assumed state of affairs to which the other party to the transaction has contributed, if it would be unfair or unjust not to do so. There are, however, constraints upon the use of equitable estoppel. The applicant must prove that he or she assumed the existence of a particular legal relationship with the respondent, that the respondent induced that assumption, that the applicant acted or abstained from acting on the faith of that assumption, that the respondent knew of the applicant's action or intended the applicant to act in that way and that the applicant would suffer detriment if the assumption were not fulfilled. See Waltons Stores (Interstate) Ltd v Maher . 150 In effect, in order to establish equitable estoppel, it must be shown that it would be unconscionable for one party to resile from the assumed state of affairs on which the other party has relied. 151 In circumstances where it is uncertain as to the form that any permanent injunction might have taken, it is difficult to see how any assurance given by Mr Brett, expressed, it must be said, casually and in informal terms, can make it unconscionable for the NCC to go about performing its statutory duty. It must be remembered that Hamersley was represented by experienced and competent counsel at the time the assurance was given. It could have sought clarification of Mr Brett's remarks but did not do so. If, at the end of the day, Mr Brett had one thing in mind, and Ms Sloss something else, that is unfortunate. However, the test to be applied when determining whether something said by counsel gave rise to an undertaking must be the same as that to be adopted when construing judicial orders. That test is an objective, and not a subjective, one. 152 Applying an objective test, Mr Brett's remarks would not, in context, have been understood as giving rise to a formal undertaking, and certainly not one in the terms for which Hamersley now contends. It follows that I reject the submission that the NCC is precluded by Mr Brett's "assurance" from considering the TPI application. However, neither Robe River nor Hope Downs, the respondents in that proceeding, have any involvement in this case. 154 TPI, as the person seeking the NCC's recommendation, stands in the shoes previously worn by Robe River, and perhaps Hope Downs as well. That means that the parties in the earlier action relied on as creating a res judicata, and those in this proceeding, are not identical. That might affect Hamersley's entitlement to the relief sought since TPI cannot conceivably be estopped from making its application to the NCC. There is no suggestion in this case that Kenny J's judgment can operate, as it were, in rem. They say that if, contrary to my primary findings, an estoppel based on res judicata does arise in this case, Hamersley's undertaking to the Full Court in the earlier litigation prevents it from taking advantage of that estoppel. 156 In that context, it will be recalled that the appeal from Kenny J's judgment by the NCC and Hope Downs was forever stayed after the withdrawal of Robe River's application to the NCC. That occurred after Hamersley gave certain undertakings. Paragraph 4 of those undertakings is set out at [34] of these reasons for judgment. 157 I reject this contention by the NCC and TPI. The undertaking given by Hamersley to the Full Court was specifically linked to any application made under Pt IIIA of the TPA by Hope Downs or any of its related corporations. It was limited to any proceedings in connection with that application. It was only in that regard that Hamersley undertook not to rely, in the future, upon any issue estoppel or res judicata. The undertaking has no wider application and certainly no application to the present proceeding. At least one of the parties has indicated that it might wish to be heard in relation to costs. In the normal course, Hamersley, as the unsuccessful applicant in this proceeding, would be ordered to pay the costs of the respondents. I can see no reason to depart from that course. However, if any party wishes to be heard to the contrary, I will allow a period of seven days for the filing of submissions. If no submissions are filed, the Court will order that the applicant pay the respondents' costs, to be taxed in default of agreement. I certify that the preceding one hundred and fifty-eight (158) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Weinberg. | access to services under pt iiia of the trade practices act 1974 (cth) rail track service whether application can be made under s 44f(1) to national competition council for recommendation that particular rail track service be declared following rejection of similar application res judicata abuse of process estoppel principles by which earlier court orders to be construed what constitutes an undertaking to a court trade practices |
2 The applicants have commenced their claim against Rosanza and 18 other respondents under s 180(1) of the Corporations Act 2001 (Cth), s 52 of the Trade Practices Act 1974 (Cth) and s 42 of the Fair Trading Act 1987 (NSW). 3 In order to obtain a freezing order the applicants must establish in accordance with O 25A of the Federal Court Rules 1979 (Cth) that they have a good arguable case on a prospective cause of action that is justiciable in the Federal Court. Where this is established the Court has a broad discretion to make a freezing order against a prospective judgment debtor if it is satisfied in all the circumstances that there is a danger that the prospective judgment will be wholly or partly unsatisfied because that person's assets could be disposed of or diminished in value: see O 25A r 5. Order 25A r 6 provides that nothing in O 25A diminishes the inherent or implied jurisdiction of the Court to make a freezing order or ancillary order. The First to Sixth and Eighth to Ninth Respondents are medical practitioners. The Seventh Respondent is a chartered accountant. They have at all material times been the Directors of Rosanza which owns the property at 12 Macdonald Street, Harbord, in its capacity as Trustee of the Peninsula Private Hospital Trust ("the Unit Trust"). They were previously directors of the Second Applicant (Peninsula Hospital Management Pty Limited) ("Peninsula") before the shares in Peninsula were sold to the First Applicant (KGL). Those Respondents are being sued by Peninsula for alleged breach of directors' duties to Peninsula. They may be conveniently referred to as "the Director Respondents". The Eleventh to Nineteenth Respondents (as well as the Fourth, Sixth and Ninth Respondents) were previously the holders of shares in Peninsula before they sold them to KGL in about March 2004. They may be conveniently referred to as "the Vendor Respondents". Those Respondents also owned the units in the Unit Trust. From about 1996, Peninsula carried on the business of a private hospital and day procedures centre from the premises which were owned by Rosanza. On about 18 February 2004, the shareholders of Peninsula (being the Vendor Respondents referred to in paragraph 6 above) entered into a Sale of Share Deed with the First Applicant (KGL). Under that Deed, the Vendor Respondents sold their shares in Peninsula to KGL and the Director Respondents (other than the Ninth Respondent) ceased to be directors. Rosanza executed a fresh lease of the premises to Peninsula for a term of six years commencing 3 March 2004 ("the Lease"). The new Directors of Peninsula guaranteed Peninsula's obligations under the Lease ("the Guarantors"). Clause 4 of the Lease required Peninsula to operate the Hospital business from the premises, to maintain the Hospital Licence and to ensure that the premises and the Hospital business complied with all relevant laws and regulations. On or about 13 April 2006, Peninsula ceased to carry on the Hospital business and the Hospital Licence was no longer maintained. After 13 April 2006, Peninsula's then solicitors (Cosoff Cudmore Knox) sent a letter dated 20 April 2006 to Rosanza advising that Peninsula had ceased to carry on the Hospital business because the building on the premises did not meet Australian Building Code Standards and that, as a result, Peninsula was in breach of the Hospital Licence and that it would be unsafe and possibly illegal to continue to operate. Rosanza replied denying the allegations. On or about 30 May 2006, Rosanza received another letter of demand from new solicitors acting for Peninsula (Bruce Stewart Dimarco) dated 30 May 2006 alleging matters not raised in the previous letter from Cosoff Cudmore Knox and alleging that it was a consequence of those matters that the Hospital ceased operating on 13 April 2006. A similar letter of demand dated 30 May 2006 was sent to the Vendor Respondents. Rosanza and the Vendor Respondents (through their solicitors) replied denying the allegations and further correspondence ensued between the parties' legal representatives. The Respondents deny the allegations in the Statement of Claim. In particular, they deny that the Works were in breach of or threatened the Hospital Licence or were in breach of [the Environmental Planning and Assessment Act 1979 (NSW)] or threatened the continued operation of the Hospital business or that closure of the Hospital business was as a consequence of any matters arising from the Works or an absence of consent or authorisation of those Works related to the Works. On 10 May 2007, Rosanza terminated the Lease. It has cross-claimed against Peninsula and the Guarantors for rent and other debts due under the Lease to the date of termination as well as liquidated and general damages arising from the loss of the Lease. On 22 August 2007, Rosanza entered into a contract for the sale of the premises to a third party who will use the premises as a hospital. That sale is due to complete on 12 September 2007. The allegation in the Statement of Claim is that the works were carried out without the consent of the New South Wales Department of Health or the Consent Authority under s 76A of the Environmental Planning and Assessment Act 1979 (NSW). As a consequence, the licence of the hospital situated on the properties could be cancelled and the Consent Authority could issue orders adversely affecting the premises, thereby rendering them unfit for use as a private hospital. 8 I turn now to consider the first issue in relation to the present motion, namely, whether the applicants have established a prima facie cause of action against the respondents. If the party on whom the burden of proof rests fails to make out a prima facie case, the other party will be able to submit that there is no case to answer and the case will be dismissed: see Rutherford L and Bone S (eds), Osborn's Concise Law Dictionary (8th ed, Sweet & Maxwell, 1993) p 259. The precise level of proof required to raise a "good arguable" or "prima facie" case cannot be defined and will depend on the circumstances of a given case. Although for present purposes there is no need to draw a distinction between a "prima facie" and a "good arguable" case, it is clear that there must be some evidence , as opposed to an assertion or allegation, which shows that such a case exists. 10 The need for evidence to make out a prima facie case is illustrated by Patterson (1989) 18 NSWLR 319. In that case, Gleeson CJ at 321 referred to the need to establish a prima facie cause of action, and also noted at 322 that Giles J was satisfied, as the primary judge, that there was sufficient evidence to satisfy this first condition for grant of the remedy. Giles J only came to that conclusion after carefully considering the extensive and detailed evidence before him, which provided the necessary basis for his finding: see BTR Engineering (Australia) Ltd v Patterson (unreported Supreme Court of New South Wales, Giles J, 1 September 1989) at 3-5; see also Biscoe P, Mareva and Anton Piller orders: freezing and search orders (LexisNexis, 2005) at [2.60]-[2.61]. 11 In Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1 ; (1968) 118 CLR 618 at 622 the High Court observed that a prima facie case is made out where, if the evidence remains as it is , there is a probability that at the trial of the action the plaintiff will succeed. How strong the probability needs to be depends upon the nature of the rights asserted and the likely practical consequences of the order for sales. 12 The protection afforded by a preservation order to an applicant is a substantial encroachment on the basic right and freedom of the respondent to deal with his or her property. Practice Note 23 emphasises this point when it states that the purpose of the order is to prevent abuse of process and not to provide security in respect of the judgment. The restraint must be regarded as an extraordinary remedy because it restricts the right to deal with property even before judgment. This level of interference confirms the necessity of the person seeking the freezing order to provide sufficient oral or documentary evidence of his or her prima facie case. The mere making of allegations in correspondence or the assertion of a case in a Statement of Claim is not of itself, in my view, sufficient to make out a good arguable case. This is especially so where, as in the present case, there is a denial of the allegations both in correspondence and in the pleaded Defence. 13 In my view, at the time of this application for an asset preservation order, sufficient evidence has not been adduced by the applicants to establish a prima facie case. There are serious shortcomings in that evidence which has been adduced. By way of illustration, there is no evidence that the works being performed on the hospital were "unauthorised" by the New South Wales Department of Health or the local Council. There is no evidence that the hospital did not comply with fire safety requirements or that they could not be lawfully and safely occupied. As to the questions of causation, there is no evidence of damage being suffered as a result of the work allegedly being unauthorised. Nor is there any evidence as to the feasibility or cost of reinstatement. These are matters central not only to the applicants' claim but also to any consideration of whether they have a prima facie case. In the absence of such evidence, the Court is left with only bare allegations in correspondence and the Statement of Claim, the general circumstances of the case, some relevant documents, and a chronology of events unassisted by any evidence from persons familiar with the facts. 14 The applicants seek to rely on the certificate given by their solicitor under s 347 of the Legal Profession Act 2004 (NSW) ("the Act ") to the effect that there are reasonable grounds for believing, on the basis of provable facts and a reasonably arguable view of the law, that the claim for damages in the proceeding has reasonable prospects of success. In my view, such a certificate does not advance the applicants' case for several reasons. First, the certifying solicitor is not able to give any evidence as to the factual basis for the allegations since the certificate is no doubt given on the basis of instructions by a client which are then used to formulate the allegations in the Statement of Claim. There is no indication of what claims were made by the solicitor as distinct from his or her client. Secondly, the certificate is directed to satisfying a minimum requirement for the filing of the claim in a court (see s 347(2) of the Act ) and not directed to establishing the soundness of the allegations. It is concerned to prevent the filing of hopeless, vexatious or scandalous accusations. Thirdly, the certificate cannot prove that facts alleged have occurred or that any opinion or evidence is sound --- it purports only to verify the facts alleged. 15 Accordingly, on the meagre material before me, I cannot find that there is sufficient evidence to constitute a prima facie case. In light of this conclusion, there is no need for me to consider at length whether there is a danger of the respondents disposing of or removing their assets so that a prospective judgment may not be fully satisfied. I only note that I am not satisfied that, in all the circumstances, there is any such danger in this case. Although an applicant for a freezing order need not go so far as to show that the respondent formulated a plan or expressly or impliedly threatened to dispose of its assets, it must at least adduce evidence showing an appreciable or real risk or danger that the respondent will do so. In my view, that threshold has not been met in the present case. In light of these conclusions, the application for the preservation order must fail. 16 The applicants' application for an asset preservation order is therefore dismissed with costs. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin J. | asset preservation order sufficient evidence required to establish prima facie cause of action solicitor's certification of claim's reasonable prospects of success not evidence of prima facie case practice and procedure |
Each appeal is from a judgment of the Federal Magistrates Court of Australia. The two cases were heard together in that court. The reasons for judgment of the learned federal magistrate in both cases are published as MZXQS v MIAC & Anor and MZXQT v MIAC & Anor [2008] FMCA 372. In each case, the federal magistrate dismissed the appellant's application for judicial review of a decision of the Refugee Review Tribunal ("the Tribunal"). In each case, the Tribunal affirmed a decision of a delegate of the then Minister for Immigration and Multicultural and Indigenous Affairs (now the Minister for Immigration and Citizenship) (in both cases, "the Minister"), refusing to grant to the relevant appellant a protection visa. The appellants are citizens of Sri Lanka, of Tamil ethnic origin. They are sisters. Because s 91X of the Migration Act 1958 (Cth) ("the Migration Act ") requires that their names not be published, the older sister is identified in her proceeding as MZXQS and the younger as MZXQT. For the purposes of these reasons for judgment, when it is necessary to distinguish between the two appellants, I refer to them as "Appellant S" and "Appellant T" respectively. They arrived in Australia together, on 9 October 2006. Their applications for protection visas were both made on 20 November 2006. The initial decisions, rejecting their applications, were made on 9 January 2007. Their applications to the Tribunal for review of those decisions were both made on 25 January 2007. Both were represented by the same migration agents, one of whom is counsel who appeared for both appellants on the hearing of their appeals. On 22 February 2007, each appellant attended a Tribunal hearing. The member constituting the Tribunal was the same in both cases. That member signed each of the two decisions of the Tribunal on 30 April 2007, and they were sent to the respective appellants on 10 May 2007. By s 36 of the Migration Act , there is a class of visas to be known as protection visas. A criterion for a protection visa is that the person applying for it be a non-citizen in Australia to whom the Minister is satisfied Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol. The terms "Refugees Convention" and "Refugees Protocol" are defined in s 5(1) of the Migration Act to mean respectively the Convention relating to the Status of Refugees done at Geneva on 28 July 1951 and the Protocol relating to the Status of Refugees done at New York on 31 January 1967 . It is convenient to refer to these two documents, taken together, as the "Convention". The ground of race was invoked by each appellant on the basis that persons of the Tamil race were likely to be persecuted by the majority Sinhalese in Sri Lanka, and also on the basis that persons of the Tamil race were likely to be suspected of involvement with or sympathy for the Liberation Tigers of Tamil Eelam ("the LTTE"), a political and military organisation of Tamils, agitating for Tamil self-rule in Sri Lanka. The ground of political opinion was invoked not by reason of any actual political opinion, but by reason of imputed support for the LTTE or the Tamil cause. The ground of membership of a particular social group was invoked on two bases. One was the appellants' family. It was contended that the appellants had a well-founded fear of persecution because another sister is a member of the Sri Lankan Parliament, representing a constituency in the LTTE-controlled north of the country, and a member of the Tamil National Alliance ("the TNA"), to whom is imputed the political opinion of support or sympathy for the LTTE. The other particular social group contended for was Tamils returning from overseas who had spent a considerable period in a western country. The contention was that the appellants would be targeted by security forces and by militant Tamil groups for extortion. Under the heading " Tamil ethnicity ", the Tribunal dealt with what it described as a claim by each appellant "that as a Tamil she is suspected of involvement or sympathies with the LTTE solely on the basis of her race". The Tribunal referred to the lack of difficulty that the appellants had had in passing security checks in the past, to the fact that both appellants had been able to relocate from Jaffna to Colombo, obtain employment there, and travel overseas at will. The Tribunal was not satisfied that either appellant was of any adverse interest to the Sri Lankan authorities or that either had suffered discrimination or serious harm on the basis that she was a Tamil. She claims that that [ sic ] as a Tamil she is suspected of involvement or sympathies with the LTTE solely on the basis of her race...and if she returned to Colombo "she would face a real chance of becoming subject to cordon and search operations of the security forces directed at Tamils". It expressed the view that a family is capable of constituting a particular social group within the meaning of the Convention, but said that "this is subject to s.91S " of the Migration Act and set out an extract from that section. The Tribunal is not satisfied in this case that the applicant is a member of a social group...In any case, the Tribunal is satisfied that the applicant does not have a well founded fear of persecution as a result of being a member of a family group of a Parliamentarian. There is no substance for this claim in the history of the applicant's previous overseas travel. After travelling abroad in 2004 and 2005 she was not subject to extortion or theft attempts. The Tribunal does not accept the claim. The Tribunal notes that the applicant has travelled overseas before and not experienced any difficulty in travel movements and therefore puts no weight on this claim. The Tribunal has also considered the applicant's claims cumulatively against the three convention grounds of race, imputed political opinion and member [ sic ] of a particular social group(s). The Tribunal is not satisfied that the circumstances that the review applicant has put forward, taken either individually or cumulatively, evidence that the applicant has a well-founded fear of persecution within the meaning of the Convention. For present purposes, it is necessary only to deal with two of those grounds. The first was that the Tribunal "failed to deal either expressly or at all with the specific claim of imputed political opinion of being pro-LTTE through the [appellant's] sister being an MP from a political party considered to be pro-Tamil/LTTE". The second ground was that the Tribunal "failed to deal with the specific claim of fear of harm as a returned asylum seeker". At [10], his Honour relied on the Tribunal's finding of fact that there is no well-founded fear of persecution as a consequence of either appellant being a member of the family of a parliamentarian. His Honour expressed the view that the Tribunal dealt with the claim of particular social group, and also dealt with the claim that the appellants had profiles because their sister was a parliamentarian. At [17]-[29], his Honour considered and rejected the second ground relevant to this proceeding. His Honour accepted a submission by counsel for the Minister to the effect that, on a fair reading of the Tribunal's reasons, the manner in which the Tribunal dealt with the appellants' claim that they would be at risk as Tamils returning to Sri Lanka after spending time in a western country indicated that it had also considered whether either appellant had a well-founded fear of persecution as a result of applying unsuccessfully for refugee status. The TNA has its power base in Jaffna and is the northen [ sic ] Tamil's political party. She was living and working in the north of Sri Lanka when she was elected to represent the north. It is generally agreed that any member from the north of Sri Lanka, must have had some link or connection to the LTTE and it is fact that all those members are viewed with suspicion and distrust from the general Sri Lankan Sinhalese population. The very fact that she was able to stand for election in the north of Sri Lanka (Jaffna) means that she would have needed the support or endorsement of the LTTE. The LTTE will vet and control who and who does not stand for election. If the person is viewed as having anti LTTE views that person will not be a candidate for the north. My sister the MP is a very well known MP, she visits my house on a regular basis and all of my neighbours were well aware of this fact. Before she was elected MP she resided with me. That is, she supports a party who has the backing of the LTTE. My claim can also be seen as a member [ sic ] of particular social group, in this case the family, which includes my politician sister. It was clear from these submissions that each of the appellants was making a claim of imputed political opinion on the basis of her relationship to the appellants' sister. Each was saying that, because their sister was a member of Parliament, representing a constituency in the LTTE-dominated north of the country, and a member of the TNA, the sister would be understood or believed to be sympathetic to the cause of Tamils in general and to the LTTE in particular. This political opinion would be imputed to members of her family, whether they actually held it or not. The imputation was said to be more likely because the sister had stayed with the appellants in their home in Colombo. This was a claim of imputed political opinion distinct from that based purely on the appellants being of the Tamil race. It was also a claim of a well-founded fear of persecution for the Convention reason of political opinion, entirely distinct from any claim with reference to the Convention reason of particular social group. The Tribunal did not deal expressly with that claim. The Tribunal member appeared to be unaware of it as a separate claim. The Tribunal dealt only with imputed political opinion on the basis of race. It dealt only with the relationship of the appellants with their sister on the basis that it was a claim based on membership of a particular social group. In dealing with the latter, when it discussed s 91S of the Migration Act , the Tribunal appears to have overlooked the claim that the appellants' sister would have imputed to her a political opinion by reason of the location of her constituency and her membership of the TNA. The appellants were not relying on membership of a particular social group for this purpose, so s 91S was inapplicable. The sister might not have feared persecution herself, because she might have assumed that her prominence as a member of Parliament would protect her. This would not prevent her political opinion being imputed to either of the appellants, causing them to fear persecution. The Tribunal's statement that each appellant had exaggerated the possibilities of a threat to herself as a result of her sister's position was not made in the context of consideration of imputed political opinion by this means. It was made in the context of the particular social group ground and the Tribunal's discussion of the application of s 91S to that ground. Similarly, the Tribunal's finding that each appellant had not suffered discrimination in employment as a member of the family of a parliamentarian, and would not face a real chance of this in the reasonably near future, was in the context of the particular social group ground. The Tribunal simply did not deal with the separate, and separately articulated, claim of imputed political opinion by reason of the appellants' sister's position. In most cases there is no information about their subsequent fate or whereabouts. There are reports of returned asylum seekers and refugees going into hiding after receiving death threats, being arrested on arrival and reported deaths both in police custody and by the army. When the security officers realise that she has been in Australia for some time, they may well ask by what authority she stayed in Australia and she would have to say that she applied for Refugee Status. The next obvious question is as to why she had to apply for Refugee Status, and as a Tamil she may then be under suspicion because of this application. Each appellant then went on to assert that, as a Tamil who had spent a considerable period in a western country, she would be of interest to the security forces and militant Tamil groups, as a target of extortion. In this way, the claim of a well-founded fear of persecution as a member of a group consisting of returned asylum seekers, or returned Tamil asylum seekers, was put as a separate and distinct claim from any other claim based on a group of returnees to Sri Lanka defined in any other way. The Tribunal was bound to consider each of these separate and distinct claims. The Tribunal does not appear to have been aware of the claim of either appellant to have a well-founded fear of persecution on the basis of membership of a particular social group, being failed asylum seekers returning to Sri Lanka, or Tamils who were failed asylum seekers returning to Sri Lanka. The claim obviously had dimensions greater than the other claim or claims in relation to returnees. It would be necessary for the Tribunal to consider whether a confession of an unsuccessful claim for refugee status in another country would lead officials to question the basis on which such a claim had been made, and to suspect that there was some substance to that basis, even though the claim had been rejected. If it had considered that claim, it would then have been necessary for the Tribunal to consider whether s 91R(3) required it to disregard the application for a protection visa. That subsection requires the decision-maker to disregard any conduct engaged in by a protection visa applicant in Australia unless that applicant satisfies the decision-maker that he or she engaged in the conduct otherwise than for the purpose of strengthening his or her claim to be a refugee within the meaning of the Convention. The fact that the Tribunal did not discuss the possible impact of s 91R(3) is a further indication that it had not considered this claim as a separate claim in relation to either appellant. They were claims based on imputed political opinion as a result of the appellants' sister's position, and claims based on the proposition that they would be members of a particular social group, being citizens returning to Sri Lanka after making unsuccessful claims to be refugees in other countries. It is well-established that the Tribunal is obliged to deal with each and every claim made by an applicant for review of a decision refusing to grant a protection visa. Failure to do so amounts to jurisdictional error. To make a decision without having considered all the claims is to fail to complete the exercise of the jurisdiction embarked on. The federal magistrate was therefore in error in failing to find in favour of the appellants on each of the two grounds to which I have referred. His Honour should have found that there was jurisdictional error on the part of the Tribunal in relation to the decision in each of the appellant's cases. His Honour should have made the orders sought in the applications to the Federal Magistrates Court, or similar orders, having the effect of quashing the Tribunal's decision in each case and remitting each matter to the Tribunal to be heard and determined according to law. His Honour should also have ordered that the Minister pay the costs of the proceeding in the Federal Magistrates Court. The appeals must therefore be allowed. The orders made by the federal magistrate on 10 April 2008, dismissing the two applications, must be set aside. In substitution for those orders, there should be made orders for writs of certiorari quashing the decisions of the Tribunal, and orders for writs of mandamus, having the effect of requiring the Tribunal to hear and determine each appellant's application for review of the decision of the delegate of the Minister according to law. The Minister should be ordered to pay the costs of each appellant of the proceedings in the Federal Magistrates Court. The Minister should also be ordered to pay the appellants' costs of their appeals to this Court. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray. | visa protection visa whether refugee review tribunal failed to consider all claims of appellants whether claim based on persecution for imputed political opinion due to sister's political affiliations distinct from claim to membership of particular social group (family), or from claim based on imputed political opinion as tamil whether tribunal failed to consider claim based on membership of particular social group, being failed asylum seekers returning to sri lanka migration |
The action relates to the raising and application of so called mezzanine finance from retail investors by Ann Street. The statement of claim asserts against Mr Carey that he was at all material times a director of the company within the meaning of s 9 of the Corporations Act 2001 (Cth) for reasons and on the basis of particulars which are pleaded. It pleads the process of the raising and application of mezzanine finance, and various breaches by directors of the company, including Mr Carey, of duties owed to Ann Street and damages said to arise from their breach. There are also breach of trust claims and allegations of knowing assistance in breaches of fiduciary duty by Mr Carey and others. This application having in effect been commenced today, I make no comment upon its merits, save to the extent that is necessary for the purposes of this interlocutory application. 2 These proceedings were commenced following a decision by Finkelstein J in judicial review proceedings in Carey v Australian Securities and Investments Commission, VID57 of 2008, that ASIC was not authorised under s 50 of the ASIC Act to cause previous Federal Court proceedings, VID 351 of 2007, brought in the name of the company in liquidation, and existing Federal Court proceedings, VID 386 of 2007, to be carried on by it in the name of Ann Street: Carey v Australian Securities and Investments Commission [2008] FCA 963. 3 The decision by Finkelstein J was made at a time that applications for interlocutory freezing orders had been listed for hearing in the Perth Registry of the Court in VID 386 of 2007. On 27 June 2008, ASIC brought an urgent application in the earlier proceedings WAD 83 of 2006, which had been brought under s 1323 of the Corporations Act , seeking an extension of orders which had been made against Mr Carey and others in those proceedings and which were due to expire today. Those orders had been made in March of this year. That application was adjourned to today. In the meantime, the proceedings presently before the Court were commenced by ASIC in the name of Ann Street pursuant to what is, on Finkelstein J's judgment, the proper application of ASIC's powers under s 50. 4 In that proceeding, VID 485 of 2008, ASIC has brought an interlocutory process in which it seeks Mareva-style relief against various of the defendants and a variety of other entities which are set out in Schedule C, inter alia, to that application, and they are being referred to as "the Carey entities". Those are companies which, as I understand it for the most part, have not been served and so I do not propose to make any orders in relation to them. I have heard debate on the question whether I can make an order under s 1323 of the kind which ASIC seeks or directly under s 23 of the Federal Court of Australia Act 1976 (Cth) . Plainly, the power under s 1323 can be exercised where there is a civil proceeding pending but the structure of the section, which includes provision for interim orders and the absence of any requirement to offer an undertaking as to damages in interim orders in proceedings under that section, rather suggests that it is to be treated as self-contained and collateral to, rather than an element of, the civil proceeding upon which it may rely. I do not need to give a concluded opinion on that matter. 6 The argument put by ASIC in relation to the s 1323 element of its application was that I should make an order under s 23 as an incident of my power to make an order under s 1323. This would be on the basis that I was satisfied that receivers could be appointed under s 1323 and could then resort to s 23 as a fallback position: see Australian Securities & Investments Commission; In the Matter of Richstar Enterprises Pty Ltd ACN 099 071 968 v Carey (No 14) [2007] FCA 310. I think the preferable course here is to go directly to s 23 and the power it confers in aid of the jurisdiction invoked in these proceedings. In my opinion, at least for the purposes of making an interim order under s 23 and allowing parties further time to consider their position and also to consider the position of third parties who have not been served, there is sufficient to warrant my making an interlocutory freezing order. 7 ASIC relies largely upon evidence which it adduced before this Court in WAD 83 of 2006 in relation to Mr Carey. That evidence has been reviewed in previous judgments of the Court in WAD 83 of 2006. I do not propose again to go through that litany of transactions described in previous judgments, nor the reference to overseas dealings which were said to have been at first denied by Mr Carey and then falsified by reference to documents that were later obtained as part of the investigative process, ancillary to the proceedings in WAD 83 of 2006. It suffices to say that there is still some risk of a dissipation of assets, if there be assets, under the control of Mr Carey. I express no concluded view about that, but it is sufficient for me to identify a risk and to say that in this case an order can be structured in such a way that the balance of convenience favours making the order rather than not making it. The form of the order which is proposed largely accords with existing arrangements which have applied under the s 1323 orders made in WAD 83 of 2006. I will, however, delete the reference to the travel restraint which really only operated in the context of those orders. I think also, given what has been said about Mr Carey's capacity to either control or effectively direct or influence the disposition of assets in third party companies, that there should be some restraint imposed in relation to his capacity to do that in a way that might be adverse to the plaintiff as a potential creditor in these proceedings. 8 I am expressing no concluded view, obviously, about the merits of the proceedings themselves beyond the fact that there is, on the material which I have previously seen, an arguable case in relation to the various causes of action that are raised. I do not wish to say any more about that. I do not wish to pre-empt any judgment that might be made on complex, factual questions. 9 I propose to make an order in terms of the s 23 orders which are sought by ASIC in its interlocutory process relevant to Mr Carey and subject to certain variations. I will add to para 1, after the words, "all or any of his assets whether within or outside Australia whether held legally or beneficially by him" these words, "nor do any act by way of instruction, advice or expression of wishes to any company or third party which has the purpose or is likely to have the effect of reducing the value of any asset owned by him or under his control. " Subject to that change and the deletion of the travel restraint, which is not in dispute, and other minor variations, I will make the orders sought. There will be no order as to costs. I do not require that ASIC offer an undertaking as to damages. Relevant to that consideration, is the fact that the proceeding is brought in the exercise of its statutory responsibilities and in the public interest. Liberty to apply is available at short notice in the event of any apprehension that the freezing order will result in some unexpected and unfair detriment to Mr Carey. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | freezing orders action by regulator in name of corporation action brought pursuant to statutory power claims against directors breach of duties claim for interlocutory relief whether any risk of dissipation of assets limited freezing order granted no undertaking required liberty to apply at short notice to vary or discharge restraint. corporations |
Under s 36(2) of the Act the criterion for a protection visa is that the applicant for the visa is (relevantly) a non-citizen in Australia to whom the Minister is satisfied Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol (meaning, in accordance with s 5(1) , the 1951 Convention relating to the Status of Refugees and the 1967 Protocol relating to the Status of Refugees). Section 474 of the Act protects "privative clause decisions" (defined to include decisions with respect to protection visas) from challenge other than on the grounds of jurisdictional error. The appellant is a citizen of India. He arrived in Australia on 10 April 2007. On 19 April 2007 the appellant applied to the Department of Immigration and Citizenship for a protection visa. A delegate of the respondent Minister refused the application on 31 May 2007. On 29 June 2007 the appellant applied to the Tribunal for a review of that decision. The Tribunal affirmed the decision on 3 September 2007. The appellant appealed to the Federal Magistrates Court, filing an amended application on 25 July 2008. The Federal Magistrates Court dismissed the appeal on 17 October 2008. On 4 November 2008 the appellant filed a notice of appeal to this Court from the orders of the Federal Magistrates Court. The notice of appeal specifies three grounds which may be summarised as follows: - (i) the Federal Magistrates Court should have found that it was open to the Tribunal to find that the appellant was a refugee, (ii) the Tribunal denied the appellant procedural fairness in respect of his persecution, as a member of the Akhil Bharatiya Vidyarthi Parishad (or ABVP), by the Communist Party of India (Marxist) and not the Communist Party of India (Maoist), these being different parties, and (iii) the Tribunal's failure to give the appellant accurate particulars of adverse information (namely, about the difference between the Communist Party of India (Marxist) and the Communist Party of India (Maoist)) constituted a jurisdictional error (citing SZEEU v Minister for Immigration, Multicultural & Indigenous Affairs (2006) 150 FCR 214 ; [2006] FCAFC 2). The primary judge found that the Tribunal's decision was not affected by jurisdictional error. Before the primary judge the appellant claimed that the Tribunal had not provided the appellant with procedural fairness by failing to comply with s 424AA of the Act. This claim was particularised by reference to the Tribunal having put to the appellant during the hearing that the Communist Party of India and the Communist Party of India (Marxist) were not the same party. The appellant said this constituted the giving of information within the meaning of s 424AA(a) of the Act without complying with the requirements of that section. (2A) The Tribunal is not obliged under this section to give particulars of information to an applicant, nor invite the applicant to comment on or respond to the information, if the Tribunal gives clear particulars of the information to the applicant, and invites the applicant to comment on or respond to the information, under section 424AA. The primary judge held that the information about the Communist Party of India and the Communist Party of India (Marxist) fell within s 424A(3). As s 424AA was an alternative method of complying with the obligation in s 424A the distinction between the Communist Party of India and the Communist Party of India (Marxist) to which the Tribunal referred during the hearing was not "information" within the meaning of either s 424A or s 424AA (citing SZLXI v Minister for Immigration and Citizenship (2008) 103 ALD 589 ; [2008] FCA 1270). I agree with the reasoning of the primary judge. Further, the additional grounds of appeal put before this Court do not lead to a result other than dismissal of the appeal. The first ground of appeal is misconceived. Insofar as this ground refers in the notice of appeal to adverse information it is encompassed by grounds two and three, both of which appear to relate to the Tribunal's reference to the Communist Party of India and the Communist Party of India (Marxist) being separate parties (albeit within the same Left Democratic Front coalition). Otherwise the ground is an impermissible attempt to challenge the merits of the Tribunal's decision. Insofar as the second and third appeal grounds refer to the appellant being an active member of the ABVP, factual findings in respect of the appellant's claims about his activities as a member of the ABVP were a matter for the Tribunal. Neither this Court nor the Federal Magistrates Court has jurisdiction to interfere with those findings of fact which were clearly open to the Tribunal on the evidence. Otherwise these grounds relate to an alleged denial of procedural fairness. In SZLXI (2008) 103 ALD 589 ; [2008] FCA 1270 Cowdroy J held that the exceptions in s 424A(3) must apply to s 424AA as that section is merely an alternative method of providing appellants with information. Section 424AA itself imposes no obligation upon the Tribunal. It provides an alternative means by which the Tribunal may give to the applicant 'information' that it is otherwise required to give in writing pursuant to s 424A(1) of the Act. A jurisdictional error will only arise if there is a breach of s 424A ( SZLXI v Minister for Immigration & Citizenship [2008] FCA 1270 at [23] ---[28]; SZLWI v Minister for Immigration & Citizenship [2008] FCA 1330 at [17] ---[21]; SZLQD v Minister for Immigration & Citizenship [2008] FCA 739 at [12] ). There was no 'information' for the purposes of s 424A(1) , and s 424AA was not engaged. I agree with these submissions. This observation supports the approach of the primary judge. Denial of procedural fairness by reason of breach of s 424AA(b) is not established because the information about political parties was not information for the purposes of that section. Further, I am unable to see any unfairness in the Tribunal's approach to this issue. The Tribunal referred to the difference between political parties merely by way of background. The appellant's reference to SZEEU (2006) 150 FCR 214 ; [2006] FCAFC 2 provides no assistance. As the Minister submitted, this ground is devoid of proper particulars and fails to identify any error by the Tribunal. In his oral submissions to this Court the appellant said he was nervous and unable to represent himself before the Federal Magistrates Court or this Court. He also said that the Tribunal and Federal Magistrates Court had not fully considered his claims so as to make a justifiable decision. These submissions, as the Minister submitted, do not disclose any error which would enable the appeal to be upheld. Further, and as the Minister pointed out, the appellant had legal representation before the Federal Magistrates Court. In essence, the Tribunal rejected the appellant's claims because it did not accept his role in the ABVP. This was a factual finding open to the Tribunal. The appellant has not identified any error in the approach of the Federal Magistrates Court. Accordingly, the appeal must be dismissed 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 Jagot. | application for protection visa migration |
The orders made by the Registrar are that Helimount Pty Ltd ('Helimount') be wound up in insolvency under the Corporations Act 2001 (Cth) (' Corporations Act ') and that Mr Hugh Sutcliffe Martin, an official liquidator, be appointed liquidator of the company. 2 The orders were made on the application of Web Wealth Proprietary Limited ('Web Wealth') and the application was based on the failure of Helimount to pay a debt which was the subject of a statutory demand dated 28 November 2005 and served on Helimount by Web Wealth. Helimount did not apply under s 459G of the Corporations Act for an order setting aside the statutory demand. 3 The statutory demand was served on the registered office of Helimount on or about 28 November 2005 and the application by Web Wealth for a winding up order was made on 31 January 2006. The Registrar made the orders referred to above on 26 July 2006 and the application for review by Helimount was made on 16 August 2006. 4 At the time the statutory demand was served on Helimount the sole director and shareholder of the company was Mr Domenico John Callipari. 5 The application for review is brought under s 35A(5) of the Federal Court of Australia Act 1976 (Cth). It is well-established that the hearing before me is a hearing de novo (s 35A(6)). 6 Mr Callipari caused Helimount to bring the application for review. At the time the application was made Helimount was subject to a winding up order and, by reason of s 471A(1) of the Corporations Act , Mr Callipari did not have the power to cause the company to bring the application. For the reasons I gave in Lightburn Pty Ltd v Kama Power Products Pty Ltd (2003) 226 LSJS 61 at [24] there is no longer a residual power at common law in directors to cause a company to appeal against a winding up order. In my opinion, the same applies in the case of an application for review under s 35A(5) of the Federal Court of Australia Act 1976 (Cth). However, the Court is able to grant approval under s 471A(1A) of the Corporations Act nunc pro tunc for Mr Callipari to cause the company to bring the application. The first question before me is whether approval under s 471A(1A) should be granted. 7 As I have said, Helimount did not make an application to set aside the statutory demand under s 459G of the Corporations Act . However, it disputes the debt, or at least the quantum of the debt, it is said to owe to Web Wealth. By reason of s 459S of the Corporations Act Helimount may not, without the leave of the Court, oppose the application for it to be wound up in insolvency on a ground that it could have relied on but did not so rely on for the purposes of an application by it for the statutory demand to be set aside. The second question before me is whether Helimount should be granted leave under s 459S. 8 By reason of Helimount's failure to comply with the statutory demand it is presumed to be insolvent: s 459C(2) of the Corporations Act . It seeks to establish that it is not insolvent and whether it has discharged the onus of proving that it is not insolvent is the third question before me. 9 I turn to examine the facts established on the evidence before me and I start with the facts surrounding the debt allegedly owed by Helimount to Web Wealth. It appears that the original proposal was for the loan to be in the sum of $600,000 but that at the last moment the amount to be lent was increased to $630,000. It is common ground that the sum of $630,000 was paid by Web Wealth to Helimount and Mr Callipari. The repayment of the moneys was secured by a first registered mortgage over two properties identified in the deed. 11 The deed provided that the moneys were advanced for a period at Web Wealth's absolute discretion but for not less than two calendar months with provision for the loan to be rolled over calendar monthly if Helimount and Mr Callipari were not in default under the terms of the deed and the said mortgages. 12 The deed provided for the payment of interest on the moneys advanced. As will become clear, the payment of interest is at the heart of Helimount's challenge to the debt. The deed provided for the payment of a reduced rate of interest where payment is made as scheduled and a normal rate where payment is made after the due date. The Borrower hereby agrees to pay interest as per the Memorandum of Mortgage being at the "Reduced Rate" of Six Percent per calendar month (6.00% pcm) where it is paid as scheduled and at the "Normal Rate" of Ten Percent per calendar month (10.00% pcm) where it is paid after the due date. The Borrower hereby agrees to pay interest calendar monthly in arrears directly to the Mortgagee in the amount of $36,000.00 ("Reduced") PROVIDED THAT IT IS RECEIVED on or before the 13 th day of the calendar month during the term of the Loan AND in the amount of $60,000.00 ("Normal") WHERE IT IS RECEIVED after the 13 th day of the calendar month during the term of the Loan. For example, why are there two clauses dealing with the payment of interest? Can they operate together? They appear to be consistent if the loan amount is $600,000 but not if the loan amount is $630,000. Clearly I cannot resolve those issues on an application of this nature. 14 It is common ground that Helimount has not repaid the principal amount of $630,000. Web Wealth's case is that interest of $740,429 had accrued on the principal amount as at November 2005 and that the sum of $1,370,429 was due and payable by Helimount to it. That is the amount referred to in the statutory demand. Helimount denies this allegation. 15 A number of affidavits were filed which were directed to Helimount's dispute about the debt. Although I cannot resolve the various disputes on this application I find on the evidence there is no genuine dispute concerning Helimount's liability to pay the principal amount of the loan and some interest and there is a genuine dispute about the interest claimed by Web Wealth. Helimount claimed that some of the cheques given to it by Web Wealth as part of the loan were not met when they were first presented and that this caused the company financial loss in the course of its business operations. The details were sketchy and the argument was not pressed in the submissions before me. On the material, I would not be prepared to find that there was a genuine dispute or claim on this basis. This contention was the only one put forward by Helimount which might impact on its obligation to repay the principal amount of the loan in the sense that it might have given rise to counterclaim, set-off or cross-demand. The rest of Helimount's claims centred on its obligation to pay interest. Helimount alleges that the agreed interest rates were 4 per cent (reduced rate) and 6 per cent (normal rate) respectively. Helimount alleges that the first instalment of interest was paid out of the loan moneys and was in the sum of $25,000. Helimount alleges that at the time the deed was entered into Web Wealth's agent agreed that the loan was a short term loan only and that it would only be outstanding for two months or so and that he would arrange for refinancing after that period at a commercial rate of interest of 7 per cent or 8 per cent per annum. Helimount alleges that Web Wealth's agent failed to do that and Helimount has suffered loss as a result. In addition to those allegations Helimount alleges that the interest stipulated in the deed is usurious and invalid, or gives rise to unconscionable conduct under s 51AB of the Trade Practices Act 1974 (Cth) and that, in the alternative, the interest rate referred to in the deed as the normal rate is void as a contractual penalty. Web Wealth's response to these allegations is largely one of denial. Web Wealth does accept that there was an oral agreement to the effect that the first month's interest would be $25,000 if that sum was paid as clear funds. Other than this, Web Wealth's case is that the interest rates were as set out in the deed. Web Wealth denies that it promised to arrange alternative finance after two months at a commercial rate of interest of 7 per cent or 8 per cent per annum. Web Wealth alleges that the person said to be its agent was not its agent. In any event, that person (who has sworn an affidavit) denies making any promise to arrange alternative funding. It is convenient to note at this point that one matter established by Web Wealth's evidence is that Mr Callipari received an offer of finance from Banksia Mortgages Limited in the sum of $1,450,000, but it seems that Helimount did not take up the offer. On 24 March 2006 it made an offer to pay $700,000 in full and final satisfaction of the debt, interest and costs. There were also offers made (and, on the face of it, agreements reached) in the period between the making of Web Wealth's application and the date the Registrar made the orders which are the subject of the application for review. On 24 May 2006 a solicitor of the firm of solicitors formerly acting for Helimount entered into an agreement with Web Wealth and on the basis of the agreement the Registrar adjourned the application to 12 July 2006. Among other things, the agreement provided for the payment of $1.1 million to Web Wealth on or before 5 July 2006 by Mr Callipari who is also recorded as being a party to the agreement and, in the absence of such payment, Helimount agreed not to oppose the making of orders to wind it up upon the application of Web Wealth. 17 The agreement of 24 May 2006 was not carried out and there were further negotiations between the parties on 12 July 2006 and again an agreement was said to have been reached on that day resulting in Web Wealth's application being adjourned to 26 July 2006. The agreement reached on 12 July 2006 provided for the payment of the sum of $1.1 million and an additional sum of $100,000 by Helimount and Mr Callipari to Web Wealth on or before close of business on 25 July 2006, and for 'Helimount to provide by way of comfort documentary evidence of the approval of finance by G E' for the above by 14 July 2006. That agreement also was not carried out. 18 As I understand it, in putting those agreements before the Court, Web Wealth was not seeking orders to enforce either agreement but rather seeking to show that there was in reality no genuine dispute about the debt. Helimount sought to meet that argument by putting forward evidence which was in hearsay form to the effect that Mr Callipari on behalf of Helimount did not give instructions to Helimount's former solicitors to enter into the first agreement. It was not suggested that instructions were not given in relation to the second agreement and in view of that it is not clear to me what precise point Helimount seeks to make. Web Wealth objected to the reception of the evidence which was in hearsay form and in my opinion the evidence should not be received. The only basis put forward by Helimount upon which I could receive the evidence was that the proceeding before me was an interlocutory proceeding within s 75 of the Evidence Act 1995 (Cth). I do not think the proceeding before me is an interlocutory proceeding and therefore the disputed evidence should not be received. In my opinion, an order that a company be wound up in insolvency is a final order and the proceedings are of that character. I will not receive in evidence paragraphs 11 (other than the first four sentences) and 12 (other than the first two sentences) of the affidavit of Mr Russell Mitchell sworn on 15 August 2006. 19 I turn now to consider the explanation put forward by Helimount as to why it did not apply under s 459G of the Corporations Act to set aside the statutory demand. 20 Mr Callipari states that he was not aware of the service of the statutory demand by Web Wealth until February 2006. He states that the statutory demand was served 'from the offices of my former accountants', and that a copy of the demand did not come to his attention until February 2006. He states that he was never personally served with the notice and he states that as soon as he received the statutory demand he instructed solicitors. That is the limit of the explanation provided by Mr Callipari. As I have said, the statutory demand was served on the company's registered office. 21 There is some evidence that touches on this topic in the affidavit of Helimount's present solicitor wherein he states that he was informed by Mr Callipari that he suffered a heart attack in early February 2006 and that it was not until later in February 2006 that he became aware of correspondence relating to the statutory demand. There is also a suggestion that there was a breakdown in communication between Mr Callipari and the solicitors he had acting for him in November 2005 and, although it is not entirely clear, the suggestion seems to be that those solicitors had received instructions to apply to set aside an earlier statutory demand. 22 The evidence as to Helimount's explanation for not applying to set aside the statutory demand is inadequate, confusing and unsatisfactory. 23 I turn now to consider the evidence relating to the financial position of Helimount. The first aspect is the evidence that relates to Helimount's profit and loss and trading performance. The second aspect is the quality of the evidence put forward by Helimount and, in particular, whether it was the 'fullest and best' evidence: Commonwealth Bank of Australia v Begonia (1993) 11 ACLC 1075 at 1085 per Hayne J. The third aspect is the evidence as to the assets and liabilities of Helimount and this is relevant for the purposes of considering its ability to borrow funds to overcome any temporary cashflow or liquidity problems. 25 I start with Helimount's profit and loss and trading performance. 26 The liquidator has deposed to Helimount's profit and loss and trading performance over certain years. His evidence is to the effect that in 2003 Helimount earned $78,916 from the sale of wine grapes and made a profit of $1,510. In 2004 the company earned $105,000 from the sale of wine grapes and $124,228 as a profit on the sale of property and made a profit of $150,623. In 2005 Helimount made sales of $472,015 and made a profit of $159,247. In 2006 Helimount could not sell its wine grapes. The liquidator states that no financial statements have been prepared for the last year, which I assume to be the financial year ended 30 June 2006. The liquidator does not reveal the source of these figures. 27 Mr Callipari states that Helimount is the trustee of the DJ and AC Family Trust. He states that he and Helimount have recently changed accountants and that the new accountants are in the process of preparing financial accounts and taxation returns for the financial year ended 30 June 2005. He states that the 'former' financial accounts of the company and trust do not assist in an assessment of the financial position of Helimount or the trust, 'as there have been substantial changes in relation to the financial position of the company and trust since 30 June 2004'. At the very least, Mr Callipari seems to qualify that statement in a later affidavit. He produces the financial statements of the family trust for the year ended 30 June 2004. Those statements contain the figures for the years ended 30 June 2003 and 30 June 2004 referred to by the liquidator and set out above [26]. In the later affidavit Mr Callipari repeats his statement about the change of accountants and the fact that the balance sheet and taxation returns for the financial year ended 30 June 2005 have not been prepared, but he goes on to say, 'that the financial affairs of the Trust and company Helimount Pty Ltd have not materially altered in an adverse manner, since the 30 th June 2004'. 28 It is clear from the evidence that Helimount has not repaid the debt or any part of it to Web Wealth and that it would have to borrow moneys to repay the debt or any substantial part of it. 29 It seems that if Helimount was to refinance its liabilities the valuation and acceptance fees associated with the borrowings would be paid out of the loan(s) themselves rather than from cash available to Helimount. 30 I turn now to examine the evidence which was put forward by Helimount with a view to considering if it was the 'fullest and best' evidence. 31 The first point to note is that no financial statements of Helimount since 30 June 2004 have been put in evidence. In my opinion, Mr Callipari's explanation for this state of affairs is a cause for concern. There is no explanation as to why the company changed accountants, but more importantly, the company presumably keeps some records and yet Mr Callipari has made no attempt to give any detailed evidence of Helimount's trading performance since 30 June 2004. The second point to note is that Mr Callipari has not completed a report as to affairs of Helimount and the liquidator has reported this breach of the law to the Australian Securities and Investments Commission. The third point to note is that in March 2006 and a little over one month after Web Wealth had filed its application, Helimount granted to the Australia and New Zealand Banking Group Limited ('ANZ') a fixed and floating charge over all its assets to secure advances to Mr Callipari. The advances presently total a sum in excess of $1.7 million. There was some, but not a full, explanation, of the circumstances surrounding this transaction. The fourth point to note is that on 21 July 2006 and five days before the Registrar made her orders, Mr Callipari granted Mrs Callipari on behalf of Helimount what the liquidator describes as 'a transfer for the freehold of the property known as 162a Eighth Street, Mildura, and a share of the net proceeds from the sale of all other property owned by [Helimount]'. Mrs Callipari is sometimes referred to as Mr Callipari's wife and on other occasions as his estranged de facto wife. There is evidence referring to a matrimonial dispute between Mr Callipari and Mrs Callipari, and of proceedings in the Supreme Court of Victoria but there was no evidence explaining the precise nature of the dispute or the proceedings or the nature or basis of the interest granted to Mrs Callipari by Helimount. The fifth point to note is that there is very little cogent and clear evidence of Mr Callipari's financial position and his ability to meet his liabilities to the ANZ. 32 In terms of the assets and liabilities the liquidator has sworn an affidavit providing details of what he considers to be the assets and liabilities of Helimount. 33 The liquidator states that the company owns a number of blocks of land. He is presently arranging valuations, but at this stage his best estimate of the value of all the land is $1,665,000-$1,920,000. A number of the blocks are encumbered either by caveats lodged by Web Wealth or Mrs Callipari or by mortgages securing the loan by the ANZ to Mr Callipari which was guaranteed by Helimount. There is evidence that the caveats lodged by Mrs Callipari or at least some of them have been removed. The debt to Web Wealth being an amount as at November 2005 of $630,000 by way of principal and $740,429 by way of interest. 2. A fixed and floating charge over all of its assets in favour of ANZ securing Helimount's guarantee of Mr Callipari's debt to the ANZ which was $1,711,106 as at 31 August 2006. 3. A liability to Mr Callipari as an unsecured creditor of the company which the latest financial statements showed to be $730,622.71 as at 30 June 2005. That liability apparently relates to certain properties Mr Callipari transferred to Helimount at the time it was registered. A liability to Helimount's accountant in the sum of approximately $10,000. As I said earlier, on 21 July Mr Callipari granted Mrs Callipari on behalf of Helimount a transfer 'for' the freehold of the property known as 162a Eighth Street, Mildura, and a share of the net proceeds from the sale of all other property owned by Helimount. It is not clear from the evidence what liability Mr Callipari, let alone Helimount, has to Mrs Callipari. The fixed and floating charge granted to the ANZ a little over a month after Web Wealth filed its application. The liquidator states that the amount of the loans, not taking into account Helimount's ability to claim the debt from Mr Callipari, would make Helimount insolvent. The liquidator expresses the view that the transaction may be an uncommercial transaction within s 588FB of the Corporations Act 2001 (Cth). 2. The loan by Web Wealth to Helimount may involve an interest rate which is or was extortionate within s 588FD of the Corporations Act 2001 (Cth). 3. The transaction involving Mrs Callipari and effected on 21 July 2006 may fall within the terms of s 588FDA of the Corporations Act 2001 (Cth). With the charge currently existing in favour of ANZ and after all legal, liquidators and sale costs [sic] are unlikely to leave any funds for unsecured creditors. For the purposes of the application of s 471A(1), I do not think that any distinction should be drawn between an application for review and an appeal although in the case of an application for review what French J called the 'constitutional imperative' in HVAC Construction (Qld) Pty Ltd v Energy Equipment Engineering Pty Ltd (2002) 44 ACSR 169 may be relevant to whether approval to cause a company to bring an application for review should be granted. That consideration would not be relevant in the case of an appeal. 39 An application for approval can be made before a proceeding is commenced or sought nunc pro tunc after the proceeding has been commenced but before the substantive proceeding (be it an application for review or an appeal) is heard. A key consideration when an application is made at either of these stages is the preservation of the company's assets and the importance of avoiding a situation whereby the company's assets are diminished by an unsuccessful appeal ( Lane Cove Council v Geebung Polo Club Pty Ltd (No 2) [2002] NSWSC 118 ; (2002) 167 FLR 175. Therefore, in deciding whether to grant approval a court will consider the solvency of the company and whether the director offers to undertake to pay the costs if the appeal is unsuccessful (see Lightburn Pty Ltd v Kama Power Products Pty Ltd (supra) at [24]-[33]). 40 In this case no application was brought by either party which might have led to the question of whether approval should be granted being determined before the hearing of the substantive proceeding, that is, the application for review. I have heard all the arguments together and, for reasons I will give, I am not satisfied that Helimount has discharged the onus of proving its solvency. In those circumstances, it is not appropriate to grant approval under s 471A(1A)(d) for Mr Callipari to bring the application for review. The issue which has arisen is whether s 459S(2) means that the debt must on the company's case make the difference between a finding of solvency and a finding of insolvency, or is it sufficient that depending on what other findings are made it may be relevant to the question of solvency? The New South Wales Court of Appeal in Switz Pty Ltd v Glowbind Pty Ltd [2000] NSWCA 37 ; (2000) 48 NSWLR 661 favoured the former interpretation. In my opinion s 459s(2) directs attention, in part, to what it is that the company intends to prove and how it intends to prove it. If the company is not prepared to contemplate the possibility that its assertion of solvency is subject to qualification, then the Court cannot be "satisfied" of the mandatory precondition in s 459s(2). An objective element is introduced by the word "material" but that can only be determined after identifying the company's contentions. 45 Applying these principles to the facts, I do not think that leave under s 459S should be granted. I have divided the grounds upon which the debt might be disputed into those which relate to the principal amount and those which relate to interest. Leave should not be granted in relation to the grounds which bear on the principal amount because even on a preliminary consideration there is no genuine dispute in relation to the principal amount and, furthermore, Helimount's explanation for not applying to set aside the statutory demand is unsatisfactory. Leave should not be granted in relation to the grounds which bear upon the interest because the explanation for not applying to set aside the statutory demand is unsatisfactory and, more importantly, it is not clear to me (and in terms of s 459S(2) I am not satisfied: see Shakespeares Pie Co Australia Pty Ltd v Multipye Pty Ltd [2005] NSWSC 1338 per Barrett J at [10]) that grounds bearing upon the interest are material in proving Helimount is solvent. In other words, it is not clear to me that Helimount is not saying that it is solvent irrespective of Web Wealth's claim for interest. 46 I decline to grant leave under s 459S. First, the only genuine dispute relates to the interest claimed by Web Wealth and, secondly, in any event the presumption of insolvency which arises from Helimount's failure to comply with the statutory demand still applies and 'operates except so far as the contrary is proved for the purposes of the application' (s 459C(2) and (3)). The latter proposition follows from the terms of s 459C and from the fact that the leave granted under s 459S(1) is not leave to apply to set aside the statutory demand, but rather leave to oppose the application for a company to be wound up in insolvency on a particular ground. 49 In ACE Contractors & Staff Pty Ltd v Westgarth Development Pty Ltd [1999] FCA 728 Weinberg J set out a number of principles which he considered to be relevant on an application of this nature. (1997) 15 ACLC 477 per Mansfield J. Nor are bald assertions of solvency arising from a general review of the accounts, even if made by qualified accountants who have detailed knowledge of how those accounts were prepared: Simionato Holdings Pty Ltd ( supra); Re Citic Commodity Trading Pty Ltd v JBL Enterprises (WA) Pty Ltd [1998] FCA 232 per Heerey J; Leslie v Howship Holdings Pty Ltd (1997) 15 ACLC 459 at 463 per Sackville J. A company may be at the same time insolvent and wealthy. The nature of a company's assets, and its ability to convert those assets into cash within a relatively short time, at least to the extent of meeting all its debts as and when they fall due, must be considered in determining solvency: Rees v Bank of New South Wales [1964] HCA 47 ; (1964) 111 CLR 210; Re Tweeds Garages Ltd [1962] Ch 406 at 410 per Plowman J; Simionato Holdings Pty Ltd (supra); Melbase Corporation Pty Ltd v Segenhoe Ltd (1995) 13 ACLC 823 at 832 per Lindgren J; Leslie v Howship Holdings Pty Ltd (supra) at 465-466. The credit resources available to the company must also be taken into account: Sandell v Porter [1966] HCA 28 ; (1966) 115 CLR 666 at 671 per Barwick CJ (with whom McTiernan and Windeyer JJ agreed); Leslie v Howship Holdings Pty Ltd (supra) at 466; Taylor v ANZ Banking Group Ltd (1988) 6 ACLC 808 at 812 per McGarvie J. However, this does not mean that future events are to be ignored: Leslie v Howship Holdings Pty Ltd (supra) at 466-467. 51 It is to be presumed until the contrary is proved that Helimount is not able to pay all its debts as and when they become due and payable. 52 Helimount submits that it has discharged the onus of proving that it is solvent. It submits that it has at most only a couple of creditors and a substantial excess of assets over liabilities. It points to three matters in particular. First, it submits that three of the valuations of the land it has produced are more reliable than the liquidator's estimates and should be preferred to the liquidator's estimates. It seems to me that the answer to this submission is that it is a matter of small consequence because even if it is correct it increases the upper limit of the liquidator's estimates by no more than $40,000. Secondly, Helimount submits the debt owed by it to Mr Callipari (which on Helimount's case is now in the order of $1,000,000) is not presently due and owing. The answer to this submission is that even if it is correct, on the liquidator's figures there is still an excess of liabilities over assets. In saying this I am assuming as liabilities the full debt to the ANZ and the principal amount of the debt claimed by Web Wealth. Thirdly, Helimount refers to the values placed on properties owned by Helimount in a letter from NFFA Finance Warehouse Pty Ltd to it dated 31 August 2006. It is said that the letter embodies an offer of finance to Helimount. I do not place any weight on the values referred to in the letter first, because I do not know who is putting forward the values and secondly, because the letter specifically states that 'the properties are being revalued and values may change'. Furthermore, I note that the figures put forward in the letter suggest that in some cases there have been very significant increases in what Helimount said were the value of various properties in early 2005. 53 I am not satisfied that Helimount's assets exceed its liabilities and that any temporary cashflow or liquidity problems can be overcome by borrowing. For the reasons given earlier [31] I am not satisfied that Helimount has put forward the 'fullest and best' evidence of its financial position. The presumption of insolvency that arises is reinforced by the company's inability to repay the debt to Web Wealth and has not been rebutted by any evidence adduced by Helimount. 54 Helimount has not persuaded me that it is solvent. | insolvency winding up application failure to comply with statutory demand application for review of order of registrar of federal court that company be wound up where no application made to set aside statutory demand within prescribed period where company presumed to be insolvent whether approval to cause company to bring application for review should be granted pursuant to s 471a of the corporations act 2001 (cth) whether sufficient evidence to rebut presumption of insolvency whether leave should be granted pursuant to s 459s of the corporations act 2001 (cth) to raise ground opposing winding up which could have been relied on in application to set aside statutory demand relevant considerations for granting of leave under s 459s. corporations |
The Tribunal had dismissed an application by the appellant for a review of the rejection of his application for a protection visa. The notice of appeal originally listed the Tribunal as the only respondent. At the hearing of the appeal, the Court gave leave for the Minister for Immigration and Multicultural Affairs to be added as a respondent to the appeal. 2 The appellant represented himself before the Court below. His grounds of review were generally unparticularised and sought to cavil with matters of merit determined by the Tribunal. 3 One of two matters of substance dealt with by the Court below was the appellant's criticism of the Tribunal for proceeding to determine the matter in his absence. He said that he did not receive the Tribunal's invitation to attend a hearing and was not informed of the hearing by his migration agent. The problem about that submission was that the Tribunal received an acceptance, in writing and purportedly signed by the appellant, of a written offer from the Tribunal to attend a hearing before it. 4 Her Honour, Emmett FM, held that, given the appellant was in regular contact with his migration agent until at least May 2000, it is unlikely that the agent would not have informed him of the hearing scheduled for 11 March 1999. However, her Honour said that the Tribunal should have attempted to contact the migration agent by telephone when the appellant failed to appear, given that he had earlier requested an oral hearing. By proceeding without allowing the appellant to fully explain his claims, her Honour considered the Tribunal denied him procedural fairness. This ordinarily would, according to her Honour, have led the Court below to find that a jurisdictional error had occurred. 5 Her Honour then considered, notwithstanding her determination that a jurisdictional error had been committed by the Tribunal, whether she should refuse relief based on the appellant's delay in bringing the proceeding. 6 The Tribunal's decision is dated 12 March 1999. The appellant filed his application for judicial review on 13 July 2005, in excess of six years later. The appellant contended before her Honour that he made inquiries with his migration agent about the fate of his review application, without success, until about May 2000. The appellant said that he did not contact the Minister's Department about the fate of his application because he did not know its telephone number and that he had been told by his migration agent to wait for the decision. 7 Her Honour considered the appellant's delay in applying for judicial review of the Tribunal's decision was unjustified. She exercised her discretion to decline to grant the appellant relief on account of that delay. 8 In his appeal grounds the appellant takes no issue with her Honour's exercise of discretion but merely seeks to re-agitate the other matters raised at first instance. However, in his oral submissions, he said he had no idea what had happened to his review application. But for the exercise of her Honour's discretion, because of the appellant's delay, the appellant would have succeeded before the Court below. There would have been nothing for the appellant to gain by seeking to address matters other than delay. However, the Minister has filed a notice of contention dealing with the procedural fairness issue. 9 In the circumstances, Emmett FM was entitled to exercise her discretion to decline relief on account of the appellant's long delay in applying to the Court below for judicial review. It is entirely implausible that the appellant would not be able to locate the telephone number of the Minister's Department to enquire about the status of his application. Her Honour did not err in the exercise of her discretion. Consequently it is unnecessary to deal with the submission raised in the Minister's notice of contention that the appellant had not been denied procedural fairness. 10 The appeal is dismissed with costs. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. Counsel for the second respondent: J.A.C. | application for protection visa application for review to refugee review tribunal proceeded in the absence of appellant appeal to federal magistrates court whether denial of procedural fairness substantial delay in lodging application for judicial review exercise of discretion appeal dismissed no error in exercise of discretion by federal magistrate migration |
The parties have brought forward an agreed statement of facts and proposed consent orders. 2 The matter involves a breach of an undertaking given by the respondent on 22 October 2004 to the Australian Competition and Consumer Commission ("the ACCC") for the purposes of s 87B of the Trade Practices Act 1974 (Cth) ("the Act "). Had it not been for the undertaking the ACCC may have concluded that the purchase by the respondent, as one of a consortium of three buyers, of an interest in the Dampier to Bunbury Natural Gas Pipeline should be rejected pursuant to s 50 of the Act by reason of its anti-competitive potential. 3 Any breach of such an undertaking given to the ACCC is a matter that will be viewed with the utmost seriousness. Because the bare terms of the orders proposed by the parties do not explain the basis upon which they have been sought, I intend to set out in its entirety the agreed statement of facts. In essence, that statement of facts speaks for itself. On 22 October 2004, Alinta 2000 Limited (formerly Alinta Limited) ( Alinta 2000 ) and a number of other companies gave an undertaking to the Australian Competition and Consumer Commission ( Commission ) for the purposes of section 87B of the Trade Practices Act 1974 (Cth) ( the Act ) ( Undertaking ), a copy of which is annexed hereto and marked A . The Undertaking was given in connection with the purchase by Alinta 2000, as one of a consortium of three buyers, of an interest in the Dampier to Bunbury Natural Gas Pipeline ( DBNGP ). Unless otherwise defined or indicated in this document, defined terms in this document have the same meaning given to them in the Undertaking. The Commission expressed concerns about the Proposed Acquisition. For the purposes of clause 5.4, "DBNGP Holdings" refers to DBNGP Holdings Pty Limited, a member of the DBP group of companies ( DBP ), which own and operate the DBNGP. On 25 June 2003, Shelley Kalms signed an employment agreement ( 2003 Agreement ) with Alinta 2000 for the position "Business Improvement Specialist". On 30 March 2004, the 2003 Agreement was terminated when Shelley Kalms signed a new employment agreement with Alinta 2000 for the position "Manager, Retail Services". In early January 2006, Ian Devenish, a senior person within the Alinta Group (General Manager of Asset Owner Interface (AOI)) of Alinta 2000), Shelley Kalms and others had discussions about commencing a secondment with DBP. On 23 January 2006, Shelley Kalms commenced a secondment from Alinta 2000 to DBP in the position "Manager Business Projects". On 16 February 2006, Anthony Cribb (Manager Regulatory and Legal and Company Secretary for DBP) informed Ian Devenish that DBP may ask Shelley Kalms to become involved in commercial negotiations with shippers in relation to various services relating to the DBNGP. Between 17 February 2006 and 7 March 2006 Ian Devenish took formal steps to change Shelley Kalms' employer from Alinta 2000 to ANS but did not make any changes to her reporting arrangements. On 14 March 2006, while still seconded to DBP, Shelley Kalms' employment was formally transferred from Alinta 2000 to AAM. No changes were made to her reporting arrangements. On 6 October 2006, Shelley Kalms' secondment to DBP ended and on 9 October 2006 she commenced duties with AAM in a role which did not concern the DBNGP. By reason of the foregoing matters, during the period of her secondment to DBP from 23 January 2006 to 6 October 2006, Shelley Kalms was a member of the staff of Alinta 2000 within the meaning of clause 5.4 of the Undertaking. During the period from 23 January 2006 to 6 October 2006, Shelley Kalms was, on various occasions, involved in commercial negotiations between DBP and Shippers (as defined in clause 1.1 of the Undertaking) relating to gas transportation on the DBNGP. Alinta 2000's conduct in seconding Shelley Kalms to DBP, and permitting her to remain there in circumstances where Alinta 2000 knew that she was involved in commercial negotiations with Shippers, constituted a breach of clause 5.4 of the Undertaking. I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Weinberg. For the avoidance of doubt, this paragraph does not restrict or prevent me from advising or representing those entities in relation to matters that are upstream or downstream of the Pipeline. 2. 4. Subject to these undertakings, I will not disclose the Documents or the Information to any person. 5. I will take all reasonable precautions to prevent any disclosure of Documents or Information which is not permitted by these undertakings. 6. I may also disclose Documents or Information, as reasonably required, to administrative or support staff if they have first been informed (in general terms) of the requirements of these undertakings and directed to keep the Documents and Information confidential. 9. If I cease to be retained by or on behalf of the respondent in connection with the Costs Determination, or employed by any person so retained, I will return all records that contain Information and that are in my possession or control to a partner of the respondent's solicitors who has provided an undertaking to the court in the same terms, or substantiality the same terms, as this undertaking. 11. I, or any party to these proceedings, or DBP, may apply to the court for these undertakings to be varied or terminated, or for me to be relieved of these undertakings in respect of any specified Documents or Information. 2. DBP's lists of discoverable documents provided to the applicant in these proceedings and any copies of those lists. 3. All documents or copies of documents provided by DBP or DBP's solicitors to the respondent's solicitors for the purpose of the Costs Determination and identified by DBP as being confidential documents. | application by australian competition and consumer commission for declaratory and other relief breach of undertaking given by respondent for purposes of trade practices act 1974 (cth) s 87b proceeding settled declarations and orders by consent competition law |
The Federal Magistrate dismissed the application on several grounds, expressed as alternatives. The application was an abuse of process, pursuant to Rule 13.10(c) of the Federal Magistrates Court Rules 2001 (Cth). 2 Before the Federal Magistrate, the applicant sought to re-agitate issues substantially the same as those which had previously been litigated in both this Court and the High Court. Details of the length history of litigation were recounted in her Honour's reasons at [2] to [9] and need not be repeated here. 3 There was no error attending the decision of the Magistrate to dismiss the application. This application for leave is doomed to fail. 4 The only remaining matter is that the day prior to the hearing, a facsimile letter from was received by the registry of this Court from the first applicant. I am extremely sick and unfit. This hearing is extremely important to my cause and I wish to be present at the hearing of my application. Unfortunately, due to illness I am unable to attend. I hereby fax my medical certificate for your kind consideration. I kindly seek the indulgence of the Federal Court that another hearing date be facilitated. If you require any further information please do not hesitate to contact me on phone number [number is given] . It records that the applicant is "suffering from tonsillitis and is unfit to work". It is insufficient evidence, in my opinion, to sustain a finding that it was reasonable for the applicant not to attend the hearing, and certainly would not have precluded the applicant having someone attend on his behalf. This documentation provides an insufficient basis to adjourn the application which is the import of the letter from the applicant. Also my associate contacted the applicant this morning by telephone. The applicant repeated that he was too ill to attend and secondly, would not be able to attend even if the matter was stood down for hearing later in the day. 6 The application for an adjournment is refused and the application is dismissed. The applicant should pay the respondent's costs of the application, which are fixed in the sum of $846. | no point of principle immigration |
2 The Australian Securities and Investment Commission ("ASIC") applied to the Board on 31 May 2005 for an order that the applicant's registration be cancelled. On 22 December 2005, the Board decided that it was satisfied that the applicant had failed to carry out or perform adequately and properly the duties or functions required by Australian law to be carried out or performed by a registered liquidator. The Board made no order on that date. On 12 April 2006, the Board made the challenged decision. On 18 April 2006, an application was filed for the Board's order to be reviewed. The operation of the Board's decision was suspended by me on 20 April 2006 until twenty-eight days after judgment in this application. 3 The applicant submits that the Board: (a) wrongly construed s 1292(2)(d)(ii) of the Corporations Act and therefore had no jurisdiction to make the decision; (b) applied the wrong test to determine whether the applicant was in a position of conflict when he accepted appointments as administrator of Freedom Pools (NSW) Pty Ltd ("Freedom"), Holilop Pty Ltd & W & C Callen Electrical Pty Ltd ("Holipop and Callen") and MailTV Pty Ltd ("MailTV"); (c) applied the wrong test to determine whether sufficient disclosure of the applicant's previous involvement with the shareholders and secured lenders of MailTV had been made; (d) applied the wrong test to interpret the relevant professional standards; (e) did not take into account the evidence of Mr Lombe, the expert relied on by ASIC, in concluding that the applicant was in a position of conflict; (f) did not take into account relevant factors when making its decision, including consideration of comparable penalties handed down by the Board in other cases. The expression "Australian law" is also defined by s 9 as a law of the Commonwealth or of a State or Territory. 7 The Board is assigned functions under s 204 of the Australian Securities and Investments Commission Act 2001 (Cth) ("the ASIC Act ") conferred on it by the ASIC Act and the Corporations Act . 8 Under s 203 of the ASIC Act , the Board comprises a Chairperson, a Deputy Chairperson, three members selected by the Minister from a panel of seven persons nominated by the Board of the Institute of Chartered Accountants in Australia, three members selected by the Minister from a panel of seven persons nominated by the Board of Directors of CPA Australia, and six business members selected by the Minister who are eligible under s 203(2A) for appointment. The constitution of the Board can therefore be said to reflect characteristics of a body acquainted with the expectations of the accounting and business communities, which is informed by experience with the practices of those communities. Holilop and Callen. 10 The first question raised is the correct construction of s 1292(2). The Board saw the dispute as turning on a difference between the parties as to the role, if any, which professional standards played in constituting or defining the "duties" under s 1292(2)(d)(ii). 11 As summarised by the Board, ASIC's contention is that having regard to the existence and nature of the commercial relationships between SDW and CWSPL, the acceptance by the applicant of appointments as administrator of clients of CWSPL or CWS Partners contravened the professional standards and therefore constituted a failure by the applicant to carry out his duties properly and adequately. The Board noted the contention of the applicant that a contravention of professional standards is not a breach of a duty or function of any administrator required by the Corporations Law or any other legislative or common law duty, and that if professional standards had been breached, these breaches could not be taken into account under the section in determining whether s 1292(2) had been contravened. 12 The Board decided that the words "required by an Australian law" do not confine the meaning of the word "duties," but rather serve to identify the relevant duties and functions as being those which attach to an office (such as administrator) required by Australian law to be performed and observed by a registered liquidator. The duties and functions are those which the administrator must carry out to perform that office. It is not essential to identify a specific statutory provision as to the source of that duty. Failure to carry out the function and office of an administrator in an adequate and proper manner constitutes a breach of that section. 13 The Board observed that in s 1292(2)(d)(i), the term "duties" is not confined by reference to Australian law. The Board referred to decisions in Re Wylie and CALDB (1998) 54 ALD 523; Re Vouris [2003] NSWSC 702 ; (2003) 47 ACSR 155 and Goodman v ASIC [2004] FCA 1000. After considering these decisions, the Board concluded that it is permissible to have regard to professional standards in deciding whether the office has been "adequately and properly" carried out or performed. The Board considered it is artificial to confine "duties" to matters required by an Australian law because there exist a large number of matters governing proper professional practice which are not dealt with by specific statutory prescriptions. Therefore, guidance can be obtained from relevant material published by professional bodies and other evidence, including expert evidence, in determining the terms, nature and content of the relevant duties to assess whether there has been an adequate and proper performance. Moreover, the expressions "adequate" and "proper" call for an evaluation of the way in which, and the extent to which, the functions have been performed. This indicates that it may be appropriate to consider professional standards or guidelines. 14 The Board relied on evidence from Mr Lombe, who was accepted by the Board as an expert. Although the Board noted that some criticism could be made of Mr Lombe's evidence, it did not accept that he was lacking in independence or objectivity. The Board took his opinion into account and gave weight to it. 15 In relation to the Codes regarding professional conduct, the Board accepted that the published professional standards do not override the law and that where there is inconsistency between professional standards and the law, the law must prevail. The Board also accepted that references in the professional standards to conflicts and apparent conflicts meant that there must be a real possibility of conflict or potential conflict and not simply a theoretical, fanciful or speculative conflict. 16 In construing the expression "related practice," the Board concluded that if the arrangement between CWSPL and SDW was capable of impairing the independence of SDW (from the viewpoint of a client of SDW), then CWSPL was a related practice of SDW and the joint venture was an ongoing financial or commercial relationship. The Board considered that if, on an objective view, the relationship when created resulted in a real possibility of impairment of independence, then the definition of related practice applied. This did not depend on being able to identify particular circumstances of any appointment or administration as giving rise to a possibility of impairing independence. Acceptance of an appointment where the relationship existed was sufficient to contravene s 1292(2). 17 The Board concluded that the existence of a prior relationship (between SDW and CWSPL) was such that where there were known circumstances (e.g. the fact that CWS had previously acted as auditor, external accountant or was a creditor of the company concerned) which could potentially give rise to a conflict, then that in itself was sufficient to create the perception at the time of acceptance of the appointment that the independence of the applicant could be impaired. In considering the circumstances of the present case, the Board accepted that there had been a breach of s 1292. 18 In relation to the joint venture, the Board considered that the existence of the relationship between SDW and CWSPL was crucial, not because the creation of the relationship was itself a breach of duty, but because of its impact on the possible acceptance by the applicant of each appointment. The Board considered that the important provisions of the joint venture agreement were as follows: • SDW would refer to the joint venture all administration work it obtained in the defined region; • CWSPL would refer to the joint venture all administration work it obtained except for client work which would be introduced to SDW who may in turn contract the services of CWSPL subject to conflicts; • SDW would refer to CWSPL all accounting, audit and tax business it obtained in the region; • CWSPL would make available to the joint venture office accommodation and facilities, as would SDW, but to a lesser extent; • both parties would make staff available to the joint venture and would be reimbursed at standard rates for the time of partners and staff. 19 In relation to the disclosure question, the Board considered an unsigned letter by a solicitor, Mr Somerset, of 29 October 1997, in relation to a joint venture which had been entered into between the applicant and another practice in similar circumstances to the present case. In this letter, it was stated that Mr Dean-Willcocks was under no legal obligation to disclose the agreement and that entry into it did not present a problem. The letter said that the agreement was not contrary to the Corporations Law and did not raise a moral issue, so therefore there was no reason, except in exceptional circumstances of which the solicitor had no knowledge, to make any disclosure to creditors. The Board considered that letter to be irrelevant. In forming this opinion, it referred to the evidence of Mr Lombe, who considered that the letter did not go to the real issues of the present case because it did not consider the relevant professional standards. The Board considered that the letter did not provide a sufficient basis for believing that appointments as administrator could be accepted in the circumstances of the present case. 20 The Board then proceeded to consider each of the contentions outlined in the application before it and found that those in respect of which this review application is made had been established. As a consequence, it ordered that the registration of the applicant as a liquidator be suspended for twelve months. They are simply guideline indicators which record the views held by professional bodies as to appropriate conduct, and are not requirements of any legislative provision. The applicant submits that ASIC must point to a particular legislative provision imposing the duties and obligations in respect of which there has been a failure to perform. It is said that the reference to "an Australian law" in s 1292(2)(d)(ii) must be read as a reference to a legislative instrument. 22 In support of this submission, the applicant refers to the reference in s 1292(2)(d)(i) to "duties of a liquidator". This is expressed in general terms and there is no reference to any requirement of an Australian law. Therefore, it is said the word "duties" in 1292(2)(d)(ii) refers to duties which are required by a legislative provision to be performed, and does not extend to include general professional standards or levels of performance. Since professional standards do not satisfy this requirement of s 1292(ii), then the Board erred in law in exercising its power to suspend the registration. 23 In order to be approved or act as an administrator, a person must be a registered liquidator (s 448B). The applicant submits that because s 448C disqualifies a person seeking consent to act as an administrator in certain circumstances and does not refer to the professional codes, it would be wrong to proceed on the basis that it is permissible to imply the provisions of those codes or guidelines into the regulatory legal framework. The difficulty with this argument is that the matters referred to in s 448C are not expressed to be exclusive. 24 The language of s 1292(2)(d)(ii) directs attention to the question of whether there has been a failure to adequately and properly carry out or perform the duties or functions required to be performed by a registered liquidator. The emphasis is on the adequacy level or sufficiency of performance of the function or role by the registered liquidator. In this case, the function to be performed is that of an administrator. To evaluate the level of performance is a question of fact and degree which calls for the application of a standard. It is not a qualitative consideration whether there has been performance, but rather calls for consideration as to the sufficiency of the acts or omissions of the administration. This is a task which calls for some acquaintance with professional standards applicable to the role of an administrator. 25 Upon and after accepting appointment of the office of an administrator, the liquidator must perform the functions and tasks of that office in a proper and adequate way. This obligation to meet a standard is attracted by the terms of s 1292(2)(d) itself. It is not necessary, in my view, to identify a specific legislative duty independently imposed by legislation. When a person assumes the office of an administrator, he or she is then bound to perform adequately and properly the functions of the office. The focus of the provision concerns the sufficiency and quality of the performance of the office that must be carried out by a registered liquidator. The expression "registered liquidator" is expressly used in s 1292(2)(d)(ii) in contradistinction to the reference in s 1292(2)(d)(i) to "liquidator. " 26 There is nothing in the language of s 1292(2)(d)(ii) which excludes regard to professional standards and codes when deciding whether the performance is a proper and adequate exercise of the office. The reference to "proper" and "adequate" invites the testing of performance against a relevant standard or benchmark of performance. The interpretation advanced for the applicant, in my view, is too narrow in requiring the identification of a specific duty directly imposed by legislation. The level of performance called for is that of "adequacy. " The standard is that the duty must be performed "properly". The provision is designed to enable a Board representative of the commercial and accounting communities to consider whether the function has been adequately and properly carried out. To assess this, it is permissible, in my view, to have regard to the standards operative in the relevant sphere of activity. 27 One of the functions to be performed by a registered liquidator is that of administrator. It is in the performance of that office, created under Australian law, on which the provision is focused. Under Australian law, the role of administrator of a corporation is a person who is not only a liquidator but who must also be a registered liquidator. 28 The interpretation of s 1292(2)(d)(ii) is subject of authority adverse to the applicant's case. In Re Vouris at [99], Campbell J considered that the duties or functions required by an Australian law to be carried out or performed by a registered liquidator within s 1292 were intended to be those duties and functions connected with being an administrator. His Honour gave some examples in support of this conclusion. In particular, he referred to the circumstance that it would be a breach of s 1292(d)(ii) if an administrator had taken a bribe for making a particular recommendation even though nothing in Pt 5.3A of the Act said that administrators were not to take bribes. The applicant points out that there are provisions in the Act which would cover the taking of bribes. Notwithstanding the applicant's submissions as to the inadequacy of the examples given by his Honour, I consider that the reasoning and conclusion of his Honour accord with the proper approach to the interpretation of the provision. The words 'adequately' and 'properly' incorporate notions of judgment. The relevant judgments call for consideration to be given to accepted professional standards .... The task of determining the relevant professional standards is a task within the expertise of the Board. The accepted professional standards may be found by the Board to be set by, or alternatively reflected in, published Auditing Standards --- notwithstanding that the Auditing Standards have no direct statutory significance. The applicant says that on a proper analysis this case does not support the Board's reasoning because her Honour's remarks were made in circumstances where the relevant section of the Act imposes a specific statutory obligation. It is argued that those circumstances are not evident in the case here. While it is true that in Goodman, there was an obligation imposed by statute, the reasoning of her Honour in relation to the application of s 1292 strongly supports the position of the respondents in respect of the interpretation of that section. I consider that the observations of their Honours in the above authorities accord with natural reading of s 1292, they are decisions directly on point. It is also in the interests of uniformity and consistency in the application of the law that there should be a uniform interpretation of the provision. I am not persuaded that these observations are wrong. I consider they are correct. I therefore propose to follow and apply them in the present case. For these reasons, I do not accept the first argument advanced for the applicant. 32 The applicant also contends that the Board erred in deciding that acceptance of the appointment amounted to a breach of duty because voluntary administration only commences on and after appointment, and an administrator does not have any duty or function as an administrator until that appointment takes place. I do not accept this submission. The proper performance of the function of an administrator is sufficiently wide to include the act of accepting the appointment of the office. The obligation to act properly in accepting appointment is one of the duties and obligations of the administrator. 33 Next it is submitted that since s 448C imposes restrictions on consenting to be appointed or acting as an administrator as a matter of Australian law, these factors ought to have been taken into account by the Board. In my view, for reasons given earlier, s 448C is not relevant to the present issue and it does not purport to or set out in an exhaustive manner all the relevant considerations. This argument has no substance. There was therefore no need for the Board to specifically refer to this provision. 34 In the context of disclosure obligations, the applicant referred to the Harmer Report. This report made recommendations which were not taken up by Parliament to the effect that any association between the company and the administrator (or the firm of the administrator) should be declared and publicised at the time of appointment of the administrator. In my view, the fact that this proposal was not adopted by Parliament does not warrant a conclusion that duty of disclosure is not relevant for consideration. It does not exclude consideration of such a factor. It does not follow from the non-inclusion of such a provision in the legislation that there is no such obligation at law. There are many possibilities as to why the provision was not adopted, one of which may be that it was considered not to be a necessary having regard to the present state of the law. It says that the law requires the liquidator to consider the specific circumstances of each appointment and that a conflict can only be held to arise if there is a "real conflict" such that the circumstances give rise to an actual or potential, and not merely a theoretical, possibility of conflict or embarrassment. The existence of the relationship provided for in the joint venture, it is said, is not sufficient to warrant a finding of conflict. Further, it is said, a liquidator is permitted to act as administrator, even where there is a prior involvement with the company in liquidation, provided that the involvement is not likely to impede or inhibit the liquidator from acting impartially in the interests of all creditors or give rise to a reasonable apprehension of such impediment. Moreover, it is not improper for a person to give professional advice in respect of actual or apprehended insolvency and then accept appointment as an administrator. The applicant further submits that central to the Board's reasoning is the proposition that the decision as to whether CWSPL was a related practice of SDW does not depend on being able to identify particular circumstances of any appointment or administration as having a real possibility of impairing independence in connection with that appointment. It is contended that the Board fell into error because it did not analyse each particular appointment to see if there was a real possibility of conflict. In failing to do this, it is submitted that the Board departed from settled legal principle and applied the professional standards as though they had statutory force. A number of authorities are referred to in support of this proposition. The principal authority relied on is the decision of Sackville J in Pongrass Group Operations Pty Ltd v Lowerpinems Pty Ltd (1994) 15 ACSR 341 at 345-346. 36 The authorities referred to are not of assistance to the applicant because they do not address the terms of the statutory provisions concerning the cancellation of registration or suspension of liquidators under the regime established by ss 1290-1298. These provisions are specifically designed to set up a regime for cancellation and suspension where there has not been proper or adequate performance of duties as determined by a representative specialist Board, which is set up to take into account the conduct standards formulated by relevant professional bodies. Section 1292 is concerned with the manner and sufficiency of the liquidator's performance of the office of administration. Both the constitution of the Board and the formulation of the standards provide a benchmark and specialist framework of reference for consideration of questions of adequacy and sufficiency of performance. 37 Since it is permissible to take professional standards into account as guidelines, it is open to the Board to give such weight as it thinks appropriate to those guidelines which categorically state that a person in practice shall not accept appointment as administrator of a company where any person in the practice has, or during the previous two years has had, a continuing professional relationship with the company: (see ICAA Code at paragraph F.22). It is for the specialist Board to give weight to this provision as it sees fit. The function of the Board, when considering circumstances such as those in this case, is to decide whether there has been adequate and proper performance and execution of duties and functions. 38 The Board's determination states that it has considered accepted professional standards to provide guidance in dealing with the allegations. The Board acknowledged that the published statements of professional bodies could not override the law and that references to conflict required a real possibility of potential conflict as opposed to a theoretical or remote prospect of conflict. The Board did not apply the wrong test or standard. In reaching its decision, the Board also had regard to the expert evidence of Mr Lombe and assigned what it considered to be appropriate weight to that evidence, which was accepted by the Board for the most part. His evidence was subject to strong criticism by the applicant. The Board noted this criticism but accepted the substance of the evidence. It was a matter for the Board to determine its acceptance and the appropriate weighting of Mr Lombe's evidence --- this is not a matter for the Court. 39 The Board considered that the decision as to whether the entities were related did not depend on identifying whether the detailed circumstances of any particular appointment or administration created a real possibility of impairing independence. It accepted that a related practice should be viewed as part of the practice of the applicant. The Board also accepted, in light of the evidence and the standards, that the likelihood of potential conflict is regarded by professional bodies as being so great that there exists a presumption of impairment of independence. This conclusion was based on the formulated professional standards governing the performance of an administrator's duties. The Board considered that these standards require that a registered liquidator accepting an appointment as administrator must first consider whether there could be a real risk of apparent conflict. In reaching this conclusion, the Board accepted the evidence of Mr Lombe. This conclusion was open to it on the evidence. 40 The emphasis of the Board is on the relationship created by the joint venture. It refers to the professional standards which establish that the relationship itself is sufficient to indicate a real possibility of apparent impairment of independence upon acceptance of any particular appointment. In my view, the Board, as a specialist body, applied generally accepted relevant professional standards in the light of accepted professional evidence to reach its conclusion that the duties referred to in s 1292(2)(d)(ii) had not been adequately or properly performed. In so doing, there is no error of law as the Board's evaluation was open to it. It is not warranted to impose a further obligation to investigate all the circumstances of each appointment to establish whether, in the case of each appointment, there exists an actual conflict. The Board considered that acceptance of any appointment where such a relationship exists amounts to relevant failure of duty without any further investigation of the circumstances surrounding the appointment being necessary. 41 The applicant submits that the concept of a related practice or a commercial relationship that of itself gives rise to an impermissible conflict is unknown to the law. I do not accept this broad general proposition as relevant to this matter. There are circumstances set out in the reasons for determination as to the nature of the related practice in the present case. I do not consider it was necessary for the Board to descend into an analysis of each particular appointment or to travel beyond the circumstances of the relationship and the fact of acceptance of appointment in order to determine there was an inadequate performance of the relevant duty. 42 The applicant's submission that there was no conflict arising by virtue of the joint venture is sought to be substantiated by detailed analysis of the evidence of Mr Lombe and the historical circumstances of each appointment. In my view, these submissions do not advance the applicant's case. Central to the criticism of the evidence of Mr Lombe is the proposition that examples given by him in relation to the possible impairment of independence were pure conjecture. It was submitted that the examples did not fall within the relevant principles because they did not point to specific or real conflicts likely to impede independence. However, the weight to be given to the evidence of Mr Lombe and his detailed cross-examination is a question of fact for determination by the Board. I do not consider the analysis advances the applicant's case. In my view, it is not necessary for the Board to conclude that there was in fact a position of conflict upon the applicant's acceptance of the appointments to the three companies in question. It was open to the Board to conclude that the acceptance of the appointments, in circumstances where the joint venture existed, was contrary to professional standards and sufficient to establish that there had been a failure to properly or adequately perform the functions of administrator. The Board is a specialist body bringing to bear professional experience and taking into account of professional standards. 43 In relation to MailTV, the Board formed the view that the disclosure made was not an effective and prompt disclosure sufficient to meet an adequate level as indicated by the evidence of Mr Lombe and the professional standards. It is submitted that so long as creditors are given an opportunity to replace the administrator, it is not necessary that there should be an immediate opportunity for removal. Therefore, it is contended, the creditors' interests are not irredeemably prejudiced and this means that the later disclosure was sufficient. 44 Paragraph 21 of the ICAA Code entitled "Conflicts" requires that full and frank explanation and disclosure of actual or apparent conflict is made to the clients. It is a matter for the Board to determine whether the timing, nature and extent of the disclosure were adequate and proper. In relation to the MailTV appointment, it was noted that there was a failure to disclose the nature of the conflict in both the administrator's letter to creditors and the notice convening the first creditors' meeting. The Board held that in these circumstances, this meant that there was not sufficient or timely disclosure. The Board considered that there existed a duty to disclose at the first practical opportunity so that the first meeting of creditors were on notice of the conflict and would have an immediate opportunity to appoint a different administrator if they considered appropriate. This objective would not be met if the disclosure was not made until the meeting itself. Moreover, it was considered necessary to have disclosure in the notice convening the creditors' meeting in order to ensure that all creditors had full benefit of the disclosure in making the important decision whether to attend. There is no error of law identified in the Board's decision that disclosure should have been made at the earliest opportunity, in particular having regard to what the Board considered to be real problems in disclosure at a later stage. It was open to the Board to reach this conclusion. This proposition is advanced on two bases. The first is that comparable sanctions in other cases were not considered or expressly referred to by the Board. The second submission is that there was a failure to give any weight to a letter by Mr Somerset in October 1997 in relation to another proposed joint venture arrangement along similar lines to the joint venture in the present case. It was submitted that this letter indicated that there was no problem at law in entering into such an arrangement except in exceptional circumstances. 46 In relation to the first matter, I am not satisfied that the Board did not take into account other comparable cases in reaching its conclusion as to the period of suspension. In any event, only the most general guidance can be obtained from this type of "precedent" because these cases cannot be readily compressed into a template which permits reasonable comparison. The reasons for the Board's orders were set out by the Board on 12 April 2006 after hearing submissions from the parties and after reading the reasons for determination. In those reasons, the Board adopted as its guiding principle the protection of the public as opposed to any consideration of punishment. It was considered important to demonstrate publicly that there is a regulatory regime which is applicable to liquidators and is effective. 47 The Board took a balanced approach and recognised that the applicant was contrite and regretted entering into the joint venture agreements and accepting the appointments considering the Board's findings. Nevertheless, it considered that a reasonably competent registered liquidator would have recognised the existence of the conflict in the light of accepted standards of professional conduct. 48 The Board accepted that the character references produced for the applicant indicated that his personal integrity and professional competence were outstanding and that there were some very laudatory remarks by some of Sydney's leading figures in the insolvency industry. Nevertheless, the Board gave great weight to the importance of enforcing the regulatory regime and the seriousness of the matters which had been found to be established in so far as they dealt with independence, objectivity and conflicts of interest. The Board also took into account that there were no mitigating circumstances put forward to explain the breaches other than the applicant's view of the professional standards. The Board noted evidence that the applicant turned his mind to the issue of conflict prior to consenting to act in each case. 49 The Board specifically dealt with the Somerset letter at paragraph 5.7 of its reasons for determination and considered the advice given therein was not relevant to the contentions before the Board because it did not refer to published professional codes or standards and was directed to breaches of "law". The Board also refers to the fact that there was no reference to Mr Somerset in relation to the present joint venture or further advice sought about the circumstances of this particular case. The Board agreed with the view of Mr Lombe that the letter did not go to the real issues in the applicant's present circumstances and that there was a necessity to consider professional standards. This conclusion was open to it. 50 In my view, the reasons given by the Board for not assigning weight to the Somerset letter are cogent and the conclusion reached as to the form of orders was open to the Board on the law and in light of the evidence before it. 51 I am not persuaded that the Board erred in law or principle in relation to the sanction imposed in this case. 52 Accordingly, I dismiss the application for review in this case with costs. | companies auditors and liquidators disciplinary board suspended applicant's registration as liquidator on basis that s 1292(2)(d)(ii) was breached whether caldb applied correct test in determining that applicant was in a position of conflict at time of appointment as administrator whether caldb applied correct test in determining that in sufficient disclosure in relation to apparent conflict was made to creditors whether caldb erred in taking professional standards into account in finding s 1292(2)(d)(ii) was breached whether caldb considered all relevant factors in determination of penalty. corporations |
Traxon is a company incorporated in Australia which carries on the business of manufacturing, marketing and selling oil level control devices. One of these devices is known as the TraxOil Management System (the TraxOil Device). Emerson is a company incorporated in Missouri. It currently trades under the business name Emerson Climate Technologies. It previously traded as Alco Controls. 2 Traxon seeks leave, by notice of motion, to serve its application, statement of claim and supporting affidavit on Emerson in the United States of America. It does so pursuant to O 8 r 2 of the Federal Court Rules . In considering that motion it is necessary to have regard to the causes of action alleged and the relief claimed in the application and statement of claim. It is also necessary to have regard to the evidence relied upon as establishing a prima facie case sufficient to support the grant of leave to serve the application in the United States of America. 3 For the reasons that follow, I am not satisfied that the proceeding is one to which O 8 r 1 applies. The application of O 8 r 1 to the proceeding is a necessary condition of the grant of leave to serve out of the jurisdiction under O 8 r 2. I also have some concerns about the sufficiency of the evidence going to the creation of the agreement relied upon by Traxon. I will adjourn the application for leave to 19 May 2006 to allow Traxon time to consider amending its statement of claim and supplementing the evidentiary material which has been put before the Court. Such certification, according to the statement of claim, was at all material times a necessary precondition to the offering of the TraxOil Device for sale in the USA. 5 Traxon says that before November 1997 it had an agreement with a United States company called Sporlan Valve under which Sporlan Valve would market and sell the TraxOil Device in the US. During the currency of its arrangements with Sporlan Valve, Traxon 'owned' a file maintained by Underwriters in the name of Sporlan Valve in relation to the TraxOil Device (UL File). The nature of the ownership of the file is not explained. The Distribution Agreement with Sporlan Valve ceased in November 1997 and in 1998 Traxon and Emerson agreed that Emerson would be the exclusive distributor for the TraxOil Device in the USA. At that time the largest single user of the device in the USA was Hussman, a company which carried on business in that country and used the TraxOil Device on Copeland compressors. They are manufactured by Copeland, a company which also carries on business in the USA and is associated with Emerson. 6 The Distribution Agreement between Traxon and Emerson is said to have been partly written and partly oral. The oral terms were agreed during the course of a meeting between Mr Barry Waller and Mr Wayne Cattach of Traxon and Mr Robert Kensinger of Emerson held in May 1988 at Perth in Western Australia. The written part of the agreement comprised a document titled 'Confidentiality Agreement' dated 7 May 1998 and a document titled 'Distribution Agreement' executed in or about May 1998. Emerson agreed not to disclose any data or information it received from Traxon which Traxon designated as proprietary or confidential. Nor would Emerson use that data or information for its own benefit for a period of five years after receipt of it without first obtaining written permission from Traxon. 2. Emerson would undertake any formalities and make any payments required to be made in relation to any necessary amendments to the UL File which flowed from the 1998 agreement. The UL File was to be owned and maintained by Underwriters in the name of Traxon. It is said to be an express term of the agreement that Traxon and Emerson would jointly participate in a program of further development and refinement of the TraxOil Device. They are also said to have agreed that the 1998 agreement would be governed and construed in accordance with the laws of the State of Western Australia. In reliance upon that representation, Traxon entered into the agreement, purchased capital equipment for the production of the TraxOil Device for the purpose of selling it in the USA and, between May 1998 and November 2003, provided Emerson with confidential information about the device. Particulars of the confidential information are given in the statement of claim. 9 In February 2000 it is said that Traxon and Emerson Electric agreed to vary the 1998 Agreement. The variation agreement was oral and made in the course of a meeting held on 2 and 3 February 2000 in St Louis. Mr Wayne Cattach of Traxon was present and a number of persons from Emerson. It was agreed under the variation that Traxon and Emerson would jointly participate in a program of further development and refinement of the TraxOil Device and would jointly participate in the development of a new model of it. The remaining terms of the 2000 Agreement would be all of the terms of the 1998 Agreement. 12 Traxon says that the representation pleaded was made by Emerson in trade and commerce and was misleading or deceptive or likely to mislead or deceive as Emerson did not, at the time the representation was made, intend to comply with the terms of the 1998 Agreement. Traxon invokes, inter alia, s 51A of the Trade Practices Act . 13 Traxon claims that it has suffered loss and damage of not less than $1,407,889 as a result of Emerson's conduct. This includes $668,646 incurred in the purchase of capital equipment and $18,396 incurred in relocating factory premises for the purpose of manufacturing the TraxOil Device and the TraxOil Generation 2 to be sold in the USA. Loss of profits from the sale of the TraxOil Device in the USA during the period January 2004 to 29 June 2005 are said to have amounted to $70,5744. Traxon also claims damages represented by lower profits because of diminished sales of the TraxOil Device in the USA on or after 29 June 2005 and costs of $15,103 incurred by it in relation to its application for a new file to be maintained by Underwriters. 14 Traxon claims that Emerson breached the terms of the 1998 Agreement as varied by the 2000 Agreement and, alternatively, breached the terms of the original agreement and the terms of the substitute agreement. It claims the same damages in respect of the alleged breach of contract as it does in respect of the contraventions of the Trade Practices Act . Traxon says that Emerson was at all material times under a duty not to disclose or use for its own benefit the confidential information and that it had breached that duty. Again, the loss and damage claimed is the same amount. 16 A further alternative claim is that Traxon and Emerson engaged in a 'fiduciary joint venture' to develop and refine the TraxOil Device and, from February 2000, the TraxOil Generation 2. Because of this it is said that Emerson owed a duty to Traxon to not seek to obtain a benefit in circumstances where there existed a conflict between Emerson's interests and the interests of Traxon. Emerson Electric is said to have breached the fiduciary duty pleaded. The loss and damage claimed is again in the same amount. In his February affidavit Mr Waller said that Traxon manufactures and markets oil level control devices one of which is known as the TraxOil Management System or TraxOil Device. Between 1996 and 1998 the TraxOil Device was sold in the USA by Sporlan Valve, a US company pursuant to a Distribution Agreement between it and Traxon. From 1 September 1996 Sporlan Valve as agent for Traxon, owned a file maintained by Underwriters in the name of Sporlan Valve in relation to the TraxOil Device. Underwriters is a non-profit organisation which conducts compliance tests for products marketed in the USA to ascertain whether they comply with US safety laws. Without the compliance function being performed the TraxOil Device could not be sold in the USA. 18 Following the expiry of its Distribution Agreement with Sporlan Valve in November 1997, Traxon sought to enter into a new distribution agreement with another entity in the USA. Its biggest customer for US sales at the time was a company known as Hussman, whose primary use for the TraxOil Device was on Copeland compressors. The compressors are components of refrigeration and air-conditioning machines. According to Mr Waller Traxon approached Emerson trading as Alco Controls to discuss the possibility of that company distributing the TraxOil Device in the USA. Emerson carries on business in the USA and is based in St Louis. Copeland, which is the manufacturer of Copeland compressors and Emerson are part of the Emerson Group of Companies. The business carried on by Emerson, formerly known as Alco Controls, now operates as Emerson Climate Technology. Mr Waller exhibited to his affidavit some pages from Emerson's internet site which was downloaded on 12 February 2006. 19 In or about April 1998 Mr Waller had a telephone conversation with Robert Kensinger, Senior Vice President of Emerson. He said that they agreed that their two companies would enter into a Distribution Agreement under which Traxon would supply the TraxOil Device exclusively to Emerson and Emerson would market and sell the TraxOil Device in the USA. They also agreed, according to Mr Waller, that Emerson would enter into a confidentiality agreement with Traxon under which it would undertake not to disclose any information provided to it by Traxon and designated as proprietary or confidential information or use such information for its own benefit for a period of five years after its receipt. 20 Following the telephone conversation Mr Waller met Mr Kensinger in Perth. The meeting was also attended by Mr Cattach. In the course of the meeting Mr Kensinger said that Emerson would undertake formalities and make payments necessary for the UL File to reflect the new Distribution Agreement. He also said that Emerson accepted that the UL File was to remain the property of Traxon. According to Mr Waller, ownership of the UL File for the TraxOil Device was important for Traxon in marketing and selling in the USA. Without it, the company would be effectively shut out of the US market. He, Mr Kensinger and Mr Cattach also discussed Traxon's plans to further develop and refine the TraxOil Device. Mr Kensinger said that Emerson would participate in that development program. 21 At the conclusion of the meeting, according to Mr Waller, a 'Distribution Agreement and a Confidentiality Agreement' were executed. The Confidentiality Agreement referred to was exhibited to Mr Waller's affidavit. It took the form of a memorandum from Traxon to Mr Kensinger as Senior Vice President of 'Alco Controls'. It recited the intention of Traxon and Alco Controls to discuss matters relating to refrigeration leak detection, oil level control, time delayed fluid level monitoring technology and other related inventions and in particular the manufacture of parts and or devices incorporating such technology. The memorandum proposed that Alco Controls would agree to accept in confidence such data and/or information designated as proprietary and confidential information by Traxon and would not disclose it to a third party or use it for its own benefit for a period of five years without first obtaining written consent from Traxon. There were some qualifications on the obligation thus proposed which would not be binding with respect to any information demonstrably known to Emerson at the time of disclosure or which became known to the public generally through no fault or other action of Emerson. Nor would the obligation apply to information obtained lawfully from a third party who themselves were under no obligation to keep such information confidential. It would not apply to information developed by the employees, agents or representatives of Emerson as a result of their own efforts and not as a result of the disclosure of the same information by Traxon. 22 There were some specific undertakings proposed, namely that Emerson would make no copies of any information disclosed to it without prior written approval of Traxon, it would disclose the information only to its employees who required it for the performance of their duties and would return all written information received from Traxon if requested to do so. The terms and conditions contained in the confidentiality agreement were said to be governed by and construed in accordance with the laws of the State of Western Australia. The agreement was signed by Mr Kesinger for Emerson and was dated 7 May 1998. 23 There is no written Distribution Agreement exhibited to Mr Waller's affidavit. A document entitled 'Distribution Agreement' is referred to in par 9 of the statement of claim and in par 11 of the affidavit. No explanation is offered for its absence in evidence. 24 In a letter dated 17 December 2004, to Emerson from Traxon's solicitors, Solomon Brothers which is exhibited to Mr Waller's affidavit, reference is made in a paragraph numbered 1 to the agreement executed on 7 May 1998 which, it is said in paragraph 2, 'was made shortly before Alco Controls became the distributor for the Traxoil Oil Management Product'. This suggests that the appointment of Emerson as distributor was made sometime after 7 May 1998 contrary to the suggestion in par 12 of Mr Waller's affidavit that it was made on that day. 25 According to Mr Waller Traxon entered into similar agreements with a company related to Emerson trading as Alco Europe, which carried on business in Europe. That company was appointed as the exclusive distributor of the TraxOil Device in Europe. 26 Between 1998 and 2000, according to Mr Waller, Traxon developed, refined and enhanced the TraxOil Device. Matters relating to its ongoing development and refinement were discussed with representatives of Emerson and their feedback received. There is little or no reference to the sales of TraxOil Devices effected by Emerson under its distributorship arrangements during that period. 27 On 2 and 3 February 2000 Mr Cattach attended a meeting in St Louis, USA with representatives of Emerson and Alco Europe. According to Mr Waller it was agreed at the meeting that the two companies and Alco Europe would jointly undertake a program of further development and refinement of the TraxOil Device in order to create an updated version of it which is referred to in the affidavit as TraxOil Generation 2. Annual sales of 50,000 units of the TraxOil were necessary to make the development project commercially attractive. A copy of the minutes of the meeting were exhibited to Mr Waller's affidavit. The minutes dealt with the requirements for the TraxOil redesign, sales volume versus selling price, other items and action items. It was also agreed following that meeting that Emerson would manufacture some of the components of the TraxOil Device. 28 After the meeting Traxon continued to further develop and refine the TraxOil Device and in so doing had discussions with representations of Emerson and also Alco Europe about its further development and refinement. 29 In November 2000 Mr Cattach received an email from Mr Al Maier of Emerson requesting an update about any findings resulting from a visit to Isval, an Italian manufacturer of brass forgings. Mr Maier asked Mr Cattach to let him know whether Traxon was pursuing the idea of including an enclosing tube as part of a forging. Mr Maier had reviewed the new unit with some other people at Emerson's office in St Louis and they had some comments for Mr Cattach to consider which the email set out in detail. On the same day Mr Cattach received an email from a Dr Tomski, which was also sent to several representatives of Emerson and contained detailed comments about aspects of the TraxOil Device's development program and sought information about other aspects of that program. 30 On 9 November 2000 Mr Cattach sent an email to Mr Sciuto, another representative of Emerson, with a copy to Mr Maier. Mr Cattach asked to be provided with information regarding enclosing tubes. Emerson was manufacturing the tubes on behalf of Traxon. 31 Further exchanges concerned with the development of the TraxOil Device were referred to in Mr Waller's affidavit. 32 Through 2002 and 2003 Traxon continued its distributorship arrangements with Emerson and Alco Europe and undertook further development of the TraxOil Device together with Emerson and Alco Europe. Various emails were exhibited concerning day-to-day matters relating to the performance of the distribution agreements, sales of the TraxOil Device and its further development. 33 Traxon purchased plant and equipment for the purpose of manufacturing the TraxOil Device in 2002 and 2003. In 2002 it relocated its factory to accommodate the new plant and equipment. According to Mr Waller Traxon made those purchases and undertook that relocation in the belief that the TraxOil Device and its successor, the TraxOil Generation 2 would be sold in the US market. Traxon incurred costs of $668,646 in relation to the purchase of capital equipment and $18,396 in relation to the relocation. 34 In September 2003 Mr Cattach attended another meeting in St Louis with Mr Kensinger. Mr Kensinger told him that approximately 2,000 Copeland compressors had failed because of deficiencies in the TraxOil Device. Mr Kensinger said that Emerson would not renew its distribution agreement with Traxon. He also said that Emerson had developed its own oil management system device in conjunction with Copeland and would market it in competition with Traxon. As that device was not currently ready for sale, Emerson still wished to purchase the TraxOil Device from Traxon. According to Mr Waller neither he nor Mr Cattach had been informed of any Copeland compressors failing because of the TraxOil Device prior to this meeting in September 2003. 35 Mr Waller said that he and Mr Cattach had made numerous oral inquiries about the alleged failures of Copeland compressors because of the TraxOil Devices. His inquiries had extended to representatives of Emerson in Europe and Hong Kong. Neither of them had been informed of any facts supportive of Mr Kensinger's assertion. As a result of their inquiries it is Mr Waller's belief that the cause of any failures of Copeland compressors was unrelated to the TraxOil Devices. 36 He deposed to a further meeting which he and Mr Cattach had with the President of Emerson, Mr David Kirk, and other representatives of that company. Mr Kirk told him at that meeting that Emerson would provide a full report on the alleged failures of Copeland compressors. 37 On 3 October 2003 Mr Waller sent Mr Kensinger a letter about the meeting. The letter said that Traxon had always regarded Emerson as a partner and had freely shared technology and information with it, had made significant capital investments in reliance on the agreements with Emerson and had often re-organised its factory to meet fluctuating orders for the Device from Emerson. He expressed his shock at the outcome of the meeting. He also said that Traxon would continue to supply the TraxOil Device to Emerson on a non-exclusive basis. The tone of the letter is indicative of the surprise with which Traxon greeted the development at the September meeting. The letter referred to the UL File and said that the TraxOil Device had previously used components manufactured by Emerson and some manufactured by Traxon. As from mid-January 2004 the TraxOil Device was not to be made jointly between the two companies and the letter requested that a new UL File be created for TraxOil Devices in Traxon's name alone. 39 Various emails were subsequently exchanged between Mr Cattach and representatives of Underwriters between 6 and 10 September 2004. It appeared that about one year after Emerson had informed Traxon that it was terminating their agreements, the UL File had not been transferred into Traxon's name. During that period therefore Traxon had been unable to market and sell the TraxOil Device in the USA. The transfer was only affected on 29 June 2005. Mr Waller estimated a loss of $705,744 as a direct result of the company's inability to market and sell the TraxOil Device in the USA during that period. It also cost some $15,103 for Traxon to re-establish its accreditation with Underwriters. 40 On 18 October 2004 Mr Waller attended a meeting with Mr Cattach and representatives of Emerson in St Louis. Mr Waller exhibited to his affidavit notes of the meeting of 18 October 2004 which he had prepared. Mr Kirk, the President of Emerson, was present at the meeting as was Mr Maier. The notes record allegations made by Traxon. Mr Waller recorded that with goodwill and cooperation Flow Controls and Traxon were in agreement to develop a partnering arrangement, with mutually beneficial projects, with the object of good business and the opportunity for Traxon to recover unnecessary incurred costs. Any agreements between them were to be documented by their legal representatives so as to make clear the obligations of each party. He noted that by way of conclusion that Traxon would write a draft letter of understanding for perusal and comment by those 'in the communications loop'. When the letter of understanding was agreed on by all, a legal document would be prepared to formalise the understandings. 41 On 1 November 2004 Mr Waller received a letter from Mr Kirk saying that Mr Kirk had discussed the meeting with Mr Maier and Mr Maier's recollection was that Traxon was going to work with Alco Europe on some design changes to the TraxOil Device but that Emerson was going to have to look 'elsewhere' if it wanted cost reduction. The letter also stated that while Emerson had received some periodic reports by way of emails between Traxon and Alco Europe, Emerson did not respond to those emails as it had assumed they were merely for its information and that because at these times it was 'moving in a different direction'. The statements in the letter from Mr Kirk were said, by Mr Waller, to be contrary to Mr Cattach's recollection of the meeting. On 17 November 2004 he received a letter from Mr Maier stating that the cause of the delay in transferring the UL File to Traxon was because the TraxOil Device featured new components. The letter also asserted that the failures of the Copeland compressors were due to the TraxOil Device resetting itself automatically after a trip. However the resetting of TraxOil Devices was within the operating specifications of the TraxOil Device and the effect which it was said it had had on Copeland compressors could easily be avoided. 42 On 17 December 2004 the solicitors for Traxon, Solomon Brothers, sent an email to Mr Kirk alleging that Emerson's conduct constituted a breach of the Confidentiality Agreement, a breach of fiduciary duty and a breach of s 52 of the Trade Practices Act . A response to that email was received dated 21 January 2005 essentially denying the allegations. The letter was signed by Michael K Shannon, a Vice President and General Counsel and Secretary for Emerson. The letter did, however conclude with a proposal that Mr Kirk and Mr Shannon meet with Mr Solomon and his client in Perth to see whether the matter could be resolved. 43 Although the affidavit does not refer to subsequent discussions, the fact that the current proceedings were not initiated until 18 April 2006 suggests that at least some of the time that ensued was taken up with negotiations. 44 A second affidavit, sworn by Mr Waller on 18 April 2006, deposed that on 23 February 2006 he met with Mr Spears of Alco Europe in Brussels. In the course of this meeting he told Mr Spears that Traxon intended to institute proceedings against Emerson in the Federal Court. He provided Mr Spears with a copy of the statement of claim. Mr Spears told him that he would soon be meeting with representatives of Emerson in St Louis and would discuss the proposed proceedings with them. Mr Spears also told him that if Traxon could supply him with the necessary information he would discuss Traxon's dispute with his superiors and attempt to induce Emerson to settle the dispute in a sensible manner. 45 On 4 April 2006 Traxson received a letter from Emerson enclosing a document titled 'Notice and Acknowledgment for Service by Mail' and a summons issued by the Circuit Court of St Louis County in Missouri in the United States. The documents so delivered record that on 29 March 2006 Emerson instituted proceedings in Missouri seeking negative declarations against Traxon. However as earlier noted, the letter from Solomon Brothers of 17 December 2004 does suggest that the Distribution Agreement came into existence after 7 May 2004. I infer from the declarations sought by Emerson and from the Solomon Brothers' correspondence, that it is unlikely to be disputed that a Distribution Agreement was made in 1998. The evidence discloses virtually nothing of its terms. What does appear seems inconsistent with the pleaded proposition that there was a single Distribution and Confidentiality Agreement which was partly oral and partly in writing. This means that Div 2 of Order 8 does not apply. However Div 3, relating to service in non-convention countries, does apply. I conclude therefore that the Court does have jurisdiction in the matter. The misleading or deceptive conduct alleged is said to have arisen out of the making of the Distribution and Confidentiality Agreements. This is said to have occurred in Western Australia. Emerson's entry into 'the 1998 Agreement', is said to have amounted to a representation that it would comply with the terms of that agreement. The representation is said to have been misleading or deceptive or likely to mislead or deceive as Emerson did not intend to comply with the terms of the agreement at the time it entered into it. 54 Failure to honour a promise is not of itself misleading or deceptive or likely to mislead or deceive as the promisor may genuinely intend to honour the promise at the time that it is made. However, to make a promise while not intending to keep it, involves a misrepresentation by the promisor of its intention and can be misleading or deceptive within the meaning of s 52 of the Trade Practices Act . 56 A promise is a representation with respect to a future matter namely, the performance of the promise and ordinarily carries the implication that reasonable grounds exist for the making of the promise including the intention and capacity to perform it. The representation pleaded in this case was said to arise out of the entry into 'the 1998 Agreement'. There is no pleaded representation in relation to the variation to the Agreement and the alternatively pleaded 2000 Agreement. However the continuing effect of the original pleaded representation is asserted in par 16 of the statement of claim. The respondent is a foreign corporation and on that basis the allegations raise a cause of action for breach of an Act of the Commonwealth which occurred in Western Australia and therefore within the Commonwealth. Order 8 r 1(b) therefore applies to the cause of action in misleading or deceptive conduct. 58 The contract said to have been breached is 'the 1998 Agreement pleaded in paragraph 10 as varied by the 2000 Agreement' and alternatively 'the 1998 Agreement pleaded in paragraph 10 and the ... 2000 Agreement pleaded in paragraph 15'. 59 As pleaded the 1998 Agreement was made in Western Australia. Its variation was made orally in St Louis, Missouri in the United States of America in 2000. Alternatively, the parties substituted a new agreement for the old in St Louis, albeit it embodied all the terms of the 1998 Agreement. The 1998 Agreement is said to have contained a term that it would be governed by and construed in accordance with the laws of Western Australia. It may be implied from the pleading of the 2000 Agreement that the varied or substituted agreement contained the same terms. On this basis the claim for breach of contract, as pleaded, is one to which O 8 r 1 applies. 60 The causes of action for breach of duty of confidence and breach of fiduciary duty turn on the alleged disclosure by Emerson of confidential information relating to the TraxOil Device. Traxon relies upon the facts pleaded in pars 18 and 19 of the statement of claim as amounting to a breach of the duty of confidence. It is not said in the statement of claim where the conduct occurred but, in context, it seems inescapable that the allegation relates to conduct by Emerson outside Australia. Traxon submits that the matters giving rise to both duties occurred in Western Australia. 61 It does not appear from Traxon's submissions nor from the provisions of O 8 r 1 just how the causes of action for breach of confidence or breach of fiduciary duty are causes of action to which O 8 r 1 applies. 62 The causes of action pleaded are based on conduct engaged in in the United States. Even though the duties pleaded depend upon conduct in Australia that does not mean that their breach by acts outside Australia gives rise to a cause of action 'arising in the Commonwealth' under O 8 r 1(a). As von Doussa J observed in Delco Australia Pty Ltd v Equipment Enterprises Incorporated trading as Kukla Trenchers [2000] FCA 821 , the authorities establish that 'cause of action' within the meaning of O 8 r 1(a) does not refer to all the elements of the cause of action. It refers rather to the act on the part of the defendant which gave the plaintiff his cause for complaint. The right approach is, when the tort is complete, to look back over the series of events constituting it and ask the question, where in substance did this cause of action arise? That is the rule laid down in Jackson v Spittal (1870) LR 5CP 542, which is an authoritative case, and the rule is inherently reasonable, as the defendant is called upon to answer for his wrong in the courts of the country where he did the wrong. 63 The question that then arises is whether, given that the causes of action in misleading or deceptive conduct and breach of contract are within O 8 r 1, that is sufficient to satisfy the requirement that the rule 'applies to the proceeding' within the meaning of O 8 r 2(2)(b). In my opinion r 1(n) makes it clear that an originating process to be served out of the Commonwealth must be confined to causes of action that fall wholly within one or several of the heads in r 1. An originating process that includes a claim that does not fall within one or more of the heads is not an originating process that meets the description of r 1, in that it is not one "in" any of the cases described in the rule. It is not a "proceeding to which rule 1 applies" so as to meet the requirement of r 2(2)(c)(b). A similar conclusion was expressed by Wilcox J in Tycoon Holdings Ltd v Tencor Jetco Inc (1992) 34 FCR 31 at 35. The order sought by Traxon cannot be made on the current state of the pleadings. It will be necessary to reconsider the pleadings and either plead those facts which would make it clear that the causes of action referred to fall within the scope of the rule or to abandon those causes of action. It does not suggest the kind of scrutiny that would occur in a submission of no case to answer following the closure of an applicant's case at trial... It may be therefore that a court at this stage might draw inferences more readily in favour of an applicant, bearing in mind, among other things, that the applicant will not have had the advantage of discovery, subpoena and other procedural aids to the making out of a prima facie case at trial. Where the relief sought is based upon more than one cause of action, it is sufficient that there is a prima facie case demonstrated for at least one of the causes of action relied upon. In my opinion it is sufficient to say for the moment that a prima facie case within the meaning of O 8 r 2(2)(c) is raised in respect of the cause of action in breach of contract. It is questionable whether there is a prima facie case shown for misleading or deceptive conduct without more than the alleged breach of the promises embodied in the agreements. There is a disquieting confusion about the documentation comprising the written part of the so called Distribution and Confidentiality Agreement made in 1998. Having regard, however, to my conclusions that the proceeding is not one to which O 8 r 1 applies, these are matters which may be able to be addressed by Traxon prior to a renewal of its motion. Traxon, it seems to me, has to address the question whether all of the causes of action pleaded can be brought within O 8 r 1 and secondly, present a somewhat clearer foundation for its contention that there is a prima facie case in relation to the existence and breach of the agreements pleaded. 67 It may be that the amendments required to the pleading coupled with some additional evidence will cure these difficulties. I will therefore adjourn the motion for the time being to a date to be fixed, with liberty to Traxon to file additional documentation and to amend its proposed statement of claim. I certify that the preceding sixty seven (67) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | service of originating process out of jurisdiction whether the proceeding is one to which federal court rules o 8 r 1 applies claims based on misleading and deceptive conduct in australia in contravention of the trade practices act 1974 (cth) breach in the united states of contract made in australia breach of duty of confidence breach of fiduciary duty breach of confidence and breach of fiduciary duty alleged to have occurred in the united states whether causes of action must be wholly within one or more of the heads enumerated in rule 1 whether a prima facie case disclosed proceeding not one to which o 8 r 1 applies application adjourned leave to amend statement of claim and to file further evidence practice and procedure |
The application be dismissed. 2. The applicant pay the costs of each respondent. 'Blue eyed - Brown eyed' incident 4 2. Award of low marks 6 3. Reference to hostile people 6 4. Refugee allegation 7 5. Afghani Detainee 8 6. Reference to shoes of Imelda Marcos 9 7. Centrelink allegation 9 8. Roll call allegation 10 9. Failure to mark fairly 10 10. Fast dictation 10 11. Gay incident 11 12. Allegations of sexual discrimination 11 Victimisation 12 13. Writing on the board 13 14. Costs agreement 13 15. Date of course ending 14 16. More favourable treatment for Ms Ramos 15 17. Approach of Mr Norman to Ms Obieta 15 18. Credit/distinction 16 19. Throwing of examination papers 17 20. Cheezels Incident 17 COMPLAINTS AGAINST MS ALEXIE DAVIS 18 16. Wrong name called in class 18 20. The Cheezels incident 18 21. Mimic of a duck or chicken 19 22. Verbal behaviour of Ms Davis 19 23. Allegations of tutoring 20 24. Apprehension of bullying 20 25. Claim in relation to unnamed Asian student 21 COMPLAINTS AGAINST MS FOGARTY AND MRS ELFERT 21 26. Interference with right to ask questions 21 COMPLAINTS AGAINST 'AUSTRALIAN STUDENTS' 22 27. Victimisation by students 22 COMPLAINTS AGAINST MRS ELFERT 23 28. Misleading information provided by Mrs Elfert 23 COMPLAINT AGAINST MS ILLINGWORTH 24 29. Failure to comply with agreement to have test independently reviewed and re-marked 24 COMPLAINT AGAINST MR STEWART 27 30. Discrimination in provision of services 27 COMPLAINTS AGAINST MS ILLINGWORTH 28 31. Grades of other students 28 32. Mr Stewart was not an assessor 29 33. Denial of access to interview records and grades 30 34. Request for the removal of the word 'Deferred' on test results 30 COMPLAINT AGAINST MS CONNELLAN 31 35. Refusal by Ms Connellan to supply Transcript of Record 31 COMPLAINT AGAINST MR HASSETT 32 36. Less favourable treatment 32 COMPLAINT AGAINST TAFE 33 37. Failure to act on complaints against Mr Norman 33 COMPLAINTS AGAINST VETAB 34 38. Failure to undertake audit of Students' records 34 39. Vicarious liability of VETAB 35 40. VETAB not providing remedy to complaints 35 COMPLAINT AGAINST MRS ELFERT 36 41. Complaint to Ms Illingworth concerning Mrs Elfert's failure to provide information relating to the examination 36 COMPLAINT AGAINST TAFE 36 42. Failure to obtain diploma 36 COMPLAINT AGAINST DEPARTMENT OF EDUCATION AND TRAINING AND VETAB 37 43. Failure to take appropriate action 37 COMPLAINTS AGAINST TAFE 37 44. Failing to take appropriate action 37 45. Victimisation in relation to exclusion from supplementary exams 38 46. No offer to sit supplementary exams 38 47. TAFE did not award Diploma 39 48. TAFE did not award Diploma and hindered career opportunities 39 III RELEVANT LEGAL PRINCIPLES 39 Racial Discrimination 40 Sexual Discrimination, sexual harassment and victimisation 47 IV CREDIT 50 V FINDINGS 53 COMPLAINTS AGAINST MR NORMAN 53 1. 'Blue eyed - Brown eyed' incident 53 2. Award of low marks 54 3. Reference to hostile people 54 4. Refugee allegation 54 5. Afghani Detainee 54 6. Reference to shoes of Imelda Marcos 55 7. Centrelink allegation 55 8. Roll call allegation 55 9. Failure to mark fairly 55 10. Fast dictation 55 11. Gay incident 56 12. Allegations of sexual discrimination 56 Victimisation 56 13. Writing on blackboard/white board 57 14. Costs agreement 57 15. Date of course ending 57 16. More favourable treatment for Ms Ramos 57 17. Approach of Mr Norman to Ms Obieta 58 18. Credit/distinction 58 19. Throwing of examination papers 58 20. Cheezels Incident 58 COMPLAINTS AGAINST MS ALEXIE DAVIS 59 16. Wrong name called in class 59 20. The Cheezels incident 59 21. Mimic of a duck or chicken 59 22. Verbal behaviour of Ms Davis 59 23. Allegations of tutoring 59 24. Apprehension of bullying 60 COMPLAINTS AGAINST MS RYISSA FOGARTY 60 26. Interference with the right to ask questions 60 COMPLAINTS AGAINST AUSTRALIAN STUDENTS 60 27. Allegations of victimisation by students 60 COMPLAINT AGAINST MRS SUSAN ELFERT 61 28. Misleading information provided by Mrs Elfert 61 COMPLAINTS AGAINST MS NEREDA ILLINGWORTH 61 29. Failure to comply with agreement to have test independently reviewed and re-marked 61 COMPLAINT AGAINST MR STEWART 62 30. Discrimination in provision of services 62 COMPLAINT AGAINST MS ILLINGWORTH 62 31. Grades of other students 62 32. Mr Stewart was not an assessor 62 33. Denial of access to interview records and grades 63 34. Request for the removal of the word 'Deferred' on test results 63 COMPLAINTS AGAINST MS CONNELLAN 63 35. Refusal by Ms Connellan to supply transcript of record 63 COMPLAINT AGAINST MR HASSETT 64 36. Less favourable treatment 64 COMPLAINT AGAINST TAFE 64 37. Failure to act on complaints against Mr Norman 64 COMPLAINT AGAINST VETAB 65 38. Failure to undertake audit of students' records 65 39. Vicarious liability of VETAB 65 40. VETAB not providing remedy to complaints 65 COMPLAINT AGAINST MRS ELFERT 65 41. Complaint to Ms Illingworth concerning Mrs Elfert's failure to provide infromation relating to the examination 65 COMPLAINT AGAINST TAFE 65 42. Failure to obtain diploma 65 COMPLAINT AGAINST THE DEPARTMENT OF EDUCATION AND TRAINING AND VETAB 66 43. Failure to take appropriate action 66 COMPLAINTS AGAINST TAFE 66 44. Failure to take appropriate action 66 45. Victimisation in relation to exclusion from supplementary exams 67 46. No offer to sit supplementary exams 67 47. TAFE did not award diploma 67 48. Ms Obieta claims that such conduct was unlawful as it constituted breaches of the Racial Discrimination Act 1975 (Cth) ('the RDA'), the Sex Discrimination Act 1984 (Cth) ('the SDA') and against Human Rights and Equal Opportunity Commission Act 1986 (Cth) ('the HREOC Act'). 2 TAFE is an organisation within the NSW Department of Education ('the Department'). VETAB is a body corporate which was constituted by the now superseded Vocational Education and Training Accreditation Act 1990 (NSW) (see now: Vocational Education and Training Act 2005 (NSW)). Although no cause for complaint arose in 2003, during May of 2004 Ms Obieta made allegations with respect to the conduct of her course, and against Mr David Norman, her teacher. Such complaints were made only after Ms Obieta received a grading of credit in her examination. She claimed that she was entitled to a mark entitling her to the grade of distinction. Her allegations against other teachers arose in consequence of their refusal to accede to her demands for higher marks to qualify her for a distinction. Her complaints against TAFE, VETAB and the Department were made following her dissatisfaction with the rejection by them of the complaints against her teachers and the administration. 4 On 24 May 2004 Ms Obieta had raised matters of complaint concerning the alleged conduct of Mr Norman with the Head Teacher, Business Administration and Technology, Ms Nereda Catherine Illingworth. Those issues concerned not only the alleged conduct of Mr Norman in the classroom but also raised a complaint alleging discrimination based upon Ms Obieta's assertion that she was deliberately awarded poor results for her examination work. 5 On 7 June 2004 Ms Illingworth interviewed Ms Obieta in the presence of Ms Ellen Margaret Lawson, Head Teacher of Business Administration, and Mr Norman. Ms Obieta claims that at this meeting Ms Lawson prevented her from speaking. Ms Obieta complained that she had not been awarded correct marks for her examination. She also claimed that Mr Norman discriminated against her in class as detailed in the issues discussed hereunder. 6 Ms Illingworth requested that Mr Norman provide an apology in respect of statements made in a class discussion which Ms Obieta claims were discriminatory. During this meeting, and in an attempt to resolve their differences, Mr Norman agreed to provide an apology for any misunderstanding arising out of the class discussion. However whether the apology was to be given to the class, or to Ms Obieta, is a matter in issue. An apology was provided, as detailed in the issues, which Ms Obieta claims did not accord with the agreement. 7 Ms Illingworth also arranged for Ms Obieta's examination paper to be reassessed by Mr William Stewart, a teacher in the Business Administration and Technology teaching section of TAFE. On 29 July 2004 another meeting was held convened by Ms Illingworth. Present at that meeting was Ms Obieta, Ms Illingworth, Ms Lawson and Mr Stewart. Ms Clifton, another Head Teacher, arrived later. By the date of this meeting, Mr Stewart had re-marked Ms Obieta's examination paper, as well as the examination papers of all other students in Ms Obieta's class, except one. Mr Stewart increased the marks of Ms Obieta by 2%, which made no difference to her grade of 'credit'. Ms Obieta demanded a distinction, but Mr Stewart explained that he was unable to justify the award of the additional marks necessary for Ms Obieta to achieve such grade. 8 During that meeting Ms Obieta complained that Ms Illingworth, Ms Lawson and Mr Stewart had racially and sexually discriminated against her. Ms Obieta also claimed that Mr Stewart was not a qualified assessor to re-mark her paper. 9 Ms Obieta then complained to Ms Terri Connellan, Assistant Director, Educational Programs of TAFE concerning the conduct of Mr Norman, Ms Illingworth, Ms Lawson and Mr Stewart. As Ms Conellan was absent on leave at that time, Mr Peter Hassett, Chief Education Officer of TAFE reviewed Ms Obieta's complaints. 10 In relation to the reassessment of Ms Obieta's assignment, Mr Hassett satisfied himself that TAFE's Review of Results Policy had been followed. On 11 August 2004 he informed Ms Obieta that following his investigation he believed that the review process was carried out in an equitable manner and that the amendments suggested by Mr Stewart to the original marks granted should be accepted. On 26 August 2004 Ms Obieta responded complaining that Mr Norman continued to be unpleasant and intimidating towards her. 11 Ms Connellan had tried unsuccessfully to contact Ms Obieta on 2 and 3 September 2004 requesting Ms Obieta to contact her. In the absence of any reply Ms Connellan wrote to Ms Obieta on 8 September 2004. Such letter requested that Ms Obieta telephone Ms Connellan's assistant to arrange a suitable time to meet with a view to resolving her issues. No response was received. On 20 September 2004 Ms Connellan contacted VETAB to advise that she could take no further action because of the absence of communication from Ms Obieta. 12 Thereafter Ms Obieta wrote to Margaret Anne Willis, Director of Quality Assurance Services of the NSW Department of Education and Training, complaining of her treatment by Ms Connellan and reiterating the complaints against her teachers. Having reviewed the complaints of Ms Obieta and the conduct by the Officers of TAFE in the review of the complaint, Ms Willis wrote to Ms Obieta on 4 February 2005 stating that VETAB had conducted an investigation of her complaint and was satisfied with the way in which TAFE had managed it. 13 Ms Obieta thereafter referred the conduct of Mr Norman, TAFE and VETAB to the Human Rights and Equal Opportunity Commission ('the Commission'). 14 Ms Obieta instituted these proceedings nominating the Commission as the first respondent. However, Ms Obieta later instituted separate proceedings against the Commission (see Lina Obieta v Human Rights and Equal Opportunity Commission [2006] FCA 1684) and the Court ordered that the Commission be removed as first respondent to these proceedings. 15 The fifth and sixth respondents were fellow students of Ms Obieta. Ms Obieta has alleged that they engaged in conduct which was unlawful pursuant to the SDA, RDA and the HREOC Act. 16 A section entitled 'Specific Issues' considered hereunder contains details of the 48 issues raised by Ms Obieta of alleged discrimination, harassment and victimisation under the RDA and SDA. It follows the same order as contained in the Statement of the Precise Matters raised against each respondent contained in Ms Obieta's submissions filed on 16 June 2006. Such document was prepared in response to the Court's direction that Ms Obieta provide a list of precise matters upon which she relied and the sections of the relevant legislation which she claimed were breached. 17 Some of the alleged breaches refer to definition or explanatory sections, which cannot give rise to a cause of action. Accordingly the Court will make no reference to the alleged breaches of such sections. Further, no cause of action can arise from an alleged breach of an International Convention as claimed by Ms Obieta (see Tasmanian Wilderness Society Inc and Others v Fraser and Others [1982] HCA 37 ; (1982) 153 CLR 270 at 274 per Mason J). Accordingly the Court will similarly not refer to articles of International Conventions which Ms Obieta claims have been breached. 19 On Wednesday 5 May 2004 during a class exercise relating to discrimination, Mr Norman proposed that the class be divided into different groups and that each group would be required to report, either ' for' a particular argument or ' against ' it. He made a comment to the effect ' my two blue-eyed good friends over here would report that there is discrimination and the other group would report there is no discrimination '. Ms Obieta says that Mr Norman indicated that one who would be advocating that there was no discrimination came from the Philippines, thereby indicating Ms Obieta, and the other had a history of China, thereby indicating Ms Chong, another student in the class. Ms Obieta claims that by reason of Mr Norman saying such words loudly and repeatedly on two occasions, she felt discriminated against. She alleges that such conduct breached ss 9 and 18C of the RDA. 20 Mr Norman states that as part of the Advocacy Skills module he decided that a short class debate would be appropriate to give the class confidence in public speaking. Following a discussion amongst the class members it was agreed that 'discrimination in Australia' was an appropriate topic. He requested Ms Obieta and Ms Chong to debate that there was no discrimination and addressed two other students and asked them to prepare the opposite argument. Mr Norman has deposed that the four students selected were chosen solely because they were sitting closest to him in the front row of the class. As such I would like you to debate there is no discrimination. It was a fascinating example of how discrimination can be highlighted. I would hope not. Nevertheless I think it is important that you use tonight's exercise to debate that there is no discrimination in Australia. As an advocate you will find that you will be confronted with situations where you don't agree with the position or views of your client. That's part of being an advocate. You have to follow the client's instructions. He says that his use of the ' Blue eyed --- Brown eyed ' description was made only in reference to the television program, which he used to introduce the debate on discrimination in Australia. He says his comments were not made to humiliate, insult or intimidate Ms Obieta. 26 Ms Fogarty recalls that Mr Norman made the statements concerning blue eyed and brown eyed people by reference to the television program. 27 Ms Davis recalls this debate but did not remember Mr Norman ever using the words ' the other one comes from the Philippines and the other one has a history of China'. As such, Ms Obieta claims that such conduct breached ss 9 and 13 of the RDA. 29 Mr Norman denies that there was any bias or lack of objectivity in the grading of tests, assignments and reports prepared by Ms Obieta. 3. Ms Obieta claims that Mr Norman made the comment in class that ' hostile people answering will get low grades and people who are not hostile answering will get high grades '. Such conduct is claimed to be a breach of ss 9 and s 13 of the RDA. 31 Mr Norman denies that he said ' hostile people answering will get low grades and people who are not hostile answering will get high grades '. Mr Norman says that the comment that he did make was ' Hostile people will get high marks. Non hostile people will get low marks '. He says that this comment was made in a light hearted way and was an attempt to bring the class to order, as they had been unsettled. 32 Ms Davis recalls the incident and verifies Mr Norman's evidence of the words he used and the fact that it was said as a joke at which the class laughed. 4. Ms Obieta claims that these comments of Mr Norman's involved a distinction, exclusion or reference based on race, colour, descent or ethnic origin to offend, humiliate, insult and intimidate Ms Obieta in front of the class. Such conduct is claimed to be a breach of ss 9 and 18C of the RDA. 34 Mr Norman denies that the discussion took place in the terms stated by Ms Obieta. He recalls that during the discussion Ms Obieta volunteered that she was a refugee and then after further class discussions she aggressively denied that she was a refugee. Mr Norman denies that he said to Ms Obieta ' Lina, did you come here by boat ', and he denies that anything that was said in this discussion was designed to discriminate, offend, humiliate, intimidate or insult Ms Obieta. 35 Ms Davis recalls Mr Norman asking the class whether anyone knew the difference between a refugee and an immigrant and whether anyone in the class had come to Australia as a refugee. She also recalls that he asked whether any such person would share their experiences. Mr Norman asked the class to consider the general needs of detainees. Ms Davis answered ' entertainment' . Mr Norman allegedly said ' Are they allowed to have sex there? Can they make sex there? ' to which Ms Davis replied ' yes' . Mr Norman allegedly responded ' What do they use? Do they use condoms? Ms Obieta claims that she felt sexually harassed and humiliated on that ground and therefore Ms Obieta claims that his conduct breached s 28F of the SDA. 38 Mr Norman denies that a conversation took place in the manner described by Ms Obieta and denies particularly that he said the words attributed to him. He says that the class discussion commenced to consider the issues an advocate would need to consider if they were representing a detainee. Amongst the issues identified were health (physical, mental and sexual), language, customs and traditions, religious beliefs and education of children. It was in the context of discussing health issues that the question of sexual relations and birth control arose. Ms Davis asked whether there was entertainment in detention. Mr Norman responded, ' What do you mean? ' Ms Davis responded, ' You know, entertainment. ' He says he made such statement because he wished to maintain the class focus on issues that would need to be considered by an advocate acting for a detainee. The class discussion then moved on to consider the issues of sexual health and birth control and how an advocate for a detainee would need to give consideration to such matters if they arose. He particularly recalls the issue of birth control because the class discussion moved on to consider the possible impact of HIV and Hepatitis on a person in detention. 40 Ms Davis acknowledges that following a discussion considering the needs of a detainee she raised in a sarcastic manner the entertainment needs and acknowledged that she meant the sexual health needs of a detainee. 6. Ms Obieta claims that conduct breached ss 9, 17 and 18C of the RDA. 43 Mr Norman denies that he said the words attributed to him. 44 Ms Davis recalls that the subject of the shoes of Imelda Marcos was raised but not by Mr Norman. She says that Mr Keen, another student, made such a statement. 7. Ms Obieta alleges that Mr Norman said ' There are some people here who are doing mutual obligation with Centrelink and are being paid by Centrelink to do this course, ' and accordingly breached ss 9, 17, and 18C of the RDA. 46 Mr Norman denies that he said the words attributed to him by Ms Obieta and denies that he made mention of the fact that a student was on a ' mutual obligation scheme ' and denies that he had any knowledge whether any of his students were receiving any financial assistance from Centrelink. 47 Ms Davis does not recall any statements made by Mr Norman concerning Centrelink. She says that another student in the class, Ms Gleeson said words to the effect of 'I work for the dole' or 'I work for Austudy'. 8. She claims that the names of other students were called out, but not hers and as such claims that this is a breach of ss 9 and 13 of the RDA. 49 Mr Norman says that when he marks the class roll he only calls out the names of students who he cannot readily see or recognise when looking around the classroom. As Ms Obieta invariably sat at the same seat at the front of the classroom she was always visible and it was not necessary for him to call her name. 50 Ms Davis recalls Mr Norman stating in class that it was necessary for him to keep the class roll as part of his duty of care to ensure that if a student was injured there was a record of those present in class and of those who had left. In answer to a question by a student who wished to know why Mr Norman was diligent in keeping the class roll, he responded that he was aware that if students were receiving Austudy, they were required to attend 80% of classes and that the record was keep for that purpose also. 9. She claimed that such conduct is a breach of ss 9 and 13 of the RDA and a breach of s 21 of the SDA. 52 Mr Norman denies the allegation that he unfairly assessed and marked Ms Obieta's work and that there were discrepancies in his grading system and assessment practices. 10. This conduct is claimed to be a breach of s 27 of the RDA and s 94 of the SDA. 54 Mr Norman denies the allegation that he was dictating fast and ' acting furious. ' He acknowledges that on some occasions, it was drawn to his attention by students that he was dictating too quickly, and that when requested to slow down he would do so. 55 Ms Davis said that at times Mr Norman did dictate too quickly but that if a student asked him to slow down, he would do so. 11. The students were required to complete an application for victim's compensation. Ms Obieta says that when she asked the question ' Was the man gay? ', Mr Norman became very angry and yelled at her from the front of the class questioning her as to why she raised the matter. She claims that Mr Norman's conduct was rude, intimidating and offensive and that he treated her unfairly. Ms Obieta claims that this conduct is a breach of s 9 of the RDA. 57 Mr Norman responds that he recalls the question being raised by Ms Obieta and that he said words to the effect ' Lina, that is not a matter that is relevant to applying for victim's compensation in this case. ' Mr Norman says he responded in a calm manner and he denied that he got ' very angry ' or that he ' yelled ' at Ms Obieta as she claims. Nor did he angrily question her why she had asked the question as she alleges. He denies there was any dispute with Ms Obieta as alleged. 58 Ms Davis recalls this incident. She says that Mr Norman did not yell or scream at Ms Obieta as she claimed. She remembers Mr Norman responding to Ms Obieta's question whether the man was gay by saying words to the effect: 'that is not a matter that is relevant to apply for victims' compensation', and that such words were said in calm manner. 12. Ms Obieta suggested Ms Chong ask Mr Norman. Mr Norman allegedly said angrily, ' You were abducted, you were taken to the dungeon, you were raped over and over again. You were raped over and over again for a very long period of time. ' Ms Obieta claims that such remarks were repeated many times and were yelled by Mr Norman whilst he was in a rage. She claims that his behaviour was sexual verbal behaviour appertaining or imputed generally to women and that therefore she was sexually harassed by Mr Norman in breach of ss 28F and 94 of the SDA. 60 Mr Norman denies he said the words attributed to him on that occasion. 61 Ms Davis recalls the incident and says that she never heard such words being said by Mr Norman. Following her complaint to Ms Illingworth concerning Mr Norman's conduct, Mr Norman continued to provide her with less favourable treatment and interfered with her work and learning conditions. She claimed that he would dictate fast and mumble with the effect that she had to stop taking notes. She claimed that he was picking on her all the time and was frequently calling her attention in class. She claims Mr Norman sexually harassed, intimidated and humiliated her and demeaned her dignity as a woman on 25 August 2004. He intentionally repeated his unfair marking of her class test and showed less favourable treatment to her than other students in the class. He did not mark her class test of 17 November 2004 fairly which gave her a lower grade. He impaired her enjoyment or her right to enjoy, in a non-discriminatory learning and work environment which made her work or study environment unpleasant. 63 Ms Obieta claims that Mr Norman's discriminatory conduct was unnecessary to the performance of his professional duties. Accordingly she claims that Mr Norman's conduct breached s 9 of the RDA and ss 21 and 94 of the SDA. 64 Mr Norman denies any such discriminatory conduct. 65 Ms Fogarty testified that she never saw Mr Norman become aggressive towards Ms Obieta and said that he was always polite and answered questions from any student including Ms Obieta in a polite and helpful manner. 13. She says that she told Mr Norman that the letter was too long to write on the board. She alleges that Mr Norman then asked her to stand up in front of the class next to him to read the letter. She says she refused and told Mr Norman that he could use the projector. Mr Norman declined to do so and then informed her that she could read the letter from her seat. 67 Ms Obieta claims that he did not ask other students to write on the blackboard or to stand up in front of the class next to him to read their work. Accordingly, as she was the only one who was asked to do this task she was discriminated against. Ms Obieta accordingly claims a breach of s 9 of the RDA. 68 Mr Norman does not recall the particular incident in question and believes that he would not have asked Ms Obieta to write her letter on the board. Rather, he would have asked the students to note on the board in point form the essential parts of a report or letter they had prepared so that the information could form the basis of a class discussion. Mr Norman says his teaching technique was to ask a number of students to read out work they had prepared so that the class was provided with a variety of information from which the class discussion could then occur. 69 Ms Davis said that Mr Norman asked other students to write on the board when necessary and that he often asked students to come forward and make a presentation, especially in advocacy classes. 70 Ms Fogarty said that Mr Norman often asked students to come to the front of the class and read material they had prepared and gave an example of her own presentation to the class. 14. Ms Obieta says that she argued with Mr Norman and told him that since a motor vehicle accident claim for personal injuries requires a costs agreement, the same should apply to a victim's compensation claim. She says that Mrs Elfert verified that the information provided by Mr Norman was incorrect. She says that the information was intentionally misleading and accordingly breached of ss 9, 13 and 27 of the RDA and s 21 and s 94 of the SDA. 72 Mr Norman responds that he explained to Ms Obieta that since solicitor's fees for a victim are paid by the Victim's Compensation Tribunal rather than through a costs agreement with the client, it was not necessary to have a costs agreement with the client. He says he also explained to her that if it was a personal injury matter, such as a motor vehicle accident or worker's compensation matter, a costs agreement should be forwarded to the client. 73 Mr Norman denies Ms Obieta's allegation that there was any argument and says that at all times he remained calm in attempting to explain to Ms Obieta that it was not necessary that a costs agreement be prepared for a client in a victim's compensation matter. 15. The other Australian students said that the last exam would be in December 2004. Mr Norman thanked the Australian students, but not Ms Obieta. Ms Obieta claims he repeated the ' thank you ' and said ' I appreciate that very much ' on three occasions to the other students. Ms Obieta claims that he thereby showed favouritism to the Australian students and that such conduct was a breach of s 9 of the RDA. 75 Mr Norman says that in class on 22 September 2004 he did not have with him his timetable. As he wanted to know how much class time was left to cover the remaining materials in the course, he asked the class whether anyone knew when the course finished. Ms Obieta replied that the course finished in December in the previous year and accordingly the course would finish in December this year. Ms de Souza responded that the last exam was in December but the classes actually finished in November. He recalls that there was some disagreement between Ms Obieta and Ms de Souza but as it was disrupting the class he said that he would check the timetable. 76 Ms Davis recalls that Mr Norman asked the class whether anyone remembered when the teaching semester finished and the exams commenced. She recalls Ms Obieta responding that because the class finished in December in the previous year, it would finish in December of that year. Ms Davis then recalls Ms de Souza then said that the last exam was in December in the previous year and that the class would finish in November. She recalls that there was a disagreement between Ms Obieta and Ms de Souza at which time Mr Norman told them that he would check the timetable. 16. He referred to Ms Roxanna Ramos as ' Roxan' in his greeting to her. He called upon Ms Cecilia Cordova to recite a passage and referred to her as ' Lina' . Ms Obieta claims that when Mr Norman apologised for calling Ms Cordova 'Lina', this created hostility from other students in the class. She claims that Mr Norman's less favourable treatment of her had the effect of violating or impairing her rights on an equal footing with other students and made her feel ridiculed. As such she claims that she was subjected to harassment or bullying which is at law, ' being subject to any other detriment '. Such conduct is alleged to be a breach of ss 9, 17 and 27 of the RDA and s 94 of the SDA. 78 Mr Norman says that he inadvertently referred to Ms Cordova as Lina, realised his mistake and apologised to Ms Cordova. He states that it was not an attempt by him to incite other students to feel contempt for Ms Obieta. 17. Such conduct is alleged to be in breach of ss 9, 17 and 27 of the RDA and s 94 of the SDA. 81 Mr Norman is not certain what the alleged incident relates to and does not recall it. He maintains that he was always civil and polite when he was responding to questions from Ms Obieta, as well as questions from any other student, and that he did not address Ms Obieta at any time in a 'nasty' manner. 18. She states that the other students became angry and argued and wanted to know why Mr Norman marked the case study. She claims that previously Mr Norman had indicated that the case study would not be marked. As a result Ms Obieta claims that she was harassed and bullied and that the conduct of Mr Norman breached ss 9, 17 and 27 of the RDA and s 94 of the SDA. 83 Mr Norman states that when the students were asked to do their assignments he informed them that it would be a percentage graded assignment. He states that on 3 November 2004 when the students submitted their assignments there was uncertainty in his mind whether the advice he had provided concerning the grading was correct. He advised the students of his uncertainty on 3 November 2004 and told them that he would seek clarification from Ms Illingworth. He duly obtained the advice and spoke to the class on 10 November 2004. He informed them that he had been told that it had been necessary for that piece of work to be given a percentage grading and he had graded the assignments accordingly. He advised the class that two students had received distinctions. One such student was Ms Obieta. 84 Mr Norman acknowledged that there was some disquiet in the class on 10 November 2004 but says that questions were directed at him and were concerned with the previous conflicting advice he had provided. He states that the disquiet was not the fact that Ms Obieta had been awarded a distinction and he refutes that he was attempting to incite the class to feel contempt towards Ms Obieta. 85 Ms Davis recalls that when an assignment was returned there was some confusion concerning the grading of the assignment. 19. Ms Obieta testifies that Mr Norman did not come to her desk to return the papers but stood at the printer and threw her papers at her. She found Mr Norman's behaviour offensive and rude, and intimidating. Further, Mr Norman omitted to mark two questions in her class test with the result that she received a lower grade. She was the only student who complained. She says she had an argument with Mr Norman and felt that Mr Norman was victimising her. She claims that his treatment of her was discriminatory and breached ss 9, 13, 27 of the RDA and s 94 of the SDA. 87 Mr Norman responds that the class being taken on that day was being conducted by Mrs Elfert. He attended at the commencement of the class to return the class tests to the students. He denies that he 'threw' Ms Obieta's class test at her and says that he handed it back to her. After it was handed back, Ms Obieta approached him and began questioning him in relation to the grading. As the other class had commenced and Ms Obieta's questioning was interrupting that class he asked Ms Obieta to make an appointment to see Ms Illingworth, the Head Teacher, and that he would attend to discuss her concerns. He says that upon closer examination he discovered that he had unintentionally forgotten to mark two questions on Ms Obieta's examination paper. He left the room and reviewed the test, re-marked it and returned it to her. The marks were subsequently increased from 84 to 92. 88 Ms Obieta disputes that the class had already commenced. She acknowledges that she was told to contact Ms Illingworth but said that as Ms Illingworth had not conducted herself properly during her previous complaints, she did not regard it as appropriate that she should contact her. 20. She said Ms Davis stood up at her desk facing towards her and looked at her. She lifted up her hand and inserted over her five fingers Ring Cheese Curls (otherwise known as Cheezels) one by one. Ms Davis then waived her hand at Ms Obieta, sucked her middle finger while she was looking at Ms Obieta. Ms Obieta claims that Ms Davis made such gesture in the presence of Mr Norman and demeaned her. She claims that after a while Mr Norman said 'o k, that's enough ', and Ms Davis then sat down. 90 Ms Obieta claims that Mr Norman was legally responsible for the students and that failing to control the class and permitting such conduct constituted treatment less favourable to her than to the other students and violated her human right. She claims that this conduct was inciting sexual discrimination. 91 Mr Norman says that he did not see, and is not aware of the incident to which Ms Obieta is referring. As such Ms Obieta claims that Ms Davis discriminated against her on the grounds of race within the meaning of ss 9, 17 and 27 of the RDA. 93 Ms Davis denies making any duck, chicken or other such noises. 94 Ms Fogarty testifies that she did not recall Ms Davis ever making duck or chicken noises. 20. Further, she claims that after a complaint had been made to Mr Norman, Ms Davis sexually harassed her on 23 June 2004 and on 6 November 2004. Ms Obieta alleges that these incidents resulted from Ms Davis, '... staring at me and intimidating me all the time in class, and bullied me '. She claims that as a result she was sexually harassed and that the conduct of Ms Davis breached ss 28F and 94 of the SDA. 96 Ms Davis denies the allegations and says that she rarely spoke to Ms Obieta. Ms Davis says that she often ate Cheezels in class and while doing this placed them on her fingers. No sexual innuendo was ever intended. Ms Davis said that Ms Obieta sat facing the back of the class, and she faced the front. To see the teacher Ms Davis would look in the direction of Ms Obieta who occupied a seat in the front row. As such Ms Davis looked towards Ms Obieta, but denies that she stared at her. 21. When Ms Obieta's name was called out, Ms Obieta alleges that Ms Davis made the noise of a duck or chicken. She claims that Ms Davis was mimicking manner of speech or her Asian accent in class and that Ms Davis made racist sounds in her presence. She claims that such conduct was harassment and constitutes ' being subject to any other detriment '. Ms Obieta claims that this constitutes a breach of ss 9, 17, 18C and 27 of the RDA. 98 Ms Davis states that she has no recollection of such event and does not believe that she has ever done so. She states that she does not mimic ducks or chickens. 99 Ms Fogarty testifies that she does not recall Ms Davis ever making any duck or chicken noises. 22. On one occasion she said that Ms Davis went to the printer in front of her desk and said words to the effect ' This is for people who have problems with their hearing . She says this created a hostile environment and that her conduct constitutes racial and sexual discrimination and was in breach of ss 9 and 27 of the RDA and ss 28F and 94 of the SDA. 102 Ms Davis repeats that her desk was so placed that she had to look towards Ms Obieta to see the front of the class, since Ms Obieta, although being in the front row, sat facing the back of the class. She acknowledges that she often went in front of Ms Obieta's desk with other members of the class but does not recall making any comments relating to Ms Obieta's hearing on any occasion and does not believe that she made such comments. 23. ' Ms Obieta says she felt harassed and intimidated by Ms Davis' behaviour and felt that Ms Davis did not want Mrs Elfert to teach her or give her information. She considers that Ms Davis was denying her access to education and training and depriving her of her rights and privileges as a student of TAFE. As such she was intimidated and was subject to harassment and that such conduct constituted a breach of s 9 and s 27 of the RDA. 104 Ms Davis acknowledges that she did say to Mrs Elfert on one occasion words to the effect ' Oh, you are tutoring her. ' She says that such incident occurred after Ms Obieta had, in the middle of the class, asked her a series of questions which related to earlier classes and unrelated subjects. As this had been proceeding for more than half an hour Ms Davis felt extremely frustrated by so much class time being devoted to one student. She considered it inappropriate for Mrs Elfert to be providing in effect a private lesson instead of teaching the whole class. She says Ms Obieta screamed back at her. Later, when she went to explain her statement to Ms Obieta, Ms Obieta took hold of Ms Davis' arm and ' screeched' at her, refusing to let go. 24. Ms Obieta moved to the seat adjacent to the seat which had been occupied by her and felt that a 'bully group of students' were doing something behind her back and were all giggling. She turned around and saw Ms Davis and others giggling and felt harassed by them. For this reason she claims that she has been sexually discriminated against by Ms Davis pursuant to ss 28F and 94 of the SDA. 106 Ms Davis does not deny that she and other students were giggling in the class room on this particular Saturday. She says that because it was a Saturday and because she didn't want to be in the class, she was going through some of the drawers in the classroom and 'generally clowning around with other students'. She denies however that this behaviour and giggling was in any way directed to Ms Obieta. 25. The particular student did not return to class after this incident. Ms Obieta claims that Ms Davis' conduct constitutes racial discrimination under ss 9 and 18C of the RDA. At the hearing Ms Obieta was unable to identify the student and she had made no claim. Accordingly the Court disallowed this claim and will not consider it further. Ms Obieta claims that Mrs Elfert, her teacher in the modules of Litigation and Routine Legal Office Functions, supported Ms Fogarty and told Ms Chong and Ms Obieta not to ask questions during class discussions but to ask the questions after the class. Ms Obieta claims that the Australian students were permitted to ask questions during class discussions. As such Ms Obieta claims that Mrs Elfert treated her unfairly and less favourably than the other students. 109 Ms Obieta claims that Ms Fogarty's behaviour had the purpose of undermining and endangering her study or work performance or academic success or progress. She claims that Ms Fogarty isolated her by denying resources required to learn and violated her fundamental right in education. Ms Obieta says that Ms Fogarty came up to her seat on 28 October 2004 and said: ' I hate this class. I don't want to attend this class any more '. 110 Ms Obieta found such comment intimidating and offensive and capable of inciting the class to feel hatred towards her. As such Ms Obieta claims that such conduct was a breach of ss 9, 17, 18C and 27 of the RDA. 111 Ms Fogarty denies that she treated Ms Obieta in the manner alleged and denies that she deprived her of any opportunity as claimed to ask questions. She says that she asked Ms Obieta to consider that the other class members were also entitled to the same rights that she asked of the other class members. She said at one stage Ms Obieta started 'screeching' and verbally abusing her when it was suggested to Ms Obieta that she should reciprocate the same rights to other students. 112 Ms Obieta submits that Mrs Elfert supported Ms Fogarty's conduct and therefore Mrs Elfert engaged in conduct in breach of the RDA. She claimed that Mrs Elfert admitted that the students were ' corroborating' [sic --- collaborating] and that Mrs Elfert said that she did not wish to become involved in the matter. Ms Obieta claims that the 'Australian students' discriminated against her in breach of ss 9 and 27 of the RDA. 114 Mrs Elfert says that she had no recollection of such conversation nor of the allegation of victimisation or that Ms Obieta told her that the students were ' corroborating' . Mrs Elfert otherwise does not recall any discussion concerning this topic. She does recall that Ms Obieta claimed that she had been treated unfairly in Mr Norman's class. She says that she was surprised by such allegation because in previous remarks from Ms Obieta, she considered that Ms Obieta liked Mr Norman and until this time had received no negative feedback concerning his class. Mrs Elfert says that she said to Ms Obieta, ' What would you like me to do about this? You must put it in writing and I will bring it to Ms Illingworth's attention if you feel strongly about it. Mrs Elfert allegedly did not provide to Ms Obieta and Ms Chong the assessment guidelines for those modules, which Ms Obieta claims are mandatory. Ms Obieta claims that she and Ms Chong asked Mrs Elfert the requirements for the exam in the litigation module and Mrs Elfert provided the wrong information by informing her that the examination was one in which books were not allowed. Ms Obieta claims that Ms Elfert breached ss 9, 13 and 27 of the RDA and ss 21 and 94 of the SDA. 117 Mrs Elfert recalls Ms Obieta asking her what materials can be taken into the examination. She responded ' Just check the Study Guide. ' Mrs Elfert denies that she failed to provide the assessment guidelines as alleged. She states that she always handed out the guidelines at the commencement of the module which would have been in July 2004 in this instance. She states that she also showed the assessment requirements on an overhead displayed for the first three or four classes. She told the students it was a matter for them whether they wished to purchase the recommended texts and that they were in any event available in the library. She says it was the responsibility of each student to determine whether they would buy text books or borrow them. 118 Mrs Elfert denies the assertion of Ms Obieta that she informed the class that the exam would be 'closed'. She told the class that in the past the examination had been 'closed' but they needed to check the study guide as to whether or not books and notes could be brought into this exam. She states that in fact the only relevant extract of any text book was printed out in full in the examination paper with the result that examinees had no need to refer to the text book. She denies that she failed to provide Ms Obieta with vital information and that she supplied Ms Obieta with incorrect information. Mrs Elfert also says that the exam was internally set and that the material that she taught to the students in her classes corresponded with the module assessment guidelines. She also states that the examinations for those modules were publicly marked by a panel. Ms Obieta did not pass the exam but she was not the only student who failed. She said that Ms Chong re-sat the examination and passed. 119 Ms Davis testified that Mrs Elfert, at the commencement of a module would put the assessment guidelines on an overhead projector and would explain the assessment guidelines to the class. Ms Davis says that this occurred on several occasions. 120 Ms Fogarty confirmed the evidence of Mrs Elfert and Ms Davis, and said that Mrs Elfert encouraged students to take notes on the assessment guidelines. Ms Fogarty also confirmed Mrs Elfert's evidence that she told the students that it was their decision to purchase text books. She remembers Mrs Elfert telling the class that the necessary books were available in the library and that she encouraged the students to use the library rather than incurring expenditure in purchasing the books. Ms Obieta says it was also agreed that Mr Norman would apologise to her in front of the class but that Mr Norman only apologised to the class and not to her. Accordingly, Ms Obieta claims that Ms Illingworth failed to comply with the agreement to have her test reviewed independently and to have her papers marked by an independent assessor. 122 Ms Obieta claims that she was therefore discriminated against by Ms Illingworth in breach of ss 9 and 13 of the RDA and s 21 of the SDA. 123 Ms Illingworth states that on 24 May 2004 Ms Obieta informed her that she wished to make a complaint concerning Mr Norman and said that Ms Obieta was not happy with the grade she had received for the Interaction in a Legal Office module. Ms Illingworth told Ms Obieta that she could ask Mr Norman for a review. Ms Obieta responded that she had requested a review but that Mr Norman had not done so. 124 Ms Illingworth says that Ms Obieta then began to speak to her in an agitated manner and made allegations against Mr Norman. Ms Illingworth informed her that the allegations she was making were serious and that she should put them down in writing and that she would ask Mr Norman to review the marks. Ms Illingworth denies that she told Ms Obieta to come back on the following day, as Ms Obieta alleges. 125 Ms Illingworth agrees that Ms Obieta asked her on 25 May 2004 if she had talked to Mr Norman concerning her grades. Ms Illingworth responded that she had not done so because Mr Norman, a part-time teacher, had not been at TAFE since she last spoke with Ms Obieta. On the afternoon of 26 May 2004 Ms Illingworth and Mr Norman had a conversation in which Mr Norman was asked to re-mark the exam. 126 On Monday 31 May 2004 Ms Illingworth received a letter of complaint from Ms Obieta concerning Mr Norman. Ms Illingworth informed Ms Obieta that no examination papers would be returned until Mr Norman was instructed to do so. The only complaint made by Ms Obieta in the letter was in relation to her marks. Upon receiving such letter Ms Illingworth telephoned Ms Obieta to tell her that such letter did not make any complaints of the kind she had referred to during her brief conversation with Ms Illingworth. 127 A meeting was then arranged for Ms Obieta, Ms Illingworth and Mr Norman on 7 June 2004. The meeting was attended also by Ms Ellen Lawson, another Head Teacher from the section, as an observer. Prior to the meeting commencing, Ms Obieta was allowed time to read a letter written by Mr Norman in response to her complaint. Having read the letter, Ms Obieta alleged that Mr Norman had 'twisted what had happened'. 128 An agenda for the meeting was then given to Ms Obieta prepared by Ms Illingworth. Ms Illingworth says that she agreed to arrange for an independent assessor who was one of the day teachers, to review the assignment. Because Ms Obieta then alleged bias, Ms Illingworth informed her that the class tests of all the students would be re-marked and compared to each other. 129 With regard to the ' hostile people ' remark which was discussed, Mr Norman responded that he made reference to that issue in a light-hearted fashion to bring the class to order. 130 Ms Illingworth said that Ms Obieta became very aggressive and was yelling much of the time. Ms Illingworth did not prevent her talking. 131 Ms Obieta had made allegations that Ms Illingworth had referred to Ms Davis as a 'bully' and that some of the students had been offended by the ' sex and condom ' issue. Ms Illingworth denies that she made any such remarks. Ms Norman explained that he had raised the issue of ' sex and condom ' relevantly in class discussions on health issues. 132 With regard to the 'Centrelink' issues, Ms Illingworth noted that there was no way of resolving the disagreement between Mr Norman and Ms Obieta and accordingly said that she would interview the class members concerning the issues raised by Ms Obieta. 133 Ms Illingworth denies that it was agreed that Mr Norman would apologise personally to Ms Obieta. She states that it was agreed that Mr Norman would apologise to the class for any offence or misunderstanding caused by the class discussion and Mr Norman indicated that he was prepared to do so. 134 Pursuant to the arrangement for a review, Ms Illingworth instructed Mr William Stewart, a teacher, to undertake the review and the review was undertaken. 135 Miss Illingworth then interviewed 21 students. She maintained confidentiality by not revealing who had made the complaint against Mr Norman, and requested each student to keep the interview confidential. 136 Ms Illingworth received Mr Stewart's results of the review and re-mark, which made minor adjustments to 7 of 25 student's results. In Ms Obieta's case, the marks were marginally increased for the class examination from 67.5 to 69.5. Such adjustment did not alter the grade awarded to Ms Obieta. 137 Ms Illingworth then requested Mr Stewart to mark the assignment of Ms Obieta, and of two other students. Mr Stewart undertook such task, and provided marks for the assignments of the three students. 138 Ms Illingworth arranged a meeting with Ms Obieta which took place on 29 July 2004. Present were Ms Obieta, Ms Illingworth, Mr Stewart and later, Ms Clifton. Ms Obieta was informed of the results of the review and re-mark and that investigations were concluded. 139 Ms Clifton explained the results to Ms Obieta, and showed Ms Obieta where the additional marks had been awarded. However, Ms Obieta said that she wanted a grade of distinction. Mr Stewart said that there were not sufficient marks to reach that level and Ms Obieta requested another review and re-mark. Ms Clifton refused such request and informed her that her record would show 'd eferred results ' until the matter was resolved. 140 Ms Illingworth denies that Ms Obieta requested a copy of her class test under the Freedom of Information Act . Subsequently her results were changed from ' deferred result ' to her reviewed result as determined by Mr Stewart. Accordingly she claims that Mr Stewart failed to provide fair teaching services and failed to supply these services and discriminated against her on the grounds of race. Ms Obieta claims that he breached ss 9 , 13 and 27 of the RDA and ss 21 and 94 of the SDA. 142 Mr Stewart denies such allegations. He says that he reviewed Ms Obieta's examination paper, and those of 24 other students. He was informed that a student had complained, but that he was unaware of the identity of that student. Mr Stewart reported to Ms Illingworth that he found only minor discrepancies but that there was no evidence of bias in the earlier marking. 143 In the re-mark of the three student's assignments Mr Stewart says that no marks were indicated on the paper of Ms Obieta. Mr Stewart allocated 29 out of 40 for Ms Obieta's assignment. 144 Mr Stewart says that at the meeting of 29 July 2004 he explained how he had increased the mark from 25 to 29 out of 40. He says that Ms Obieta appeared to be dissatisfied with the mark and questioned Mr Stewart's objectivity. She demanded the grade of distinction, but Mr Stewart told her that he could not justify awarding the further 12 marks which was required to meet such standard. 145 Mr Stewart denies Ms Obieta's evidence that she advised him that the assessment should be based on the ' assessment tools of the competency-based training '. He denies Ms Obieta's claim that Ms Illingworth told him not to answer Ms Obieta's questions. Mr Stewart recalls Ms Obieta shouting words to the effect that she was not content with the review. She also claims that she advised Mr Stewart that there was a student in the class who submitted a wrong report or case study but received a mark. She claims that Ms Lawson and Ms Illingworth avoided the conversation. As a consequence she claims that Ms Illingworth's conduct involved an exclusion and preference which denied her access to benefits, and that she was discriminated against in breach of ss 9 and 27 of the RDA and ss 21 and 94 of the SDA. 147 Ms Obieta also claims that the first to fourth respondents failed to take all reasonable steps to prevent or stop discrimination and victimisation and failed to implement its ' Staff and Student Policies '. 148 Mr Stewart has no recollection of such conversations. Ms Lawson recalls Ms Obieta referred to other students' marks, but both Ms Illingworth and Ms Lawson informed her that they could not discuss other students' marks and that they could only address Ms Obieta's concerns with regard to her own marks. 32. She says that she claimed that Mr Stewart was not an assessor and advised Ms Illingworth that the agreement for an assessment of her class test by an independent assessor had not been complied with. Ms Obieta also claims that she advised Ms Illingworth that the test was unfairly reassessed and re-marked by Mr Stewart. She claims that Ms Illingworth refused to provide her with a further reassessment and accordingly Ms Obieta claims that she was discriminated against in breach of ss 9 , 13 and 27 of the RDA and ss 21 and 94 of the SDA. 150 Ms Illingworth states that Mr Stewart was a teacher in the daytime class. Mr Stewart testified that he holds qualifications issued by the Commonwealth Government which qualifies him as an assessor and teacher. Ms Illingworth maintains that there was no breach of the agreement as alleged, since Ms Obieta's class test was marked by Mr Stewart, who was independent. 151 Ms Lawson recalls that Ms Obieta challenged Mr Stewart's qualifications and abilities to re-evaluate her results and claimed that he was not a law teacher. Both Ms Illingworth and Ms Lawson reassured Ms Obieta that Mr Stewart was qualified however Ms Obieta continued to challenge Mr Stewart's qualifications. 33. She claims Ms Illingworth denied that there was discrimination and that there were no complaints from other students. Ms Obieta claims that other students had informed her that they had verified the verbal behaviour of Mr Norman in class. 153 Ms Obieta says she requested Ms Illingworth to supply a copy of her class test pursuant to the Freedom of Information Act but Ms Illingworth refused and advised her that a pass mark of 69.5 (as marked by Mr Stewart) would be rounded to 70 to make it a credit in the 'Transcript of Record'. Ms Obieta claims Ms Illingworth's conduct discriminated against her in breach of ss 9 , 13 and 27 of the RDA and ss 21 and 94 of the SDA. 154 Ms Illingworth acknowledges that Ms Obieta received the grade of 'credit', and says that she did not qualify for the grade of 'distinction'. She denies that there was any discrimination in the manner in which Ms Obieta was treated. 34. She claims that Ms Illingworth declined to do so and that Ms Illingworth handled the grievance procedure poorly, unsatisfactorily and inadequately. As a result she discriminated against Ms Obieta in breach of ss 9 , 13 and 27 of the RDA and ss 21 and 94 of the SDA. 156 Ms Illingworth rejects Ms Obieta's claims and says that the word 'Deferred' was included in her results because she had requested a review and that Ms Obieta was informed that the 'Deferred' result would remain until the matter was settled. She also asked for a copy of the mark of the class test pursuant to 'Freedom of Information', and that the 'Deferred' results be removed from her Transcript of Record. She also requested that she be supplied with the amended Transcript of Record with the re-marks by an independent assessor and the written result of the investigation in relation to her complaint against Mr Norman's alleged discriminatory conduct. Ms Connellan declined to accede to such requests. Ms Obieta claims that in consequence she was discriminated against in breach of ss 9 , 13 and 27 of the RDA and ss 21 of the SDA. Further she claims that the Department of Education and TAFE respondents failed to prevent discrimination and failed to implement its ' Staff and Student's Policies' . 158 Ms Connellan says that as she was on leave she did not see or respond to a letter which Ms Obieta wrote dated 3 August 2004 which itemised her requests. Mr Hassett, acting in Ms Connellan's role responded by a letter dated 11 August 2004. 159 Ms Connellan says that when she returned from leave on 30 August 2004 she had a discussion with Mr Hassett concerning the complaint and saw both Ms Obieta's letter and the response. 160 On 1 September 2004 Ms Connellan became aware that Ms Obieta had made a complaint to VETAB and following a discussion with an officer in VETAB it was agreed that her complaint would be managed by TAFE in accordance with TAFE's complaints policy namely ' Responding to Suggestions, Complaints and Allegations Policy '. A further letter was sent by Ms Obieta to Mr Hassett dated 26 August 2004 alleging discrimination. Ms Connellan attempted to contact Ms Obieta and left several messages requesting that she communicate with her. Such messages were left on Ms Obieta's mobile telephone but no response was received. 161 Ms Connellan met with Ms Illingworth on 2 September 2004 and 6 September 2004 to discuss the management of Ms Obieta's complaint. Ms Connellan also spoke to Mr Hassett concerning Ms Obieta's letter of 26 August 2004. 162 On 8 September 2004, having received no response to her messages requesting that Ms Obieta contact her, Ms Connellan wrote to Ms Obieta informing her that attempts had been made to contact her in relation to the issues raised and that messages had been left on her home number on two days of the previous week. Ms Connellan requested that Ms Obieta contact her. The letter was addressed to Ms Obieta's postal address. No response was received from Ms Obieta. 163 On 20 September 2004, in the absence of any communication from Ms Obieta, Ms Connellan contacted VETAB to advise that no further action on her part was possible because Ms Obieta had failed to respond to requests for communication. On 14 December 2004 Ms Connellan received a facsimile from Ms Margaret Willis, the general manager of VETAB advising her that Ms Obieta had made complaints. By letter dated 20 December 2004 Ms Connellan responded to Ms Willis informing her of the attempts to communicate with Ms Obieta and that so far as possible the complaint had been resolved to the best of her ability. He also advised that the mark should stand and that she would receive a new Transcript of Record shortly and that the internal action had been appropriate. 165 Ms Obieta claims that Mr Hassett's conduct was discriminatory because he denied her access to benefits provided by an education institution and that she received less favourable treatment. Further she claims that the Department of Education, VETAB and TAFE failed to take all reasonable steps to prevent the discrimination. Ms Obieta claims that such conduct breached ss 9 , 13 and 27 of the RDA and ss 21 and 94 of the SDA. 166 Mr Hassett says that he became aware that on 3 August 2004 Ms Obieta had written to Ms Connellan during her absence. Upon receipt of the letter he proceeded to investigate the complaints and in doing so spoke to Ms Illingworth. He ascertained the procedures that had been used in accordance with the Review Policy. Ms Illingworth had informed him that Ms Obieta's class papers had been sent to Mr Stewart for reassessment. Mr Hassett says he did not know Mr Stewart but understood him to be a teacher in the Legal Studies section of TAFE NSW Sydney Institute. He also inspected Mr Stewart's reassessment. 167 Mr Hassett spoke to Ms Lawson, another Head Teacher in the Business Administration and Technology teaching section. He satisfied himself that the correct procedures had been adopted. 168 Mr Hassett says that he noted Ms Obieta's request under the Freedom of Information Act 1982 (Cth) but states that at that time it was his understanding that requests had to be made in a more formal manner. He believed that a formal request would need to have been sent by an applicant for information to the Freedom of Information Unit of the Department of Education and Training for response. Mr Hassett acknowledges that his assumptions may have been incorrect but his action in declining to make the invitation available was not because of Ms Obieta's background, race or sex. He states he knew nothing of her background. 169 With regard to Ms Obieta's allegation that she requested her Transcript of Record with re-graded marks, Mr Hassett states that the records of TAFE NSW Sydney Institute database shows that Ms Obieta's re-graded results were sent to her on 6 August 2004. 170 Mr Hassett acknowledges that Ms Obieta again wrote on 26 August 2004 to him complaining of Mr Norman's conduct and that such letter had been received on 2 September 2004. He did not respond since Ms Connellan had taken over the conduct of Ms Obieta's complaint. She also informed him that TAFE had failed to carry out appropriate action and no remedies had been implemented in connection with the behaviour of Mr Norman. 172 Ms Obieta also complained that she had not received her Transcript of Record with her grade on the two modules of Mr Norman and a copy of the class test and the result of the investigation had not been provided to her. 173 Ms Obieta claims that TAFE discriminated against her by reason of the above and denied her benefits and claims discrimination in breach of ss 9 , 13 , 27 of the RDA and ss 21 and 94 of the SDA. Additionally she claims that TAFE was vicariously liable under the SDA and the RDA for their failure to provide her with an appropriate work environment. 174 Mr Hassett says that upon receipt of Ms Obieta's letter of 3 August 2004, addressed to Ms Connellan, he made enquiries of Ms Illingworth and of Ms Lawson concerning the issues raised by Ms Obieta. He satisfied himself that the requirements of TAFE's Review and Results Policy had been satisfied. 175 With regard to Ms Obieta's request for her Transcript of Record under the Freedom of Information Act , he believed then that her request was informal and was insufficient. He acknowledges that he may have been mistaken in so concluding. 176 Mr Hassett responded to Ms Obieta, informing her that TAFE had followed the appropriate procedures. He enclosed the Policy documents and invited Ms Obieta to telephone him. She also complained that a class member, Roxana Ramos received a pass in the class test of Mr Norman's modules and that the grade was changed to 'credit' in the Transcript of Record. Ms Obieta claims that Ms Ramos was always absent from the modules of Mr Norman and in other modules of this course yet nevertheless Mr Norman provided her with the grade of credit in all three modules. 178 Ms Obieta claims that her request to VETAB to audit the student's records in relation to the discrepancies in the grading and assessment practices of Mr Norman and in the teaching staff of TAFE was not actioned. Ms Obieta relies upon vicarious liability provisions in ss 18A and 18E of the RDA and s 106 of the SDA. 179 Ms Willis Director of Quality Assurance for the NSW Department of Education and Training and Director of VETAB gave evidence that VETAB's role was to monitor compliance with the Standards for Registered Training Organisations ('RTOs') which includes handling complaints relating to RTOs. She gave evidence that VETAB did not order an investigation of students' records because it does not carry out an audit of individual assessments of students. 39. Ms Obieta refers to the vicarious liability provisions in ss 18A and 18E of the RDA and s 106 of the SDA. 181 Ms Willis' affidavit states that Ms Grayce attempted to contact Ms Obieta on 16 September and 24 September 2004 and left messages requesting Ms Obieta to contact her. Ms Obieta did not return any phone call. 40. She requested VETAB to provide her with the results of her complaint and the outcome of the investigation. 183 Ms Obieta claims that VETAB did not redress her grievances and that VETAB discriminated against her. She claims that VETAB was in breach of ss 9 , 13 , 17 , 18C, and 27 of the RDA and ss 21 , 28F and 94 of the SDA. 184 Ms Willis' affidavit annexes a file note which details the attempts made by VETAB to communicate with Ms Obieta by telephone, email and letter, and by message sent through her teacher. Ms Obieta did not make contact in response to any of the requests made by her. Complaint to Ms Illingworth concerning Mrs Elfert's failure to provide information relating to the examination. Ms Obieta says that she and Ms Chong complained to Ms Illingworth concerning the allegedly misleading information provided by Mrs Elfert. She claims that she was discriminated against in breach of ss 9 , 13 and 27 of the RDA and ss 21 and 94 of the SDA. This claim is a duplication of the claim made in 28 above and accordingly the response of Mrs Elfert is the same. It established that she failed two modules, namely Litigation and Routine Legal Office Functions. Such courses were conducted by Mrs Elfert. 187 Ms Obieta alleges that TAFE discriminated against her in breach of ss 9 and 13 of the RDA, and ss 21 and 94 of the SDA because she was not awarded the Diploma due to her fail results in the two subjects. 188 Ms Illingworth's affidavit sworn 13 September 2006 states that Category A exams of which Litigation and Routine Legal Office Functions were comprised, were marked by a marking panel which is separate from the teachers of the Business Administration and Technology at TAFE. The affidavit also states that once the papers have been marked they are forwarded directly to the Students Records Department at each college and therefore a teacher would not know the grading of a student from their class. 189 Mrs Elfert testified that although she was a member of the marking panel there are 'strict protocols' in place to prevent a person marking the papers of a student from that person's own college and that she did not have access to Ms Obieta's exam papers nor did she mark them. However VETAB did not respond regarding the results of the audit of the students' records in relation to discrepancies and failed to respond to the complaints regarding bullying and victimisation by the students. She says VETAB did nothing to resolve her complaints and failed to take any appropriate action. For these reasons she claims that there was discrimination by the Department and VETAB against her in breach of ss 9 , 13 , 17 , 18C, and 27 of the RDA and ss 21 , 28F and 94 of the SDA. 191 The Department and VETAB deny that Ms Obieta's complaint was not handled correctly. She also claims that TAFE discriminated against her under the SDA arising out of the same conduct. 193 Ms Obieta claims that TAFE failed to take appropriate action to resolve all the discrimination that occurred during her period of study and failed her in the course which prevented her from obtaining her qualification. She says that she was penalised by TAFE and discriminated against in breach of ss 9 , 13 , 17 , 18C and 27 of the RDA and ss 21 , 28F and 94 of the SDA. 194 TAFE denies such allegations. 45. She said that she learnt of the availability of supplementary exams from the submission of Mr Phillip Carroll of TAFE which was provided to the Commission dated 10 October. Accordingly Ms Obieta claims that she was discriminated against in breach of ss 9 , 13 and 27 of the RDA and ss 21 and 94 of the SDA. 196 The affidavits of Mrs Elfert and Ms Illingworth state that it is the responsibility of students to request supplementary examinations, the procedure for which is set out in the ' Revised Policy on Review of Results' . Ms Davis and Ms Fogarty stated in oral evidence that Ms Illingworth had told the students on a number of occasions that if they failed a Category A exam it was their responsibility to approach her as Head Teacher, to make arrangements to undertake revision exercises and supplementary exams. Mrs Elfert also says that Ms Obieta was not the only student to fail a Category A exam and that another class member, Ms Chong had failed, re-sat and subsequently passed the examination. 46. However TAFE did not offer the opportunity to do any supplementary exam and therefore discriminated against her in breach of ss 9 , 13 and 27 of the RDA and ss 21 and 94 of the SDA. 198 The Department and TAFE refer to the affidavits of Mrs Elfert and Ms Illingworth which state that it is the responsibility of the student to arrange for supplementary exams after failing a Category A exam, as referred to above. 199 Ms Davis testified that Ms Illingworth often told class members of the procedure to be followed if they failed Category A examinations, namely that they should approach her and ask her to make arrangements to do revision exercises and supplementary exams. 200 Ms Fogarty also testified that Ms Illingworth told the students of the process to be followed if they failed a Category A examination. Her evidence confirmed that of Ms Davis and of Ms Illingworth. 47. As such it is claimed that this constituted breaches of ss 9 , 13 and 27 of the RDA and ss 21 and 94 of the SDA. 202 The Department and TAFE make the same response as in 46 above and deny the allegations. 48. She also claims to have lost her self esteem and confidence. Accordingly she was discriminated against by TAFE in breach of ss 9 , 13 and 27 of the RDA and ss 21 and 94 of the SDA. 204 The Department and TAFE deny the allegations. Ms Obieta claims that the conduct of the first, second and third respondents and that of several of their employees and also of Mr Norman, Ms Davis and Ms Fogarty and other students, variously constitutes racial discrimination pursuant to ss 9 , 10 , 13 , 18 and 18C of the RDA, intimidating and coercive behaviour in breach of s 27(2) of the RDA, inciting unlawful acts under s 17 of the RDA, and vicarious liability pursuant to ss 18A and 18E of the RDA. Ms Obieta also makes allegations of sexual discrimination and harassment purportedly pursuant to ss 5 , 21 , 28A of the SDA, allegations of sexual harassment specifically in the context of educational institutions pursuant to s 28F of the SDA, allegations that the respondents have committed the offence of victimisation pursuant to s 94 of the SDA, allegations that the respondents have caused, instructed, induced, aided or permitted another person to do an act that would be unlawful under the SDA pursuant to s 105 of the SDA, and claims of vicarious liability pursuant to s 106 of the SDA. In addition, Ms Obieta claims that the respondents have breached provisions of the International Convention for the Elimination of All Forms of Racial Discrimination (entered into force 2 January 1969) ('ICERD'), the International Covenant on Civil and Political Rights (entered into force 23 March 1976) ('ICCPR'), the Convention for the Elimination of All Forms of Discrimination against Women (entered into force 27 August 1983) ('CEDAW') and the Convention Concerning Discrimination in Respect of Employment and Occupation , (entered into force 15 June 1960) ('CDREO'). 207 For Ms Obieta to establish that any of the conduct of which she complains amounts to racial discrimination under s 9(1) of the RDA she must establish the occurrence of an act involving 'a distinction, exclusion, restriction or preference based on race, colour, descent or national or ethnic origin' which had the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise, on an equal footing of Ms Obieta's human rights or fundamental freedoms: see s 9(1) of the RDA. 208 The elements that Ms Obieta must establish to prove race discrimination within the meaning of s 9(1) of the RDA are as follows: a person must do an 'act'; the act must involve either a 'distinction', 'exclusion', 'restriction' or 'preference' in the areas of 'social' or 'cultural' life or any 'field of public life'; the act must be based on race; the act must have either the purpose or the effect of impairing a human right; and the relevant 'human right' is identified. 209 The expression 'act' is not defined in the RDA. The determination of whether there has been a 'distinction', 'exclusion', 'restriction' or 'preference' must be determined objectively based on an assessment of the evidence. 210 The requirement to identify that the particular 'distinction', 'exclusion', 'restriction' or 'preference' was ' based on' Ms Obieta's race has been the subject of judicial determination in Macedonian Teachers' Association of Victoria Inc v Human Rights and Equal Opportunity Commission and Another (1998) 91 FCR 8. At [33] the Court considered that the words 'based on' required a test of 'sufficient connection' with race rather than a 'causal nexus'. Weinberg J distinguished the expression 'based on' from other constructions used elsewhere in Federal anti-discrimination legislation (such as 'by reason of' or 'on the ground of'). The words 'based on' encompass a broader meaning of 'by reference to' and are not limited to 'by reason of' (at [30]). What is required is a close relationship, between the designated characteristic and the impugned conduct, which is not necessarily causal (at [33]): see also Baird and Others v Queensland (No 1) (2005) 224 ALR 541 and Commonwealth v McEvoy and Another [1999] FCA 105 ; (1999) 94 FCR 341 for an analysis of the meaning of 'based on'. 211 The effect of s 18 of the RDA is that Ms Obieta does not have to establish that race was the only reason for the act. It is sufficient if it were one of the reasons. 212 The standard of proof that is required to establish unlawful conduct under s 9 of the RDA was considered in Sharma v Legal Aid (Qld) [2002] FCAFC 196 ; (2002) 115 IR 91. It may be accepted that it is unusual to find direct evidence of racial discrimination, and the outcome of a case will usually depend on what inferences it is proper to draw from the primary facts found: Glasgow City Council v Zafar [1997] UKHL 54 ; [1998] 2 All ER 953, 958. There may be cases in which the motivation may be subconscious. There may be cases in which the proper inference to be drawn from the evidence is that, whether or not the employer realised it at the time or not, race was the reason it acted as it did: Nagarajan v London Regional Transport [1999] UKHL 36 ; [1999] 3 WLR 425, 433. It was common ground at first instance that the standard of proof for breaches of the RDA is the higher standard referred to in Briginshaw v Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336, 361-362. Racial discrimination is a serious matter, which is not lightly to be inferred: Department of Health v Arumugam [1988] VR 319, 331. No contrary argument was put on the hearing of the appeal, apart from the comment that there is no binding authority on this Court that Briginshaw should be applied in cases of this nature. One should not put a piece of circumstantial evidence out of consideration merely because an inference does not arise from it alone: Chamberlain v The Queen [No 2] [1984] HCA 7 ; (1983-1984) 153 CLR 521 at 535. It is the cumulative effect of the circumstances which is important provided, of course, that the circumstances relied upon are established as facts. The expression 'human right' for the purpose of the RDA incorporates the rights set out in the International Convention on the Elimination of all Forms of Racial Discrimination (CERD) scheduled to the RDA. The preamble to the RDA recites the entry into force of the CERD and the desirability of parliament making provision for giving effect to the CERD. One such other instrument is the International Covenant on Civil and Political Rights (ICCPR) (as provided in Schedule 2 to the HREOC Act) which is relied upon by Ms Obieta. 215 To succeed in establishing a claim under s 9(1A) of the RDA that there was an act involving a distinction based on, or done by reason of, her race, colour, decent or national or ethnic origin, Ms Obieta must establish that a term, condition or requirement that was not reasonable in the circumstances was imposed upon her (see s 9(1A)(a)). As was held by McHugh J in Waters and Others v Public Transport Corporation [1991] HCA 49 ; (1991) 173 CLR 349 at 406 in reference to a similar provision in Victorian anti-discrimination legislation (see s 17(5)(a) Equal Opportunity Act 1984 (Vic)), such term, condition or requirement would need to be identified with precision. 216 Further, under s 9(1A)(b) Ms Obieta must established that she does not or cannot comply with the term, condition or requirement and under s 9(1A)(c), that the requirement has the purpose or effect of interfering with the recognition, enjoyment or exercise, on an equal footing, by persons of the same race, colour, descent or national or ethnic origin as Ms Obieta, of any relevant human right or fundamental freedom. 217 Section 10 of the RDA relevantly provides for a right of equality before the law and that the laws of the Commonwealth, States and Territories are to apply generally to all people regardless of their race, colour, national or ethnic origin. Ms Obieta must show that under a particular law, she does not enjoy a right that is enjoyed by persons of another race, colour or national or ethnic origin, or that she enjoys that right to a more limited extent. Once this has been established then notwithstanding the particular law in question, by force of this section, she is entitled to enjoy the right to the same extent as persons of another race, colour or national or ethnic origin. 218 Section 13 of the RDA specifically deals with the provision of goods and services to the public and makes it unlawful for a person to refuse or fail to supply goods or services to another person or to do so on less favourable terms because of the race, colour or national or ethnic origins of that other person. To establish a claim under this section, Ms Obieta must establish that by reason of her race, colour or national or ethnic origin or that of any of her relatives or associates, the supply of goods or services was refused to her or that there was a failure on her demand to supply such goods or services (s 13(a)). Such claim could be established if such goods or services were supplied to Ms Obieta on terms or conditions less favourable than such goods and services would otherwise be supplied by reason of Ms Obieta's race, colour or national or ethnic origin or that of her relatives or associates (s 13(b)). 219 Section 18 of the RDA is a deeming provision which provides that if an act is done for two or more reasons and one of the reasons is because of the race, colour, descent or national or ethnic origin of a person, then for the purposes of Part II of the RDA, the act is taken to have been done for that reason. Under s 18(b) there is no requirement that the reason for the act being the race, colour, descent or national or ethnic origin of the person be the dominant reason or a substantial reason for doing the act. 220 Section 18A of the RDA provides that employers or principals are vicariously liable for the acts of their employees or agents in circumstances that if the act was done by the employer or principal it would be unlawful under Part II of the RDA. Section 18A(2) provides that vicarious liability does not apply to an employee or agent of a person if it is established that the person took all reasonable steps to prevent the employee or agent from doing the act. For Ms Obieta to establish a claim under this section she must establish that there was an act; that the act was done by an employee or agent of a person; that the act was done in connection with his or her duties as an employee or agent (s 18A(1)(a)); and that the act would be unlawful under Part II of the RDA if it were done by that person (s 18A(1)(b)). 221 Section 18C of the RDA makes it unlawful for a person to do any act (otherwise than in private) if the act is reasonably likely, in all the circumstances, to offend, insult, humiliate or intimidate another person or group of people (see s 18C(1)(a)). Pursuant to s 18C(1)(b), the act must have been done because of the race, colour or national or ethnic origin of the other person or all of the people in the group. Thus the first inquiry of s 18C is whether the act in question, can in the circumstances be regarded as reasonably likely to offend or humiliate a person in Ms Obieta's position. 222 In Bropho v Human Rights and Equal Opportunity Commission and Another [2004] FCAFC 16 ; (2004) 135 FCR 105, French J observed at, [69] that the words ' offend, insult, humiliate or intimidate ' are to be considered according to ' their ordinary meaning, in their context, acknowledging their somewhat elastic content and having regard to the objectives of the legislation...' . These objectives, it was noted, are to be gleaned not only from the words of the legislation but also from extraneous material such as, inter alia, the Second Reading Speech of the Racial Hatred Bill 1994 (Cth) ('Second Reading Speech'). The Second Reading Speech provides that the Act was intended to ' close a gap in the legal protection available to the victims of extreme racist behaviour ': see Bropho 135 FCR at [70]. In Creek v Cairns Post Pty Ltd [2001] FCA 1007 ; (2001) 112 FCR 352 at 356-357 Kiefel J said that the conduct which is encompassed by s 18C of the RDA is that which has, ' profound and serious effects not to be likened to mere slights '. 223 Section 18C of the RDA requires the satisfaction of an objective test of the likelihood that the act complained of will have the prohibited effect: see Hagan v Trustees of the Toowoomba Sports Ground Trust [2000] FCA 1615 at [15] . 225 The question of causation that arises in the application of s 18C(1)(a) has been considered in numerous cases. In Purvis v New South Wales (Department of Education and Training) and Another [2003] HCA 62 ; (2003) 202 ALR 133 at 138 the High Court explained per Gleeson CJ, at 171-2 per McHugh and Kirby JJ, at 187 per Gummow, Hayne and Heydon JJ, that the accepted test for causation in the context of anti-discrimination legislation focuses on the 'genuine basis' or 'the true basis' or 'real reason' for the act of the alleged discriminator. The question of causation was also considered in Bropho 135 FCR at [71] wherein French J referred to the description by Kiefel J in Creek v Cairns Post 112 FCR at [28] of the key causation issue as 'whether anything suggests race as a factor' in the act in question. Kiefel J at [23] adopted the approach to the construction of statutory provisions similar to s 9 of the RDA taken by McHugh J in Waters 173 CLR at 401. The status ... of the victim must be at least one of the factors which moved the discriminator to act as she or he did. It seems clear from what her Honour said at [22] that she regarded the assessment of a reason as being an objective one, but not one which excluded any evidence of the relevant person's intention or motive. Regard was to be had to all the circumstances. I respectfully agree with that approach. For Ms Obieta to establish claims under this provision she would have to satisfy the same elements as for s 18A of the RDA. 229 Section 27(2) of the RDA provides for offences relating to the administration of the RDA. To establish her claims pursuant to this section Ms Obieta must demonstrate that the particular respondent acted in a way to intimidate or coerce, or impose any pecuniary or other penalty on Ms Obieta 'by reason that' Ms Obieta had made or proposed to make a complaint of unlawful discrimination, or had furnished or proposed to furnish information to the Commission, or proposed to attend a conference held under the RDA or the HREOC Act. In Microsoft Corporation and Another v Marks (No 1) 1996 69 FCR 117 Beaumont J noted at 137 that a proceeding should be classified as civil or criminal when it is commenced, and where the substance and object of the proceedings are remedial the proceeding should be classified as civil. 230 Despite the fact that one of the options of the Court in s 27(2) of the RDA is the imposition of a penal sentence, it has been held that the civil standard should nevertheless apply where the substance of the proceedings are civil (see In Marriage of Lindsey (1995) 128 FLR 46). The majority of the High Court in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd and Others [1992] HCA 66 ; (1992) 110 ALR 449 has emphasised the fact that the ordinary standard of proof in civil litigation is proof on the balance of probabilities even when the matter to be proved involves criminal conduct or fraud (see Rejfek and Another v McElroy and Another [1965] HCA 46 ; (1965) 112 CLR 517 at 519-21). It was also held in that case that the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. 231 Under s 17(a) of the RDA it is unlawful for a person to incite the doing of acts made unlawful by a provision of Part II of the RDA. Further s 17(b) makes it unlawful for a person to assist or promote the doing of such an act (whether by financial assistance or otherwise). Incitement denotes encouragement in an active way. It essentially provides the conditions that are required before a person called the 'discriminator' (s 5(1)) can be found to have discriminated against another person called the 'aggrieved person' (s 5(1)) on the grounds of the sex of the aggrieved person. Under s 5(1) if by reason of the sex of the aggrieved person, or a characteristic that generally pertains to or is generally imputed to a person of that sex, the discriminator treats the aggrieved person less favourably than the discriminator treats or would treat a person of the opposite sex, then the discriminator has discriminated against the aggrieved person. Ms Obieta must establish that the respondent in question treated her less favourably than the respondent would treat a person of the opposite sex in circumstances that are the same or not materially different. 234 Section 21(2) of the SDA renders it unlawful for an education authority to discriminate against a student on the grounds, inter alia, of the student's sex relevantly by denying or limiting the student's access to any benefit provided by the educational authority (s 21(2)(a)); or by subjecting the student to any other detriment ( s 21(2)(c)). 235 For Ms Obieta to establish a claim under s 21(2)(a) of the SDA she must prove that the respondents discriminated against her on the ground of her sex pursuant to the definition in s 5 of the SDA, either by denying or limiting her access to any benefits provided by the educational authority (s 21(2)(a)) or by subjecting her to any other detriment (s 21(2)(c)). 236 In Sivananthan v Commissioner of Police, New South Wales Police Service [2001] NSWADT 44 , a case which considered, inter alia, the meaning of 'detriment' in comparable state legislation, the Administrative Decisions Tribunal ('ADT') found that the word 'detriment' should be given its common meaning of 'loss, damage or injury' (at [40]). It was also said in that case that '[t]he detriment suffered... must be real and not trivial' and 'whether something constitutes a detriment must be determined objectively and not subjectively' (at [41]). It provides the definition of sexual harassment and in order for Ms Obieta to establish that any of the conduct alleged constitutes sexual harassment she must establish that a person made an unwelcome sexual advance, or an unwelcome request for sexual favours to her (s 28A(1)(a)) or that a person engaged in other unwelcome conduct of a sexual nature directed at her (s 28A(1)(b)). Where it is alleged that conduct is unlawful under the SDA, the context of the conduct must be considered. In Cooke v Plauen Holdings [2001] FMCA 91 , Driver FM observed that whether an act or statement can constitute sexual harassment will depend upon the nature or the quality of the act or statement. 239 For Ms Obieta to establish her claims under section 28F of the SDA she is required to establish that the relevant staff member (s 28F(1)) or adult student (s 28F(2)) of TAFE sexually harassed her. That is, pursuant to s 28A of the SDA, Ms Obieta would have to establish that the relevant respondent made an unwelcome sexual advance, or an unwelcome request for sexual favours (s 28A(1)(a)) or engaged in other unwelcome conduct of a sexual nature (s 28A(1)(b)) in circumstances in which a reasonable person having regard to all the circumstances, would have anticipated that Ms Obieta would be offended, humiliated or intimidated. 240 Pursuant to s 94(1) of the SDA it is an offence for a person to commit an act of victimisation against another person. Pursuant to s 94(2) Ms Obieta is required to establish that the relevant respondent subjected, or threatened to subject her to any detriment on the grounds that Ms Obieta had or was believed to have made or proposed to make a complaint under the SDA or under the HREOC Act (s 94(2)(a)); or that Ms Obieta had brought or proposed to bring proceedings under the SDA or the HREOC Act against any person (s 94(2)(b)); or that Ms Obieta had furnished or produced or proposed to furnish or produce any information or documents to anybody exercising functions under the SDA or the HREOC Act (s 94(2)(c)); or that Ms Obieta had attended or proposed to attend a conference held under the SDA or the HREOC Act (s 94(2)(d)); or that Ms Obieta appeared or proposed to appear as a witness in proceedings under the SDA or the HREOC Act (s 94(2)(e)); or that Ms Obeita has reasonably asserted or proposed to assert any rights under the SDA or the HREOC Act (s 94(2)(f)); or that Ms Obieta had made an allegation that a person had done an act that is unlawful under Part II of the SDA (s 94(2)(g)). In Damiano [2004] FMCA 891 Baumann FM at [22] said, referring to Bailey v ANU (1995) EOC 92-744, that for victimisation to be established under comparable legislation one of the grounds under a section comparable to s 94(2) of the SDA must be a 'substantial and operative' factor for the alleged action. 241 Under s 105 of the SDA a person who causes, instructs, aids or permits another person to do an act that is unlawful under Division 1 or 2 of Part II shall, for the purposes of the SDA, be taken also to have done the act. The meaning of the word 'permit' was discussed in Cooper v Human Rights and Equal Opportunity Commission and Another [1999] FCA 180 ; (1999) 93 FCR 481 at 494-495, [41] - [45] . Moore J in Elliott v Nanda and Another [2001] FCA 418 ; (2001) 111 FCR 240 at 293, [163] explained the operation of s 105 as pertaining to the situation where a person who is in a position to prevent allegedly unlawful conduct fails to do so. A person can prevent unlawful conduct by not creating a situation where it will or may take place or altering a situation so it will not continue. Section 106(1) does not apply if it is established that the employee took all reasonable steps to prevent the unlawful act taking place (s 106(2)). For the question of vicarious liability to arise, Ms Obieta would need firstly to establish that the acts alleged of the relevant employee amounted to an unlawful act under Division 1 or 2 of Part II or Division 3 of Part II of the SDA. Ms Chong told the Court that the affidavits were prepared by herself with the assistance of her cousin who is a solicitor. Many passages were identical, both in the words used and in the punctuation, to the passages relating to the same incidents and recitation contained in Ms Obieta's affidavits. This was apparent in numerous instances in both her affidavits. 244 On 18 October 2006 Ms Chong swore that she did not consult with Ms Obieta, and did not see Ms Obieta's affidavits before she prepared her own affidavits. She swore that the content of her affidavit was from her own memory, and that her cousin assisted her. She denied that her cousin had a copy of Ms Obieta's affidavit. 245 Ms Chong also swore that despite the fact that she was only asked to provide her affidavits close to the time they were sworn, that she nevertheless was able to recollect in detail events and conversations which occurred almost 18 months previously. Ms Chong reiterated that she had not collaborated with Ms Obieta and that the content of the affidavits was from her own recollection. 246 At the request of counsel for the first to fourth respondents, the Court provided a warning relating to perjury and the Court adjourned. 247 The next day on 19 October 2006 Ms Chong indicated that she wished to withdraw from the hearing, and to withdraw her evidence. I would like to apologise and extremely sorry for not telling the Court the truth yesterday, because I was stressed being a witness in Court, and workload and work, and my English. Please disregard what I said yesterday. And, secondly, my cousin who is a lawyer did not help me to prepare the affidavit. Thirdly, Ms Obieta help me to draft the affidavit and I sign, because of my English and my grammar is no good. And in the beginning I didn't know that I can withdraw the affidavit because I kept on thinking that I already sign the affidavit. What should I do? Now that I can withdraw the affidavit I decided to withdraw as witness. Again? It became apparent that she had difficulty with the English language. Ms Chong recalled some of the incidents referred to in her affidavits. However, it was impossible to know whether such recollection resulted from the text of the affidavits which Ms Obieta prepared for her, or from independent recollection. For this reason, and taking into consideration the fact that she had provided no independent evidence of substance, the Court places no weight on her testimony or affidavits. 250 Ms Chong withdrew as a witness after Ms Obieta acknowledged that she did not wish to persevere with her testimony. 251 It is disturbing that Ms Obieta was prepared to permit testimony to be given to the Court by Ms Chong which she knew was false. Ms Obieta told the Court that Ms Chong's cousin who is a lawyer helped her prepare Ms Chong's affidavit. Such statement was untrue. 252 Further disturbing conduct occurred when Ms Obieta made statements from the Bar table which were false. Such statements related to the preparation of Ms Chong's affidavits. The typing --- the typing of the affidavit. Is that true or false?---It is false. When confronted with this reality the applicant made what can only be described as a disingenuous and nonsensical attempt to draw a distinction between lying from the bar table and lying on oath: T 351.21-.29, (19/10/06). 255 Ms Obieta has further alleged that the TAFE records have been falsified and in particular that the record of Ms Ramos had been altered. She alleged also that Ms Illingworth swore a false affidavit and that she believed that the Crown Solicitor of NSW was complicit in such conduct. Ms Obieta also alleges that TAFE had tampered with a letter forwarded by Ms Obieta's previous solicitor. Even when that solicitor produced a computer generated copy, identical to that which was sent to TAFE except for the absence of the letterhead, Ms Obieta maintained that there were discrepancies in the content of the letter. 256 Having made observations during oral evidence, and having considered their testimony, I find that the respondent's witnesses, the teachers of Ms Obieta, and staff of TAFE namely Mr Norman, Mrs Elfert, Ms Illingworth, Ms Lawson, Ms Willis and Mr Stewart were dedicated educators whose evidence I accept. I have also formed the view that Ms Connellan, Mr Hassett, Ms Davis and Ms Fogarty were all truthful witnesses. 257 Surprisingly, Ms Obieta did not suggest to any of the witnesses that the conduct she relied upon as establishing discrimination was based upon her race, sex, nor that such actions arose in consequence of a proposal by her to make a complaint to the Commission. 258 The Court finds that where evidence conflicts between that of Ms Obieta and other witnesses, the Court must consider these findings of credit in determining whether the burden of proof has been satisfied. Firstly, the burden of proof lies upon Ms Obieta to establish discrimination, harassment or victimisation whether it arises pursuant to the RDA or the SDA. Secondly, with respect to claims of unlawful discrimination, harassment or victimisation under the RDA, it is essential that the discrimination, harassment or victimisation be proved, on the balance of probabilities, on the ground of Ms Obieta's race (see Victoria v Macedonian Teachers' Association of Victoria Inc and Another [1999] FCA 1287 ; (1999) 91 FCR 47). Similarly, with regard to a claim for sexual discrimination, harassment or victimisation under the SDA, discrimination, harassment or victimisation based upon Ms Obieta's sex must be established on the balance of probabilities: see Aboriginal Legal Rights Movement Inc v South Australia and Another (No1) (1995) 64 SASR 551 at 553. 260 The findings of the Court in relation to each of Ms Obieta's allegations are set out below and must be read in conjunction with the section entitled Relevant Legal Principles. It is not established that the words ' the other one comes from the Philippines and the other one has a history of China ' were ever said by Mr Norman. 262 Taking into account the context of the discussion, the Court is satisfied that the selection of Ms Obieta to take part in the debate did not involve a distinction, exclusion, restriction or preference based upon race, colour, descent or national or ethnic origin. Accordingly, no breach of s 9 of the RDA is established. Further the statement was not reasonably likely to offend, insult, humiliate or intimidate, nor was it done because of Ms Obieta race, colour, or national or ethnic origin and so does not establish a breach of s 18C of the RDA. 2. In any event, such conduct would not establish a breach of ss 9(1) and 13 of the RDA as the onus of establishing that there was a distinction, exclusion, restriction or preference which was based on Ms Obieta's race or that she was refused supply of goods and services because of her race is not satisfied. 3. Even if such statements had been said, they would not amount to a breach of ss 9 and 13 of the RDA as there is no evidence that such statement was based on Ms Obieta's race. 4. Further, even if such words were said, the context would not render them words which would constitute a breach of ss 9(1) and 18C of the RDA. Such words, even if said could not have affected the enjoyment or exercise of a human right as required by s 9(1) of the RDA. Further there is no evidence to establish that in the context in which any such words were said, they would be reasonably likely to offend, insult, humiliate or intimidate Ms Obieta. 5. Further, contrary to the Court's finding, even if such words had been used by Mr Norman, such conduct would not amount to a breach of s 28F because the requirement of the definition of 'sexual harassment' contained in s 28A would not have been established. The circumstances were not such that a reasonable person would anticipate that Ms Obieta would be offended, humiliated or intimidated. 6. Accordingly the Court finds that Mr Norman did not say the words alleged. 7. The Court therefore finds the allegation not proved. Further, if, contrary to the Court's finding such words had been said, there is no evidence that they were racially based and accordingly there is no evidence of any breach of the RDA. 8. The Court finds that the evidence does not establish a basis for a claim of racial discrimination and there is accordingly no breach of the RDA. 9. The Court finds that there is no evidence of any unfairness in the grading system. Further, there is no evidence that any such conduct, even if proved, was motivated by race. Accordingly there was no breach of the RDA. 10. The Court is also satisfied that if such occasion arose, it was unintentional. The Court finds that there is no discrimination based upon race, nor is there any evidence that such conduct constituted sexual harassment of Ms Obieta as claimed as in the circumstances a reasonable person would not have anticipated that Ms Obieta would be offeneded, humiliated or intimidated by such conduct. 11. The Court finds that there was no dispute as alleged by Ms Obieta. 273 Even if, contrary to the Court's finding, Mr Norman responded as Ms Obieta alleges, there is no evidence that such conduct was racially based. It follows that there was no breach of the RDA. 12. Further, even if, contrary to the Court's finding, such words were said, the context was that of a class discussion. The Court is satisfied that such occasion does not give rise to sexual harassment within the meaning of s 28A of the SDA as a reasonable person would not anticipate that Ms Obieta would be offended, humiliated or intimidated by such conduct. Further such conduct does not constitute an unwelcome sexual advance or request or other unwelcome behaviour of a sexual nature and could not therefore constitute a breach of the SDA. She repeats an allegation of humiliation and that she received less favourable treatment than other students in her class test marks. 276 The Court finds that the burden of proof in relation to any of the factual issues has not been established. Even if, contrary to the Court's finding, the factual matters, insofar as they have been already considered in the preceding paragraphs did occur, then there is no evidence that such conduct arose in consequence of Ms Obieta's race or sex or because Ms Obieta had made complaints against Mr Norman to Ms Illingworth. 13. However, there is nothing to suggest that the request of Mr Norman to do so in such circumstances was done in consequence of her race or constituted sexual harassment or discrimination. 14. In these circumstances there is no factual basis for the allegations made. Even if the Court were in error in so concluding, upon the facts alleged, they would not give rise to any issue under the RDA because there is no suggestion that the statements of Mr Norman were related to Ms Obieta's race. Further, there is no evidence that such conduct had any relationship to her sex. Accordingly, there is no basis for the claims made under the RDA and the SDA. 15. However the conduct referred to does not establish any basis of racial or sexual discrimination. 16. Mr Norman acknowledges that this was an unintentional error and there was no intention to incite any feeling of contempt for Ms Obieta. The Court accepts Mr Norman's explanation. Further the Court finds that there is no evidence that such conduct arose because of any racial distinction or oppression, nor is there any evidence that it was based upon Ms Obieta's sex. Accordingly the Court finds that there is no breach of either the RDA or the SDA. 17. Further, even if, contrary to the Court's finding, such incident occurred, there is nothing to suggest that it was made on the basis of Ms Obieta's race or sex. Accordingly the Court does not find any breaches of the RDA or the SDA as claimed. 18. However, the Court is satisfied that there is no basis for any alleged racial or sexual discrimination of Ms Obieta. 19. Further, the Court does not find from this incident any facts which suggest that the omission to mark the two exam questions arose in consequence of Ms Obieta's race or the sex. This was an unintentional oversight of Mr Norman. Accordingly the Court finds no breach of the RDA and the SDA. 20. The Court is not satisfied that any such act would constitute a distinction, exclusion, restriction or preference based on race or that such conduct would constitute an unwelcome sexual advance, request or other unwelcome behaviour of a sexual nature in circumstances in which a reasonable person in the circumstances would have anticipated that Ms Obieta would be offended, humiliated or intimidated. Further, even if such incident did take place there is no evidence to suggest that it arose in consequence of Ms Obieta's race or sex. As such there is no breach of the RDA and SDA as claimed. 20. She stated, and the Court accepts, that from the position where she sat in class towards the back of the room, she would have to look in the direction of Ms Obieta to see the teacher who stood at the front. The Court accepts that she did not stare at Ms Obieta as claimed, and that there was no racial or sexual innuendo in her conduct as perceived by Ms Obieta which could constitute a breach of the RDA or SDA. 287 The Court is unable to find any conduct of a racial or sexual nature directed at Ms Obieta and rejects the claims. 21. Further, even if such incident was proven, there was nothing to suggest that it arose in consequence of Ms Obieta's race or sex. 22. It further finds that, even if such statement had been made, there was nothing to suggest that it was based upon Ms Obieta's race or sex as claimed. 23. Further, the Court accepts the evidence of Ms Davis that such comment resulted from the exasperation of Ms Davis that so many questions were being asked requiring Mrs Elfert to provide extensive attention to Ms Obieta. The Court accepts the explanation of Ms Davis that she felt that it was inappropriate for one student to receive so much attention when the course was unfinished and the end of the semester was rapidly approaching. 291 The Court finds that the conduct complained of was not racially or sexually motivated as alleged and that no breach of the RDA or the SDA resulted. 24. This occurred when the students were light-hearted and the Court finds that Ms Davis' giggling was not directed at Ms Obieta. Further, the Court finds that there is no evidence that such conduct arose in consequence of Ms Obieta's race or sex. However the Court finds that such request was unrelated to the race or sex of Ms Obieta and as such did not constitute a breach of the RDA or SDA. Further there is no evidence that any such conduct was racially or sexually motivated and thus does not constitute racial or sexual discrimination, harassment or victimisation. The Court is satisfied that Mrs Elfert provided all the necessary information for Ms Obieta and other students and that Ms Obieta either failed to comprehend or failed to follow information provided to all students at the commencement of and during the course. 296 The Court also finds that Mrs Elfert told Ms Obieta to check the Study Guide when a question arose concerning the material which could be taken into the exam. The Court also finds Mrs Elfert did not tell Ms Obieta that no materials could be taken into the exam. Further, even if Ms Obieta was not provided with accurate information, there is no evidence to suggest that this was based upon Ms Obieta's race or sex and as such does not constitute a breach of the RDA or SDA. 298 The Court also finds that there was an agreement made on 7 June 2004 by Ms Illingworth that Mr Norman would apologise to the class, but not specifically to Ms Obieta, for any misunderstanding that may have arisen out of class discussions. Such agreement was made solely in an attempt to placate Ms Obieta, without any acknowledgement by Mr Norman that his conduct in the class discussion was in any way improper. 299 Further, the Court accepts Ms Illingworth's evidence concerning the conduct of Ms Obieta during the meeting on 7 June 2004. The Court also accepts the evidence of Ms Illingworth concerning the conduct of Ms Obieta in a subsequent meeting on 29 July 2004. 300 The Court finds that there is no discrimination against Ms Obieta as claimed resulting from any conduct engaged in by Ms Illingworth and that there is no basis for any claim under the RDA or SDA. None of the conduct complained of by Ms Obieta, even if established, is claimed to have arisen in consequence of her race or sex. The Court also accepts that Mr Stewart, in response to Ms Obieta's demand that her grades be increased from a credit to a distinction, explained to her that she did not gain sufficient marks required for such standard. 302 The Court is satisfied that there is no conduct which could constitute a breach of the RDA or the SDA and that no discrimination of any kind was suffered by Ms Obieta. However, the Court finds that there is no evidence of racial or sexual discrimination, harassment or victimisation and there is no breach of the RDA or SDA. 32. He was qualified to undertake the re-mark of Ms Obieta's class tests and assignment. The Court is also satisfied that he was independent of the staff who were engaged in the day-to-day tuition of Ms Obieta and that accordingly his assessment of Ms Obieta's marks was 'independent'. 305 The Court is satisfied there is no racial or sexual discrimination resulting from Mr Stewart's re-mark of Ms Obieta's paper and thus no breach of either the RDA or the SDA. 33. The Court also finds that Ms Obieta requested a copy of her class test. The Court also finds that Ms Illingworth refused to provide both but does not find that Ms Obieta requested her class test pursuant to the Freedom of Information Act . The Court finds that there is no evidence of discrimination in the conduct of Ms Illingworth in refusing to supply such records. 307 There is no basis to suggest that Ms Illingworth's refusal resulted from racial or sexual considerations relating to Ms Obieta and accordingly there was no breach of the RDA or the SDA. 34. The Court also finds that Ms Obieta was told that the deferred result would remain on her record until the issue concerning her marks was resolved. 309 The Court is unable to find any evidence of discrimination in such conduct of Ms Illingworth and further, that there is no basis for any allegation that such conduct was based on race or sex. No breach of the RDA or SDA is established. 311 The Court finds that since it was not possible to communicate with Ms Obieta, Ms Connellan communicated with VETAB advising that no further action could be taken. 312 In view of these proven facts, the Court is unable to find that there is any racial or sexual discrimination directed towards Ms Obieta in consequence of any conduct of Ms Connellan. Mr Hassett was not primarily responsible to handle such matters, but he did so during Ms Connellan's leave from 2 August to 27 August 2004. The Court accepts Mr Hassett's evidence that he understood that an application for information under the Freedom of Information Act would need to be addressed to the Freedom of Information Unit of the Department of Education and Training for a response. It was for this reason that he declined Ms Obieta's request for the supply of the Transcript of Record. The Court accepts that Mr Hassett knew nothing of the background of Ms Obieta and did not discriminate against her on the ground of race or sex in declining to forward her Transcript of Record. A distinction, exclusion, restriction or preference based upon Ms Obieta's race is therefore not established and Ms Obieta was not treated less favourably than someone of the opposite sex. As such there no breach of the RDA or SDA. Mr Hassett took no action but the Court is satisfied that Mr Hassett, by not responding to her letter, did not discriminate against Ms Obieta on the grounds of race or sex. The Court is also satisfied that the actions of TAFE in relation to Ms Obieta's requests for her class test, results of interviews and enquiries relating to the 'Deferred' result appearing on her Transcript of Record were not racially or sexually discriminatory and do not constitute breaches of RDA or SDA. There is no basis for the alleged racial or sexual discrimination, as the reason that no audit of students' records was conducted as requested was because this was not part of the function of VETAB. As such no breaches of the RDA or SDA are established. 39. 40. Further the Court is satisfied that Ms Obieta failed to respond to VETAB's requests that Ms Obieta contact them. Complaint to Ms Illingworth concerning Mrs Elfert's failure to provide information relating the to the examination. There can be no vicarious liability when no primary liability is established, and no racial or sexual discrimination is established. Accordingly the allegations of discrimination and victimisation on the basis of race or sex have not been made out. It was not the role of VETAB to investigate the specific complaints of Ms Obieta. In this respect the role of VETAB is misunderstood by her. 321 The evidence establishes that VETAB did ensure that appropriate procedures were in place and on the material before it was satisfied that those procedures had been implemented by TAFE. 322 No discrimination on the ground of race or sex by VETAB against Ms Obieta is established. Further, the Court is satisfied that there is no evidence to find that TAFE discriminated against Ms Obieta on sexual grounds. 324 In respect of Ms Obieta's claim that TAFE excluded her because she was not given revisionary exercises and a supplementary exam, the Court is satisfied from the evidence of Ms Illingworth and Mrs Elfert that the procedures were clearly established pursuant to which a student who is unsuccessful in an exam was entitled to sit for a further exam. The evidence shows that Ms Obieta's friend, Ms Chong sat for such exams. The Court is satisfied that Ms Obieta chose to dispute the marks given to her and to pursue her belief that she should have been awarded higher marks, in preference to accepting that her performance did not justify the grades to which she aspired. The evidence of Ms Connellan establishes that her attempts to communicate with Ms Obieta in September 2004 were unsuccessful. Had Ms Obieta elected to return the calls, the Court is satisfied that she would have received additional advice on the avenues available to her to sit for further exams. Ms Obieta chose not to do so. There is no basis for the assertion that TAFE discriminated against Ms Obieta on racial or sexual grounds. 45. 326 The Court is unable to find that TAFE discriminated or victimised against Ms Obieta on the grounds of her race or sex as claimed. 46. The Court finds that it was the responsibility of the individual student to request a further examination and the procedure for doing so was explained by Mrs Elfert on several occasions. The Court therefore finds that there is no basis for the allegations of unlawful discrimination or victimisation made by Ms Obieta and there was no breach of the RDA or SDA as claimed. 328 TAFE received the letter from Ms Julie Yates of the Hargreaves Practice. However a reply was forwarded and there was no further follow up to the enquiry. The Court finds no evidence that TAFE falsified the letter as claimed by Ms Obieta. 47. However, Ms Obieta failed to avail herself of this opportunity. There is no evidence to establish the allegations of unlawful discrimination or victimisation due to Ms Obieta's race or sex in relation to the failed modules. 48. Pursuant to s 18E of the RDA, TAFE, the Department of Education and VETAB can only be held to be liable if an employee or agent in connection with his or her duties as an employee engages in conduct which is unlawful. A provision to the same effect is contained in s 106 of the SDA. Since the Court has found that none of the conduct of the employees whose conduct has been complained of constitutes a breach of either the RDA or the SDA, there is no occasion to give rise to vicarious liability under either statute. Ms Obieta told the Court that she did not wish to raise any further matters. 333 The hearing was then adjourned to allow the parties to provide written submissions and the hearing resumed on 11 December 2006 for the purpose of hearing submissions. 334 In her written submissions Ms Obieta claimed that she was humiliated, insulted, intimidated and offended with the treatment she had received during the hearing of the matter in Court; that documents were 'struck off' by the Court during the hearing; and that she received unequal treatment. Since the Court was still possessed of jurisdiction, it was concerned to know of the specific matters of which Ms Obieta claimed in order to remedy any alleged unfairness or irregularities. Accordingly the Court asked Ms Obieta to identify the matters she claimed in support of her submissions. 335 Ms Obieta said two medical reports were 'struck off'. In fact they were rejected because the reports were not verified and the makers were not available for cross examination. 336 Ms Obieta also claimed that her class exercise described as her 'portfolio' had been rejected from tender. The Court transcript records that she never sought to tender it on a prior occasion. In response Ms Obieta claims that the transcript had been edited. The Court granted leave to Ms Obieta to re-open the hearing to tender her portfolio. 337 Ms Obieta also claimed that attendance records had been rejected by the Court. In fact they had already been marked as an exhibit. She then complained that she was not allowed to photocopy documents that had been produced on subpoena. It was explained again to her that such order had been made during the hearing to preserve the confidentiality of other persons. Ms Obieta nevertheless had the opportunity to inspect all of the records produced on subpoena during the hearing. 338 Ms Obieta then claimed that she had been 'blocked to ask questions' and that she was forced to ask questions. The transcript does not record that she was ever forced to ask questions. She could not identify any questions which she was prevented from asking and the transcript does not support her submission. I certify that the preceding three hundred and thirty-nine (339) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy . | racial discrimination sex discrimination victimisation vicarious liability credit of applicant discrimination |
It is unnecessary to repeat that outline. 3 The Court has the power to set aside or vary the previous orders because those orders are interlocutory orders over which the Court maintains its control: see Adam P. Brown Male Fashions v Phillip Morris [1981] HCA 39 ; (1981) 148 CLR 170 (' Phillip Morris ') at 178. However, for reasons that I shall endeavour to briefly state I am of the clear view that the orders sought should not be made and that each of the notices of motion of the respondent should be dismissed with costs. The orders were first challenged by Siminton by his motion of 14 March 2006, which was well after the original orders were spent. The only apparent purpose of that challenge was Siminton's endeavour to have the orders declared to be a nullity so that they could not found the motion of the applicant (APRA) against him for contempt. For the reasons given (at [42]-[53]) of my reasons for judgment handed down today I have concluded that the challenge to the orders made by Sundberg J is to be rejected. The motion to set aside the orders has been brought too late, is misconceived and is without merit. His Honour was in no doubt that there was a serious issue to be tried and that the balance of convenience favoured the grant of the injunctive relief sought. Siminton has not adduced evidence of any new facts that have come into existence or been discovered that render the enforcement of the orders unjust: see Phillip Morris at 178. His challenge to the orders appears to be an endeavour to rely on the Court's power to set aside interlocutory orders as a substitute for an appeal. The challenge should be refused as it is a misuse of process and, in any event, is wholly without merit. In particular, I am not satisfied that any proper basis has been demonstrated for interfering with his Honour's orders. Siminton has complained that it was erroneous to make the orders 'until further order', rather than to make them operate until a fixed date. Liberty to apply on 48 hours notice was expressly reserved and it was open to Siminton to apply to vary or set aside the orders. He did not do so until 17 February 2006. His complaint about the form of the orders is without merit. 7 In ex tempore reasons given on 23 December 2005 I stated that the orders were made in the inherent jurisdiction of the Court to make orders which prevent its processes from being frustrated. Also, it appears Siminton has travelled outside of Australia three times for a total of seven weeks since the commencement of his bankruptcy. 9 Further, there is a serious question about Siminton's failure to surrender his passport as ordered. He used his passport at the Bendigo Bank on 21 December 2005. My order requiring him to surrender his passport was made on 23 December 2005. Siminton appears to be claiming that he could not comply with the order as he sent the passport for diplomatic recognition by the U.N., to which he plainly has no entitlement. 10 Also, in my decision today I have found that Siminton deliberately breached certain orders made by Sundberg J and have adjourned the contempt hearing to enable submissions to be made in relation to penalty which, plainly, can involve the possibility of a term of imprisonment. 11 Finally, Siminton has placed no evidence before the Court as to why the orders made by me might work any injustice or unfairness. Indeed, it appears that independently of my orders, he has no entitlement to his passport. Nonetheless, he claims that the orders 'deprive him of his liberty'. 12 Accepting, as I do, that orders of the kind made by me ought to be made sparingly and only where the special circumstances of the case require the making of such orders, the above matters leave me with little confidence in Siminton. In particular, he has not provided any information or taken any steps to allay the concerns I expressed on 23 December 2005. For the reasons there expressed (save that there may no longer be a difficulty in locating Siminton) this is an exceptional case in which it is in the public interest that the Court ensures that Siminton's presence in Australia is secured to prevent the Court's processes from being frustrated and, in particular, to ensure that any relief to which APRA may become entitled is able to be effective. I would add that the contempt proceeding, with the possibility of a term of imprisonment, is an added reason for not varying the orders I made. 13 If the circumstances change or Siminton is able to demonstrate that the enforcement of the orders is unjust then it is open to Siminton to make a further application to the Court. The Court has on some occasions stayed a civil proceeding pending the conclusion of a criminal proceeding. However, the principles that warrant that course have no application in the present case as there is no criminal proceeding. 15 The challenge to the Statement of Claim is also without merit. The only point of any substance concerns paragraphs 15 and 16 of the Statement of Claim. However, having regard to the width of the discretionary relief that might be granted under ss 65A(2) and (11) of the Banking Act 1959 (Cth) I am satisfied that the matters pleaded in these paragraphs are not embarrassing or irrelevant as they relate to matters that go to the discretion of the Court to grant relief under those sub-sections. 16 The main complaint of Siminton was that particulars of several significant allegations have not been given and are said to await discovery or other interlocutory steps. However, the particulars relate to matters within the knowledge of Siminton, rather than APRA. While Siminton maintains that he is entitled to refuse to give discovery, there are other means by which APRA may be able to obtain the information in question. For example, members of the public may come forward or third party discovery may be sought. Indeed, the evidence is that members of the public have already been in contact with APRA and there is no difficulty about further particulars being supplied when the relevant information becomes available to APRA. I am not satisfied that any aspect of the statement of claim is vexatious, oppressive, embarrassing or irrelevant. 17 Accordingly, there is no proper basis for striking out the Application or the Statement of Claim. 18 The notices of motion dated 17 February 2006, 12 February 2006 and 14 March 2006 are to 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 Merkel J. | practice and procedure application to vary interlocutory orders application to strike out application and statement of claim courts |
He is entitled by operation of the Act to bring an application for an order seeking a civil penalty under the Act: s 285F(4). He brought this application on 4 May 2006 seeking the imposition of a penalty in respect of a contravention of s 285E(1) of the Act. 2 The respondent was at the relevant time, and still is, an official (officer) of the Construction, Forestry, Mining and Energy Union (CFMEU) which is an organisation registered under the Act. He is the holder of a permit issued by a Registrar under the Act: s 285A(1). 3 A permit permits the holder to enter, during working hours, any premises where employees work who are members of the organisation of which the person is an officer or employee, for the purpose of investigating a suspected breach or continuing breach of the Act, or an award or order of the Commission or certified agreement that binds the organisation of which the permit holder is an officer: s 285B(1) and (2). 4 If a permit holder enters a premise by virtue of the statutory authority in s 285B(2), the permit holder may exercise the powers in s 285B(3) of the Act. 5 Moreover, a person who is a holder of a permit may enter premises in which work is being carried on to which an award applies that is binding on the organisation of which the permit holder is an officer or employee, or premises in which employees who are members or eligible to become members of the permit holder's organisation work, for the purposes of holding discussions with any of those employees who wish to participate in those discussions: s 285C(1). However, the permit holder may only enter the premises during working hours and may only hold the discussions during the employees' meal times or other breaks: s 285C(2). There are prescribed circumstances in which a permit holder may not enter premises under s 285C(1) but they are not relevant to this application. 6 Section 285D of the Act imposes obligations upon a permit holder. Section 285D(2) requires a permit holder who is entitled to enter premises and exercise powers under ss 285B or 285C to give the occupier of the premises at least 24 hours' notice of the permit holder's intention so to do. 7 Section 285D(1) obliges the permit holder to show his or her permit to the occupier of the premises if so required by the occupier and the permit holder's right to remain on the premises ceases if the permit holder fails to comply with the occupier's request. 8 Section 285E provides that a person exercising powers under ss 285B or 285C must not intentionally hinder or obstruct any employer or employee: s 285E(1). Correspondingly, a person must not intentionally hinder or obstruct a person exercising powers under ss 285B or 285C: s 285E(4). There are also obligations imposed on occupiers (s 285E(2)) and employers (s 285E(3)) which are not relevant to this application. 9 Section 285F provides for civil penalties in the event that there is a contravention of a penalty provision. The penalty provisions are identified as s 285A(5) or s 285E(1), (2), (3) or (4). In this application the relevant penalty provision is s 285E(1). This Court is an eligible court for the purpose of s 285F and therefore has the jurisdiction to impose a civil penalty: s 285F(1) and (2). An application for a civil penalty may be made by any person: s 285F(4). 11 The applicant brought this proceeding for a civil penalty claiming that on the morning of 5 May 2004 the respondent, while exercising powers under s 285B and/or s 285C of the Act, entered a site at Halifax Street in Adelaide (Halifax Street site) where S J Salisbury Constructions Pty Ltd trading as Scott Salisbury Homes (Scott Salisbury Homes) was constructing an apartment complex for domestic dwellings. The application was accompanied by a statement of claim. The applicant claims that whilst on the site and exercising powers under s 285B and/or s 285C of the Act, the respondent intentionally hindered and obstructed: (1) Peter Potter; (2) J & M Zito; and (3) employees of J & M Zito. The applicant claims that the respondent's conduct "intentionally injured or obstructed committing a contravention of the Act for which the applicant now seeks the imposition of a penalty". Clearly, the word "injured" should be read as "hindered". The persons named above should be read as being included after the word "obstructed". 12 The respondent admitted in his amended defence, which was filed after the respondent had given evidence, that the applicant was an inspector and entitled to bring an application for an order seeking a penalty under the Act. He also admitted that he was an officer and/or an employee of the CFMEU and the holder of a permit issued under the Act. He did not exercise any power under s 285B and/or s 285C of the Act until he was requested to produce his right of entry permit. 2. He ceased exercising his powers pursuant to s 285B and/or s 285C of the Act when he removed himself and his vehicle from the Halifax Street site. 3. He did not exercise any powers pursuant to s 285B and/or s 285C of the Act after he had removed himself and his vehicle from the Halifax Street site. 14 The question for determination in this trial is whether on 5 May 2004 the respondent, whilst exercising powers under either ss 285B or 285C, intentionally hindered or obstructed the persons mentioned above. 16 The respondent, Mr Justin Feehan, gave evidence on his own behalf. He called, in support of his case, Mr John Dundon, a surveyor who was carrying out work at the Halifax Street site in May 2004 and Mr Maurice John Howard, who at the relevant time was employed as the Industrial Relations Manager at the Master Builders Association. 17 I am satisfied that each of the witnesses called on behalf of the applicant was doing their very best to assist me. Each of those witnesses gave their evidence directly with not the slightest hint of hesitation. I formed the view that all of them were credible and reliable and I accept their evidence. 18 Mr Dundon was obviously offended by something Mr Peter Potter said on the morning when these events took place which, I think, tended to colour his evidence. Moreover, his evidence lacked particularity. He did not, for example, observe the respondent's car in a particular place even though the car was there on everyone else's evidence, including the respondent's, for probably some time near an hour and a half. The position of the car was particularly relevant. Whilst I do not mean to suggest that Mr Dundon was not assisting me, I think his evidence was less reliable than the applicant's witnesses' evidence. Mr Howard, I think, was trying to assist the Court. 19 Mr Feehan was not a good witness. He was clearly defensive and his answers were often evasive. He made the mistake of trying to be an advocate in his own cause through his evidence. I do not accept his evidence where it conflicts with the evidence of any of the applicant's witnesses. I only accept his evidence where it is consistent with the evidence of other witnesses. That question is simply a question of fact. A person may intentionally hinder or obstruct another person by an active act or conduct which is essentially negative in character: O'Reilly v The Commissioners of the State Bank of Victoria [1983] HCA 47 ; (1983) 153 CLR 1 at 49-50. 22 Here the case against the respondent is that he did both. He both performed acts and failed to perform acts which showed that he intentionally hindered or obstructed both employers and employees. It is on the southern side of Halifax Street and its eastern border was on Cardwell Street. Part of its southern border at that time was on Ely Place. The rest of its southern border was on Gilles Street. The site was owned by the Southcott family but it was the Kinsmen Group who was the developer of the site. Scott Salisbury Homes were in May 2004 commencing to build eight separate two-storey townhouses or units with separate strata titles on an area of the site called "Stage 4". Stage 4 was on the western boundary of the site near Ely Place. The only access to the site was from Halifax Street, there being no access either from Cardwell Street or Ely Place. The area of the site immediately adjacent to Halifax Street was called the common access roadway. It was into that area that traffic coming from Halifax Street onto the site would enter. Immediately south of the common access area and to the east of Stage 4 was an area undergoing remediation. There was an access lane area between Stage 4 and the area undergoing remediation upon which traffic, including trucks, could travel to get access to all of Stage 4. Trucks could not turn in that access lane area. If a truck needed to turn it had to turn into the common access area immediately off Halifax Street. If a truck wanted to travel down the access lane area, the truck driver would have had to back down the lane if the truck driver wished to drive out nose first, or back out if the truck driver had chosen to drive in nose first. The common access area was sometimes used as a parking area for employees on the site and had been so used prior to the day in question. J & M Zito, of which Joe Zito was a principal, was contracted by Scott Salisbury Homes to provide general concrete services, including pouring and laying concrete foundations for buildings at the Halifax Street site. The firm engaged six full time workers, one of whom was Rocky Mastrullo. I have in these reasons referred to them as employees notwithstanding that their status as employees or independent contractors was a matter of dispute at the time. That dispute does not need to be resolved in this proceeding. 25 On 3 May 2004, Mr Zito, and his employees, were erecting the reinforcing for the concrete foundations to be laid the next day. Mr Zito said that Mr Feehan attended at the site and spoke to his employees. He was not able to hear what was said. However, Mr Feehan later spoke to him and told him that he and his employees were not supposed to be on the site and that he was "going to actually close the site down". He said that there was no reason why Mr Zito's employees were not in the Union so he was going to close the site down. He told Mr Zito that the facilities provided on the site were not right in that there should have been two toilets on the site. Mr Feehan also said that the lunch room was not properly set up. 26 Mr Zito said that Mr Feehan attended at the Halifax Street site again either later that day or on the next day with Mr Ben Carslake, who was at the relevant time another officer of the CFMEU. He said that Mr Ben Carslake said, in the presence of Mr Feehan, that they were not going to be pouring that job the next day. 27 Mr Feehan denied that he made the statement of the kind to which Mr Zito deposed. His evidence was that he raised with Mr Zito various issues about the site, including toilets and a lunch shed. He said that he raised questions of site allowance, long service leave, contributions to the Construction Industry Long Service Leave fund, redundancy contributions to the Building Industry Redundancy Scheme Trust, superannuation contributions and WorkCover contributions with Mr Zito. He denied that he said that Mr Zito would not be pouring any concrete on the site and that if Mr Zito attempted to pour concrete the Union would stop him. 28 Mr Zito denied that Mr Feehan raised with him matters relating to his employees' entitlements and, in particular, a site allowance, superannuation entitlements or WorkCover payments. 29 I prefer the evidence of Mr Zito to that of Mr Feehan. Moreover, I think Mr Zito to be a more reliable witness than Mr Feehan. The conversation to which Mr Zito deposed is consistent with the events which occurred on 5 May 2004. 30 There was, as I have said, another witness to the second conversation, namely, Mr Carslake. He was not called by Mr Feehan. I asked Mr Griffin QC, who led for the respondent, before he closed his case, whether the respondent would be calling Mr Carslake who could give evidence relevant to the second conversation with Mr Zito and to two other conversations to which I will later refer. Senior counsel said Mr Carslake would not be called. 31 In my opinion, in the absence of any explanation for failing to call Mr Carslake and none was proffered, it would be right to draw the inference that Mr Carslake's evidence would not have assisted the respondent on this and the other two relevant conversations: Jones v Dunkel (1959) 101 CLR 298. There is no suggestion that Mr Carslake was not available to be called and I find that a conscious decision was made not to call him. 32 I accept Mr Zito's evidence and I find that on 3 May 2004 Mr Feehan told Mr Zito that he would close the site down because Mr Zito's employees were not members of the Union and because the site lacked the appropriate facilities. I also find that either later on 3 May 2004, or on 4 May 2004, Mr Feehan attended the site with Mr Carslake and Mr Carslake spoke to Mr Zito and told Mr Zito that he would not be able to pour concrete the next day. 33 The respondent said that he told Mr Zito that he would be back on 5 May 2004. I accept that aspect of the respondent's evidence because it is consistent with both Mr Potter's and Mr Zito's evidence. Moreover, he did return on 5 May 2004 as he promised. 34 Mr Potter did not see Mr Feehan on site on 4 May 2004. However, he had a conversation with Mr Zito. Mr Potter also spoke to two Union officials on site that day, a Mr Gava and a Mr Roberts. Mr Potter contacted Mr Howard of the Master Builders Association because he suspected they were going to have issues with the Union. Mr Howard suggested he contact Mr Concannon from the "Federal Government Taskforce" for advice. Mr Potter spoke to Mr Concannon and received advice that if a Union officer or employee came on site he should ask to see any Union officer or employee's permit or specific notice of attendance on site. 35 The evidence of those conversations is, of course, hearsay and could not be admitted to prove the truth of what was said: s 59 of the Evidence Act 1995 (Cth). The conversations were admitted to show why Mr Potter acted in the way he did on 5 May 2004: s 60 of the Evidence Act 1995 (Cth). He had the responsibility for the overall management of the construction work performed on the site that required him to coordinate work done by subcontractors on site. It was his responsibility to ensure that the work proceeded in accordance with the construction schedule. Scott Salisbury Homes had contracted with J & M Zito to perform the concrete work associated with the Stage 4 development of the site. The plan was to pour concrete for two townhouses at a time. Concrete was to be supplied by Boral in concrete trucks. The first pour took place on 5 May 2004. 37 Arrangements had been made with Boral that its concrete trucks would enter the Halifax Street site turning left from Halifax Street into the site and then the driver stop and manoeuvre the truck by reversing into the Stage 4 area down the access lane and unloading the concrete. The concrete truck would then leave the site nose first. The plan, therefore, was for concrete trucks to both enter and leave the Halifax Street site nose first. Because the concrete trucks needed to stop and manoeuvre so as to be able to reverse to the Stage 4 area, the common area needed to be free of vehicles to enable that manoeuvre to take place. 38 Mr Potter's evidence was that at about 7.15am he was rung by Mr Zito who told him that the Union was there. He immediately rang Mr Howard and Mr Concannon in accordance with the advice which he had been given the day previously by those gentlemen. He left home to arrive at the Halifax Street site at 8.00 am with the intention of meeting Mr Howard and Mr Concannon at the site. 39 Mr Potter left his vehicle off site in Halifax Street because of his intention to keep the common access area clear for concrete trucks to turn around. 40 It is not entirely clear on the evidence who arrived at the site first and the order of arrival of the various participants, but nothing much turns on that. Mr Potter said in his affidavit evidence that he saw Mr Feehan enter the site. He said in his oral evidence that Mr Feehan arrived at the same time as he did. On the other hand, other evidence would suggest that Mr Feehan arrived before Mr Potter and that Mr Potter arrived shortly before the applicant, Mr Concannon and Mr Burrell from the Master Builders Association. Mr Howard arrived probably three quarters of an hour to an hour after that. 41 The respondent said that when he went to the Halifax Street site he saw a concrete truck reversing across Halifax Street into the site. No-one else witnessed a truck reversing into the Halifax Street site. Such a manoeuvre would be inconsistent with the plan which Mr Potter had put in place. Moreover, the manoeuvre would be unnecessary. Before the respondent arrived there was nothing to prevent a truck turning in the common access area. His evidence in cross-examination was vague and it is difficult to understand exactly where was and where the truck was when he said he first saw it in Halifax Street. Later, the undisputed evidence shows that the respondent claimed that there was no proper traffic management control in place. When he raised that matter with Mr Potter he did not then tell Mr Potter that he had seen the concrete truck backing across Halifax Street. 42 In that regard, I accept Mr Potter's evidence. I am not prepared to accept the respondent's evidence that he saw a concrete truck back into the Halifax Street site. If it had occurred, Mr Potter probably should have witnessed the manoeuvre. When it was put to Mr Potter in cross-examination that a truck had reversed into the site he said that was the first time he had heard that issue raised. He said that the respondent did not raise that issue on the morning. I accept his evidence. I am of the opinion that the respondent invented that observation to give more credibility to his complaint of inappropriate traffic management control. 43 When Mr Feehan did arrive, he parked his vehicle in the area which Mr Potter had designated as the area for trucks to turn in. There was one other vehicle parked in the area, which was Rocky Mastrullo's truck, but it was in a position where sufficient room was given to concrete trucks to turn. Mr Mastrullo was engaged by J & M Zito and on that day his duties were to help to direct the trucks to the site where the pour was to take place. Mr Dundon parked his vehicle on site but well out of the way. He shifted his vehicle out of the way at the request of Mr Potter. It is common ground that the respondent parked his car next to Rocky Mastrullo's truck. The respondent said that he had parked in that area before and no-one had complained. I accept that Mr Feehan had on other occasions before this day parked his vehicle in the common access area. That area had, prior to this day, been used in part as a car park. 44 Mr Potter said he came face to face with Mr Feehan in the middle of the common access area and he asked Mr Feehan where his notice of entry was. He said that he made that request because he had been advised by Mr Howard that he should do so. 45 Mr Potter was under the impression that if Mr Feehan was on the site, Mr Feehan was exercising powers under ss 285B or 285C of the Act and would need to have both an entry permit and a notice of entry. In any event, Mr Potter said that when he made his request Mr Feehan showed him a laminated card which was a little bigger than a business card which he was unable to read in totality without his glasses. 46 The respondent said that after he parked his car and walked a few metres he was approached by Mr Potter who told him "Get off the site, you and your car, get off the site right now. " The respondent said that Mr Potter also said, "You're not authorised to park there. " Mr Potter said that his first words to the respondent were to get his car off the site. Mr Potter said that he then asked, "Where's your --- where's my 24 hours notice? Where's your entry permit? The respondent said that he told Mr Potter that he was authorised to be on the site as he had provided the required notice. He said that Mr Potter told him that he had not given proper notice. There was then a debate about whether the notice should have been put in writing, or whether verbal notice was sufficient. 48 Mr Potter agreed that his manner was direct but would not agree that he had been abrupt. Mr Potter said that he would have had a problem with anyone who had parked where the respondent parked. There is no real dispute about what was said. I think that Mr Potter was probably more aggressive toward the respondent than he would admit. I think Mr Potter came to the Halifax Street site that morning expecting trouble from the Union. I think he wanted to exert his authority. I find that immediately after the respondent parked his car, Mr Potter forcefully requested the respondent to get the car off the site. He made that request for two reasons. First, because the car was parked in a place where it would impede the concrete truck traffic. Secondly, because Mr Potter believed that the respondent was not authorised to bring the car on to the site. I find that the respondent showed Mr Potter his entry permit as requested and in compliance with s 285D(1). By showing Mr Potter, the respondent became entitled to remain on the premises, if he had previously complied with s 285D(2), and only so long as he was exercising powers under ss 285B or 285C of the Act. Mr Potter, at this time, wrongly thought the respondent was obliged to show him a notice in writing under s 285D(2). Section 285D does not require a person seeking to exercise powers under ss 285B or 285C to give a notice in writing. The subsection is concerned with the timing of the notice, not its form. 49 When Mr Potter asked the respondent for the notice of entry he was told by the respondent that the respondent did not need one and that he [Mr Potter] knew the respondent was coming. 50 In that regard, the respondent relies upon what he told Mr Zito on 4 May 2004, that is, that he would be back the next day. Mr Zito was not the occupier of the premises and he was not a person to whom notice could be given under s 285D(2). 51 In those circumstances, both Mr Potter and the respondent were wrong about the assumptions they made. 52 During the period between 8.15 am and 9.02 am when the respondent moved his car, a time frame that will be discussed in detail later, he had a number of conversations with Mr Potter in relation to the matters which he raised with Mr Zito on the previous day and other matters. He raised with Mr Potter the absence of any appropriate traffic management control measures. He accepted in his evidence that during this period of time he raised with Mr Potter industrial issues including possible breaches of a relevant award, underpayment of employee entitlements and inadequate site amenities. 53 Mr Potter said that the respondent told him that Mr Zito was underpaying some employees. The respondent also told him that proper superannuation was not being paid on behalf of Mr Zito's employees. The respondent told him that Mr Zito was not meeting his BIRST payments, nor was he paying appropriate WorkCover premiums. 54 I find that the respondent came on to the site to investigate suspected breaches relating to employees' entitlements and other suspected breaches including non-compliance with relevant superannuation legislation and WorkCover legislation. He was thus purporting to exercise his power under s 285B. The fact that he proffered his entry permit in response to Mr Potter's request evidences his belief that he was entitled to be on the premises at least for the reasons to which I have referred. 55 Whilst the respondent was on site between 8.15 am and 9.02 am, the respondent spoke to some of Mr Zito's employees. He told Mr Potter words to the effect, "We are going to stop you guys. " That was the evidence of Mr Concannon and I accept it. It was both Mr Concannon and Mr Potter's evidence that the respondent spoke to Mr Zito's employees. 56 Shortly after he was told by Mr Potter to get off the site and take his car off the site, the respondent noticed two members of the Building Industry Task Force. They would have been Mr Concannon and the applicant. They spoke to Mr Potter and Mr Potter then approached the respondent and told him again to get off the site. The respondent accepts that at that stage he was told to get his car off the site as it would stop concrete trucks getting on site. 57 The respondent said he told Mr Potter that there was plenty of room for concrete trucks to get on the site. 58 The respondent said that he contacted other Union officials by telephone to suggest they attend at the site. Mr Potter continued to insist that his car was in the way of concrete trucks backing up to pour concrete. The respondent said that while he initially disagreed about that, he then agreed to move his vehicle. 59 I make the following findings. The respondent drove on to the site intending to exercise his powers under ss 285B and 285C. 60 Such a finding is consistent with him telling Mr Zito that he would be back the next day and with his later actions. He parked his car next to Rocky Mastrullo's truck. Shortly after he alighted from his car, he was approached by Mr Potter. He was asked to remove his car from the site. A conversation ensued. During the conversation Mr Potter asked to see the respondent's permit and the written notice of entry. The respondent disputed that he needed a written notice and claimed that Mr Potter knew that he would be there that day. The respondent showed Mr Potter his permit as he was obliged to do under s 285D(1). The exercise of a power of entry under the Act is a matter of fact: Pine v Doyle (2005) 143 IR 98. The respondent exercised that power of entry. 61 Mr Potter told him to move his vehicle and told him that the vehicle was parked in a position which would impede the progress of concrete trucks which needed that space in which to turn so that the trucks might back down the access lane to the Stage 4 development. The respondent did not comply with that request, notwithstanding that he was told that the position of his car was in an area designated for the trucks to turn. His silence amounted to a refusal. 62 It was at the time the practice of the Building Industry Task Force to maintain a running sheet as a record of matters that were attended to on particular days. Mr Concannon kept a running sheet of the events of 5 May 2004 which was exhibited to his affidavit. Peter Potter approached Feehan asked for permit & ROE notice --- Feehan on Friday --- attended --- no notice & said he would be back. No time or date. ... 8:35 --- Peter asked Feehan to remove car --- refused. ... 8:59 : MBA --- Chris asked Feehan to move car from site. Feehan refused --- said he would move it when he was ready. 9:02 Car moved --- Blocking driveway. Blocking traffic control. Mark Garver --- Union on site --- XAS-849 Holden Rodeo-White. 64 The respondent accepted in cross-examination that he had been asked to move his motor vehicle and had refused. He was not prepared to accept that the vehicle had impeded the concrete trucks. I find that the respondent failed to comply at any time between 8.35 am and 9.02 am with Mr Potter's request to move his vehicle. 65 I accept Mr Potter's evidence that the position in which the car was placed did impede the movement of concrete trucks. 66 The respondent knew that he had no right to leave his vehicle on site and he did not need to do so to exercise any of the powers under the Act. I find that the respondent intentionally left his vehicle in the position in which it was so as to prevent Mr Potter carrying out his duty to keep the designated area free. The respondent intentionally hindered and obstructed Mr Potter carrying out his duties to ensure that trucks could enter the Halifax Street site and to ensure that the pour took place. He also intentionally hindered and obstructed Mr Zito and his employees in carrying out their duties. 67 That, however, was not the only act committed by the respondent which intentionally hindered or obstructed persons on that day. 68 Mr Concannon's running sheets show, and it was his evidence, that whilst the respondent's vehicle was parked in the position to which I have referred, the respondent stood in front of a truck that was about to enter the site and waved it away from the site. Mr Concannon said of the respondent, "He physically stood in the middle of the driveway with his hands up and just waved him through. " When asked what he meant by "waved him through", he said, "[I]ndicated to him to keep going. So it would have been --- I don't know. What time did he move his vehicle? 70 That vehicle came on to the site later. The respondent denied that he had stopped a vehicle but I do not accept his evidence in that regard. Stopped at gate. By Feehan. 71 That action meant that the truck did not enter the site upon its first attempt and, in fact, did not manage to enter the site until a further 15 or 20 minutes later. 72 I am satisfied that the respondent did what he did with the purpose of intentionally obstructing Mr Potter carrying out his duties and the Boral employee from entering the site in his truck. 73 At 9.02 am the respondent reversed his vehicle from the position which I have previously described and stopped it immediately off the site. He left the vehicle facing due south about one metre north of the Halifax Street site. Thus, the vehicle was parked across the footpath immediately north of the site. Part of the vehicle, from about the rear wheel back, was protruding on to the roadway. 74 The vehicle was parked in such a position that it obstructed the path of a truck which was travelling west along Halifax Street intending to turn left into the Halifax Street site. 75 I have no doubt that the respondent parked his vehicle in that position with the intention of obstructing the concrete trucks which had been organised to travel along the path that I have just mentioned. 76 The fact that the respondent parked his vehicle there demonstrates, in my opinion, that the respondent had in mind to make the pour which was to take place on this day as difficult as possible. He also had the intention of hindering Mr Zito in the carrying out of his work. 77 During the time that the vehicle was parked in the position immediately north of the Halifax Street site, Mr Potter asked the respondent on a number of occasions to move the vehicle so that proper access to the site could be maintained. The respondent refused. It was not until the police were called that he moved his vehicle, and then only belatedly. 78 It is not entirely clear how many concrete trucks attempted to enter the site whilst the respondent's vehicle was in the second position to which I have referred. One smaller truck did enter and turned around in the area which was previously occupied in part by the respondent's vehicle. It is also possible that a large truck entered the site but the evidence on that is confused both as to whether the event occurred and its timing. If it did occur, it may have been after the respondent had moved his vehicle. However, I am confident finding, relying on the evidence of Mr Potter and Mr Concannon, that whilst the vehicle was in the second position, at least one concrete truck did not enter the site. 79 I also find that, whilst the respondent's vehicle was in that position, the entry of concrete trucks was delayed which had the effect of delaying Mr Zito in his operation. I find that whilst the respondent's vehicle was parked in the second position to which I have referred, the respondent and other members of the Union, probably officers, stood in a position so as to prevent trucks entering the site until they moved from the position in which they stood. 80 During the period when the respondent's vehicle was parked in the second position, the respondent continued to enter the Halifax Street site and leave it as he wished. In my opinion, whilst his vehicle was parked in the second position, the respondent was still purporting to exercise his powers under the Act. Indeed, during this period, he brought to Mr Potter's attention, Mr Zito's employees' failure to provide a safe traffic management system. He could only have been entitled to do that if he had been acting in accordance with his powers under the Act. 81 I find, as a matter of fact, that he was exercising his power of entry under the Act. 82 Eventually, the respondent moved his vehicle from the second position and left the entry to the Halifax Street site open. However, he and other members of the Union continued to stand in a position across the opening to the site so as to prevent trucks entering the site. 83 It was Mr Zito's evidence that he and his employees were working on a concrete pour which had occurred prior to the respondent coming on site and his further evidence, which I accept, that he and his employees lost approximately two hours of working time by reason of the inability of the Boral trucks to enter the site. The next concrete pour was delayed, on his evidence, by reason of the respondent's actions. 84 The delay was such that he and his employees were required to work quite late and under lights in an attempt to finish the concrete pour. 85 At some time during the morning, whilst the respondent was on site, he also stopped a vehicle which was leaving and spoke to the driver. The respondent admitted so. That was also Mr Howard's evidence. 86 It is right, as the respondent has contended, that positioning the vehicle in the place that he did, did not mean that all trucks could not enter the site. However, all trucks were inconvenienced by the position in which he secondly left his car. 87 I find that the respondent, after he moved his vehicle to the second position, took up a position with other Union officials to the west of the vehicle at the point of access to the Halifax Street site so as to prevent other vehicles from entering the site. The position in which he put himself and the other Union officials put themselves meant that no concrete trucks could enter the site unless they moved. Whilst he was in that position, at least one concrete truck did not enter the site. 88 The respondent did not move his vehicle from the second position until some time after 10.00 am. After his vehicle had been moved for the second time, he and other Union officials continued to stand in a position so as to block access to the Halifax Street site. He did so intentionally. 89 In my opinion, the applicant has established that during the period between 8.15 am and 10.00 am on 5 May 2004, the respondent hindered or obstructed Mr Potter carrying out his duties to coordinate the concrete pour. He also hindered or obstructed Mr Zito and his employees from carrying out their work by delaying trucks entering the Halifax Street site. 90 I find therefore the applicant has established that the respondent contravened s 285E(1) of the Act. The parties have not had the opportunity of addressing penalty and I will hear the parties on penalty. I will also hear the parties as to costs. In the meantime, I will make a declaration that on 5 May 2004 the respondent contravened s 285E(1) of the Act. I certify that the preceding ninety-one (91) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. | application for an order seeking a civil penalty under s 285f(4) of the workplace relations act 1996 (cth) (the act) for a breach of s 285e of the act whether respondent provided adequate notice regarding his intention to exercise his power under ss 285b or 285c of the act whether the respondent in exercise of his power under the act intentionally hindered or obstructed any employer or employees application allowed. industrial law |
The Liquidators have applied for leave under s 436B(2) of the Corporations Act 2001 (Cth) (the Act) to appoint themselves as administrators of Terraplanet. On 21 December 2007 I granted that leave. These are my reasons for having done so. 2 Section 436B falls within Pt 5.3A of the Act which deals with the administration of a company's affairs with a view to its executing a deed of company arrangement (DOCA). Section 436B(1) provides that a liquidator or provisional liquidator of a company may by writing appoint an administrator of the company if he or she thinks that the company is insolvent, or is likely to become insolvent at some future time. However, a liquidator or provisional liquidator may appoint himself or herself as an administrator under that provision only with the leave of the Court. It was admitted to the Official List of the Australian Stock Exchange (ASX) on or about 12 May 2000. However, Terraplanet's securities were suspended from being traded on the ASX in November 2002. 4 On 3 December 2002, Terraplanet and two subsidiary companies, Terraplane Press Pty Ltd (Press) and Terraplane Imaging Pty Ltd (Imaging), by resolutions of their respective boards of directors, appointed the Liquidators as administrators of the respective companies pursuant to s 436A of the Act. 5 The Liquidators, in their then capacity as administrators, negotiated a contract for sale of most of the business assets of Terraplanet and Press. The sale was completed on 6 January 2003. The sale price was $951,000 plus GST, of which $682,321 was paid to the secured creditor, Quality Web Australia Pty Ltd (Quality). 6 On the following day, 7 January 2003, at the meeting of the creditors of Terraplanet convened under s 439A of the Act, the creditors resolved under s 439C(c) of the Act that Terraplanet be wound up. The creditors also resolved that a committee of inspection be appointed. By the operation of s 446A(4) of the Act, Terraplanet was taken to have nominated the Liquidators to be liquidators for the purposes of the winding up, and the creditors were taken not to have so nominated anyone. 7 In their capacity as liquidators, the Liquidators sought, under s 588FF of the Act, to recover as an unfair preference an amount of $509,871 from the Deputy Commissioner of Taxation (DCT). DCT joined the directors of Terraplanet as parties to the proceeding pursuant to s 588FGA of the Act. The proceeding was settled in December 2005 for $272,000, on the basis that each party bear its own costs. DCT released the directors from any potential claims for insolvent trading. 8 The Liquidators also launched a proceeding against Quality in relation to payments made to Quality totalling $445,754. Quality had been granted a fixed charge over assets of Terraplanet on 15 November 2002 (not long before the appointment of the Liquidators as administrators). Apparently, the dispute concerned pre-charge payments made by Terraplanet to Quality. The proceeding was settled in November 2005 for $70,000, on the basis that each party bear its own costs. 9 Creditors of Terraplanet had previously been advised that there was unlikely to be any distribution to ordinary unsecured creditors unless the proceedings against DCT and Quality resulted in substantial recoveries. I was told that Imaging had no assets. 12 If the winding up of Terraplanet were to be finalised, the remaining monies after costs would be applied in part payment of the preferential claim by the Department of Workplace Relations (DEWR) in respect of the GEERS payout to employees. There would be no distribution to ordinary unsecured creditors, whose claims total approximately $1,533,000. 13 Subject to the recapitalisation proposal discussed below, the directors intend now to finalise the winding up of Terraplanet and to apply for deregistration of Terraplanet. If implemented, both proposals would result in the lifting of Terraplanet's present suspension from trading on the ASX and the resumption of Terraplanet's trading activity. 15 After the Liquidators carried out negotiations with both parties, they received a "mature proposal" (the Proposal) from one of those parties, Dalgety Capital Pty Ltd (Dalgety). 16 Briefly, under the Proposal, Dalgety will inject $1,800,000 cash into Terraplanet in return for shares representing approximately 92.17% of Terraplanet's issued share capital. In return, the Liquidators are to apply to the Court to terminate the liquidation of Terraplanet. 18 Another term of the Proposal is that Dalgety is to pay $10,000 to the Liquidators. Apparently this amount is to be used by the Liquidators to cover the cost of the convening of the meeting of creditors under s 439A of the Act (see para 16), and it will not be refundable to Dalgety. 19 After payment of the sum of $450,000 to the Liquidators (as administrators), Terraplanet will have approximately $1,350,000 (being $1,800,000 less $450,000) for working capital. (ii) There are approximately 2,500 shareholders of Terraplanet who will receive nothing from its winding up. If, however, the Proposal is accepted, they will retain one share for every eight shares currently held in Terraplanet, which will again be traded on the ASX. (iii) The committee of inspection appointed on 7 January 2003 has been kept informed of the Proposal and has been supportive. The Committee comprises representatives of two of the major unsecured creditors, a former employee and a former director. All four members have expressed their support for the Proposal and have agreed to the making of the present application to the Court. The reason is that, in my view, on any approach, the discretion should be exercised in favour of the granting of leave for the Liquidators to appoint themselves as administrators. The main question under s436B(2) of the Act is whether the Court is satisfied that the liquidator is an appropriate person to be appointed as administrator. After all, a liquidator is at liberty under s 436B(1) of the Act to appoint another person as administrator without the necessity of leave: see Deputy Commissioner of Taxation v Foodcorp Pty Ltd (1994) 13 ACSR 796 ( Foodcorp) ; Re Cobar Mines Pty Ltd (rec and mgr apptd) (in liq) (1998) 30 ACSR 125; John R Turk & Sons (Artarmon) Pty Ltd v Newmont Television Pty Ltd [1999] NSWSC 622 ; Nardell Coal Corporation Pty Ltd (recs and mgrs apptd) (in liq) (2003) 47 ACSR 122. It has been suggested, however, that the Court should also have in mind considerations of commercial morality: see Re Data Homes Pty Ltd (in liq) [1972] 2 NSWLR 22; Re Depsun Pty Ltd (1994) 13 ACSR 644; Foodcorp at 798-9. 23 I am satisfied that the Liquidators are appropriate persons to become administrators. They are familiar with the history of Terraplanet. Moreover, there is no suggestion of anything offensive to commercial morality in the proposed DOCA. There is not, for example, evidence of a relationship between Dalgety and the directors of Terraplanet (or the Liquidators), which might suggest that the reversion to a voluntary administration is being used in some way to benefit them. 24 Dalgety, a party at arm's length from both those associated with Terraplanet and the Liquidators, has, no doubt in pursuit of its own interests, proposed a DOCA which Terraplanet's creditors should have the opportunity of considering and, if they think fit, accepting. 25 The Liquidators also sought an order under s 447A of the Act to the effect that Pt 5.3A of the Act should operate on the basis that the requirement contained in s 436E of the Act for an initial meeting of creditors be dispensed with. Section 436E of the Act provides for an administrator of a company under administration to convene a meeting of the company's creditors so that they can, amongst other things, determine whether to appoint a committee of creditors and, if so, who are to be its members. 26 It would be wasteful to put the Liquidators to that effort and expense, having regard to the fact that the members of the committee of inspection in the liquidation have unanimously supported the Proposal, in general, and, in particular, the re-appointment of the Liquidators as administrators for the purpose of advancing it. For this reason I made the order sought under s 447A of the Act. I note that such an order has been made in somewhat similar circumstances in Re Cobar Mines Pty Ltd (rec and mgr apptd) (in liq) (1998) 30 ACSR 125; John R Turk & Sons (Artarmon) Pty Ltd v Newmont Television Pty Ltd [1999] NSWSC 622 and Re Nardell Coal Corporation Pty Ltd (rec and mgr apptd) (in liq) (2003) 47 ACSR 122. I stood the proceeding over, provisionally to 6 February 2008 for the making of such further orders as may be appropriate, having regard to the fact that the Liquidators anticipate that the meeting of creditors under s 439A of the Act to consider the proposed DOCA will take place at the end of January 2008. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. | application by liquidators under s 436b(2) of corporations act 2001 (cth) for leave to appoint themselves as administrators of the company considerations relevant to exercise of discretion main consideration whether liquidators appropriate persons to be appointed whether order should be made under s 447a of act dispensing with holding of first meeting of creditors under s 436e of act in circumstances in which there had been a committee of inspection in the liquidation all the members of which supported the present application corporations |
The applicants sought six separate orders restraining the respondent in the terms mentioned in their Claim for Interlocutory Relief. 3 The application for interlocutory relief first came before me on 24 February 2006 when the applicants sought ex parte orders in terms of paragraphs 1(b), 3, 4 and 5 of the Claim for Interlocutory Relief. I made those orders on 24 February 2006 in the terms of an interim injunction which was to expire on 2 March 2006. On that day, the respondent consented to the orders continuing until 5 o'clock today. Whilst the respondent consented to the orders continuing, it was only for the reason that he wished to prepare his evidence to address the interlocutory relief sought by the applicants. It was not, in any way, any admission by the respondent of the matters contained in the applicants' affidavits. 4 On this application, the applicants have relied on four separate affidavits of Mr Peter Campbell (the applicants' solicitor), two affidavits of Mr John Hunter (the applicants' in-house general counsel) and an affidavit of Andrew Reitzer, who is the Chief Executive Officer of the holding company of the first applicant. 5 It is necessary to say something about the parties before addressing the application. The first applicant is a wholly owned subsidiary of Metcash Limited, which is a publicly listed company on the Australian Stock Exchange. The second and third applicants are trading subsidiaries of the first applicant. The first applicant and the second applicant operate a grocery wholesale business throughout Australia, which business, Mr Hunter has deposed, generates an annual turnover of approximately $4 billion. The third applicant was formerly known as Consolidated Liquor Merchants Pty Ltd and carries on the business of a liquor merchant. 6 The respondent, Mr Bunn, has relied on an affidavit sworn by himself in answer to the applicants' claim for interlocutory relief. Mr Bunn was the proprietor of Chadmar Enterprises Pty Ltd ('Chadmar'), a retailer formerly supplied by IGA in the course of IGA's business. Chadmar is now in liquidation. 7 It is fair to say that Mr Bunn is aggrieved by the conduct of the applicants, both before and after Chadmar went into liquidation. It is not necessary, on an interlocutory application of this kind, to enter into and inquire into the various matters which underlie Mr Bunn's grievances in relation to the applicants. It is simply enough to observe, and to put it in neutral terms, that Mr Bunn has carried out a spirited campaign directed to and against the applicants. 8 The applicants claim that Mr Bunn has infringed the applicants' trademarks and continues to do so, that he has committed the tort of inducing parties with whom the applicants have contracted to breach their contracts, and that he has contravened ss 52 and 53 of the Trade Practices Act 1974 (Cth) (' Trade Practices Act '). They claim, in respect of each of those causes of action on the facts contained in the affidavit to which I have referred, that there is a real likelihood that unless restrained Mr Bunn will continue to infringe the trademark, commit the tort, and contravene the Trade Practices Act . In respect of the first cause of action, they claim to be entitled to an injunction under the Trade Marks Act 1995 (Cth) (' Trade Marks Act ') or in accordance with the ordinary equitable principles. In respect of the second cause of action, they seek relief in equity. In respect of the third matter, they claim to be entitled to an injunction pursuant to the provisions of s 80 of the Trade Practices Act . 9 The first applicant is the registered proprietor of a trademark for the word 'Metcash'. IGA Inc is the registered proprietor of the Australian trademark 'IGA'. The first applicant is licensed to use the 'IGA' name and mark in Australia. The third applicant is registered as the proprietor of a trademark, 'ALM'. 10 The applicants complain that the respondent has and will continue to infringe their trademarks by operating two domain names on the Internet; namely, metcashinfo.net and IGA-ALM.net. It is contended that the use of those names by the respondent on the Internet amounts to an infringement of the trademarks whereby they are entitled to injunctive relief, either under the terms of the Trade Marks Act or in equity. The respondent has contended that there is no infringement of those trademarks because, in respect of each of those Internet addresses, the first page shows that the Internet address is not operated by the registered proprietors. Therefore, he says, there is no infringement. 11 The applicants complain that the respondent has committed the tort of inducing a breach of contract by advertising generally for parties who have contractual arrangements with the applicants to provide information relating to their contracts and commercial dealings with the applicants which, because of the standard form of contract between the applicants and their suppliers and retailers, would amount to a breach of those contracts. In respect of both their suppliers and their retailers, the applicants say that the parties are bound to keep confidential the terms of their contracts and their commercial dealings. Therefore, if they were to supply the information sought by the respondent they would be in breach of those contracts. They say that the respondent by advertising for those classes of people to contact the respondent for the purposes named in the advertisement that it amounts to a tort of inducing a breach of contract. 12 The third cause of action, as I have said, relies upon the provisions of ss 52 and 53 of the Trade Practices Act . Of course, Mr Bunn is an individual and he will only have a liability under the Trade Practices Act if what he has done comes within s 6(3) of the Act. It is contended by the applicants that Mr Bunn's activities in relation to the two websites which I have identified amount to engaging in conduct which involves the use of postal and telephonic services so as to bring him within s 6(3) of the Trade Practices Act . 13 The applicants also say that the impugned conduct amounts to conduct in trade or commerce. It was put that his conduct amounted to representations of a disgruntled trader in trade or commerce and, therefore, came within the terms of the Trade Practices Act . 14 The applicants' claim, in relation to the respondent's conduct which they say amounts to a contravention of the Trade Practices Act , is that the respondent has made a series of allegations which are misleading and deceptive. The categories of allegations of which the applicants complain have been severally identified in paragraph 8 of an affidavit of Mr Hunter sworn on 8 March 2006. He there identifies four different types of allegations; being recovery proceedings allegations, Chadmar destruction allegations, retailer destruction allegations, and concealment allegations. Mr Hunter, in that affidavit, identifies the source of those allegations and in that same affidavit addresses the falsity of each of those allegations. 15 As I explained to Mr Bunn (who was unrepresented) during the hearing, the purpose of this hearing is not to determine any facts or to make any findings of facts. What I am called upon to determine is whether the applicants have identified a serious question to be tried; whether the balance of convenience favours the applicants; whether damages are an adequate remedy; and whether the orders sought should be made. 16 I am satisfied on the evidence which has been produced that the serious questions to which the applicants advert have been made out. There are, in my opinion, serious questions to be tried. I have no doubt that the balance of convenience favours the applicants. There would be no inconvenience to Mr Bunn in making the orders which are sought except the inconvenience of having to abide by those orders. However, if the orders were not made there is a real risk that the applicants could suffer damage for which damages are not an adequate remedy. 17 I am satisfied, therefore, that the applicants are entitled to the relief which they have sought except in respect of one aspect of the claim. The applicants have sought six separate orders which, as I have said, are identified in the originating application as amended as mentioned above. I am not satisfied on the evidence before me that there is any need to make the order sought in paragraph 5 of the orders sought. I think if an order were made in the terms of paragraph 1 a., which I am prepared to make, there is no need for the further order in paragraph 5. 18 I am not persuaded that there is any real likelihood that Mr Bunn would make any representation that he has a sponsorship or approval or affiliation of or with the applicants or any of them. For those reasons, I make the orders contained in paragraphs 1, 2, 3, 4 and 6 in the minutes of order, except in respect of paragraph 6, I delete in the third line of that paragraph the words 'by any person' and include the words 'to the effect that'. Those orders are made, of course, on the basis of the undertaking as to damages which was filed by the applicants on 27 February 2006 and which Mr Wells QC has said today is still proffered in support of the application for the interlocutory relief. The parties will have liberty to apply. I reserve the question of costs. | application for injunction to restrain the publication of certain allegations whether there was a serious question to be tried whether the balance of convenience favoured the applicants whether damages adequate remedy application allowed. interlocutory application |
He arrived with his wife, his son and his daughter [respectively SZJKJ, SZJKK and SZJKL] in Australia on 6 December 2005. 2 On 23 December 2005 an application for a Protection (Class XA) visa was lodged with the Department of Immigration and Multicultural and Indigenous Affairs. That application identified the first appellant as the person who was claiming to be a refugee. No such claims were made in respect of the second, third and fourth appellants. Their claims in respect of protection visas are covered by s 36(2)(b) of the Migration Act 1958 (Cth) ('the Act'). 3 Under s 65(1) of the Act the Minister is in certain circumstances 'to grant the visa', and if those circumstances do not apply is 'to refuse to grant the visa'. It is not necessary for the purposes of this appeal to set out the relevant provisions of the Refugees Convention which define who is a refugee. 6 The appellants' application for a protection visa or visas was refused by the Minister's Delegate on 15 March 2006, whereupon the appellants applied to the Refugee Review Tribunal ('the Tribunal') for review of the Minister's delegate's decision. The Tribunal was constituted for the purposes of the review by Tribunal Member Ms O'Toole, who appears to have conducted a hearing which lasted for approximately four hours on 11 July 2006. It would appear that the persons in attendance were the first appellant, the second appellant, the appellants' migration agent and a pastor, David Boyd. 7 Following the hearing it would appear that a letter was forwarded by facsimile to Parish Patience Immigration Lawyers, who were representing the appellants, inviting the appellants to comment on certain information. It may be inferred that the facsimile, which appears to be undated, was sent having regard to the Tribunal's then understanding of the obligations cast upon the Tribunal by s 424A of the Act. Further material was provided by the appellants to the Tribunal in response to the facsimile to which I have referred. The Tribunal proceeded to decide that the decision of the Minister's delegate not to grant the applicants Protection (Class XA) visas should be affirmed. That decision was apparently made on 23 August 2006 and handed down on 31 August 2006. 8 In relation to the decision of the Tribunal the appellants, who had been represented before the Tribunal, brought, without the assistance of any lawyers, an application for constitutional writ relief in the Federal Magistrates Court of Australia, the relevant Application being lodged on 25 September 2006. An Amended Application was filed in the Federal Magistrates Court of Australia on 21 December 2006 and the application for constitutional writ relief was decided by Smith FM on 21 May 2007. His Honour ordered that the application be dismissed and made an order in respect of the payment of part of the respondent Minister's costs by the first and second appellants. 9 From the decision of the learned Federal Magistrate an appeal has been brought to this Court by a Notice of Appeal filed 8 June 2007. That Notice of Appeal was apparently filed by the first appellant acting as a litigant in person on behalf of himself, his wife and their two children. 10 On 13 August 2007, that is to say on Monday of this week, it would appear that the appellants instructed Parish Patience Immigration Lawyers to act for them on the hearing of the appeal. An amended Notice of Appeal was filed in Court today. It raises two grounds. In assessing the applicants' Convention claims, I am required to determine whether they have a well-founded fear, and if so, whether what they fear amounts to persecution for a Convention reason. The first appellant relevantly claimed to have converted to Christianity prior to arriving in Australia and, consistent with his conversion, to have practised Christianity consistently since his arrival in Australia. 14 The Tribunal referred to s 91R(3) of the Act in its summary of the ' RELEVANT LAW ' before proceeding to a consideration of the appellant's ' CLAIMS AND EVIDENCE'. In its 'FINDINGS AND REASONS ' the Tribunal returned to specifically mention s 91R(3) of the Act, which it had previously set out. The Tribunal does not accept, however, that the applicants were involved in or converted to Christianity between 2000 and 2005 whilst living in Singapore. The Tribunal does not find the applicants' explanations regarding not being baptised in Singapore to be convincing. It is the Tribunals' (sic) view that had the applicants been serious about an interest in Christianity since 2000, they would have made an effort to be baptised in Singapore and prior to coming to Australia. The Tribunal is not satisfied that the applicants converted to Christianity as claimed and is supported in this finding by the applicants' conflicting evidence relating to the obtaining of a Bible or Bibles in the Nepali language. It is the Tribunals' view that the applicants became involved with the Jesus Family Centre shortly after their arrival in Australia with a view to enhancing their protection visa applications. In making this finding the Tribunal has considered the evidence of Pastor Boyd and others who attest to the sincerity of the applicants' conversion. However, the Tribunal's view is that such witnesses' evidence does not overcome the problems arising from the applicants' oral evidence as set out above. As a consequence the Tribunal finds that the applicants engaged in Christian activities since their arrival in Australia for the purpose of enhancing their claims to be refugees. ' That obligation, it is said, requires fairness on the part of the Tribunal. This states that Div 4 "is taken to be an exhaustive statement of the requirement of the natural justice hearing rule in relation to the matters it deals with. Given the significance of procedural fairness for the principles concerned with jurisdictional error, sourced in s 75(v) of the Constitution , the subversion of the processes of the Tribunal in the manner alleged by the present appellants is a matter of the first magnitude in the due administration of Pt 7 of the Act. It is important, however, to note the High Court's observation concerning the obligation of the Tribunal to accord procedural fairness to applicants for review, notwithstanding what some may have thought to be a limitation contained in s 422B of the Act. 19 Proceedings before the Tribunal are not adversarial, but inquisitorial; the Tribunal is not in the position of the contradictor of the case being advanced by an applicant. A Tribunal Member conducting the inquiry is not an adversarial cross-examiner but an inquisitor obliged to be fair. 20 In an application for review before the Tribunal it is for the applicant to advance whatever evidence or argument he wishes to advance and for the Tribunal to decide whether his claim has been made out; it is not part of the function of the Tribunal to seek to damage the credibility of an applicant's story in the manner a cross-examiner might seek to damage the credibility of a witness being cross-examined in adversarial litigation. However, equally, the Tribunal, conducting an inquisitorial hearing, is not obliged to prompt and stimulate an elaboration which an applicant chooses not to embark upon (see per Gummow and Heydon JJ in Re Ruddock (in his capacity as Minister for Immigration and Multicultural Affairs); Ex parte Applicant S154/2002 (2003) 201 ALR 437 at [57] --- [58]). It is not necessary (and often would be inappropriate) for the tribunal to put to an applicant, in so many words, that he or she is lying, that he or she may not be accepted as a witness of truth, or that he or she may be thought to be embellishing the account that is given of certain events. The proceedings are not adversarial and the tribunal is not, and is not to adopt the position of, a contradictor. But where, as here, there are specific aspects of an applicant's account, that the tribunal considers may be important to the decision and may be open to doubt, the tribunal must at least ask the applicant to expand upon those aspects of the account and ask the applicant to explain why the account should be accepted. If this were a rule of natural justice only the most talkative of judges would satisfy it and trial by jury would have to be abolished. On the contrary, to adopt such a course would be likely to run a serious risk of conveying an impression of prejudgment. The appellants urge that the Tribunal failed to afford the appellants an opportunity to present arguments concerning their religious observance in Australia with a view to arguing that it was not colourable, that it was not simply engaged in for the purpose of bolstering their protection visa applications, and that it was genuine and consistent with their conversion to Christianity prior to their arrival in Australia. 23 For such an argument to succeed one might have expected the evidence before the Federal Magistrates Court to include either the tapes of the Tribunal hearing or a transcript of what transpired during the course of the four hour Tribunal hearing. 24 The learned Federal Magistrate was not prepared to entertain that there could have been procedural unfairness in this regard in the absence of a transcript of what had transpired before the Tribunal. In particular, it would appear to have been made clear to them from the questioning at the hearing and from the s.424A(1) letter that the genuineness of their conversion to Christianity, and the truth of their claims to have converted prior to coming to Australia, might not be accepted by the Tribunal. Certainly, in the absence of a transcript I am not satisfied that any breach of s.425 occurred such as was found by the High Court in SZBEL v Minister for Immigration & Multicultural & Indigenous Affairs [2006] HCA 63. By letter dated 11 July 2006 the Tribunal forwarded to Parish Patience Immigration Lawyers the relevant tapes under cover of a letter reading, 'I am enclosing a copy of your Tribunal hearing tapes as requested'. It is apparent that the tapes were received because prior to the Tribunal reaching its decision a further letter dated 24 July 2006 was obtained by the appellants from Senior Pastor David Boyd who referred to them. 27 The appellants recognise the very considerable difficulty with which they are confronted by the absence of a transcript of the hearing before the Tribunal or the tender of the tapes of the Tribunal hearing. Counsel for the respondent Minister observes that if the reason for the absence of the evidence in respect of the Tribunal hearing was that the hearing before the Magistrates Court was conducted by the appellants in person, there is no reason why an application to lead further evidence could not have been brought on the hearing of the appeal as permitted in certain circumstances by s 27 of the Federal Court of Australia Act 1976 (Cth). There is some force in this submission. 28 The appellants urge that notwithstanding the absence of a transcript or of the tapes, they can nevertheless point to the Tribunal's summary of the hearing, which is recorded on four and a half pages of the Tribunal' s 21 page 'STATEMENT OF DECISION AND REASONS', to argue that s 91R(3)(a) of the Act should not apply in the circumstances of their case. This argument was advanced on the basis that the Tribunal Member quite obviously asked questions of the first appellant and of the second appellant in relation to matters which were of concern to her. I think it fair to say that the several matters which were raised by the Tribunal Member and referred to in her reasons for decision went to factual issues, not to the legal significance of factual matters. 29 It does not seem to me that this case falls within the ambit of that portion of the reasons for judgment of Gleeson CJ, Kirby, Hayne, Callinan and Heydon JJ in SZBEL to which reference has been made. The suggestion is that the Tribunal Member failed to evaluate and have regard to the evidence of Senior Pastor Boyd as contained in a letter dated 23 June 2006 to the Tribunal and his further letter to the Tribunal of 24 July 2006 and a letter from an outreach pastor from the same church, namely the Jesus Family Centre at Cabramatta, which was directed 'To Whom It May Concern' and was apparently provided to the Tribunal. 33 Counsel for the respondent Minister quite rightly points out that the Tribunal Member recorded the Tribunal's receipt of the communications mentioned and also set out in considerable detail the matter contained in Senior Pastor Boyd's letter of 24 July 2006, which had been prepared following receipt of the Tribunal's s 424A letter of 14 July 2006. The Tribunal Member also adverted to submissions apparently put by the appellants' migration agent to the Tribunal which are recorded under the heading 'Advisor's written submissions (27 July 2006)'. 34 It would be quite impermissible for the Federal Magistrate or for this Court to undertake a merits review directed at reaching a different conclusion on the same evidence. There is nothing in my opinion to found an argument that the Tribunal failed to have regard to all relevant material. 35 The fact that the conclusions reached may have been inconsistent with some of that material does not mean that it was not properly taken into account. In the circumstances, the second ground of appeal also fails. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. | the tribunal's duty to afford procedural fairness the tribunal should refrain from providing a running commentary tribunal members are inquisitors required to be fair, not adversarial cross-examiners migration |
The parties have filed written submissions and have agreed that the motion be decided on those submissions. 2 Order 20 rule 2 provides that where it appears to the Court in any proceeding that (a) no reasonable cause of action is disclosed; (b) the proceeding is frivolous or vexatious; or (c) the proceeding is an abuse of the process of the Court, the Court may dismiss the proceeding. 3 On 3 January 2006 the plaintiff purported to commence a proceeding under the Corporations Act 2001 (Cth) ("the Act ") against Weaver as "Joint and Several Administrator of Sons of Gwalia and certain subsidiaries". In the title to the application it was recited the plaintiff acted in a representative capacity "for and on behalf of the constituents of The Murphy Interest ABN 39 734 598 213". 4 An appearance as defendants to the application was filed by Weaver and the two other joint and several Administrators appointed under a Deed of Company Arrangement for Sons of Gwalia Ltd and 24 associated companies. 5 Although the application stated that a statement of claim accompanied it, no statement of claim was filed and the plaintiff relied instead upon an affidavit in which the plaintiff purported to outline the basis on which the matter was said to engage the jurisdiction of the Court. In that affidavit the plaintiff claimed, in effect, that a proof of debt lodged by the plaintiff with the defendants as a claim for payment under the Deed of Company Arrangement had been wrongly disallowed by the defendants. 6 In the affidavit the plaintiff stated that he was the "Administrator for The Murphy Interest (formerly Diespa Nominees Pty Limited (deregistered) and The A-M Family Trust (now vested)". 7 It is unnecessary at this point to determine whether the plaintiff had standing to bring a proceeding in the manner asserted. "The Murphy Interest" appears to be no more than a descriptive title. Diespa Nominees Pty Ltd ("Diespa") remains a deregistered company. Pursuant to s 601AD of the Act upon deregistration Diespa ceased to exist and all property of the company vested in the Australian Securities and Investment Commission ("ASIC"). It appears that no application has been made under s 601AH of the Act to obtain an order that ASIC reinstate the registration of Diespa. 8 It was said that the claimed indebtedness to "The Murphy Interest" of the companies under administration "arose from commission of organised crime as from 1993 on the constituents of The Murphy Interest - said organised crime was assisted as to commission by identified Western Australia Public Officers with protection of relevant senior Western Australia Public Officers continuing through present date". 9 It appears from further material and submissions filed on behalf of the plaintiff that in or about 1991, when Diespa was a registered corporation and the plaintiff was involved in the management thereof, Diespa acquired a mining lease from a third party, later transferring a one-half share in the lease to TZ Mining Pty Ltd ("TZ"). The plaintiff asserts that between 1991 and 1993, by means of alleged sharp practices engaged in by other parties, Diespa and TZ were deceived and suffered loss in relation to their further dealings in respect of the lease. 10 In 1993 Diespa and TZ commenced proceedings in this Court against parties the subject of those allegations. In July 1994 the parties to that litigation executed a Deed of Settlement, replaced by a further Deed in September 1994, which settled the differences between the parties and terminated the proceeding in this Court. 11 In March 1995, Sons of Gwalia Ltd and a subsidiary, being persons unconnected with the foregoing proceeding, acquired all of the shares in one of the former respondents to that litigation and thereby acquired proprietorship of the mining lease referred to above. In October 1995 Diespa was deregistered. In June and August 2005 Sons of Gwalia transferred the lease and associated property to another purchaser. 12 The defendants have filed an affidavit in which it is deposed that having considered all of the foregoing information put before them by the plaintiff it was obvious that neither Sons of Gwalia Ltd nor its subsidiary had any indebtedness to the plaintiff and that the defendants had a duty to disallow the proof of debt lodged. 13 The plaintiff has adduced no material to dispute that contention and has made no submission to the effect that the defendants failed to duly exercise their powers as Administrators in disallowing the plaintiff's proof of debt. 14 The plaintiff's claim in this proceeding appears to concede that the Deed of Settlement executed in September 1994 bars any action on behalf of Diespa. The plaintiff, therefore, purports to seek a further order that the Deed of Settlement be set aside. The grounds upon which the plaintiff foreshadows reliance for making such an application to set aside the Deed of Settlement do not allege fraud on the part of a party to the Deed. It appears that instead it would be alleged that the Deed was executed by Diespa under the duress of solicitors instructed by Diespa. 15 No party to the Deed of Settlement is a party to the proceeding. More particularly it is not asserted that Sons of Gwalia Ltd acquired its interest in the mining lease and associated property other than as a 'bona fide' purchaser for value without notice. Apart from the insurmountable difficulties that would usually face a party attempting to have a Deed of Settlement set aside it is obvious that this proceeding against the defendants has no prospect of success seeking as it does an order against the defendants in respect of their rejection of the proof of debt lodged by the plaintiff. (See: Bowen v Stratigraphic Explorations Pty Ltd [1971] WAR 119, 121). 16 It may be accepted that an application for summary dismissal of a proceeding will rarely succeed if the application is based on no more than the apparent lack of probability that the claimant will succeed or if the application to dismiss does not address whether there are latent substantive questions that may arise in the course of the proceeding. (See: Lonrho Plc v Al-Fayed (No 2) [1992] 1WLR 5; Seven Network Ltd v News Ltd (No 4) (2005) 214 ALR 686). However, this proceeding is one of those cases where it is obvious that there is no utility in allowing the matter to continue. On its face there is no question that can be competently raised by the plaintiff for resolution by the Court in respect of the conduct of the defendants as Administrators. (See: Dey v Victorian Railways Commissioners [1949] HCA 1 ; (1949) 78 CLR 62 per Dixon J at 91; General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 per Barwick CJ at 129). 17 It is unnecessary to address the question of unexplained delay nor of apparent expiration of periods of limitation that would be live issues if a proceeding to set aside the Deed of Settlement were to be commenced by a party to that Deed against other parties thereto. 18 It is apparent that no reasonable cause of action has been disclosed by the plaintiff in this proceeding and further that to allow the proceeding to continue would constitute an abuse of process of the Court. 19 The proceeding must be dismissed with costs. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lee. | summary dismissal of proceeding under federal court rules o 20 r 2 whether reasonable cause of action whether abuse of process of the court proceeding dismissed. practice & procedure |
The twentieth respondent, Australian Integrated Finance Pty Ltd ('AIF'), went into liquidation on 13 October 2008. The Commission has filed a notice of motion seeking leave under s 471B of the Corporations Act 2001 (Cth) ('the Corporations Act ') to continue these proceedings against AIF, proffering a condition that it does not seek the enforcement of any order for the payment of money, whether by way of penalty, costs or otherwise, without the further leave of the Court. The Commission alleges, generally, that AIF as the Finance Company for customers acquiring telecommunications equipment and services is accessorily liable for the contraventions of the Trade Practices Act 1974 (Cth) ('the Trade Practices Act ') by "Axis Telecoms" (defined in paragraph 1(e) of the statement of claim as the third and fourth respondents, Axis Telecoms Pty Ltd and Service AT Pty Ltd) and "WorldTel" (defined in paragraph 1(dd) of the statement of claim as the thirteenth respondent, WorldTel (Aust) Pty Ltd, and further or in the alternative WorldTel Corporation Pty Ltd ('WorldTel Corporation')) (together, 'the Telcos'). It is alleged that AIF was knowingly concerned in or aided and abetted contraventions of s 47 of the Trade Practices Act by Axis Telecoms and WorldTel. ... It did so as part of a transaction in which the Fourth Respondent offered credit on charges that would be incurred by those customers for telecommunications services which it was to provide to each of those customers. ... It leased the equipment to each customer as part of a transaction in which the Thirteenth Respondent or WorldTel Corporation offered credit to the customer on charges the customer would incur for telecommunications services to be provided by the Thirteenth Respondent or WorldTel Corporation. Axis Telecoms also admitted in writing to the Commission that about 8,000 customers purchased its bundled services. In response to a notice issued under s 155 of the Trade Practices Act , AIF acknowledged that it was associated with Axis Telecoms and with WorldTel in relation to the provision of credit to customers via the Telcos. There is evidence that AIF knew of the similarity of the business method of a number of providers of telecommunication services and that it involved providing a bundle of equipment leasing, telephone services and call credits on those telephone services which were in turn related to the rental on the lease. AIF denied that it was in any way involved in exclusive dealing but accepted that it had a role in the transactions which, it said, was limited to providing equipment finance such as leasing. AIF denied involvement, other than by provision of finance, in determining the underlying commercial terms applied by the Telcos, including any discounts which it said were dealt with by the supplier. It said that AIF's finance terms were incorporated in its standard finance documents. AIF denied receiving any return other than its normal financing margin but acknowledged that ' the other relevant parties have received substantial benefit from these transactions ' and that the Telcos receive ' the financial benefit of payment from AIF funding the entire transaction on settlement '. The Commission's case is that this discloses that AIF knew of the relevant transaction between the Telco and the customer. The Commission submits that this is sufficient to establish a serious question to be tried as to the accessorial liability of AIF in the contravention by the Telcos of the exclusive dealing provisions of the Trade Practices Act ( Vagrand Pty Ltd (in liq) v Fielding (1993) 41 FCR 550). I am satisfied that there is a serious question to be tried against AIF and that the allegations made in the statement of claim have a foundation (Australian Broadcasting Corporation v O'Neill [2006] HCA 46 ; (2006) 227 CLR 57). As the Commission points out, these proceedings do not represent a choice as is often available in a liquidation, between an action and a proof of debt. The remedies sought by the Commission are not available in the liquidation. Although the unavailability of relief pursuant to liquidation does not automatically entitle an applicant to leave under s 471B of the Corporations Act ( Vagrand at 553), the fact that relief is not otherwise available is a significant factor in favour of the exercise of discretion to grant leave to proceed against the company in liquidation. Further, the Commission submits that it is necessary to obtain the relief sought in order to inform and protect customers who may be unaware of their potential rights under the Trade Practices Act . The public interest in the declarations and other orders sought against AIF is relevant. As the Commission points out, consumers may be subject to claims by AIF for moneys owed as part of the bundling agreement. In view of the large number of individual customers said to have been made subject to the bundling arrangements as pleaded, I accept that findings of fact in these proceedings as against AIF may be useful to persons who have dealt with the company in a similar manner to that pleaded in the statement of claim and who may wish to pursue their own remedies against it. If the contracts with AIF are found in these proceedings to have been "forced" in contravention of s 47(6) of the Trade Practices Act , customers against whom enforcement proceedings are brought may be able to seek relief from the contracts by virtue of any findings made in these proceedings. If AIF is not a party to these proceedings, then it will be free to argue in any such enforcement proceedings that it is not bound by any judgment, so that the question of contravention of s 47(6) of the Trade Practices Act would need to be relitigated by the individual customer, even if that customer were aware of the provisions of the Trade Practices Act . There is no indication from the liquidator whether there are any funds available in AIF. However, the assets of the liquidator include claims against customers who have an equipment lease with AIF. Those assets come to the liquidator with their history and inherent characteristics. As the Full Court pointed out in Vagrand (at 553), '[a] lthough the liquidator takes the assets on behalf of the creditors, third parties retain any rights which enure to them as a result of that history or those characteristics '. These proceedings were commenced on 17 September 2008, prior to AIF being placed into liquidation. The Commission submits that the fact that resources have already been committed to litigation is an important consideration in granting leave to continue. However, unlike Speiser v Locums Financial Management Pty Ltd (1996) 22 ACSR 478 at 482---3, the liquidation in the present case did not occur in the midst of litigation after days had been set aside for further hearing. In this case there are a number of respondents in the proceedings and there is no indication that the formulation of the claims against AIF represents a predominant allocation of resources. Only a small amount of time has elapsed since the commencement of the proceedings. I do not consider this to be a relevant factor in support of the exercise of discretion. The Commission also submits that it is important in the public interest and the administration of the Trade Practices Act that it be given leave to proceed against AIF in order for the public to be informed, if the Commission is successful, of the public's rights in relation to the provision of bundled services. I accept that, if the Commission is successful, there is utility in promoting general deterrence. As was pointed out by Carr J in Australian Competition and Consumer Commission v Goldy Motors Pty Ltd (2001) ATPR 41-801 at [34], '[t] here is some degree of public interest in the determination and declaration that the respondent by its conduct has contravened [a provision of the Trade Practices Act ]'. However, I do not consider this to be a factor in support of the exercise of discretion to proceed against AIF. There are other finance companies already joined as respondents to the proceedings. If the Commission is successful in establishing contraventions of the Trade Practices Act , this aspect of the public interest will be served. The Commission points out that it may be successful against AIF and not against the other companies but I cannot properly weigh that likelihood at this stage of the proceedings. The Commission submits that it is in the public interest to grant leave to proceed against AIF ' because it is important that the Trade Practices Act ... be seen to be enforced '. I do not accept that it is appropriate to grant leave to proceed against a company in liquidation simply because the Commission considers it important that the Trade Practices Act be seen to be enforced. The Commission also relies upon the public interest in obtaining declarations that a party has contravened the Trade Practices Act ' to vindicate the rights and interests of small businesses which have entered into arrangements with [AIF] which are contrary to section 47(6) of the [Trade Practices Act]'. If the Commission is successful, AIF will be obliged to provide information to any consumer against whom it litigates to recover monies said to be owed. The large number of consumers potentially involved, the fact that these consumers may be the subject of litigation and that they may not have knowledge of the Trade Practices Act or of these proceedings, together with the public interest in the administration of the Trade Practices Act , are important factors in favour of making the orders sought. The Commission has established a foundation for the allegations made against AIF and that there is a serious question to be tried against AIF. There is public interest in the continuation of the proceedings against that company and utility in so proceeding. The liquidator does not oppose leave being granted. In the absence of any evidence as to the financial situation of the company, it is appropriate to add that the liquidator of AIF be at liberty to apply to the Court concerning the costs and expenses of the litigation. | leave to proceed against company in liquidation s 471b of the corporations act 2001 (cth) leave granted foundation for allegations against company serious question to be tried public interest conditions proffered and imposed on grant of leave corporations |
By that cause of action the applicant contended that she had made a relevant disclosure to the Chief Executive Officer of the respondent, Mr Norris, of conduct of certain employees and officers of the respondent which contravened their obligations to act in good faith. The Court was further told that in an affidavit sworn in support of the injunction application, the applicant asserted her desire to retain her employment with the respondent. 3 It is common ground that in ruling upon this application, the Court is to apply the test established by the High Court in Adam P. Brown Male Fashions Pty Ltd v Phillip Morris Inc (1981) 148 CLR 170 which requires the respondent to persuade the Court that the discharge of the undertaking would be appropriate because of the existence of new facts that render the ongoing enforcement of the undertaking unjust. 4 The respondent carries the burden of establishing the new facts. Mr McDonald of Senior Counsel, who appeared on behalf of the respondent with Mr O'Grady, argued that there were two material changes in circumstances which rendered it unjust for the Court to maintain the undertaking of the respondent. 5 First, Mr McDonald contended that the cause of action under s 1317AA of the Act had been abandoned by the legal representative of the applicant in the course of the trial, which is presently part heard. Reference was made to the transcript at pp 22 and 50 which support the contention that this cause of action was abandoned in the course of the trial. 6 The second factor relied upon by the respondent was that the evidence of the applicant given in the course of the part heard trial demonstrated that she did not wish to return to her employment with the respondent and, in any event, would not go back on the terms available to her. A number of passages of transcript were relied upon by the respondent. Do you want to go back to work?---I can't. There's a job for you. It's waiting there for you. It's been an offer made in good faith to you. Do you want to go back to the bank and be an employee of the bank?---I don't believe, Mr McDonald, your clients have good faith because I don't trust --- after what happened to me I do not trust that they had any good faith in any decision they made. So is the answer no, you don't want to go back?---I cannot. I want to. I wish if you could bring the time that it's January again and I could get the same job, but during the last 10 months the bank has caused major damage, damage to my reputation, to my client base, to my future, not only with the bank but to my future elsewhere as well if I go and do this lending elsewhere, because I had a community --- people from the same background that relied on, that trusted me and they rely --- they rely on me for any of their banking needs and those clients, they went somewhere else and... those clients, the bank never paid commission for me to get them. Well, then you have to go. Then you have to leave the bank, don't you?---I cannot trust them and I believe the Court cannot make these people accept me and give --- [if] this Court proceeding made the bank take me back, yes, but the revenge and the lack of trust in Carney's decision, the --- once I'm in the workforce with the bank I --- the Court will have no control over whatever decision Mr Carney is going to make against me. The Court cannot be involved in day-to-day activities or decisions or --- who could guarantee that the same things or anything worse than this will not happen to me again. Well, no-one can guarantee it but you have legal rights and if the bank did misconduct itself on your return, well, you have rights in contract and there are human rights and equal opportunities laws and there are antidiscrimination and all sorts of laws that you may be able to use, but we can't solve the problems of the future. It is clear enough that any termination which might now occur would most likely be a result not of that disclosure, but rather on the basis of the evidence given by the applicant of her desire to cease employment with the respondent. 9 Mr Ginnane, who appeared as counsel on behalf of the applicant, contended that the undertaking should not be discharged. He is at some disadvantage, having taken over the brief recently and not yet being in possession of the transcript of the hearing. He was therefore not able to contest the allegation that the s 1317AA cause of action had been abandoned. Rather he contended that if it had been then he may get instructions to resurrect it. 10 In relation to the evidence given by the applicant he contended that it was equivocal and whilst, on its face, may suggest that the applicant desired no longer to be employed by the respondent, it should rather be viewed as showing that Ms Yousif wished to return to employment provided that the trust which to date had been lost was restored. 11 In my view, the situation has changed significantly since the undertaking was given to the Court on 2 June 2008. Even if the proper characterisation of the applicant's evidence is that it is equivocal, then her position has nonetheless changed from being certain that she wished to retain employment to being equivocal about whether and on what terms she would wish her employment to continue. 12 Even if one were to assume that the s 1317AA cause of action had not been abandoned or was resurrected in the short term, there is force in Mr McDonald's contention that any termination now likely to take place stands little likelihood of qualifying under s 1317AA as being on the basis of the relevant disclosure. Whilst that is not an impossible outcome, it is not likely on the material presently before the Court. Section 1317AB allows the Court, on the establishment of the cause of action under s 1317AA , to order both compensation and reinstatement. These remedies would be available in combination if the undertaking was discharged but the applicant was ultimately successful under s 1317AA. 13 For those reasons I am satisfied that the respondent has made out a case for the discharge of the undertaking given to the Court on 2 June 2008 and orders will be made to that effect. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice North. | undertaking given to the court request by party subject to the undertaking for it to be discharged whether new facts render undertaking unjust practice and procedure |
648634, entitled "A Hull Structure for Multi-Hull Ships". Stena claims priority from an application filed in Sweden on 30 January 1991. The respondents, which I will refer to collectively as "Austal", comprise a group of ship building companies based in Western Australia. 2 Stena sues Austal for alleged infringement of the patent and seeks an injunction to restrain Austal from continuing to infringe. Specifically, Stena alleges that the hull forms of three types of vessels manufactured, sold or promoted by Austal --- namely the Austal 94, Austal 196 and Austal 285 hull forms --- infringe its patent. 3 In response to these allegations, Austal filed a cross-application seeking to revoke the patent for invalidity on the grounds of (i) lack of novelty, (ii) lack of inventive step or obviousness; and/or (iii) failure to comply with the requirements of s 40 of the Patents Act 1990 (Cth) ("Act") that the claims be clear and succinct, define the invention and possess a fair basis. There are two claims in issue in these proceedings, claims 1 and 7. A hull according to any one of claims 1 to 5, wherein the width of the hull at the water line is substantially constant in the case of the sternward quarter part of the vessel and then narrows towards the prow of the vessel. ' (Emphasis added. The critical integers for present purposes are integers 1.5 and 1.6. In relation to claim 7, the dispute concerns the relationship of claim 7 to claim 1 and the meaning of the words 'the water line is substantially constant in the case of the sternward quarter part of the vessel'. 6 The invention relates to a hull structure for a multi-hull ship. the hull width is narrower in the region of the water line than both above and below the water line, and a rearward hull part which merges continuously therewith , the local draft of which decreases in a direction towards the stern while simultaneously the width of the hull at the water line increases in this direction. This imparts to the stern of the vessel a shape which is favourable for water-jet propulsion. The invention is not restricted to water-jet propulsion, however. As a result of the invention, the hull has a relatively large width at the water line at the stern part of the hull, which enables propulsion engines and like prime movers to be readily fitted to the hull with the absence of any problems concerning air intake, exhaust gas discharge, lifting and lowering of engines, etc. Because the hull has a relatively large water line width in relation to the maximum width of the hull beneath the water line, particularly at the stern of the hull, the hull has good stability , particularly at its stern part, therewith favouring the loading and offloading of cargo from the stern of the vessel. a relatively narrow hull width in the vertical region of the hull that extends up through the water line, as a continuation of the more generally U-shape of the hull stern, limits the wave-dependent vertical movement associated with conventional catamaran hull designs that include a generally uniform hull cross-section along the length of the hull. As a result of the bulbous shape of the cross-section of the foreward hull part, the wave-exerted lifting force will be lower at the foreward part of the hull, and motion-restricting suction forces will occur at the bottom surface of the hull structure and at the upwardly facing wet surface of the hull as the hull moves vertically in the water. ' (Emphasis added. As a consequence, multi-hull vessels were developed with a hull which had a narrow cross-section at the water line. This meant that only a small lifting force is generated by the waves acting on the hull, so that the seakeeping of the vessel is improved. The parts of the hull beneath the surface of the water were joined to those parts of the hull located above the surface by means of narrow connections. This approach to the improvement of seakeeping led to problems regarding the use of and type of equipment required to propel the vessel, and a consequent need for greater power. 8 One object of the invention is to provide a hull structure of favourable construction with a low tendency to lift upwards under the influence of waves. This result would create highly efficient movement through the water, allow greater speed in high seas with a high load resistance and enable the vessel to be powered by water jet propulsion. It was also an objective to have a high stern stability to enable the vessel to be loaded and unloaded from the stern. An example of this type of vessel is a fast passenger and cargo carrying catamaran which can have a speed of 30 to 50 knots, with a length of 120 metres by a width of 40 metres, and a submerged volume of up to 3,000 cubic metres. 9 As is apparent in the description of the invention above, the 'bulbous shape' of the forward part of the hull cross-section, which is described as a relatively narrow hull in the vertical region of the hull extending up through the water line as a continuation of a generally U-shaped hull stern, has the effect of limiting or dampening the wave-created vertical movement experienced by conventional catamaran hull designs. The bulbous shape also has the effect that the wave lifting force will be lower at the forward part of the hull, creating motion restricting forces at the bottom surface of the hull structure, which in turn will contain any excess movement and so improve the vessel's seakeeping. 11 Claim 7 expresses a preference that the width of the hull at the water line should be substantially constant in the sternward quarter of the vessel, and then narrow towards the prow of the vessel. This latter requirement that the width is 'substantially constant', is accepted to be inconsistent, on its face, with the requirement in integer 1.5 which requires that the width of the hull must continually decrease in a forward direction. 12 The vessel is described as differing from conventional hull designs because the width of the inventive hull decreases generally in a forward direction at the water line, and keeps a constant frame area beneath the water line along the length of the hull, decreasing at the forward and aft parts of the hull. This means that the hull will have a relatively large width at the water line in the stern part of the hull, thereby restricting the local draft of the hull at the stern. 13 There are said to be five advantages which flow from the Stena design. 15 The specification describes the inventive hull by reference to a preferred embodiment. Three drawings or 'Figures' illustrate this embodiment. Figure 1 is a body plan for the forward and sternward half of a hull, which is illustrated by six similar but separate frames numbered from 0 to 5 along the hull, with the water line corresponding to a normal draft. This is said to show that the local draft of the hull decreases in the afterbody of the hull in a sternward direction so that it falls to about 50% of the hull draft, with the maximum local draft occurring in the area forward of the hull's length centre. Figure 1 also shows that the width of the hull at the water line decreases generally continuously from the stern to the forward part of the hull, while the width of the underwater body of the hull increases downwards from the water line so that the underwater body has a bulbous or onion-shaped cross-section, at least in the length region between fore to midships. 16 Figure 1 also shows that changes in the normal draft only slightly alter the area and shape of the hull at the water surface so that the width of the hull decreases in the area above the water line thereby restricting any additional lifting forces exerted against the hull by waves. The additional lifting forces are smaller at the forward part of the inventive hull as a result of the smaller width of the hull in the forward hull parts above the water. 17 The bulbous shape which is solely at the forward part of the underwater body of the vessel means that the upward facing surface of the displacement body is large in the forward part. As a result, the downward movement of the hull during pitching is restricted in that forward part. The vessel depicted in Figure 1 is a hull for a twin hull vessel to be propelled at 40 knots with a draft of about 4.5 metres, an underwater part of about 5 metres and a length of about 120 metres. 18 Figures 2 and 3, neither of which feature prominently in these proceedings, illustrate respectively the position of the centre of gravity of the hull frame area and the displacement of the forward and sternward parts of the hull. It is clear that the claims must not be read in the abstract, but rather in their context, including existing published knowledge. What is being construed is a public instrument which must define a monopoly in such a way that it is not reasonably capable of being misunderstood: Populin v HB Nominees Pty Ltd (1982) 41 ALR 471 at 476. In Kimberly-Clark Pty Ltd v Arico Trading International Pty Limited [2001] HCA 8 ; (2001) 207 CLR 1 at 16, the majority joint judgment noted that it is necessary to construe the complete specification in the light of the common general knowledge and the art before the priority date, allowing the Court to place itself in the position of a person reading the specification who is acquainted with the surrounding circumstances as to the state of that art and its manufacture at that time. 20 Where the language of the specification is unambiguous, a court should not readily depart from the wording of the claim by reading words into it or using stray phrases in the body of the specification in order to narrow or widen the boundaries of the monopoly fixed by the plain words of a claim. Their primary object is to limit and not to extend the monopoly. What is not claimed is disclaimed. The claims must undoubtedly be read as part of the entire document and not as a separate document; but the forbidden field must be found in the language of the claims and not elsewhere. 21 Patent language which uses terms expressing approximation or requiring assessment according to circumstances does necessarily not mean that the impugned claim lacks clarity. Exact expressions are not always essential. An example of this dictum is found in Minnesota Mining & Manufacturing Company v Beiersdorf (Australia) Ltd [1980] HCA 9 ; (1980) 144 CLR 253 at 274, where Aickin J said that lack of precise definition in claims is not fatal to validity so long as they provide a workable standard suitable to the intended use. In that case, his Honour did not consider the word 'inextensible' to be imprecise because on its correct construction in the circumstances his Honour considered that it meant 'relatively inextensible' or 'not capable of extending appreciably'. As can been seen from his Honour's use of language in deciding the meaning of the term, his Honour did not shrink from using other words of general connotation. 22 In Leonardis v Sartas No 1 Pty Ltd (1996) 67 FCR 126 at 134, the Full Court stated that it is not inadmissible to use an imprecise word in a claim where, in an appropriate context, it conveys the necessary meaning. The Court there referred to the use in patent claims of imprecise expressions such as 'relatively small', 'a minor amount', 'substantial effect' and 'substantially above' as terminology which does not necessarily invalidate a patent. Relative expressions which require the exercise of judgment can be used but they must be understood in a practical commonsense manner. Moreover, as Dixon CJ cautioned in Martin v Scribal Pty Ltd [1954] HCA 48 ; (1954) 92 CLR 17 at 60, a patentee does not have to express his claim with a precision that implies an arbitrary restriction on the inherent variability of a feature which is part of the invention. 23 In Melbourne v Terry Fluid Controls Pty Ltd (1993) 26 IPR 292, Jenkinson J decided that the words 'substantial portion' used in a claim to describe a sleeve of a mechanical assembly did not apply to a situation where the portion was less than 50% of the total length. In that case it was 48%. In reaching this conclusion his Honour had regard to context of the complete specification and to the expert evidence concerning the functions which the sleeve was intended to perform in operation of the device. 24 The above interpretation principles are relevant in the present case to a consideration of the particular expressions in the patent specification which Austal submits display uncertainty and lack of clarity. The relevant expressions are found in integers 1.5 and 1.6 and, to a lesser extent, in claim 7. 25 The gravamen of the submission by Austal is that the language of claim 1 is so obscure, ambiguous and uncertain in important respects that it cannot give rise to an infringement. The submission relies on the principle adopted by Hely J in Flexible Steel Lacing Company v Beltrico Ltd (2000) 49 IPR 331 at 348-349, that a claim may be bad for uncertainty notwithstanding that the Court could find its true meaning in the circumstances, if it is so obscure that its proper construction must remain a matter of doubt. The difficulty in the application of the principle is in defining the level of clarity required in the context of a particular claim. It is not sufficient to show merely that a claim might have been better drafted or that it is capable of more than one construction. 26 The imprecise language which Austal says makes claim 1 invalid for uncertainty resides particularly in the drafter's use of the undefined expressions 'substantial portion' and 'narrow waisted' in integer 1.6. The vagueness which arises from these expressions is said to be compounded because they are interrelated features relating to the bulbous underwater part of the hull shape. Austal notes that the expression 'substantial portion' was first introduced into the claim by an amendment as a consequence of opposition. He graduated with a Bachelor of Science in engineering and is a member of the Royal Institution of Naval Architects. He has had considerable experience in the design of large twin hull vessels. His expertise and experience is not in issue. Between 1980 and the year 2000 he was involved in the design of over 120 high speed light craft ranging from 16 metres to 100 metres. He was the Senior Naval Architect at Incat Designs between 1983 and 1985, a role which involved computer programming, structural design, design technology developments, supervision and project management for high speed catamarans. 28 When Mr Soars first read the patent his impression was that it was unconventional and highly innovative. It was different because of the torpedo-like forward body with small water plane area, which towards the aft transitioned into a more conventional catamaran stern. The impression conveyed to him was that of a Small Waterplane Area Twin Hull ("SWATH") design at the front half of the vessel --- that is, the maximum beam of the underwater hull form is significantly greater than the beam at water line throughout the length of the hull --- combined with a reasonably conventional catamaran design at the back half of the vessel. He describes the invention in loose terms as a 'semi-SWATH' hull design. A vessel of this description, he says, should have the maximum beam of the underwater hull greater than the beam at the water line for a significant proportion of the length of the hull. His understanding of integer 1.6 of claim 1 of the patent was that the terms 'substantial portion', 'bulbous underwater part' and 'narrow waisted part' are interrelated, together forming part of the composite phrase 'wherein the cross-sectional shape of the hull throughout a substantial portion in the forward half of the hull located between the bow and midships has a bulbous underwater part and a narrow waisted part which extends through the water line. On his interpretation, integer 1.6 means that there is a definite pronounced bulbous shape to the underwater hull, which is coupled with a narrow waisted part protruding through the water over most or all of the forward half of the hull . This is a characteristic of the so-called semi-SWATH vessels. He observes that there must be a transitioning or fairing area between the SWATH-like forward section of the hull and the more conventional catamaran-like rear of the vessel. He considers that, practically speaking, the bulbed and narrow waisted section could cover all the forward half of the hull. 30 Mr Soars refers in his construction of the patent to the references in the patent's specification to 'SWATH vessels', which he says enables him to understand the nature of the hull forms described. His construction considers the way in which the force exerted by the waves will be lower at the forward part of the hull because of the bulbous shape of the cross-section of that part of the hull, which is a typical aim of a SWATH type vessel. He observes that the wording of the patent draws attention to Figure 1 which shows a vessel with a SWATH-like forward two-thirds and a conventional looking round bilge stern. He has regard to the statements in the specification which describe the result achieved by a SWATH-type vessel as deriving from the fact that there is a smaller cross-section at the water line, which in turn implies a larger cross-section below the water line. 31 Mr Soars interprets the term 'narrow waisted' to mean that the hull has a width or beam at the water line significantly narrower than the maximum beam of the underwater hull form. While a figure for narrow waisting cannot be precisely defined due to the necessity of taking into account the overall shape of the hull below and slightly above the water line, as well as the transitioning of the SWATH-style forward part into the conventional back half, Mr Soars selects a figure of 20 percent as a general indication of a narrow waisted hull form. In practical terms, such a figure means that the hull width at the water line is at least 20 percent narrower than the maximum underwater beam width. Although noting that such precision is not necessary to understand the hull forms which are the subject of the patent, Mr Soars acknowledges that more than a minute concavity at the water line is required for the hull form to have a bulbous underwater part and a narrow waisted part extending through the water line. 33 Austal contends that, on the evidence, the compound and inherent uncertainty in the terms used in the claims cannot be resolved by a skilled addressee so as to provide a commonsense assessment or understanding of the claims. Austal accepts that, consistent with a proper understanding of the specification as a whole, the reference to 'narrow waisted bulb' may be capable of referring to a circumstance where the bulb shape is present for the whole or almost all of the forward half of the hull. Austal refers to the fact that it will always be the case that the underwater forward extremity of the bulb is not waisted and therefore it cannot be said that the bulb occupies the entire forward half of the hull. At best, it could only occupy a substantial portion. Notwithstanding this conclusion, Austal contends that the claim lacks sufficient precision. 34 Austal says that a critical question is whether a clear meaning can be given to the minimum longitudinal extent of the 'narrow waisted' bulb and the extent of waisting which must exist before it can properly be said to be narrow waisted. 35 According to Stena, when the specification is read as a whole it gives sufficiently precise content to the expression 'substantial portion'. Stena refers to the prior existence of SWATH vessels and conventional catamarans, pointing out that the invention combines these two hull forms. Therefore, looked at broadly, the vessel would have a SWATH hull at the front end and a conventional catamaran form at the aft end, which difference in form requires a transition zone in between. The existence of a transition zone indicates that there is no precise transition point on the hull. Stena submits that the existence of the transition zone supports the view that there must be significant fairing between the forward and aft parts of the hull. When considering the characteristics of good stability at the aft of the hull and increased seakeeping at the forward part of the hull, one must balance considerations of the role of the vessel, the results required, and the particular circumstances which the vessel is likely to encounter. According to Stena, Figures 1, 2 and 3 also strongly support its construction. Figure 1 indicates a hull shape where the bulb and narrow waisted portion extends beyond the forward half significantly into the rearward half of the vessel. On its face, therefore, a reference to a 'substantial portion' of the forward half is a reference to hull forms in which the whole, or almost the whole, of the forward half of the hull has the relevant feature. 36 The evidence of Mr Soars supports the conclusion that there is sufficient clarity and certainty in the expression 'substantial portion'. He says that on first reading the specification the language conveyed three parts to him and not two halves . The three parts were a forward section, an aft section and a transition zone. His interpretation was that 'substantial portion' is a reference to more than 50%, and thus the claim envisages a bulbous shape to the underwater hull over most or all of its forward half. He reached this conclusion as a consequence of the references to two characteristic shapes in the inventive hull, namely the SWATH-like forward end and the more conventionally shaped rear end, which are then required to merge. 37 Mr Quigley, a witness called for Austal, considers that Mr Soars gave undue weight to the word 'substantial' in reaching his conclusion. Austal points out that Mr Soars conceded that Figure 1 was different to what he had in mind before he first saw it, and that he paid little regard to the features of the preferred embodiment as depicted in that drawing. There is nothing, Austal says, to compel the universal conclusion that the relevant portion of the forward half can be as little as 50% because of the lack of precision in the expression 'substantial portion'. Mr Quigley considers that the expression is imprecise and its parameters unclear. He attacks Mr Soars' construction on the basis that it was imprecise because he could not confidently give any exact figure to the expression. Mr Soars, it is said, conceded that the term 'substantial' is open to diverse meanings. 38 In my view, the evidence indicates that it is not necessary to have numerical parameters to ascertain the meaning of 'substantial portion'. Having regard to the proposed practical operation of the vessels, and read in the context of the specification as a whole, I prefer the construction of Mr Soars to that of Mr Quigley. The meaning of the expression can be more closely defined when assessing the circumstances and objectives of the particular design of a vessel in the particular conditions in which it is expected to operate. The specification allows for a range of forms which will differ according to these variables. Accordingly, I do not consider that the expression is obscure or uncertain or otherwise inappropriate, regardless of whether considered in isolation from or in context of the other requirements in the specification. Such vessels have a narrow hull waist, or narrow cross section, at the water line. That is, the hull width is narrower in the region of the water line than both above and below the water line. There are numerous references to the bulbous shape. For example, 'pronounced bulbous shape solely at the foreward part of its underwater body'. The bulbous shape of the forward part of the hull cross-section --- a relatively narrow hull width in the vertical region of the hull extends up through the water line. 41 It is noteworthy that the reference is to a waist which is narrow. Not all waisting can of course be described as 'narrow'. As a matter of language, the expression 'waisting' requires only a discernable narrowing. However, given that the expression at issue here is 'narrow waisting', I agree with Bennett J that the expression 'narrow waisting', on its correct construction, means a 'significant narrowing': see Austal Ships Pty Ltd v Stena Rederi Aktiebolag (2004) 66 IPR 420 at 433-434. 43 Mr Soars agreed that a hull with an underwater bulb which, at the waterline at 50 percent of the forward half of the hull, is waisted at little more than 20 percent would be profoundly different to the preferred embodiment in its ability to dampen the pitching of the vessel. Such a hull would have only one quarter of the waisting of the preferred embodiment at 50 percent of the forward half of the hull (that is, 20 percent waisting compared with 80 percent). Although Mr Soars ultimately put the requirement as being any waisting in excess of 20 percent, Austal notes that in cross examination Mr Soars referred to the expression 'narrow waisted' as being a vague one. By contrast, Mr Quigley considered that a vessel could not be a SWATH style vessel unless it had a waisting of at least 70 percent. He added that he had never seen a SWATH with only 20 percent waisting, stating that although he was unable to determine from the claims of the specification a precise percentage for the narrow waisting, a significant narrowing of the waist would require at least a 50 percent narrowing of the maximum underwater hull width. Accordingly, Austal submits that that degree of waisting, on the language of the claim, must be more than 50 percent. 44 The difficulty with the evidence of Mr Quigley is that he has regard solely to the SWATH-type characteristics of the vessel. He has given insufficient weight to the hybrid nature of the hull design issue in suit. In my view, a narrowing of the waisting in the order of 20 percent or more could be said to be a significant narrowing. I accept the evidence of Mr Soars on this point. Accordingly, it can be said that claim 7 incorporates claim 1 and is dependent on it. When read literally, integer 1.5 and claim 7 have different and inconsistent requirements. In integer 1.5 there must be a continual decrease in the forward direction, whereas claim 7 requires that the width is substantially constant in the sternward quarter and narrows towards the prow. 46 Stena submits that the two requirements must be read together with the consequence that the requirement in claim 7 that the width remains substantially constant must replace the reference to 'continually decreases' in claim 1. 47 Both Mr Soars and Mr Quigley considered that the 'substantially constant' requirement of claim 7 and the requirement of integer 1.5 were alternatives, so that there would be an inconsistency if claim 7 was construed so as to import the 'continually decreases' requirement of integer 1.5. Mr Soars went on to state that the term 'substantially constant' means constant or almost constant. He envisaged a water line width which is either constant over the sternward quarter of the hull or varies slightly or by a small amount. He expressed the view that where any variation in the width of the hull is less than 1.5 percent of the average width, this variation would be insignificant in the overall form of the hull. 48 As a consequence of this view, Mr Soars considered that the width of the hull in the sternward quarter of the Austal 94 hull is substantially constant. Similarly, in the case of the Austal 196 and Austal 285 hulls, he regards the width of the hull at the water line as substantially constant in the sternward quarter, and any deviations as insignificant. 49 Mr Soars' conclusion is that each of the three impugned Austal hulls shapes incorporate integer 1.6 of claim 1 because they have a hull form in which the cross-sectional shapes throughout a substantial portion of the forward half have a bulbous underwater part and a narrow waisted part which extends through the water line. He also considers that each of the impugned Austal hulls has a width at the water line which is substantially constant, and therefore incorporates this feature. 50 In order to give content to both integer 1.5 and claim 7, it is appropriate to read integer 1.5 as requiring that the width of the hull at the water line is substantially constant in the sternward quarter and then narrows towards the prow. In this way the inconsistency can be resolved, all the while having regard to the fact that the requirement in claim 7 is specifically directed to the sternward quarter of the vessel whereas integer 1.5 refers to the entire hull. In my view, this is a fair and reasonable reading of the claims in the light of the specification as a whole, and is in accordance with the principle that a dependent claim incorporates the features of an earlier claim unless it is clear that the later claim is intended to cover a modification of the earlier claim: Blanco-White, Patents for Inventions (4 th ed., 1974) at [2-210]. In the present case such a modification, in my view, was intended in relation to the sternward quarter of the inventive hull form. 51 On this interpretation, claim 7 is not otiose and is given a commonsense construction when looked at in context of the whole specification. Further support for this interpretation is gleaned from comparing the claims as they stood immediately prior to the amendments made with effect from 5 March 1998. The previous version of claim 7 (which was then claim 8) removed the words 'generally decreases in the forward direction' from claim 1, and substituted them for the words 'is substantially constant in the case of the sternward quarter part of the vessel and then narrows towards the prow of the vessel' in claim 7. Accordingly, claim 7 was always intended to have its own specific width requirement referable to the sternward quarter which substituted for the more general width requirement appearing in claim 1. 52 I am of the view that the two claims can be read in a modified way, such that the width of the inventive hull be substantially constant in the sternward quarter and then narrows forward. This reading has significant implications when considering whether there has been an infringement in respect of the Austal 94 hull form. 54 The infringement claim concerns six multi-hull seagoing vessels, which were manufactured and sold by the respondents. Each of the six vessels were manufactured in accordance with one of three hull forms used by the respondents as set out in the following table. 56 Austal submits that because the Austal 94 vessels actually expand by 147 millimetres between the 100 percent and 90 percent frames in the sternward part of the hull they do not infringe the patent. This is because integer 1.5 requires that the width of the hull at the water line 'continually decreases in a forward direction'. Accordingly, if the vessel increases rather than reduces in width, there can be no infringement. 57 I do not accept this argument. I accept the evidence of Mr Soars that the increase is insignificant and immaterial, and reject the submission of Austal that it is a significant deviation which takes the Austal 94 vessel outside the patent's integer 1.5. Although the deviation percentage between the 100 percent and 90 percent frames is 1.6 percent, which exceeds Mr Soars' suggested allowable maximum deviation of 1.5 percent, in my view this deviation must on the evidence be accepted as immaterial and insignificant or barely discernible. 58 Additionally, I consider that on a proper construction of integer 1.5 and claim 7 the inconsistency in relation to the width requirements be resolved on the basis that claim 7 varies integer 1.5. The resulting requirement is that the hull width at the water line in the sternward quarter must be substantially constant before then narrowing forward. 59 Mr Quigley accepted that a hull width which decreased only slightly would be 'substantially constant' and that this expression is less exacting than the expression 'continually decreasing'. In my view, a hull which increases in width by 147 millimetres would still be regarded as 'substantially constant'. Claim 7, while being dependent on claim 1, operates to clarify and vary the meaning of integer 1.5, so that the inventive hull has a sternward quarter at the water line which is 'substantially constant' before it then 'continually decreases' towards the prow of the vessel. 60 In relation to Austal 196 and Austal 285, Austal accepts that the width of the sternward quarter of these hull forms is 'substantially constant', despite portions of the sternward quarter of these vessels being parallel. However, Austal does not accept that the vessels infringe claim 1 of the patent specification because they do not 'continually decrease'. Having regard to my conclusion in relation to claim 7, which more specifically deals with the sternward quarter being 'substantially constant', I do not think that claim 1 is applicable. Accordingly, I consider that the three hull forms are, in relation to their width , caught by claim 1 and claim 7. 61 The degree of waisting of the preferred embodiment of the inventive hull is set out at [41] above. This narrowing ranges from 85 percent narrowing at 40 percent of the forward half of the hull to 42 percent at midships (100 percent of the forward half). Of course, the preferred embodiment is indicative only and does not limit the range of narrowing which can be comprised within the claim. In addition, the evidence also demonstrates that almost the entire forward half of the Austal 94 hull shape exceeds 25 percent narrowing. In my view, that extent of narrowing can be said to come within integer 1.6. 63 By contrast, it cannot be said that all or almost all of the forward half of the Austal 196 and Austal 285 possess a significant waisting. Indeed, Stena even accepts that Austal 196 and 285 are closer to the margins of the claims in respect of the requirements in integer 1.6 for a 'bulbous underwater part' and 'narrow waisted part which extends through the waterline'. In the case of Austal 196 hull there is a narrowing from 25.5% at 50% of the forward half of the hull to 5.8% narrowing at midships. In the case of the Austal 285 hull there is a narrowing from 27.1% narrowing at 50% of the forward half of the hull to 8.5% narrowing at midships. In my view, both of these vessels are outside the claim because they do not satisfy the requirement that they should be significantly narrow waisted for all or almost all of the forward half of the hull. 64 Accordingly, in relation to the question of infringement, I consider that the Austal 94 hull form is within claims 1.6 and 7 and thus infringes the patent. I also consider that both the Austal 196 hull form and the Austal 285 hull form are outside claims 1.6 and 7 and consequently do not infringe the patent. The determination is important because it affects the questions of obviousness and novelty due to the fact that the Stena hull forms which constitute the embodiment of the claimed invention were disclosed after 1991 but before 1998. 66 The priority date of the claims is to be determined according to ss 43 and 114 (1) of the Act and regs 3.12 and 3.14 of the Patents Regulations 1991 (Cth) ("Regulations"). The effect of these provisions is that the priority date of the current patent is the filing date in Australia, namely 28 January 1992, unless the Regulations so provide. However, if the claims of the patent are fairly based on matter which is disclosed in the original application document in Sweden, then the priority date will be the date of filing in Sweden, namely 30 January 1991. In other words, if the present claims cover matters which were in substance really and reasonably clearly disclosed, so that the invention as now claimed is broadly described in the body of the original specification considered as a whole, then the priority date will be taken as 30 January 1991: see Pfizer Inc v Commissioner for Patents [2005] FCA 137 ; (2005) 141 FCR 413 at 420; Rhem Pty Ltd v Websters Security Systems (International) Pty Ltd (1988) 81 ALR 79 at 95; Lockwood Security Products Pty Limited v Doric Products Pty Limited [2004] HCA 58 ; (2004) 217 CLR 274 at 300-301. 67 The submission by Austal in relation to the question of priority date is that if the words 'substantial portion' in integer 1.6, when properly interpreted, mean something other than 'all or almost all the forward half of the hull', then the amendments made on 5 March 1998, which introduced the feature for the first time, materially altered the scope of the invention claim, therefore rendering the priority date the date of the amendments. This is said to be so because, prior to the amendments, the specification described a bulbous and narrow waisted part as extending throughout all of the forward half of the hull. Indeed, in the case of the preferred embodiment, the bulbous narrow waisted part extended throughout all or almost all of the forward half and into the sternward half of the hull. Thus if the term 'substantial portion' means something other than all or almost all of the forward half, then the amendments enlarge the scope of the claim because the bulbous and narrow waisted part need only be located in a substantial portion of the forward half of the hull. 68 For reasons given earlier on the question of construction, I am of the view that the expression 'substantial portion' means all or almost all of the forward half of the hull. Therefore, the arguments advanced by Austal do not arise. 69 In any event, even if the question of construction had been decided differently, I would conclude that integer 1.6 is in substance disclosed in the original application in Sweden and the claims are thus entitled to priority as from 30 January 1991. On a fair and commonsense reading of that patent specification as a whole, there is a real and reasonably clear disclosure of the invention. The body of the specification and the claims provide a broad and general disclosure of a family of hull shapes incorporating a conventional catamaran aft and a SWATH-like shape forward with a transition zone between the two. There is no specific numeric or percentage limitation as to the extent of the length or size of the respective shapes, nor is there an explicit requirement that the bulbous underwater part and the narrow waisted part must extend through the whole of the forward half. The language used is cast in terms broad enough to allow for a spectrum of possible versions of the hull shape, depending on particular needs and circumstances of operation. The specification simply requires that the cross section of the hull has a substantially onion-shape in the forward part of the hull. It is a general disclosure not limiting the bulb to the whole of the forward half. There is a clear difference between the references to a forward half and a forward part . The language of the original application in Sweden is not prescriptive or precise as to any limitations of forms. It is comprehensive and flexible, and the 5 March 1998 amendment does not materially alter the scope of the invention claim in such a way as to defer the priority date. 70 Mr Soars' evidence confirms the above conclusion. I accept his evidence that the inventive hull shape begins as a pronounced onion-shape merging into a catamaran aft, whereby at some point in between the two areas there will be a bulb which is not 'pronounced'. He did not consider that the word 'pronounced' required the bulb-shape to be coextensive with the whole forward half, but simply that it was required to be pronounced or narrow waisted in the forward part. Mr Soars acknowledged that Figure 1 attached to the patent specification covered a concept with a multitude of possibilities, of which the preferred embodiment was one. It was illustrative, not definitive or prescriptive. 71 Accordingly, for these reasons, I conclude that the priority date of the claims is 30 January 1991. Consequently, the disclosure of various documents and publications after the priority date but before 5 March 1998 need not be taken into account on the question of novelty or obviousness. In that case, their Honours referred to ss 7(2) and (3) the Act , which describe the statutory test as to what constitutes an 'inventive step'. Their Honours noted at [122] and [150] that the standard by which obviousness is to be determined is by reference to the understanding of a person skilled in the relevant art, who, at the priority relevant date, would possess common general knowledge in that art, and who would have had regard to any additional information referred to in s 7(3): see also Firebelt Pty Ltd v Brambles Australia Ltd [2002] HCA 21 ; (2002) 188 ALR 280 at 287-289; Tidy Tea Ltd v Unilever Australia Ltd (1995) 32 IPR 405 at 414 (per Burchett J). The Court clarified at [152] that s 7(3) has the effect of enlarging the prior art base to include relevant prior disclosures beyond that information which is shown to constitute common general knowledge in that art. 73 The High Court at [111] emphasised that it is not the role of a court to substitute its own conclusion for the objective test laid down by ss 7(2) and (3), except in the rarest of circumstances: see also Technograph Printed Circuits Ltd v Mills & Rockley (Electronics) Ltd [1972] RPC 346 at 355 (per Lord Reid). The task for the court is to look forward from the prior art base to what a person skilled in the relevant art is likely to have done when faced with the problem which the patentee claims to have solved. The Court noted at [115]-[116] the importance of secondary evidence when considering whether an inventive step has been achieved. Secondary evidence is that evidence which relates to matters such as the commercial success of the invention, the satisfaction of a long felt want or need, the failure of others to find a solution to the problem and the copying of the invention by competitors. Their Honours at [115] also refer to the necessity for a court to consider the scope and extent of the prior art, and to determine the precise advance over that which was previously in existence, when assessing the level of that prior art. 74 When considering the application of s 7(3) , the Court observed at [152] that attention must be directed to prior disclosures (that is publicly available information which is not part of common general knowledge), which a person skilled in the relevant art could be expected to have regarded as relevant to solving a particular problem. This does not mean that regard must be given to any work in the relevant art whatsoever, but rather only to that information a person skilled in the art could regard as relevant when confronted with the problem faced by the patentee. 75 In this case, it is not the principles relating to 'inventive step' and 'obviousness' which are in dispute, but rather their application. Austal submits that the hull of the invention is only a hybrid combination of desirable features of conventional catamaran hulls and SWATH hulls to produce a multi-hull vessel suitable for high speed operations in exposed seas. The design approach of Stena was not counter-intuitive. A person or team skilled in the art as at the priority date would, when seeking to modify the hull of a catamaran or SWATH into a hull of a so-called semi-SWATH in order to improve seakeeping while retaining speed and stability, design a hull form within the claims without any inventive step. This, Austal submits, demonstrates that the claimed invention is obvious. 76 Austal submits that the relevant prior art base for consideration concerns large high speed multi-hull passenger and cargo vessels suitable for use in exposed sea conditions. It argues that, prior to 30 January 1991, the advantages and disadvantages of both conventional multi-hull catamaran-type vessels and SWATH-type vessels were apparent and known to those in the field. Conventional catamarans were known to be highly efficient with low resistance and capable of high speeds greater than 30 knots. They had broad flat stern sections and were well suited to accommodate large engines, gear boxes and water jets to enable high speed propulsion. In addition, the broad flat stern sections were suitable for loading cargo on and off the stern. One difficulty they suffered, however, was bad seakeeping when operating in exposed waters, which arose from the vertical motion imparted due to the influence of waves. 77 SWATH vessels, on the other hand, had advantages of good seakeeping due to their small water plane area and the ability to move at high speeds (up to about 30 knots). However, SWATH vessels suffered hindrances in the form of limitations on their maximum speed due to high frictional resistance arising from large wetted surface areas. They also had low load stability and involved some engineering complexities, such as difficulty in installing and powering suitable water jet propulsion. As a result of this difficulty with propulsion, they were regarded as unsuitable for use above 30 knots. 78 Having identified the respective advantages in each type of vessel, Austal contends that the invention claimed by Stena was simply a combination of the stern part of a catamaran hull form with the forward part of a SWATH hull form in order to achieve the benefits of both hull forms in combination. 79 The inventive hull achieves high speeds in exposed seas while at the same time maintaining good seakeeping. The high speed is achieved by water jet propulsion, the use of which is made possible by the wide flat stern, which is a feature adopted from the catamaran hull form. Austal submits that a person skilled in the prior art would have been directly led to adopt this form of 'hybrid' hull if faced with the same problem addressed by the patent. Mr Soars agreed that the advantages of the invention were a direct consequence of marrying the respective features of a catamaran and a SWATH. The approach which Austal argues was obvious, was to start with a SWATH vessel and modify it accordingly. The design pathway would involve widening the transom to accommodate water jets and then placing those jets at or about the waterline. The transom could be lifted to reduce transom drag and ensure that the underside of the transom was reasonably close to the bottom of the water jets. Finally, the hull lines could be merged into the conventional shape of the forward part of a SWATH vessel, while retaining as much of the SWATH shape as possible. This, it is said, was an obvious solution to the disadvantages of speed suffered by the SWATH hull form. To support this contention, Austal refers to evidence that SWATH vessels (such as the "Seagull", the "Patria" and "Navatek 1"), which were known or in operation by the priority date, had good seakeeping qualities. 80 A second obvious approach advanced by Austal was to start with a catamaran hull form and modify it accordingly. Austal says that this approach had been taken in Australia before 1991, and referred to the Crowther 155, the Austal 14 and Austal 18 vessels as examples. The evidence is, however, that these vessels were designed for semi-sheltered waters, and not for exposed seas where good seakeeping was of central importance. Nor did they provide significant seakeeping improvements. Notwithstanding this, Austal submits that the improvements made by the invention could readily be made by extending the bulbous portion of the hull. Austal points to the fact that these hulls had a smaller forward water plane area than conventional catamarans, thus approximating or suggesting a type of 'hybrid' hull form. Mr Black considered that the design of the Crowther 155, the Austal 14 and Austal 18 vessels were very close to incorporating the features of the present claims. Austal argues that this design pathway of 'desensitising' the forward part of the hull to reduce vertical movement was also an obvious approach to improve seakeeping of catamarans. 81 On the question of lack of inventive step or obviousness, the evidence of Mr Soars is that the hull forms in the patent are not mere variations of already designed hull forms in existence prior to 30 January 1991. He was aware of catamarans with bulbous bows, such as the Crowther and Austal designs, which had been used on conventional cargo ships for many years to reduce the resistance of the vessels. He had carried out tank testing on the effects of bow shape on dampening motions, but felt that while they would provide some improvement it would be quite small. 82 He does not consider that someone as at the priority date would have tried to solve the problem addressed by the patent in the way set out therein. The facts that there was a lot of development work going on world-wide, including in Australia, and that nobody had resolved the seakeeping problem in the way described by the patent, supports the innovative nature of the hull shapes in the patent. 83 He states that other hull forms which had been designed sought to reduce pitching by reducing the reserve buoyancy above the water line, while the inventive hull sought to reduce buoyancy both above and just below the water line. While the same can be said of the Austal and Crowther bulbous bow catamarans, they also had bows that were substantially smaller and did not include a narrow water line or small water plane area. In the pre-existing vessels described in the Austal evidence as 'semi-SWATH', the water plane area of the forward half of the hull is conventional. The inventive design differs from these characteristics in significant respects. 84 In the opinion of Mr Soars, none of the Crowther designs or Austal designs included all the features required by claim 1. They were at most conventional catamarans with the addition of a smaller bulbous bow. They did not have a substantial portion of the forward half of the hull which was bulbed and waisted. Nor did they have a small water plane area in the forward part of the hull. The bulbous portions of the hulls did not extend beyond 10 to 15 percent of the length of the hull. They did not have hull shapes a with small water plane area forward at the water line. Other vessels relied on to demonstrate the lack of an inventive step were twin hull vessels with bulbous bows and normal (that is, not small) water plane areas at the water line in the forward half. Mr Soars stated that the defining feature of SWATH vessels is to have the maximum beam of the under water hull form significantly greater than the beam at the water line throughout the length of the hull, thereby giving a small water plane area. None of the hull forms in Australia at 30 January 1991 had water plane areas which could be described as small throughout the forward half. Moreover, the Crowther and Austal designs do not have a hull the width of which at the water line is substantially greater in the aft body than in the forward body, and thus can be said to generally decrease in a forward direction. They have a water line that is constant or near constant in the entire aft of the hull. 85 Mr Soars considers that the claims and description in the patent specification provide sufficient information to develop the design of a catamaran hull form having the features required. He sees the essence of the patent being in the fact that the hull shape has a low centre of buoyancy in the forward part of the hull, with a significantly lower than average water plane area, combined with a higher centre of buoyancy in the aft part of the hull, with a high water plane area increasing from forward to aft. He considers that a competent naval architect is given more than enough information in the patent to put the invention into practice. Mr Soars also disagrees with the approach suggested by Mr Quigley with respect to the "Patria", on which Austal relied to demonstrate a lack of inventive step in the patent. Mr Soars states that the "Patria" was a failed attempt to make a SWATH vessel more practical. He notes that the merging of a SWATH with a catamaran, as described in a journal article put in evidence, is quite different to that in the patent. The "Patria" and the hybrid in the article are simply SWATHs with more water plane area than a conventional SWATH. There was no suggestion in either source of what Mr Soars describes as a 'semi-SWATH hull' prior to the priority date. He says the design trend in the industry in the 1980s and early 1990s was towards a wave piercer design to reduce motions in a seaway. The wave piercer has its water plane width forward, which is at its widest closest to the water line and becomes narrower above and below the water line. This is the opposite from a SWATH where the water plane is narrowest at the water line and increases below and above the water line. 86 Mr Soars also notes that wave piercers were designed to achieve better seakeeping than traditional catamaran hulls by 'piercing' the waves. On the other hand, SWATH vessels minimise forces that cause pitching by reducing the volume of the hull in the vicinity of the water line, often by using struts to connect the superstructure with the underwater torpedo hull form. This has no resemblance to a conventional catamaran. The wave piercing hull was derived by starting first with a conventional catamaran hull and then reducing the free board of the hull so that the deck was above the static water line. 87 Although there was some attack was on the effect of the evidence given by Mr Soars, I am of the view that his evidence was not significantly shaken in cross-examination and I accept him as a credible witness. I prefer his evidence to that of the other witness for the following reasons. 88 In a number of significant respects the evidence of Mr Quigley was unsatisfactory and I conclude therefore that his evidence should not be accepted where it is conflict with Mr Soars'. 89 The evidence of Mr Quigley was influenced by information and knowledge acquired after the priority date as a consequence of hindsight and information given to him by instructions of a leading nature when he was first retained. The clearest illustration of this point, identified by Stena, is Mr Quigley's use of the expression 'semi-SWATH' when the term was not, as is demonstrated by the evidence, in existence until after the priority date. Furthermore, instructions alerted Mr Quigley to the Crowther 155, Austal 14 and Austal 18 hulls relied on by Austal, and he was aware of the patent to which his expert evidence would relate. While he included a discussion of SWATHS in his affidavit, none had been sold in Australia before the priority date. 90 Of particular significance when considering the evidence of Mr Quigley are the handwritten annotations made by him on the instructions he received when initially asked to provide evidence. The notes indicate that he was not aware of publications to which he later referred in subsequent affidavits. Indeed, it is difficult to identify those publications referred to in his affidavit that he would have been able to obtain if he had sought to solve the problem addressed by the patent specification prior to 1991. His attempts to explain this in cross-examination were unsatisfactory. The substance of these notes suggests that there was no distinction between SWATHS and semi-SWATHS, which he claims were known to him prior to the priority date. I am not persuaded that he undertook research on the state of naval architecture in 1991 for the purpose of giving his evidence. His later affidavits were highly argumentative in nature and in a number of respects failed to address the substance of the views expressed by Mr Soars. Finally, in cross-examination he was unable to identify what design he would have used when confronted in 1991 with the problem addressed by the patent specification. Ultimately, this supports the existence of an inventive step in the invention. 91 Other witnesses called for Austal were also unsatisfactory on this question. Mr Wagner's evidence neither relates to the issues in dispute in these proceedings, nor is based on any work done in Australia relevant in this case. Moreover, the designs with which he is familiar differ from the hull in the claimed invention. Mr Black's evidence suffers because he is not an independent witness, employed as he is by Austal, and because he was aware of the patent and had been involved in its opposition. Indeed, it is revealing to note that Mr Black described the similarities between the Austal 94 hull form and the patent claims as 'too close for comfort!'. His evidence that the expression 'narrow waisted' refers to any waisting whatsoever has already been rejected by Bennett J, with whom I agree at [42] above: see A ustal Ships Pty Ltd v Stena Rederi Aktiebolag (2004) 66 IPR 420 at 433-434. In addition, he refers to the concept of 'semi-SWATH', which indicates that his knowledge was affected by information obtained after the priority date. 92 The evidence of Mr Norman for Austal was also unsatisfactory. His evidence does not address the developments in Australia at Austal between the design of both Austal 14 and Austal 18 in 1990 and the design of Austal 94. It is significant to note that no evidence was adduced by Austal to explain the steps which were taken to arrive at the design of the Austal 94, despite the apparent availability of this information. 93 Austal relied on the "Patria", which was a modified SWATH in operation before the priority date, as an example of a vessel with SWATH-type features which could be suitably modified to solve the problem addressed by the patent. The "Patria", however, is classified as a SWATH vessel and the evidence indicates that its design and use of propeller propulsion created problems at speed. This indicates that any attempt to modify the "Patria" design would require significant design modifications in order to accommodate some form of water-jet propulsion in order to achieve speeds above 30 knots. While the "Patria" may have had good seakeeping features, this was achieved at the expense of speed, which is a critical element in the problem the invention was designed to meet. It should be noted that when Mr Quigley initially dealt with the question of obviousness, he made no reference whatsoever to the "Patria". This lends support to the conclusion that it was not a type of vessel which readily came to mind when considering the question of obviousness. 94 I do not agree that, on the evidence, it would have been a clear and simple task to make adjustments to the hull form of the "Patria" so as to include some form of jet propulsion, and thereby satisfactorily resolve the problems addressed by the patent. Moreover and more generally, it is not sufficient, in my view, simply to assert that the fusing together of the concepts of a SWATH and a conventional catamaran was an obvious solution to the problem addressed by the patent. The level of generality of this assertion is too great. 95 To further its argument that the claimed inventive step was obvious, Austal also relies on documents and information concerning the Davidson A destroyer and related vessels, which were disclosed before the priority date and showed high speed vessels designed to improve seakeeping in exposed waters. Austal submits that this information would be considered by a person skilled in the art as being directly relevant to the design of a hull suitable for such operations. The result of this submission is that the invention would be obvious once a person skilled in the art had regard to the Davidson A hull design. 96 In particular, Austal relied on prior art information in the form of some journal articles, drawn in particular from the Journal of Ship Research . These articles, which date back to 1960, are advanced as publications which Mr Quigley in fact consulted or which he could have readily located. For instance, Austal relies on information relating to the Davidson A destroyer discussed in an article in a 1970 article: Smith & Salvesen, "Comparison of Ship-Motion" (1970) 14(1) Journal of Ship Research 67. However, in my view, the articles are inconclusive. In part, this is because the Davidson A destroyer is a monohull vessel developed in the area of military defence vessels. Mr Quigley gave evidence that he is now aware of the Davidson Laboratory, but did not recall whether he was aware of it in January 1991. He says that it was possible that he might have sought out a copy of the publications concerning the vessel. His evidence is quite unsatisfactory on this aspect. The mere fact that the vessel was a monohull would not of itself eliminate from consideration publications discussing it, but Austal has not explained precisely how such modification to a monohull shape could be achieved so that it would come within the claims. Where the evidence of a relevant person constitutes no more than speculation as to what that person might have done in circumstances that had never arisen ... the evidence will have little weight'. 99 Furthermore, simply because the earlier Austal hulls and Crowther hull included a bulbous bow in a catamaran hull design does not automatically mean they were relevant to a consideration of the problem addressed by the patent. It is left unclear as to the nature and extent of the modifications required to make such vessels suitable for use in exposed waters. I accept the evidence that these vessels did not disclose the use of a small water plane area for a substantial portion of the forward half of the vessel, which is a crucial feature of the patent specification. They were more akin to the water plane areas used in conventional catamarans at that time. The use of such vessels in calm or sheltered waters does not necessarily provide any useful guide to the design of a hull suitable for use at high speed in exposed waters, in which conditions the problem of good seakeeping is greatly increased. 100 The onus is on Austal to show that the documents and publications establish a lack of inventive step. It is not enough merely to show that the documents and publications relied on could have been ascertained. Rather, Austal must show that they were documents and publications which the skilled person could be 'reasonably expected' not only to have ascertained but also to have understood and regarded as relevant to the inventive hull form. In my view this has not been proven. 101 The evidence does not satisfy me that the documents and publications relied on by Austal could have been reasonably expected to have been ascertained by a person skilled in the art who would understand or regard it as relevant as at the priority date. In my view, the evidence advanced by Austal amounts to little more than an argument that the respective advantages of the SWATH and catamaran vessels might have been fused as at the priority date, but no obvious way in which this might have been accomplished has been indicated in any convincing manner. It is not enough to suggest that, conceptually or theoretically, there may have been a combination of the desirable characteristics of both types of vessels in order to achieve the qualities achieved by the patent. 102 For the above reasons, I am not satisfied that there was no inventive step in this case. Austal has failed to make out its case that there was no inventive step in the invention, as required by ss 7 and 18 of the Act . This argument depends on a finding that the priority date is 5 March 1998. For the reasons given above, I consider that the priority date is 30 January 1991. Accordingly, Austal's submissions on novelty must fail. The use of percentages following expressions such as 'greater than' or 'less than' does not mean that the claims fail to define the invention. Nor can it be said that the specification does not describe the invention fully. The language used in the claims is clear and comprehensive. 105 As to the question of fair basis, because I consider the patent as granted is fairly based on the disclosure in the original application in Sweden, and taking into account the similarity of that patent specification and the present patent specification, I consider there is fair basis for the claims in this case. The claims do not travel beyond the disclosure. The consistory clauses at pages 3 to 3A reflect the language of the claims and provide a fair basis for them: see Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 58 ; [2004] 217 CLR 274 at 293-294. The cross-claim as to invalidity is dismissed. I direct the applicant to draft and file Short Minutes of Orders to deal with the precise form of orders and as to future directions in this matter. I will hear the parties on costs and on the form of orders at a time to be arranged with my associate. I certify that the preceding one hundred and six (106) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. | hull structure of multi-hull vessel improved seakeeping at high speeds construction of claims application of agreed legal principles to present case whether claims ambiguous or uncertain whether ambiguity in 'substantial portion' or 'narrow waisted' 'substantial portion' not defined by numerical parameters 'narrow waisted' means 'significant narrowing' construction of inconsistent claims modification of claims infringement of patent whether width of allegedly infringing vessels continually decreases priority date of patent whether claims in australian application disclosed by claims in earlier swedish application whether amendments affect priority date inventive step and obviousness consideration of high court in lockwood application of agreed legal principles to present case whether combination of swath forward hull with catamaran stern hull obvious whether prior art disclosed inventive step before priority date prior art of vessels built before priority date prior art of publications published before priority date novelty whether claims are clear and succinct, define the invention and possess fair basis. narrow waisting substantial proportion continually decreases patent words and phrases |
The ACCC alleges that Harris Scarfe engaged in misleading or deceptive conduct, contrary to s 52 of the TP Act, and made false or misleading representations with respect to the prices of goods in connection with their possible supply contrary to s 53(e) of the TP Act, by publishing a sale catalogue in October 2006 and a television commercial. The television commercial related to a sale at Harris Scarfe stores in October 2006. It was played on the three Melbourne commercial television channels and the two rural Victorian commercial television channels on 11 occasions between 5 pm and 11:30 pm on 11 October 2006 relating to a sale at Harris Scarfe stores. The sale catalogue was published and distributed in South Australia, Victoria and Tasmania relating to the same sale. There were about 1,159,000 copies of the sale catalogue distributed through inserts in newspapers, letterbox drops, and direct mailing as well as being available in Harris Scarfe stores, and on Harris Scarfe's website. In South Australia, about 437,000 of them were distributed on 7 and 8 October 2006. In Tasmania, about 169,000 of them distributed on 7, 8 and 10 October 2006, and in Victoria, about 553,000 of them distributed on 10 and 11 October 2006. Harris Scarfe conducts a retail business through approximately 20 department stores in South Australia, Tasmania and Victoria. In October 2006, Harris Scarfe conducted a mid-season clearance sale through those stores. The sale was conducted in South Australia between 9 and 15 October 2006, in Tasmania between 11 and 17 October 2006, and in Victoria between 12 and 18 October 2006. Harris Scarfe routinely promotes its advertised sales by television commercials, by publishing and distributing sale catalogues, and by publishing promotional material on its internet site or website and by in store and window displays through its stores. The ACCC describes the text and voice-over statements together as "the 20% to 60% Off Storewide Statements". I shall adopt that description. What is in dispute in respect of the television commercial is the significance of the 20% to 60% Off Storewide Statements. The ACCC asserts, and Harris Scarfe disputes, that by making those statements Harris Scarfe represented that it was offering a discount on all goods in its stores for the duration of the sale (a representation conveniently described as "the Storewide Discount Representation"). The ACCC says that that is the natural inference to be drawn from the 20% to 60% Off Storewide Statements, in the context of the entire television commercial. Harris Scarfe disputes that. It accepts that it was not offering a discount on all goods in its stores for the duration of the sale. It draws attention to the television commercial, which also contained the following text statement shown for approximately six seconds: "Discounts off regular prices. Excludes television, sound, digital cameras & toys". The statement of claim identifies three items which were offered for sale during the sale in respect of which Harris Scarfe's television commercial was said to be misleading. Harris Scarfe did not offer two particular specified televisions at 20 to 60% off the regular price. One was a Panasonic Standard Definition Viera 42" (106 cm) Widescreen Plasma. It was offered during the sale at a price which was the same as the regular price. The other was a Panasonic High Definition Viera 42" (106 cm) Widescreen Plasma which was offered during the sale at a price 10% less than the regular price. In addition, a Sony DSCH2 6MP Digital Camera had a price during the sale which was the same as the regular price. The statement of claim also says that some televisions, sound and digital cameras were not discounted at all, and some toys were not discounted at all. Those final allegations are put in issue in the defence. There is a further representation, which the ACCC alleges, was made by the television commercial, namely that all goods in Harris Scarfe stores were being offered for sale at a minimum of 20% off the regular prices for the duration of the sale, what it calls the 20% Off Storewide Representation. It says that is a natural inference to be drawn from the 20% to 60% Off Storewide Statements in the context of the entire television commercial. Harris Scarfe acknowledges that it was not offering a minimum of 20% off the regular prices of all goods in its stores for the duration of the sale, but by reason of the text statement referred to in [9], Harris Scarfe disputes that it engaged in misleading or deceptive conduct or made misleading representations contrary to ss 52 and 53(e) of the TP Act by that conduct. There are also a number of products offered for sale which are pleaded as having been offered, contrary to the 20% Off Storewide Representation, at less than 20% off the regular price. They are also items depicted in the catalogue about which the ACCC makes allegations. I shall refer to them when considering whether those alleged contraventions are made out. It comprises 20 pages. It is brightly coloured. The front page after the introductory Harris Scarfe logo has in very big print "MID SEASON CLEARANCE" and immediately below in slightly lesser sized print and in a different colour print appear the words "20%-60% OFF* STOREWIDE". The ACCC alleges that as a result, Harris Scarfe made the Storewide Discount Representation. It says that is the natural inference to be drawn from the statement in its context in the sale catalogue. Harris Scarfe points out that, almost at the bottom of the front page, albeit in a much smaller print than that of the opening words of the catalogue, is stated the following: "*Discounts off regular prices. No further discounts apply to catalogue lines. Excludes television, sound, digital cameras & toys". On the bottom of each subsequent page of the catalogue the same entry appears, save that the words "Excludes television, sound, digital cameras & toys" do not appear. By reason of that footnote and in the context of the catalogue as a whole, Harris Scarfe denies that the Storewide Discount Representation was made at all. The ACCC also claims that by the same statement on the front page of the catalogue, Harris Scarfe made the 20% Off Storewide Representation, that also being the natural inference to be drawn from the statement at the commencement of the catalogue and in its context in the sale catalogue. Harris Scarfe says that, in context and because by reference to the asterisk the entry at the bottom of the front page in smaller print is also referred to, it did not make the 20% Off Storewide Representation. It accepts that it did not offer a 20% discount on all goods in its stores for the duration of the sale. There are a series of "banners" or headlines on succeeding pages of the catalogue. Harris Scarfe points to them as part of the relevant context. Page 2 of the catalogue provides an illustration. There is a banner advertising: "15% OFF* ALL LCDs, VCRs and Digital Set Top Boxes". The top half of the page apparently depicts and describes several such products. Page 2 of the catalogue, in the right-hand third of the bottom half, also has another banner prominently displayed: "15% OFF* ALL Audio & MP3 Players". And page 3 of the catalogue, in the top two-thirds, has a banner in large print "15% OFF* ALL 5MP Digital Cameras & Mini DV Camcorders". It depicts nine particular camera products. The remaining pages of the catalogue also have various banners dealing with different product types, none of which has a heading suggesting a discount of less than 20 to 60% off, but with varying percentage discounts either at or greater than 20%. In each instance, the banner is asterisked to direct attention to the footnote. The banners themselves, in a number of instances, are said to give rise to specific representations. I have referred to page 2 of the sale catalogue with the banner at its top "15% OFF* ALL LCDs, VCRs and Digital Set Top Boxes". Beneath it appear images of two television sets, a DVD player, a DVD/video cassette recorder combination player, and two digital set top boxes each with a statement of its price, and in five of the six instances with a savings amount also specified. The ACCC alleges that that conduct involved representations that all of the items depicted were being offered for sale at 15% off the regular prices for the duration of the sale --- the 15% Off Home Entertainment Representation --- that being the natural inference from the banner, the images and the statement of the sale prices in their context in the sale catalogue. Harris Scarfe say that it did not make the 15% Off Home Entertainment Representation, because page 2 of the catalogue at its bottom, with an asterisk has the footnote entry, "Discounts off regular prices. No further discounts apply to catalogue lines ...". However, it acknowledges that it was not offering the two television sets depicted on page 2 of the catalogue at 15% off the regular price. In addition, it says that the two television sets depicted were plasma televisions (as they are described), and therefore did not fall within the banner description "15% OFF* ALL LCDs, VCRs and Digital Set Top Boxes". It also points out that in respect of one of the televisions, the price offered is said to give a saving of $300 with a price of $2,699, and an "R.R.P. " (that is, a recommended retail price) of $2,999, so that it is self-evident that the discount was 10%. The other television is advertised at a price of $1,999, which is the regular price. In that instance there is no comparison price or specified saving. I have also referred to page 2 of the catalogue under a banner (in its bottom right third) "15% OFF* ALL Audio & MP3 Players". Below it are the images of two MP3 players, a radio and a clock radio. That has been called the 15% Off Audio Representation. Each product depicted has a statement of its price, and a specified saving and a "Reg. " (that is, regular) price. The ACCC alleges that by the 15% Off Audio Representation, each of those items was represented as being offered for sale at 15% off their regular price for the duration of the sale, that being the natural inference to be drawn from the banner, the images and the statement of the sale prices in their context in the sale catalogue. The ACCC alleges that the item, namely a Samsung Z5 Music & Photo 2GB MP3 Player, is offered at a price of $289, a saving of $30 and a regular price of $319, and therefore with a discount of 9.4% only. Harris Scarfe says that there was no 15% Off Audio Representation in relation to the items depicted because of the footnote comment at the bottom of the page. It also says that the actual discount in respect of the one item particularised by the ACCC was stated as $30 adjacent to the image of that item, as was the regular price of $319, so that simple arithmetic would indicate that the saving was a little less than 10%. Page 3 of the catalogue has the heading in the banner "15% OFF* ALL 5MP Digital Cameras & Mini DV Camcorders" under which are images of several digital cameras and camcorders. The ACCC asserts that Harris Scarfe has thereby represented that all of the items depicted were being offered for sale at 15% off the regular prices for the duration of the sale --- the 15% Off Cameras Representation --- because that is the natural inference to be drawn from the banner, the images and the statement of the sale price in their context in the sale catalogue. It is plain enough that five of the six items depicted were not offered at 15% off the regular prices, because each has a highlighted price, a saving amount, and in smaller print a regular price. Harris Scarfe admits that it did not offer all of the digital cameras and camcorders depicted at 15% off the regular prices. It notes that the footnote on page 3 of the sale catalogue contains the statement: "*Discounts off regular prices. No further discounts apply to catalogue lines". It further says that the items in the table immediately above, other than item (a), were not 5MP Digital Cameras or Mini DV Camcorders as referred to in the banner. Items (b) and (c) are Camcorders and not Mini DV Camcorders and items (d) and (e) are not described as 5MP Digital Cameras and by their description are 6MP Digital Cameras. It also points out that, in respect of the first three of those items, the regular price and the savings were stated so the percentage discount could readily be calculated. Hence, Harris Scarfe denies making the 15% Off Cameras Representation, and it denies misleading or deceptive conduct or making false or misleading representations with respect to the price of those goods. The bottom quarter of page 3 of the catalogue has a banner "20% OFF*ALL Cordless Phones". Under the banner are five cordless phones each with a statement of the sale price. The ACCC alleges that that conduct involved representations that each of the items depicted was being offered for sale at 20% off the regular prices for the duration of the sale --- the 20% Off Cordless Phones Representation --- as the natural inference to be drawn from the banner, the images and the statement of the sale prices in their context in the catalogue, and that in respect of each of the five cordless phones depicted that representation was not accurate. There is no dispute as to the terms of the advertisement, but a dispute that the 20% Off Cordless Phones Representation was made. Harris Scarfe admits that it did not offer all of the cordless phones depicted at 20% off regular prices. It again draws attention to the asterisked footnote at the bottom of that page, and further says that each of the items referred to in items (b) to (e) of the table set out below (taken from the sale catalogue) stated the actual discount and so did not contravene ss 52 or 53(e) of the TP Act. The bottom half of p 4 of the sale catalogue has a banner headline "20%-25% OFF*ALL Personal Care Appliances". Underneath are images of three shavers, a massager, two hairdryers, an electric toothbrush, two grooming kits and a foot spa each with a statement of its sale price, and in each instance with a description of the regular price and the amount of the saving. The ACCC alleges that by that conduct Harris Scarfe represented that all of the items depicted were being offered for sale at 20% to 25% off the regular prices for the duration of the sale --- the 20%-25% Off Personal Care Representation --- that being the natural inference to be drawn from the banner, the images and the statement of the sale prices in their context in the sale catalogue. Harris Scarfe denies that it made the 20%-25% Off Personal Care Representation. It admits that it was not offering all of the items depicted in that part of the catalogue at 20% to 25% off regular prices. Again, it draws attention to the footnote at the bottom of page 4 of the catalogue "*Discounts off regular prices. No further discounts apply to catalogue lines". It also notes that, in respect of each of the items referred to, the saving was stated in respect of each of the items of which the ACCC complains. Page 5 of the catalogue has the banner: "20%-50% OFF* ALL Kitchen Appliances". There are 19 items depicted on that page, including a Sunbeam Can Opener. The ACCC alleges, and Harris Scarfe disputes, that by that conduct it represented that each of the items depicted was being offered for sale at 20% to 50% off the regular prices for the duration of the sale --- the 20%-50% Off Kitchen Appliances Representation --- because that is the natural inference to be drawn from the banner, the images and the statement of the sale prices in their context in the sale catalogue. The ACCC further alleges that the can opener was not offered for sale at a saving of 20% to 50% off its regular price. It was advertised at $29.95, and its regular price as stated in the catalogue was $34.95 representing a specified saving of $5. That meant the discount was 14.3%. Harris Scarfe admits that the can opener depicted was not offered at 20% to 50% off its regular price, but it draws attention to the asterisked footnote to page 5 of the catalogue: "*Discounts off regular prices. No further discounts apply to catalogue lines". Again it points out that the actual cash saving on the can opener was stated so that the percentage discount was readily calculated. It thus denies making the representation, or that it acted in a misleading or deceptive way, or in a way which involved making a false or misleading representation with respect to the price of the can opener. It appears that the ACCC received a complaint about the television advertisement and about the catalogue on 12 October 2006 and undertook an investigation. That included access to the website of Harris Scarfe, and a visit to the Harris Scarfe retail store at 81 Rundle Mall, Adelaide on 13 October 2006. As the statement of claim makes no specific allegation about the terms of in-store promotions, beyond the availability of the catalogue, it is not necessary to refer to the detail of the in-store promotions. Subsequently, a copy of the television advertisement was procured and examined. There was then an extensive period of correspondence between the ACCC and Harris Scarfe respectively seeking and providing information and comment on various matters arising from the investigation. It extended over the period from 13 November 2006 to 13 March 2007, following which these proceedings were commenced on 10 October 2007. Harris Scarfe provided information as requested by the ACCC. It was part of Harris Scarfe's submission that the various alleged representations (if made) were not misleading or deceptive, because of certain surrounding circumstances. They are set out in the immediately following paragraphs. Harris Scarfe referred to an undertaking given on 3 November 2004 (the 2004 undertaking) to the ACCC under s 87B of the TP Act by which it implemented a Trade Practices Compliance program (TPC program). The 2004 undertaking under s 87B followed an investigation commenced in December 2003 by the ACCC in relation to concerns that Harris Scarfe, during the promotion of sales at the end of 2003, had made representations in relations to savings that contravened ss 52 and 53(e) of the TP Act. By cl 19 of the 2004 undertaking, Harris Scarfe undertook to implement a TPC program in a manner and form described in the undertaking within three months of that undertaking coming into effect, and to maintain and continue to implement the TPC program for a period of three years from its date. Subsequently, the ACCC monitored the compliance of Harris Scarfe with the TPC program obligations under the 2004 undertaking. Harris Scarfe then engaged Watchdog Compliance Pty Ltd (Watchdog Compliance) as a compliance adviser to Harris Scarfe. Its Managing Director David Johnson then had regular dealings with Harris Scarfe's Compliance Office. In about May 2005, the ACCC commenced a further investigation in relation to concerns that Harris Scarfe had contravened s 65C of the TP Act in relation to the supply of certain children's nightwear. On 2 September 2005, through Watchdog Compliance, Harris Scarfe sent a copy of its trade practices compliance manual (the compliance manual) to the ACCC. There was subsequent correspondence between the ACCC and Watchdog Compliance in relation to Harris Scarfe's obligations under cl 19 of the 2004 undertaking. That was followed on 23 November 2005 by the ACCC accepting a written undertaking given by Harris Scarfe for the purpose of s 87B of the TP Act (the 2005 undertaking) in relation to the investigation concerning the supply of certain children's nightwear. Clause 14 of the 2005 undertaking required Harris Scarfe (inter alia) to extend its TPC program to the application of Pt V (consumer protection) and in particular Pt V Div 1A (product safety and product information) of the TP Act for a period of three years from its commencement. The ACCC again monitored Harris Scarfe's compliance with those obligations. In February 2006, the ACCC commenced a further investigation in relation to concerns that Harris Scarfe between about January 2004 and February 2006 had made representations in relation to the contents of certain quilts which, it was concerned, may have been false and likely to mislead consumers. There was correspondence between the ACCC and Harris Scarfe through its solicitors, Cooper Grace Ward Lawyers, including a letter of 10 May 2006 enclosing a document entitled "Report to the Australian Competition and Consumer Commission on review of the Trade Practices Compliance Program of Harris Scarfe Australia Pty Ltd (Harris Scarfe) 26 April 2006" (the Cooper Grace Ward Report). That was followed by further communications between Harris Scarfe or its representatives and the ACCC. On 4 September 2006, the ACCC accepted a further written undertaking from Harris Scarfe for the purposes of s 87B of the Act (the 2006 undertaking) in relation to the investigation concerning the quilts. Clause 19 of the 2006 undertaking required Harris Scarfe to amend its TPC program to the extent necessary to ensure awareness of its responsibilities in relation to ss 52, 53(e) and 55 of the TP Act, and to minimise risk of future breaches of those provisions. Clause 20 of the 2006 undertaking required it, to the extent necessary, to amend its TPC program to provide for two independent audits on the effectiveness of its TPC program, the first to be undertaken within 18 months, and the second within three years of the commencement of that undertaking. Clause 21 of the 2006 undertaking required Harris Scarfe to maintain and continue to implement its TPC program for a further period of three years from the date of its commencement. That history, together with one additional matter, largely comprises what Harris Scarfe called the surrounding circumstances. The additional matter is that there is no evidence that any person within the class to whom the television commercial was broadcast or the sale catalogue was published has actually been misled. That is correct. Of course, the absence of such evidence is not conclusive of the fact that the various representations, if made, were not themselves misleading or deceptive. Nevertheless, it is a relevant piece of information. Harris Scarfe contends that it is the more relevant in the present circumstances because Harris Scarfe customers are a particular subclass of consumers who are educated and well-versed in Harris Scarfe advertisements. Following the November 2004 undertaking, Harris Scarfe implemented a TPC program. It provided a report to the ACCC through Watchdog Compliance about that TPC program on 2 September 2005. Watchdog Compliance is shown to be a reputable organisation established specifically for the purpose of advising clients on trade practices compliance in Australia and New Zealand. Mr Johnson of Watchdog Compliance liaised on a regular basis with Harris Scarfe, and Watchdog Compliance has been consistently retained since January 2005. The audit of its TPC program conducted in March and April 2006 by Cooper Grace Ward Lawyers was for, or included, the purpose of being able to "identify potential contraventions of the TP Act or weaknesses in the compliance program and to advise on how to rectify them". That led to the Cooper Grace Ward Report which concluded, inter alia, that "there has not been any misrepresentation of the sales price of goods within a random selection of catalogues over the past 12 months". That information was provided to the Board of Harris Scarfe in May 2006. And, Harris Scarfe points out that it continually reviewed its TPC program. In May 2006, it requested its internal compliance officer to develop a proactive plan for the development of the TPC program for the next 12 months. She did that in conjunction with Watchdog Compliance. An action plan was prepared and focus areas were reviewed every three or four months according to a list prepared by Mr Johnson. During the 12 month developmental process from May 2006, which extended to the period of the subject conduct in October 2006, no difficulty with promotional material that was being produced was identified by Watchdog Compliance. In fact, Mr Johnson of Watchdog Compliance gave evidence of his significant oversight of Harris Scarfe's processes over that period and his liaison with the compliance manager of Harris Scarfe about its TPC program and other trade practices related matters. Watchdog Compliance specifically considered from time to time price comparison advertising, prescribed consumer product standards, promotional material, product plans, the availability of stock, warranties and refunds, the complaint handling system, store visits and Board reporting. Harris Scarfe accepts that such evidence does not show conclusively that it did not contravene ss 52 and 53(e) of the TP Act as alleged. However, it says that those matters are powerful evidence on the question of whether any of the pleaded representations was misleading or deceptive, or likely to mislead or deceive within the meaning of s 52, or was false or misleading within the meaning of s 53(e). That is because the external organisation engaged to review and develop Harris Scarfe's TPC program did not identify any difficulty with its promotional practices at the time, particularly as it specifically considered Harris Scarfe's promotional material and other matters which cross into the subject of the present proceedings, such as store visits and price comparison advertising. Finally, Harris Scarfe contends on the basis of the further evidence that, in the event that a contravention or contraventions of ss 52 or 53(e) is established as alleged, the relief sought by the ACCC beyond declaratory relief should be refused as being substantially without utility. It presents a number of reasons for that contention. First, Harris Scarfe says that it did not undertake the impugned conduct in the belief that it was breaching the TP Act or that it considered that there was any reason for it possibly breaching the TP Act. Secondly, Harris Scarfe has developed, since the commencement of these proceedings, an "Advertising Rule Book" which is designed to complement, with greater detail, the compliance procedures contained in attachment 10 to its Compliance Manual. Attachment 10 to its Compliance Manual itself has some inbuilt processes in an endeavour to prevent Harris Scarfe from engaging in conduct in breach of the TP Act. The Advertising Rule Book also has such material. The Advertising Rule Book is directed, in part, specifically to the matters of which the ACCC complains in this proceeding. Clearly, Harris Scarfe did not (and subject to the outcome of these proceedings, does not) consider that either the television commercial or the catalogue breached ss 52 or 53(e) of the TP Act. Consequently, neither the development of the Advertising Rule Book, nor its contents can be taken as an admission. It is a sensible process to undertake, after an occurrence about which the ACCC is concerned, and to adapt to its concerns: see eg Ryan v ETSA (No 1) (1987) 47 SASR 220. Nevertheless, it is significant in my view, on the issue of the appropriateness of any orders, if a contravention or contraventions are established, that Harris Scarfe has sought to reinforce the processes which it had in place, and which it had reason to think would protect it from contravention of the TP Act, by the introduction of the Advertising Rule Book and the training associated with it. There is evidence of that training having now been undertaken. Harris Scarfe has also offered, on an open basis, to enter into yet a further s 87B undertaking in a form proposed. That form is responsive to the nature of the contraventions currently asserted in these proceedings. Further, Harris Scarfe has adopted a cooperative approach to the ACCC's inquiries at all times and endeavoured to address those concerns without the need for litigation. The applicable principles are now well established: see eg Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 ; (1982) 149 CLR 191 ( Parkdale ); Taco Company of Australia Inc v Taco Bell Pty Ltd [1982] FCA 136 ; (1982) 42 ALR 177 ( Taco Bell ). Conduct is misleading or deceptive if it induces or is capable of inducing error (to adopt the expression in Harris Scarfe's written submissions). That must of course be understood as applying not in an absolute sense, but in relation to consumers or to a relevant class of consumers. Evidence of members of the public having been misled is not conclusive: Parkdale at 198-9. Of course, the converse is also not necessarily correct. That is, the absence of evidence that members of the public have been misled does not necessarily negate the fact of a contravention having occurred. It has also been held that the words "likely to mislead or deceive" do not add much to the section: Parkdale at 198. In the submissions, nothing was made of those particular words. It is sufficient if there is a real chance that the conduct will mislead or deceive: Global Sportsman Pty Ltd v Mirror Newspapers Ltd [1984] FCA 180 ; (1984) 2 FCR 82 at 87. Importantly, whether conduct is misleading or deceptive or is likely to mislead or deceive must be determined in context. Although it is true, as has often been said, that ordinarily a class of consumers may include the inexperienced as well as the experienced, and the gullible as well as the astute, the section must in my opinion by (sic) regarded as contemplating the effect of the conduct on reasonable members of the class. The heavy burdens which the section creates cannot have been intended to be imposed for the benefit of persons who fail to take reasonable care of their own interests. What is reasonable will or (sic) course depend on all the circumstances. Not every member of the public needs to have been misled or capable of having been misled for the conduct to be misleading or deceptive. That passage was referred to with approval in Parkdale at 199 but, as the passage from Parkdale quoted above shows, it is to be measured against reasonable members of the class. In the submissions, no difference was identified between the application of s 52 and s 53(e) to the relevant conduct. The applicability of s 53(e) is similarly a question of fact to be assessed objectively in the context of the conduct and the surrounding circumstances: Taco Bell at 202. Those considerations apply equally to representations by advertising as to other forms of conduct. Whether a representation has been made in advertising material must be assessed not by a particular statement taken in isolation, but by the statement in its context and, where appropriate, in the surrounding circumstances: Trade Practices Commission v Optus Communications Pty Ltd & Optus Mobile Pty Ltd (1996) 64 FCR 326 ( Optus ) at 336-8; Australian Competition and Consumer Commission v Thorn Australia Pty Ltd [2004] FCA 157 at [13] - [14] ; Australian Competition and Consumer Commission v Signature Security Group Pty Ltd [2003] FCA 3 ( Signature ) at [25]-[28]. In the case of television advertising, necessarily the message is conveyed visually --- with images and in this case printed text --- and generally with oral text. It is relatively fleeting (although the fleeting impression is often sought to be reinforced by iteration or abridged iteration, sometimes in successive advertisements). Nevertheless, it is still necessary to determine the overall impression of what is conveyed from consideration of all parts of the television presentation to ensure the message is taken in context: Chief Executive Officer, Australian Competition and Consumer Commission v Medical Benefits Fund of Australia Ltd (No 2) [2002] FCA 1097 ( MBF No 2 ) at [45]. Where printed advertising is under consideration, it is appropriate to consider not simply the words or images depicted but also their relative emphasis (whether by print size, location, colour or other manner of presentation) to determine whether the asserted representation has been made in its overall context. So, where, as here, particular words or figures are accompanied by an asterisk and the asterisk apparently directs attention to a footnote, it is necessary to do more than treat the whole of the communication as one piece of text. It is necessary to look to the way the asterisk is placed, the size of the footnote relative to the text in the body of the advertisement, and the terms of the footnote: see per Davies J in Trade Practices Commission v QDSV Holdings Pty Ltd (t/as Bush Friends Australia) [1994] FCA 1562 ; (1995) 128 ALR 551 at 559. Whilst, as his Honour says, the ideal is that qualifying words should be in the same sized print as the print which catches the eye, it is not necessary for qualifying print to be in that size to avoid the large print which first catches the eye from conveying a representation without regard to the qualification. See the discussion in Optus at 339-41; Medical Benefits Fund of Australia Ltd v Cassidy (2003) 205 ALR 402 at [35]-[41]. I have taken into account the asterisk where it appears, and the footnote text. That case concerned, inter alia, the packaging of the respondent's bread which declared in large typeface 'Now Twice the Fibre*'. One could expect a consumer interested in the fibre content to seek out the qualification or explanation. Not only is the explanation within 2 cm of the words used on the package (albeit in much smaller type) but it is repeated elsewhere on the packaging. The footnote disclaimer accompanied by the asterisk is not hard to find and is not hidden. But the context is clear, by the relative size of the headline and the footnote: the footnote is not to contradict the headline, but to explain or qualify or limit it. If it were simply to contradict the headline, one would expect the footnote to be much more prominent. In my view, the footnote on each page was of limited effect. It said two things: that discounts were off "regular prices"; and that no further discounts apply to catalogue lines. The first part of the footnote, by itself, has no apparent special significance in this matter. It may serve to avoid any suggestion that the price markdown was from a price other than the regular price. Its significance may be tied to the second of those comments. That is because Harris Scarfe says that either the second of the two messages (or both together) amount to the footnote (or, as Harris Scarfe calls it, the catalogue disclaimer) meaning that the stated discounts "do not necessarily apply to those lines which appear in the catalogue". In my judgment, that is an obscure reading of the "catalogue disclaimer". The meaning suggested is that the catalogue items do not, or do not necessarily, offer prices reduced by 20% to 60% from the regular price but are either not discounted from regular prices or have some other (and presumably lesser) reduction from regular prices. If that was what was intended to be conveyed to consumers, I think the appropriate disclaimer should have been that the catalogue items were excluded from the price deduction covered by the banner "20%-60% OFF* STOREWIDE". And, so dramatically different from the apparently intended message of the banner would be the disclaimer --- in effect 20% to 60% off regular prices storewide except for the items depicted in the sale catalogue --- that its relative size and position would have to have been more prominent. I do not have to go so far. It is sufficient to find, as I do, that a significant class of reasonable consumers would have understood that the items depicted in the catalogue were items reduced in price by between 20% and 60% from the regular price (other than television, sound, digital cameras and toys). I also find that a significant class of reasonable consumers, upon reading the footnote, would not regard that message as qualified in the way Harris Scarfe contends. The particular words "no further discounts apply to catalogue lines" are capable of conveying, and to a significant class of reasonable consumers would have conveyed, a composite message. First, that the price of catalogue lines as depicted had been reduced from the regular price by 20% to 60%, and secondly, that no further discounts could be expected. What further discounts might have been available is not explored in the evidence: it may have been understood as referring to some form of loyalty or card holder discount otherwise available, or simply to negotiated discounts, or to something else. But the use of the word "further" in relation to the "discounts" suggests, or at least would suggest to a significant class of reasonable consumers, that it refers to discounts from regular prices beyond those presented by the catalogue itself. The catalogue, on subsequent pages, under certain banners says that the percentage price reduction is less than that range: 15% in the case of "ALL LCDs, VCRs and Digital Set Top Boxes"; and in the case of "ALL Audio & MP3 Players" (both on the second page); and in the case of "ALL 5MP Digital Cameras & Mini DV Camcorders" (the third page). On the remaining pages the banners refer to a percentage range of price reductions within the wider range of 20% to 60% except on the eighth page where the percentage reduction range in the banner is 40% to 70% off all "Essence, Living Art & Stanley Rogers Dinnerware". The three percentage reductions lower than the 20% to 60% Off Storewide Statements relate to products which fall within the exception signified by the third element of the footnote on the first page. In my view, the third part of the footnote on the first page, excluding television, sound, digital cameras and toys, in conjunction with the banners on pages 2 and 3 of the catalogue to which I have referred, was sufficient to indicate to consumers that that range of products was not encompassed within the discount range conveyed by the banner on the first page. It is not necessary to determine whether the size and the terms of the footnote, taken alone, would have been sufficient to avoid such a representation to consumers or a class of consumers. The asterisk on the banner was prominent. It directed attention to the footnote. The footnote --- in that regard --- was clear and explicit, albeit in very much smaller print than the banner. But a consumer interested in purchasing such products would also have gone to the pages of the catalogue at which they were depicted. The banners on the second and third pages to which I have referred indicate clearly enough by their position and size that in respect of the products described or depicted (which are part of the more generic groups of television, sound and cameras in the footnote), the reduction from the regular price for those categories of products was not 20% to 60%. The ACCC has not sought to make out a case that the Storewide Discount Representation or the 20% Off Storewide Representation were other than unqualified. I consider that they were. That is, in my view, the sale catalogue in context for the reasons given did not represent that all goods in Harris Scarfe stores were being offered at a discount, or offered for sale at a minimum of 20% off the regular prices for the duration of the sale. It did make those representations in respect of all products in its stores other than television, sound and camera products and toy products, but that is not the case sought to be made by the ACCC. The 15% Off Home Entertainment Representation was, in my view, made by Harris Scarfe. Other than the content of the second page of the sale catalogue, including the footnote, it was not suggested there was other relevant content. I have already explained why I reject the contention that the footnote by itself excluded all products depicted under the banner (or in the sale catalogue) from the assertion that there was 15% off all LCDs, VCRs and Digital Set Top Boxes, so that no representation of any reduction in price in relation to the products depicted under the banner was made. The banner is on a yellow background, constituting about one quarter of the top half of the page. (There are different banners for the bottom half of the page). Apart from the text already referred to, it has five brand names (apparently in their individualised font style) including Panasonic. There are then depicted only two television sets, each occupying vertically about one half of the top half of the page and laterally about one third of the page. The left-hand depiction has the words "24 Months Interest Free" highlighted in large print in the screen. It also has above it the stylised Panasonic name and on a smaller red rectangular background in white print the word "Plasma". In the same format immediately below the screen are the words "Giant 106cm Widescreen". Its presentation is roughly of the same dimensions, and style, including the word "Plasma" as described. The screen contains, in larger print, "High Definition Widescreen. Crisp Images with Superb Depth". The highlighted price of $2699 also has above it "Save $300". R.R.P. " so that the percentage saving could be readily calculated. I do not consider that either the fact that the two televisions depicted were plasma screens rather than LCD screens, or the fact that the centrally depicted television disclosed the "R.R.P" --- which I take to mean the regular price, as was assumed in submissions --- and the sale price and the saving so that the percentage price reduction could be calculated (namely 10%) means that the 15% Off Home Entertainment Representation was not made in respect of the depicted items. The two points made by Harris Scarfe may apply made in the case of a cautious consumer. But not every consumer is as cautious as would be necessary to discern the refinements of the presentation and the small print. Nor, necessarily, is every reasonable consumer or class of consumer informed as to there being a difference between an "LCD" and a "plasma" television. The dominant message from the banner, and one which I find would readily have been taken by a reasonable class of consumers, was that the two televisions depicted were offered at a sale price 15% less than the regular price. Rhetorically, one might ask: to what other televisions was the banner directed, if not at least to those depicted? The banner was in the largest print, clearly highlighted by the colour print on a black background. A reasonable class of consumers, in my mind, would understand that the two televisions depicted immediately under the banner were those to which the banner related. The Harris Scarfe contention requires first an awareness of there being a difference between "LCD" and "plasma" and a sufficient attention to the detailed presentation under the banner to become aware that the only two televisions depicted were not encompassed within the message of the banner. Banners are obviously to draw attention to the opportunity to purchase certain products at a reduced price. The products are depicted. The fine print is not sufficient to exclude all reasonable groups of consumers from understanding that the message which --- in my view --- the banner conveys does not apply to the items depicted under it. Insufficient focus was drawn to the fact that the two televisions were plasma, as opposed to LCD, screens. I am satisfied that a reasonable class of consumers would have understood the banner as conveying the 15% Off Home Entertainment Representation, at least so far as it applied to the two depicted televisions, notwithstanding the word "Plasma" appearing in its size and form and colour in the depictions under the banner. I have reached the same conclusion in relation to the second point made by Harris Scarfe concerning the television depicted in the middle of the top half of that page. The saving is identified as $300, and the larger printed price is $2,699. The "R.R.P. " of $2,999 is in much smaller print and is not highlighted. Not every consumer attends to every aspect of advertising with fine attention to the detail. The "R.R.P. " appears at the end of the fine printed text, apparently with other technical details. I do not consider it was sufficiently apparent as to expect all reasonable classes of consumers to have read it. More accurately, in the light of the banner and the overall presentation, I consider that there would have been a reasonable class of consumers who would not have realised that the regular price of that television was $2,999. I also consider that such an awareness was necessary, because it is no straightforward arithmetical task to calculate from the saving of $300 and the price of $2,699 that the saving was less than 15%. It is necessary to properly understand that the calculation requires the addition of the saving and the sale price, and then the calculation of the percentage that the saving represents of that total. I am satisfied that a reasonable class of consumers would not have made that calculation. The overall presentation gave them no especial reason to do so. And, in any event, I am satisfied that there would have been a reasonable class of consumers who would simply have associated the banner with the televisions depicted under it, and would have assumed that the saving of $300 represented 15% of the regular price. There is no duty resting upon a citizen to suspect the honesty of those with whom he transacts business. Laws are made to protect the trusting as well as the suspicious. The best element of business has long since decided that honesty should govern competitive enterprises, and that the rule of caveat emptor should not be relied upon to reward fraud and deception. That is a matter to be addressed when I consider the appropriate relief. There is no dispute that the television depicted on the left was not reduced in price from its regular price, and that the other was reduced by only 10%. I therefore conclude that, at least in respect of those two televisions as depicted, that the sale catalogue made the 15% Off Home Entertainment Representation, and that it contravened both s 52 and s 53(e) of the TP Act. It is not necessary to consider whether the 15% Off Home Entertainment Representation was made in respect of all other televisions which Harris Scarfe offered for sale during the period of the sale. Essentially for the same reasons, I find that the 15% Off Audio Representation was made by Harris Scarfe. I have rejected the contention that the footnote to which attention may have been directed by the asterisk conveyed, or would have conveyed to all reasonable groups of consumers, that no representation about the percentage price reduction from the regular price was made in relation to the items depicted under the relevant banner. One of the four items depicted under the relevant banner was a Samsung Z5 Music & Photo 2GB MP3 Player. It was not offered at a price reduced by 15% from its regular price. It was in fact offered at a price that was about 9.4% less than the regular price. That the discounted percentage could have been calculated on information contained in the text under the banner, upon a careful reading of that part of the sale catalogue does not mean that, to a reasonable class of consumers, that representation was not made or that it was not made in contravention of ss 52 and 53(e) of the TP Act. I have had regard to the size and appearance of the printed "Reg. " price of that item relative to the advertised price and to the saving, and to the banner itself which prominently highlighted 15% off all MP3 players (as that item is described, in somewhat larger and highlighted print than the regular price), and the depiction of only two MP3 players under the banner. My conclusion is that a reasonable class of consumers would have taken the 15% Off Audio Representation as having been made and as applying to that depicted item. It was not accurate. I also find that the 15% Off Cameras Representation was made by Harris Scarfe in respect of each of the items depicted on the third page of the sale catalogue. I further find that, in respect of the five items listed in [20] above, that representation was misleading and deceptive contrary to s 52 of the TP Act and was false and misleading as to the price of those items contrary to s 53(e) of the TP Act. In respect of that banner and those items, Harris Scarfe relied on three matters to contend that no such contraventions were established: the terms of the footnote, to which the asterisk drew attention; secondly that two of the items are not "Mini DV Camcorders" but Camcorders and that two of the items are not "5MP Digital Cameras" but 6MP Digital Cameras; and thirdly that the first three items are presented with a disclosed regular price and a saving amount, so that the actual amount of the saving is apparent and the percentage price reduction from the regular price is calculable. For the reasons already given, I reject the first contention. I reject the second contention based upon the whole of the relevant part of the third page of the sale catalogue. The terms of the banner are set out in [20] above. It relates to the top two-thirds of that page. Under the banner, in the top half of the page, there are two separately delineated sections. The left third is under a sub-banner with particular savings on two specified and depicted camcorders. It is not necessary to refer to it. The right hand two-thirds depicts four camcorders, three of which are items (a)-(c) in the table in [20] above. They are all depicted as being about the same size. Underneath those two sections are depicted three cameras, running across the page and just below its centre line. Each camcorder is depicted, and has a large highlighted price and immediately above the price, also obvious but in a smaller print the saving (the camcorder not referred to in the table has a "lowest price" rather than a "saving" --- I do not need to refer to it further). Each has a stylised brand name adjacent to its image, and in two instances (items (b) and (c) in the table) there is also a smaller highlighted technical feature. Each of those two camcorders then has a printed description in considerably smaller print containing a product description and the technical details, with at the end a "Reg. " price. The product description is slightly bolder print than the technical details. In each of those two cases the description is "JVC GZ-MG37 30 GB Everio Hard Disk Camcorder" and "Panasonic NV-GS180 3CCD Camcorder". The item in (a) of the table is similarly presented. It is described as "JVC GR-D350 Mini DV Camcorder". In my view, the fact that items (b) and (c) in the table are depicted under the banner, and the overall presentation, would have lead a reasonable class of consumers to the view that those items were for sale at prices which represented 15% off the regular prices. That is not to say that some consumers would not have appreciated, by reading the advertisement carefully, that items (b) and (c) were not Mini DV Camcorders but some other size of camcorder. Indeed, whether there is in the minds of all reasonable classes of consumers an awareness that a camcorder is not a mini camcorder --- especially where they are depicted as about the same size --- was not addressed in evidence. Nor did the evidence suggest that because a depicted item is a "Hard Disk" or a "3CCD" camcorder, it may not be in the minds of all reasonable classes of consumers a mini camcorder. Those observations reinforce the conclusions I have reached at the start of this paragraph. For reasons similar to those expressed in relation to the 15% Off Home Entertainment Representation, I am also satisfied that a reasonable class of consumers would have understood the 15% Off Cameras Representation as applying to items (a)-(c) in the table, notwithstanding that a saving and a regular price was set out and, by calculation, a percentage saving revealed. That is not to say that a careful consumer might not have discerned in relation to those items and item (a) that the saving as specified did not represent 15% off the regular price. But I am satisfied that a reasonable class of consumers would not have been so discriminating. A reasonable class of consumers would have connected the depicted items to the banner and there was in the presentation then insufficient focus on the matters to which Harris Scarfe refers to correct that message in relation to those items. The two cameras referred to in items (d) and (e) of the table are presented in a slightly different way. There are only three digital cameras depicted under the banner. None is in fact (as presented) a 5MP Digital Camera. Each is described as a 6MP Digital camera, first by a small but highlighted box entry above its image reading "6MP Digital" and secondly, by the detailed printed description. The box highlighting is in the same style and colouring as the banner: black on yellow, except in the banner the words "15% OFF*" are further highlighted by a yellow on black boxed area. But for the small but highlighted box entry, I could have been satisfied that the 15% Off Cameras Representation was made in respect of those cameras, for reasons like those already given. It is a matter of impression. A reasonable class of consumers would be entitled to assume that the depicted cameras were, or included, those to which the banner was intended to apply. There is no particular reason why a significant contrast between the cameras referred to in the banner and as depicted should be drawn. Why, again rhetorically, would those cameras have been depicted if they were not, or were not illustrative of, cameras to which the 15% Off Cameras Representation applied? It is not simply a matter of noticing that 6MP Digital cameras were depicted, as distinct from 5 MP Digital cameras, but then of drawing the necessary disconnection between them and the banner because the banner referred only to "5MP Digital Cameras". I have come to the view that a reasonable class of consumers would have regarded the 15% Off Cameras Representation as applying to the cameras depicted, so the contravention of ss 52 and 53(e) of the TP Act is also made out in that respect. I further find that the 20% Off Cordless Phones Representation was made, and that in respect of each of the items listed in the table in [23] above, that representation was misleading and deceptive contrary to s 52 of the TP Act and was false and misleading with respect to the price of those items contrary to s 53(e) of the TP Act. For the reasons given earlier, I do accept that the footnote to which the asterisk in the banner directed attention conveyed that the price of the depicted items was not reduced by 20% from the regular price. Nor, for reasons similar to those expressed earlier, do I consider that the fact that in respect of items (b) --- (e) in the table in [23] above, the saving and the regular price was set out so that, by calculation from that information or from the highlighted price and the regular price, the percentage price reduction could have been calculated, means that the representation was not made or that it was not misleading. The banner relating to Cordless Phones runs across the third page of the sale catalogue about two thirds down that page. It is smaller than the other banners on that page. There are only five types of cordless phones depicted under it. Each has a highlighted price, and in smaller print and in a smaller and lesser highlighted box immediately above a saving amount. It is, in my view, clear that a reasonable group of consumers --- if not the majority of consumers --- would not readily calculate from that information the percentage saving from the regular price or conclude that the dollar saving was less than 20% off asserted in the banner. Each also has a detailed printed product description, with some additional features and, in four of the five cases, at the end of that relatively smaller and less featured text a "Reg. " price. The departure from the banner's asserted reduction which Harris Scarfe seeks to justify by calculation from that extra data is not, in the light of the overall presentation, warranted. In each of those four cases, the calculation (if made) would directly contradict the banner. In my view, in such circumstances, much more prominence should have been given to that data, or the banner should have been qualified. No doubt some consumers, upon seeing the highlighted price and the saving sum expected no more than that saving. No doubt some cautious consumers calculated the percentage price reduction. But, as I have found in respect of similar instances in the catalogue, I consider that a significant group of reasonable consumers would have been misled by the representation into thinking that the price, and/or the saving, reflected a price reduction of 20% off the regular price. I further find that the 20% - 25% Off Personal Care Representation was made, and that a significant class of reasonable consumers would have been misled by the representation into thinking that the price reflected a price reduction of 20% off the regular price. The lower half of the fourth page of the sale catalogue contained the relevant banner. There were 10 items depicted under it, including the five items in the table in [25] above. Each of the depicted items had adjacent to it a highlighted boxed price, and immediately above it a smaller boxing saving in dollars. Each also had a detailed printed product description, in smaller and unhighlighted print with, at the end of that text, a "Reg. " price. I do not accept for the reasons already given that the asterisk on the banner and the footnote to which it drew attention meant that the prices set out in this part of the sale catalogue did not represent savings off regular prices. Also, for the same reasons as previously given, I find that a significant class of reasonable consumers would have concluded that the specified price in respect of each of the five items in that table represented a saving of not less than 20% off the regular price of those items. I shall not repeat those reasons. The evidence also shows that the price of those five items did not represent such a saving. Consequently, I find that the 20%-25% Off Personal Care Appliances Representation was made in respect of the items depicted under the banner, and that Harris Scarfe contravened ss 52 and 53(e) of the TP Act by doing so. Finally, in this part of my reasons, I find that the 20-50% Off Kitchen Appliances Representation was made and that in respect of the Sunbeam Can Opener depicted under that banner the representation was misleading and deceptive contrary to s 52 of the TP Act and was false and misleading as to the price of that item contrary to s 53(e) of the TP Act. Again, I do not accept that the sale catalogue had prices which did not represent savings from regular prices for the reasons already given. The banner runs prominently across the top of the fifth page of the sale catalogue. There are 19 kitchen appliances depicted, all with significant savings specified relative to the sale catalogue price. They give no indication that the banner representation of 20% - 50% off did not apply to them, and that representation is reinforced in two instances where the percentage price reduction is highlighted. That overall picture provides further support for the conclusion I have drawn. The Sunbeam Can Opener is depicted in the bottom left hand corner of that page. As in other instances, it has a highlighted price and immediately above it a saving sum, and a more detailed product description in smaller and unhighlighted print ending with a "Reg. " price. For reasons similar to those already given, together with the overall picture which that page of the catalogue presents, I am satisfied notwithstanding that data being set out in that way, that a reasonable class of consumers would have regarded the 20%-50% Off Kitchen Appliances Representation as applying to that item. It was not correct. It is a communication by visual and audio means, so the assessment of its message must be made in that context. The audience does not have the opportunity to read and absorb in the same way as the printed word or the depictions in the sale catalogue. The television commercial ran for only a brief time. It had a red background with the stylised Harris Scarfe name. It opened with the large printed words in white, "MID SEASON SALE" for several seconds. The background screen image, including the Harris Scarfe name, remained the same. There were then a series of printed images, all of which were on the screen only for a few seconds. The first and last had the large printed words in white "20%-60% OFF STOREWIDE". In between were three screen images with the large printed words "20%-60% OFF" and the additional words "ALL MANCHESTER", "ALL HOMEWARES", "ALL CLOTHING AND MUCH MUCH MORE" in three sequential screen images. Each of those three screen images had in much smaller print under that printing the words: "Discounts off regular prices. Excludes televisions, sound, digital cameras and toys". There is a voice commentary which, in effect, repeats the printed screen words except for the words: "Discounts off regular prices. Excludes television, sound, digital cameras and toys". It points out the sale commences the following day. The primary issue between the ACCC and Harris Scarfe is whether the television commercial thereby made the Storewide Discount Representation and the 20% Off Storewide Representation. Harris Scarfe says that, for two reasons, it did not do so. Firstly, it relies on the fact that examples are given of the type of products that were included (Manchester, homewares and clothing) together with the words "and much much more" to indicate that not all products were so discounted. Secondly, it points to the disclaimer which expressly excluded certain products. I do not accept that, by giving examples of the type of products included in the discounted range, the unqualified terms of the words "20%-60% Off Storewide" were somehow qualified. The clear impression from the television commercial, viewed as a brief audio-visual communication is that all items in the Harris Scarfe stores were reduced. The word used is "storewide", used at the beginning and at the end of the television commercial. The examples, or the additional words "and much much more" do not diminish that impression. I think they enhance it. The disclaimer, in printed terms, excluded certain types of items from the discounts being storewide. The opportunity during the hearing of viewing the television commercial was not ideal. However, notwithstanding that the voice-over did not refer to the disclaimer, the printed text running for six seconds or so only was, in my view, sufficiently prominent and prolonged to draw to the observer's attention to the fact that there is some form of exemption or exclusion from the application of the discounts storewide. An observer would have found it hard to absorb the detail of the exemption, particularly as it was accompanied by the three or four brief images concerning the included items and the accompanying voice-over. Whether, as an advertising technique, that was intended, does not matter. I have formed the opinion that the television commercial, in a very general way, gave the impression that there were some exclusions from the storewide application of the discounts. It follows that I am not satisfied that, by the television commercial, Harris Scarfe made the Storewide Discount Representation or the 20% Off Storewide Representation as alleged by the ACCC. It did so in relation to the items about which those representations were made and about which I have found in the foregoing reasons to have contravened those provisions. I conclude that Harris Scarfe did not make the Storewide Discount Representation or the 20% Off Storewide Representation either by publishing the sale catalogue or by publishing the television commercial. It is apparent from my reasons thus far that, in reaching those views, I have not regarded the "Further Evidence" discussed above to have been of any particular significance. The task of determining whether those representations were made was to make an objective determination in the light of all the relevant circumstances. The steps taken by Harris Scarfe or by others on its behalf to avoid such contraventions were not, in my view, capable of informing that decision. Nor were the views of officers of Harris Scarfe, or of those advising it, relevant to that question. That evidence was not sought to be adduced or relied upon as expert evidence on the objective factual determination which was required. Harris Scarfe said that the further evidence was "relevant and powerful" evidence as to whether any of the pleaded representations was misleading or deceptive or was likely to mislead or deceive, especially in the absence of evidence of any consumer actually being misled or deceived. The further evidence did show that Harris Scarfe endeavoured, in the manner that the evidence discloses, to avoid contravening the TP Act including ss 52 and 53(e). Its efforts were extensive. But, as I noted, it was not put forward as expert evidence. Nor did it show that each of the particular entries in the sale catalogue about which I have made adverse findings was considered by its external legal or compliance consultants, or indeed that the sale catalogue itself was carefully perused in its entirety by those external consultants. Accordingly, even if I accept (as I do) that Harris Scarfe had systems in place to try to avoid contravening the TP Act, and even if I assume (contrary to my approach in the preceding paragraph of these reasons) that its systems and the fact that they did not give warning signs in relation to the particular content of the sale catalogue which has given rise to the contraventions, I would nevertheless have reached the same conclusions as to the contraventions of the TP Act. That further evidence is obviously relevant to the nature of the relief which should be granted in the light of those conclusions. It also seeks corrective advertising both in its stores and in a subsequent Harris Scarfe sale catalogue, on the internet and once in a weekend edition of newspapers circulating in South Australia, Victoria and Tasmania. It further seeks orders under s 86C(2)(b) of the TP Act requiring Harris Scarfe to refine its trade practices compliance program. And the ACCC seeks the right to apply, in this proceeding to extend the "probation period" beyond three years if Harris Scarfe further contravenes ss 52 or 53 within the next three years. Finally, it seeks the costs of these proceedings. Harris Scarfe opposes the grant of any relief other than declaratory relief. It points to its offer to provide yet a further undertaking pursuant to s 87B of the TP Act as being a sufficient response to the contraventions of the TP Act which have been established. In my view, it is appropriate to make a declaratory order in respect of the contraventions I have found to be established. It will be in the form proposed by the ACCC. The facts that the contraventions occurred notwithstanding Harris Scarfe's efforts to comply with the TP Act over quite some time, and that they occurred notwithstanding in particular the 2004 undertaking and the 2006 undertaking, indicate to my mind that it is appropriate to make the declaratory order sought, as relevant to the contraventions, rather than permit Harris Scarfe to provide yet another undertaking to the ACCC. Moreover, and perhaps more importantly, the acceptance of a s 87B undertaking is within the discretion of the ACCC. It does not appear that the Court has power to oblige the ACCC to accept such an undertaking: Trade Practices Commission v Cue Design Pty Ltd (1996) 85 A Crim R 500 ; Australian Competition and Consumer Commission v Monza Imports Pty Ltd [2001] FCA 1455. The ACCC is not prepared to do so in respect of these contraventions. Even if it could be obliged to do so, contrary to the decisions referred to, I would not impose upon the ACCC the acceptance of yet a further s 87B undertaking. Then, rather than there be no formal recording of the contraventions, I would make the relevant declaratory order sought. That form of injunctive order is quite specific. It is not generic, in the sense that it simply prohibits conduct which the TP Act prohibits: see BMW Australia Ltd v Australian Competition and Consumer Commission [2004] FCAFC 167. It captures the form of advertising in the sale catalogue which has led to the contravention. Such conduct occurred notwithstanding Harris Scarfe's compliance program, and the considerable effort and expense which Harris Scarfe had in the past put into trying to avoid conduct in contravention of ss 52 and 53 of the TP Act. An injunction in those terms should therefore deter Harris Scarfe from engaging in such conduct during the period of its currency: ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 at 268. Harris Scarfe, since the conduct giving rise to the contraventions, has introduced and developed its Advertising Rule Book. It appears to address the circumstances giving rise to the present contraventions. However, as in any substantial retail organisation with an extensive product range, there may be scope for different views about the way such a document should be construed or applied. So too is there such scope, notwithstanding a compliance program and its Compliance Manual and its Advertising Rule Book and ongoing training, for oversight or error. The fact that Harris Scarfe committed the contraventions despite the extensive external and internal structures and resources it utilised to avoid contravening the TP Act provides reason to specifically prohibit the offending advertising style. The steps taken by Harris Scarfe to avoid such contraventions in the future may provide a reason not to make any injunctive order (cf Australian Competition and Consumer Commission v Wizard Mortgage Corporation Ltd [2002] FCA 1317 ( Wizard Mortgage ) per Merkel J at [22]). However, having regard to the past history including the 2004 undertaking, and the 2006 undertaking, my conclusion on balance is that it is appropriate to make the injunctive order in the terms sought. The purpose is not to add to Harris Scarfe the possible exposure to contempt of court if it commits a further contravention such as those which have been established. It is to add the additional incentive, or deterrence, of quite specific injunctive orders to prevent the re-occurrence of the offending conduct, albeit in the context of voluntary action already taken by Harris Scarfe which makes the risk of such re-occurrence quite small. It will, however, be limited in time to a period of three years: Australian Competition and Consumer Commission v Midland Brick Co Pty Ltd [2004] FCA 693 ; (2004) 207 ALR 329 at [45] . I have not overlooked that, in Australian Competition and Consumer Commission v Telstra Corporation Limited [2004] FCA 1132 , Gyles J granted an injunctive order for five years. His Honour discussed that question at [5]. In my view, however, the period of three years, acting as a reinforcement in the manner I have described, is appropriate to enable the advertising practices of Harris Scarfe to have been cemented so as to thereafter carry little or no risk of like contravening conduct. The orders for corrective advertising and refinement of Harris Scarfe's compliance program are founded upon s 86C of the TP Act. In my view, there is no real purpose in making such an order in the present circumstances. The injunctive order will prevent the form of advertising which gave rise to the contraventions. There is no evidence of any consumer having suffered loss as a result of the contravening conduct. There was a significant period after the sale catalogue was published before these proceedings were instituted, and a further period has since elapsed. In those circumstances, it is difficult to see how the proposed corrective advertising would serve any useful purpose: see Hospitals Contribution Fund of Australia Ltd v Switzerland Australia Health Fund Pty Ltd (1987) 78 ALR 483 ; St Lukes Health Insurance v Medical Benefits Funds of Australia [1995] FCA 1314 per Northrop J at [34]; Wizard Mortgage per Merkel J at [27]; Signature [2002] FCA 3. In Australian Competition and Consumer Commission v Telstra Corporation Limited (ACN 051 775 556) [2007] FCA 2058 , Gordon J summarised the principles concerning the issue of whether corrective advertising should be made. In the light of the injunctive order proposed to be made, and in the particular circumstances, I do not think any of those three purposes would usefully be served now by corrective advertising. The public interest is adequately protected by the injunctive order, in effect reinforcing the voluntary action taken by Harris Scarfe. The absence of any identified consumer who suffered loss as a result of the contravening conduct makes it quite unlikely now that corrective advertising would alert any particular consumer to the possibility of a remedy. And I have already indicated the injunctive order itself is to aid in preventing a repetition of the contravening conduct. Corrective advertising may, of course, raise public awareness as to the type of conduct that may contravene the TP Act, as well as the outcome of the particular case: see per Lee J in Australian Competition and Consumer Commission v Target Australia Pty Ltd [2001] FCA 1326 at [21] . That case involved orders, including corrective advertising, proposed to be made by consent. In the particular circumstances, I do not consider that factor in the overall balance warrants the making of orders for corrective advertising. Consumers are unlikely to be further exposed to such contravening conduct on the part of Harris Scarfe for the reasons already given. Competitors will no doubt become aware of the outcome of this case, and take account of its reasons in their further advertising. Hence, consumers more generally are also not likely to benefit from corrective advertising specific to Harris Scarfe's contravening conduct unless, first, a competitor engaged in similar conduct and the connection between that advertising and the corrective advertising specific to Harris Scarfe was made. I therefore decline to order corrective advertising. The final package of orders sought by the ACCC under s 86C involve Harris Scarfe being required to revise and review its internal operations in relation to its compliance with the TP Act. Specifically, the package of orders would require: (1) Harris Scarfe to appoint a senior employee as its "Internal Review Manager"; (2) Harris Scarfe, on the recommendation of its Internal Review Manager, to retain an appropriately qualified and experienced Independent Reviewer (a person not previously involved in the design or implementation of the compliance program); (3) the Independent Reviewer to review the compliance program and the process of producing the sale catalogue to determine why the contraventions occurred, and to recommend steps to be taken, including revision of the compliance program, to ensure similar or related conduct does not occur in the future; (4) Harris Scarfe to provide a copy of the Independent Reviewer's report to the ACCC; (5) Harris Scarfe to implement the Independent Reviewer's recommendations as it "considers reasonably necessary" to ensure it does not engage in the contravening conduct or any similar or related conduct in the future; (6) Harris Scarfe to report to the ACCC of the steps it has taken pursuant to (5) or to report that it has decided not to implement any of those recommendations. Presumably, the expectation is that the Court would then be asked to determine whether some further orders in relation to Harris Scarfe's internal systems should be directed by the Court. Part of the ACCC's proposal is the requirement that Harris Scarfe maintain its compliance program (as modified) for a further period of three years. It is clear that s 86C permits the imposition of a compliance program, and an order directed to modification or review of an existing compliance program. However, I doubt that it is appropriate that the Court should entitle the ACCC to apply for a further probation order or other order as sought in [123] above. The proposed order is carefully drawn so as to enliven that entitlement only in the event of a further similar contravention of the TP Act. The proposed order is premised upon a future contravention, because otherwise the probation order can only extend for three years: s 86C(2)(b), otherwise power would exist to extend the probation order. Such a contravention, if established, would then enable the Court to exercise the powers available under s 86C afresh. But, in the event of such a contravention (whether proved or admitted), the ACCC would have the entitlement which it seeks to have recognised in any event. I therefore do not see much utility in that suggested order. In the event that such a contravention occurred, it may be that the ACCC would seek relief --- whether declaratory, injunctive or other relief --- and such relief would not properly be brought in this action. There is thus a potential, if that order is made, to invite or condone the splitting of remedies for a future contravention. I have come to the view, more generally, that it is not appropriate to make the orders sought by the ACCC in relation to Harris Scarfe undertaking a revision of, and supervised implementation of, its compliance program. That is because, in essence, I do not consider that there is sufficient utility in the circumstances in doing so. Harris Scarfe, as the further evidence shows, had actively and at its own expense, developed and implemented a compliance program, albeit under the umbrella of the 2004 undertaking and the subsequent undertakings. That process included the extensive involvement of three external professional consultants: Watchdog Compliance, Cooper Grace Ward, and Compliance and Complaints Advisory Services Pty Ltd (CCAS) (which independently audited the compliance program in accordance with the 2006 undertaking). Since the contraventions, it has revised that program with particular focus on the particular contraventions, including the introduction of its Advertising Rule Book. Both Watchdog Compliance and CCAS have subsequently been involved in the assessment of the adequacy of the Advertising Rule Book. Its Chief Financial Officer, an executive director, has been its Trade Practices Compliance Officer since 4 April 2008, and Harris Scarfe also has a Compliance Manager responsible for the day to day maintenance and implementation of the compliance program. Its staff training program, in particular for its marketing team, in relation to compliance with the TP Act is ongoing, and it has an induction program for all new staff which includes compliance training. The level of management at which compliance issues are being addressed indicates how seriously Harris Scarfe regards the obligations imposed on it (and other retailers) under the TP Act. Put shortly, I have difficulty in seeing what value the Court could usefully add to that process, in the sense contemplated by s 86C(2)(b), by the orders sought. I do not consider they would ensure that Harris Scarfe does not engage in the contravening conduct or similar or related conduct over the next three years in any real way, and in the light of the injunctive order. However, there is utility in ensuring that the compliance program as modified by Harris Scarfe continues for a further period of three years. I accordingly propose to order that Harris Scarfe, at its own expense, maintain for a period of three years its compliance program, as modified by it from time to time. I note that it has provided to the ACCC its Trade Practices Compliance Manual and its Advertising Rule Book. I have no reason to expect that it would not provide to the ACCC its current versions of those documents in the event that they are further modified. I will hear the parties as to the costs of the proceeding. 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 Mansfield. | misleading and deceptive conduct where representation made in television commercial, sales catalogue and in-store promotions for "20%-60% off storewide" express exclusion of certain goods in smaller print whether statement misleadingly suggested that every item in store was for sale at least 20% less than the regular price whether various banner headings in sales catalogue advertising different percentage savings for specific types of goods depicted in proximity to particular goods not within specific type of goods misleadingly suggested that the depicted goods were for sale at the specified savings in terms of percentage whether asterisks in banner headings and footnotes sufficiently drew viewers' and readers' attention to exclusions and limitations of advertised sale misleading and deceptive conduct where compliance program with external audit obligations already imposed under s 87b undertaking appropriate terms of declaratory orders whether order for corrective advertising should be made whether corrective advertising serves an appropriate preventative purpose in the circumstances whether injunctive orders preventing specific conduct and methods of advertising appropriate in the circumstances trade practices trade practices |
2 The Commission alleges contraventions of ss 45 and 48 of the Act by the first respondent, Jurlique International Pty Ltd ('Jurlique International') and the second respondent, Jurlique Distribution Pty Ltd ('Jurlique Distribution'), with the third respondent, J & J Franchising Pty Ltd ('J & J Franchising'), and the fourth respondent, Jurlique Spa Pty Ltd ('Jurlique Spa'), being knowingly concerned in those contraventions. In addition, the Commission alleges ancillary involvement in those contraventions within the terms of ss 75B and 76 of the Act by the fifth respondent, Dr Jurgen Klein ('Dr Klein'). The contraventions of s 48 of the Act alleged by the Commission against the respondents is in relation to resale price maintenance of skin care, cosmetic, and herbal medicine products, and the contraventions of s 45 are in relation to price fixing of skin and body treatment services. 3 On 3 October 2006, the first to fourth respondents filed a defence admitting to the conduct pleaded against them in the statement of claim, and on 28 September 2006, the fifth respondent filed a defence admitting to the conduct pleaded against him in the statement of claim. 4 On 27 September 2006, the parties filed a joint submission as to the form of final orders and penalties. 5 The joint submission reflects an agreement between the applicant and the respondents as to the relevant facts of the involvement of each of the respondents in the contraventions of Pt IV of the Act alleged by the Commission. Agreement has also been reached between all the parties as to the levels of pecuniary penalties pursuant to s 76 of the Act, to be recommended to the Court as appropriate in relation to the contraventions of Pt IV , as well as injunctions pursuant to s 80 of the Act, and two other orders which the Court is asked to make. 6 The issue before the Court is the amount of pecuniary penalty each respondent should be ordered to pay the Commonwealth in respect of the contraventions of the Act. 7 The joint submission recognises that, under s 76 of the Act, it is for the Court to determine whether the contraventions in relation to ss 45 and 48 of the Act have occurred and the quantum of any pecuniary penalties and other relief that should be ordered. The applicant and the respondents in their joint submissions recommend levels of pecuniary penalties which it asks the Court to impose, '... in order to assist the Court in coming to its own assessment of the level of penalties to be imposed and any other orders that the Court sees fit to make '. 8 Section 83 of the Act is an evidentiary provision which in essence provides that findings of fact made against a respondent in earlier proceedings is prima facie evidence of those facts in later proceedings by any affected person for damages or compensation orders. Section 83 further makes the provision that findings of fact in the reasons for judgment may be proved by production of a copy of the reasons for judgment sealed with the seal of the Court. 9 In light of the above, and having regard to the pleadings and the agreement between the applicant and the respondents as to the relevant facts concerning the involvement of each of the respondents in the contraventions of Pt IV of the Act, I make the findings which follow. The Jurlique Companies are involved in the production and sale of Jurlique Products. Jurlique Products are skincare, cosmetic and herbal medicine products offered under the "Jurlique" brand name, manufactured by Jurlique International, including cleansers, moisturisers, face wash products, hand cream, essential oils, lipsticks, floral water, masks, shampoo, conditioner, bubble bath, shaving gel and showering gel. Until November 2003 Dr Klein was a director of each of the Jurlique Companies, and operated the Jurlique Companies as a group. The companies' principal roles within that group have changed throughout the relevant period due to corporate restructures over time, and are detailed below. Dr Klein did not always make clear on behalf of which entity he was purporting to act. Dr Klein's multiple directorships of the companies, the common ownership of the companies and their operation as a group are appropriate matters to take into account when considering the appropriate penalties. Prior to 19 September 2002, each entity was owned by a holding company called Ngeringue Pty Ltd. Jurlique International also operated as distributor and supplier of Jurlique Products prior to 28 October 1998 and has done so again from 1 June 2003. Jurlique Franchisees for sale by them within Australia to members of the public. Jurlique Distribution was a distributor and supplier of Jurlique Products to wholesale customers and engaged in related sales and marketing activities. It fulfilled this role between 28 October 1998 and 31 May 2003. The company has not traded since June 2003. Jurlique Distribution supplied Jurlique Products to the same categories of outlets set out in paragraphs 11.1.1 to 11.1.4 above. J & J Franchising operates Company Outlets in Australia that offer Jurlique Products and Jurlique Treatments. It is also the franchisor for the Franchise Outlets in Australia through which franchisees offer Jurlique Products and Jurlique Treatments. At 1 July 2003, it was the operator of 13 Company Outlets and the franchisor company for 12 Franchise Outlets. Currently it is the franchisor of 3 Franchise Outlets. The Company Outlets and Franchise Outlets retailed only Jurlique Products, which were supplied to them by Jurlique Distribution and Jurlique International. A number of admitted contraventions concern offers to enter into franchise agreements by J & J Franchising and franchise agreements made by J & J Franchising. Each of these offers and franchise agreements required the franchisee to purchase all stock of Jurlique Products from J & J Franchising or Jurlique Distribution. While J & J Franchising has never offered to supply or supplied Jurlique Products to franchisees, the Jurlique Respondents have admitted the contraventions on the basis that J & J Franchising offered to enter into the franchise agreements on behalf of or by arrangement with Jurlique Distribution (the actual supplier of Jurlique Products at the relevant times). Jurlique Spa offered training services and is party to various supply and distribution agreements with overseas entities for Jurlique Products. A number of admitted contraventions concern licence agreements made by Jurlique Spa each of which required the licensee to purchase all stock of Jurlique Products from Jurlique Spa or its importer in the relevant country. While Jurlique Spa has not supplied Jurlique Products to the licensees the Jurlique Respondents have admitted the contraventions on the basis that Jurlique Spa entered into the licence agreements on behalf of or by arrangement with Jurlique Distribution (the actual supplier of Jurlique Products at the relevant times). Jurlique Spa has not conducted any business since 19 September 2002. Until November 2003 Dr Klein was managing director of Jurlique International and was the directing mind of each of the Jurlique Companies. Until 2003, the Jurlique Companies were owned by Dr Klein and members of his family through various trusts. Dr Klein began to sell down his interest in the Jurlique Companies during 2003. Until November 2003 Dr Klein was involved in the day to day management of the Jurlique Companies including dealing with Jurlique Franchisees, negotiations with new stores and accounts and determining the marketing and sales strategy of the Jurlique Companies. He was familiar with the Jurlique Companies' agreements for Franchise Outlets and was directly involved in numerous discussions with Retailer Outlets and Jurlique Franchisees. This meant that discounting from the Jurlique Companies' price lists was not permitted. In about August 1996, Dr Klein on behalf of Jurlique International, by correspondence with Soichiro Pty Ltd, a Jurlique Franchisee, attempted to induce Soichiro Pty Ltd not to sell Jurlique Products at prices less than the retail prices specified in the price lists published and distributed from time to time by Jurlique International. The conduct is outside the limitation period for penalty. The conduct is set out at paragraphs 10 to 12 of the statement of claim. In entering the franchising agreements, J & J Franchising was acting by arrangement with or on behalf of Jurlique Distribution. Any pricing which discounts the upmarket image and positioning of the Jurlique brand is a serious breach of this Agreement. In entering into each of the agreements referred to in paragraph 13 above, J & J Franchising was acting by arrangement with or on behalf of Jurlique Distribution. On or about 27 and 28 February 2001, Jurlique Distribution, by Dr Klein, entered into an agreement with the Gillans, by their solicitors Riordan & Partners, about the termination of the supply of Jurlique Products by Jurlique Distribution to the Gillans. It was a term of the agreement referred to in paragraph 17 above that in the period between 27 February 2001 and 21 May 2001 the Gillans would not sell Jurlique Products at prices below the recommended retail prices, being prices specified by Jurlique Distribution. In or about August 2001, Dr Klein on behalf of Jurlique International, by correspondence with 88 Australian Products which operated a Franchise Outlet, attempted to induce 88 Australian Products not to sell, or advertise for sale, Jurlique Products at prices less than the retail prices then specified by Jurlique International. In or about August 2001, 88 Australian Products offered and advertised for sale Jurlique Products at its Franchise Outlet at The Summit in Sydney, New South Wales at a 10% discount from the retail prices then specified by Jurlique International in the price lists published and distributed at or about that time by Jurlique International. By Dr Klein's conduct referred to in paragraphs 20 and 21 above, Jurlique International attempted to induce 88 Australian Products not to sell, or advertise for sale, Jurlique Products supplied to 88 Australian Products by Jurlique International at prices below the retail prices then specified by Jurlique International. In or about November 2001, Jurlique Distribution, by correspondence, terminated supply agreements with House of Nature Pty Ltd, South Ocean Duty Free Pty Ltd, Jin Hsing Duty Free Pty Ltd and Monarch Duty Free Pty Ltd for the reason that each company had sold Jurlique Products supplied to them by Jurlique Distribution at a price less than the retail prices specified by Jurlique Distribution. The Jurlique Companies do not assert that the supply agreements were true agency agreements. On or about 1 January 1999 Jurlique Distribution entered into agreements with each of the Jin Hsing Companies for the supply by Jurlique Distribution to the Jin Hsing Companies of Jurlique Products for resale to the public through Retail Outlets conducted by the Jin Hsing Companies on the Gold Coast, Queensland, Melbourne, Victoria and in Sydney, New South Wales. . . Jurlique has positioned its range as a prestige up-market brand and this is not to be devalued, discredited or down graded by the actions of the Agent. Jurlique Distribution Pty Ltd is entitled to immediately terminate this agreement and withdraw supply if, in its view, the standard of any of the Agreed Premises or the Agent's presentation of Jurlique falls below Jurlique's image criteria. The initial term of this agreement began on the 1 st January 1999 and will end on the 31 st December 1999, unless earlier terminated pursuant to clause 6. This agreement, unless earlier terminated pursuant to clause 6, will then continue for successive periods of 6 months from the 1 st January in each year to the 30 th June and from the 1 st July to the 31 st December in that year. . . In or about November 2001 Jurlique Distribution terminated the above agreements with the Jin Hsing Companies referred to in paragraph 23 above. Between about November 2001 and 8 February 2002 Jurlique Distribution withheld supply of Jurlique Products from each of the Jin Hsing Companies. Jurlique Distribution engaged in the conduct referred to in paragraphs 26 and 27 above, for the reason that the Jin Hsing Companies had sold Jurlique Products supplied to them by Jurlique Distribution at prices below the retail prices specified by Jurlique Distribution in the price lists referred to in paragraph 25(b) above. On or about 24 January 2002 the Jin Hsing Companies requested that Jurlique Distribution continue to supply Jurlique Products to the Jin Hsing Companies and offered to apply a selling policy to the effect that "strictly no discounts will be offered but instead bonus packs, samples or gift-with-purchase will be provided to customers. On or about 8 February 2002, Jurlique Distribution agreed to resume supplying Jurlique Products to the Jin Hsing Companies for resale to the public through Retail Outlets conducted by the Jin Hsing Companies on the Gold Coast, Queensland and in Sydney, New South Wales. It was term of the agreement referred to in paragraph 30 above that the Jin Hsing Companies strictly adhere to the terms of the offer referred to in paragraph 29 above. In or about January 2002, J & J Franchising, by correspondence with Neal and Lisa Withington, attempted to induce Neal and Lisa Withington as representatives for each of the Withington Franchisees, namely Ceon Holdings Pty Ltd, Jupita Investments Pty Ltd, South Addline Holdings Pty Ltd and Adnyl Investments Pty Ltd, not to sell Jurlique Products at prices less than the retail prices specified from time to time by Jurlique Distribution. J & J Franchising engaged in the conduct referred to in paragraph 32 above by arrangement with or on behalf of Jurlique Distribution. In making the offers, J & J Franchising was acting by arrangement with or on behalf of Jurlique Distribution. The offered franchise agreements containing the clause were not executed. On or about 24 January 2002 J & J Franchising (as Franchisor) offered in writing to enter into a franchise agreement with Evelyn Moore (as Franchisee). Any pricing which discounts the upmarket image and positioning of the Jurlique brand is a serious breach of this Agreement. In engaging in the conduct referred to in paragraph 34 above, J & J Franchising was acting by arrangement with or on behalf of Jurlique Distribution. The purchase price of Stock may vary from time to time. If the Franchisor and the Franchisee cannot agree those prices and margins within a reasonable time then the Franchisor may, in its absolute discretion, terminate this Licence on two months notice. In engaging in the conduct referred to in paragraph 37 above, J & J Franchising was acting by arrangement with or on behalf of Jurlique Distribution. The franchise agreements sent to Evelyn Moore ... Richard Firth ... and Mandy Tapfield ... were never finalised. J & J Franchising did not sign the franchise agreements containing the term with 88 Australian Products Pty Ltd (paragraph 27.4 and 27.11 above), Ceon Holdings Pty Ltd (paragraph 27.5 above), Jupita Investments Pty Ltd (paragraph 27.6 above), South Addline Holdings Pty Ltd (paragraph 27.7 above), BIM Investments Pty Ltd (paragraph 27.8 above), Adnyl Investments Pty Ltd (paragraph 27.9 above), Day Spa 267 Pty Ltd (paragraph 27.10 above). The pleaded conduct is that of offering to enter an agreement, for the purposes of section 96(3)(c) of the Act. In June 2004, as part of its response to the ACCC's investigation, J & J Franchising executed a deed of waiver in relation to each of the offered agreements in paragraphs 27.5 to 27.11 above. In making the agreements, Jurlique Spa was acting by arrangement with or on behalf of Jurlique Distribution. On or about 1 February 2002, Jurlique Spa entered into a written agreement with Inchant Korea Limited (as Licensee) and Junhee Bang, licensing Inchant Korea Limited to retail Jurlique Products in the Republic of Korea. . . shall be set by agreement between Jurlique [Spa] and the Licensee. If Jurlique [Spa] and the Licensee cannot agree those prices and margins within a reasonable time then the Jurlique [Spa] may, in its absolute discretion, terminate this Licence on two months notice. In entering into the agreement referred to in paragraph 40 above, Jurlique Spa was acting by arrangement with or on behalf of Jurlique Distribution. On or about 26 June 2002, Jurlique Spa (as Licensor) entered into a written agreement with Zhongshan Julei Beuty Company Limited (as Licensee) and Ruan Hai Fan, licensing Zhongshan Julei Beauty Company Limited to retail Jurlique Products in Guangdong Province and Zhuai, China for an initial term of three years commencing on 1 August 2002. . . shall be set by agreement between the Licensor and the Licensee. If the Licensor and the Licensee cannot agree those prices and margins within a reasonable time then the Jurlique [Spa] may, in its absolute discretion, terminate this Licence on two months notice. In entering into the agreement referred to in paragraph 43 above, Jurlique Spa was acting by arrangement with or on behalf of Jurlique Distribution. On or about 10 August 2002, Jurlique Spa entered into a written agreement with Beau' Belle Spa and Skin Care Pvt Ltd and Madhuri Kadiyala, licensing Beau' Belle Spa and Skin Care Pvt Ltd to retail Jurlique products in Hyderabad, India for an initial term of five years commencing on 1 August 2002. . . shall be set by agreement between Jurlique [Spa] and the Licensee. If Jurlique [Spa] and the Licensee cannot agree those prices and margins within a reasonable time then the Jurlique [Spa] may, in its absolute discretion, terminate this Licence on two months notice. In entering into the agreement referred to in paragraph 46 above, Jurlique Spa was acting by arrangement with or on behalf of Jurlique Distribution. In or about December 2002, Jurlique Spa (as Licensor) entered into a written agreement with Fullo Pty Ltd (as Licensee) and Winnie Lo, licensing Fullo Pty Ltd to retail Jurlique products in Taipei, Taiwan for a term of five years from 1 January 2003. . . shall be set by agreement between the Licensor and the Licensee. If the Licensor and the Licensee cannot agree those prices and margins within a reasonable time then the Licensor may, in its absolute discretion, terminate this Licence on two months notice. In entering into each of the agreements referred to in paragraph 49 above, Jurlique Spa was acting by arrangement with or on behalf of Jurlique Distribution. In August 2005, as part of its response to the ACCC's investigation, Jurlique Spa executed a deed of waiver unconditionally releasing each other party from any obligations to comply with the term in each of the above agreements. In or about June 2003, Dr Klein on behalf of Jurlique International entered into an international supply agreement with Jurlique Hong Kong Limited containing a clause which contained a term that Jurlique Hong Kong Limited would not sell Jurlique Products at prices less than retail prices to be specified from time to time by Jurlique International. In or about June 2003, Jurlique International (as Licensor) entered into a written agreement with Jurlique Hong Kong Limited (as Licensee) in relation to the operation of retail outlet for Jurlique Products in Hong Kong, China, for a term of five years from June 2003. If the Licensor and the Licensee cannot agree those prices and margins within a reasonable time then the Licensor may, in its absolute discretion, terminate this Licence on two months notice. In August 2004, as part of its response to the ACCC's investigation, Jurlique International executed a deed of waiver unconditionally releasing Jurlique Hong Kong Limited from any obligation to comply with the term. On or about 15 July 2002, Dr Klein on behalf of J & J Franchising entered into a franchise agreement with Beaut'e Werx Pty Ltd and Dorothy Chua containing a clause which contained a term that Beaut'e Werx Pty Ltd would not sell Jurlique Products at prices less than retail prices to be specified from time to time by the Jurlique Distribution. In making the offer, J & J Franchising was acting by arrangement with or on behalf of Jurlique Distribution. The Jurlique Companies do not assert that the agreement was a true agency agreement. On or about 15 July 2002, J & J Franchising (as Franchisor) entered into a written franchise agreement with Beaut'e Werx Pty Ltd (as Franchisee) and Dorothy Chua for the operation of a Franchise Outlet at Parramatta, New South Wales for a term of five years commencing 1 July 2002. The purchase price of the Stock may vary from time to time. If the Franchisor and the Franchisee cannot agree those prices and margins within a reasonable time then the Franchisor may, in its absolute discretion, terminate this Agreement on two months notice. In entering into the agreement referred to in paragraph 55 above, J & J Franchising was acting by arrangement with or on behalf of Jurlique Distribution. On 4 September 2002, as part of its response to the ACCC's investigation, J & J Franchising executed a deed of waiver unconditionally releasing the other parties from any obligations under the term. In or about July 2002, Dr Klein on behalf of Jurlique Distribution, by correspondence to all Jurlique Franchisees, induced or attempted to induce Franchise Outlets not to sell Jurlique Products to customers visiting Australia at prices less than the retail prices specified from time to time by Jurlique Distribution in the price lists published and distributed by Jurlique Distribution. Dr Klein engaged in the conduct referred to in paragraph 58 above on behalf of Jurlique Distribution. On or about 27 December 2002, Dr Klein on behalf of Jurlique International, by correspondence to 88 Australian Products, offered to reach an agreement with 88 Australian Products which contained a term that the 88 Australian Products would not sell Jurlique Products at prices less than retail prices specified and to be specified by Jurlique Distribution. On or about 27 December 2002, Jurlique International, by Dr Klein, offered in writing to give 88 Australian Products a 20% discount froom the wholesale price for Jurlique Products supplied to 88 Australian Products by Jurlique Distribution for a 12 month period from 1 January 2003, provided none of the Jurlique Products was discounted or sold to persons other than genuine retail customers at the retail prices that would be specified from time to time by Jurlique Distribution. In making the offer referred to in paragraph 60 above, Jurlique International was acting by arrangement with or on behalf of Jurlique Distribution. In or about February 2003, J & J Franchising entered into a franchise agreement containing a clause which contained a term that Ceon Holdings Pty Ltd and Neal and Lisa Withington would not sell Jurlique Products at prices less than retail prices to be specified from time to time by Jurlique Distribution. On or about 11 February 2003, J & J Franchising entered into a written franchise agreement with Ceon Holdings Pty Ltd, Neal Withington and Lisa Withington for the operation of a Franchise Outlet at Fountain Gate, Victoria. The purchase price of the Stock may vary from time to time. If the Franchisor and the Franchisee cannot agree those prices and margins within a reasonable time then the Franchisor may, in its absolute discretion, terminate this Agreement on two months notice. In entering into the agreement referred to in paragraph 62 above, J & J Franchising was acting by arrangement with or on behalf of Jurlique Distribution. On 25 June 2004, as part of its response t the ACCC's investigation, J & J Franchising executed a deed of waiver unconditionally releasing Ceon Holdings Pty Ltd from any obligation to comply with the term. Price lists for Jurlique Products were issued by the Jurlique Companies between 1991 and 2003. The price lists referred to in paragraph 66(d) above were intended by Jurlique International and by Dr Klein to be understood by Retailer Outlets and Jurlique Franchisees to be stating the price below which Jurlique Products were not to be sold or advertised for sale by the Retailer Outlets and Jurlique Franchisees. By reason of the matters set out in paragraphs 65, 66 and 67 above, the price lists referred to in paragraph 66(d) above were likely to be understood by Retailer Outlets and Jurlique Franchisees as stating the price below which Jurlique Products were not to be sold or advertised for sale by the Retailer Outlets and Jurlique Franchisees. The price lists referred to in paragraph 69(d) above were intended by Jurlique Distribution and by Dr Klein to be understood by Retailer Outlets and Jurlique Franchisees to be stating the price below which Jurlique Products were not to be sold or advertised for sale by the Retailer Outlets and Jurlique Franchisees. By reason of the matters set out in paragraphs 65, 69, 70 above, the price lists referred to in paragraph 69(d) above were likely to be understood by Retailer Outlets and Jurlique Franchisees as stating the price below which Jurlique Products were not to be sold or advertised for sale by the Retailer Outlets and Jurlique Franchisees. After the ACCC investigation into the relevant conduct commenced, in June 2004 Jurlique International wrote to Jurlique Franchisees and stated that there was no obligation to comply with the prices in Jurlique's retail price lists. In July 2004, Jurlique International instructed its staff to refer to price in all documents as "recommended retail price" and to include a disclaimer on price lists that price was only recommended, with no obligation to comply with that recommendation. From about July 2004, Jurlique International began including a statement on its price lists that the prices were recommended only and there was no obligation to comply with the recommendation. From about January 2001, J & J Franchising supplied Jurlique Treatments through its day spa at Melbourne Central in the Melbourne central business district. Jurlique Treatments are skin, body and spa treatment services using Jurlique Products, including facials, massages, waxing, tinting, body wraps and exfoliation, offered under the "Jurlique" brand name. From about March 2001, the arrangement was that Adnyl Investments Pty Ltd would supply the Jurlique Treatments at the same prices as the Jurlique Companies' day spa at Melbourne Central and that from about March 2001, each of Ceon Holdings Pty Ltd, South Addline Holdings Pty Ltd and Jupita Investments Pty Ltd would supply the Jurlique Treatments at the prices used prior to March 2001 by the Jurlique Companies' day spa at Melbourne Central. The ACCC alleges, and Jurlique International and Jurlique Distribution admit, that Jurlique International and Jurlique Distribution contravened the resale price maintenance provisions in section 48 of the Act. The ACCC alleges, and Jurlique International admits, that Jurlique International was directly or indirectly knowingly concerned in or party to, and aided and abetted particular contraventions of the resale price maintenance provisions by Jurlique Distribution. The ACCC alleges, and Jurlique Spa admits, that Jurlique Spa was directly or indirectly knowingly concerned in or party to, and aided and abetted contraventions of the resale price maintenance provisions by Jurlique Distribution. The ACCC alleges, and J & J Franchising admits, that J & J Franchising was directly or indirectly knowingly concerned in contraventions of the resale price maintenance provisions by Jurlique International and Jurlique Distribution, and further was party to, and aided and abetted, particular contraventions by those companies. The ACCC alleges, and J & J Franchising admits, that J & J Franchising contravened the price fixing provisions in sections 45 and 45A of the Act. The ACCC alleges, and Dr Klein admits, that Dr Klein was knowingly concerned in, and aided and abetted the breaches by the Jurlique Companies. The practice of resale price maintenance is the practice identified in Part VIII of the Act: s 4. 47 Section 45(2) of the Act prohibits, inter alia, price fixing. 50 The appropriate penalty is to be determined by the Court after having regard to 'all relevant matters'. The applicability of the 'totality principle' to penalties for contraventions of the Act was accepted by Burchett J in Trade Practices Commission v TNT Australia Pty Ltd & Ors (1995) ATPR 41-375 at 40,169. 53 While all the factors referred to above have to be considered in the context of the circumstances of a particular case, some of those factors are of particular relevance in the assessment of appropriate penalties in the present case. 54 The contravening conduct is in connection with premium skin care products. Approximately three quarters of the Jurlique Products sold in Australia by value of retail sales are skin care products. The remaining quarter of Jurlique Products sales by retail value relate to hair care, essential oils, and tincture products. Skin care products were the subject of the decision Australian Competition and Consumer Commission v Dermologica Pty Ltd (2005) 215 ALR 482 (' Dermologica '), and it is right to note that the Commission considers the objective of general deterrence to be of particular importance in relation to the skin care product industry. 55 However, it is also relevant to note that Jurlique Products comprise a small proportion of total skin care product sales in Australia, but their share of premium skin care products is larger. 56 The majority of the contraventions by the Jurlique Companies involve specialist retailers, including the company outlets, franchise outlets, and the Jin Hsing Company. The contravening conduct concerning price lists also involves pharmacies and salons. 57 The joint submissions of the parties acknowledge that the Jurlique brand is particularly attractive to consumers who are looking for products that they consider are natural, Australian made, and luxurious; and that Jurlique Companies offer Jurlique products at relatively expensive prices. The Jurlique Companies considered that discounting undermined the Jurlique brand and the brand value was maximised if Retailer Outlets and Jurlique Franchises did not discount Jurlique Products. Consistent with this view, the Jurlique Companies at the time of the conduct considered the maintenance of resale prices contributed to the growth in the Jurlique brand. 60 The fact of the matter is that the attraction of many products to consumers lies in the fact that they are expensive, and have an aura of exclusivity about them. That attraction is enhanced if the product outwardly displays the signs of its expensive exclusivity, as in the well-known pattern of a product, or by the name that is displayed on the product itself, as on the arms of sunglasses, or on a label of a shirt. 61 There is a respectable view among economists, particularly those belonging to the so-called 'Chicago School of Economics', that vertical price restraints such as retail price maintenance are not anti-competitive. Such economists would argue that there is absolutely no basis on which such practices should be illegal per se , even if there is room for the view that they should be subject to a 'rule of reason'. 64 The Chicago School of academics supports vertical price restraints such as resale price maintenance, presuming them to be pro competitive and producing significant economic benefits, by facilitating the distribution of products to consumers: see Alan J Meese, 'Property Rights and Intrabrand Restraints ' 89 (2003 --- 2004) Cornell Law Review 553; Keith M Hylton, Antitrust Law: Economic Theory And Common Law Evolution (2003) Cambridge University Press, ch 13; Robert W Hahn (ed) Antitrust Policy and Vertical Restraints (2006) AEL-Brookings Joint Center for Regulatory Studies, particularly ch 1; James Cooper et al, 'Vertical antitrust policy as a problem of inference' 23 (2005) International Journal of Industrial Organization 639. 65 Resale price maintenance is said to enable a supplier to maintain the reseller's profit level, and therefore the incentive the reseller has to distribute the goods. For examples of how resale price maintenance may assist new products entering the market and increase competition, see Julie Brebner 'Resale Price Maintenance --- The Need for Further Reform' (2001) 9 Trade Practices Law Journal 19. 66 The prevention of a 'free ride' by discounting retailers is one justification for resale price maintenance: see the classic article by Lester G Telser, 'Why Should Manufacturers Want Fair Trade' (1960) 3 Journal of Law and Economics 86; Keith M Hylton, (2003) Antitrust Law: Economic Theory And Common Law Evolution Cambridge University Press , particularly at pp 252 --- 261. 67 The concept of a 'free ride' is described by Yuankuo Wang and Mark J Davison in the article 'Resale Price Maintenance: is the Per Se Prohitibion Justified? It is said that at least some consumers will consume the service and then go to buy the relevant item at another shop which does not provide the service and therefore can price the item lower than the retailer which does provide the service. This free-ride process, if not prevented, can ultimately discourage any retailer from providing services sufficient to maxim wise joint profits. Thus, in order to increase their sales, they will have to compete in non-price aspects such as providing services. 69 There is a strong case for the argument that by employing a minimum resale price, and preventing the undercutting of prices by discount retailers, the image and status of a product is protected; that is, the high price is a mechanism through which a manufacturer can certify to its customers consumer that the products they are purchasing are of a high quality: see Alan J Meese, 'Property Rights and Intrabrand Restraints ' supra at p 565 . But other retailers can take a free-ride on this certification process. They can sell the same brand at a lower price and get the benefit of the high quality certified by the prestigious, high-priced stores which presumably have incurred cost in screening products. By using rpm to protect quality certifiers from free-riding, a manufacturer can attract more demand for its product . Such certification, it is said, need not be limited only to quality, but can also extend to style and fashion trends of apparel. The benefits of maintaining a price for goods in the prestige market was discussed by Geoff Edwards, in the article, 'When Should Resale Price Maintenance be Authorised? Guidelines for Use in Authorisation Decisions ' (1996) 4 Trade Practices Law Journal 161 at p 170. Products targeted at upscale customers may sell better at high prices since low prices may cause those customers to question the exclusivity of the product. The basis of the argument here is that when consumers buy a prestige product, they are buying more than just its practical usefulness; they are also buying the ability to show off the purchase, that is, to demonstrate to others that they can afford prestige. Consumer welfare is enhanced since it must be assumed that consumers do derive genuine benefit from the purchase of this non-tangible prestige. It is argued that to assume otherwise would be to second guess those consumers and suggest they do not know what is in their own best interests. However it is also arguable that consumers are being fooled into paying too much for a product of only the same quality as cheaper alternatives and that to facilitate the continued existence of expensive prestige goods is not in society's interest. If enough consumers (whether marginal or inframarginal [inframarginal consumers are those who place no value on extra services] ) are dissatisfied with the product, the manufacturer will find it unprofitable to enforce it --- dissatisfied consumers will substitute away to a more satisfactory product mix --- and the manufacturer will be forced to either retract the offending product mix or introduce a superior alternative. Consequently, a profit-maximising manufacturer may only implement a vertical restraint if the restraint is welfare-enhancing. On the other extreme, it is argued that rpm is a part of an efficient overall distribution system which can overcome the problems resulting from market imperfections. 75 In the present proceedings, the difficulty is that, notwithstanding the views outlined above, I am bound by the law, and, in particular, by the Trade Practices Act 1974 (Cth). Resale Price Maintenance is a per se contravention of s 48 of the Act. It is therefore somewhat of an indulgence to consider whether the law ought to be different from what it is presently is. The parties and this Court are bound by the provisions of the Act. 76 Nonetheless, it is significant that the parties acknowledge in the joint submissions that 'it is not possible to quantify the loss or damage caused by the conduct '. It is, in my view, unhelpful to attempt to assess any loss on the basis of an assumption that the effect of retail price maintenance was to maintain the retail price by 10% higher than it would be in the absence of such maintenance. That assumption is based on the simplistic view of competition by price, and at least in the context of prestige goods, competition by price is, it seems to me, not by any means the dominant consideration. 77 There is much to be said for the view that the volume of sales, in a sense, depends on the prestige and goodwill associated with the knowledge that the products are highly priced. In short, there seems to be no evidence to support the view that if retailers were able to discount by 10%, the same volume of sales would occur, but at the reduced price. As the comments I made above make plain, it may very well be that if there were to be widespread discounting, then the volume of sales would decrease. 78 Where, it is acknowledged, Jurlique Companies did not have significant market power in relation to premium skin care products, and where, it is acknowledged, the Jurlique Companies compete in the market of premium skin care products with competitors, including substantial international corporations, it is impossible to conclude that the maintenance of retail prices by the Jurlique Companies caused loss and damage to consumers. The Jurlique Companies were spending significant advertising funding differentiating its product from its competitors and it gained what it considered to be an advantage in the promotion of its image and stocking of its product by maintaining undiscounted prices for its products. These two issues meant that through its contravening conduct, Jurlique Companies obtained advantages over competitors who complied with the law . 81 The parties and the Court have to take the law as it is, and the Act provides for penalties for a contravention of a corporation of up to $10 million, and up to half a million dollars in the case of a natural person. 82 In Trade Practices Commission v Stihl Chain Saws (Aust) Pty Ltd (1978) ATPR 40-091 at 17,896, Smithers J made plain so long ago as 1978, ' the principal object of the imposition of a penalty under s 76 is deterrence '. Their deterrent effect has been insufficient. For a penalty to have the desired effect, it must be imposed at a meaningful level. Most antitrust violations are profitable. Accordingly, the penalty must be at a level that a potentially-offending corporation will see as eliminating any prospect of gain. First, it means that penalties for collusive price fixing will need to be substantial and significant. This is, of course, reflected in the size of the maximum penalty upon corporations of $10 million. However, it also follows logically from the principle. Collusive price fixing, particularly between tenderers is difficult to detect. Public enforcement often only occurs with "a tip from an affected party or an insider" (See Marshall & Meurer, "Bidder Collusion and Antitrust Law: Refining the Analysis of Price Fixing to Account for the Special Features of Auction Markets" (2004) 72 AntiTrust Law Journal 83 at 101). Given these difficulties and the potential for large profits from such practices there is a chance that those in the market place might be prepared to factor the risk of a low penalty into its pricing structure as a 'business cost'. That would be inimical to the statutory purpose of ensuring that the practices do not occur. The penalty must be sufficiently high that a business, acting rationally and in its own best interest, will not be prepared to treat the risk of such a penalty as a business cost. 89 There is, of course, a need to consider the capacity of a contravening party to pay in the calculation of the appropriate penalty, while also giving effect to the primary obligation of the Court to impose a penalty which satisfies the requirement of general deterrence. Obviously the sum required to achieve this object will be larger where the Court is setting a penalty for a company with vast resources. However, as specified deterrence is only one element and general deterrence must also be achieved, consideration of the party's capacity to pay must be weighed against the need to impose a sum which members of the public will recognise as significant and proportionate to the seriousness of the contravention. The first instance in the pleadings was in 1991, with the last conduct, the subject of these proceedings, being in 2003. The majority of the conduct the subject of the contraventions occurred during 1999, 2001 and 2002. These proceedings were filed on 14 August 2006. Within the six year time frame prior to the institution of these proceedings there are more than 30 resale price maintenance contraventions of the Act. That conduct affected Jurlique franchisees and retailer outlets throughout Australia and also involved international customers, both within Australia and overseas. 92 Dr Klein, during the period of the relevant contraventions for penalty, was the most senior executive and owner of the Jurlique Companies. He set the policy on discounting, was directly involved in aspects of the drafting of Jurlique Franchise Agreements, in negotiating the schedules and terms with franchisees, and he had direct contact with the stores. He was involved in all aspects of the contravening conduct. The other contraventions did not involve ongoing conduct. 93 While some aspects of the financial position of the respondent companies are confidential, it is relevant to record that over the four financial years from 2000/2001 to 2003/2004, the total wholesale sales of Jurlique International and Jurlique Distribution rose from slightly over $10 million to about $21 million, and the domestic retail sales of J & J Franchising Direct Sales and Treatments rose from nearly $8 million to about $11 million. While it is not appropriate to give precise details of the financial size of the contravening companies, in circumstances where confidentiality has been claimed over particular aspects of the accounts before the Court, it is appropriate to acknowledge that the consolidated position of the group discloses substantial assets and significant profits. 94 The profit of the group is substantial against revenue. It is indicative of the group's financial position to have regard to the consolidated results for the 2002/2003 financial year, where the net assets of the group was more than $90 million, revenue more than $46 million, and the profit from ordinary activities before income tax was a little more than $11 million. 95 As an indication, for Jurlique International in that 2002/2003 financial year, sales were slightly more than $28 million with profit before tax of a little more than $10.5 million. For that same financial year, Jurlique Distribution recorded sales of slightly more than $15 million, and profit before tax a little over $9 million. 96 For J & J Franchising, for that year, the sales were nearly $8.5 million and the profit before tax was nearly $25 million. 97 Jurlique Spa had limited trading activity during the period of the conduct. It received little income and profit during the period, had negligible net assets, and did not distribute any dividends in the relevant period. 98 The consequence is that the financial information before the Court indicates that the Jurlique Companies have the financial resources to meet penalties which are recommended by the parties as appropriate for the Court to impose. 99 It is relevant in this context to refer to Dermologica . The report indicates that Dermologica, in the financial year 2001/2002, had sales of nearly $15 million and profit before income tax in the order of $1.2 million. In the present case, in the 2003/2004 financial year, the Jurlique Companies' revenue was four times larger than Dermologica's income in 2001/2002, and the Jurlique Companies' profit before tax was considerably higher than Dermologica's. 100 As to the degree of market power of the Jurlique companies, I have already referred to the lack of market power of Jurlique in the market of premium skin care products. Jurlique's share of sales is low in the skin care product industry however Jurlique Products are highly differentiated and offers one of only a few ranges of products claiming to have natural ingredients and to be made in Australia. Customers' perception of a brand's image, which is expensive to create and maintain through advertising and marketing, differentiates Jurlique Products from many competitors' products. Accordingly, some customers are willing to pay more for particular skin care products based on their perception of image. Because Jurlique Franchisees made a substantial investment in each franchise store, Jurlique Companies had significant power in respect of its Jurlique Franchisees. It was the result of a long-standing company policy that retail prices should not be discounted. The founder of the Jurlique Companies, Dr Klein, believed strongly in their quality and considered that the prestige image of the Jurlique products could only be maintained if it was not damaged by discounting behaviour. However defensible that view might be, it is no defence to a contravention of the Act, and as the quotations earlier referred to about general deterrence make plain, Parliament has decreed that conduct in contravention of the Act has to be deterred and to this end has provided for a maximum penalty in the case of a corporation of $10 million. 103 The conduct occurred at the most senior level of the company, and flowed through the operations of the Jurlique Companies. Dr Klein and the Jurlique Companies initially denied that contraventions had occurred. The initial denials by Dr Klein continued after allegations were first raised in March 2003, and persisted at least until some 'without prejudice' admissions were made at the end of August and early September 2004. 104 In November 2003, Dr Klein ceased as managing director; in December 2003, a new shareholder acquired 25% of Jurlique International. In 2004, that shareholder acquired a further 50% of Jurlique International, and the remaining 25% interest was sold by interests associated with Dr Klein in 2005. Since 25 July 2005, Dr Klein has not been involved in the management of the Jurlique Companies and is no longer a shareholder in that company; he has ceased to be a director. 105 In April 2004, the Jurlique Companies arranged for their lawyers to provide its senior executives and sales managers with a training session specifically targeting resale price maintenance and price fixing. Trade practices training was also provided to Jurlique Companies' sales staff who were located in Adelaide, Melbourne and Sydney in July 2005. No compliance training was delivered to staff until a year after the Commission raised its concerns about the Jurlique Companies' conduct. Dr Klein himself had received no trade practices training. 106 It is relevant to note that the Jurlique Companies have offered to provide a s 87B undertaking to the Commission to implement a compliance program with particular regard to Part IV of the Act. There have been no previous contraventions by any of the Jurlique Companies or Dr Klein relating to Part IV of the Act. 107 It has to be also recognised that the Jurlique Companies and Dr Klein have saved the time of the Court and Commission by making the admissions constituted by the filing of the respective defences, and in reaching agreement with the Commission on the making of joint submissions to the Court as to the appropriate orders and penalties to be imposed. There has been a saving of some investigation costs, but any savings would have been much greater had there been a timely acknowledgement by the Jurlique Companies and Dr Klein about the Commission's concerns regarding retail price maintenance, and had there not been a denial of any wrongdoing by Dr Klein over an extended period. Dr Klein pay the applicant's costs of and incidental to these proceedings as against him in the agreed amount of $20,000 within 7 days of the date of this order. When corporations acknowledge contraventions, very lengthy and complex litigation is frequently avoided, freeing the courts to deal with other matters, and investigating officers of the Australian Competition and Consumer Commission to turn to other areas of the economy that await their attention. At the same time, a negotiated resolution in the instant case may be expected to include measures designed to promote, for the future, vigorous competition in the particular market concerned. These beneficial consequences would be jeopardised if corporations were to conclude that proper settlements were clouded by unpredictable risks. A proper figure is one within the permissible range in all the circumstances. The Court will not depart from an agreed figure merely because it might otherwise have been disposed to select some other figure, or except in a clear case. Each of Jurlique International, Jurlique Distribution, J & J Franchising and Jurlique Spa be restrained, within Australia and in respect of agreements for supply between Australia and places outside Australia, for a period of 5 years, from being directly or indirectly knowingly concerned in or party to a corporation engaging in the conduct set out in pars 1.1 to 1.4 above in relation to the supply of skincare, cosmetic or herbal medicine products, or products under the 'Jurlique' brand. 3. Dr Klein be restrained, within Australia, for a period of 5 years, from being directly or indirectly knowingly concerned in, or aiding, abetting, counselling or procuring, a corporation that supplies health treatment service making, or arriving at, or giving effect to any contract or arrangement or understanding (other than an agreement to jointly supply such services, or an agreement with a related entity), which contains a provision that has a substantial purpose or effect or likely effect of fixing, controlling or maintaining or providing for the fixing, controlling or maintaining of, the prices charged for the services supplied or offered for supply by any of the parties to the contract, arrangement or understanding in competition with each other. 6. Dr Klein pay the applicant's costs of and incidental to these proceedings as against him in the agreed amount of $20,000, within 7 days of the date of this order. | admitted contraventions of ss 45 and 48 of the trade practices act 1974 (cth) franchisor conduct resale price maintenance price fixing quantification of loss and damage resulting from resale price maintenance in premium skin care products franchise agreements included clause that franchisee would not sell products at prices below recommended retail prices specified by franchisor and distributor pecuniary penalty claiming penalties for contraventions of pt iv of the trade practices act 1974 (cth) quantum calculation of appropriate penalty for resale price maintenance and price fixing public policy considerations general deterrence deliberate contraventions trade practices practice and procedure |
By that judgment the Federal Magistrates Court ordered that a writ of certiorari issue quashing a decision of the second respondent (Tribunal) and that a writ of mandamus issue requiring the Tribunal to re-determine the matter according to law. The decision referred to was a decision of the Tribunal signed on 1 February 2007 and handed down on 13 February 2007 affirming a decision of a delegate of the Minister (Delegate) not to grant the first respondent (SZKJT) a Protection (Class XA) visa. On the appeal SZKJT was self represented. The Tribunal filed an appearance submitting to such order as the Court might make save as to costs. The appeal was fixed for hearing on 27 August 2009. On the preceding day, 26 August 2009, the High Court of Australia delivered judgment in Minister for Immigration and Citizenship v SZKTI [2009] HCA 30 ( SZKTI ) by which the High Court allowed an appeal from a Full Court of this Court in SZKTI v Minister for Immigration and Citizenship [2008] FCAFC 83 ; (2008) 168 FCR 256 ( SZKTI (Full Court decision)). Contemporaneously, the High Court heard an appeal in Minister for Immigration and Citizenship v SZLFX [2009] HCA 31 ( SZLFX ) because a common issue of statutory construction was involved in the two appeals. The reasons given in SZKTI were also applicable to SZLFX and the Minister's appeal in the latter case was also allowed. In the present case the Federal Magistrates Court based its decision the subject of the present appeal on the decisions of Full Courts of this Court in SZKTI (Full Court decision); Minister for Immigration and Citizenship v SZLFX [2008] FCAFC 125 ; and SZKCQ v Minister for Immigration and Citizenship [2008] FCAFC 119 ; (2008) 170 FCR 236. The first two of those three cases were the subject of the appeals to the High Court referred to above. The consequence of the High Court's reversals of the Full Court decisions in SZKTI and SZLFX is that the present appeal by the Minister must be allowed. As will appear below, it was after the Federal Magistrate reserved judgment that the three Federal Court Full Court judgments were delivered, and his Honour based his decision favourable to SZKJT on them and not on the grounds which SZKJT had raised. His Honour allowed the parties an opportunity to make further submissions on the s 424 issue the subject of the three Full Court decisions. The Minister did so, submitting (at [41], [42]) that for any one of several reasons, s 424(2) of the Act was not engaged. For reasons that appear below, the appropriate order is that the matter be remitted to the Federal Magistrates Court for determination of the outstanding issues. He arrived in Australia on 17 April 2006 and applied for a protection visa on 22 May 2006. SZKJT's claims were to the effect that he had had to pay certain fines and debts, and had been active in questioning Chinese authorities in respect of "donations" that he and others had had been compelled to pay. He claimed that as a result of a belief by Chinese authorities that he had encouraged his fellow villagers not to pay these donations, he had been harassed, detained and physically abused by those authorities. He claimed that he had encouraged local people also to protest, and that, as a result, he had been questioned by police, who he had heard were planning to detain him again. On 9 August 2006 the Delegate refused to grant the visa. On 7 September 2006, SZKJT applied to the Tribunal for review of the Delegate's decision. SZKJT attended a hearing before the Tribunal on 15 November 2006. In the course of the hearing and in the presence of SZKJT and an interpreter the Tribunal member telephoned a friend of SZKJT's father-in-law and had a conversation with him. The friend was in China. The friend answered some questions asked by the member concerning SZKJT's background in China. Following the hearing, the Tribunal wrote to the Department of Foreign Affairs and Trade (DFAT) concerning the authenticity of four documents that had been provided to the Tribunal by SZKJT in support of his claims. In substance, the Tribunal asked DFAT to ascertain from the (overseas) "post" whether the documents were genuine. There was a response suggesting that they were not. On 3 January 2007 the Tribunal wrote to SZKJT through his migration agent, pursuant to s 424A of the Migration Act 1958 (Cth) (the Act). The court book before the Federal Magistrate discloses that the letter gave details of the information received from DFAT adverse to a finding of authenticity of the four documents and invited SZKJT to comment on the information. SZKJT did so on 17 January 2007. After identifying SZKJT's claims, including those mentioned above, the Tribunal addressed the documents that SZKJT had tendered in support of his claims. The Tribunal declared itself persuaded by the DFAT assessment that they had been fraudulently created. The Tribunal stated that it was strengthened in that finding by the results of the Tribunal's own investigations with regard to available information, and noted that this information indicates the prevalence and availability of fraudulent documents in China. The Tribunal stated that it had considered SZKJT's submission with regard to the DFAT assessment but was not persuaded by that submission to think that the documents had not been fraudulently procured and submitted by SZKJT to strengthen his claims for a protection visa. The Tribunal also referred to the information given over the telephone by the friend of SZKJT's father-in-law. The Tribunal said that this was not sufficiently strong to provide corroboration for SZKJT's claims, and that the weight of evidence with regard to the documents being fraudulent led it to find that SZKJT's claims were fabrications. The Tribunal failed to comply with its obligations under s.420 of the Act. The Tribunal failed to comply with its obligations under s.430 of the Act. The Federal Magistrate stated (at [13]) that SZKJT "pressed the following": A breach of s.420 of the Act. The applicant submitted that s.420 requires the Tribunal to pursue a mechanism that provides a "just, fair, and economical review mechanism", and that it was unfair of the Tribunal to find that the documents submitted in support of his application were forged in the absence of any "material direct evidence" in support of that finding. A breach of s.430 of the Act. The applicant explained that the Tribunal refused to consider his explanation for the information provided by DFAT (that is, his response to the Tribunal' s s.424A letter). Further, the Tribunal did not set out the reasons for this, and the evidence it relied upon ("the Tribunal did not specify on what basis it behaved in such a way and in accordance with what evidence"). The Tribunal breached its obligations pursuant to s.424A(1) of the Act. The applicant submitted that the Tribunal did provide him "with relevant information" (the information from DFAT and the other information the Tribunal relied on), but that the Tribunal, "without any reason", refused to consider his explanation in response to this information. The applicant also submitted that this led him to "question the sincerity of the Tribunal". (This may also have been a complaint of an apprehension of bias (see the applicant's written submissions provided subsequently - see [16] of this judgment). The Federal Magistrate then stated (at [14]) that given the fact that SZKJT was unrepresented before the Court, his Honour had raised the following matters with Mr R Foreman who appeared for the Minister: In relation to the applicant's second ground, whether the question may better have been posed as whether the Tribunal properly considered all of the applicant's claims. Whether, in light of SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63 ; (2006) 228 CLR 152 ; [2006] HCA 63 (" SZBEL "), the Tribunal complied with its procedural fairness obligations pursuant to s.425 of the Act. In relation to the applicant's third ground, whether a breach of s.424A of the Act occurred in relation to the oral evidence obtained by the Tribunal via telephone. The parties were given the opportunity to make written submissions in relation to these issues and to provide any further evidence that might be relevant to them. The Minister filed supplementary written submissions and an affidavit annexing a copy of the transcript of the hearing that had been held before the Tribunal on 15 November 2006. SZKJT subsequently filed written submissions in which he argued apprehension of bias on the part of the Tribunal. According to [119] of his Honour's reasons for decision, he had drafted reasons dealing with the grounds put forward by SZKJT and as pleaded, and had concluded that he could not find jurisdictional error. However, the entire process was then overtaken by the handing down of the three Full Court decisions of this Court as noted at [6]-[8] above. These decisions caused his Honour to turn his attention to the telephone call that the Tribunal member had made to the friend of SZKJT's father-in-law during the course of the hearing, and to the post-hearing written request made by the Tribunal to DFAT for information concerning the authenticity of the four documents. Because his Honour concluded that, consistently with the Full Court decisions, s 424(1) , (2) and (3) applied, he found jurisdictional error because the invitations to the friend and to DFAT had not been made in conformity with ss 424(3) (which incorporates by reference s 441A) and 424B of the Act. The conclusion is inescapable that the Federal Magistrates Court erred (through no fault of its own) in its finding of jurisdictional error. That finding was founded on the proposition that the telephone call and the written inquiry of DFAT did not comply with ss 424(3) , 424B and 441A . It suffices to say that the effect of the High Court decision in its application to the facts of the present case is that the Tribunal was at liberty to get the information in question from the friend and from DFAT without complying with those provisions. I do not think that [47] of their Honours' reasons for judgment was intended to confine the ratio decidendi to the getting of information over the telephone. It is not necessary to explore other issues, although I note in passing that the inquiries made by the Tribunal of the friend and of DFAT were first time inquiries of those sources and could not be characterised as invitations to them to provide information additional to information that they had previously given to the Tribunal; cf SZLPO v Minister for Immigration and Citizenship [2009] FCAFC 51 ; (2009) 255 ALR 407 at [99] , [100]; SZKTI at [4]. The Minister argued that the matter should not be remitted to the Federal Magistrates Court because it was plain that the grounds on which SZKJT had relied before that Court were unsustainable. While it is understandable that the Minister would make this submission in view of the Federal Magistrate's statement that he had not found jurisdictional error in the grounds on which SZKJT had relied, I think that the matter should be remitted. Apparently the Federal Magistrate had drafted his reasons for judgment dealing with the grounds raised by SZKJT but those reasons were not revealed. It is not appropriate that in disposing of the appeal in its appellate jurisdiction, this Court should deal with those grounds for the first time in the exercise of its original jurisdiction. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. | s 424 of migration act 1958 (cth) high court's decision in minister for immigration and citizenship v szkti [2009] hca 30 handed down the day before the hearing federal magistrates court of australia had relied on decision of full court of federal court of australia which had been reversed by the high court in that case inevitable that appeal be allowed and decision of federal magistrates court be set aside matter remitted to federal magistrates court for other grounds of application to that court to be considered and determined. migration |
The plaintiff complains that the conduct of the Council's affairs has been contrary to the interests of the members of the Council as a whole and oppressive to, unfairly prejudicial to, and unfairly discriminatory against, members of the Council. The plaintiff seeks an order pursuant to ss 232 and 233 of the Corporations Act 2001 (Cth) ("the Act") that an independent person from one of the "major four" accounting firms be appointed to prepare a report to the members of the Council in relation to a number of matters relating to the conduct of the affairs of the Council to which I will refer later in these reasons. Initially the plaintiff claimed, in the alternative, an order that the Council be wound up pursuant to s 233(1)(a) , or alternatively s 461(1)(k) of the Act on the grounds that it was just and equitable to do so. Pursuant to a directions order the plaintiff filed particulars of the grounds relied upon in support of its winding up application on 20 August 2008 and its Outline of Contentions of Fact and Law filed on 1 October 2008 included submissions as to why the Council should be wound up on the just and equitable ground due to oppression of the minority or a failure of the substratum of the Council. The plaintiff abandoned that relief when the final hearing of the proceeding commenced. The merger was implemented as a result of a Memorandum of Understanding made on 31 August 2007 between the Council, BCSE and AusWind. The Memorandum of Understanding noted that the BCSE and AusWind were peak industry associations "representing a range of energy supply and demand side technologies" and that the objective of the merger was to ensure that the "sustainable" energy sector was represented by a single entity that clearly and articulately presented a uniform message to external stakeholders. The Memorandum of Understanding set out the provisions by which the Council, BCSE and AusWind were to implement the merger of the two organisations. The members of BCSE and AusWind had been provided with an Information Memorandum which they had considered at a special general meeting of the members of each organisation. The members of each organisation had voted affirmatively to amalgamate the two organisations. A copy of the Information Memorandum was attached to the Memorandum of Understanding. The Memorandum of Understanding set out the obligations, activities and conduct to be undertaken by the Council upon the merger. The reference in the Memorandum of Understanding to "supply and demand side technologies" is not a reference to "supply side" and "demand side" as those expressions are ordinarily used in an economic sense or in any economic context. Mr Szental, a director of the plaintiff, explained that the sustainable energy sector can be understood as being made up of companies and organisations on the "supply side" and companies and organisations on the "demand side". Companies and organisations on the "supply side" are concerned with the generation of sustainable energy for sale by energy retailers to individual consumers. Companies and organisations on the "demand side" are concerned with products and services to be used by individual consumers to reduce their use of energy or to use it more efficiently. An example of a "supply side" participant is a company which generates electricity. An example of a "demand side" participant is a manufacturer of photovoltaic cells for domestic use, for example, a solar panel which can be installed on the roof of a suburban house. The Memorandum of Understanding provided for the assignment and novation of the assets and liabilities of BCSE and AusWind to the Council. The memberships in BCSE and AusWind were transferred to the Council from 31 August 2007. The current Board of Directors of the Council is an interim Board which was appointed by the BCSE and AusWind Boards following the merger. A 'directorate' structure is proposed to meet Members' needs for this technology-specific representation. Directorates may form or dissolve as required around specific clusters of Member interest. The activities to be undertaken by specific Directorates will not be prescribed by the Board however the Board will be informed about these activities to ensure that they are consistent with a unified association's objectives. The Board and CEO are ultimately responsible for approving Directorate business plan and outputs. In the development of policy and high level representation the CEO and the Board will take advice from and be informed by the views of the Members through the Leaders' Advisory Council and the Directorates. The business plan and budget will allocate resources to effectively address both a unified association's overall objectives and the issues pertaining to specific technology sectors. Five of the directors are directors of BCSE and five of the directors are directors of AusWind. One director is a director of both BCSE and AusWind and two directors are neither directors of BCSE nor AusWind. The Chair, Mr Richard McIndoe is the CEO of TRUenergy Australia Pty Ltd and is not a director of either BCSE or AusWind. Mr Szental's evidence related to a number of respects in which he claimed that the Council had not carried out its obligations under the Memorandum of Understanding or the Information Memorandum and that the merger had failed to achieve its objective of unifying members of BCSE and AusWind. The Council has only recently established Technology Directorates. Despite repeated requests from Mr Szental for detailed financial reports, budgets and cashflow projections, none of these documents have been provided to him in an adequate form. The plaintiff's complaint is that the Council has developed very few policies and those policies that it has developed relate substantially to supply side interests. Mr Szental stated that there has been a desultory effort to set up policy working groups to address "demand" and "supply" side policy issues. On 18 December 2007 the Board of the Council resolved to establish a policy and advocacy subcommittee which Mr Szental undertook to chair. There has been a luncheon to which selected sponsoring members were invited to attend to meet politicians and also a breakfast meeting. Mr Szental had lost faith and confidence in the ability of the other directors and senior management to manage the affairs of the Council in the interests of its members. In particular, over a considerable period of time Mr Szental has raised concerns about the Council's budget and its financial position. From time to time Mr Szental sought financial information from the Chairman of the Council but this was not made available to him. Having regard to the conclusions I have reached as to the characterisation of the plaintiff's complaints, the manner in which the Council's affairs and activities were being conducted as at the time of the final hearing and as to the nature of the relief sought by the plaintiff, it is not necessary to make specific findings in relation to the plaintiff's particular complaints. A number of the complaints were contested by the Council with varying degrees of cogency. Nevertheless, it is necessary to consider some of the plaintiff's complaints in order to understand the context in which the somewhat unusual form of relief sought by the plaintiff is placed. The plaintiff had a particular complaint in relation to the financial position of the Council and the financial information which was available to, and supplied to, the Board. Mr McIndoe acknowledged that in the period following the merger the Council experienced difficulties in establishing comprehensive financial and accounting records and that immediately post-merger the Council was not performing in a satisfactory way. It was clear to Mr McIndoe in January 2008 that the financial records of the Council were unsatisfactory and completely inadequate. It was for that reason that he commissioned a report from an independent accountant, Ms Emma Stone of Stones Management Services ("the Stone Report"). The report, provided in February 2008, confirmed Mr McIndoe's view of the Council's financial records. Mr McIndoe did not disclose or make available the Stone Report to the directors of the Council other than to Mr Jones, the Chairman of the Finance and Compliance Sub-committee. He only brought it to the attention of the directors after the receipt of the second Stone Report in May 2008. Mr McIndoe's explanation for not doing so was that he commissioned the Stone Report for his own use. Mr Szental dissented. Up to this meeting, and indeed for some days after it, the second Stone Report was not made available to the directors. The statement was obviously relevant to the issue of the declaration of solvency yet Mr McIndoe said that the statement was not discussed at the board meeting although the issue of the cash flow forecast was discussed at length. During May 2008 Mr Szental sought information about the Council's financial position and solvency from Mr McIndoe and he made his concerns known to other Board members. He did not receive the information he sought. On 22 May 2008 Mr Jones, the Chairman of the Finance and Compliance Subcommittee, provided a summary of the Council's financial position to the Board by email. Mr Szental was dissatisfied with this summary as it did not respond to a number of issues he had raised earlier with Mr McIndoe. Further, the summary was based partly on the contents of the Stone report which had not been made available to Board members. On 29 May 2008 Mr Jones circulated Ms Stone's supplementary report dated 8 May 2008 ("the Second Stone Report"). This was the first time that the details of the Stone Report had been provided to the Board. The report had been critical of the financial records and financial data of the Council. In particular, Ms Stone had noted that there was a lack of control in relation to financial data and transactions. In the Second Stone Report Ms Stone noted that most of the issues which she had raised previously had been attended to. In particular, and as detailed in par [24] above, Ms Stone made observations about the forecasting of the cashflow of the Council. These financial issues culminated in the plaintiff, through Mr Szental, sending a letter to each of the directors of the Council on 17 June 2008. The letter set out in some detail Mr Szental's complaints about the lack of transparency in the management of the Council and several corporate governance failings. In the letter Mr Szental said that he wished to discuss these issues at the next Board meeting and he expressed the view that the Board should immediately appoint an expert insolvency accountant to examine the solvency of the Council and report back to the Board. A Board meeting of the Council was held on 20 June 2008. At the meeting Mr Szental was handed a letter signed by 10 of the 13 directors seeking his resignation as Deputy Chair and as a Director on the basis that the Board had lost confidence in him. This action was apparently based on a claim that Mr Szental had breached Board confidences and had a conflict of interest, with which he disagreed. Mr Szental asked that the Board address some of the issues raised in his 17 June 2008 letter but his request was denied. At the end of the meeting the Chairman noted the plaintiff's letter of 17 June 2008 and said that because the meeting had run over its allotted time there would be no discussion of the letter. On 24 June 2008 Mr Szental sent a letter to the directors of the Council in which he explained, inter alia , why he had written the letter of 17 June 2008. He called upon the Board to consider the issues raised in his letter and said that this should occur at a special meeting of the Board which he said should be convened by the Chair. On the same day the Chair, Mr McIndoe, sent an email to Mr Szental stating, inter alia , that he would convene a meeting of the directors to discuss his letter and any response they wished to make. A meeting of directors of the Council was convened on 25 June 2008 for 27 June 2008 but Mr Szental was not invited to attend. The application in this proceeding was filed on 11 July 2008. On 11 July 2008 Ernst & Young were retained to undertake the audit of the Council. Although issues of the solvency of the Council were raised in the affidavit material filed in support of the application, it was not suggested in the course of the hearing that there is an issue as to the solvency of the Council. There were hiccups along the way. The original chairman resigned in October 2007 and the original chief executive officer resigned at the end of March 2008. The development of policies in the sustainable energy field was an important issue for the Council. The development of these policies was slow in coming. For example, on 8 May 2008 the Council conducted a strategy day attended by its directors, and a further strategy day for staff members on 20 May 2008. At the latter meeting, the Council agreed upon a "Strategic Framework and Action Plan 2008---9" which sought to identify the strategic priorities of the Council. It is important to note that in relation to "influential policies" the immediate strategic priority identified was to re-confirm positions on existing policies and accelerate planning on new policies. This did not occur for a considerable period of time. The establishment of the Technology Directorates was also slow in coming. A draft of a proposed review of the Technology Directorates' structure was tabled at an April 2008 Board meeting of the Council. On 1 July 2008 the CEO of the Council sent a letter to members advising that the review of the directorate structure was complete and that seven directorates would be established. Whatever may have been the position in the first seven or eight months of the Council's existence, since at least May 2008 the Council has been active in its liaison and relationship with Government. This, I know, caused some frustration and angst to members, as we not only seemed to be losing our intellectual property, but to many, it appeared that we had disappeared off the radar screen. You will have received a letter from the Chairman, Richard McIndoe, and myself advising members of the strategy day that was held with the Board and the executive team in May. Repopulation of the staff was our key first step in going forward. Since May you will have received two newsletters updating you on activities and there is another coming mid July. You will also have noticed the significant increase in our presence in press articles. One conference, the ATRAA 2008 Conference and Exhibition was held at the end of July and the beginning of August 2008 and the National Conference of the Council was scheduled to be held in November 2008. On 16 July 2008 the Council sent a letter to all its members over the name of the CEO Ms Warrock which stated that the Council was financially secure. During the transition to a single entity, we have employed a number of independent accountants to repeatedly review our finances, budgets and cash flows, as well as maintain an active board-approved finance committee. As Mr McIndoe was at pains to make clear, he had commissioned the Stone Report for himself; that was why he had not made the two Stone reports available to the other directors after they had been received. On 14 July 2008 Mr McIndoe sent Mr Szental a reply to his letter of 24 June 2008. In that letter Mr Indoe enclosed "a complete set of financials including the rolling 12 month cashflow forecast as specifically requested". In the letter Mr Indoe rejected the request by Mr Szental that there be a solvency investigation by an independent accountant on the basis that the Council had commenced the standard end of year financial year audit process which would provide external verification of the finances of the Council. A Board meeting was scheduled for 19 August 2008. Prior to the meeting the CEO circulated business plans of the Council to the directors for their consideration at the meeting. These business plans included the development of policies, the implementation of the Technology Directorates' structure and other aspects of the Council's activities. At the meeting the directors considered a report from its CEO in relation to an overview of the steps being taken by the Council in the furtherance of its objects. Draft audited financial statements and audit report and the final audited financial statements and the final audit report were provided by Ernst & Young to the Council on 30 September 2008 and distributed to the Board on 1 October 2008. The draft audited financial statements and audit report included a letter from the auditors to the directors of the Council which contained matters for consideration by directors. General ledger reconciliations were not prepared on a timely basis. A number of the general ledger reconciliations contained unreconciled differences. As a consequence of this weak control environment we performed a substantive audit with particular emphasis on the balance sheet accounts at 30 June 2008. We bring these matters to your attention in order to assist with the improvement of the CEC internal control environment. It appears that these organisations are external to CEC but are using CEC finance and back office resources. Regular reconciliation of general ledger to management reporting. Establishment of accounting policy in relation to government grants. I am satisfied that the situation and conduct of which the plaintiff was complaining, after the merger was effected and throughout the first half of 2008 up to the time this proceeding commenced, has been ameliorated since July 2008. After the merger was implemented there was a considerable settling down period during which there was significant staff turnover which had an impact on the activities of the Council generally, including development of administrative procedures, development of policies, implementation of financial controls and the development of governance structures. A number of the plaintiff's complaints about these matters were justified at the time the complaints were made. A number of the activities to be undertaken by the Council identified in the Memorandum of Understanding were not implemented or carried out for some time. A number of the promises identified in the Information Memorandum as to how the Council's affairs would be conducted and the benefits that would be derived by members were not implemented or carried out for some time. Whatever may have been the position at the time the application by the plaintiff was filed in the Court, a number of the matters of which the plaintiff complained at that time in the evidence in the support of the application have been attended to and the position has now changed. I refer in particular to the appointment of the auditors and the presentation of the auditors' report, the implementation of the strategy plan and the development and implementation of policies, the restructure of the Technology Directorates, the revival or renewal of the Leaders' Advisory Council, and acknowledgement and acceptance that financial issues needed to be addressed and have been addressed. The plaintiff's claim that the Council has conducted its affairs in the interests of its supply side members to the exclusion or disadvantage of its demand side members has not been established. There is no evidence which supports this claim. The plaintiff's case is put on the basis, pursuant to ss 232 and 233 of the Act, that the conduct of the Council's affairs is either contrary to the interests of the members as a whole or oppressive to, unfairly prejudicial to, or unfairly discriminatory against, members of the Council. If I make a finding that any of those circumstances have existed and still existed at the time of trial, it is open to me to make any of the orders provided for in s 233(1). Pursuant to s 233(1), I am able to make any order that I consider "appropriate in relation to the company", including a number of specified orders. (b) If so, was that conduct continuing as at the date of the trial and the date of judgment? (c) If so, what relief is open to the plaintiff, and is the relief it seeks appropriate in all the circumstances? I do not consider that the proceeding has been shown to be an abuse of process. The plaintiff's complaint, both before and after this proceeding was filed, has consistently been that the conduct of the Council's affairs has not been in the interests of the Council's members in a number of respects to which I have already referred. The plaintiff has sought to have that conduct brought to an end. The plaintiff sought relief which it considered might achieve the result that the conduct of which it complained would be terminated. That relief was sought in the alternative --- if the conduct could not be terminated then the plaintiff sought the winding up of the Council on the just and equitable ground. The plaintiff abandoned that claim at the commencement of the final hearing. The Council submitted that the plaintiff acknowledged that it had never been its purpose to wind up the Council but that submission does not accurately reflect the plaintiff's evidence. What Mr Szental said, in the course of the cross-examination, was that the statement by the plaintiff's counsel in opening was accurate. And my client's purpose has always been to remedy the failure to pursue the objects of the company, not to bring it to an end. What apparently weighed in Mr Szental's mind was that as a result of the audited accounts becoming available the immediate future of the Council did not appear to be at risk. The Council then submitted that in seeking an order that will not remove oppression the plaintiff had commenced and continued the proceeding as a means of obtaining some advantage for which the proceeding was not designed or some collateral advantage beyond what the law offered: Williams v Spautz [1992] HCA 34 ; (1992) 174 CLR 509 at 526---7. The Council contended that the plaintiff's true purpose in bringing the proceeding was to obtain findings from the court for potential distribution to members of the Council. ---The object of this exercise is to bring to the attention of the members that the management of the industry association up till now has been far from adequate and not in their best interests. I mean I have nothing to gain out of this other than to try and improve the benefits. I led three-quarters of the members through the BCSE into this merger and I have an obligation to them and I'm trying to fulfil that obligation by trying to inform them that what they signed on for isn't what they got. The plaintiff has brought the proceeding in order to have the manner of the conduct of the Council's affairs changed. It seeks to achieve this result by seeking certain relief --- a report by an independent accountant to the members of the Council in relation to particular aspects of the conduct of the Council's affairs. For reasons to which I shall refer, I do not consider that that form of relief is appropriate in the circumstances of this case or that it will achieve a result of the type contemplated by ss 232 and 233. But that conclusion does not mean the plaintiff has been motivated by an improper purpose in commencing the proceeding. Its purpose in bringing the proceeding is to end a course of conduct. Accepting Mr Szental's evidence that the plaintiff commenced the proceeding to obtain findings by the Court which it could distribute to members does not mean an abuse of process. Rather, it means that the means by which the plaintiff is seeking to achieve its purpose is misguided and inappropriate. The discretion committed to the Court by s 233 is very wide and unconstrained. In an appropriate case, a particular type of conduct of the affairs of a company might be eliminated or terminated by directing a particular person to report on particular aspects of the conduct of a company's affairs to its members or by a Court making particular findings as to the manner in which the company's affairs have been conducted. The plaintiff may be misconceived as to whether the relief it seeks will end the conduct or oppression of which it complains. That misconception does not mean that it is seeking an improper collateral advantage in bringing the proceeding. The advantage sought by the plaintiff in the proceeding is to terminate the manner in which the Council's affairs have been conducted in a number of respects. Section 232 gives the plaintiff the opportunity to seek relief within the range of relief provided in s 233 of the Act. The appropriate relief to grant in any given case is a matter for the Court and the court must tailor that relief so as bring to an end the impugned conduct: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [1998] NSWSC 413 ; (1998) 28 ACSR 688 , 742. As I noted in par [21] above, I do not propose to make specific findings in relation to the numerous complaints made by the plaintiff. A number of the issues raised by the plaintiff were acknowledged by the Council with the addendum that they had been rectified and remedied by the time the proceeding commenced. I have referred to some of these issues in par [47] above. The "contrary to the interests" provision now contained in subpar (d) of s 232 has a separate and distinct area of operation from the "oppression" provisions in subpar (e) of s 232. The manner in which a company is being administered and in which its affairs are conducted may fall within the category of conduct contrary to the interests of the company's members as a whole although it may not be described as oppressive, unfairly prejudicial to, or unfairly discriminatory against members of the company: Turnbull v National Roads & Motorists' Association Limited [2004] NSWSC 577 ; (2004) 50 ACSR 44 at 52, 57; Campbell v BackOffice Investments Pty Ltd [2008] NSWCA 95 ; (2008) 66 ACSR 359 at 400. (See also Re Spargos Mining NL (1990) 3 ACSR 1 at 42; Shelton v NRMA Limited (2005) 51 ACSR 278. ) An example of such conduct may be found where a company is formed for the purpose of undertaking particular activities but the directors and management disregard those activities and direct the company into different commercial areas. An essential feature of the "oppression" provisions in subpar (e) of s 232 is whether or not there has been commercial unfairness. The court will generally look at the overall course of conduct and consider whether it is so unfair that reasonable directors would not consider it fair. If directors exercise a power so as to impose a disability or burden on a member that is unfair according to ordinary standards of reasonableness and fair dealing, then such conduct may be described as oppressive. The question is one of fact and degree for the Court to determine, having regard to the view the directors have formed themselves, and allowing for any special skill or knowledge possessed by the directors. The test of unfairness is objective: see Wayde v NSW Rugby League Limited [1985] HCA 68 ; (1985) 180 CLR 459 at 472 (" Wayde ") per Brennan J; Morgan v 45 Flers Avenue Pty Ltd (1987) 11 NSWLR 573. The court should not take a narrow approach to cases of oppression. It is necessary for the court to come to a conclusion that there has been conduct unfairly prejudicial to or unfairly discriminatory or oppressive to a member before it makes an order to this effect: see John J Starr (Real Estate) Pty Ltd v Andrew (Australasia) Pty Limited (1991) 6 ACSR 63 , and the authorities there collected at 65-67. In John J Starr (Real Estate) Pty Ltd v Robert R Andrew (Australasia) Pty Limited (1991) 6 ACSR 63 , Young J set out a number of principles in relation to the interpretation and application of the oppression provisions of the Act. Those who are alleged to have acted oppressively must be shown to have acted at least unfairly towards those who claim to have been oppressed: Re Five Minute Carwash [1966] 1 WLR 745 at 751. In a number of respects, to which I have referred, the Council did fail for a period of time to carry out, implement and carry into effect the promises, provisions and undertakings set out in the Memorandum of Understanding and the Information Memorandum. The Memorandum of Understanding and the Information Memorandum and their contents were fundamental to the decision of the two organisations to merge into the Council. Effectively the Information Memorandum and the Memorandum of Understanding formed the factual sub-stratum which justified the coming into existence of the Council. I do not consider that the complaints raised by the plaintiff in relation to the affairs of the Council and the manner in which the Board and its executive officers have conducted the business of the Council amounts to or constitutes oppression of the members of the Council, and in particular the plaintiff, within the oppression provisions of subpar (e) of s 232. In short, the conduct of the Council's affairs has not been oppressive to, unfairly prejudicial to or unfairly discriminatory against any members of the Council. The matters of which the plaintiff complains, taken either singularly or cumulatively, are not such as to constitute oppression or commercial unfairness as that expression has been construed and analysed in the authorities. That is not to say that the plaintiff's complaints have not had any substance. Some of the concerns the plaintiff and in particular Mr Szental had about the finances of the Council have been substantiated in part and certainly supported by the first Stone report which was commissioned by Mr McIndoe. I can understand the concern Mr Szental had in relation to a number of the issues he raised in relation to the finances of the Council. But those matters, either singularly or cumulatively, do not constitute oppression in the sense that they gave rise to the availability of a remedy under ss 232 and 233 of the Act. Although it may be said that for a time prior to the commencement of the proceeding the Council had engaged in conduct which was contrary to the interests of its members, in that it had not carried out the obligations it had accepted and undertaken to carry out in the Information Memorandum and the Memorandum of Understanding, that conduct had ceased prior to the commencement of the final hearing. In the course of final submissions Senior Counsel for the plaintiff submitted that the Council ought to be condemned for its failure to meet the expectations of its members. However, s 232 is not a punitive provision but rather a remedial provision: Re Spargos Mining NL (supra) at 44. The remedy to be granted under ss 232 and 233 is not to punish or to condemn but rather to remedy and end such oppression as has existed or such conduct which has arisen. Senior Counsel for the plaintiff explained the concerns of the plaintiff in response to a question I put to him when he drew my attention to the fact that in the audited financial statements for the year ended 30 June 2008 there was a significant variation in the figure shown as the surplus between the draft financial statements and the final financial statements. The Income Statement in the draft financial statements showed a net surplus for the period ended 30 June 2008 of $666,448 whereas the Income Statement in the final financial statements showed a net surplus of $1,074,464 for the same period. I asked Counsel how he put the variation on the issue of oppression. We say it's consistent with an organisation that simply isn't effectively pursuing its objectives and properly conducting its affairs. But in itself, it doesn't constitute oppression and as it doesn't disclose insolvency it isn't a ground we rely upon for winding up. We don't pursue winding up. But, your Honour, it's also consistent with a course of conduct with not providing documents which ought to have been provided. When they're requested they're still not provided, let alone within a reasonable time. He either walked away, saying well it doesn't matter that this company is not being conducted properly, it doesn't matter that it's not pursuing its objectives, it doesn't matter that the demand side policies aren't being developed and advocated. He could do that, that would be an easy thing to do. Or he could do it really as the only effective form of proceeding that he could bring, which is this proceeding, to attempt to remedy those deficiencies, which is what he's done. Further, by the commencement of the final hearing the substantive matters complained of by the plaintiff had been attended to by the Council. That consequence gives rise to the question as to whether it is open to a court to grant relief under s 233(1) when the conduct complained of, although in existence at the time the proceeding was filed, is no longer continuing as at the date of the trial or thereafter. The power to grant relief under s 233 is very wide and the specific types of orders set out in s 233(1) are inclusive rather than exclusive. However, in considering what remedies should be made available to a party seeking relief under ss 232 and 233, it is necessary to consider the appropriateness of the remedy as at the time of the trial, and not simply at the time the application to the Court for relief was filed. Notwithstanding the width of the discretion in s 233 as to the relief which may be granted, the relief to be granted should be such as to terminate or remove the oppressive conduct or the conduct which is contrary to the interests of the members of the company. Note the remedy in fact given in Re H R Harmer Ltd [1959] 1 WLR 62 at 68. Thus it is not enough merely to find oppression and then proceed to find some remedy that might bring peace to the company generally. The court should only grant the remedy that removes the oppression found. They enabled orders by which the oppression came to an end with the shareholder remaining a shareholder (as in Re H R Harmer Ltd [1958] 3 All ER 689; (1959) 1 WLR 62) or came to an end through the shareholder being brought out as a shareholder (as in Scottish Cooperative Wholesale Society Ltd v Meyer [1959] AC 324 ; [1958] 3 All ER 66 ( Scottish Cooperative )). That legislation was adopted in Australia, and has since been significantly amended to the form earlier set out. There are more widely available statutory remedies, but historically the point of granting a remedy is to bring an end to the oppression --- as Powell J said in Re Dernacourt Investments Pty Ltd (1990) 20 NSWLR 588 at 620; 2 ACSR 553 at 566 "if it be possible, to bring the 'oppression' to an end without recourse to a cure the effects of which would, in many cases, be worse than the disease". Given that the purpose of granting a remedy under ss 232 and 233 is to bring to an end the conduct complained of, what is the situation if that conduct, in existence at or prior to the commencement of the proceeding, has terminated by the time of trial? The general trend of authority is that it is open to a court to grant relief under s 233(1) of the Act notwithstanding the fact that at the time of the trial or the making of an order the conduct or oppression complained of is not continuing. A considerable number of authorities in this context were considered by the members of the Court in Campbell v BackOffice Investments Pty Ltd (supra). Rather, claimed relief founded on conduct which is no longer continuing may be refused, but will not always be refused, in the exercise of the discretion, and the discretion adequately allows for the logicality to which Hamilton J referred [in Bessounian v Australian Wholesale Mortgages Pty Ltd [2007] NSWSC 35 ]. However, Young CJ in Eq took the view (at 432) that "the authorities still require one to show continuing oppression at the date of hearing unless one is complaining about an act in the past of a director or other controller of the company which has a continuing effect". As the Council had attended to the substantive matters complained of by the plaintiff by the commencement of the final hearing, there is no conduct which needs to be the subject of an order or relief to operate prospectively. In any event, I do not consider that the relief sought by the plaintiff is an appropriate form of relief either in the circumstances of this case or for the purposes of satisfying s 233 of the Act. The relief sought by the plaintiff is that an independent person from one of the major four accounting firms be appointed to prepare a report to the members of the Council as to the Council's compliance with its obligations under the Memorandum of Understanding and the Information Memorandum, as to the adequacy of the Council's financial records and its solvency, and as to the extent and adequacy of the policies, mechanisms and procedures of the Council concerning corporate governance, reporting to the board and financial record-keeping, budgeting, forecasting and reporting. Further, the plaintiff seeks that the independent person provide recommendations as to what changes should be made to such policies, mechanisms and procedures. There are a number of criticisms or objections to this form of order of relief. Such relief leads nowhere. It does not resolve or remove the conduct complained of by the plaintiff or the acts upon which it relies for the purpose of complaining about the conduct of the Council's affairs. The matters upon which the independent person is required to report are not solely accounting or financial matters and extend beyond his or her probable expertise and experience. In particular, compliance with the Council's obligations under the Memorandum of Understanding and the Information Memorandum are not matters appropriate for determination by an accountant. The relief sought by the plaintiff was predicated upon s 233(1)(j) of the Act which empowers the Court to make an order "requiring a person to do a specified act". However, the relief sought by the plaintiff is not, in my opinion, aptly described as requiring a person to do "a specified act". Rather, the plaintiff is seeking an order that the independent accountant undertake an enquiry and report to the members of the Council. The fact that an order such as is sought by the plaintiff has not been made in any previous proceeding is no reason to refuse the relief for that reason. The discretion granted to the Court under s 233(1) is very wide and, as I noted earlier, it is not restricted to the forms of order set out in subs (1) of s 233. As I observed earlier, that section empowers the Court to make "any order" that it considers "appropriate in relation to the company". Nevertheless, I consider that the order sought is not appropriate in relation to the Council. The plaintiff referred to three cases in respect of which it appeared to submit that a court had made an order requiring a person to do a specified act or thing. However, the circumstances in each of those cases was quite different from the circumstances presently before me. In those cases, the orders made were specific and did not involve a wide-ranging enquiry or investigation and report of the type sought by the plaintiff. In Ghabrial v Romolly Pty Ltd (1991) 5 ACSR 611 the order made required the directors to appoint a quantity surveyor to determine a particular issue, namely how much of the costs of construction were attributable to matters for which shareholders were solely responsible and the cost of other construction work which was for the benefit of all the shareholders. In Sypkes Securities v Jeugny Pty Ltd (1991) 4 ACSR 668 the Court had made an order that the company provide accounts to one of its shareholders. The shareholder sought a further order that the company provide answers to certain questions about the accounts. Matters of opinion and matters of treatment properly are the subject of board consideration and determination. But antecedent to matters of the formation of opinion and the decision as to treatment is the supplying of information. What the plaintiff seeks here is factual information. I consider the plaintiff is entitled to be informed of relevant factual matter, being a corollary of Hampel J's order and antecedent to the formation of board opinion or decision as to treatment, before attending a board meeting wherein those decisions might be reached. It is entitled to attend the board meeting on a factually informed basis. The judgment does not appear to have any relevance to the issues before me. I do not consider that the relief sought is appropriate. As I pointed out earlier, it resolves no issue as to the conduct of the Council nor any issue which might conceivably fall under the heading of "oppression". It brings nothing to an end; rather, it perpetuates the issues raised by the plaintiff. The application will be dismissed. The plaintiff should pay the defendant's costs of the proceeding. I certify that the preceding eighty-six (86) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg. | oppression claim brought by member of not-for-profit company plaintiff claimed that objectives of the company were not being pursued and that company conducted its affairs in the interests of a sub-set of members to the exclusion of others where winding-up claim by plaintiff not pursued at trial whether abandoned winding-up claim abuse of process order sought that an accountant be appointed to prepare a report for the members of the defendant as to its affairs. corporations |
The respondent had acted under s 206F of the Corporations Act 2001 (Cth) ("the Corporations Act "). It seems that the applicant received a copy of the decision of the Tribunal on 9 July 2008. That being so, the final date for the filing of a Notice of Appeal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act ") was 6 August 2008. The applicant did not institute such an appeal within time, but, on 4 August 2008, filed an application for an extension of time to do so. It is that application which is presently before the court. 2 In his affidavit in support of the present application, the applicant swore that his father, a man of 98 years, was sick and dying in another State, and that he, the applicant, had need to attend upon his father during the week when he ought to have filed his notice of appeal. He also swore that he needed time to obtain legal advice, so that he might be able to express his grounds of appeal properly. The respondent accepted that the applicant had given a satisfactory explanation for his failure to file a notice of appeal within time, and accepted also that it was not prejudiced by the applicant's delay. Nonetheless, the respondent resisted the application for an extension of time upon the ground that the applicant's foreshadowed case was devoid of merit. 3 In taking that position, the respondent was availing itself of the opportunity to raise matters of substance on an application such as the present one, consistently with the long-accepted principles enunciated by Wilcox J in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 , 348-349. Although referring to s 11 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act "), his Honour's judgment has often been applied to the similarly-worded discretion arising under s 44(2A) of the AAT Act . The authority to which his Honour referred as " Lucic " was Lucic v Nolan (1982) 45 ALR 411. Nor, in my opinion, is it possible to identify particular circumstances or classes of circumstances which must automatically be excluded from consideration. Each individual case should be dealt with individually, giving due weight to prior decisions and what they reveal of judicial attitudes: cf s 11(4) and (5). Whilst there are obvious reasons why there should be no attempt at a full investigation of the merits of the application for review on an application for an extension of time, I would not exclude from consideration in an appropriate case some obvious strength or weakness in an applicant's case or matters which might justify the refusal of relief, if the court has a discretion to do so where a ground for relief is made out. The authority to which Wilcox J referred as " Chapman " was Chapman v Reilly , an unreported judgment of Neaves J given on 9 December 1983. It will be seen that this passage identifies the provenance of the formula used by Wilcox J in Hunter and may be thought to have gone further than the more tentative observations of Fitzgerald J in Lucic . However, in his actual disposition of the application in Chapman , Neaves J took an approach which was four square within Lucic , in that, while recognising the difficulties which stood in the way of the applicant in that proceeding, his Honour declined to express an opinion about them, and gave the applicant the extension of time which he sought. 5 A party to a proceeding in the Tribunal has an appeal as of right on a question of law. Such an appeal is in the nature of a new proceeding in the original jurisdiction of the court. It is unnecessary for an applicant in such an appeal to have grounds of any particular strength or intrinsic merit (although I recognise, of course, the relevance of s 31A of the Federal Court of Australia Act 1976 (Cth) in these, as in all other, original proceedings). For this reason (and perhaps the moreso because of the availability of s 31A) , I consider that the court should be slow to reject an application for an extension of time under s 44(2A) of the AAT Act , where otherwise the principles in Hunter are appropriately satisfied, for no reason other than that the appeal, if prosecuted, would be unlikely --- even very unlikely --- to succeed. I note that this was effectively the approach taken by the court in Mustafa v Chief Executive Officer, Centrelink [2000] FCA 1897 and in Wiegand v Comcare Australia [2005] FCA 1904. I consider that such an approach would be consistent with that taken by Fitzgerald J in Lucic and, because his Honour followed Lucic , by Wilcox J in Hunter . 6 While it will be apparent that I do not consider that an application for an extension of time is an occasion for any more than the most cursory examination of the merits of the proposed proceeding, nonetheless I recognise that, if such an examination does reveal the proceeding as being conspicuously devoid of merit, the application might well be rejected upon the ground that the prosecution of it would, in effect, be pointless. In the present case, the condition referred to in par (a) of s 206F(1) was satisfied in relation to four corporations of which the applicant had been a director. Those corporations were specified in the notice given to the applicant by the respondent under par (b) of the subsection. No question arose before the Tribunal --- and no question presently arises --- under either of those paragraphs, at least in relation to those four corporations. 8 The applicant filed a draft Notice of Appeal on 15 August 2008, in which grounds were set out which were said to disclose the questions of law upon which the appeal would be centred. Notwithstanding one of the applicant's reasons for seeking an extension of time, those grounds were, it seems, prepared without the assistance of a legal practitioner. This placed the applicant at a considerable disadvantage, particularly given the confinement of appeals under s 44 to those which are concerned with questions of law. On the hearing of the application for an extension of time, the applicant relied upon a written submission which provided some development of his grounds of appeal, but which do not betray an appreciation of the distinction between a question of law and other questions as to which the applicant may feel some disquiet about the Tribunal's decision. 9 The applicant's first proposed ground related to the consideration by the Tribunal of the circumstances of a fifth corporation which also satisfied the requirements of par (a) of s 206F(1) of the Corporations Act . That corporation was Austbloom Pty Ltd. Before the Tribunal, the applicant submitted that account could not be taken of the situation of Austbloom, since it had not been specified by the respondent in its notice under s 206F(1)(b)(i) of the Corporations Act . Indeed, in making its original decision under s 206F , the respondent had taken no account of Austbloom at all. Mr Culley was well aware that the position regarding Austbloom would be put to the Tribunal at the hearing by raising this issue in its statement of facts and contentions served on Mr Culley nearly five months prior to he hearing and he was given a full opportunity to be heard in relation to Austbloom at the hearing. In any event s 206F allows the Tribunal to have regard to any other matters considered appropriate in considering his disqualification once he has passed the initial barrier of being an officer of two or more corporations relevant to the operation of that section. 10 On the present application, the applicant submitted that, in exercising its power under s 206F , it was not open to the Tribunal to take account of circumstances of the kind referred to in par (a) of subs (1) save with respect to corporations referred to in the notice for which par (b) provides. Supporting the decision of the Tribunal, the respondent contended that, once "2 or more corporations" were identified as satisfying the conditions referred to in par (a), the respondent itself, and the Tribunal on review, were effectively at large in the exercise of their discretion under the section, and might take into account whatever other circumstances appeared to be relevant to the question of disqualification, including the past involvement of the person concerned in the management of other corporations. In this respect, the respondent relied particularly upon subpars (i) and (iii) of par (b) of subs (2). 11 Where the respondent has under consideration the exercise of powers under s 206F of the Corporations Act , it is required to give the person concerned "a notice in the prescribed form". By reg 1.0.03 of the Corporations Regulations 2001 , the prescribed form is No. 5249. That form requires the respondent to specify the corporations of which, according to its records, the person concerned was an officer, which had been wound up, and in relation to which a liquidator had reported under s 533(1) that they may be unable to pay their unsecured creditors more than 50 cents in the dollar. In the present case, it seems that the records of the respondent, at the relevant time, showed that the applicant had been an officer of Austbloom, being a corporation which had been wound up, and in relation to which the liquidator had made such a report under s 533. I consider that there may be an argument that Form 5249, and, therefore, that s 206F(1)(b)(i), required the respondent to specify all of the corporations which, according to its then records, satisfied the conditions set out in s 206F(1)(a)(ii). It may be possible to argue, notwithstanding the terms of par (b) of subs (2), that s 206F does not contemplate the circumstances of failed companies, other than those referred to in the prescribed form, being used by the respondent to add gravity to the case for disqualification. 12 If the construction of s 206F to which I have referred as being possibly open should be the correct one, there may likewise be a second question whether the Tribunal would also be constrained by the terms of the notice which was given to the applicant under par (b) of s 206F(1). It is true that the Tribunal's decision must be the correct or preferable one in all the circumstances, but that truism may not justify the conclusion that the Tribunal need not be concerned with statutory procedural requirements which governed the original decision of the respondent itself. It is sufficient for present purposes to conclude that the proposition that it need not be is not self-evident. 13 For the above reasons, I am not disposed to dismiss the present application for no reason other than that an appeal of the kind which the applicant proposes to bring would inevitably fail. I would not go so far as to say that the applicant's intended case has prima facie prospects of success, but it does seem to raise a legitimate, and potentially important, point of law which is worthy of consideration by the court. As I have said, the respondent accepts that the applicant has provided a satisfactory explanation for his failure to file a notice of appeal within time, and does not claim to be prejudiced by any delay. None of the other circumstances referred to by Wilcox J in Hunter would tend to point to the dismissal of the present application. I propose to grant that application. 14 I have dealt only with one of the applicant's proposed grounds of appeal. There were several other grounds, the sufficiency of which was challenged by the respondent. However, having decided, in relation to the one ground with which I have dealt, that the application should be granted, I consider that it would be inappropriate, and somewhat gratuitous, for me to enter upon the respondent's criticisms of the other grounds. If the applicant does file an appeal within the time which I propose to allow, the grounds upon which he then relies will be a matter for him. Nothing presently said by the court would be at all relevant upon the hearing of such an appeal; neither would any observations now made with respect to those other grounds bear one way or the other upon the disposition of the present application. 15 I propose to give the applicant 21 days after the publication of these reasons within which to file an appeal under s 44 of the AAT Act . I shall hear the parties on the question of costs. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup. | whether time should be extended for institution of appeal from administrative appeals tribunal whether proposed appeal devoid of merit extent of investigation of merits required. practice and procedure |
2 The plaintiff claims to be a creditor of Ranelagh House, which went into liquidation. The plaintiff notified the liquidator of its claim to be a creditor in August 2008. 3 The plaintiff contends that on 22 September 2008, without any communication from the liquidator in relation to the claim made by the plaintiff, the liquidator made a final distribution from the funds available to the liquidator which consisted of a significant surplus that was distributed to the members of the company. The plaintiff also contends that the liquidator did not have regard to its claim in the liquidation of the company. 4 Final accounts were filed by the liquidator with ASIC, the effect of which would have been that under s 509(5) of the Act, ASIC would have been required to deregister the company at the end of the period of three months after the return was lodged. The effect of this would have been that the company would be deregistered on 29 December 2008. Within the three-month period, the plaintiff filed an application which included the claim for an order under s 509(6) that ASIC deregister the company on 15 December 2010. 5 I have been taken to affidavit evidence which sets out the nature of the claim made by the plaintiff for breach of contract. The plaintiff asserts that the company owes it a debt in the sum of nearly $182,000. The application having been made within the period referred to in s 509(6) , I am satisfied that I have power to make the order. 6 The application is not made by the liquidator, but it is made by the plaintiff as an interested party. There is authority in a decision in Kerol Pty Ltdv Vergeld Engineering Pty Ltd (in liquidation) (unreported, Supreme Court of South Australia, Burley J, 30 April 1998) that a creditor is an interested party within the terms of s 509(6). The application in that case was quite similar to that which is made in the present proceedings. 7 In Kerol , Judge Burley said that the subsection confers a discretion on the Court to defer the dissolution of the company in two circumstances, one of which is that the continued existence of the company is necessary in order to effect some proper purpose. In that case, the proper purpose was the maintenance of proceedings in the District Court against the company by the plaintiffs. Here it is the continuation of the proceedings in this Court in which the plaintiff seeks to recover its debt in the amount, as I have said, of approximately $182,000. 8 I do not see that the present circumstances are materially different from those which existed in Kerol. Moreover, as Judge Burley said, the other circumstances in which the discretion to defer dissolution may be exercised arise where the interested party needs to make an application in relation to the administration of the liquidation. Here it may be necessary for the liquidator to seek to recover a part of the surplus from the members. That is a further reason for me to exercise my discretion to make the order. 9 In Billingham; Re WM Ritchie (Aust) Pty Ltd [2007] NSWSC 325 , Barrett J made an order under s 509(6) upon an application by the liquidators of a company. His Honour observed that at [3] that the application was made in circumstances where the liquidators had completed their administration and distributed the surplus to the members. The liquidators were unaware at all material times that the creditors had instituted proceedings in the District Court of South Australia. They sought an extension of the registration of the company for a period of approximately six months and his Honour made an order in those terms. 10 Barrett J observed at [11] that a court's jurisdiction under s 509(6) cannot be exercised after the expiration of the period of three months of the lodgment of the liquidator's final return. The effect of what his Honour said at [11] is that an order under the subsection can only be made once. Accordingly, a party requesting an order will need to arrive at a period sufficient to enable the purpose for which the order is made to be achieved. 11 Here, the plaintiff seeks an extension for two years. At first sight, that seems to be a period which might be thought to be excessive, however, bearing in mind what Barrett J said about the limitation upon the power to make such an order, I have come to the view that I ought to extend the registration of the company for the full two-year period as sought by Ms Soars of counsel for the plaintiff. 12 In coming to this view, I have heard from counsel for the first and second defendants; he does not oppose the extension for that period of time. Also, I have before me a letter from ASIC which states that ASIC does not consider it necessary to make submissions in regard to the application. ASIC never consents to, nor opposes the making of orders sought pursuant to s 509(6) of the Act. Accordingly, I propose to make orders in terms of the short minutes of order provided by the plaintiff, which I will sign and date and place with the Court papers. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. | application by plaintiff creditor to defer dissolution of defendant company final distribution of funds already made by liquidator plaintiff claiming unpaid debt continued existence of company necessary to effect proper purpose application granted corporations |
I indicated that reasons for those orders would be given later. These are those reasons. 2 Orion is publicly listed on the Australian Securities Exchange and its business is providing fixed line, mobile and data communications services. Should the Net Proceeds turn out to be negative, that will not reduce the share and cash component of the consideration. 3 The directors of Orion unanimously recommend that, in the absence of a superior proposal, shareholders vote in favour of the scheme. 4 Lonergan Edwards and Associates Limited (LEA) was engaged as independent expert to assess the scheme and prepared a report which is in evidence. It concluded that the scheme is fair and reasonable and, therefore, in the best interests of Orion shareholders. (b) The proposed scheme is an "arrangement" within the meaning of s 411. (c) There has been proper disclosure to members. (d) The scheme is bona fide and properly proposed. (e) The Australian Securities and Investments Commission (ASIC) has had reasonable opportunity to examine the proposed scheme and explanatory statement, to make submissions and has had 14 days' notice of the proposed hearing date of the first court hearing --- see generally s 411(2). (f) Any other procedural requirements have been met, eg Rule 3.2 as to nomination of chairperson for scheme meeting. (b) Details of Orion's capital. (c) Orion's Constitution. (d) Orion has committed itself to propounding the scheme. (e) The text of the scheme booklet containing the statutory explanatory statement, the Independent Expert Report, the Implementation Agreement, the Deed Poll, the text of the scheme, the notice of meeting and the proxy form. (f) Verification of factual information in the scheme booklet, thus providing prima facie evidence of proper disclosure. (g) Proof of the expert opinion of LEA contained in the scheme booklet giving the Court prima facie evidence of fairness. (h) Consents to act as chairman and alternative chairman of the scheme meeting. (i) Notice to ASIC. (j) The "usual letter" from ASIC that it does not propose to appear at the first court hearing --- ASIC's practice is not to give a s 411(17) clearance until the second court hearing. 7 My attention has been drawn to several aspects of the scheme which have, in the past, caused debate. I am satisfied that there is no relevant performance risk for shareholders. The break fee, no shop and no talk obligations are within reasonable bounds and in accordance with authority ( Re APN News & Media Ltd (2007) 62 ACSR 400; (2007) 25 ACLC 784; [2007] FCA 770 at [25] ---[55]). There is no complication in relation to the scheme itself by reason of the existence of the options which are to be dealt with by another mechanism. 8 The following clause caused me some concern. However, Lindgren J considered such a clause in Re APN News 62 ACSR 400; 25 ACLC 784; [2007] FCA 770 at [57] ---[63] with approval and took the same course in Re Investa Properties Ltd [2007] FCA 1104 at [21] . In Mincom Ltd v EAM Software Finance Pty Ltd (No 3) [2007] QSC 207 Fryberg J considered such a clause at [20]---[29]. His Honour was persuaded to change the initial adverse reaction which he had expressed in Mincom Ltd v EAM Software Finance Pty Ltd (2007) 61 ACSR 266; (2007) 25 ACLC 163; [2007] QSC 37 at [39] . In this field, it is acknowledged that uniformity of decision is important to avoid unnecessary uncertainty. As I cannot be satisfied that the other decisions are clearly wrong, I should follow them. If, on confirmation of the scheme, a party raises the issue so that an argument with a contradictor takes place, it is possible that a different result would occur. Even if that were so, the scheme could be confirmed without the relevant clause (cf Re WebCentral Group Ltd (No 2) (2006) 58 ACSR 742; [2006] FCA 1203). 10 The scheme is appropriate to be put forward to members for consideration. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. | convening scheme meeting no encumbrance warranty discussed corporations |
The plaintiff was the successful party. He prefers not to apply for a costs order against the company for it has no assets. Instead he asks that the liquidator pay his costs. The facts may be reduced to a relatively simple statement. On 20 September 2006 the plaintiff entered into a contract with the company to purchase for $780,000 a parcel of land at Noosaville. The plaintiff paid the deposit of $39,000 to the company's estate agent and was to pay the balance at settlement which was due on 20 November 2006. At the time of the contract, however, Bluestone Mortgages was in possession of the land in its capacity as mortgagee. Therefore, the company had no authority to sell. Moreover, the mortgagee had not assented to the sale and thus was not bound by the contract. The liquidator was appointed on 10 October 2006. A few days later the plaintiff's solicitor advised the liquidator of the existence of the contract and provided him with a copy. On 25 October 2006 the liquidator wrote to the mortgagee inquiring whether it would "ratify the contract offer made [by the plaintiff] and allow [the sale] to proceed. " The plaintiff's solicitor made a similar enquiry of the mortgagee. The mortgagee did not adopt the contract. Instead it put the land up for sale. Accordingly, on 6 November 2006 the plaintiff's solicitor wrote both to the agent and to the company's solicitors advising them that the contract was terminated. He also asked for a refund of the deposit. Neither the agent nor the solicitors took any step to return the money. The agent did seek instructions from the liquidator but was told that as the mortgagee had entered into possession the liquidator "now [has] no role to pay in determining whether the contract that has been exchanged can be completed". The solicitors said they could do nothing in the absence of instructions from the liquidator. The plaintiff's solicitor asked the liquidator to intervene. The liquidator refused. He explained his position in a letter dated 9 November 2006. I confirm my previous advices that you should make contact with Bluestone Mortgagees in that regard as it is they who control the subject property. I confirm that I am without funds to seek such advice in the liquidation of Jonkay Pty Limited and that the mortgagee's solicitor has advised that there is no realistic prospect that any funds will become available to the company from any equity after a sale of the property. He appeared to be uncertain whether it should go back to the plaintiff or whether the mortgagee was entitled to the deposit. The reason for his uncertainty was not explained. That has now been cleared up. Counsel for the liquidator has identified two matters that troubled his client. First, as company had sold the land while the mortgagee was in possession the sale might have been a fraud on the mortgagee who might then be entitled to the deposit. The second flowed from the rule that a mortgagee in possession is entitled to the rents and profits. The liquidator thought that by reason of that rule the mortgagee might also be entitled to the deposit. Neither point had any substance. As the mortgagee had not adopted the contract, the plaintiff was entitled to get his money back. His entitlement not being recognised, the plaintiff had to go to court. First, he applied for leave under s 471B of the Corporations Act 2001 (Cth) to bring the action. Then he initiated the action and, in due course, obtained an order that the agent refund the deposit. He now seeks the costs from the liquidator. There is a general rule that in a proceeding by or against a liquidator the real party to the action is the company and the company's assets are responsible for the costs: In re Marseilles Extension Railway and Land Company (1885) 30 Ch D 598. Of course if the liquidator is the plaintiff he will be ordered to pay the costs of the successful defendant but has an indemnity for those costs. If this were not the rule a liquidator would be in an impossible position. He would only bring an action if it were bound to succeed. He might not resist claims brought against the company unless they were clearly hopeless. There is also the risk that good people would be deterred from taking on the responsibility of acting as a liquidator: Re Wilson Lovatt & Sons Ltd [1977] 1 All ER 274. There are exceptions to the rule that the company's assets should bear the costs. Broadly speaking, if the liquidator acts unreasonably, recklessly or even negligently and his conduct leads to the unnecessary incurring of costs, those costs ought to be paid by the liquidator: In re Beddoe; Downes v Cottam [1893] 1 Ch 547; Mead v Watson (2005) 23 ACLC 718. In deciding whether the liquidator is acting unreasonably it is necessary to have regard to s 545 of the Corporations Act . Subsection (1) provides that "a liquidator is not liable to incur any expense in relation to the winding up of a company unless there is sufficient available property". (There are certain exceptions in relation to lodging of documents with ASIC: see s 545(3). ) The effect of the section is that, apart from lodging certain documents, a liquidator is not required to do anything if he cannot recover his expenses. It means the liquidator commits no wrong in failing to carry out any duties. Here I think the liquidator found himself in a difficult position. He was not sure what to do. He thought that he was at risk if he were to accede to the plaintiff's request. Ordinarily the liquidator should have obtained legal advice regarding what to do. If he had there is little doubt he would have been told to refund the deposit. The liquidator did not consult a lawyer because he had no funding to do so. So he did nothing. Still, he is protected by s 545 unless it could be shown that it would have been obvious to any liquidator that the plaintiff was entitled to his money. I cannot make that finding and therefore I will not make a costs order against the liquidator. So far as the costs of this application against the liquidator are concerned, they should lie where they fall. The liquidator should have told the plaintiff why he would not direct a return of the money. Had he done so, the application may not have been made. The plaintiff is, however, entitled to his costs against the company. | winding up claim against company liquidator fails to take legal advice no funds to pay legal costs action against company successful whether liquidator personally liable for costs corporations |
That application was supported by an affidavit sworn by the solicitor for Austcorp to which a draft Notice of Appeal was annexed. The Grounds of Appeal set out in that draft Notice of Appeal are many. It is not necessary to refer to those grounds in these reasons. On 1 May 2009, his Honour delivered Reasons for Judgment ( Ackers v Austcorp International Ltd [2009] FCA 432) but did not make any orders giving effect to those reasons on that day. Thus, in form, Austcorp seeks leave to appeal from reasons, not orders. Ordinarily, this is a course of action which the Court will not permit (see Baxter Healthcare Pty Limited v Comptroller-General of Customs (1997) 72 FCR 467 at 483 and the cases cited by Burchett J at 483; and see also Secretary, Department of Social Security v Lowe [1999] FCA 705 ; (1999) 92 FCR 26 at [16] (pp 33---34)). However, in the present case, it is not necessary for me to decide whether leave to appeal from his Honour's reasons should be granted. This is because, subsequent to 1 May 2009, his Honour made various orders on three separate occasions consequent upon the delivery of his reasons on 1 May 2009. During the course of argument before me, Austcorp made clear that it wished to challenge all of the substantive orders made by his Honour after 1 May 2009 by whatever means were considered by the Court to be appropriate. Subject to one matter to which I shall refer shortly, Counsel for the respondents to the present application did not oppose leave to appeal being granted to Austcorp nor did she oppose the making of other appropriate orders to regularise Austcorp's appeal. Judgment be entered in the amount of $164,863.95 in favour of Sear Tan-Bounkeua, the forty-second applicant, against Austcorp International Limited, the fifth respondent. Judgment be entered in favour of Austcorp International Limited, the fifth respondent, against Joseph Anthony Luciani & Taldamar Holdings Pty Ltd (ACN 081 320 194) atf Future Gen Family trust, together the twenty-sixth applicants. The time in which any party may seek leave to appeal from orders 1, 2 and 3, if leave be necessary, be extended to 29 May 2009. Orders 1 and 2 not be entered prior to 15 May 2009. The matter stand over for directions to 22 May 2009 for the purposes of the parties proposing orders for: the further conduct of the outstanding issues in the remaining applicants' cases that have not been determined; and costs of the matter to date or of the applicants' cases that have been determined. Argument on those issues be provisionally fixed on 5 June 2009. The questions of costs and proposals for the further conduct of the balance of the cases be listed for argument on 9 June 2009. Either party have liberty to apply. The questions as to the costs of the common issues subject to the hearing resulting in the Judgment of Rares J of 1 May 2009 and the orders made on 8 May 2009 and the entitlement to the costs of Mr Owers and Ms Tan-Bounkeua and Luciani/Taldarmar and Austcorp International Ltd flowing from those orders and the claims of the outstanding applicants, current as at the present time, be referred to mediation pursuant to s 53A of the Federal Court of Australia Act 1976 (C) before a registrar. Although Austcorp has not identified with precision the orders which it seeks to challenge on appeal, I have taken its position to be that it wishes to challenge all of the substantive orders made by his Honour on 8 May 2009, on 22 May 2009 and on 9 June 2009. As I have already mentioned, Austcorp has approached the question of appeal upon the basis that leave to appeal is required. This was because it took the view that the orders made by his Honour on 8 May 2009 pursuant to which judgments were directed to be entered against Austcorp were interlocutory. The only parties named as party respondents to Austcorp's leave application are Brian Stephen Owers ( Mr Owers ) and Sear Tan-Bounkeua ( Ms Tan-Bounkeua ). These are the two parties who have the benefit of the judgments directed to be entered by his Honour on 8 May 2009. I was informed by the solicitor for Austcorp that, if leave to appeal were granted or held to be unnecessary, it was Austcorp's intention to name only Mr Owers and Ms Tan-Bounkeua as party respondents in its foreshadowed appeal. This stance on the part of Austcorp gave rise to the only point of contention in the present application. Counsel who appeared for Mr Owers and Ms Tan-Bounkeua in the present application did not oppose leave to appeal being granted. Nor did Counsel oppose the making of an order in favour of Austcorp extending the time within which an appeal as of right might be filed should I be of the view that such an order was both necessary and desirable. The contest before me concerned an application made by Counsel for Mr Owers and Ms Tan-Bounkeua for an order that several other persons (said to number 14), being those applicants in the proceedings below who have not yet settled their claims and whose cases have not yet been determined by his Honour ( the remaining applicants ), be joined as party respondents to Austcorp's appeal so that, according to the respondents' contention, they would be bound by the Full Court's findings when judgment in the appeal is delivered in due course. Austcorp opposed the making of such an order upon the basis that the joinder application was misconceived. The proceedings below were commenced by the filing of one Application and one Statement of Claim. These documents have subsequently been amended. It is clear that each of the applicants had an individual or separate case against one or more of the respondents when the proceedings below were commenced. No joint claim was made. The mere fact that only one originating process was filed does not change these basic and essential facts. When the joinder application was made by Counsel for Mr Owers and Ms Tan-Bounkeua before me upon the hearing of Austcorp's application for leave to appeal, I informed Counsel that I was disinclined to make the order sought by her. She requested a short time in which to prepare and lodge Written Submissions in support of the order which she sought. I acceded to Counsel's request and reserved my decision in order to allow Counsel the opportunity to make such further submissions in writing as she may be advised. Written Submissions were subsequently filed in accordance with the directions which I made. These reasons are directed to determining Austcorp's application for leave to appeal (or, alternatively, its application for an extension of time within which to file an appeal as of right) and the application by Counsel for Mr Owers and Ms Tan-Bounkeua for an order joining the remaining applicants as party respondents to the appeal. It is neither necessary nor desirable for present purposes to refer to them in detail. It appears from submissions made to me at the hearing of Austcorp's leave application and from the primary judge's reasons that the proceedings below were originally commenced by 48 individuals or separate entities against five respondents. Each of those original applicants had purchased one or more residential apartments off the plan in a resort development on the waterfront at The Entrance, a town on the Central Coast of New South Wales. The promotional material which had initially attracted the attention of those purchasers promised them a guaranteed 7% p.a. net return "... with the security of strata title and a 10 year lease to Pacific International Hotels ". The purchasers were told that the venture was a "... five star investment ". Most of them borrowed most, if not all, of the purchase price required. Unfortunately, within a short time after completing their purchases, the lessee company went into administration and the return on the purchasers' investment turned out to be far less than 7% p.a. before expenses. At the time his Honour delivered his reasons on 1 May 2009, 25 applicants remained active in the proceedings below. For one reason or another, the first four entities named as respondents in the proceedings below were no longer active by that date. The only active respondent by 1 May 2009 was Austcorp. The principal reason that some parties have become inactive in the proceedings or have been dismissed from the proceedings is that the claims involving those parties have been settled by agreement. His Honour's reasons dealt with the claims of three investors only: Mr Owers, Ms Tan-Bounkeua and Joseph Luciani and his associate Taldarmar Holdings Pty Limited ( the Lucianis ). The parties who appeared before me upon the hearing of Austcorp's leave application informed me that the proceedings involving the Lucianis have also now been settled. Thus, the only live cases which have been determined by his Honour are those which were brought by Mr Owers and Ms Tan-Bounkeua. All cross-claims have been resolved by way of settlement. These reasons deal with three test cases. Originally I had made orders for a separate hearing of five claims which the parties had selected as raising questions representative of most issues common in a variety of situations involving the various other applicants and respondents. In general terms, the Court should approach claims such as those made in the proceedings below in accordance with the principles articulated by the High Court in Butcher v Lachlan Elder Realty Pty Limited [2004] HCA 60 ; (2004) 218 CLR 592. Of necessity, such an approach requires a careful consideration of all of the relevant circumstances in each individual case, many of which will be different as between one case and another even where some features in play may, at first blush, appear to be common. The approach which his Honour took and the findings which his Honour made will be under challenge in Austcorp's appeal. For this reason, I expressly refrain from expressing any views about any of those matters at this stage. Two points emerge from his Honour's reasons. It is obvious that his Honour has not determined on a final basis the whole of, or any part of, any of the cases brought by the remaining applicants. His reasons make this clear as does the form of the orders which he has so far made. No judgment or order has yet been made by which the effect of his reasons has been carried across to any of the other cases encompassed within the proceedings below. Indeed, having programmed and having heard argument directed to determining what consequences (if any) for the other cases might flow from his Honour's reasons of 1 May 2009, his Honour expressly declined to decide the question and referred that question to mediation. His Honour has also expressly refrained for the time being from determining what effect (if any) an alleged agreement concerning the so-called "test cases" might have on the cases of the remaining applicants in light of his Honour's reasons of 1 May 2009. Whilst it may well be the case that the primary judge's reasons might influence the conduct of Austcorp and the remaining applicants in relation to settlement and/or in relation to the future conduct of the cases of the remaining applicants, neither the reasons of the primary judge nor the orders which he has made so far purport to extend the effect of the judgment which his Honour has given in any legally binding way to the cases brought by the remaining applicants against Austcorp. Counsel for Mr Owers and Ms Tan-Bounkeua did not suggest otherwise. Rather, her submissions focussed upon the effect of an order made by his Honour on 7 December 2007 which was said to have been made pursuant to O 29 r 2 of the Federal Court Rules and upon the effect of an agreement said to have been made early in the life of the proceedings below between the applicants, on the one hand, and Austcorp, on the other hand. Alternatively, it was submitted that, if leave pursuant to that rule had not already been granted, it should now be granted. These submissions have not persuaded me that I am obliged to make the joinder order sought by the respondents nor do they persuade me that it would be sensible to do so were it a matter within my discretion. As matters presently stand, his Honour's 1 May 2009 decision is plainly confined to the cases of Mr Owers, Ms Tan-Bounkeua and the Lucianis. His Honour has had under consideration the question of whether the reasons and findings which underpin that decision should be carried across in some way to the cases of the remaining applicants but has expressly refrained from making any orders that might be thought to have that effect. His Honour has not yet accepted that either the orders made by him on 7 December 2007 or the alleged agreement amongst some or all of the parties below is sufficient to lead to such orders inevitably being made. It seems to me that his Honour has done no more than suggest that the application of good commercial sense might lead the parties to agree to extend some of his findings to the cases of the remaining applicants. The proceedings below have not been constituted as representative proceedings under Pt IVA of the Federal Court of Australia Act 1976 (Cth) ( the Federal Court Act ). Nor, in my view, has any leave yet been granted by the Court (whether expressly or impliedly) to the applicants in the proceedings below to proceed to conduct those proceedings in accordance with O 6 r 2 of the Federal Court Rules . The order made by his Honour purportedly pursuant to O 29 r 2 of the Federal Court Rules does no more than purport to decide that the five nominated cases be heard separately from and before the remaining cases encompassed within the Statement of Claim. It does not attempt to deal with the question of what consequences (if any) might flow from a decision in those five cases insofar as the cases of the remaining applicants are concerned. Nor could it do so. Furthermore, I do not think that O 29 r 2 of the Federal Court Rules is directed to or contemplates the making of an order for the trial of a separate question in the terms of the order made in the present case. In substance, the proceedings below, as originally constituted, comprised at least 48 separate cases (and perhaps more, having regard to the fact that there were multiple respondents originally in the proceedings below) rolled up into the one Statement of Claim. I make no comment at the moment as to whether this approach to the litigation of multiple but separate claims is permissible. However, I wish to make clear that nothing in these reasons should be taken as approval of such an approach. Order 29 r 2 of the Federal Court Rules is not directed to hiving off one case from one or more other cases but rather is directed to the expeditious determination of separate questions or issues which can be appropriately identified within the one case. It is simply not apt to be deployed to decide the whole of three or five separate cases before and separately from another 43 or so cases. This view of O 29 r 2 is supported by the reasoning of the English Court of Appeal in Radstock Co-Operative & Industrial Society v Norton-Radstock Urban District Council [1968] Ch 605 , [1968] 2 All ER 59, [1968] 2 WLR 1214. For these reasons, I think that the only basis upon which any part of the reasons delivered by the primary judge on 1 May 2009 could conceivably be held to bind the remaining applicants in some way is if the agreement alleged to have been made amongst the parties early in the life of the proceedings below adequately and effectively operates to render part or all of those reasons binding upon the parties in all of the cases of the remaining applicants or if the parties make an agreement to similar effect in the future. It is impossible for me at the moment to express any sensible views as to the effect of this alleged agreement. It is true that there are indications in the materials tendered before me to the effect that the parties to the proceedings below do regard themselves as being obliged to some extent to translate or extend in some way the ultimate findings of the Court in the three cases with which his Honour has already dealt into the cases of the remaining applicants. However, it is highly undesirable that I should express any views at all as to the effect of the so-called agreement, especially when the evidence before me as to the making of the agreement was scant to say the least and when the existence and the effect of this alleged agreement were not matters which were litigated before me in the present application. The primary judge has not made any orders which give effect to this alleged agreement or which extend the operation of any part of the reasons delivered by him on 1 May 2009 or the findings made by him to any of the cases of the remaining applicants. There can be no doubt that the cases of Mr Owers, Ms Tan-Bounkeua and of each of the remaining applicants are separate cases and have not been brought in the one proceeding in order to agitate some joint right or entitlement. It has not been submitted to me that the joinder of the remaining applicants is necessary in order to activate whatever agreement has been reached amongst the parties concerning some extended operation of his Honour's reasons and findings or that the joinder of those parties is a condition either to the making of that agreement or to its performance. For these reasons, I do not think there is any justification or proper basis for adding the remaining applicants as parties to Austcorp's foreshadowed appeal. The joinder of the parties would not, of itself, have the effect claimed by Counsel for Mr Owers and Ms Tan-Bounkeua. The only live cases which have been finally determined by his Honour are the cases brought by Mr Owers and Ms Tan-Bounkeua. The cases of the remaining applicants have not yet been heard nor have they been determined. It is for Austcorp, the present respondents and the remaining applicants to determine what steps any one or more of them may wish to take in an endeavour to extend his Honour's reasons and findings or, indeed, the reasons and findings of the Full Court in due course, in the cases which his Honour has decided and finalised by judgments, to the cases of the remaining applicants. Whether this can sensibly or properly be done at all is a matter which I leave open. No reliance was placed by Counsel for Mr Owers and Ms Tan-Bounkeua on O 52 r 14 of the Federal Court Rules . It may be thought that, by reason of the agreement alleged to have been made amongst the parties, the remaining applicants have a sufficient interest in the appeal or are affected by the relief sought in the foreshadowed Notice of Appeal. However, the existence, operation and effect of that alleged agreement has not been litigated before the primary judge. It seems to me that there may well be significant difficulties in deciding what impact or effect (if any) that alleged agreement has on the cases of the remaining applicants in light of his Honour's reasons and findings and in light of the reasons and findings of the Full Court in the event that an appeal is filed and ultimately determined by the Full Court. The obvious general interest which the remaining applicants have in the progress of the so-called "test cases" is not sufficient to engage O 52 r 14 of the Federal Court Rules . His Honour's reasons and the orders which his Honour has made in order to give effect to those reasons finally determine each of the three cases with which his Honour dealt (save for costs). Only two of them remain as live cases since the Lucianis have settled their case. Because those orders finally determine all of the substantive rights underpinning the cases brought by Mr Owers and by Ms Tan-Bounkeua (other than in respect of costs), his Honour's orders are final orders and Austcorp has a right to appeal from those orders pursuant to s 24(1) of the Federal Court Act. It does not need leave to appeal (see Carr v Finance Corporation of Australia Ltd (No 1) [1981] HCA 20 ; (1981) 147 CLR 246 at 248, per Gibbs CJ and at 253---254, per Mason J; and see also Sanofi v Parke Davis Pty Ltd (No 1) [1982] HCA 9 ; (1982) 149 CLR 147 at 152---153, per curiam). On the other hand, because these are the only cases which have so far been determined, these are the only cases in respect of which Austcorp is presently able to appeal. However, Austcorp is now out of time for the bringing of such an appeal (see O 52 r 15 of the Federal Court Rules ). As I have already mentioned, Counsel for Mr Owers and Ms Tan-Bounkeua, quite properly, indicated to me that her clients were prepared to consent to an appropriate order extending the time within which Austcorp might file its Notice of Appeal from the orders which his Honour has made. For the above reasons, I propose to extend the time within which Austcorp might appeal from some or all of the orders made by his Honour on 8 May 2009, 22 May 2009 and 9 June 2009 to 14 August 2009. In order to avoid further interlocutory disputation and unnecessary expenditure as to costs, I will also grant leave to appeal to Austcorp to the extent that such leave is necessary. I do not propose to make any order for the joinder of the remaining applicants to the appeal along the lines of that sought by Counsel for Mr Owers and Ms Tan-Bounkeua. The only respondents to the appeal will be Mr Owers and Ms Tan-Bounkeua. Subject to a Notice of Appeal being filed within the time permitted by the orders which I shall make, the costs of and incidental to the present application will be costs in the appeal. If no appeal is instituted, each party should bear his, her or its own costs of the present application. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. | application for leave to appeal from a decision of a single judge which determined three out of 48 cases propounded in the one proceeding by means of a single application and a single statement of claim in substance, orders made below were final leave to appeal not necessary but granted in any event time within which to appeal as of right extended observations as to the desirability of dealing with 48 separate cases in one proceeding without utilising pt iva of the federal court of australia act 1976 (cth) or o 6 r 2 of the federal court rules three "test cases" decided appeal from orders made in those cases whether parties to the extant remaining cases should be made parties to the appeal from the orders made in respect of the three "test cases" application for the joinder of the remaining parties refused appeal practice and procedure |
The trade mark comprises an image or device depicting food items which spin around a TV antenna. The trade mark was registered on 28 April 1997 and is registered in Classes 38 and 41. The respondent, Television Food Network, G.P. The relevant period for the purposes of s 92(4)(b) is the period 14 July 2003 to 14 July 2006. On 16 November 2006, FCN filed a notice of opposition under s 96 of the Act to the removal application. The reasons for decision of the Registrar's delegate reflect the procedural history concerning the filing and serving of evidence before the Registrar. As events transpired before the Registrar, a statutory declaration filed by Mr Paul Lawrence, the Managing Director of FCN, was excluded from consideration as evidence in support of the opposition on the basis of a failure on the part of FCN to comply with relevant steps within the prescribed times although Mr Lawrence disputes an aspect of that contended non-compliance. The application for removal was heard by the Registrar's delegate on 2 September 2008. The delegate decided that FCN had not made out its opposition to the removal application particularly since there was no evidence to support the opposition so as to discharge the rebuttal burden carried by the opponent under s 100(1)(c) of the Act in relation to allegations made by TFN under s 92(4)(b) of the Act. Thus, the Registrar's delegate directed that the trade mark be removed from the Register in respect of all classes. The application before this Court under s 104 is an application in the original jurisdiction of the Court. Having regard to the powers conferred upon the Court under s 197 of the Act, it is plain that it is not necessary on appeal under s 104 to determine whether the decision of the Registrar was correct when made. In that sense, the appeal proceeding is a hearing conducted "afresh" or de novo (like an appeal proceeding under s 56 of the Act: N.V. Sumatra Tobacco Trading Company v British American Tobacco Australia Services Limited [2008] FCA 1542) on material properly placed before the Court ( Blount Inc. v Registrar of Trade Marks [1998] FCA 440 ; (1998) 83 FCR 50 at 58-9; [1998] FCA 440 ; 40 IPR 498 at 506; Soncini v Registrar of Trade Marks [2001] FCA 333 ; (2001) 109 FCR 548 ; 51 IPR 411 ; Ostrowski-Meissner v Registrar of Trade Marks (2006) 69 IPR 291 at [7] and [8]). In addition, FCN proposes to rely upon further material (subject to objections to be made by TFN) which, when filed, will consist of at least, it is said, an affidavit from Mr Matthew Day which seeks to establish facts demonstrating use of the trade mark in the relevant period and a further affidavit from Mr Ian Bates also going to use of the trade mark in the relevant period. Both these affidavits are mentioned further shortly. TFN seeks consequential orders that the proceeding be stayed until security is provided and that upon failure to provide security in compliance with the principal order, FCN's appeal be dismissed with costs. The second application is an application by FCN as applicant for an order that TFN provide security for FCN's costs of and incidental to the appeal proceeding. That application although conceded by FCN to be novel, is made, it is said, on the footing that although FCN is the applicant in the proceeding, TFN ought to be regarded for all practical purposes as the prime mover or aggressor having initiated the application for removal of the trade mark before the Registrar. FCN says its appeal arises out of that "proceeding" and is responsive to it in the sense that FCN is exercising a right of appeal derivative of that proceeding. Therefore, it is said, s 56(5) of the Court Act in conjunction with Order 28 of the Federal Court Rules contemplates that an order for security for costs might be made against a respondent before this Court, who is (or was) an "applicant" in a proceeding before the Registrar of Trade Marks. That result is said to follow because Order 28, r 1 provides that references to an applicant (for the purposes of that Order) "extend to any person who makes a claim for relief in any proceeding" (Order 28, r 1). Secondly, FCN's application is said to be supported by the powers conferred on the Court by s 197 of the Act to make any order that in all the circumstances the Court thinks fit (s 197(e)). Principal among those for the moment are said to be that TFN ought to be characterised as the prime mover or aggressor and secondly, TFN is a partnership foreign to the jurisdiction with no assets within the jurisdiction. TFN says that FCN's application for security is misconceived because s 56 of the Court Act and Order 28 of the Federal Court Rules only contemplate orders for security for costs against an applicant or appellant or a person who "makes a claim for relief in any proceeding" (Order 28, r 1). TFN says it makes no claim for relief in this proceeding and the reference in Order 28, r 1 can only be a reference to a proceeding in the Court. Thus, there is no power to make an order against a respondent who makes no claim upon an applicant. Secondly, s 222 of the Act confers power upon the Registrar and only the Registrar, in the circumstances of the section and is not a provision which confers power on the Court. Thirdly, FCN's notice of motion is confined to an order sought under s 222 and does not, in terms, rely upon s 197. Fourthly, s 197 is directed to the powers of the Court in the hearing and determination of an appeal and does not confer power to make an order for security for costs. The power to do so in a s 104 proceeding before the Court is, it is said, determined by the Court Act and the Federal Court Rules . By FCN's website material it describes itself as a company founded in 1997 that utilises the internet and television as the medium for distributing multimedia productions to promote a range of services and products in a range of regions. TFN says that FCN is a company which has one issued share of $1.00 in paid up capital and Mr Lawrence is the only shareholder. TFN says that searches fail to reveal any significant assets held by FCN. Further, TFN says that The Food Channel website does not identify the entity conducting the business nor the business premises. TFN says that it raised its concerns about the capacity of FCN to meet any order for costs and invited FCN to provide evidence of its ability to satisfy a costs order. TFN says that FCN has failed to do so. Moreover, TFN says that FCN in a submission to the Registrar's delegate dated 2 September 2008 made two statements concerning Mr Lawrence which causes TFN concern. Significant cash flow negatives would make it difficult but not impossible for him to operate. TFN says that FCN has failed to provide any material in response to correspondence from TFN's lawyers which would suggest that FCN has the financial capacity to meet an order for costs. In response, FCN says three things. First, FCN has previously been ordered to pay costs in proceedings between these parties in the Federal Court and has paid a costs order which suggests that FCN can and will meet orders for costs when called upon to do so. It seems to be common ground that in related Federal Court proceedings an order for costs was made against FCN in an amount of $9,000.00 and those costs were paid. Secondly, FCN says that in order to put the matter beyond doubt, Mr Paul Lawrence offers an undertaking to pay any costs ordered to be paid by FCN. Mr Lawrence thus stands beyond the corporate veil of FCN and exposes himself to a liability for FCN's costs. Thirdly, FCN says that in exercising the discretion as to whether an order for security for costs ought to be made, the Court ought to have regard to the underlying merits of the matter. As to the underlying merits, Mr Hauff exhibits to his affidavit sworn 30 January 2009 a copy of an affidavit sworn by Mr Matthew Day on 23 January 2009. The essential facts Mr Day deposes to are these. In the period June 2003 to April 2007, Mr Day was the Programming Manager for a free to air community television channel described as BRIZ 31 broadcasting in the greater Brisbane area. Mr Day was in charge of program scheduling. Mr Day says that in February 2005 he spoke to Mr Lawrence by telephone and communicated with him by email in relation to a sponsorship program by which FCN might sponsor an organisation described as "Stained Glass Fishbowl". Mr Day says that Mr Lawrence provided BRIZ 31 with a copy of FCN's "sponsorship tape" which included Trade Mark 733265 depicting the trade mark image. Mr Day says the trade mark was animated in the tape such that the food and vegetable items rotated around a TV antennae depicting the words "The Food Channel". Mr Day says that the program sponsored by FCN exhibiting the tape was broadcast from 1 June 2005 to 8 July 2005 with a total of 16 broadcasts in that period. Mr Day says that he can recall viewing the program himself on air on a number of occasions in that period. FCN says that the evidence of Mr Day if accepted demonstrates use of the trade mark in the period 14 July 2003 to 14 July 2006 and thus FCN's prospects of success in the principal proceeding are strong. FCN also relies upon an affidavit annexed to Mr Hauff's affidavit, sworn by Mr Ian Bates. Mr Bates says that he is the proprietor of an audio visual equipment and productions company. In January 2002, Mr Lawrence showed Mr Bates Trade Mark 733265 for the purpose of placing the trade mark on a series of tapes of programs for television. Mr Bates explained that he could animate the trade mark. In July or August 2002, Mr Bates sublet premises to FCN for FCN's operations and in the period January 2002 to October 2005, Mr Bates' company undertook editing of the trade mark onto tapes for FCN in relation to a number of identified programs. In March 2004, Mr Bates' company performed editing services to insert the trade mark into a Food Channel video. TFN, in response, says that as to the costs order, it was a single order for a relatively small amount. Secondly, as to the undertaking offered by Mr Lawrence, the undertaking ought to be weighed in the balance but it is simply one factor and ought not to be treated as a decisive factor. In any event, the matters at [11], [12] and [13] of these reasons suggest that Mr Lawrence does not have the capacity to satisfy a costs order. Thirdly, the Court should be reluctant to have regard to the affidavits of Mr Day and Mr Bates as that material is simply annexed to the affidavit of Mr Hauff, has not been filed in the proceedings and when and if filed, will be the subject of objections on a number of grounds which ought not to be ventilated in this application. TFN says that the material suggests that use by FCN is an open question. However, the merits of FCN's application can be put no higher than an open question as to use. The position is this. It is true that FCN has failed to identify assets of the company out of which an order for costs might be satisfied. However, on the evidence, FCN is a going concern. FCN has previously satisfied at least one order for costs in litigation between the same parties. The undertaking offered by Mr Lawrence is not decisive of TFN's application in the sense that the offer of the undertaking is determinative of a decision in the exercise of the discretion. It is one important factor to be taken into account. There are other matters to be considered such as the merits of the action, the conduct of the parties and any other matter relevant to the exercise of the discretion, including the proposition that the mere impecuniosity of a plaintiff should not be a bar to the commencement of proceedings. Connolly J also observed that, "If however he [or she] is already available for whatever he [or she] is worth, the object of the legislation is seen to be satisfied". In Gentry Bros. Pty Ltd v Wilson Brown & Associates Pty Ltd & Ors (1992) 10 ACLC 1394 at 1399, Cooper J observed that once the shareholders have been exposed to personal liability, the weight to be given to the statutory purpose of an order for security against the corporation is gone. Cooper J described the offer by shareholders to accept personal liability for the costs of the corporation as a factor "weighing heavily" against the making of an order for security "notwithstanding that the worth of the shareholders may ultimately prove insufficient to satisfy any judgment in whole or in part". In this case, two other matters are relevant. The first is that FCN has previously paid an order for costs. Secondly, although TFN urges the Court not to place any reliance upon the affidavits of Mr Day and Mr Bates annexed to the affidavit of Mr Hauff, it seems to me that the affidavit of Mr Day reflects an underlying foundation of fact which suggests use of the mark in connection with the services for which the mark is registered, in the relevant period. That suggestion arises on the footing that facts may be capable of being adduced in evidence in proper form subject to proper objections. TFN also says that the undertaking offered by Mr Lawrence simply provides a further avenue for the potential recovery of TFN's costs within the limits of Mr Lawrence's assets. Two things should be noted. First, should TFN be successful in the proceeding, an order can be made against Mr Lawrence directly for the costs incurred by TFN of and incidental to the proceeding. It would not be necessary for TFN to commence proceedings upon the undertaking. TFN would have the benefit of a third party order for costs against Mr Lawrence directly, pursuant to his undertaking. Secondly, Mr Lawrence by his undertaking exposes himself to an order for costs to the full extent of his assets and interests constrained by the discipline of potential sequestration at the suit of TFN should he not pay an order for costs. Having regard to these considerations, TFN's motion for security is to be dismissed with costs. Section 56 of the Court Act in conjunction with Order 28 of the Federal Court Rules contemplates an order for security directed to a person who makes a claim for relief in the relevant proceeding. Such a claim might be made by a respondent who agitates a cross-claim. There is no claim or cross-claim made by the respondent in this proceeding. If the source of the power is to be found in the Trade Marks Act 1995 , s 222 of the Act does not confer that power upon the Court. It confers power on the Registrar to order a non-resident (or person not carrying on business in Australia) who makes a removal application under Part 9 of the Act, to give security for the costs of that proceeding. Section 197 of the Act is framed in broad terms. The terms of that enabling provision are directed to conferring broad powers of rehearing in the disposition of an appeal from the particular decision of the Registrar ( Blount Inc. v Registrar of Trade Marks (supra)), that is: admit further evidence; permit examination and cross-examination of witnesses; permit an issue of fact to be tried as directed; affirm, reverse or vary the primary decision; give any judgment or make any order the Court thinks fit; and make an order as to costs. That which is to be reheard on the application (appeal) of FCN is whether FCN can make out, on all the evidence, its opposition to removal of the mark having failed to make out that position before the Registrar's delegate. The decision from which the appeal lies did not involve any element of security for costs. Nevertheless, s 197(e) of the Act confers broad power to "... give any judgment, or make any order , that, in all the circumstances, it thinks fit on hearing an appeal against a decision or direction of the Registrar" [emphasis added]. The conferral of power upon the Court to make any order on hearing an appeal is sufficiently broad to confer a power to make any order in the course of an appeal proceeding including any interlocutory order. That power may extend in a given case to a security for costs order. In the ordinary course however, an applicant for security would find the source of the power for such an order in s 56 of the Court Act and Order 28, r 1 of the Federal Court Rules . The conferral of an express power on the Court to order security under the Trade Marks Act was probably not thought necessary having regard to the powers conferred upon the Court by the Court Act and the Federal Court Rules . In principle, the scope of s 197(e) is broad enough to confer power on the Court to make an order against any party in all the circumstances in any given case, if the relevant discretionary factors are satisfied. In this case, it is not necessary to consider any further the scope of the power particularly as it relates to a potential order that might be made against a respondent (if at all) as no order ought to be made in the exercise of discretion for these reasons. First, no claim for relief is made by the respondent other than to affirm the decision of the respondent's delegate challenged by the applicant by way of rehearing. Secondly, although the respondent initiated the proceeding before the Registrar and sought to remove the trade mark from the Register, the present applicant seeks the rehearing and could have put on before the Registrar all of the evidence that it now proposes to put on in the appeal. If all the evidence bearing on the question is as compelling as FCN contends, the Court proceeding and the attendant costs would not have been necessary. Thirdly, the applicant bore the rebuttal burden as a matter of law under s 100 of the Act before the Registrar in relation to any allegation made by TFN under s 92(4)(b) of the Act and failed to put on all the evidence that might have discharged that burden. Fourthly, the evidence as to the amount of costs which might be the subject of an order is scant. 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 an application by a respondent for an order for security for costs of and incidental to appeal proceedings under s 104 of the trade marks act 1995 (cth) consideration of an application by the applicant in those proceedings for an order that the respondent provide security for the applicant's costs of and incidental to the proceeding practice and procedure |
The reasons for decision cover the preparation of revised mediation protocols and programs for those applications subject to mediation. The Tribunal's proposal to the Court for revised mediation timetables responded to chronic delays in the mediation of native title determination applications in the two regions, in particular in relation to the resolution of overlap issues and the preparation of connection materials by the various applicant groups. 2 The Tribunal had prepared outlines of proposed orders for revised regional mediation protocols. In both the Geraldton and Pilbara regions past mediation protocols and timetables had not been adhered to. I made orders on 21 December 2006 for the parties to convene with the Tribunal in order to formulate precise minutes in respect of the applications in each region in order to give effect to the Tribunal's proposals. The directions hearings were otherwise adjourned to 29 June 2007. 3 A meeting was convened between the parties and the Tribunal on 15 January 2007 and on 18 January 2007 a minute of proposed orders was sent in to the Court by the Tribunal for each region. After discussions between Deputy Registrar Eaton and the Tribunal a revised version of the minutes was sent in by the Tribunal on 19 January 2007 which made variations to deal with claims involved in more than one overlap management strategy, to make the specific matter numbers more evident and to remove some claims from the revised mediation protocols. Where particular claims included in the 21 December 2006 judgment have been removed it is because they are not ready to mediate or because active mediation protocols are already in place. I propose to make orders in terms of the revised Pilbara and Geraldton minutes. I certify that the preceding three (3) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | practice and procedure directions to give effect to previously published reasons for decision native title |
In 1991, he joined the firm of Duesburys Chartered Accountants ('Duesburys'). He made a capital contribution of $174,000, $160,000 of which was financed by an advance from Westpac Banking Corporation. In 1994, Duesburys merged with Deloitte Touche Thomatsu ('Deloittes'), at which time the taxpayer made a further capital contribution of $150,000, the whole of which was financed by an advance from National Australia Bank. He remained a member of Deloittes until the events of 1997 with which this proceeding is concerned. 3 The agreement between the partners at Deloittes ('the partnership agreement') was in evidence in the Tribunal. It provided that Deloittes was an ongoing partnership, not dissolved, as regards continuing partners, by the retirement, removal or resignation of a partner. It provided for a "Policy Board" to exercise a general supervision of the affairs of the partnership. It provided for the keeping of partnership books of account, and required the preparation of a balance sheet, and profit and loss account, as at 30 June each year. It provided that no partner would have any personal financial interest in the partnership apart from the accrued or accruing profits to which he was entitled from time to time, and any other amounts recorded in the partnership accounts as due to him. The criteria by which R/R units were allocated to partners were dealt with in section D3 of the "Partner Manual" (there called "Role Units"). Those units then formed part of the basis for the distribution to partners of the profits of the firm for each year. The other part was according to what were called "Performance Units". They were not part of the capital, but were allocated to partners after each year to reflect their performance in that year. 5 The partnership agreement provided that a partner could retire on giving 12 months' written notice thereof, expiring on 30 June. Additionally, the Policy Board might, in its discretion, permit a partner to retire on less than 12 months' notice, and/or on a date other than 30 June. A partner retiring in any of these circumstances might, at the discretion of the Policy Board, be entitled to participate in the Partner Retirement Plan. A partner could also be involuntarily removed by resolution of the Policy Board (on the recommendation of the Chief Executive Officer) on the ground that such removal was "in the best interests" of the partnership. Upon ceasing to be a partner otherwise than by death, a partner was entitled to be paid the amount of his capital account, his share of profits from the end of the last completed year down to the date of ceasing to be a partner, and his share of other undrawn profits (if any). 6 Clause 22 of the partnership agreement dealt with the situation which arose when a partner retired, died or was removed. It provided that the partnership would not be totally dissolved, "but shall be dissolved so far only as regards that Partner". It was divided into sections. Section D1 dealt with the subject of accounts. Work-in-progress shall be brought into account for the purposes of the Partnership's own accounts and for settling the rights of the Partners as between themselves but it shall not be brought into account for income tax purposes. Work-in-progress shall be valued on the basis directed by the Policy Board. The Chief Executive Officer shall cause income tax returns to be prepared and lodged on behalf of the Partnership and he shall cause copies thereof to be forwarded to each Practice Office. Work-in-progress at the 30 th day of June in each year shall be deemed to be derived as taxable income in the following year. The Partners shall be entitled to the profits of the Partnership for each year to 30 June pro rata according to their respective totals for Role Units and Performance Units allocated to them in respect of that year and, to any extent necessary to reflect such entitlement, adjustments shall be made as between them having regard to distributions made on account of the profits. 9 The Partner Retirement Plan was dealt with in section D6 of the Partner Manual. Clause (12) thereof dealt with a situation in which a partner retired or was removed from the partnership. He was informed by correspondence of that date that he had thereby ceased to be a partner. The taxpayer did not accept that he had been validly removed from the partnership. Through his solicitors, he disputed his removal, and eventually undertook negotiations with Deloittes for a resolution of that dispute. His solicitors prepared (but did not issue) an intended Statement of Claim in which the taxpayer would have sought declarations that the actions of the Policy Board were unlawful and invalid, but in which he would not have sought damages. 11 The dispute between the taxpayer and Deloittes was settled at mediation on 9 December 1997. This agreement is made between Walter McNally (WM) and Deloitte Touche Tohmatsu (the firm). 2. This agreement is conditional upon the Policy Board of the firm confirming clause 6 below and resolving by 22 December 1997 to revoke its resolution of 17 July 1997 that WM be removed as a partner of the firm, in consideration of the parties agreeing now that WM has retired from the firm as at 17 July 1997. 3. The firm agrees to pay WM the amount of $500,000 within two business days of the Policy Board referred to above. 4. The firm is to obtain a discharge of the obligation by paying to the National Australia Bank such part of the capital of $150,000 that WM contributed to the firm that he has borrowed from the National Australia Bank. WM directs the firm to pay the amount of $150,000 or such amount as is owing to the National Australia Bank as part of the return of his capital and $160,000 to Westpac Banking Corporation. 5. The firm releases WM from the restrictive covenants in s. 16 of the Partnership Agreement. 6. In all other respects the Partnership Agreement is affirmed as between the parties except that the firm releases WM from any future liability under clause 21B of the Partnership Agreement and acknowledges that WM has satisfied his obligations for professional indemnity claims for the two years after his retirement. 7. WM releases the firm from all claims he has told the firm of through his solicitors and all claims arising from his ceasing to be a member of the firm. 8. These terms are confidential to the parties. 13 By letter to the taxpayer dated 24 December 1997, Deloittes informed him of the passing of the resolution referred to in cl 2 of the settlement agreement, and of the application of the settlement sum in the way I have described. Based on my review this Statement is incorrect, in that John has impacted the full extent of the Capital Reconstruction. John is currently on leave and I suggest you do not attempt to complete your taxation return until you talk to John following his return from leave on the 12 January 1998. He was originally assessed on the basis of that statement. However, information from Deloittes caused the Commissioner to revisit that assessment. By letter dated 1 December 2000, Deloittes answered the Commissioner's queries concerning the entitlements of partners who had retired. One such retired partner was the taxpayer. The statement also showed that there was, in the 1998 year, no normal profit distribution to the taxpayer. However, there was an amount of $230,000 shown as "Profit Distribution --- Partnership --- Gratuitous Payment". Together with two other relatively insignificant sums, the taxpayer's entitlement to distributable income for the year was shown as $233,031.63. That sum, rounded to $233,032, was shown in the taxable income schedule as the taxpayer's share of the partnership income from all sources. The taxpayer was reminded of the various provisions of that Act which provided for the imposition of penalties in situations of undeclared income, and was told that, in due course, the Commissioner would include the sum of $557, 521 in his assessable income for the 1998 year. The taxpayer was invited to respond to the Commissioner's letter. 19 There followed a period of correspondence and discussion as between the taxpayer and his representatives of the one part and the Commissioner of the other part. Eventually, by letter dated 27 April 2004, the Commissioner informed the taxpayer that the sum of $559,219 would be added to his assessable income for the 1998 year. The Commissioner also imposed a penalty of 75% under s 226J of the 1936 Act (involving a finding that there had been an intentional disregard of the law by the taxpayer) in relation to so much of the assessment that consisted of work-in-progress in the amount of $89,428, and a penalty of 50% under s 22H of the 1936 Act (involving a finding that there had been recklessness on the part of the taxpayer) in relation to the balance of the assessment. The version of the objection which was before the Tribunal was the taxpayer's amended notice of objection dated 8 July 2004, lodged under cover of correspondence dated 9 July 2004. In that notice, the taxpayer prefaced his grounds of objection with some general commentary on the subject of his relations with Deloittes, and with respect to the propriety of certain things alleged to have been done by Deloittes, but which appear to be otherwise irrelevant to the circumstances. In the grounds as such, the taxpayer dealt specifically with the question of his interest in the partnership income for the 1998 year. He denied that he had such an interest in the sum of $559,219 for the purposes of s 92(1) of the 1936 Act. He said that he had a settlement arising from legal proceedings (by which, I take it, he meant contemplated proceedings) which did not reflect an interest in the partnership income. He said that the settlement of December 1997 was all-embracing, and finalised matters between himself and Deloittes. He said that he did not receive the beneficial interest of the tax accounting treatment, such as by way of receiving monies for any work-in-progress reductions. He accused Deloittes of manipulating their books after they had reached a settlement with him. This is not conceded, because the sum is not reflected [sic] of a loss of income but damages for loss of reputation for being marched out of the building and the consequences or damages of that news in the professional world. He made a number of other points along similar lines, together with some that appeared to have little or no bearing on the question arising under s 92(1) of the 1936 Act. 23 The Commissioner disallowed the taxpayer's objection on 15 December 2004, and provided the taxpayer with his reasons for that decision. Those reasons dealt with the taxpayer's grounds of objection, and with the many individual points which he had made in his notice of objection. The Commissioner set out the facts as he understood them, including those referred to above in these reasons. Under the heading "1998 --- Partnership Distribution", the Commissioner referred to the Deloittes resolution to remove the taxpayer from the partnership, to the mediation in December 1997, and to the agreed terms of settlement. He said that, after the end of the 1998 year, Deloittes "worked out the figures for its 1998 income tax return". He said that the taxpayer, and others, were issued with individualized partnership distribution statements, and that the taxpayer's statement "detailed that your share of the net income of the partnership was $559,219". He referred to the reconciliation between the figure of $230,000 and the balance on settlement of $190,000 after return of capital. He referred to the "timing differences", and said that the management at Deloittes had demonstrated to the tax office that its method of calculating the timing differences was the correct one for tax purposes. This work in progress ('WIP') is not assessable for income tax purposes until the relevant invoices have been issued. Together with other timing differences such as prepayments, opening and closing balances of WIP are entered on the partnership income tax return reconciliation statement in order to calculate the net income of the partnership for tax purposes. The partnership distribution statement issued to each partner by Deloitte after year-end discloses the accounting share of profit calculated through to the taxation share of net income. To arrive at a partner's share of the net income of the partnership, the net accounting share of profit is shown plus/minus the share of permanent differences, such as non-allowable deductions. Then, a partner's share of opening timing differences is added and his/her share of closing timing differences is subtracted as the final step in the tax reconciliation. To explain Deloitte's method in more detail, the first point to note is that Deloitte, upon the entry of a new partner, does not include opening timing differences in its calculation of that partner's share of the net income of the partnership at the end of the partner's first financial year. This is because at the beginning of the partner's first year with Deloitte, he/she has no interest in Deloitte's net assets including timing differences. The opening timing differences are shared among all of the partners who were Deloitte members as at the beginning of the year so that the total net income of the partnership is distributed to partners and taxed. However, at year-end, a partner is a continuing partner which entitles him/her to a share of Deloitte's net assets including closing timing differences such as WIP. The second point is that Deloitte does not include closing timing differences in its calculation of an exiting partner's share of the net income of the partnership at the end of that partner's last financial year. The rationale for this method is the same as the one explained above. When a partner retires during the year, Deloitte includes his/her share of opening timing differences in its calculation. However, at year-end (30 June) the retired partner no longer has a share in closing timing differences as his/her entitlement to a share in the net assets has terminated. The closing timing differences are included in the net income calculation of the remaining partners. The third point to note is that Deloitte's method of not including opening timing differences in its calculation of a new partner's share of the net income of the partnership often results in a new partner having a 'notional' tax loss in his/her first year notwithstanding Deloitte having a net distributable profit overall. This is because Deloitte's method includes only billed fees but allows all tax timing deductions for tax reconciliation purposes. Deloitte avoids the outcome of a new partner having a tax loss by adjusting that partner's closing timing differences in the first year and by reversing the adjustment in the following year. This results in the new partner returning no tax loss in the first year but in the second year a contra adjustment reduces his/her share of the net income of the partnership. No tax overall is avoided year by year as the other partners effectively bear the opposite side of these adjustments so that the total partnership net income is distributed to partners and taxed in their hands each year. Overall, Deloitte's method ensures that a partner's entire share of timing differences is included in his/her share of the net income of the partnership. 24 On the subject of penalty, the Commissioner was satisfied that the taxpayer had intentionally disregarded the law with respect to the work-in-progress component of his partnership distribution because there was "strong proof" that before he lodged his 1998 return he knew that there was going to be a tax liability. As to the balance of the partnership distribution, the Commissioner was satisfied that the taxpayer did not take the necessary steps to ensure that his tax obligations were met, and did not present "persuasive or coherent legal arguments" in his own favour. He said that he believed that the reasons provided in his objection were well-founded, but reserved his right to make further representations at the hearing. 26 In a decision given on 22 June 2006, the Tribunal set aside the Commissioner's decision, and remitted the matter to the Commissioner for reconsideration in accordance with the Tribunal's findings and conclusions. Those findings and conclusions were contained in the Tribunal's reasons for decision published on the same day. The Tribunal referred to the exchange of correspondence between the taxpayer and the Commissioner which led to the amended assessment, to Deloittes explanation of the "timing differences", to relevant provisions in the partnership agreement, to the settlement of the dispute between the taxpayer and Deloittes in December 1997, to the assessability of the "opening timing differences" and to the matter of penalties. It did not, however, seek to characterise separately the balance of the settlement sum, $190,000. Rather, it looked at the total settlement sum of $500,000 in the context of the claims which the taxpayer had made, or had foreshadowed, against Deloittes, and which ought to be taken as having been settled by the payment of that overall sum. It cannot be affected by any subsequent action taken by Deloitte in accounting for the payment in its books of account. This was a case in which the applicant received what has been referred to in a number of judicial determinations as an "undissected" lump sum in settlement of a raft of claims, some contractual and capable of calculation and others of an unliquidated nature. The Tribunal referred also to the Full Court's observation that, in CSR , the conclusion could not be avoided that the consideration "was a release of causes of action some of which would have generated receipts of a non-income nature". (104 FCR at 60) The Tribunal said that, in both Allsop and CSR , the agreed settlement sum was treated as a payment of a capital nature, and added: "the same applies in the present case. It follows that the applicant should not be subjected to any penalty by reason of the non-disclosure of the settlement sum in his return. It pointed out that there was no question but that, had the taxpayer remained a partner of Deloittes until 30 June 1998, "this sum would have been included in his income tax return as income. " The Tribunal asked itself the question --- "whether the [taxpayer's] departure from the partnership provided a reason for not including the opening timing difference in his 1998 return". The Tribunal said that there appeared to be no logical reason why "the established practice" in relation to timing differences, of which the taxpayer had had the benefit whilst a partner, should not be applied in relation to the final year of his "tenure as a partner". It referred to some correspondence which appeared to be based upon a supposition that the opening timing differences would form part of the taxpayer's assessable income. It noted that the taxpayer's departure from the partnership would not affect his tax liability with respect to the amount that had been claimed as a deduction for closing timing differences in his 1997 return. In the result, the Tribunal took the view that the amount claimed by the taxpayer in his 1997 income tax return as closing timing differences should have been returned as income in his 1998 return. 30 With respect to penalties, in the light of the Tribunal's decision regarding the settlement sum, the only remaining question was whether the taxpayer should incur a penalty because of his failure to declare the opening timing differences as part of his income in the 1998 year. Given his professional standing as a practising chartered accountant, albeit not one who practiced in the field of income tax, the Tribunal is of the view that his failure to seek other advice as to the matters in issue was reckless and that the consequential tax shortfall was caused by his recklessness. There is however no basis upon which to conclude that the applicant acted with any dishonest intention or with an intentional disregard of the Act or regulations. (c) Is the failure of a taxpayer under the self assessment regime of the Income Tax Assessment Act 1936 and Income Tax Assessment Act 1997 ("the Assessing Acts") to obtain income tax advice conduct that is reckless? (2) Whether the sum of $190,000 formed part of the respondent's individual interest in the net income of the partnership pursuant to s 92 of the Income Tax Assessment Act 1936 for the year ended 30 June, 1998? He contended that the Tribunal should have held that the whole of the sum $559,219, so calculated, was assessable income. He contended that the Tribunal erred in holding that no part of the sum of $500,000 paid pursuant to the settlement of December 1997 was assessable income, and that the whole amount was a capital receipt in the nature of an undissected lump sum. He contended that the Tribunal should have held that the sum of $190,000 formed part of the taxpayer's individual interest in the net income of Deloittes under s 92. He contended that the Tribunal erred in concluding that the tax shortfall arising from the taxpayer's failure to include the opening timing differences in his 1998 return was caused by his recklessness. 35 As is apparent from the third of the Commissioner's questions of law, the Commissioner sought to argue in the alternative that the sum of $190,000 was part of the taxpayer's assessable income, as a capital gain pursuant to Pt 3 - 1 of the Income Tax Assessment Act 1997 ("the 1997 Act "). The taxpayer opposed the Commissioner's attempt to introduce the question of liability to capital gains tax into the appeal. He applied to have so much of the Commissioner's grounds as related to the matter of capital gains tax struck out. The Commissioner's attempt to make the matter of capital gains part of this appeal was based upon two propositions. First, Ms Symon SC, who appeared with Mr Sest on behalf of the Commissioner, submitted that, having held that the whole of the settlement sum of $500,000 was, in effect, a capital payment, the Tribunal should have proceeded to consider whether any part of that payment constituted an assessable capital gain. She submitted that, once the taxpayer had brought the correctness of the amended assessment into dispute in the Tribunal, the Tribunal's function was not completed merely by having dealt with the question whether the basis upon which the Commissioner made his assessment was right or wrong: the Tribunal was required to go further and to consider whether the amended assessment was excessive. She submitted that it was for the taxpayer to show that the assessment was excessive in the sense that it could not be justified under any provision of the legislation. Secondly, Ms Symon referred to a written submission made in reply on behalf of the taxpayer in the Tribunal. Reiterating his submission that the whole of the $500,000 was not income according to ordinary concepts, but was capital, the taxpayer had observed that neither was it taxable as a capital gain, because of the operation of s 160ZB of the 1936 Act. Ms Symon submitted that the taxpayer had thus made the question of assessability under the capital gains provisions of the legislation relevant to the proceedings in the Tribunal, and that it was an error of law for the Tribunal not to have dealt with the matter. 36 Towards the end of the hearing of the appeal, I heard the parties on the question whether the Commissioner should be permitted to raise the matter of capital gains tax in the appeal. I ruled that, whatever be the outcome of the appeal, the Commissioner's appeal would not be upheld upon this ground. Before the Tribunal, the Commissioner did not contend that any part of the settlement sum of $500,000 was assessable as a capital gain. Save for the matter of the taxpayer's written submission in reply, the question of capital gains was never an issue. As to that submission, I do not consider that it had the effect of making capital gains assessability an issue which the Tribunal was obliged to determine. I do not believe there is any reasonable basis upon which it could be suggested that the Tribunal's failure to consider the matter of capital gains assessability, in the circumstances to which I have referred above, constituted an error of law. 37 As it happens, by reason of the way in which I propose to deal with so much of the Tribunal's decision as related to the settlement sum paid in December 1997, I would, in any event, have found it unnecessary to decide the capital gains point sought to be raised by the Commissioner. 38 The primary submission advanced on behalf of the taxpayer in his appeal was that the net income of Deloittes for the 1998 year of taxation could only be determined, and was in fact determined, at the end of that year: Federal Commission of Taxation v Galland [1986] HCA 83 ; (1986) 162 CLR 408. Mr Lockie, who appeared on behalf of the taxpayer, submitted that his client left Deloittes on 17 July 1997, and had no interest in the income of the partnership thereafter. Alternatively, Mr Lockie submitted that the income of the partnership, in the relevant year, did not include the so-called opening timing differences. He said that those differences were no more than accounting entries, and that the assessable income of Deloittes did not, and could not, include items which had not been invoiced. 39 In defending the Tribunal's decision on the matter of the opening timing differences, Ms Symon submitted that it was fundamental to appreciate that the taxpayer had been assessed as a member of the Deloittes partnership, rather than as an individual standing outside that partnership. Notwithstanding that, at the end of the 1998 year, the taxpayer was no longer a member of the partnership, he had been a member for some part of that year, and upon the questions whether he had an interest in the net income of Deloittes for that year, and if so in what amount, the taxpayer was contractually bound by the partnership agreement, and therefore by the decision of the partners collectively on such matters. She said that Deloittes had issued a distribution statement which set out the taxpayer's relevant interest, and it was not open to the taxpayer to contend that his interest was something other than there set out. Ms Symon submitted that, properly understood, the opening timing differences were in the nature of an adjustment, and should be regarded as corresponding with the equivalent closing timing differences which had been deducted to obtain the fiscal income of the partnership at the end of 30 June 1997. With respect to so much of the opening timing differences as related to work-in-progress, Ms Symon submitted that those sums reflected an expectation that the work would be invoiced in the 1998 year, and that, consistent with that expectation, the practice of Deloittes was to bring the sums into their fiscal income immediately upon the opening of the year. However, according to Ms Symon, the court need not be concerned as to the precise nature of the amounts referred to as opening timing differences (and indeed, significant parts of those amounts were not so readily explicable, at least conceptually, as the work-in-progress) because the critical point was that Deloittes brought them into its treatment of fiscal income on 1 July 1997, and that the taxpayer was bound by the approach which Deloittes had taken. 40 In relation to the Commissioner's appeal against so much of the Tribunal's decision as dealt with the settlement sum of $500,000, Ms Symon said that the Tribunal's written reasons for its decision were devoid of any reference to s 92 of the 1936 Act. She submitted that the Tribunal had approached this part of its task as though the only question were whether the amount paid to the taxpayer in December 1997 was income according to ordinary concepts in the hands of the taxpayer. Although documents before the Tribunal demonstrated how Deloittes reconciled its distribution statement with the actual payment made to the taxpayer in December 1997, Ms Symon submitted that, as a matter of law, such things were beside the point: whatever the taxpayer was in fact paid, such payments did not provide an answer to the questions which arose under s 92 of the 1936 Act. Ms Symon did submit, however, that Deloittes' reconciliation demonstrated that so much of the $500,000 as was not manifestly a return of capital ($190,000) was part at least of the taxpayer's interest in the income of the partnership. She submitted that, given the terms of the settlement of December 1997, it could not have been otherwise. The settlement was between the taxpayer and his former partners at Deloittes, considered as partners. Not being part of the capital of Deloittes, the payment could only be regarded as a distribution to one partner (the taxpayer) of his interest in income. It is true, Ms Symon accepted, that no combination of provisions of the partnership agreement appears to have entitled the taxpayer to a distribution of income in the amount of $190,000, but she submitted that the relationship between the partners was contractual, and they were always at liberty to vary the contract for the purposes of providing a benefit to a particular partner, and that was what must be taken to have been done in relation to the taxpayer in December 1997. 41 On the matter of the settlement sum, Mr Lockie reiterated his general submission that his client was not, after 17 July 1997, a member of the partnership. He submitted that the mere fact that the taxpayer had received, by way of the settlement of proposed litigation, a sum of money from his former partners did not establish, either in fact or in law, that that amount represented, or corresponded with, any income of the partnership; and he repeated that, in any event, at no relevant time did the taxpayer have an interest in that income. Mr Lockie also supported the Tribunal's conclusion that the $500,000 was a single undissected sum, and that it would be pure speculation to infer that some part of it was capital, and the remainder income. While recognising that, as a matter of mechanics, $310,000, out of the $500,000, was used by Deloittes, at the direction of the taxpayer, to repay loans which the taxpayer had previously taken from the banks, Mr Lockie submitted that that pragmatic arrangement did not imply what was the appropriate characterisation of a corresponding part of the settlement sum. That is to say, the sum which the Commissioner included in the taxpayer's assessable income for 1998 was so included not because it was income according to ordinary concepts, but because it was the taxpayer's interest in the net income of Deloittes. By s 91 of the 1936 Act, a partnership must furnish a return of its income, but is not liable to pay tax thereon. Strictly speaking, the process of identifying the assessable income of the taxpayer should have involved two steps: determining what was the net income of Deloittes, and calculating the individual interest of the taxpayer in that income. 43 It is also central to an understanding of the position taken by the Commissioner that partnerships do not pay income tax as such at all. The integrity of the taxation system in relevant respects rests on the operation of s 92: all of what would, save for s 91, be the assessable income of the partnership must be "caught" by the assessment of the individual interests of the partners. 44 Deloittes filed a return of the income of the partnership, as required by s 91, for the 1998 year. Not unreasonably, the Commissioner seems to have treated the allocation of that partnership income as between the partners of Deloittes as primarily a matter for the partners themselves. Consistently with that approach, the Commissioner makes the point that a successful attempt by a partner (or former partner) to establish that his or her own interest in the partnership income is less than stated by the partnership, and accepted by the Commissioner, will inevitably mean that a portion of the partnership income is not effectively taxed, or that corresponding adjustments need to be made in the calculation of the assessable income of all other partners. Mr Lockie submits, however, and I agree, that the taxpayer "is entitled to have considered the nature of the transaction which gives rise to the suggested liability for tax unaffected by what the partnership may do or say in relation to his income": Stapleton v Federal Commissioner of Taxation (1989) 89 ATC 4818, 4827. 45 On the other hand, this is not a full appeal from the decision of the Tribunal. The question is not whether certain sums should have been included in the assessable income of the taxpayer: it is whether an error of law is disclosed by the way the Tribunal answered that question. What was the taxpayer's interest in the net income of Deloittes was a question of fact. The Tribunal held that the opening timing differences should have been included in the taxpayer's assessable income as returned, thereby implicitly holding that such differences were part of the net income of Deloittes for 1998. It is only if those holdings were infected by an error of law that the taxpayer is entitled to succeed on his appeal. 46 The Commissioner accepted that the valuation of work-in-progress in a business such as that conducted by Deloittes is not as such income according to ordinary concepts. When, as appears to have been the case here, accrual accounting is employed for the purpose of calculating the income of a partnership, only when a sum has become recoverable is it to be regarded as part of that income. These propositions were, it seems to me, propounded as matters of law by the High Court in Henderson v Federal Commissioner of Taxation [1969] HCA 14 ; (1970) 119 CLR 612, 650-651. It would follow that any decision which included work-in-progress as part of the net income of a partnership should be regarded as being erroneous in point of law. 47 As set out in para 7 above, the Partner Manual of Deloittes provided that work-in-progress should not be brought into account for income tax purposes. However, it also provided that work-in-progress at 30 June each year would be "deemed to be derived as taxable income in the following year". As between the partnership and the Commissioner, such a deeming provision could not be conclusive as to the calculation of the net income of the partnership pursuant to s 92 of the 1936 Act. As between the partners of Deloittes, a provision which specified how the net income of the partnership was to be distributed between them --- i.e. what was each partner's interest in that income --- would be binding. However, such an agreement could be effective and binding for taxation purposes only if it operated by reference to income which was in fact and in law net income within the meaning of s 90 of the 1936 Act. 48 How are the two provisions of the Partner Manual referred to in the previous paragraph to be reconciled? The first is apparently consistent with the law as stated in Henderson ; the second appears not to be, in that it brings work-in-progress into taxable (i.e. fiscal) income in the following year. The answer, I consider, is to be found in the explanation provided by Deloittes as to their calculation of the timing differences as set out in para 23 above. Internally, Deloittes includes work-in-progress in the calculation of its income --- "accounting income" as it has been called. However, since work-in-progress is not income for the purposes of taxation law, when calculating the figure that will be returned as the income of the partnership under s 91 of the 1936 Act, Deloittes takes the value of work-in-progress out of the accounting income figure. This procedure is intended to produce the correct figure to be returned under s 91 --- one which is confined to the assessable income of the partnership as though it were an individual taxpayer, as required by ss 90 and 92 of the 1936 Act. 49 Having thus calculated their assessable income for a particular year in the correct way, Deloittes must then add the value of work-in-progress back into their reckoning of their income for taxation purposes for the following year. That is the effect of the deeming provision in the manual to which I have referred. Properly understood, that provision does not "deem" anything to be something that it is not (as lawyers are accustomed to find in legislation from time to time): rather, it is in the nature of an instruction to those responsible for maintaining the accounts that, in their calculation of the income which Deloittes will return each fiscal year under s 91 of the 1936 Act, the value of work-in-progress as at 1 July that year should be included. However, in the course of that very calculation, the value of work-in-progress at year-end will be excluded. The net effect, manifestly, will be that only to the extent that it has been invoiced --- thereby losing its status as work-in-progress --- will the value of what was the work-in-progress on 1 July appear in the partnership's income as returned under s 91 as at the following 30 June. 50 By the method of maintaining their accounts in the way I have described, Deloittes ensures that only income within the meaning of the legislation --- i.e. never including work-in-progress --- is treated as income of the partnership for taxation purposes. As I have said, the result is in harmony with the law as stated in Henderson . 51 In her argument on behalf of the Commissioner, Ms Symon submitted that the adding-back of work-in-progress on 1 July each year in effect corresponded with the taking-out of the same figure the day before, pursuant to the deeming provision in the Partner Manual. She submitted that those who were partners on 30 June had had the "benefit" of the taking-out, and that they should likewise bear the consequences of the adding-back. For taxation purposes, however, the removal of work-in-progress should not be regarded as a benefit --- the value of such an item was not, when taken out, income in the legislative sense at all. The taking-out should be regarded as an appropriate rendering into legislative income of a figure which would otherwise include something which will never be part of that income. 52 Ms Symon also submitted that the way the system operated, in effect, was that work-in-progress became part of Deloittes' income for taxation purposes on 1 July each year, and that it remained there until some event occurred which removed it. That event might be the rendering of an invoice for the work, the conclusion of the fiscal year, or the winding-up of the partnership. In each such situation, as I understood her, Ms Symon submitted that work-in-progress would remain firmly in the taxation income figure unless and until such an event occurred. So much may be accepted, but only as a matter of internal accounting at Deloittes. Each of the events to which Ms Symon referred by way of example would involve either the disappearance of the work-in-progress (i.e. by having been invoiced) or the adjustment of taxation income to remove the work-in-progress before a s 91 return was submitted. None of these events would involve the submission of such a return of income containing work-in-progress. 53 Submissions were also made about the situation arising when a new partner joined Deloittes. It was said that a partner who joined during the course of a fiscal year would have the benefit of a deduction --- or subtraction --- from what would otherwise be his or her share of the partnership income for taxation purposes. The suggestion seemed to be that such a joining partner would somehow derive the benefit of a lower taxation income figure by reason of the fact that opening timing differences were not included, while closing timing differences were taken out. To the extent that I can follow this submission, I must say that it seems to deflect attention from the real question at stake, which is whether the effect of the Commissioner's assessment was to include work-in-progress in the calculation of the assessable income of Deloittes for the purpose of ascertaining the taxpayer's share in that income. It is to that question that I now turn. 54 It is manifest, from the Deloittes' distribution statement, that the opening timing differences for the year ended 30 June 1998 have been included in the taxpayer's interest in what is said to be the (fiscal) income of the partnership, and that those "differences" include work-in-progress. Because the closing timing differences have not been excluded, the resulting figure necessarily includes work-in-progress. The justification, presumably, for the non-exclusion of closing timing differences is that the taxpayer was not a partner on 30 June 1998, when those differences were excluded for the remaining partners. That is not, I consider, a justification which should be regarded as acceptable under taxation law. If, as I have held, the assessable income of Deloittes could not include work-in-progress, necessarily the taxpayer's share of (or interest in) that income could not include such an element. The fact that the taxpayer was a partner for part only of the year in question cannot affect the legally correct approach to the matter of the determination of Deloittes' assessable income, to the extent that the taxpayer had an interest in it. If a set of accounts for taxation purposes was struck when the taxpayer left on 17 July 1997, necessarily work-in-progress would have been taken out. That was not done, the result of which may create practical difficulties in the way of calculating the taxpayer's interest. However that may be, it provides no reason to calculate that interest in a way that unarguably includes work-in-progress. 55 The effect of the Tribunal's decision was to uphold so much of the Commissioner's assessment as included work-in-progress in the assessable income of the partnership for the purpose only of calculating the taxpayer's interest under s 92 of the 1936 Act. For the reasons given above, that was erroneous in point of law. 56 Within the broad category of opening timing differences, I have so far concentrated on work-in-progress (an amount of $89,428 out of a total of $322,890). The category includes also "prepayments" and "other". There was no evidence as to what these items involved. Mr Lockie explained that "prepayments" were payments for which a deduction would be allowed under taxation law, but which related to a period subsequent to the fiscal year in question and which, therefore, were not part of Deloittes' internal accounts for the year in question. If that explanation were correct, it would propound a proper basis for the adjustment of accounting income to reflect net income in the year of the deduction. Why it would be appropriate to add the prepayments back on 1 July is not clear and, as Mr Lockie submitted, would seem to be at odds with Federal Commissioner of Taxation v Rowe [1997] HCA 16 ; (1997) 187 CLR 266. Ms Symon invited me not to speculate upon what these "prepayments" were --- much less with respect to the item referred to only as "other". She submitted that they both represented sums which it was appropriate to keep out of income for tax purposes each 30 June, but which should be included each 1 July "in the expectation that it will be appropriate to include it for tax purposes in the next year". 57 I cannot accept that an item should be treated as part of the assessable income of Deloittes merely because there is an expectation that it will become fiscal income at some time in the year in question. In the present case, the taxpayer has had attributed to him what is said to be a share in the income of Deloittes, where that income is as appears in the accounts on 1 July 1997. On Ms Symon's explanation, there was then only an expectation that relevant items in that income would fall into the category of fiscal income. The Tribunal accepted that approach without any investigation of whether, before the taxpayer's interest in that income was calculated and for the purpose of that calculation, such an expectation had become reality. Although I know little of the exact nature of the items to which I here refer, if their inclusion is based upon the approach explained by Ms Symon, it does appear to result in amounts which were not as such part of the assessable income of Deloittes at any time being notionally apportioned in some way, and in a share of, or an interest in, such amounts being treated as the income of the taxpayer for the purposes of s 92. That approach is, I consider, wrong in law. 58 What I have said above might reasonably be read as implying that the taxpayer's interest in the net income of Deloittes in the 1998 year was some figure other than that assessed by the Commissioner. It is, however, no part of the court's role to make any such finding, and I do not do so. I was invited by Mr Lockie to find that no part of the opening timing differences should have been taken into the taxpayer's assessable income. I do not make such a finding. Indeed, the only question before the court is whether the Tribunal's decision was erroneous in point of law. In relation to work-in-progress, I consider that it was. In relation to other elements of the opening timing differences, I consider that the Tribunal erred in law to the extent that it found that the mere fact that they had been brought into Deloittes' internal account for fiscal purposes thereby made them part of the net income of the partnership within the meaning of s 90 of the 1936 Act. Whether they were part of the net income was --- and will again be --- a question for the Tribunal. It will doubtless involve issues of fact which are not before the court. 59 The Commissioner's appeal may be disposed of more simply. I accept Ms Symon's submission that, when the Tribunal came to consider the settlement sum of $500,000, it looked only at whether all or any part of that sum was the income of the taxpayer according to ordinary concepts. But the Commissioner had never assessed the taxpayer on that basis. He may well have defended his assessment by saying that some part of the settlement sum --- $190,000 --- was in the nature of an income distribution to the taxpayer. To the extent that he did so, the exercise may have been evidentiary or demonstrative, but it was otherwise something of a distraction from the issues presented by ss 90 and 92 of the 1936 Act. These issues related to the taxpayer's interest in the net income of the partnership, not to distributions to, or drawings by, the taxpayer qua partner. 60 If it be the fact, as the Tribunal found, that the $500,000 was an undissected lump sum, such fact may have provided a useful evidentiary link in the determination of what was the taxpayer's interest in the income of Deloittes in the 1998 year. That is not for the court to say. But that fact should not be regarded as dispositive for the purposes of s 92 of the 1936 Act. As I read the Tribunal's reasons, it did so regard that fact. In this respect also I consider that the Tribunal erred in law. 61 For the above reasons, each of the appeals will be allowed. I propose to set aside the Tribunal's decision and to remit the taxpayer's application for a review of the Commissioner's assessment to the Tribunal for reconsideration in accordance with these reasons. In the circumstances, it is unnecessary to deal separately with so much of the appeals as related to the matter of penalty. I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup. | assessable income of former member of partnership taxpayer a partner for part only of fiscal year whether net income of partnership included work-in-progress at start of year or other adjustment items whether taxpayer's interest included a share of those items income tax assessment act 1936 , ss 90 , 92 assessable income of former member of partnership taxpayer retired from partnership taxpayer paid lump sum on retirement whether all or part of lump sum constituted taxpayer's interest in net income of partnership income tax assessment act 1936 , ss 90 , 92 income tax income tax |
Its business was that of a painting contractor. Its directors from the date of its incorporation were Stiven Marin Jakovich and Vjeko Nikola Jakovich. 2 On 11 April 2007 the directors of the company signed a circulating resolution pursuant to s 436A of the Corporations Act 2001 (Cth) appointing Dino Travaglini as voluntary administrator of the company under Pt 5.3A of the Corporations Act . The resolution of the directors incorporated their opinion that the company was likely to become insolvent at some future time or was already insolvent at that time. 3 On 12 June 2007, at a meeting of creditors of the company, a resolution was passed for it to be wound up and Mr Travaglini be appointed as its liquidator. According to his initial review of the company's affairs in his role as administrator, and later as liquidator, he had formed the view that the company should have sufficient funds to discharge its liabilities. 4 According to Mr Travaglini, Mr Jakovich was previously married to one Loretta Jakovich. Upon his appointment as voluntary administrator Mr Travaglini was provided with a copy of orders made in the Family Court of Australia on 20 December 2006 pursuant to Pt VIIIAA of the Family Law Act 1975 (Cth). The orders were made pursuant to an application brought by Loretta Jakovich against Stiven Jakovich and Vjeko Jakovich concerning the division of marital assets following their divorce. 5 The orders made by consent included an injunction restraining Stiven and Vjeko Jakovich from dealing with assets of the company in its own right or in its capacity as trustee for the S & V Jakovich Family Trust. 6 On 8 May 2007 the second meeting of the creditors of the company agreed to adjourn the meeting to allow Mr Travaglini to progress matters relating to the administration of the company including but not limited to varying the Family Court orders to authorise him to exercise his powers under the Corporations Act . 7 In late May 2007 Mr Travaglini sought advice about the effect of the orders upon his powers as administrator and later as liquidator. He instructed solicitors to draft a minute of consent orders to be signed by all parties to the Family Court proceedings with a view to varying the orders. The effect of the variation which he sought was to ratify his appointment as liquidator and to authorise him to exercise all powers and deal with the assets of the company pursuant to Pt 5.4B through to Pt 5.9 of the Corporations Act in respect of winding up the company. 8 There were difficulties getting in touch with Stiven Jakovich. Consent orders were signed on behalf of Vjeko Jakovich and Loretta Jakovich. Information was obtained through a third party that Stiven Jakovich had received the proposed consent orders but wanted to take some advice about their content. In the event, Mr Travaglini's solicitors, Price Sierakowski, received a letter by facsimile from him. The letter stated that Stiven Jakovich was awaiting the signature of a third director, namely Linda-Jane Neophytou. According to Mr Jakovich she was a shareholder and director and it was necessary for her to sign any documents pertaining to the "liquidation authority" in terms of the Corporations Act . The document which he attached was a letter dated 22 October 2006 evidently addressed to Linda Neophytou and confirming that she was that day appointed a director of the company. The appointment, as noted, does not appear from the Australian Securities and Investments Commission records. 9 Mr Travaglini said that in light of the failure of Stiven Jakovich to sign the consent orders he instructed Price Sierakowski to make an application seeking orders to ratify his appointment as liquidator and to vary the Family Court orders so that as liquidator he was duly authorised to exercise all powers without restraint to deal with the assets of the company and the creditors' claims pursuant to Pt 5.4B through to Pt 5.9 of the Corporations Act in respect of the winding up. 10 Loretta Jakovich and Vjeko Jakovich were represented on the application when it came before the Court for first directions. The application was adjourned to 4 April 2008 and the applicant was directed to use best endeavours to inform Stiven Jakovich of the adjourned hearing date. A direction was also made that a decision would be made on the application on 4 April 2008 unless opposed by Stiven Jakovich. In the event, the application was further adjourned to 28 April 2008 at 9am and further to 29 April 2008 at 9am. There has been no contact with the Court by Mr Jakovich. 11 In an affidavit of Loretta Jakovich sworn 10 April 2008, she said that she had signed the written consent after taking legal advice to the appointment of an administrator to the company. She agreed to an administrator being appointed to the company but did not have a preference for any particular firm of insolvency practitioners. She said she was content for her consent to be used for the appointment of Mr Travaglini as the administrator. She would not oppose the winding up of the company and swore the affidavit in support of the orders sought in the application. 13 In his originating process Mr Travaglini sought a declaration from the Court that he is authorised to deal with the assets of the company without restraint and is authorised to exercise all of the powers conferred on him pursuant to the relevant provisions of the Corporations Act . He also sought an order that the orders of the Family Court be varied by incorporating in them an authorisation for him to deal with the property of the company pursuant to his powers as liquidator. 14 Clearly this Court is not in a position to vary the orders made by the Family Court. A variation of those orders is not necessary. Those orders restrain Stiven and Vjeko Jakovich effectively from dealing with the property of the company without the prior consent of Loretta Jakovich. They do not purport to affect the rights of creditors of the company nor the powers of a liquidator appointed under the Corporations Act to get in the assets of the company and to distribute them to the creditors. If there be any surplus remaining after the distribution to creditors and the payment of the fees of the administration and winding up, then that surplus would no doubt be affected by the Family Court injunction. If there are any uncertainties concerning the application of the injunction to such surplus, then that is a matter to be taken up with the Family Court. In my opinion, however, it is open to me to make the orders sought by Mr Travaglini pursuant to s 511 of the Corporations Act and I propose to do so. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | winding up directions assets of corporation subject to injunction as against former directors by family court no effect of injunction on powers of liquidator directions accordingly corporations |
Reserve the applicant's costs of preparation for and the hearing between 11.30 am and 12.45 pm on 24 April 2009 with respect to the first respondent's (withdrawn) application for leave to re-open and reserve the costs of the applicant's notice of motion filed 25 May 2009 and heard on 29 May 2009. The parties requested that I determine the outstanding costs issues by reference to their written submissions. The first respondent ( the ACC ) noted in its submissions that during the course of the hearing I in fact indicated that three issues of costs would be reserved. The order I made on 29 May 2009 omitted reference to the costs of a video-link during the hearing on 27 March 2009 when Andrew Cann of the ACC gave evidence. The ACC submitted that the costs of this video-link should be costs in the cause and thus part of the general costs order in its favour in order 2. The applicant ( SS ) did not address this issue in its submissions, presumably on the basis that the orders did not specifically reserve the costs of this video-link. I did not specifically consider the costs of the video-link when making the general costs order in order 2. It was appropriate for the ACC to bring that matter to my attention. It is also appropriate to record my view that there is no reason to separate the costs of the video-link from the costs of the hearing generally. As the ACC submitted, Mr Cann is based in Canberra and the only way he could be made available for cross-examination on the day required was by video-link. Further, the ACC was wholly successful in respect of the issues addressed by Mr Cann's evidence. In these circumstances the costs of the video-link on 27 March 2009 should be part of the general order that the applicant pay the respondents' costs. It follows that there is no need for order 2 made on 29 May 2009 to be varied. I turn now to the two issues in respect of which costs were reserved as set out in order 3, namely "the applicant's costs of preparation for and the hearing between 11.30 am and 12.45 pm on 24 April 2009 with respect to the first respondent's (withdrawn) application for leave to re-open and the costs of the applicant's notice of motion filed 25 May 2009 and heard on 29 May 2009". As to the first issue, SS submitted that costs should follow the event. The ACC had applied for leave to re-open in order to tender a document. The ACC had withdrawn the application for leave on SS's objection and my indication that an explanation for the late tender was required. Accordingly, SS submitted, the ACC should pay SS's costs of the withdrawn application. The ACC submitted that in producing the document it was acting consistently with its continuing discovery obligations (which I accepted in my principal reasons at [145]). SS's objection was based not only on lateness, but also on serious allegations lacking any factual foundation (which I also accepted at [147]). The ACC withdrew the application for leave to re-open on the basis of SS's objection. In these circumstances the costs relating to the withdrawn application should be part of the costs in the cause and thus part of the general costs order in order 2. The document which the ACC sought to tender was a version of a document already in evidence from which parts had been excised on the basis of a claim for public interest immunity. The additional part of the document sought to be tendered was relevant to the facts in issue and should not have been excised from the version of the document as originally produced on the grounds of public interest immunity. While there was no evidentiary basis for SS's submissions of bad faith and improper conduct and the ACC had a continuing obligation to produce relevant documents, the fact remains that the document was always in the ACC's possession and the ACC's actions caused it to make a late application to re-open its case. The ACC sought to do so in an unconventional manner by attaching the document to its written submissions in reply rather than by formal application on the basis of an accompanying affidavit explaining the late production. The ACC's application to re-open, made during the hearing, was withdrawn in the face of SS's objection and my indication that an explanation for the late production would be required. In these circumstances, I am not satisfied that the ACC should have the benefit of a costs order in its favour with respect to the withdrawn application for leave to re-open. The remaining question in respect of this first issue is whether SS should have the benefit of any costs order in its favour in the circumstances identified. Whatever the reason for the ACC's change in position (and, in this regard, no evidence supported SS's submissions of impropriety by the ACC), the fact is that the ACC was obliged to produce the document in the form in question. Moreover, it was obliged to seek to tender the document in that form. SS objected to the tender of the document causing the ACC to withdraw the tender and thus the application. Yet SS also sought to assert that the fact that this relevant document was not in evidence involved an abuse of process. In these circumstances I am not satisfied that there was an event in respect of which the ACC was unsuccessful warranting a costs order in SS's favour. At most, the ACC should not have the benefit of a costs order for this part of the hearing. Thus, in respect of this part of the hearing, costs should lie where they fall. As to the second issue, SS's submissions are unpersuasive. I dealt with the circumstances of SS's notice of motion to rely on further submissions in [141]-[143] of the principal reasons. SS's conduct in seeking to rely on additional submissions after judgment had been reserved without having obtained leave to do so was inconsistent with the principle of the open administration of justice. This is particularly so given that, in those additional submissions, SS claimed that the ACC's defence ought to be struck out when no such submission had been made orally. Contrary to SS's submission, the notice of motion was not necessary because the ACC refused to consent to the filing of the additional submissions. It was necessary because SS required and had not obtained leave. Parties are not at liberty, even by consent between themselves, simply to forward additional submissions to chambers after a judgment has been reserved on the assumption that they will be considered. Moreover, the nature of SS's additional submissions made necessary the further hearing on 29 May 2009. In these circumstances SS's claim for indemnity costs in respect of its notice of motion filed on 25 May 2009 is unfounded. Costs associated therewith should be costs in the cause and thus part of the general order for costs in the ACC's favour. I make orders accordingly. | which party should bear costs in relation to a withdrawn application to re-open circumstances of the case application to re-open based on first respondent's late production of relevant documents decision to withdraw application based on objection by applicant whether such circumstances warranted costs order in either party's favour costs of applicant's notice of motion to be granted leave to make further submissions circumstances of the case whether costs order in applicant's favour appropriate costs costs |
2 The respondent has filed a notice of motion seeking dismissal of the proceedings pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) ('the Federal Court Act') on the basis that the applicant has no reasonable prospect of successfully prosecuting the proceedings. The respondent challenges the Court's jurisdiction to hear this application because of s 483 of the Migration Act . It is appropriate to address the question of jurisdiction before considering the substance of the application under s 44 of the AAT Act. Section 44(1) provides that a party to a proceeding before the Tribunal may appeal to the Court on a question of law from any decision of the Tribunal in that proceeding. Section 44(2) is not presently relevant. The applicant contends that this decision is not a privative clause decision or a purported privative clause decision. I reject this submission. A privative clause decision is defined in s 474(2) of the Migration Act as ' a decision of an administrative character made...under this Act...other than a decision referred to in subsection (4) or (5) '. Subsections (4) and (5) outline provisions in the Migration Act under which decisions are not privative clause decisions. A decision to cancel a business visa under s 134 is not listed and it is not suggested that the decision of the Tribunal is otherwise excluded by definition in the Migration Act or in the Migration Regulations 1994 (Cth) from being a privative clause decision or a purported privative clause decision. It follows that this decision of the Tribunal is a privative clause decision or a purported privative clause decision and not a "non-privative clause decision" as defined in s 474(6) of the Migration Act . 6 Sections 476 and 476A of the Migration Act provide for the jurisdiction of the Federal Magistrates Court and the Federal Court on judicial review of, relevantly, decisions of the Tribunal. It is not suggested that s 476A(1)(c) , which concerns decisions made by the Minister personally, applies. 9 The present scheme of the Migration Act (since amendments in the Migration Litigation Reform Act 2005 (Cth) ('the 2005 Act')) is that judicial review of all migration decisions is to be commenced in the Federal Magistrates Court save for the two categories of decisions within ss 476A(1)(b) and (c), which do not apply in the present case. Section 15AB(1) provides that the note may be considered to confirm the ordinary meaning of the provision in the context of the Act and taking into account the purpose or object underlying the Act or to determine the meaning if the provision is ambiguous or obscure or if the ordinary meaning leads to a result that is manifestly absurd or unreasonable. The note cannot govern the text of the Act but it cannot be disregarded (Pearce DC & Geddes RS, Statutory Interpretation in Australia , 6 th ed at [4.49]). 12 The note supports the interpretation that s 483 bears on its face, that the section excludes an appeal under s 44 of the AAT Act for privative clause decisions and purported privative clause decisions ( Sneddon v Minister for Immigration & Multicultural & Indigenous Affairs (2005) 88 ALD 84 at [3]). The applicant does not contend to the contrary. 13 Thus, s 476A(1)(d) confers jurisdiction on the Federal Court in relation to such appeals from the Tribunal as can continue to arise under the Migration Act , given the limitation imposed by s 483. The Federal Court has jurisdiction to undertake judicial review of Tribunal decisions under the Migration Act where the decision on review is a privative clause decision or a purported privative clause decision under s 500 of the Migration Act , or a non-privative clause decision the subject of an appeal under s 44(3) of the AAT Act, or a referral by the Tribunal under s 45(2) of the AAT Act. 14 The Federal Magistrates Court has jurisdiction to undertake judicial review of any other decision of the Tribunal in relation to a migration decision, including the decision of the Tribunal in this case (s 476 of the Migration Act ). Symmetrically, s 476(2) provides that the Federal Magistrates Court does not have jurisdiction in relation to decisions described as in s 476A(1). The applicant is, however, out of time to make an application to the Federal Magistrates Court. 15 To overcome this result, the applicant makes a number of submissions. 16 First, he submits that as s 483 of the Migration Act does not specifically refer to business visas, they are excluded from the ambit of that section. I reject that submission. Section 483 does not refer to any particular category of privative clause decision or purported privative clause decision. There is no reason to put business visas into a special category. 17 Second, he submits that s 483 is directed towards judicial review, not statutory appeals under the AAT Act. I reject that submission. Section 483 is clearly directed to statutory appeals under the AAT Act and exclusion from the right of appeal provided for in s 44 of that Act. 18 Third, he points to the scheme of the Migration Act and the legislation which introduced the provisions in question. He submits that, as there is no specific reference to business visa decisions, they are not encompassed by s 483. The applicant submits that, if the intention of Parliament was to remove an existing right of appeal to the Federal Court on a question of law in relation to business visa decisions, this would have been clearly stated ( Plaintiff S157/2002 v Commonwealth of Australia (2003) 211 CLR 476 at [32] per Gleeson CJ and at [72] per Gaudron, McHugh, Gummow, Kirby and Hayne JJ). The correct interpretation is, he submits, that s 476A in combination with s 483 limits judicial review of migration decisions but not the right of appeal on a question of law, particularly in relation to business visa decisions by the Tribunal. He submits that, read together, s 483 only applies to the class of decisions referred to in s 476A. 19 There are a number of responses to this submission. Again, there is no differentiation between the subject matter of privative clause decisions or purported privative clause decisions in s 483 and there is no reason to isolate business visa decisions. Parliament chose not to refer to business visa decisions in s 476A and chose to deal globally with privative and purported privative clause decisions in s 483. Further, s 483 makes no reference to s 476A. It does not, for example, commence with the words "on review under s 500". There is no reason to read s 483 as if those words were included so that only decisions the subject of s 476A(1) were excluded from an appeal to the Federal Court under s 44 of the AAT Act. To do so would be to ignore the clear words of s 483 and the note. 20 Section 483 is clear in its terminology and meaning. The amendments to the Migration Act in the Migration Legislation Amendment (Judicial Review) Act 2001 (Cth) and the 2005 Act do not remove a right of judicial review of Tribunal decisions. They confer jurisdiction on the Federal Magistrates Court to review those migration decisions for which jurisdiction is not conferred on the Federal Court by s 476A and to place statutory limits on a statutory right of appeal. Justice Besanko observed in Epenisa v Minister for Immigration & Multicultural Affairs (2007) 44 AAR 456 at [11], on the subject of the limitation imposed by s 483 of the Migration Act , that s 44 of the AAT Act is a statutory right of appeal and ' there is nothing to prevent Parliament from excluding from its purview a certain class of decision '. 21 Clause 51 of the Revised Explanatory Memorandum to the Migration Legislation Amendment (Judicial Review) Bill 2001 concerns the proposed s 483. New section 483 prevents section 44 from applying to a privative clause decision. Therefore, an application to the Federal Court in respect of such a decision needs to be made under section 39B of the Judiciary Act . Section 483 was then amended in the 2005 Act ('the 2005 amendments'), presumably because of decisions such as S157 ( Bodruddaza v Minister for Immigration & Multicultural Affairs [2007] HCA 14 ; (2007) 228 CLR 651 at [19] ). This provides that section 44 of the AAT Act does not apply to privative clause decisions or purported privative clause decisions (inserted by item 14, Schedule 1). Section 44 of the AAT Act provides that a person may appeal a decision of the AAT on a point of law to the Federal Court. An appeal to the Federal Court under section 44 is available in relation to a non-privative clause decision. 24 The explanatory memoranda do not assist the applicant. They confirm the construction that s 483 bears on its face. 25 The applicant also relies on two decisions of the Court which considered appeals on a question of law under s 44 of the AAT Act from business visa decisions of the Tribunal, Koosasi v Minister for Immigration & Multicultural Affairs (2006) 43 AAR 462 and Yang v Minister for Immigration & Multicultural Affairs [2006] FCA 1159. The applicant accepts that neither decision canvassed the effect of s 483, although other aspects of the Court's jurisdiction were discussed. It is likely that the effect of that section on jurisdiction was simply not raised for consideration. In any event, there was no determination that the Court did have jurisdiction despite s 483 of the Migration Act . 26 There have, however, been other decisions of the Court where the effect of s 483 has been considered on appeal from the Tribunal and in the context of business visa decisions. In Li-Shien Chen v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCA 1496 at [2] ---[3] Drummond J noted that it was common ground that that the Tribunal's decision was a privative clause decision and that an appeal against the Tribunal's decision to the Court under s 44 of the AAT Act was not available because of s 483 of the Migration Act (as it was, prior to the 2005 Act). In Jong Hak Kim v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 31 ; (2004) 38 AAR 304 , also concerning a business visa decision, Kiefel J noted at [26] that it had been submitted by the Minister that the Court's jurisdiction was under s 39B of the Judiciary Act 1903 (Cth) and not s 44 of the AAT Act because of s 483 of the Migration Act . Her Honour did not reject that submission but did not consider it further. In SHCB v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 308 ; (2003) 133 FCR 561 , not a business visa case, the Full Court held at [5] that, if the Tribunal decision was a privative clause decision, there was no right of appeal under s 44 of the AAT Act by reason of the operation of s 483. In Epenisa , Besanko J considered the Court's jurisdiction in an appeal from the Tribunal decision. Noting that the Court had jurisdiction under s 39B of the Judiciary Act and under ss 476A(1)(b) or (c) of the Migration Act , his Honour observed at [8] that there was no right of appeal under s 44 of the AAT Act because of s 483 of the Migration Act . 27 I accept that, in these cases, there was available an alternative remedy and that the question of the effect of s 483 of the Migration Act was not the subject of detailed consideration. However, I see no reason why the conclusions in those decisions should not be followed. 29 The applicant is not necessarily prevented from the opportunity to review the Tribunal decision. The respondent submits that he can commence judicial review proceedings in the High Court which may, in turn, remit the matter to the Federal Magistrates Court where the application for judicial review should have been commenced in the first place. 30 The application should be dismissed pursuant to s 31A(2) of the Federal Court Act. The applicant should pay the first respondent's costs. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | appeal under s 44 of administrative appeals tribunal act 1975 (cth) regarding cancellation of a business visa whether court has jurisdiction to hear appeal section 483 of migration act 1958 (cth) excludes appeals to court under s 44 of administrative appeals tribunal act for privative clause decisions and purported privative clause decisions business visas not excluded from s 483 section 483 directed to statutory appeals court does not have jurisdiction application dismissed pursuant to s 31a(2) of federal court of australia act 1976 (cth) jurisdiction |
I invited submissions as to the appropriate costs order. 2 The applicants seek a general order for costs of the proceeding. They argue there is no reason to depart from the general rule that costs follow the event. Their clients have succeeded in establishing liability. Although the applicants failed to obtain injunctive relief, they obtained awards of damages against all the respondents. In the case of the first and second respondents for $139,200 and, in the case of the third respondent, for $99,200. 3 The respondents made an offer of settlement in the sum of $150,000. This figure was inclusive of costs. The offer was put on the basis that $100,000 would be a reasonable estimate of the costs to date, leaving $50,000 for damages. In essence, therefore, the applicants argue that, although the damages award fell well short of their claim, they beat the respondents' offer and should have the costs of doing so. 4 The respondents rely on the considerable discrepancy between the applicants' claim for $6,350,145 and the damages awarded. Counsel suggest that the general costs order should be limited to 25% of the costs incurred. However, I am not aware that a discrepancy of this nature has ever been regarded as a justification for diminished costs, in the absence of specific applicable provisions such as Order 62 rule 36A(1) or (2) of the Federal Court Rules . Of course, the situation may be different where the discrepancy flows from an applicant's failure in relation to a discrete part of his or her claim. In the present case the applicants failed on a trade marks claim and they also made a trade practices claim which I did not find it necessary to determine. However, these claims did not extend the hearing or add materially to its cost. Neither did the unsuccessful claim for an injunction. Consequently, subject to one matter, I see no principled basis for reducing the general costs order below 100%. 5 The qualification I have in mind is that Order 62 rule 36A(1) applies to the recovery against the third respondent. That sub-rule provides that, where a party is awarded judgment for less than $100,000 in a money claim, 'any costs ordered to be paid, including disbursements, will be reduced by one-third of the amount otherwise allowable ... unless the Court or a Judge otherwise orders'. I see no reason to make a contrary order in relation to the third respondent. Consequently, the costs recoverable against her will be limited to two-thirds of the amount of the taxed or assessed costs. 6 There is a subsidiary issue. Counsel for the respondents argue that any general costs order should exclude all costs associated with the report or evidence of Stuart Robertson of Ernst and Young, Chartered Accountants. I do not know the amount of these costs but they are probably substantial. 7 In my earlier reasons for judgment, I stated why I declined to accept Mr Robertson's estimate of damages. My decision to do so was not an implied criticism of Mr Robertson but, rather, arose out of the fact that the matters he assumed were unsupported by evidence. The applicants ought to have known that there was no evidence to support Mr Robertson's calculations and, therefore, that his conclusions would be of no value. In the circumstances, it was unreasonable for them to incur the expense of retaining Mr Robertson and procuring his report and attendance at court. 8 Counsel for the applicants argued that the matters addressed by Mr Robertson 'were entirely apposite to the issues arising in the proceeding'. I agree. However, an expert's opinion, even on a matter fairly arising out of the pleadings, is of no value unless it is grounded in facts that are either admitted or proved. It may be true, as counsel submitted, that 'the need for expert forensic accounting assistance is plain'. However, the need for evidence, upon which such assistance might fasten, is even more plain. 9 The applicants should have a general costs order in their favour but it should exclude all costs associated with the report or evidence of Mr Robertson. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox. | costs whether partial costs order should be made in a case where the award of damages was well short of the amount claimed by the applicants but exceeded an offer made by the respondents whether the costs associated with the evidence of an expert should be excluded in a case where the experts' opinions were unsupported by any evidence. practice and procedure |
The appellants have filed a notice of motion seeking a stay of the orders of the Federal Magistrates Court. The respondents have filed a notice of motion seeking an order that the appellants provide security in the sum of $37,963 within 14 days failing which the appeal should be dismissed (relying on s 56 of the Federal Court of Australia Act 1976 (Cth) and s 1335 of the Corporations Act 2001 (Cth)). The appeal is to be heard by a single judge as provided for in s 25(1A) of the Federal Court of Australia Act . 2 The principal claims in the amended notice of appeal filed 26 September 2008 are that the primary judge erred in finding that: - (i) the use of Terry Fitzgerald's name and image on the yellow 33 South t-shirt conveyed a representation that there was an association between Terry Fitzgerald and the production and offering of the t-shirt, and (ii) a reasonable consumer in the relevant class would assume that Mr Fitzgerald had sanctioned, permitted or allowed the production and sale of the impugned t-shirt. 3 The primary judge found (amongst other things) that: - (i) the relevant class of consumer was purchasers of surfboards and surf related products, (ii) amongst this group Mr Fitzgerald is well known as is his association with Hot Buttered International Pty Limited, (iii) with reference to all of the evidence, the use of Mr Fitzgerald's name and image on the yellow 33 South t-shirt was conduct misrepresenting to a reasonable member of the relevant class that Mr Fitzgerald had some association with the production and sale of the t-shirt. 4 The appellants submitted that the grant of a stay does not require special or exceptional circumstances and a court will ordinarily grant a stay where the appeal would otherwise be rendered nugatory ( Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 at 693 and 695). In this case the issue of misleading and deceptive conduct "must be answered by an objective assessment of the overall impression" created by the impugned t-shirt on the relevant class ( Honey v Australian Airlines Ltd (1990) 18 IPR 185 at 193). There is a need to show error on appeal but demonstrating error depends "not only on the evidence, but also on the nature of the findings or conclusions made by the primary judge" ( Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 ; [2001] FCA 1833 at [24] ). Further, "even if the question is one of impression or judgment, a sufficiently clear difference of opinion may necessitate" the conclusion that the decision is wrong ( Branir v Owston Nominees at [29]). In this case there were real prospects of success. There is no dispute on the evidence that the appellants are impecunious. The litigation had materially contributed to the appellants' parlous financial situation. Denying a stay or ordering security would deny the appellants the capacity to appeal. The respondent's submissions about the interests of unsecured creditors and the licensor of the magazine covers shown on the 33 South t-shirts were unrealistic. The factors relied on by the respondents as relevant to the making of an order for security on an appeal set out in Cultivaust Pty Ltd v Grain Pool Pty Ltd [2004] FCA 1366 at [13] in fact favoured the appellants. 5 The respondents submitted that: - (i) they had succeeded at first instance but neither their costs nor damages had been paid, (ii) the position on appeal is different from initial proceedings as explained in Tait v Bindal People [2002] FCA 322 at [3] and [4], (iii) in this case there would be unfairness to the respondents as they are unlikely to be able to recover their damages and costs in any event and yet will be put to the cost of a further appeal, (iv) the amended notice of appeal does not identify any error of principle or the application of any incorrect test but concerns findings of fact based on the whole of the evidence, (v) accordingly, the prospects of success on appeal were poor and the proceedings involved no question of public interest, (vi) the evidence did not prove that the respondents caused the appellants to become impecunious, (vii) the appellants had managed to fund the hearing below whilst in a parlous financial state, (viii) many cases involved the making of an order for security on appeal even where the result would be to stifle the appeal, and (ix) the appeal would benefit creditors and the licensor of the magazine covers printed on the yellow 33 South t-shirt and it had not been demonstrated that they could not fund the appeal. 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 corporate appellant, in substance, is the individual appellant's alter ego. I accept that the making of an order for security is likely to frustrate the appeal (given that the respondents propose to serve a bankruptcy notice on the appellants if a stay is not granted). However, as the respondents submitted, a number of other factors need to be taken into consideration. I consider that the following have particular weight on the facts of the present case. First, the appellants managed to run the proceedings below (with legal representation) when the evidence supports the inference that their financial position was very poor at that time. Secondly, while the legal costs no doubt have adversely affected the appellants' financial position generally, the appellants have not demonstrated that, without the contribution of the litigation costs, they would have had the necessary financial resources to fund the appeal in any event. Thirdly, it must also be remembered that, in terms of conduct, the respondents did nothing other than take proceedings to vindicate their rights. Fourthly, the respondents have the benefit of a damages and costs order both of which remain unsatisfied in circumstances where the appeal exposes the respondents to yet further costs that the appellants will be most unlikely to meet if unsuccessful. Fifthly, there is no public interest involved in the issues raised on appeal. Finally, insofar as the prospects of success can be assessed the respondents are correct in submitting that the appeal involves no question of principle but challenges a factual finding of the primary judge based on a detailed assessment of extensive evidence. The prospects are not such as to outweigh the other considerations to which I have referred. This is a case where granting a stay and refusing to order security would involve a "free hit" for the appellants and substantial unfairness to the respondents (in the sense identified in Tait v Bindal People at [4]). It follows that an order for the provision of security should be made. 8 The appellants submitted that the estimate of costs by the respondents' solicitor was excessive. I consider that the amount of security should be less than claimed by the respondents having regard to various items in the estimate (specifically, counsel's preparation of two days for the appeal and two days for submissions and two and a half days for solicitors, the 20% allowance of total solicitors' costs). For these reasons I consider an order for the provision of security in the sum of $25,000 appropriate failing which the appeal should be stayed rather than dismissed. 9 For these reasons the appellants' notice of motion should be dismissed and an order requiring the provision of security made. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. | notice of motion application for stay pending appeal notice of motion application for security for costs pending appeal practice and procedure practice and procedure |
Later he established a website which advised readers that the Principality had a 'new bank" which was to be known as the "Terra Nova Cache". Mr Siminton addressed a number of public meetings in which he encouraged those present to deposit funds with the 'new bank". He succeeded in persuading a considerable number of people to place their funds in the "bank". When it became aware of these events APRA formed the view that Mr Siminton had contravened certain provisions of the Banking Act 1959 (Cth) ("the Act "). It sought the orders granted by Sundberg J under s 65A of the Act and s 23 of the Federal Court of Australia Act 1976 (Cth). 2 On 29 December 2005, 4 January 2006 and on 19 January 2006 APRA filed notices of motion and statements of charge seeking orders that Mr Siminton be punished for contempt in respect of nine alleged breaches of the orders made by Sundberg J. On 30 March 2006 Merkel J found six of those charges proven. He described them collectively as "the disposal contempts". The seriousness of the breaches is underlined by the fact that Siminton's conduct was precisely the kind of conduct against which Sundberg J sought to guard by the making of the orders the subject of the contempt charges. The conduct involved the actual transfer of large sums of money ($536,880.18, $38,000, $43,000, $5,000 and $10,000 respectively), and an attempted cash withdrawal from a Bendigo Bank account of $500,000, all of which occurred shortly after Siminton became aware of the Sundberg J orders. On 10 April 2006 Merkel J ordered that Mr Siminton be imprisoned for a period of 10 weeks in respect of the disposal contempts. 3 Mr Siminton lodged an appeal against the findings and orders made by Merkel J. On 19 July 2006 a Full Court allowed the appeal in part, setting aside the order for imprisonment and imposing, in lieu, a fine of $50,000. 4 On 18 September 2006, the day which the 60 day period prescribed by Order 2(b) expired, Mr Siminton applied for an extension of time within which to make payment of the $50,000. The application was supported by an affidavit, sworn on 14 September 2006, by the solicitor acting for Mr Siminton. I am advised by my client and verily believe that he is presently unable to pay the said fine. On 10 January 2006 Gray J made an interlocutory order in the principal matter inter alia totally freezing all of my client's funds and assets. As a consequence of the full order of Gray J, which addresses a number of aspects, many hundreds of thousands of dollars have been frozen. As part of the proposed Application to stay and or set aside the principal application, a consequential application will be made to stay and/or set aside the said order of Gray J. In the circumstances, it is respectfully submitted that my client's ability to pay the fine or otherwise should not be determined whilst he is subject to such freezing order and since a challenge is to be mounted as aforesaid to such order that there be a stay for the payment of the fine pending the hearing and determination of such challenge. On that day Mr Siminton's solicitors wrote to the District Registrar seeking a further extension of one month for Mr Siminton to pay the fine. No reason for seeking the extension was given. The application was refused. The fine has not since been paid. 5 On 3 October 2006, in accordance with paragraph 2 (c) of the order of the Full Court, the District Registrar applied for direction concerning enforcement of its order. 6 On 6 November 2006 I directed the District Registrar to commence contempt proceedings in respect of the failure of Mr Siminton to pay the fine. 7 By notice of motion dated 15 December 2006 the District Registrar sought orders that Mr Siminton be committed to prison or otherwise punished for contempt of Court for failing to pay the fine imposed by the Full Court. The accompanying statement of charge alleged that Mr Siminton was guilty of contempt of court in that he failed to pay the $50,000 fine within the time stipulated in the Full Court's order (including the additional two weeks allowed by the District Registrar under that order). It was further alleged that the contempt was wilful and contumacious. 9 The first objection was that s 65A of the Act was "unconstitutional" and that this precluded the laying of contempt charges. I rejected this contention for reasons which I gave when dealing with the principal proceeding: see Australian Prudential Regulation Authority v Siminton [2007] FCA 1608 at [7] to [11]. I rejected the submissions for reasons which I gave in Australian Prudential Regulation Authority v Siminton (No 5) [2006] FCA 1340 at [5] . Proceeding number 376 of 2006 was the file number assigned to Mr Siminton's appeal from the finding and orders of Merkel J. Proceeding number 1607 of 2005 is the file number assigned to the principal proceeding in which the ex parte orders of Sundberg J were made. In my view Order 2(c) of the Full Court's orders empowered the District Registrar to make application to a single judge of the Court. It did not require her to make application to a member of the Full Court. It was appropriate for her to seek such directions by resort to a notice of motion filed in the principal proceeding. This is what she did. 11 The third preliminary matter was an application that I disqualify myself from dealing with this contempt charge. Neither of these decisions involved any prejudgment of any issue arising on the present notice of motion. Nor have I, in making those decisions, had occasion to form or express any judgment as to Mr Siminton's credit. I was not referred to any authority which would require me to disqualify myself. 12 The fourth objection was that the principal application was an abuse of process which should permanently be stayed or struck-out. This submission was also made in the principal proceeding. I rejected it then: see Australian Prudential Regulation Authority v Siminton (No 6) [2007] FCA 1608 at [25] to [27]. I reject it now. 13 In any event, these arguments cannot avail Mr Siminton in contempt proceedings. Whilst the order stands, and it is not set aside, it must be observed and obeyed and any breach of contravention of such an order can give rise to a charge of contempt of failing to comply with it or observe it. However, the disobedience will amount to a criminal contempt if it involves 'deliberate defiance or, as it is sometimes said, if it is contumacious': see Witham v Holloway [1995] HCA 3 ; (1995) 183 CLR 525 at 530 ... However, as all proceedings for contempt are now regarded as criminal in nature, all of the charges must be proved beyond reasonable doubt: see Witham at 534. 15 In Advan Investments Pty Ltd v Dean Gleeson Motor Sales Pty Ltd [2003] VSC 201 Gillard J identified the elements which it is necessary for a complainant to establish in order to make good a charge of civil contempt of Court. In accordance with the principles of the criminal law, in proving element (v) it must be proven that the act or omission which constituted the breach of the order was deliberate and voluntarily. • The terms of the order were clear and unambiguous. • A copy of the Full Court's orders was served on Mr Siminton on 27 July 2006. The endorsement required by O 37 r 2(3) of the Federal Court Rules appeared on the order. • Mr Siminton had knowledge of the terms of the order. 17 Counsel for the District Registrar accepted that his client bore the onus of establishing that Mr Siminton had the capacity to comply with the Full Court's order and that his failure to comply with that order was wilful. He was correct to do so: see Australian Competition and Consumer Commission v World Netsafe Pty Ltd [2003] FCA 159 at [51] ; Pattison v Bell [2007] FCA 137 at [34] . 18 The evidence relied on by the District Registrar was contained in a series of affidavits (together with the exhibits referred to in those affidavits). A large number of transactions are recorded through the account. That is sufficient to reach the conclusion that his failure to pay the fine is wilful because he had access to funds which would allow him to pay the fine in whole or in part. Siminton's attempts to conceal his use of funds, and his failure to complete a statement of affairs or provide books of account leads readily to an inference that Siminton has access to the funds in the account in the name of Holzheimer. • The transaction referred to in para 17 of the District Registrar's submissions is explained and dealt with in Siminton (No 7) at [28], [29] and [62]. • The direction referred to in para 19 of the District Registrar's submissions is explained and dealt with in Siminton (No 7) at [37]. They involved the use, by Mr Siminton, of the Visa card in the name of Holzheimer, to purchase goods and services from a garage, a Seven Eleven store, a cinema and a restaurant. 21 In oral submissions counsel for the District Registrar also drew attention to the use, by Mr Siminton, of the Holzheimer's Visa account, to pay legal fees totalling $19,500 in the period between 3 May 2006 and 16 August 2006. Nine separate transactions were involved. The details appear in Siminton (No 7) at [23]. Of these only one payment of $2,000 was made between 19 July and 2 October 2006. Counsel, however, submitted that the earlier payments provided evidence that Mr Siminton was in a position to draw on and did drawn on the account to satisfy his financial needs during 2006. 22 The District Registrar's invitation to the Court to draw inferences from the facts is made in circumstances in which neither Mr Siminton nor any other persons, such as the Holzheimers, who might reasonably have been expected to have knowledge of the various transactions and of his financial position, gave evidence. No adverse inference can be drawn merely because Mr Siminton has chosen not to give or call evidence in defence of the charge. The failure is nonetheless of potential significance. The most that can be said in criminal matters is that there are some cases in which evidence (or an explanation) contradicting and apparently damning inference to be drawn from proven facts could come only from the accused. In the absence of such evidence or explanation, the jury may more readily draw the conclusion which the prosecution seeks. ' "(footnotes omitted). Counsel for Mr Siminton did not make any specific submissions as to why the inferences for which APRA contended should not be drawn. 24 I am satisfied beyond reasonable doubt that those inferences ought to be drawn, that the conclusions contended for by the District Registrar are supported by the evidence and that the evidence does not support a finding that there is any reasonable or rational hypothesis consistent with Mr Siminton's innocence of the charge. 25 I am also satisfied that the affidavit and documentary evidence tendered by the District Registrar strongly supports the case made by her and that this evidence establishes each of the matters of fact on which she sought to rely. 26 Counsel for the District Registrar submitted that the evidence supported the conclusion that, in the period between 19 July 2006 and 2 October 2006, Mr Siminton had access to funds which would have enabled him, had he wished to do so, to pay some or all of the fine imposed by the Full Court. Counsel accepted that there was an issue as to whether Mr Siminton was entitled to have access to the funds consistently with orders made by Gray J on 10 January 2006. In Siminton (No 7) I have held that, in dealing with these funds, Mr Siminton was in contempt of His Honour's orders: see at [3], [4], [60], [61], [62], and [63]. Counsel, however, submits that Mr Siminton could have made application to the Court in accordance with an order made by Gray J which gave him "liberty to apply on two days notice in writing to [APRA], supported by an Affidavit as to his means, for an order that he be permitted to withdraw moneys for the purposes of paying his own living expenses and/or paying his legal expenses in relation to the proceeding. " Alternatively, an application could have been made to vary His Honour's orders so as to permit Mr Siminton to have access to sufficient funds to pay some or all of the $50,000 fine. This was not done. 27 Counsel for Mr Siminton pointed to the attempt made by Mr Siminton, in September 2006, to have the time for payment enlarged and, in particular, to the part of the affidavit, sworn by his instructing solicitor on 14 September 2006, which has been extracted above at [4]. This was said to indicate that Mr Siminton was making a bona fide attempt to obtain access to the funds frozen by Gray J's order in order to pay the fine. The affidavit did not disclose that Mr Siminton had, in fact, obtained access to some of the funds comprehended by his Honour's orders. Faced with the uncontradicted evidence that Mr Siminton had had access to some of these funds counsel was forced to concede that Mr Siminton did, during the relevant period, have the capacity, should he have so wished, to pay part of the fine. He submitted, however, that the evidence, adduced by the District Registrar, did not establish that Mr Siminton had the capacity to pay the entire $50,000 before 2 October 2006. There was, therefore, he contended a "more than reasonable doubt" as to whether Mr Siminton's failure to pay the full amount was wilful. 28 The area of disagreement between the parties was thus narrowed to the question of whether it was necessary for the District Registrar to establish that Mr Siminton had the capacity to pay the full $50,000 fine at relevant times or whether, if he had the capacity to pay part of the fine (as it was conceded he did) and did not do so he could be found guilty of contempt. It was not disputed that a failure to comply with an order of the Court to pay a money amount could constitute a contempt (a proposition supported by decisions of the Court in Australian Industry Group v Automotive, Food, Metals, Engineering, Printing and Kindred Industries of Australia (2001) 188 ALR 653 at 658 and World Netsafe at [29]) or that the Court had power to deal with such a contempt under s 31(1) of the Federal Court of Australia Act 1976 (Cth) and s 24 of the Judiciary Act 1903 (Cth) (as to which see Mudginberri Station at 105-6). 29 In dealing with the disputed issue both parties sought to rely on a passage from the judgment of Spender J in World Netsafe . Further, and regardless of any possible application of the Debtors Act in the present application, I am of the opinion that to establish contempt of an order to pay within 28 days of the making of the order, it has to be shown that a failure to comply with that order was wilful. That requirement will not be made out unless it is shown that the person the subject of the order has the capacity to comply with it, in whole or in part. A truly impecunious person who does not make a payment which a court has ordered him to pay is not guilty of contempt, in my opinion. The alleged contemnor was the sole shareholder and director of the company. He was found not to have committed contempt by failing to comply with an order requiring him to refund certain moneys which had been paid to the company. This was because it had not been established that he had the means of making the payment. 30 In my view a person who is ordered by the Court to make a payment within a certain time and, within the prescribed period, has the capacity to pay part, but not all, of the amount needed to satisfy the order, is bound to make that part of the payment which he or she has the capacity to make. Failure to make such part payment as the person has the capacity to make will constitute a contempt of Court. I understand Spender J's dictum in World Netsafe to admit this possibility. Where the Court order is made in favour of another person such an approach ensures that that person obtains at least some of the money to which the Court has adjudged him or her to be entitled. Where, as here, the Court has imposed a fine for contempt, a requirement of part payment to the limit of the contemnor's capacity at least partially serves "the very substantial purpose of disciplining the [contemnor] and vindicating the authority of the court": see Mudginberri at 112. It would offend common sense and a sense of justice if a person could avoid complying with a Court order to pay a particular sum when he or she had the capacity to pay most but not all of it. 31 The circumstances in which Mr Siminton came to have access to the Holzheimer's Visa account are explained in detail in Siminton (No 7) at [23] and [36]. In summary, what occurred was that, in April 2006, Mrs Holzheimer obtained an additional card to operate the account by reporting the loss of a card held by her. She provided the replacement card to Mr Siminton who used it regularly from April 2006 until it was cancelled by the bank on [15] September 2006. Between 19 July 2006 and 16 August 2006 he used it on many occasions to purchase goods and services. On 16 August 2006 the account had a debit balance of $2,463.73. At about that time Mr Siminton gave instructions to a bank in Austria to transfer $25,000 (less commission) from an account controlled by him to the Holzheimer's Visa account. Pursuant to those instructions $24,981 was transferred into the Visa account on 16 August 2006. The account then had a credit balance of $22,517.27. On that day he used the card to pay $2,000 to his solicitor. On 18 August 2006 he withdrew $1,000 in cash from the account. He did so again on 30 August 2006. 32 I am, accordingly, satisfied that Mr Siminton had the financial capacity to pay at least $22,517.27 to comply, in part, with the Full Court's order. I am satisfied that his refusal to do so was wilful. He was well aware of his obligation to make the payment and he chose to use the funds at his disposal for other purposes. 33 I found, in Siminton (No 7) , that the funds transferred from the Austrian bank and other funds credited to the Visa account were subject to the "freezing order" made by Gray J in January 2006. Mr Siminton should not, therefore, have dealt with these moneys. This does not, in my opinion, lead to the conclusion that he lacked the capacity to make part payment. Counsel for Mr Siminton did not so submit. Mr Siminton, in fact, had obtained access to these funds and used them. He asserted an entitlement to some, at least, of the moneys covered by Gray J's order. He had the option of preparing an affidavit as to his means and establishing his entitlement to the funds. He chose not to do so. I accept the submission of counsel for the District Registrar that Mr Siminton could, had he wished to do so, lawfully have obtained the right to use the funds to pay the fine by exercising the liberty to apply granted to him by Gray J or by applying to vary Gray J's orders. He did neither of these things. I will give directions as to the steps which need to be taken in advance of a hearing on penalty. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey. | civil contempt failure to pay fine imposed by the full court capacity to pay fine whether respondent had the capacity to pay all or any part of the fine whether refusal to pay fine was "wilful" standard of proof beyond reasonable doubt contempt |
In so doing it needs to scrutinize with care claims of privilege made on the ground now under consideration. It is for the party claiming privilege to show that the documents for which the claim is made are privileged. He may succeed in achieving this objective by pointing to the nature of the documents or by evidence describing the circumstances in which they were brought into existence. But it should not be thought that the privilege is necessarily or conclusively established by resort to any verbal formula or ritual. The court has power to examine the documents for itself, a power which has perhaps been exercised too sparingly in the past, springing possibly from a misplaced reluctance to go behind the formal claim of privilege. It should not be forgotten that in many instances the character of the documents the subject of the claim will illuminate the purpose for which they were brought into existence. This passage was cited with approval by Lockhart J in Trade Practices Commission v Sterling (1979) 36 FLR 244 at 247. Privilege was claimed in respect to a number of documents falling within the terms of that Notice . 5 Presently in issue is a claim of privilege in respect to seven documents. 9 17 March 2008 Draft Expert Report of R. Conoulty from CRA to Simpsons Solicitors with hand written annotations of V. Chylek. The Expert Report of Ms Conoulty has been filed and served upon the parties, including the Applicants. 7 The description of the documents for which privilege has been claimed has been brief. But there was no cross-examination of Ms Chylek on her Affidavi t, as there could have been: National Crime Authority v S (1991) 29 FCR 203 at 211 per Lockhart J. 8 In ASIC v Southcorp Ltd [2003] FCA 804 at [21] , [2003] FCA 804 ; 46 ACSR 438 at 441---2 Lindgren J helpfully formulated the principles to be applied in a case such as the present. The onus upon the Fifth Respondent of establishing privilege, albeit on minimal material, has been made out. Those handwritten annotations it is thus considered are privileged, as is Document 2, the email from Ms Chylek to the expert. 10 The documents, it may generally be accepted, were confidential. 11 And it may be accepted that Documents 3 and 5 caused Ms Chylek to give legal advice. Such is the evidence given in her Affidavit sworn on 25 July 2008. But there is no evidence that the disclosure of those two documents would themselves disclose any legal advice given. 12 Documents 9 and 11 are draft expert reports. The draft expert reports, however, are not considered to be privileged and the onus imposed upon the Fifth Respondent to establish the claim has not been discharged. A draft report from an expert, together with a communication from an expert to a solicitor, " do not attract privilege because they are not in the nature of, and would not expose, communications " per Lindgren J. Nor, if it be relevant, is there any evidence that the draft reports were given for the purpose of obtaining the input of the solicitors: New Cap Reinsurance Corp Ltd (in liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258. That was a case arising under s 119 of the Evidence Act 1995 (Cth) and not the common law. All that is known of the draft reports in the present proceeding is simply that, namely they are " draft reports ". Nothing is known as to the reasons why such drafts were prepared and nothing is known as to whether the disclosure of a draft report prepared by the independent expert would disclose anything other than the contents of a draft of a report which was subsequently filed and served. Indeed, Senior Counsel for the Fifth Respondent accepted that privilege would not attach to a document if all that was known was that it was a " Draft Report " which was forwarded in confidence. 13 The inadequacy in the description of the documents is exposed by the description of Document 12, being correspondence to and from the expert and Ms Chylek. To the extent that the correspondence is from Ms Chylek, the claim for privilege is upheld; to the extent that the communication is from the expert to Ms Chylek, the claim is rejected. 14 It should be noted that the potential inadequacy in the description of the documents for which privilege was to be claimed had previously been raised with Counsel appearing for the Fifth Respondent. No further affidavit was filed. To the extent that the Affidavit of Ms Chylek falls short in its description of the documents over which privilege is claimed, that presumably was a forensic choice deliberately made by those advising the Fifth Respondent. 15 The Fifth Respondent urged a course upon the Court that it should inspect the documents itself for the purpose of resolving the claim. That course has not been considered necessary and no such inspection has thus taken place. 17 The claim for privilege in respect to the balance of those documents is rejected. 18 All parties seek a quick resolution of the issues to be decided and more considered and comprehensive reasons are not sought. 19 It should be noted that one revision to the ex tempore reasons as delivered has been to extend the claim for privilege to Document 10. It is not understood that the parties dispute the ability to make that revision. ... 2 21 April 2008 Email from V Chylek to Jordan Djundja cc'ing Ms. Madeliene Avenell (Counsel for the 1---4 Respondents), Mr. C Wood (Counsel for the Fifth Respondent), attaching draft unsworn Affidavit of Jordan Kiriakidis and communicating issues to be addressed in proposed evidence. Access to other documents described in that Affidavit has not been pressed. 22 These two documents were claimed to be privileged by the Fifth Respondent by reason of both the privilege attaching to communications with legal advisers for the purposes of obtaining evidence and by reason of what has been described as a common interest privilege. That common interest has been described as including a common interest in maintaining a defence as to illegality which may be involved in either the sale or distribution of the films in issue in the principal proceeding. 23 The Applicants maintain that such privilege as otherwise may have attached to these two documents has been lost. The two documents, it is accepted by all parties, fall within the Notice to Produce . There then follows a series of expenses identified in that Report . The documents in respect to which access was sought by the Applicants were those documents described as " email correspondence " or an " email "; access was not sought to the " draft affidavit " or the " draft unsworn Affidavit " of Mr Kiriakidis. 24 To the description of the documents provided by Ms Chylek, and described by her as " email correspondence " or an " email ", the Applicants contend that there is a further description, namely the description set forth in the Notice to Produce . 25 The communication of information as between legal advisers and an expert may or may not be privileged. The mere fact that the two documents in issue may have that additional description, it is considered, does not resolve the claim for privilege. However else they may be described, the two documents record communications on matters of evidence. That, it is considered, is sufficient to attract the claim for privilege. The fact that the email communications may also be described as being in respect to " expenses " identified in an expert's report does not deny to those documents the privilege claimed. 26 The further claim for a common interest privilege need not therefore be resolved. 27 The claim for privilege in respect to the two documents now in issue is thus upheld. 28 Again, all parties seek a quick resolution of the issues to be decided and more considered and comprehensive reasons are not sought. The parties are to bring in short minutes of orders at 9.30am on 21 August 2008 that give effect to the ex tempore judgment delivered today. 2. The proceeding be adjourned to 9.30am on 21 August 2008 with a view to making orders to give effect to the ex tempore judgment delivered today. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | privilege onus communications with expert draft report of expert adequacy of description of documents practice and procedure |
It seeks declarations, injunctions and an order for the purposes of s 83 of the TP Act, and other orders under s 86C of the TP Act in respect of that conduct and those representations. It alleges that Tony Antoniou, as the director and secretary of ADC since 18 October 1993, and at all material times as an employee, servant or agent of ADC, was knowingly involved in the contraventions of the TP Act. It is really the conclusions from or the consequences of the acknowledged conduct on behalf of ADC that was in issue. Moreover, Mr Antoniou clearly acknowledged that he was the driving mind behind ADC and was fully aware of its conduct. He did not seek to say that, if ADC were found to have contravened ss 52 or 53(eb) of the TP Act, he was not knowingly involved in its contravention. Mr Antoniou, as well as being the sole director and manager, is one of two shareholders of ADC, the other being his wife. Mr Antoniou was given leave to appear in person at the hearing of this proceeding on behalf of ADC, and he also represented himself. Mr Harris was of Aboriginal descent. Mr Antoniou engaged Mr Harris to paint certain items, including didgeridoos, boomerangs and ceramics. Mr Harris painted such items for Mr Antoniou for a period of approximately three months, only. Mr Harris painted the artworks in a style and manner that is commonly recognised as Aboriginal art. Mr Harris has not since about 1993 been engaged by Mr Antoniou, or ADC, to paint any artworks and has not painted any artworks for them since that time. Mr Antoniou and/or ADC sold the items painted by Mr Harris. Mr Antoniou and/or ADC used the name "Ubanoo" or "Ubanoo Brown" to denote the artist of the painting on the artworks. Mr Antoniou says he used "Ubanoo Brown" to identify a subset of artworks, being the "cross-hatch collection", as he says the distinguishing feature of that subset is the use of a criss-cross method to create a cross-hatch effect on various parts of the artwork, such as the wings of a bird. In or about October 1993, Mr Antoniou, on behalf of ADC, engaged Greg Goodridge to paint certain artworks. Mr Goodridge is not of Aboriginal descent. During the period from October 1993 to December 2008, Mr Goodridge painted artworks for ADC in the Australian Aboriginal style, including some artwork with the cross-hatch effect. The items painted by Mr Goodridge were advertised and sold by Mr Antoniou and/or ADC through various means. In 2003, ADC imported two shipping containers from Indonesia containing various carved wooden items including birds and other animals, statues, didgeridoos, boomerangs, shields and clapsticks. Those items were made in Indonesia. They fell into three categories. They were either already painted and did not require further painting prior to sale or supply on consignment by ADC, or they were unpainted and did not require painting prior to sale or supply on consignment by ADC, or they were unpainted and required painting prior to sale or supply on consignment by ADC. The majority of the items were unpainted and required painting. Mr Goodridge painted the majority of the items that were unpainted and required painting. Mr Goodridge painted those artworks for ADC in the Australian Aboriginal style. Since 2003, ADC has promoted, sold and supplied on consignment, the wooden items that were painted by Mr Goodridge. From at least 2001, ADC has promoted and sold artworks online through an auction website www.ebay.com.au (eBay). From at least 19 August 2004 to January 2009, ADC has promoted and sold artworks both throughout Australia and internationally through an internet website www.aboriginalartpaintings.com (the Website). There are six separate representations alleged, all of which are said to be false and misleading: that since at least 1996, ADC has promoted, sold and supplied on consignment, artworks which have the words "Ubanoo Brown" written on the back or part of the artwork, which were in fact painted by Mr Goodridge (the artist representations). The words "Ubanoo Brown" were written on the artworks either by Mr Antoniou or at his direction. Mr Antoniou and ADC say that Ubanoo Brown is a "pseudonym name". The ACCC says that even if it is accepted that Ubanoo Brown is a "pseudonym name", that it was a name used by Mr Harris and not Mr Goodridge, and that it does not change the character of the representations made by ADC as the representations are still misleading in the same way, and that it does not alter the fact that the artworks sold by ADC were not painted by a person of Aboriginal descent. that since at least 2005, ADC has supplied documents to consumers and retailers entitled "Certificates of Authenticity" in relation to artworks that had the words "Ubanoo Brown" or "Ubanoo" written on them, and which were painted by Mr Goodridge (the certificate of authenticity representations). The certificates of authenticity read "AUTHENTIC ABORIGINAL PAINTING" and "I GUARANTEE THE AUTHENTICITY OF THIS ORIGINAL CANVAS PAINTING" and "ABORIGINAL FINE ART CANVAS". The ACCC says that the certificate of authenticity representations gave rise to the express representation that the artworks and paintings were painted by Ubanoo Brown by the use of the text "Artist: Ubanoo Brown", and the certificate of authenticity representations impliedly or expressly give rise to the representation that the artworks and paintings were painted by a person of Aboriginal descent, by virtue of the natural inference to be drawn from statements such as "Aboriginal fine art canvas" or "authentic aboriginal painting" included in the wording of the certificates of authenticity. The ACCC says that the certificate of authenticity representations are untrue because the artworks and paintings were not painted by a person of Aboriginal descent and were not painted by Ubanoo Brown. The ACCC pleads that those artworks were painted by Mr Goodridge or by a person or persons unknown who were not known as nor identified themselves as "Ubanoo Brown". that from at least 19 June 2007 to January 2009, ADC represented that certain artworks promoted for sale on the Website were painted by a person of Aboriginal descent and/or Ubanoo Brown. The artworks so promoted were not painted by Mr Harris. A majority of the artworks so promoted were painted by Mr Goodridge (the website representations as to artist). As at 19 June 2007, Ubanoo Brown was identified as the artist in respect of 332 artworks displayed on the website by the use of text placed in close proximity to images of the artworks. As at 1 September 2008, Ubanoo Brown was identified as the artist in respect of 322 artworks displayed on the website by the use of text placed in the close proximity to images of the artworks. The text used to identify the artist included labels such as "ARTIST: Ubanoo Brown"; "ARTIST: Ubanoo Brown, a highly talented artist from Murchison River, Western Australia"; "A real showpiece painted by Ubanoo Brown, a talented artist from Murchison River, Western Australia"; "ARTIST: Ubanoo Brown, born circa 1960, a highly talented artist from Murchison River district of Western Australia" and "ARTIST: Ubanoo Brown, born 1960 from Murchison River, Western Australia, a talented artist who has been painting since he was twelve" and various formulations of similar wording. Other text was also used, such as "Beautifully hand carved & painted Pelikan [sic] from Northern Australia by Ubanoo Brown". The ACCC says that the website representations as to artist are implied, and relies on the natural inference to be drawn from the statements on the website, made without qualification, including that ADC sells or supplies "Aboriginal Art", "Australia's original and best Aboriginal art", "Authentic Traditional Aboriginal Fine Art", and "Australian Aboriginal Art" as variously appearing on the website, and as also stated on the website that objects displayed on the website are created by "traditional Aboriginal artists", and that certain objects displayed on the website are "from Northern Australia" or "made from Australian Native Timber". The representations are said to be untrue because as at 1 September 2008, at least 281 artworks represented on the website as painted by a person of Aboriginal descent and Ubanoo Brown were painted by Mr Goodridge, and that as at 1 September 2008, at least 41 artworks represented on the website as painted by a person of Aboriginal descent and Ubanoo Brown were painted by a person or persons unknown who were not known as or identified themselves as "Ubanoo Brown". that since at least 19 June 2007 to January 2009, ADC represented that the country of origin of the carved wooden items that were imported from Indonesia (as referred to in paragraph [8] above) is Australia (the website representations as to country of origin). The ACCC says that representation is implied from the words and statements on the Website, and in the case of the carved wooden bird referred to below by the words and statements made on eBay. that in September 2008, ADC represented on eBay, the auction website, that a particular carved wooden bird was painted by a person of Aboriginal descent (the carved wooden bird representation), and that the country of origin of the carved wooden bird was Australia (addressed as part of the website representations as to country of origin). The carved wooden bird was one of the artworks imported from Indonesia (as referred to in paragraph [8] above) and was painted by Mr Goodridge. The ACCC says that representation was made expressly or by the words and manner of presentation of that artwork. The ACCC says generally that there is a real prospect that a reasonable person upon seeing the aforementioned alleged representations, would be led to believe that the product or products that they were purchasing or considering purchasing were painted by a person of Aboriginal descent, or painted by an artist named Ubanoo Brown and are from Australia. The ACCC alleges that this prospect arises from the prominent words contained on the website, the certificates of authenticity, the paintings and artworks, the stamp and the eBay auction website in their ordinary sense. The ACCC says that the impression created by the combination of the representations is made stronger by the fact that they are not qualified in any way. In addition, the ACCC says, ADC and Mr Antoniou have gone to considerable lengths to reinforce the impression that products offered for sale and sold by ADC are created by persons of Aboriginal descent, demonstrated by the following conduct: providing ADC's customers with Ubanoo Brown's dreamtime story when purchasing an item painted by Mr Goodridge; providing ADC's customers with the "bush tucker dreaming" story in relation to certain paintings attributed to Ubanoo Brown, but painted by Mr Goodridge; describing prints displayed on the Website (including those attributed to Ubanoo Brown) as "becoming increasingly popular worldwide as collectable fine art"; stating on the Website that "Certificates of Authenticity issued with every print"; including Ubanoo Brown's dreamtime story in certificates of authenticity issued in relation to paintings painted by Mr Goodridge; and mirroring the practice that Aboriginal artists have of writing their names on the back of paintings they have created. Whether a representation is likely to mislead or deceive is an objective question of fact, to be determined in all the circumstances: Taco Bell . It is sufficient if there is a real chance that the conduct or representation will mislead or deceive: Global Sportsman Pty Ltd v Mirror Newspapers Ltd [1984] FCA 180 ; (1984) 2 FCR 82 at 87. Importantly, whether conduct is misleading or deceptive or is likely to mislead or deceive must be determined in context. Although it is true, as has often been said, that ordinarily a class of consumers may include the inexperienced as well as the experienced, and the gullible as well as the astute, the section must in my opinion by (sic) regarded as contemplating the effect of the conduct on reasonable members of the class. The heavy burdens which the section creates cannot have been intended to be imposed for the benefit of persons who fail to take reasonable care of their own interests. What is reasonable will or (sic) course depend on all the circumstances. The test is whether an ordinary or reasonable person from the class of persons to whom the representation is made is likely to be misled or deceived: Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12 ; (2000) 202 CLR 45 ( Campomar ) at 85-7. Where a representation has been made in advertising material, it must be assessed not by a particular statement taken in isolation, but by the statement in its context and, where appropriate, in the surrounding circumstances: Trade Practices Commission v Optus Communications Pty Ltd & Optus Mobile Pty Ltd (1996) 64 FCR 326 at 336-8; Australian Competition and Consumer Commission v Thorn Australia Pty Ltd [2004] FCA 157 at [13] - [14] ; Australian Competition and Consumer Commission v Signature Security Group Pty Ltd [2003] FCA 3 at [25] - [28] . In QDSV Holdings Pty Ltd (t/as bush Friends Australia) v Trade Practices Commission [1995] FCA 1431 ; (1995) 131 ALR 493 ( QDSV Holdings ), the appellant was a wholesaler of soft toys. One of its products was a koala soft toy, which had a label attached to it with the words "Aussie Born" on one side, and the words "Made in Australia" on the other side, with smaller words "With Some Imported Components" beneath those words. The soft toys were designed in Australia, the components were manufactured in China, except for about 30% of the filling, and all the components were then imported into Australia, for assembly within Australia. The primary judge declared the labels were in breach of ss 52 and 53(eb) of the TP Act and made an order under s 80 of the TP Act. The Full Court dismissed an appeal from those orders and held that the labels were misleading and deceptive, although that the toys could fairly be described as having been designed and finished in Australia. The meaning conveyed by the labels will be assessed by construing the language employed, but will take account of such factors as the prominence given to particular slogans or phrases, the nature of the product itself and the expectations and likely understanding of consumers. The force of the catchphrase is, if anything, increased by the fact that it is attached to an "Australiana" product. The product is not particularly expensive, the smaller koalas retailing for about $20 to $25. The consumer is therefore likely to devote less care to reading labels in a case of this nature than where he or she is buying, for example, expensive items of furniture ... The slogan or catchphrase, in these circumstances, is likely to play an important part in creating an impression in the consumer. The consumer is also likely to believe that most of the components used in the manufacturing process themselves have been manufactured in Australia. A consumer unable or unwilling to do more than glance at the label would be even more likely to form these beliefs. The issue was really whether what ADC had done in the past conveyed the representations alleged by the ACCC. However, it is convenient to briefly advert to the evidence simply to explain why the case was so confined. As is not uncommon in the case of a litigant in person, Mr Antoniou was anxious to get the proceeding over. He conducted it efficiently on behalf of ADC and himself. He only very briefly questioned the one witness called by the ACCC who he required for cross-examination, Susan Jacquier, the Assistant Director of the Adelaide regional office of the ACCC, although he did not consistently stay on the issues arising in the proceeding. I was impressed with Ms Jacquier as a witness and I accept her evidence. It was in every respect uncontradicted and Mr Antoniou did not submit that I should not accept any particular part of her evidence. In his affidavit constituting part of his evidence, Mr Antoniou disputed certain of the numbers and descriptions of artworks described by Ms Jacquier from the Website. None of the disputes went to whether the alleged representations were made, or were otherwise significant to the findings recorded below. The Website is the website of ADC. It has as its opening screen image an evocative photograph of what appears to be part of central Australia, with an inset image of three Aboriginal men, and with the words "Aboriginal Art" above the printed words "Australian Dreamtime Creations". Ms Jacquier said in her affidavit, and counsel for the ACCC acknowledged, that the opening page of the Website recorded considerable detail about the Website in terms which were only visible when the Website was printed out. Nothing turns on that. I have placed no weight on that part of the exhibit. It is an exhibit of many pages. I find that, with that qualification, it accurately reproduces what is apparent on the Website. Mr Antoniou also disputed, to a relatively minor degree but only in the most general terms, the accuracy of the transcript of the examination under s 155 of the TP Act conducted by Ms Jacquier of Mr Goodridge in April 2009. Mr Goodridge did not give evidence. Mr Antoniou was not present at that examination. I have no reason to reject the accuracy of that transcript, including where it records identified documents being shown to Mr Goodridge for his response. In any event, the ACCC in its final submissions did not rely upon what Mr Goodridge said in that examination even though, at the hearing, Mr Antoniou did not object to the reception of Ms Jacquier's affidavit and the all exhibits to it. The other three witnesses called by the ACCC were not required for cross-examination. Mr Antoniou did not object to the affidavits of Nicholas Parkyn, a senior lawyer employed by the Australian Government Solicitor, of Christopher Williams, a solicitor employed by Gilbert + Tobin, who coincidentally had procured a copy of the Website as at 19 June 2007, or of Mark McCarthy, a Senior Investigator in the Adelaide regional office of the ACCC, or to the exhibits to their affidavits. In his affidavit, Mr Antoniou suggested that the exhibit to Mr Williams' affidavit involved some duplication of items or images. He did not take that further in his evidence. Nothing turns on the points made by Mr Antoniou in his affidavit about that exhibit. I accept that evidence. Mr Antoniou gave evidence himself, and called Ivy Taylor. Ms Taylor presented as an expert in carving and sculpting, who for some 40 years or so had specialised in acrylic paintings and sculptures, following her obtaining a Certificate in Bauhaus Graphic Design in Germany after two years full-time study. Mr Antoniou's evidence largely reflected what appeared in the defence. Mr Antoniou's evidence focused on what he said was a "world of distinction" between Aboriginal fine art on the one hand and Souvenirs on the other. Aboriginal fine arts are one-off works painted by an Aboriginal artist. He said he was in the Souvenirs market, and generally not in the Aboriginal fine art market, although he said advertising on eBay may involve Aboriginal fine art, but the particular carved wooden bird in issue (the subject of the carved wooden bird representations) did not fall into that category. He described anything that is hand painted as genuine and as Aboriginal art. He said that because Ubanoo Brown is a pseudonym, and (despite it originally being a pseudonym for the Aboriginal person Bruce Harris) that ADC could add that name to works painted by Mr Goodridge without then representing that Ubanoo Brown labelled works are painted by a person of Aboriginal descent, provided they were on works in the cross-hatch collection (referred to at [6] above). So far as the certificates of authenticity representation is concerned, he said the certificates shown to the ACCC were templates. He acknowledged he had issued some 47 certificates to art galleries dealing with those works during 2008. He agreed they had either "Original Aboriginal Painting" or "Authentic Aboriginal Painting", and probably the name Ubanoo Brown. He said, however, that the certificates did not represent that the painter was of Aboriginal descent, and accurately represented that they were "Authentic" and "Original" and were "Aboriginal art". He said a person does not have to be of Aboriginal descent to paint Aboriginal art. The distinction is a very artificial one. I do not accept it. I address that issue in more detail below. Mr Antoniou adopted a similar position in relating to the stamp representations. He said that all they conveyed was that the stamped artworks were painted in Australia, and that they did not convey that a person of Aboriginal descent painted them. He took a similar position about the artworks which were displayed on the Website and so were said to be the website representations as to artist and the artworks advertised on eBay and the subject of the carved wooden bird representations. He did not address in his evidence the website representations as to country of origin, except to say that the representation was not made based upon the primary form of presentation of those artworks. Finally I note, and reject, his claim that because ADC is the trustee for the Antoniou Family Trust, it cannot be sued for what it has done in its role as trustee. That is simply not correct. The other witness called by Mr Antoniou was Ms Ivy Taylor. I have referred to her qualifications above. She has known Mr Antoniou for many years. Not all her evidence was on a topic of her expertise; for instance she commented on how people might understand the various material constituting the representations. She spoke of the common practice of writers and artists using a pseudonym. She gave evidence --- not consistent with Mr Antoniou's pleaded case --- that the cross-hatching used by Aboriginal artists had its derivation elsewhere and was not indicative of an Aboriginal artwork. Mr Antoniou did not plead that. Nor did he maintain that. His case was the more refined one that Aboriginal artworks as he offered them to the public for sale did not convey the representations alleged. Ms Taylor's written statement was not in the form required for an expert witness, in accordance with the Federal Court Rules . Nor did it demonstrate the degree of impartiality the Court is entitled to expect of an expert witness: for instance, she described to the ACCC investigation as a "gross miscarriage of justice --- to wrongfully use [its] powers and resources" to "facilitate the threats of a disgruntled person", and then spent some time explaining that view. None of that was pleaded, nor was it part of Mr Antoniou's case. For those reasons, I have placed little weight on her evidence. That is not because there is not a range of artworks, in terms of artistic merit or size or cost or value. There clearly is. It is because that classification simply diverts attention from the real issues in the case. To label a particular artwork as a "Souvenir" or as "Aboriginal fine art" assumes that, at the lower end of the market or markets for the supply of the artworks where the descriptor "Souvenir" might be used, there can be no misleading or deceptive conduct of the nature alleged by the ACCC. That assumption is unfounded. The focus must be on the conduct of ADC, and whether that conduct --- whether or not ADC and Mr Antoniou perceived it as functioning in a Souvenir market --- was misleading and deceptive. I do not need to determine whether there are two, or more, ranges or categories of the artworks. I note, however, that Mr Antoniou did not essay a clear and consistent identification of the line between his Souvenir market and his Aboriginal fine arts market, either in terms of cost or value or any other particular criteria. Even if it is accepted that Ubanoo Brown is a pseudonym name, that name was used by Mr Harris and not Mr Goodridge. It does not change the character of any representations made by ADC as those representations may still be misleading, even if the name is accepted as a pseudonym. The question still is whether the artworks promoted and sold by ADC conveyed the alleged representations or any of them. I do not accept that general proposition. It is, of course, necessary to consider separately each of the particular types of transaction by which the alleged representations were made. I shall deal with their individual features below. But, subject to any particular factual context, I am of the opinion that to describe an artwork as "Aboriginal" is expressly to say that the artist is of Aboriginal descent. It is a common means of conveying that an artwork is painted by an artist of Aboriginal descent to describe it as "Aboriginal art". On the other hand, it is not commonplace to describe an artwork painted by an artist who is not of Aboriginal descent as "Aboriginal art". The style of Aboriginal art is not one-dimensional. It is multi-dimensional. It varies with region, with artist, and over time. Within wider regions, there are or may be local variations which identify particular local areas or artists as the source of the artwork. It is not possible to label one particular style of art as the Aboriginal style. In general, in my view, to a reasonable group of persons who buy or may buy Aboriginal art, to describe a painting as "Aboriginal art" is to convey that it is painted by an Aboriginal person or a person of Aboriginal descent. If that is not explicit, as I think it is, it is clearly implied. Indeed, the pictorial presentation of the opening page of the Website, where the words "Aboriginal Art" appear, recognise that general meaning by the depiction of Aboriginal men in conjunction with those words. The name of ADC also appearing there also fortifies that meaning. To those who would place significance on the word "Dreamtime", or "Dreaming", they would be people who are aware that the Dreamtime or the Dreaming is, in Aboriginal mythology, the time of the spiritual creation when Aboriginal persons were given their values and symbols and stories, and their laws. Of course, there may be some people who would not have that level of awareness or understanding. Nevertheless, whether the consumer considering buying Aboriginal art from ADC is a resident in Australia, buying for personal enjoyment or satisfaction or for a gift, or an overseas tourist (or an overseas collector), I find that they or a significant class of them would reasonably understand that the presentation of an artwork as "Aboriginal art" would convey the representation that the artwork was painted or made by an Aboriginal person, that is a person of Aboriginal descent. There is no contest about that. In my view, that style of presentation of such paintings conveyed to a reasonable class of persons who bought or might buy such paintings that the paintings were painted by a person who used the name Ubanoo Brown. That was expressed on the painting itself. It is not to the point that the name Ubanoo Brown may have been used as an artistic pseudonym. That may be acknowledged. Mr Harris was a person of Aboriginal descent who used that pseudonym. But it was Mr Harris who initially created the artworks using his pseudonym. He did so only for about three months in 1993. Thereafter, he did not use that pseudonym On that basis, in my judgment, it also follows that the artist representations were false and misleading. Once it is accepted that the artist representations were made, it necessarily follows from the circumstances in which the representations were made, that they were false and misleading. As noted above, ADC and Mr Antoniou did not contend to the contrary. Their contention was that the representations thus were made. The evidence indicates that, on occasions, ADC through Mr Antoniou fortified the representation by having the name "Ubanoo Brown" written on the back of the paintings by providing ADC's customers with Ubanoo Brown's Dreamtime story when purchasing a painting by Mr Goodridge, and sometimes by providing to its customers the "bush tucker dreaming" story in relation to certain of those paintings. That did not occur in every instance, but on occasion, it did occur. I infer that it occurred to encourage the purchase of the painting and to reinforce that the painting was by an Aboriginal person who used the name "Ubanoo Brown". That conduct, when it occurred, would have had the desired effect. The ACCC has established contravention of s 52 of the TP Act by the artist representations. It is plain from the form of those certificates that they represented that the paintings supported by certificates of authenticity were painted by a person of Aboriginal descent, and that some were painted by a person who used the name Ubanoo Brown. It is unclear the extent to which certificates of authenticity included the description "Artist: Ubanoo Brown", but I find that occurred in a not insignificant number of them. I have said, in my view, that describing an artwork as "Aboriginal art" represents that the artwork is created by a person of Aboriginal descent. The certificates of authenticity conveyed that representation, not simply by that formulation, but by the words used. The certificates included the words "Authentic Aboriginal painting" and a guarantee as to the authenticity of the painting. In my judgment, the use of the words "authentic" and "authenticity" make it even clearer that the paintings with which the certificates of authenticity were supplied were painted by a person of Aboriginal descent. It is almost an oxymoron to contend, as ADC and Mr Antoniou did, that authenticity in conjunction with the word "Aboriginal" conveyed that the paintings may have been painted by a person of non-Aboriginal descent, in a style of Aboriginal art. I reject that submission. I have also found that the paintings were painted either by Mr Goodridge or by other persons who were not of Aboriginal descent and by persons who did not identify themselves and were not known as Ubanoo Brown. Consequently, the certificate of authenticity representations, when made, were false and misleading. I note that, in the defence, ADC and Mr Antoniou claim that the paintings the subject of the certificate of authenticity representations were souvenirs and not fine art or investment artworks. I have indicated above that, in my view, that distinction is not directly relevant to whether the representations were made, or were false and misleading. However, the evidence of Mr Antoniou does not indicate that in fact the paintings which were provided with the certificates of authenticity were at the very lower end in terms of value or quality, or were sold as one of apparently cheap mass produced replicas (which might be described as souvenirs) in any event. He said that the paintings were provided to galleries to support the sale of paintings from ADC. They were obviously not of the character which might readily be described as souvenirs. It necessarily follows, as I have found that the certificate of authenticity representations were made and were false and misleading, that the ACCC claim in this respect is made out. The text of the stamps is set out above. ADC and Mr Antoniou assert that the text of the stamps do not convey the representation that those artworks were painted by a person of Aboriginal descent, but simply that they were hand-painted in an Aboriginal design. In my view, the stamp representations were made. In this instance, apart from the use of the words "Aboriginal art" to which I have referred above, the stamps contained the words "traditional hand painted Aboriginal art" or "authentic original Aboriginal art". In each case, the additional words "traditional" and "authentic" and "authentic original" in my view added to what was conveyed to a reasonable group of persons who purchased or may have considered purchasing those artworks that they were painted by a person of Aboriginal descent. The use of those words confirms or asserts the background of the artist. Again, particularly by the use of the words "authentic original", it is almost an oxymoron to assert that it means not painted by a person of Aboriginal descent but by a non-Aboriginal person according to an Aboriginal style. The same may be said by the use of the word "traditional". That conveys the handing down from generation to generation, and in accordance with the beliefs (in context) of Aboriginal persons. Accordingly, I find that the stamp representations were made. It follows, and was not contested, that the stamp representations were false and misleading. The ACCC has established contravention of s 52 of the TP Act by these representations. Its entry was by the image referred to above, including a picture of Aboriginal men apparently performing a traditional dance, remote desert and hill country, and apparently an Aboriginal rock painting, together with the name "Australian Dreamtime Creations". There are many artworks depicted in the Website, no doubt changing from time to time. I find that as at June 2007 Ubanoo Brown was identified as the artist in respect of 332 artworks displayed on the Website by the use of text adjacent to images of those artworks, and as at 18 June 2009 he was identified as the artist in respect of 324 of those artworks, and as at 1 September 2008, in respect of 332 of those artworks. The text used to identify Ubanoo Brown during that period included describing him simply by name, and also by name and as "a highly talented artist from Murchison River, Western Australia" or similar words, or as describing him as having been born in about 1960 and coming from Murchison River in Western Australia. The Website reinforces that the artworks offered for sale were created by artists of Aboriginal descent by depicting an Aboriginal artist at work, by referring against other images to employing "traditional Aboriginal artists to paint and refine new techniques", by referring to boomerangs "individually hand made by Aboriginals" from a particular area, by describing the passage of paintings from one generation to the next, by referring to the significance of world art markets and museums of paintings by persons of Aboriginal descent in recent times, and in respect of other artists sometimes also describing their origins. The Website also offers certificates of authenticity upon purchase. It uses phrases such as "Australia's original and best Aboriginal art", "Authentic Traditional Aboriginal Fine Art", "Australian Aboriginal art" and "Aboriginal art" and "traditional Aboriginal artists". The ACCC alleges that, in respect of the works said to have been painted by Ubanoo Brown on the Website, the representation was made that those paintings were painted by a person of Aboriginal descent, identified as Ubanoo Brown. In my judgment, the Website representations as to artist were made. I would make that finding based upon the particular text adjacent to the artworks depicted on the Website which identified Ubanoo Brown as the artist. That finding is reinforced by the entry image to the Website, and by the other features of the Website to which I have referred. It is overwhelmingly plain, in my view, that a reasonable group of persons considering acquiring, or acquiring, artworks from ADC through the Website would reasonably have understood that the artworks there displayed attributed to Ubanoo Brown as the artist were painted by a person of Aboriginal descent, and by a person of Aboriginal descent who is identified by the name Ubanoo Brown. Again, ADC and Mr Antoniou do not dispute that, if the Website representations as to artist were made, they were false and misleading. Their contest was that the website representations as to artist were not made. The website representations as to artist were false because those artworks were not painted by a person of Aboriginal descent, and not by a person who identified as Ubanoo Brown who was a person of Aboriginal descent. The ACCC has established contravention of s 52 of the TP Act by these representations. The ACCC alleges that ADC and Mr Antoniou have breached s 53(eb) of the TP Act by making the website representations as to country of origin on the Website and on eBay when making the carved wooden bird representations. A representation that goods were made in a particular country or place will be false if the goods were not, in fact, made in the place represented. The ACCC alleges that the website representations as to country of origin representations are made impliedly, so that the communications gave rise to the representation that the artworks advertised on the Website were made in Australia, and the carved wooden bird was made in Australia, whereas in fact, those artworks and the carved wooden bird were not made in Australia but largely in Indonesia. There is no express representation that any of the carved wooden items were made in Australia. That has been the context in which a number of actions under s 53(eb) have been decided: see Australian Competition and Consumer Commission v Lovelock Luke Pty Ltd (1997) 79 FCR 63 ; Siddons Pty Ltd v Stanley Works Pty Ltd (1990) ATPR 41-044 ; QDSV Holdings ; Netcomm (Australia) Pty Ltd v Dataplex Pty Ltd (1988) 81 ALR 101. The representation is said to arise by implication from the way in which the carved wooden items were promoted on the Website, and by the way in which the carved wooden bird was promoted on eBay. As noted above, the carved wooden items on the Website were supported by descriptions such as "Australia's original and best Aboriginal art"; "Authentic Traditional Aboriginal Fine Art"; "Australian Aboriginal Art", "Aboriginal Art" and objects created by "traditional Aboriginal artists". The carved wooden bird was listed on eBay in the Aboriginal art category, and was described by the text "Aboriginal Art Brolga", and was accompanied by a description saying that ADC had been supplying "Aboriginal fine art and craft work" since 1991. In my view, by those methods of presentation, in respect of the carved wooden items advertised on the Website and the carved wooden bird advertised on eBay, ADC represented that the particular artworks were made by persons of Aboriginal descent. It does not follow that a reasonable group of people seeing those communications would think about the further question of where the particular artwork was made. They might assume that it had been entirely made in Australia. That would not necessarily be assumed, however, if thought was given to the materials going to the artwork: canvas or wood and paints (no longer merely ochre), and in some instances other items such as feathers or glue. It would not be assumed that all of those elements necessarily came from resources within Australia. On a different level, if the artist were an Aboriginal person who for some reason painted the artwork overseas, rhetorically one might ask whether it would still be Aboriginal art. In my view, it is unlikely that a reasonable group of persons seeing those communications would think about the place of origin of those artworks. There is no express representation about their place of origin. There is no real reason why, beyond the clear representation as to the Aboriginality of the artist, the reasonable consumer would advert to their place of origin. In other words, the particular conduct which is said to give rise by implication to the representation that the place of origin of the particular artworks is Australia does not, in my judgment, give rise to that representation. Indeed, as was pointed out in Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) [1988] FCA 40 ; (1988) 39 FCR 546 at 555, s 52 is not expressed in terms of, and is not confined to, representations. The question is one of fact, namely whether the conduct complained of is likely "to lead into error" (per Gibbs CJ in Parkdale [1982] HCA 44 ; 149 CLR 191 at 198). Relevantly here, the question is whether the conduct, tested against ordinary and reasonable members of a section of the public, may have led into error those persons as to the place of origin of those particular artworks (as distinct from the Aboriginality of the artist). Campomar would indicate that the appropriate question is what would be the likely reaction of that section of the public to the particular conduct. On balance, I am not satisfied that the website representation as to place of origin was made. In the circumstances, I do not consider that a reasonable section of the public would have taken from that conduct more than that the artist was of Aboriginal descent. If the conduct conveyed (as ADC and Mr Antoniou urged) no more than that those artworks were of an Aboriginal style but not necessarily painted by an Aboriginal person, then a reasonable section of the public understanding that fact may well have taken the step of considering the place of origin of those artworks. In that event, I would conclude that the conduct implied that they were made in Australia. However, for the reasons given, I do not consider that situation arises. In my view, the ACCC has not made out contraventions of s 53(eb) by reason of the Website representations as to country of origin. In case I am wrong, I will address the other issues arising in respect of those alleged representations. I have made findings above about ADC having imported into Australia in 2003 a number of carved wooden animals and other three dimensional objects from Indonesia. Each of those items were items which were unpainted and required painting in Australia. On the evidence the painting carried out by Mr Goodridge. Those items, or many of them, were then advertised on the Website. In the case of the carved wooden bird, it was brought into Australia from Indonesia already in its final shape, and it was painted in Australia by Mr Goodridge before it was offered for sale on eBay. The determination of whether a representation is misleading concerning the country of origin of manufacture is to be determined by reference to the provisions of Division 1AA of the TP Act. Division 1AA provides a regime for determining when goods will and will not be regarded as made in or produced in Australia, partly by reference to the extent to which production or transformation has occurred in Australia. It is important to note s 65AA, which provides an overview of Division 1AA. It says that the Division provides that certain country of origin representations made about goods do not contravene (relevantly) ss 52 and 53(eb). I assume there is no relevant difference between "place of origin" used in s 53(eb) and "country of origin" used variously in Division 1AA. No submission was made by the ACCC on that topic. Section 65AB sets out the general test for country of origin representations. Special provisions apply for the purpose of determining the cost of producing the goods: see s 65AF TP Act. There is no real issue about that. For the purposes of this matter, the significant items were those that were unpainted and required painting prior to sale or supply on consignment by ADC. The ACCC submits that those items were all created from Indonesian material in Indonesia, and that the painting of those items in Australia does not qualify as having "substantially transformed" those items as contemplated by s 65AB(b) of the TP Act. For example, and I think an appropriate one, the ACCC says that once a carved wooden item is painted, it is not a new or different item from what it was prior to painting, and that it remains a carved wooden item which was carved in Indonesia. The ACCC says that the carving of the item is the process which provides the item with its inherent character, and that this process did not occur in Australia in respect of those imported items. In support of its proposition, the ACCC referred to several cases where the Court has considered what constitutes "substantial transformation", albeit before the introduction of s 65AB. I do not consider those cases provide any real assistance in the circumstances. As Sheppard J said in Thorp v C.A. Imports Pty Ltd (1990) ATPR 40-996 at 50,966, the question is one of fact and degree depending upon a consideration of the entirety of the steps required to manufacture the object in question. Of course, in addition, it is now necessary to apply ss 65AB and 65AE. The evidence shows that the cost to ADC of the carved wooden bird (and like objects) was under $10. The amount paid to Mr Goodridge for painting it was in excess of $30. The precise figures varied, according to the size of the objects. Even allowing for shipment costs, I find that s 65AB(c) of the TP Act would be satisfied, if there had been a representation that those artworks were Australian in origin. The remaining issue is whether those items were substantially transformed by being painted in Australia: s 65AB(b). The alleged country of origin representations did not attract ss 65AC or 65AD, so s 65AB(d) was also satisfied. That is a question of fact, informed by s 65AE. In my judgment, those artworks including the carved wooden bird were substantially transformed by being painted in Australia. There was in evidence an example of the carved wooden bird, unpainted (it is then purely a flat white in colour). The difference is significant. As an unpainted object, it is quite unappealing. The shape itself seems to lack definition. The painting makes the object quite a different one: the shape emerges as clearly defined, and the colouring gives the object a real life and attractiveness. I think the description "new and different goods" is an appropriate one, even though fundamentally the shape itself does not change. It is, in a bland sense, and remains a carved wooden item but the qualities which make it an attractive object emerge only after it is painted. Analogy is always a little dangerous, but I essay one, albeit not a perfect one: a painter's canvas may be imported, and although it does not change size, the canvas is substantially transformed by being painted. The carved wooden bird shape is, of course, not the equivalent of a canvas. It is already shaped. However, the dramatic change in appearance, including that the painting seems to add definition to the shape, has to my mind a not dissimilar transformation. In my view, a similar conclusion should be reached in respect of the other imported carved wooden items that were painted in Australia. The ACCC did not suggest that there should be a different conclusion in respect of the carved wooden bird compared to the other carved wooden items imported from Indonesia. Accordingly, even if the website representations as to country of origin were made, I would not find that s 53(eb) of the TP Act had been contravened in the circumstances. In my view, as depicted and presented, for reasons which would by now be apparent, that represented that the carved wooden bird was carved and painted by a person of Aboriginal descent. That conclusion is supported by the category in which that artwork appeared, and by ADC's description of its business. I have earlier rejected the claim of ADC that the wooden bird has an Aboriginal design painted on it, and it was therefore an Aboriginal artwork. The bird shape unpainted was imported from Indonesia, and it was then painted by a person who was not of Aboriginal descent. It follows that this representation was false and misleading. The ACCC has established a contravention of s 52 of the TP Act in that regard. I see no reason why appropriate declaratory relief should not be made in respect of the various representations which I have found to have been proved. A declaration that ADC, from at least 1996, represented in trade or commerce by the promotion, sale and supply on consignment of paintings which had "Ubanoo Brown" written on the back of the paintings, that the paintings were painted by Ubanoo Brown when the paintings were not, and thereby engaged in conduct that is misleading or deceptive in contravention of section 52 of the TP Act. A declaration that ADC, from at least January 2007, represented in trade or commerce by affixing a stamp onto artworks sold or supplied on consignment to consumers and retailers that the artworks were painted by a person of Aboriginal descent, when the artworks were painted by a person not of Aboriginal descent, and thereby engaged in conduct that is misleading or deceptive in contravention of section 52 of the TP Act. A declaration that ADC, in September 2008, represented in trade or commerce, on the eBay online auction website that a carved wooden bird promoted and sold by ADC on eBay was carved and painted by a person of Aboriginal descent, when it as not, and thereby engaged in conduct that is misleading or deceptive in contravention of section 52 of the Act. A declaration that Mr Antoniou, being the director of ADC and the person responsible for its operations and having caused or directed ADC to make each of the representations referred to in paragraphs 1 to 5 hereof was directly knowingly concerned in, or party to, each of the contraventions of the TP Act by ADC referred to in paragraphs 1 to 5 hereof. The ACCC also seeks injunctive relief. Again, in my judgment, it is appropriate to grant such relief. Although I accept Mr Antoniou's evidence that ADC has now closed the Website and does not propose to re-use it, there should be some order restraining the sort of conduct which has been engaged in in the past from being engaged in in the future. The injunction which I propose to grant should run for three years. The ACCC sought an injunction not simply restraining the conduct engaged in, but positively obliging ADC not to offer for sale any work as produced by a person of Aboriginal descent or to promote the sale of any work as produced by a person of Aboriginal descent unless it has previously sought and obtained from that person a written statement that the person is of Aboriginal descent, and that it retains that statement for at least seven years. I do not propose to include that in the injunctive relief. I think a more appropriate order is to extend the injunction to prohibit the promotion or offering for sale or the sale of any artwork described as Aboriginal art unless ADC and Mr Antoniou have made such enquiries as they consider appropriate to be satisfied that the artist or artists of each of those works is a person of Aboriginal descent, and to direct them to retain for a period of five years a record of the basis upon which they attained the satisfaction required. That is a formulation which is less onerous, as it enables them to require artworks from sources other than directly from the artist and, if satisfied that the artist is of Aboriginal descent by enquiries that they have duly recorded and retained, to then offer those artworks for sale as Aboriginal art. I will vary the proposed injunctive relief to that effect. I note that Mr Antoniou asserted that he did not think he or ADC were doing anything wrong at any material times. In my view, that evinced at least some ingenuousness on his part. It is an ingenuousness which the findings of the Court, and the declaratory and injunctive relief which I propose to make, will clearly have disabused him of. I accordingly propose to make the injunctions in the following terms: An order that ADC be restrained, whether by itself or by its employees or servants or agents or otherwise howsoever for a period of three years from representing by any means whatsoever, including by any stamp or certificate of authenticity, that any artwork promoted, sold or supplied by it to any person has been made, painted, created, crafted, carved, or otherwise produced by a person of Aboriginal descent unless the artwork was, to the best of its knowledge, made, painted, created, crafted, carved, or otherwise produced, as the case may be, by a person of Aboriginal descent and from using the words "Aboriginal art" or words describing an artwork as "Aboriginal" unless it has made such enquiries as it considers appropriate to be satisfied that the artist or artists of each such work is a person of Aboriginal descent, and it is directed to retain for a period of five years from the time of such enquiries a record of the basis upon which it attained that satisfaction. An order that Mr Antoniou be restrained, whether by himself or by his servants or agents or otherwise howsoever, from being directly or indirectly knowingly concerned in or party to ADC or any other trading corporation representing that any artwork to be promoted, sold or supplied to any person has been made, painted, created, crafted, carved, or otherwise produced by a person of Aboriginal descent unless the artwork was, to the best of his knowledge, made, painted, crafted, carved, or otherwise produced as the case may be by a person of Aboriginal descent and from using the words "Aboriginal art" or words describing an artwork as "Aboriginal" unless he has made such enquiries as he considers appropriate to be satisfied that the artist or artists of each such work is a person of Aboriginal descent, and he is directed to retain for a period of five years from the time of such enquiries a record of the basis upon which he attained that satisfaction. Mr Antoniou was at pains, in the course of his evidence, to point out that a significant volume of the artworks he had procured by importation from Indonesia, whether or not it was then enhanced by painting in Australia, had not been sold. Many would be on consignment. In those circumstances, it is appropriate to make some order to protect consumers who may be induced to acquire those artworks in the belief that they are works created by a person of Aboriginal descent from doing so. For that purpose, I propose to make further orders requiring him to disclose to the ACCC a list of the names and addresses of retailers to which ADC has sold or supplied artwork on consignment since 1 January 2007 and to direct him to send to those retailers a letter in a prescribed form. I accordingly make the following orders: An order that ADC, within 14 days of the making of this order, provide to the ACCC a list of the names and addresses of retailers to which ADC has sold or supplied artwork on consignment since 1 January 2007. An order that ADC send a letter within 21 days of making this order, in the terms of Annexure "A" to the orders on the ADC letterhead, within 21 days of making this order, to each retailer identified in Order 9 hereof. The ACCC also requested that Mr Antoniou be directed to attend at his own expense a seminar to better inform him about the obligations of a supplier under Pt V of the TP Act. In my view, that is not an appropriate order to make in the present circumstances. That is because the dispute in this matter arose not because Mr Antoniou was unaware of the relevant provisions of the TP Act but formed the view (ingenuously, as I noted) that the conduct which contravened it did not convey the representations which I have found it conveyed. It would require a refined seminar on what conduct may expressly or by implication convey to serve a useful purpose. The particular conduct in question has been injuncted for three years. I do not see a risk of other like conduct being undertaken by Mr Antoniou. Finally, in my judgment, there is no reason why the ACCC should not recover its costs of this proceeding. I order that ADC and Mr Antoniou pay to the ACCC its costs of the proceeding. I certify that the preceding one hundred and six (106) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. | misleading or deceptive conduct aboriginal art implied and express representations that artworks were painted by a person of aboriginal descent artworks not painted by a person of aboriginal descent whether false and misleading representations that country of origin of artworks imported from indonesia and painted in australia is australia whether representations made whether substantial transformation of artwork occurred in australia whether false and misleading trade practices |
I made the following additional observations (at [65] and [66]): These reasons do not develop at length the underlying very sad circumstances in which the complete breakdown in communications between Mr Fazio (now) and Centrelink have developed. However unfortunate that may be, there is no power in the Court to entertain this appeal but, in any event, no useful purpose would be served by allowing an inevitably doomed appeal to continue to run. To do so would not be in the interests of the respondent, of Mr Fazio, of the public or the Court. The appeal must be dismissed. Costs would follow the event in the ordinary course. I will allow Mr Fazio 10 days from the date of delivery of the reasons file any written submissions as to why costs should not follow the event. The Secretary is to file written submissions, if any, in response within a further 7 days. It is extremely difficult to make submissions with such a clouded mind amidst an air of futility but nevertheless we try. Yes this is a tragedy if allowed to stand. How dare those that perpetrated this nefarious wrong and the manifestly flawed, uncalibrated system that allows such! With all deference we can only ask that in relation to costs, Your Honour is mindful of the sentencing remarks and since then, further diminished circumstances in the Federal Magistrates Court (Fazio v Centrelink (No 2) [2008] FMCA 1389. ' In the Federal Magistrates' decision referred to by Mr Fazio, the following comments were made by his Honour, Lucev FM: Sad circumstances surround these proceedings. The application, which, as initially filed sought the payment of alleged unpaid and underpaid social security entitlements and out of pocket disbursements, interest on monies owed and damages, has, following amendment, become an application for payment of allegedly outstanding social security (pension and carer) entitlements, disbursements, and damages for loss of potential wages, stress, physical and mental injury, hardship, loss of earnings and dignity, plus punitive damages and unquantified interest on the basis that the respondent Centrelink, owed Mr Fazio a duty of care. In submissions filed by Mr Fazio he has also alleged misfeasance in public office by Centrelink officials. Centrelink has filed an interim application seeking the summary dismissal of the amended application. It may be those comments to which Mr Fazio was referring. I also observed in Underdown No 1 that the circumstances giving rise to the very extensive disputation between the parties was most regrettable given that the original sum involved was so small. The apparent emotional impact on Mr Fazio of dealings with Centrelink appears to have been extremely significant. How such a financially insignificant matter escalated in the fashion it has over many years remains a mystery as well as a tragedy. He ordered Mr Fazio to pay Centrelink's costs of those proceedings. The general rule is that costs follow the event unless there is some reason or special circumstance justifying some other order. The discretion to award costs has been described as being unfettered and absolute except that it must be exercised judicially, not arbitrarily or capriciously and cannot be exercised on grounds unconnected with the litigation --- Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 3) (1979) 42 FLR 213. It has also been observed that in the case of a wholly successful defending party, the judge must give that party his or her costs unless there is evidence that the defendant has brought about the litigation, has done something connected with the institution or conduct of the suit calculated to occasion unnecessary litigation or expense or has done some wrongful act in the course of the transaction of which the plaintiff complains ( Ritter v Godfrey (1920) 2 KB 47 at 60). The respondent contends that the Court should exercise its discretion and make an order that Mr Fazio pay the respondent's costs of the proceedings for the following reasons: He has been wholly unsuccessful, consistently, not only in this proceeding but also in the Social Security Appeals Tribunal and in the Administrative Appeals Tribunal. Some of the arguments advanced, in particular, the purported claim for damages were also advanced in the earlier proceeding before the Federal Magistrates Court to which I have referred. Mr Fazio was wholly unsuccessful in the arguments before that Court and without appealing that decision has attempted to relitigate them in these proceedings. Mr Fazio was given notice that the respondent would seek a costs order against him if he was unsuccessful in these proceedings. An opportunity to file written submissions on costs has been availed of by Mr Fazio but no special circumstance which would justify a departure from the usual rule of costs following the event has been articulated. Impecuniosity alone is not a sufficient reason for declining to make a costs order ( Scott v Secretary, Department of Social Security (No 2) [2000] FCA 1450). There is no evidence before the Court as to the financial circumstances of Mr Fazio but even assuming they are precarious, that is an issue which can be dealt with by making provision for time to meet a costs order by way of instalments. One would hope that creative means would be adopted to endeavour to avoid the ongoing disputation between Mr Fazio and the respondent. But in all the circumstances, I have no real choice other than to order that Mr Fazio pay the respondent's costs to be taxed if not agreed. I so order. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. | whether any departure from costs following the event can be justified costs |
The amount demanded is USD280,664.50 or, according to the statutory demand, AUD357,706.90 at the then current exchange rate. The application is brought under ss 459G and 459H of the Corporations Act 2001 (Cth). Calculation of the substantiated amount, which requires the Court to take into account the amount of any offsetting claim, is discussed below at [38]. The plaintiff seeks to set aside the defendant's statutory demand under s 459H(3). 4 Section 459J gives the Court power to set aside a defective demand if it will cause substantial injustice or if there is some other reason why it should be set aside. The plaintiff had not made any claim under that section. There is no dispute between the parties as to the existence or amount of the debt described in the statutory demand. The plaintiff is an Australian company that both manufactures and distributes dyes throughout the Asia-Pacific. The defendant is an Indian company that manufactures dyes and has supplied them to the plaintiff. As the defendant company was only incorporated in May 2004, it could only have supplied dyes from that date at the earliest. Prior to May 2004 the plaintiff was supplied dyes by a partnership, confusingly referred to as "Anar International", represented by Mr Sanjay Choksi. After the defendant was incorporated it supplied dyes previously supplied by the partnership and Mr Choksi, now acting as a representative of the defendant company, continued to negotiate with the plaintiff. As the company was not in existence prior to May 2004, prima facie any claim in respect of dyes supplied before that date could not be a claim against the company which issued the statutory demand and therefore could not be an offsetting claim as referred to in s 459H(1)(b). 8 In his written and oral submissions, Mr Bova of counsel, who appeared for the plaintiff, attempted to address this difficulty in a number of ways. 9 This submission is fatally flawed. Under Australian law, in the absence of any statutory provision to the contrary, the burden (as distinct from the benefit) of contractual obligations cannot be assigned. There are, of course, some well established exceptions as where the obligations run with an estate in land (as in a lease) or they "touch and concern" land (as in the case of covenants restricting the use of land) but no such exceptions are suggested to apply here. There are also two possible exceptions raised by Sir Robert Megarry V-C in Tito v Waddell (No 2) [1977] Ch 106 however they have attracted little if any support in England and none in Australia. In any event neither is relevant here. The fundamental principle of the non-assignability of contractual obligations is so well established that it should need no authority however, if authority is sought, the principles and the relevant authorities are discussed in Chapter 17 of Carter JW, Peden E and Tolhurst GJ, Contract Law in Australia (5 th ed, LexisNexis Butterworths, 2007) especially at [17-37]. 10 In the alternative, Mr Bova suggested that the defendant company became subject to the partnership obligations by an implied novation. While it would be possible for the defendant company, by contract, to assume obligations equivalent to those undertaken by the partnership, no evidence was adduced to show that this had occurred. Mr Bova referred to evidence given by Dr Allan Chisholm, a director of the plaintiff, to the effect that he was unaware of the change in the supplier of the dyes and that, in his purchase of dyes, he had not differentiated between the partnership and the company. Dr Chisholm said that he always dealt with the same persons, at the same email and business addresses and used the same telephone number to contact Mr Choksi. Nothing in the reasons of the three majority judges detracts from Windeyer J's discussion of the history and principles of novation. 12 The fact that the defendant company, apparently, took over the business of the partnership does not, in itself, indicate that it assumed the obligations of the partnership. As Windeyer J makes clear, for there to be a novation that released the partnership from its obligations and imposed equivalent obligations on the defendant company the partnership, the defendant company and the plaintiff would have to be parties to the contract. The fact that Dr Chisholm was unaware of the incorporation of the defendant company and the fact that it was supplying the dyes is evidence that tends against, rather than in support of, an implied novation. 13 Whether the partnership was dissolved following the incorporation of the defendant company is presently irrelevant as are any rights the plaintiff may have against the partnership. If the plaintiff is to succeed in this action to set aside the statutory demand of the defendant company it will be necessary for it to show that it has an offsetting claim against that company. In this process it is necessary to bear in mind the strict requirements imposed by s 459G(3)(a) and (b). Those requirements must be understood in the context of Division 3 of Part 5.4. As Beazley J noted in Scanhill Pty Ltd v Century 21 Australasia Pty Ltd (1993) 47 FCR 451 at 454, Part 5.4 has its origins in the Corporate Law Reform Bill 1992 (Cth). The explanatory memorandum to that Bill makes it clear at [689] that a key purpose of Division 3 of Part 5.4 is to avoid technical arguments and to facilitate speedy resolution of disputes "by requiring debtor companies to raise genuine disputes (about, for example, whether a debt is owed) at an early stage". 15 Section 459G(3)(a) states that an application to set aside a statutory demand can only be made if an "affidavit supporting the application" is filed within 21 days of service of the demand. Unless such an affidavit is filed and served in time, there is no application under s 459G and, consequently, s 459H will not apply. If there is no application, the Court has no jurisdiction and the situation cannot be remedied by filing further supporting material at a later stage; Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund (1996) 70 FCR 452 at 455 and 459. If there is a valid application, further affidavits may be filed to supplement the case made in the initial supporting affidavit; Graywinter Properties at 460. The defendant submits that the affidavit filed on 21 December 2006 does not set out a genuine offsetting claim and is therefore not a supporting affidavit for the purposes of s 459G(3)(a). Consequently, it is submitted, the Court's jurisdiction to set aside the statutory claim is not enlivened. 16 The leading authority on the question of the minimum requirements for an affidavit to be a "supporting affidavit" as required by s 459G(3)(a) is generally accepted as being the decision of Sundberg J in Graywinter Properties. An affidavit which merely says "I am a director of the company but am too busy at present to make a full affidavit, and I will do so later" would not support the application. It would in no way advance, further or assist the company's cause, which is to have the notice set aside. The content of the application and affidavit must convey, even if it be by necessary inference, a clear delineation of the area of controversy so that it is identifiable with one or more of the grounds made available by ss 459H and 459J for setting aside statutory demands. The process of delineation may not be extended after the end of the 21 day period although it is open to the plaintiff to supplement the initial affidavit by way of additional evidence relevant to the area of controversy identified within the period. In SMEC International Pty Ltd v CEMS Engineering Inc [2001] NSWSC 459 ; (2001) 38 ACSR 595 at 599, Austin J noted that the authorities accepting such an entitlement do so "provided that the application has otherwise been instituted validly". It is quite another to imply from the requirement that there be a supporting affidavit anything as to the precision with which such a ground must be expressed, other than that it be raised. Whether it is raised expressly, by necessary inference, or by a reasonably available inference, provided it is raised, in my view the requirements of s 459G are satisfied. At the hearing before me, counsel for the plaintiff, Mr Bova, did not read certain paragraphs of Dr Chisholm's affidavit. Mr DeBuse, counsel for the defendant, sought to tender those paragraphs in order to make out an argument that I will discuss further below. Mr Bova initially objected on hearsay grounds, although he accepted that the paragraphs were tendered for a non-hearsay purpose; Evidence Act 1995 (Cth) s 60. He also objected on relevance, arguing that the dispute was confined to those issues identified in the read paragraphs of the affidavit. At the hearing I reserved my decision on that objection and now find, for reasons given below at [32], that the material is relevant. 21 Mr Bova's submission that the dispute was confined to the issues identified in the affidavit as read at the hearing does not take into account the purpose of the requirement in s 459G(3) that the supporting affidavit not only be filed within 21 days of the demand but also that, within that same period, a copy be served on the party making the demand. As Olney J stated in 71 Paisley Street Footscray Pty Ltd v Vineyards Estate Pty Ltd [1995] FCA 635 at [10] , the "purpose of the affidavit contemplated by s 459G(3) is to tell the creditor why it is said that the demand should be set aside". It follows that, if the discrepancy between the affidavit as read at the hearing and the affidavit that, in its entirety, had been served on the defendant, is such as to put forward materially different bases for seeking to set aside the statutory demand, the question whether the requirements of s 459G(3) have actually been met must arise. 22 Another difficulty with the affidavit is that it does not distinguish between the defendant and the partnership. It indicates in paragraph 3 that the defendant company will be referred to as "Anar" and then proceeds to refer to dealings with "Anar" (for instance in paragraph 8) that took place before the defendant was incorporated. I can only assume that in such cases Dr Chisholm is referring to the partnership. 23 The dispute between the parties centres on the supply of a particular dye, known in the industry as Direct Blue 290. This dye is a discrete chemical compound which was developed by Ciba Specialty Chemicals in the 1970s. Ciba's patent over the compound expired in the late 1990s. In early 2003, the plaintiff negotiated with Mr Choksi with a view to sourcing a chemical copy of Direct Blue 290. In April of that year, "Anar" (presumably the partnership) sent a sample dye to the plaintiff. The sample was apparently labelled "Direct Blue 290". Accompanying the sample was a material safety data sheet which also identified the product as "Direct Blue 290". Dr Chisholm asked Mr Choksi to carry out stability work on the dye "to ensure the product was stable under Indonesian conditions". 24 Dr Chisholm states that in June 2003 he advised Anar by email that "after their stability result and our shade and cost evaluation the plaintiff could go ahead and order the dye". As read, the affidavit does not explicitly refer to the plaintiff ordering the dye although this is implied by the statement that the Direct Blue 290 dye was "used at the Paper and Pulp Mill of Pindo Delhi [in Indonesia] to produce Printing and Writing Papers for export around the world". 25 Dr Chisholm described how he had to fly to visit the pulp mill to resolve problems caused by the dye thickening which resulted in a loss of production. He was also advised of a possible claim against the plaintiff for the losses incurred by Pindo Delhi. This is the first part of the plaintiff's offsetting claim. Dr Chisholm estimated the costs and expenses incurred or anticipated by the plaintiff as a result of the dye thickening at USD69,500 comprising USD14,000 for air travel, USD1,500 for 9 nights' accommodation, USD4,000 for meals and entertainment and USD50,000 in relation to anticipated claims for loss of paper. 26 The second part of the offsetting claim is based on the allegation that the dye supplied was not Direct Blue 290 as specified by the plaintiff but had a different chemical composition. Dr Chisholm described how in July 2005 he was informed by Mr Ajay Choksi, apparently also representing the defendant company, that the dye sold to the plaintiff was not Direct Blue 290 but in fact "a mixture of Direct Blue 218(majority) and Direct Red 81 and Blue 86". 27 Dr Chisholm stated that Direct Blue 218 is a known carcinogen whose use has been banned in many countries including within the European Economic Community, Japan, Australia, New Zealand, Thailand and Indonesia. On 21 July 2005 he advised Mr Ajay Choksi that he anticipated serious claims against the plaintiff as well as damage to its reputation as a result of the supply of the wrong dye. At this point the sales are USD500,000/year, with a potential for us to obtain sales of USD 5 million. Dr Chisholm estimated this second part of the offsetting claim to be in the order of USD712,400.00 comprising USD19,000 for air travel, USD2,400 for 12 nights accommodation, USD8,000 for meals and entertainment, USD280,000 for paper, USD333,000 for loss of business in the Sinar Mas Group and other, unspecified, costs of USD70,000. 29 As the authorities discussed above make clear, the supporting affidavit must be sufficient in itself to alert the person making the statutory demand to the nature of the case that the company applying to have that demand set aside will be seeking to make. A subsequent affidavit may supplement the case by providing more detail but it may not change the nature of the case to be made. The question here is what the affidavit, as read, reveals to the defendant company. 30 In my view the first affidavit of Dr Chisholm meets the requirements of s 456G. It "promotes the company's case", and clearly stakes out the grounds of the dispute, namely the dual problems of thickening and composition afflicting the dye. Although the affidavit does not annexe invoices from the defendant, it is explicit that the plaintiff was dealing with "Anar" in 2005, after the incorporation of the defendant. The area of controversy has, by necessary inference, been clearly delineated; Elm Financial Services [2004] NSWSC 560 at [7] ; or is at the very least raised by a reasonably available inference; Hansmar Investments 61 ACSR at 326. 31 While the defendant correctly states that the plaintiff has not identified a specific cause of action with which it pursues its claim, it is apparent from the circumstances described by the affidavit that the claim would be in the nature of breach of contract or of consumer protection legislation. Adopting the language of Emmett J in Sacon Constructions Pty Ltd v Concrite Quarries Pty Ltd (1997) 15 ACLC 1303 at 1305, the affidavit attempts both to explain the nature of the cross-claim and to quantify it. In Sacon , Emmett J held that the supporting affidavit was insufficient, although his Honour observed in obiter at 1305 that, had supplementary material been filed in time, it would have probably satisfied the requirements of s 459G. That material asserted the offsetting claim in that case with significantly less detail than is present in Dr Chisholm's first affidavit in the present application. As discussed above at [21], if the case that was notified to the defendant by the affidavit served upon it was materially different from the case put to the Court, then it would be arguable that there was no compliance with the subsection, in that the affidavit relied on to support the plaintiff's application had not been served on the defendant company. The paragraphs omitted from the affidavit as read at the hearing are relevant to the resolution of this question and therefore admissible when tendered by the defendant. 33 In the omitted paragraphs Dr Chisholm refers to specific orders for dyes including Direct Blue 290 that were placed with "Anar" in August 2003, March 2004 and June 2004. As, according to the affidavit of Mr Choksi, the defendant company was incorporated on 24 May 2004, the former order is likely to have been placed with the partnership and the latter with the defendant company. The orders were for direct shipment of the dyes to Indonesia; they arrived there in May and August 2004 respectively. 34 Dr Chisholm's affidavit also refers to "a further 5000 kg of the Anar Blue Dye" having been delivered to the paper mill in July 2004. It is reasonable to assume, although it is by no means certain, that this dye was ordered from the defendant company. There is also mention of the thickening problem in the tanks of Pindo Delhi Paper and Pulp Mill and Dr Chisholm's visit to the mill to try and resolve the problem. 35 In my view the affidavit as read at the hearing is not so different from the form of the affidavit served on the defendant as to surprise the defendant at the hearing as to the case the plaintiff was seeking to make. Although the omitted details may shed some light on the plaintiff's claim it does not make it materially different. The affidavit served on the defendant would have alerted it to the fact that the plaintiff's offsetting claim was alleging that the defendant had supplied dye that was faulty and which did not conform to the specifications of the plaintiff. The fact that some of the dye was supplied by the partnership and not by the defendant does not obscure either that the plaintiff was making a claim against the defendant or the nature of that claim. Annexed to this affidavit are purchase orders, bills of lading and invoices relating to the dye supplied by the defendant in early 2005. The affidavit provides additional factual detail in support of the plaintiff's claim to have an offsetting debt. Given that the first affidavit had clearly indicated the general nature of its case it is entirely legitimate for the plaintiff to expand the factual grounds on which it relies in this way; SMEC International 38 ACSR at 599, Graywinter Properties 70 FCR at 460. 37 Although not established to the standard expected at final trial, it can reasonably be assumed, given the nature of this application, that the dye supplied by the defendant in early 2005 is the dye that generated problems from the middle of 2005. Given the difficulties that arose with this dye, I am thus satisfied that the plaintiff's claim to have an offsetting claim raises "a serious question to be tried"; Scanhill 47 FCR at 467. The threshold that the plaintiff must cross "is not a high one"; Federico's Restaurant Pty Ltd v Warwick Entertainment Centre Pty Ltd (1995) 18 ACSR 702 at 706. I am satisfied that the plaintiff has done more than simply assert a claim and some basis for it without more; Chadwick Industries (South Coast) Pty Ltd v Condensing Vaporisers Pty Ltd (1994) 13 ACSR 37 at 39. This is calculated by subtracting the total amount of any offsetting claims from the admitted amount of the debt; s 459H(2). If the substantiated amount is less than the statutory minimum (currently $2,000; s 9) then the Court must set aside the demand; s 459H(3). If the substantiated amount is equal to or greater than the statutory minimum, the Court may make an order varying the demand, with effect from the day the demand was served; s 459H(4). In this matter, the parties are agreed that the admitted amount of the debt is USD280,664.50. The question thus becomes what is the amount, if any, of the plaintiff's offsetting claim. 39 In making this assessment, it is not appropriate to delve into the merits of the competing claims; Edge Technology Pty Ltd v Lite-On Technology Corporation [2000] NSWSC 471 ; (2000) 34 ACSR 301. There is authority for the view that the amount of the offsetting claim is simply that amount claimed in good faith by the plaintiff, ambit though such a claim may be; Jesseron Holdings Pty Ltd v Middle East Trading Consultants Pty Ltd (No 2) (1994) 122 ALR 717, per Young J at 722; see also Classic Ceramic Importers Pty Ltd v Ceramica Antiga SA (1994) 13 ACSR 263 at 270. 40 The plaintiff submits that its offsetting claim amounts to USD781,900. The defendant has taken issue with the amounts claimed by the plaintiff, asserting that they are not supported by the evidence. The defendant relies on Macleay Nominees Pty Ltd v Belle Property East Pty Ltd [2001] NSWSC 743. 41 In Macleay Nominees at [15], Palmer J was explicit that perceived frailties of evidence will not prevent a claim from being a "genuine claim" for the purposes of s 459H. His Honour held at [18] that both the cause of action and the amount claimed must be advanced in good faith. In a claim for unliquidated damages for economic loss, the Court will not be able to determine whether the amount claimed is claimed in good faith unless the plaintiff adduces some evidence to show the basis upon which the loss is said to arise and how that loss is calculated. If such evidence is entirely lacking, the Court cannot find that there is a genuine offsetting claim for the purposes of s 459H(1) and s 459H(2). 43 In this matter, the plaintiff's total claim is broken down into ten particularised components, set out in annexures "E" and "F" to Dr Chisholm's first affidavit. Accordingly, it is entirely legitimate to supplement it with Dr Chisholm's second affidavit; Topfelt Pty Limited v State Bank of New South Wales Limited (1993) 47 FCR 226 at 242. In these two affidavits, and Dr Chisholm's oral testimony, the plaintiff adduces evidence relating to each of these components. It is convenient to address some of these components together. Mr DeBuse took issue with the costs claimed by the plaintiff for business class travel. As Mr Bova correctly argued, whilst this may be a question of mitigation, it cannot affect the existence of a genuine claim. The task of this Court is "to identify the genuine level of an offsetting claim (not the likely result of it)"; Re Morris Catering (Australia) Pty Ltd (1993) 11 ACSR 601 at 605. 46 As noted above, certain paragraphs of Dr Chisholm's first affidavit concern transactions with the defendant's predecessor partnership. I have rejected the plaintiff's assertion that these transactions can give rise to a genuine claim against the defendant. Dr Chisholm states that, in addition to his trip in June 2005, he made an earlier trip to Indonesia in August 2004 to deal with a similar problem of dye thickening. I am not prepared to assume that the second trip, following soon after the incorporation of the defendant, related to dye supplied by the defendant. Accordingly, I disregard the USD14,000 travel claim relating to the thickening. I accept the claim of USD19,000 for travel to Indonesia to address the problems caused by the presence of Direct Blue 218 as a genuine claim. Nevertheless, there is evidence that Dr Chisholm was required to travel to Indonesia, and such travel necessarily involves some accommodation expenses. Given that the nine nights of accommodation attributed to the thickening involves both of Dr Chisholm's trips, I can only accept that the USD2,400 which is related to the Direct Blue 218 is claimed in good faith. In his first affidavit, Dr Chisholm attests that "[c]onsiderable expense was incurred to alleviate concerns with our Indonesia agents and also Pindo Delhi Paper and Pulp Mill on this issue of dye thickening. " It may be possible to infer that these expenses included some considerable amount of corporate hospitality. However, without any evidence as to how these specific expenses were incurred it is not possible to accept that this is a genuine claim. However, there is insufficient evidence as to how the amount of USD70,000 claimed for "Other Costs" has been calculated. Accordingly, I cannot accept it as a genuine claim. In his second affidavit, Dr Chisholm clarified this, stating that the plaintiff had provided Pindo Delhi with USD50,000 worth of discounts in order to compensate it for the losses incurred when the dye thickened. Mr DeBuse argued that the meaning of "discount" was insufficiently precise, positing, for example, that the plaintiff could merely have inflated its base prices and provided an illusory "discount" at no real cost to itself. Dr Chisholm emphatically rejected such suggestions in cross-examination, and I am willing to accept, for present purposes, that the plaintiff incurred USD50,000 worth of losses in providing the discount. 51 In cross-examination of Dr Chisholm, Mr DeBuse made much of the fact that the only written correspondence describing the thickening problem is an email of 21 June 2004 from Dr Chisholm to Mr Choksi, a copy of which is annexed to Dr Chisholm's second affidavit, which describes the dye as "good except the layer of High viscosity which caused me big headache! " There is no record of any attempt made by Canpoint to recover the USD50,000 it lost through the thickening from the defendant, and it is not in dispute that the plaintiff continued to trade with the defendant following the incident. Dr Chisholm was quite emphatic that "many telephone conversations" had taken place in which the plaintiff had requested some discount from the defendant, but that the defendant refused, asserting it was prevented from offering such discounts by Indian law. Dr Chisholm further testified that he did not feel taking legal action to recover the debt was practical, and that the plaintiff refrained from doing so as it was attempting to "build up a relationship" with the defendant. Even if I were minded not to accept this evidence, "failure to complain at an earlier point of time, ... of itself is not sufficient to demonstrate that the claim made by the applicant is not genuine"; Scanhill 47 FCR at 468. It is his evidence that he was told that Pindo Delhi was making a claim against the plaintiff for USD350,000 for paper that had been returned because of the presence of Direct Blue 218. Annexed to his second affidavit is a letter dated 5 September 2006 on the letterhead of IndoAsia, the plaintiff's agents in Indonesia, asserting that they had been advised that Pindo Delhi planned a claim against the plaintiff for both the costs of the paper returned and loss of its export business. The plaintiff has not put forward any amount in relation to Pindo Delhi's anticipated claim for loss of business. 53 The defendant correctly states that there is no evidence that any claim has actually been made by Pindo Delhi. " Clearly, the plaintiff cannot be presently entitled to damages to compensate it for unquantified losses incurred in litigation that has not yet commenced. Accordingly, I do not accept the potential claims arising from the presence of Direct Blue 218 in the dye supplied by the plaintiff as "genuine claims" for the purposes of s 459H. I am fortified in this view by the decision of the Full Court in John Shearer Limited v Gehl Company (1995) 60 FCR 136, where claims that were inadequately particularised and that had not been pursued in the year since the dispute commenced were held not to be genuine claims. In his first affidavit, Dr Chisholm stated that he was told by a representative of Pindo Delhi that the sale of dye containing Direct Blue 218 had endangered Canpoint's business with the entire Sinar Mas Group. 56 In his first affidavit, Dr Chisholm attests to a conversation with representatives of IndoAsia in which total sales to the Sinar Mas Group were said to be worth "USD500,000/year, with a potential for us to obtain sales of USD5 million". Although it is unclear from the affidavit whether these figures refer to sales of the plaintiff or of IndoAsia, it is clear from Dr Chisholm's report of the conversation in his second affidavit that the figures refer to IndoAsia. As noted above, annexure "F" to the first affidavit estimates the value of the plaintiff's business with the Sinar Mas Group as "USD1.0 million". Dr Chisholm also attests that he advised Mr Choksi that shipment of the wrong dye had damaged the plaintiff's reputation and endangered its business in Indonesia, which he valued at USD1.0 million/per year. Although this evidence was admitted only for a limited purpose, a strict approach to admissibility is not appropriate in these matters; see Scanhill 47 FCR at 460. Finally, annexure "O" to Dr Chisholm's second affidavit, a print-out from the plaintiff's book-keeping database, shows total sales to Pindo Mill of USD936,625.00 in 2004, and USD1,100,175.00 in 2005. 57 Accordingly, I am willing to accept that the plaintiff's business with Sinar Mas was worth approximately USD1 million per year. It is Dr Chisholm's evidence that Canpoint has not received any orders to supply dyes to Pindo Delhi in either 2006 or 2007, through IndoAsia or otherwise. There is no evidence relating to any sales to other parts of the Sinar Mas group. 58 There is some discrepancy between the profit margin of 30 per cent claimed in Dr Chisholm's first affidavit and his evidence in cross-examination. Whilst the Court does not require evidence of a standard expected on a final claim in applications of this kind, contradictions in evidence can be fatal if they make the claim as a whole implausible; see Edge Technology [2000] NSWSC 471 ; 34 ACSR 301. In the circumstances of Dr Chisholm's unexpected cross-examination, I am not willing to draw such a conclusion. It is accepted that the amount claimed by the plaintiff may have "elements of uncertainty"; Elm Financial Services [2004] NSWSC 560 at [19] . 59 In Edge Technology [2000] NSWSC 471 ; 34 ACSR 301, a bare assertion of an amount for loss of profits without further evidence as to how that amount was calculated was held to be insufficient to ground a genuine offsetting claim in that amount; see Edge Technology at 316. In my view, the present case is distinguishable. Dr Chisholm has given oral evidence as to the different profit margins on products from different sources sold in Indonesia, and, as I have noted, has annexed to his second affidavit a print-out of a spreadsheet from the plaintiff's accounting software detailing sales and profits relating to Pindo Delhi. The Court thus has sufficient evidence to say that the claim is genuine, whilst not seeking to assess the merits of the claim. 60 Mr DeBuse argued that any loss in business suffered by the plaintiff would not have been caused by the presence of Direct Blue 218 in the dye manufactured by the defendant, but rather by the plaintiff's own delay in informing Pindo Delhi of its presence. Dr Chisholm has given evidence that the plaintiff was aware of the presence of Direct Blue 218 from July 2005, but that Pindo Delhi and IndoAsia only discovered this when informed by a Japanese buyer in January 2006. Whilst there may be some substance to the submission that the plaintiff's failure to warn its clients contributed to any subsequent loss of business, I cannot say that it is it is "implausible and extremely unlikely" that any loss resulted from the defendant's conduct; Edge Technology 34 ACSR at 315. Accordingly, I am not prepared to reject the claim on this basis. 61 In my view the plaintiff has a genuine claim against the defendant for USD333,000 for loss of business with the Sinar Mas Group. This time period reflects the expeditious mode which the legislature has determined is to be the manner of staying the operation of a statutory demand. That is not to say, however, that the mere assertion of the amount of loss, or the amount of the claim, however based, is sufficient to satisfy the Court of the amount of the offsetting claim. One would normally expect that there would be reference to at least some primary material in the affidavit to enable the Court to have the requisite satisfaction for the purposes of s 459H. 65 As noted above, the "admitted total" of the defendant company's debt for the purposes of s 459H is USD280,664.50. As I am satisfied that the plaintiff has an offsetting claim of USD404,400.00, there is an "offsetting total" in that amount. The offsetting total exceeds the admitted total by USD123,735.50 and accordingly the "substantiated amount" is less than the statutory minimum of $2,000 and the statutory demand must be set aside; s 459H(3). 66 Mr DeBuse submits that the Court, in the exercise of its discretion, should refuse to set aside the statutory demand. This submission ignores the fact that s 459H(3) mandates such an order and leaves no room for discretion although the Court may impose conditions; s 459M. Mr DeBuse asserted a lack of commercial morality on the part of the plaintiff given that it continued to obtain credit from the defendant whilst aware that problems with the dye may result in a claim against it, and in failing to alert Pindo Delhi of the presence of Direct Blue 218. The evidence does not support this allegation. In reply, Mr Bova submitted that it would be inappropriate to make any finding concerning Dr Chisholm's conduct in failing to alert Pindo Delhi of the presence of Direct Blue 218 in circumstances where he was not given an opportunity to respond to such an implication. I agree with Mr Bova's submissions. 67 Mr DeBuse proposes that any order to set aside the statutory demand should be made subject to conditions. Mr DeBuse argues that the plaintiff should be required to pay the admitted debt into court so that the genuineness of the plaintiff's claim can be tested. I agree with Mr Bova's submission that the plaintiff should not be forced to institute proceedings, especially given that Dr Chisholm has testified to his reluctance to litigate against the defendant. Nor do I feel that in the circumstances it is appropriate to require the plaintiff to pay the admitted debt into court. It remains open to the parties to make their own decisions as to the advisability of litigation. 68 Finally, I must address the issue of costs. Although I have not accepted all elements of the plaintiff's claim, I see no reason to depart from the usual approach. Accordingly, the statutory demand should be set aside and the plaintiff should be awarded its costs. I certify that the preceding sixty eight (68) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone. | application under ss 459g and 459h of the corporations act 2001 (cth) to set aside statutory demand offsetting claim identity of person against whom offsetting claim is made requirements for supporting affidavit reliance upon supplementary affidavits part of supporting affidavit served on defendant not read at hearing whether affidavit as read materially different from that served on defendant calculation of amount of offsetting claim claim for losses from potential litigation claim for loss of business whether plaintiff's conduct contributed to loss of business whether order to set aside statutory demand should be made subject to conditions non-assignability of contractual obligations novation corporations contract |
It has been given the pseudonym 'NTD8' to protect the privacy of those of its patients who may be affected by these proceedings. 2 In May 2008, the Australian Crime Commission ('ACC') served an amended notice on NTD8 under s 29(1) of the Australian Crime Commission Act 2002 (Cth) ('the ACC Act') requiring it to produce certain medical records and others documents held by it. In summary, the medical records related to the presentations by patients of NTD8 at clinics conducted by it, for treatment that may have been associated with family and domestic violence and/or other forms of assault including sexual assault. The ACC said that it required the medical records as a part of its Special Intelligence Operation into Indigenous violence or child abuse in the Northern Territory. 3 NTD8 had already commenced these proceedings to challenge the original notice which had been served by the ACC about a month earlier. When the amended notice was served, it amended its application in these proceedings to challenge that amended notice. The crux of NTD8's challenge to the amended notice is that Mr Anderson, the ACC Examiner who issued the amended notice, was required to take into account, as a primary consideration, the best interests of the children concerned, and he had failed to do so. 4 Before turning to consider those issues, it is necessary to briefly set out some of the factual background to these proceedings and to set out some of the relevant provisions of the ACC Act. In doing so, I will necessarily duplicate some of the material I set out in my earlier decision on the application by NTD8 that I should disqualify myself for apprehended bias (see [2008] FCA 984). 6 As a part of the Northern Territory Intervention, a package of four pieces of legislation was passed by the Commonwealth Parliament. It included the Families, Community Services and Indigenous Affairs and Other Legislation Amendment (Northern Territory Emergency Response and Other Measures) Act 2007 ('the FACSIA Act') and the Australian Crime Commission Amendment Act 2007, both of which made a number of amendments to the ACC Act. In general terms those amendments extended the ambit of the ACC's functions to include intelligence operations in relation to Indigenous violence or child abuse. I have set out a summary of those amendments in the Relevant Legislative Provisions section below. 7 In pursuit of its extended functions, on 5 February 2008, the Board of the ACC issued a Determination entitled the Special Intelligence Operation Authorisation and Determination (Indigenous Violence or Child Abuse) 2008 ('the Special Intelligence Operation'). The purpose of the Special Intelligence Operation included the collection and analysis of criminal information and intelligence relating to federally relevant criminal activities in relation to Indigenous violence or child abuse or other federally relevant criminal activity. On 10 April 2008, in his role as an ACC Examiner and as a part of the Special Intelligence Operation, he issued the original notice to NTD8 under s 29(1) of the ACC Act. 9 In response, on the morning of 7 May 2008, NTD 8 issued these proceedings under s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) seeking to challenge Mr Anderson's decision to the issue of that original notice. 10 In the period immediately following 7 May 2008, NTD 8 filed and served affidavits by Dr Andrew Bell sworn 9, 18 and 20 May 2008 and by Registered Nurse Rebecca Gooley sworn 9 May 2008, which set out their concerns if NTD8 were to comply with the original notice. In Nurse Gooley's affidavit she deposed to the results of her searches of NTD8's computer system which she had undertaken in response to the original notice. I do not consider this a reliable result because I believe there should be a substantially higher figure. In relation to the information sought about clients aged under 16 years I have annexed a schedule of the information I have found by computer search. This schedule is reasonably reliable and, I believe, represents almost all of the available information. It might be that reading the progress notes would reveal other relevant cases. ... The schedule is annexed hereto and marked "R[G]1". Each of the eight young Aboriginal girls (except one) had received an Implanon contraceptive implant. Noted but not inserted in our health service (name of health service not noted). No evidence in notes of suspicion of abuse. Had baby in *** No evidence in notes of suspicion of abuse. 12 On 20 May 2008, Mr Anderson issued the amended notice. Before issuing the amended notice, he had an opportunity to consider the matters set out in the affidavits of Dr Bell and Nurse Rebecca Gooley. Unlike the original notice, which was quite general in its terms, the amended notice was specifically limited to those persons described in paragraphs 7 and 8 of Nurse Gooley's affidavit (above). The ACC did not oppose that application. I interpolate that the ACC subsequently raised a time limit issue in relation to these proceedings. It claimed they were not issued within five days of NTD8 becoming aware of the original notice as required by s 57 of the ACC Act. I reject that submission. Whatever may have been the case in relation to the original notice, the fact is these proceedings now relate to the amended notice. The ACC chose to withdraw the original notice and issue the amended notice and the ACC did not oppose NTD8's application to amend the application in these proceedings so that it was directed to the amended notice. In these circumstances, I do not consider s 57 applies because these proceedings were on foot when the amended notice was served and therefore they were, in practical terms, lodged within five days of NTD8 becoming aware of the amended notice. Even if I am wrong about this conclusion, I consider the circumstances outlined above amount to special circumstances and would grant NTD8 the necessary extension of time under s 57 to pursue these proceedings, as amended. 14 When these proceedings came on for hearing before me, Mr Young for NTD8 informed me that his client only wished to challenge the notice insofar as it related to the eight young Aboriginal girls listed above. This reduced the live issues in these proceedings quite considerably, as will appear later in theses reasons. Before turning to those remaining issues, I need to briefly summarise the relevant provisions of the ACC Act. Prior to the ACC Act coming into effect in 2002, the ACC was known as the National Crime Authority (established under the National Crime Authority Act 1984 (Cth)). The ACC's functions are described in s 7A of the ACC Act. Amongst other things, they include: collecting, correlating, analysing and disseminating criminal information and intelligence, and undertaking intelligence operations (when authorised by the Board of the ACC). 16 The expression "intelligence operation" is defined in s 4 of the ACC Act to mean: "the collection, correlation, analysis or dissemination of criminal information and intelligence relating to federally relevant criminal activity. " The expression "federally relevant criminal activity" is defined in s 4 to mean: "a relevant criminal activity, where the relevant crime is an offence against a law of the Commonwealth or of a Territory; or a relevant criminal activity, where the relevant crime is an offence against a law of a State; and has a federal aspect". 17 The Board of the ACC is authorised to determine that an intelligence operation or an investigation is a 'special operation' or 'investigation' (see ss 7C(2) and (3)). The Special Intelligence Operation here was determined under these sections. 18 Much of the critical work of the ACC is carried out by examiners. Examiners are appointed by the Governor-General (see s 46B) and are given the powers, amongst other things, to conduct examinations for the purposes of a special ACC operation/investigation (see s 24A), to summons witnesses and take evidence (see s 28) and to obtain documents for that purpose (see s 29). 19 The notice that is at the heart of these proceedings was issued pursuant to s 29(1) of the ACC Act. (1A) Before issuing a notice under subsection (1), the examiner must be satisfied that it is reasonable in all the circumstances to do so. The examiner must also record in writing the reasons for the issue of the notice. The record is to be made: (a) before the issue of the notice; or (b) at the same time as the issue of the notice; or (c) as soon as practicable after the issue of the notice. 20 As I have noted above (see [6]), the ACC Act was amended by two of the pieces of legislation that formed the package of legislation which supported the Northern Territory Intervention. The new definitions applied to the following words or expressions: child, child abuse, Indigenous person, Indigenous violence or child abuse, relevant crime and serious violence. 'Serious violence' was likewise defined by a minimum penalty of three years. Most significantly, the expression 'relevant crime' replaced the expression "serious and organised crime". 'Relevant crime' was defined to mean "serious and organised crime or Indigenous violence or child abuse. " The expression "Indigenous violence or child abuse" was defined in to mean: "serious violence or child abuse committed by or against, or involving, an Indigenous person". Other definitional changes were made to extend the operation of the ACC Act to State agencies and staff. 21 The second piece of legislation, the Australian Crime Commission Amendment Act 2007 (Cth), made amendments to ss 28 and 29 of the ACC Act which are not particularly relevant to these proceedings. They are, first, in issuing the notice, was Mr Anderson required to take into account the best interests of the children concerned as a primary consideration? Secondly, if he was, did he do so? Was Mr Anderson required to take into account the best interests of the children concerned as a primary consideration? Instead, my function is to ensure that Mr Anderson acted in accordance with the statutory provisions upon which he relied when issuing the amended notice: see Sean Investments v McKellar (1981) 38 ALR 363 at 375 per Deane J and Minister for Aboriginal Affairs v Peko Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24 ( 'Peko' ) at 40-41 per Mason J. 24 For present purposes, the operative words of s 29(1A) of the ACC Act are that the examiner "must be satisfied it is reasonable in all the circumstances" to issue the notice. Apart from the general reference to "all the circumstances", the section does not expressly state what considerations the examiner is to take into account. In that event, those considerations must be "determined by implication from the subject-matter, scope and purpose of the Act": see Peko at 39-40 per Mason J. 25 It is common ground between the parties that the best interests of the children concerned is a consideration which Mr Anderson was obliged to take into account in issuing the amended notice. The parties agree that, in the context of these proceedings, this flows from a number of matters including: the amendments made to the ACC Act by the FACSIA Act (see [20] above), the Minister's Second Reading Speech on the FACSIA Bill and the Explanatory Memorandum for the FACSIA Bill. 26 However, the point of departure between the parties is whether in issuing the amended notice, Mr Anderson was obliged to take into account the best interests of the children concerned as a primary consideration (emphasis added). NTD8 says he was, essentially relying upon the High Court's decision in Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 (' Teoh '). The ACC says that he was not. It says s 29(1A) of the ACC Act bestowed upon Mr Anderson a general discretionary power and, while he had to take into account the best interests of the children concerned as a consideration, he did not have to make it a primary consideration vis a vis other considerations such as the purpose and objects of the ACC Act, the determination issued by the Board of the ACC and the Special Intelligence Operation. 27 In my view, NTD8 is correct in its submissions. So much is clear, in my view, from what the High Court said in Teoh . In that case, the High Court had to consider what effect Australia's ratification of the Convention on the Rights of the Child had on administrative decision-makers when they were making decisions affecting the interests of children. 29 In addition, Gaudron J expressed the view (at 304) that "quite apart from the Convention or its ratification, any reasonable person who considered the matter would, in my view, assume that the best interests of the child would be a primary consideration in all administrative decisions which directly affect children as individuals and which have consequences for their future welfare. Instead, they said that the decision-maker is required to: "Give [the best interests of the child] first importance along with such other considerations as may, in the circumstances of a given case, require equal, but not paramount, weight ..." at 298 per Mason CJ and Deane J; and "there may be other interests carrying equal weight", at 302 per Toohey J. 31 To similar effect, the Full Court of this Court held in Wan v Minister for Immigration and Multicultural Affairs 107 FCR 133 ; [2001] FCA 568 (' Wan ') at [32] that: "Provided that the Tribunal did not treat any other consideration as inherently more significant than the best interests of [the] children it was entitled to conclude, after proper consideration of the evidence and other material before it, that the strength of other considerations outweighed the best interests of the children". Further, at [33]: "The Tribunal was entitled to regard the expectations of the Australian community as a primary consideration provided that it did not overlook that, on the procedure which it had adopted, procedural fairness demanded that it act on the basis that the best interests of [the] children were a consideration of equal significance (ie also a primary consideration)". Wan was a case dealing with a decision by the Administrative Appeals Tribunal to affirm a decision of the Minister's delegate to refuse to grant a permanent residence visa to the father of two children aged eight and 20 months who were Australian citizens. See also Sebastian v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 31 (' Sebastian') at [10]. 32 In my view, therefore, the effect of the High Court's decision in Teoh is to identify the best interests of the children concerned as, to use the words of Mason J in Peko "a relevant factor of great importance" to which the decision-maker is required to give adequate weight: see Peko at 41. Viewed in this way, the Court has declared what weight should be given to it as a factor, thereby creating an exception to the general rule that the weight to be given to a particular consideration is a matter for the administrative decision-maker: see Peko at 41 per Mason J. By comparison, in his dissenting judgment in Teoh, McHugh J thought that the general rule should apply and the decision-maker, not the courts, should determine what weight should be given to it as a consideration: see Teoh at 321. 33 As to the qualification "statutory or executive indications to the contrary" mentioned in Teoh, the Full Court of this Court has expressed the view that broad, general statements (which presumably includes the Ministerial statements made in relation to Teoh in 1995 and 1997), were not effective indications to the contrary. Instead, it said greater specificity would be needed directed to the manner in which the particular decisions in question are made: see Lam v Minister for Immigration and Multicultural Affairs (2006) 157 FCR 215 ; [2006] FCAFC 184 at [30] . See also the discussion in Duxbury A, The Impact and Significance of Teoh and Lam in Groves and Lee, Australian Administrative Law, Cambridge University Press 2007 at page 305. 34 No such indications to the contrary have been pointed to by counsel in this case. 35 For these reasons, I hold that the High Court's decision in Teoh required that in issuing the amended notice, Mr Anderson had to take into account the best interests of the children concerned as a primary consideration. Did Mr Anderson take into account the best interests of the children concerned as a primary consideration? On this question, not surprisingly, NTD8 says he did not and the ACC says he did. Again, I consider that NTD8 is correct in its submission. This is so for two separate and independent reasons. 37 First, in his cross-examination before me, Mr Anderson was quite frank and very specific that whilst he had taken into account the best interests of the children concerned as a consideration, he had not taken those interests into account as a primary or first consideration. It wasn't the first consideration. - - -It was a matter - - - take it into consideration but not as a first or primary consideration? MR ANDERSON: The manner to which I should have regard along with several other matters in the course of making the decision. MR YOUNG: But nowhere in the documents have you recorded that you had taken account of the best interests of the relevant children as a consideration, primary or otherwise. Do you agree with that? MR ANDERSON: I haven't recorded that, no. That's in my --- in the unstated general knowledge that I have that I have not recorded. MR YOUNG: It would appear to follow from your answer and correct me if I'm wrong that you do not consider yourself bound as a matter of law at the time you made the decision to take into account the best interests of the children as a primary consideration? MR ANDERSON: My primary consideration was to give --- was the objectives of the determination. MR YOUNG: And if you had of taken the bests interests of the children into account as a primary consideration, you would have recorded it? MR ANDERSON: No. I wouldn't have recorded it anymore than I have not done now. 38 Based on this evidence, I find that in issuing the amended notice, Mr Anderson did not take into account the best interests of the children concerned as a primary consideration. 39 While this finding would be enough to dispose of the matter, I consider I should also mention the second and separate reason I have for reaching this conclusion. It is that, consistent with what he said in his cross-examination (above), Mr Anderson's only primary consideration was the objects of the Determination or the Special Intelligence Operation. Furthermore, he did not make any assessment of what the best interests of the particular children affected by his decision required in the circumstances, nor did he weigh those interests against the primary consideration he did take into account. 40 There has been a number of decisions involving the Migration Act 1958 (Cth), where this Court has examined how an administrative decision-maker should take into account the best interests of children as a primary consideration. " (at [32]). If the Tribunal had also concluded that the expectations of the Australian community were that a non-citizen who engaged in conduct of the kind engaged in by Mr Wan would not be granted a visa, and that a decision to grant such a visa would be a most serious affront to the expectations of the Australian community, it would have been entitled to conclude that, in the circumstances of the case, the best interests of the children were outweighed by the strength of community expectations. " (at [33]). It should be said at the outset that this is not some inflexible rule of law, or requirement for mechanical incantation. It is a logical and appropriate starting point if the task is to be essayed reliably. ... The interests of the children are considerations in respect of their human development --- their health, including their psychological health and happiness, their social and educational development as balanced, nurtured young citizens of this country. This is not a check list, but an illustration of the kinds of considerations relevant to these young people ..." (at [118]). See also Vaitaiki v Minister for Immigration and Ethnic Affairs (1998) 150 ALR 608 , Rocca v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 71 at [33] - [36] and Sebastian at [11]-[15]. 44 Mr Anderson swore an affidavit in these proceedings in which he described the process he followed and the matters he took into account in coming to the decision to issue the amended notice. In accordance with that subsection I recorded my reasons for the issue of the Notice in writing ('the Reasons'). Elsewhere in his affidavit and annexures, Mr Anderson refers generally to NTD8's clients being affected by the notice, but he does not refer to the fact they included this particular group of children. Mr Anderson also refers generally to "young Indigenous girls", "Indigenous children under the age of consent", and "the abuse and maltreatment of children", but these references do not mention this particular group of children. 46 It follows that nowhere in his affidavit or its annexures, does Mr Anderson embark upon an assessment of what the best interests of this particular group of children are, let alone make an assessment of what their best interests may call for in the circumstances. 47 Furthermore, while there are a number of references to NTD8's objections to the amended notice and its reasons for not wishing to produce the medical records required by the amended notice, nowhere in Mr Anderson's affidavit or its annexures, is there any discussion of NTD8's objections insofar as they applied to these eight young Aboriginal girls. 48 NTD8's objections is set out in the affidavits of Dr Bell and Nurse Gooley. In essence, they express the views that given the very personal and sensitive nature of the treatment they have received viz contraceptive implants, if NTD8 has to disclose who these eight young Aboriginal girls are, they are likely to lose trust in NTD8 as a health provider and to avoid seeking further advice and assistance from it in the future. Dr Bell points out that NTD8 is the only such health provider that is readily accessible in the region and therefore these eight young Aboriginal girls are unlikely to obtain advice and assistance in the future for their sexual health. 50 Finally, consistent with Mr Anderson's frank acknowledgement in his cross-examination (above), and in stark contrast to the dearth of mention or discussion of the best interests of these eight young Aboriginal girls, there is extensive reference in Mr Anderson's affidavit and annexures to other considerations he considered to be of importance in deciding to issue the amended notice, including the objects of the ACC Act, the objects of the determination issued by the ACC Board, the issue of under-reporting of sexual abuse at some medical clinics in the Northern Territory and the objectives of the Special Intelligence Operation. However, nowhere in Mr Anderson's affidavit or its annexures is there any indication he engaged in any process of weighing those considerations against the consideration of the best interests of these children. This is not surprising once it is appreciated that Mr Anderson considered the former were primary considerations and the latter was not. I also conclude, as a matter of fact, he failed to do so. He therefore failed to give adequate weight to a relevant consideration of great importance. It follows that he did not properly exercise the power conferred on him under s 29 of the ACC Act in issuing the amended notice. 53 I therefore propose to grant appropriate relief to NTD8 under s 5(1)(e) and 5 (2)(b) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) in relation to that part of the amended notice that relates to the medical records and other details of the eight young Aboriginal girls. However, because the amended notice is also directed to the medical records of other patients of NTD8, in relation to which there is no longer any challenge, I will hear the parties as to the form that my orders should take. I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Reeves. | australian crime commission examiner issuing notice requiring production of medical records of aboriginal teenage children requirement of teoh that the best interests of the children be a primary consideration whether proper consideration given by the examiner to the best interests of the children concerned in issuing the notice no proper assessment of what the best interests of the teenage children called for in the circumstances failure to give adequate weight to a relevant consideration of great importance taking into account other considerations as paramount s 29 of australian crime commission act 2002 (cth) s 5 of administrative decisions (judicial review) act 1977(cth) administrative law |
The Tribunal decided that it did not have jurisdiction to deal with two applications for review made by the applicant. Each of those applications for review related to a request made pursuant to the Freedom of Information Act 1982 (Cth) ("the FOI Act "), one to the Attorney-General and the other to the Minister for Justice and Customs ("the Justice Minister"), seeking access to certain documents. Both the Attorney-General's office and the Justice Minister's office purported to transfer the respective requests to the Attorney-General's Department ("the Department"), pursuant to s 16 of the FOI Act . There is a question in each case whether these purported transfers gave rise to a deemed refusal to provide access to the documents. In each case, there is an antecedent question as to whether the purported transfer was valid, and a subsidiary question as to whether a transfer of a request absolves the original agency, to which the request is addressed, from the obligation to search for documents answering the descriptions in the request, to determine whether it has such documents in its possession. 2 In each case, the Tribunal's decision was given, and its reasons for decision were published, on 26 August 2004. Each application for review was dealt with on the papers by consent of the parties to it. The decisions and reasons are found in Bienstein v Attorney-General (Commonwealth) [2004] AATA 896 and Bienstein v Minister for Justice & Customs [2004] AATA 895. 3 When the original notice of appeal was filed in this Court, it set out a large number of issues, many of which could not properly amount to questions of law arising from the Tribunal's decisions. By s 44(1) of the AAT Act , an appeal from the Tribunal to this Court is limited to a question of law. Because the applicant was unrepresented, owing to her lack of means, I referred her to counsel, pursuant to the scheme for legal representation found in O 80 of the Federal Court Rules . Subsequently, the applicant told me at a directions hearing that she did not wish to be represented by the counsel to whom she had been allocated, as she did not feel he had a sufficient understanding of administrative law. She requested allocation to another counsel. I declined, on the basis that the O 80 scheme is not designed to give a disadvantaged party choice of counsel, but to provide a means of assisting such a party, and the Court, when such assistance appears to be beneficial. The scheme ought not to be treated as a form of legal aid, entitling a party to his or her choice of legal representative. In the result, the applicant continued the proceeding, and appeared at the hearing of the appeal, without representation. She filed two amended notices of appeal. Even the latest version suffers from prolixity, lack of precision and the applicant's apparent desire to broaden the issues as much as she can. Nevertheless, it is possible to discern from the amended notice of appeal filed on 13 September 2005, and from the argument that the applicant put most capably on the hearing of the appeal, questions of law which can be raised legitimately and which are of substance. It is those questions which I have outlined above, and which are dealt with in these reasons for judgment. An applicant may make a written request for remission of the application fee. Section 30A provides for a decision on such a request within a maximum of 30 days after the request was made. By s 30A(1B) , if an applicant has not received notice of a decision on a request by the end of the period of 30 days, the agency or Minister concerned is taken to have made, on the 30th day, a decision to the effect that no part of the application fee is to be remitted. 12 Part VI of the FOI Act relates to the review of decisions. • If they are transferred, are the decisions to transfer reviewable and are there inherent decisions to refuse the requests that are reviewable? • Did the Attorney-General or the Justice Minister transfer the requests to the Department? • Did the Attorney-General and the Justice Minister transfer the requests pursuant to s 16 of the FOI Act ? • Is the Attorney-General or the Justice Minister deemed to have made a decision refusing the applicant's requests? The Tribunal pointed out that s 55(1) of the FOI Act specified the decisions in respect of which a person may apply to the Tribunal. Those decisions included those made under ss 15 and 30A , but not decisions made under s 16. 19 The Tribunal treated each of what I have identified as a request as two requests, one for access to the documents, and the other for remission of fees. For the sake of convenience, except where it is necessary to distinguish the request for remission of fees from the request for access to documents, I refer to the request to the Attorney-General as a single request, and to the request to the Justice Minister as a single request. The Tribunal found that the applicant's request to the Attorney-General was sent by post. Assuming that it was posted on the day on which it was dated, and using s 160 of the Evidence Act 1995 (Cth) as a guide, the Tribunal reached the conclusion that the request to the Attorney-General would have been received on 8 September 2003. Similarly, the Tribunal found that the applicant's request to the Justice Minister was sent by post. It assumed that the letter was posted on the day on which it was dated, 5 September 2003. Using s 160 of the Evidence Act 1995 (Cth) as a guide, the Tribunal found that the letter would have been received on 11 September 2003. 20 In each case, the Tribunal determined the first issue it had posed for itself in favour of the Attorney-General and the Justice Minister. It held that each was entitled to transfer the request, even though the applicant had asked specifically that the request not be transferred to the Department. The Tribunal held that it was apparent from the provisions of s 16 of the FOI Act that no consideration was to be given to the wishes of the person seeking access. Instead, consideration was to be given to the criteria specified in s 16. 21 In each case, the Tribunal rejected the applicant's argument that there was inherent in a decision to transfer a request under s 16 of the FOI Act a further decision, made under s 24A , that the documents requested did not exist or could not be found. Focusing on s 16(1) , the relevant subsection of s 16 for the purposes of these cases, the Tribunal held that paras (a) and (b) of that subsection are alternatives. It was only necessary for an agency to make a decision that a document was not in its possession if the agency chose to transfer a request pursuant to s 16(1)(a). A decision that the document was not within the agency's possession was not a prerequisite to a decision to transfer under s 16(1)(b). For two reasons, a decision to transfer under s 16(1)(a) did not necessarily entail a decision under s 24A. The preliminary step under s 16(1)(a) was not the same decision that must be made under s 24A. The former required a decision that a document was not in the possession of the agency, but the latter required a decision either that the document was in possession of the agency but could not be found, or that the document did not exist. Further, the decision to transfer under s 16(1) was not a decision dealing with the substance of the request. The agency transferring the request was not determining it at all. Section 16(5) made it clear that the request had not been determined when it was transferred to the other agency and s 16(4) , requiring that the transferring agency must send the relevant document to the other agency "in order to enable the other agency to deal with the request", made it clear that the transferee agency was dealing with the request, that is, determining it. 22 The Tribunal then reached the conclusion that, if either the Attorney-General or the Justice Minister had made a deemed decision under s 56(1) of the FOI Act , the applicant was entitled to apply to the Tribunal for review. If the request had been transferred to the relevant Department, and it was deemed to have made a decision, the applicant was also entitled to apply to the Tribunal. In either case, the internal review provisions in s 54 had no application. In relation to a deemed decision under s 30A(1B) , as a result of an agency's failure to deal with an application for remission of the application fee, the Tribunal held that the provisions of s 54 were not excluded, so that the applicant would have been required to apply for internal review under s 54 , before applying to the Tribunal for review. 23 The Tribunal then dealt with the question whether each of the requests had been transferred. On the basis of communications between a member of the Attorney-General's staff and an officer of the Department, and despite the lack of any notice to the applicant pursuant to s 16(4) of the FOI Act or any formal acceptance by the Department of the request to transfer, the Tribunal found that the applicant's request to the Attorney-General was transferred to the Department on 2 October 2003. On the basis of communications between the Chief of Staff of the Justice Minister and an officer of the Department, and despite the absence of notice to the applicant under s 16(4) , the Tribunal found that the applicant's request to the Justice Minister was transferred to the Department on 25 September 2003. 24 The Tribunal then dealt with the crucial question whether the requests were transferred in accordance with s 16 of the FOI Act . In each case, the Tribunal found that the relevant communications gave no indication that any consideration was given to whether s 16(1)(a) was satisfied fully, or whether s 16(1)(b) was considered. The only consideration appearing on the face of the email correspondence that took place was that the documents were not in the possession of the Attorney-General and the Justice Minister respectively. There was no indication that consideration was given to whether the documents were, to the knowledge of the Attorney-General or the Justice Minister, in the possession of the Department to which the requests were transferred. There was no indication that there was any consideration given to whether the subject-matter of the documents was more closely connected with the functions of the Department than with those of the Attorney-General or the Justice Minister. There was no evidence of compliance with the requirement of s 16(4) to notify the applicant of the transfer. 25 The Tribunal did not consider that the presumption of regularity was sufficient justification for it to find that either transfer was properly effected under s 16(1)(a). The Tribunal was not satisfied that, to the knowledge of those in the Attorney-General's office, or the Justice Minister's office, the documents sought in the applicant's request were in the possession of the Department. The Tribunal found that the question was never asked of the Department, and those in the Attorney-General's office and the Justice Minister's office did not know whether the Department held any of the documents at that time. 26 The Tribunal expressed the view that s 16(1)(b) was a different matter. It did not raise a question of whether the Attorney-General or the Justice Minister knew the whereabouts of the documents sought by the applicant. It did not raise a question whether the documents sought actually existed. Instead, it raised a question of the subject-matter of the documents sought. Was that subject-matter more closely connected with the functions of another agency than with those of the recipient of the request? In each case, it was clear on the face of the applicant's request that a number of other agencies could have been involved. Section 16(1)(b) did not require an agency to identify the agency to whose functions the request was most closely related, although there was some practical merit in doing so in order for a request to be handled most expeditiously. It only required that the subject-matter of the document be more closely related to the functions of the agency to which the request was transferred than to those of the recipient of the request. There was no requirement that the agency transferring the request actually have possession of the document. In each case, the Tribunal was satisfied that the subject-matter of the documents sought was more closely connected with the functions of the Department than with those of the Attorney-General and the Justice Minister respectively. This meant that, in each case, the request could have been transferred pursuant to s 16(1)(b). As each request had actually been transferred, the Tribunal was satisfied that the Attorney-General's office and the Justice Minister's office each purported to transfer the relevant request pursuant to s 16(1)(b). The request for remission of fees was ancillary to the request for access to documents, so the Tribunal found in each case that it was necessarily transferred at the same time. 27 Applying the principles laid down in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 (1998) 194 CLR 355, the Tribunal found that the failure to notify the applicant of the transfer in accordance with s 16(4) of the FOI Act did not invalidate the transfer. In the Tribunal's view, Parliament intended the notification requirement to be procedural. It intended that the person making the request be notified that the request was being handled by another agency. The requirement was for notification "where a request is transferred". In the Tribunal's view, this meant that the notification was to occur after the transfer had occurred. A failure to comply with s 16(4) did not affect the transfer, let alone render it invalid. 28 The Tribunal then dealt with the final question, whether the requests had been deemed to be refused while in the possession of the Attorney-General and the Justice Minister respectively. In the absence of any extension of time pursuant to s 15(6) of the FOI Act , the 30-day period for a decision on the request to the Attorney-General would have expired on 8 October 2003. The transfer occurred on 2 October 2003, within that 30-day period. Similarly, the request was received by the Justice Minister by 11 September 2003 and the date of the transfer was 25 September 2003. The transfer occurred within 30 days of the Justice Minister's receipt of the request. In each case, therefore, there was no deemed decision while the requests were in the possession of the recipients of them. No decision had been made by either recipient. The Tribunal only had jurisdiction if a decision had been made, or was deemed to have been made, so it did not have jurisdiction in either case. In other words, a transfer of the whole of a request, without regard to what documents the transferor has, or may have, that would answer the request is not a valid transfer under s 16(1)(b). The original recipient of the request retains an obligation to respond with a decision on the request within the time required, and can only transfer so much of the request as relates to identified documents that have a subject-matter more closely connected with the functions of another agency than with those of the recipient of the request. 30 The respondent submitted that the effect of s 16(5) was to make the transferee agency responsible for the request, so that the transferor agency was no longer to be treated as the agency to which the request had been made. Once the transfer had taken place, the transferor had no further duties or liabilities under the FOI Act in relation to the request, apart from complying with s 16(4). 31 It appears to be common ground between the parties that certain of the Tribunal's conclusions are correct. A decision under s 16(1) to transfer is not reviewable under s 55(1) of the FOI Act . A transfer under s 16 does not inherently involve the making of a decision under s 24A of the FOI Act that documents to which the request relates cannot be found or do not exist. In addition, there was no argument about the correctness or otherwise of the Tribunal's conclusion that a deemed decision under s 30A(1B) , that no part of an application fee is to be remitted, consequent upon the passage of 30 days from the making of the request, was a decision for the purposes of s 54(1)(e) , so that internal review was required as a prerequisite to an application for review by the Tribunal, by virtue of s 55(2). In addition, although s 16(1) of the FOI Act makes no reference to an application pursuant to s 30A for remission of an application fee, there was no challenge to the correctness of the Tribunal's conclusion that such a request was automatically transferred, as ancillary to the request for access to documents, pursuant to s 16(1). Nor does the Explanatory Memorandum in relation to the Bill that led to the passage of s 16 assist. As is commonly the case, the Explanatory Memorandum simply echoes the words of the relevant statutory provisions. It is therefore necessary to determine the proper construction of s 16(1)(b) by ascertaining the intention of the legislature by reference to the terms of the provision itself, the context provided by other provisions of the FOI Act and the underlying purpose or object of the legislation. 33 In its own terms, s 16(1)(b) authorises a transfer of a request for access to a document only where the subject-matter of "the document" is more closely connected with the functions of an agency other than the recipient of the request. It is important that regard is not to be had to the subject-matter of the request, but to the subject-matter of "the document". In some cases, there will be no difference between the subject-matter of a particular document and the subject-matter of the request for it. A person may invoke the right given by s 15(1) to make a request for access to a document in the knowledge that a specific document exists, and using terms in the request that are apt to describe that specific document. For example, the document may be described by reference to its title, its date, the parties to it (in the case of correspondence) or its contents. More commonly, however, a person seeking to invoke the right to request access to a document will not know precisely what documents exist. The request will be in terms of a description of the kinds of documents sought by the person making the request. In the first type of case, in which a specific document is sought, it would be possible for the recipient to judge from the terms of the request whether the document sought was more closely related to the functions of another agency. From the description in the request, the recipient could reach the necessary conclusion to enable a transfer to be made. By contrast, where documents are sought by general description, it may be impossible to make a decision about the subject-matter of each such document without ascertaining whether the recipient of the request holds any such documents and, if so, considering the subject-matter of each of them. This consideration points to the proposition that, at least in some cases, a request cannot be transferred pursuant to s 16(1)(b) without the agency receiving it ascertaining whether it has documents to which access is sought by means of the request. 34 Overall, s 16 of the FOI Act applies to transfers in four situations. The situations that are the subject of subss (2) and (3) give rise to a duty to transfer. The word "shall" is used. By contrast, in relation to the two conditions of transfer in subs (1), the word "may" is used, connoting that the exercise of discretion is involved. Each of the four situations in which a transfer is required or authorised focuses on the word "document". By s 16(1)(a) , the power to transfer may be exercised only where the document is not in the possession of the recipient agency but, to the knowledge of the recipient agency, is in the possession of another agency. The recipient of the request could not exercise this power to transfer without knowing that it did not have the document sought in its possession. It could only know the answer to that question if it had taken steps to ascertain what documents it did have answering the description in the request. Paragraphs (a) and (b) of s 16(1) appear to be alternatives. Between them, they exhaust the ambit of the discretionary power to transfer a request. Each of those paragraphs contemplates a specific document the subject of a request. Which one of the paragraphs will apply depends on whether the document is or is not in the possession of the recipient of the request. Before a request can be transferred pursuant to s 16(1) , it must be the case that the document is not in the possession of the recipient of the request, in which case para (a) applies, or it is in the possession of the recipient of the request and its subject-matter is more closely connected with the functions of another agency, in which case para (b) applies. The question whether a document is in an agency's possession can only be answered after the agency has made any necessary search for that document, or a document answering its description. Further, each of the duties to transfer specified in subss (2) and (3) could only be carried out if the recipient of the request was aware of what documents it had answering the description in a request and the criteria in those subsections respectively. This is a powerful reason for concluding that the process of transferring under s 16 is one that can only be considered after the recipient of the request has become aware of the documents it has in its possession answering the description in the request, by making a search of its own records. In this context, particularly because it refers to a "document", rather than to a request, as do s 16(1)(a) , s 16(2) and s 16(3) , there is no reason to suppose that s 16(1)(b) is to be construed any differently. 35 The context of the remaining provisions of s 16 of the FOI Act tends to confirm that a transfer can only be put into effect after an agency has conducted a search to ascertain whether or not it has the document sought. Section 16(3A) provides that a request for more than one document (which would include a request for documents by description of categories) is to be treated, for transfer purposes, as a request for each of those documents separately. In conjunction with s 16(1)(b) , this has the effect that the request can only be transferred to the extent that it relates to each specific document of which it can be said that the subject-matter is more closely connected with the functions of another agency. Section 16(3A) makes it clear that, where the request describes a category or categories of documents to which access is sought, s 16(1)(b) provides no authority for the transfer of the whole of the request. The specific subject-matter of each document answering the description in the request must be considered. It is unlikely that this could be done without first ascertaining whether the agency receiving the request has documents answering the description. Similarly, s 16(4) requires an agency transferring a request to another agency in any of the circumstances outlined in s 16 to send "the document" the subject of the request to the other agency "if it is necessary to do so in order to enable the other agency to deal with the request". Plainly, without having ascertained whether it has such a document, the transferor agency would not be in a position to comply with this requirement. 36 The broader context of the FOI Act is also important. It is true that there is not to be found in the provisions of the FOI Act any express imposition of a duty on the recipient of a request for access to documents to search its records to ascertain whether it has documents answering the description in the request. Such a duty is implicit, however. Section 11 provides a right to obtain access to documents. Provided that a request made pursuant to s 15(1) complies with the basic requirements of s 15(2) , s 15(4) imposes on the recipient of the request a duty to take reasonable steps to assist the person making the request to direct it to the appropriate agency, if the request "should have been directed" to another agency or Minister. It is difficult to see how that obligation could be carried out unless the recipient of the request first established that it had no documents answering the description in the request. Section 18 imposes a positive duty on the recipient of the request to give the person making the request access to the document. Only under limited circumstances, specified in s 21(1) , can such access be deferred. The circumstances in which a request may be refused are also very limited. Section 24 deals with requests that are so onerous that they would substantially and unreasonably divert the resources of an agency from its other operations, or interfere with the performance of a Minister's functions. In those circumstances, s 24(1) provides that the request may be refused "without having caused the processing of the request to have been undertaken". Section 24(2)(a) specifically allows an agency or Minister to have regard to the resources that would have been used in "identifying, locating or collating the documents within the filing system of the agency, or the office of the Minister", in determining whether to refuse to grant access to documents under s 24(1). These provisions suggest that, where a request is not so onerous, the recipient of it is obliged to cause the processing of it to be undertaken, using whatever resources are necessary to identify, locate and collate the documents in the filing system of the agency or the office of the Minister concerned. A refusal under s 24A is only possible if all reasonable steps have been taken to find the documents and the recipient of the request is satisfied either that the document cannot be found or that it does not exist. A refusal under s 24A is therefore impossible without a search. Finally, there is the specific requirement in s 15(5)(b) that a decision be given on the request within 30 days, unless the time is extended under s 15(6). It is hard to see how a decision can be given about whether to grant or refuse access to documents requested (aside from onerous requests of the kinds referred to in s 24(1)) , unless the recipient of the request took steps to find out what documents it had and to consider whether they are exempt under various provisions of the FOI Act and, if not, whether deletion of exempt matter or irrelevant material under s 22 is necessary. In this context, it is unlikely to have been the intention of Parliament that the power to transfer a request under s 16(1)(b) , alone among all of the obligations that fall on the recipient of a request, was intended to be exercisable without any step being taken to ascertain whether the recipient of the document has documents answering the description in the request. 37 If the terms of s 16(1)(b) and its context do not lead to the conclusion that s 16(1)(b) should be construed as I have suggested, then reference to the legislative purpose of the FOI Act makes that conclusion abundantly clear. The purpose of the FOI Act is explicit in s 3(1). It is "to extend as far as possible the right of the Australian community to access to information in the possession of the Government of the Commonwealth by", among other things, creating a general right of access to information in documentary form in the possession of Ministers and other agencies, "limited only by exceptions and exemptions necessary for the protection of essential public interests and the private and business affairs of persons in respect of whom information is collected and held". Not only is this purpose so expressed, but Parliament in s 3(2) of the FOI Act has expressed its intention that the provisions of the FOI Act are to be interpreted so as to further that object. If s 16(1)(b) were to be construed as permitting the recipient of a request to transfer that request without first ascertaining whether it had documents answering the description in the request, there would be a considerable gap in the right of access to information given by the FOI Act . To the extent to which s 16(1)(b) may be regarded as ambiguous, it should be construed in accordance with the legislative purpose expressed in s 3. If they did have such documents, it would have been necessary for them to consider the subject-matter of each, to see whether it met the criterion of being more closely connected with the functions of another agency than with those of the Attorney-General or the Justice Minister as the case may be. Only in respect of specific documents, and only if that criterion was met in relation to those documents, could the transfer have been effected, if the Department agreed with the transfer. The applicant had a right to access to whatever documents were in the possession of the Attorney-General and the Justice Minister, to which her requests applied. As is shown by the fact that she requested that each request not be transferred, she sought to exercise that right. 39 The Tribunal was therefore in error when it said in its reasons for decision in each case that s 16(1)(b) does not raise a question of whether the Attorney-General or the Justice Minister knew the whereabouts of the documents sought by the applicant, and that it did not raise a question whether the documents sought actually existed. The Tribunal should have held that s 16(1)(b) could only authorise the transfer of a request so far as it related to a specific document, actually existing and with a subject-matter more closely related to the functions of the appropriate department than to the functions of the Attorney-General or the Justice Minister, as the case may be. 40 The Tribunal accepted in each case that there were no documents in the possession of the Attorney-General or the Justice Minister. In the case of the Attorney-General, this finding was based on an ambiguous email from an adviser to the Attorney-General to the officer of the Department responsible for compliance with the FOI Act . The email began by saying, "We don't think we have anything here. " It went on immediately to say "If anything turns up in the packing process I'll let you know. " The Tribunal took judicial notice of the fact that the holder of the office of Attorney-General changed on 7 October 2003, and expressed the view that it was understandable that thoughts were on packing rather than on the niceties of s 16 of the FOI Act . In the light of the ambiguity of the email, it may not have been altogether clear that the Attorney-General had no documents that would answer the descriptions in the request. If the possibility existed that some such documents might turn up in the packing process, then plainly a sufficient search to exhaust that possibility had not been undertaken. Similarly, in the case of the Justice Minister, the basis of the Tribunal's finding that there were no relevant documents in existence was an email saying, "the office has no record of any Ministerial correspondence to or from Mrs Bienstein". Whether the mere reference to records of correspondence would be sufficient to exhaust the possibility that the Justice Minister had no documents answering the descriptions in the applicant's request is unclear. Nevertheless, this is an appeal limited to a question of law, and I must accept the Tribunal's findings that neither the Attorney-General nor the Justice Minister for Justice had any documents to which the applicant might have been granted access. That being the case, neither the Attorney-General nor the Justice Minister could consider the subject-matter of any such document. If neither could consider the subject-matter of any such document, neither could determine the question whether that subject-matter was more closely related to the functions of the Department than to the functions of the Attorney-General or the Justice Minister respectively. In the absence of reference to any specific document, and its subject-matter, the decision necessary to trigger the exercise of the power to transfer given by s 16(1)(b) could not be made. 41 The Tribunal was therefore in error in deciding that each of the transfers could have been made properly pursuant to s 16(1)(b). If neither transfer could have been made, it follows that the Attorney-General and the Justice Minister remained in possession of their respective requests and responsible for dealing with them. It is not express, but is certainly implicit in the reasons for decision of the Tribunal in each case that the Attorney-General and the Justice Minister did not make a decision on the request within the 30-day period specified in s 15(5) of the FOI Act . There was no extension of time pursuant to s 15(6). In the absence of a decision, there was a deemed decision under s 56(1) of the FOI Act , which entitled the applicant to apply to the Tribunal for review, pursuant to s 55(1). No application for internal review was necessary under s 54 as a prerequisite to an application to the Tribunal. Accordingly, the Tribunal did have jurisdiction in relation to each application for review. 42 As to the requests for remission of application fees, the Tribunal regarded those requests as ancillary to the requests for access to documents and as transferred along with them. Given that no valid transfer of either request for access to documents occurred, the requests for the remission of application fees were not transferred by this means either. There is no other indication in the reasons for decision of the Tribunal that those requests were transferred in any other manner. Accordingly, they remained with the Attorney-General and the Justice Minister respectively. At the end of the 30-day period specified in s 30A(1B) of the FOI Act , there was a deemed decision that no part of the application fee was to be remitted. This also gave the applicant a right to apply to the Tribunal for review unless, as the Tribunal held, it was necessary for her to apply under s 54(1)(e) for an internal review, as a prerequisite to applying for review by the Tribunal. Neither side addressed any argument to this question on the hearing of the appeal, so I prefer to say nothing about it. Each of the decisions of the Tribunal must be set aside, and the case must be remitted to the Tribunal to be heard and decided again according to law. Although the applicant is not represented, she is entitled to costs in respect of out-of-pocket expenses that she has incurred in the preparation and presentation of her case, if an order for costs is made in her favour. There appears to be no reason why such an order should not be made, in accordance with the normal principle that costs follow the event. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray. | request transfer of request to another agency transfer on basis that subject-matter of documents more closely connected with functions of another agency whether recipient of request required to search for documents before transferring request on the basis that the subject-matter of documents is more closely connected with the functions of another agency requests made to attorney-general and minister for justice and customs for access to their documents purported transfers of requests to attorney-general's department whether administrative appeals tribunal erred in law in holding requests validly transferred consequences of failure to effect proper transfers of requests freedom of information |
2 Section 42Y(1) provides that such an application may be made, as in the present proceeding, by " the Secretary ... on behalf of the Commonwealth to the Federal Court ". 3 The First Respondent, Pagasa Australia Pty Ltd, is a body corporate incorporated and registered under the Corporations Act 2001 (Cth) and an importer of goods into Australia. The Second Respondent, Ms Susan Jones, is a director and shareholder of the First Respondent and is its managing director. 4 It is claimed that both Respondents have contravened the 1989 Act. A useful overview of some of the provisions of the Act has been provided by Emmett J in McGrath v Australian Naturalcare Products Pty Ltd [2008] FCAFC 2 , 165 FCR 230. 6 For present purposes it is sufficient to make reference to but a few provisions. 7 Chapter 2 of the Act provides for the maintenance of a register known as the Australian Register of Therapeutic Goods. Part 3 - 2 of Chapter 3 further provides for the registration and listing of therapeutic goods and provides for exemptions to be granted in respect to certain therapeutic goods which are not registered. Maximum civil penalty: (a) for an individual--5,000 penalty units; and (b) for a body corporate--50,000 penalty units. 8 Chapter 5A provides for the enforcement of the Act and specifically provides for the making of an order by this Court that a " civil penalty " be paid: s 42Y. Court may order wrongdoer to pay pecuniary penalty (2) If the Court is satisfied that the wrongdoer has contravened a civil penalty provision, the Court may order the wrongdoer to pay to the Commonwealth for each contravention the pecuniary penalty that the Court determines is appropriate (but not more than the maximum amount specified for the provision). Determining amount of pecuniary penalty (3) In determining the pecuniary penalty, the Court must have regard to all relevant matters, including: (a) the nature and extent of the contravention; and (b) the nature and extent of any loss or damage suffered as a result of the contravention; and (c) the circumstances in which the contravention took place; and (d) whether the person has previously been found by the Court in proceedings under this Act to have engaged in any similar conduct. Civil evidence and procedure rules apply (4) The Court must apply the rules of evidence and procedure for civil matters when hearing and determining an application for an order under this section. Conduct contravening more than one civil penalty provision (5) If conduct constitutes a contravention of 2 or more civil penalty provisions, proceedings may be instituted under this Act against a person in relation to the contravention of any one or more of those provisions. However, the person is not liable to more than one pecuniary penalty under this section in respect of the same conduct. Section 42YB provides that a " penalty unit " has the same meaning as that given by s 4AA of the Crimes Act 1914 (Cth) which, in turn, provides that a " penalty unit " is $110. 9 Two further provisions should be mentioned, namely ss 54 and 54B. (4) Where goods are so forfeited, the Secretary may cause notice of the forfeiture to be published in the Gazette. (5) Goods forfeited under an order referred to in subsection (3) are to be disposed of in such manner as the Secretary directs. (2) The maximum penalty for an offence against subsection (1) is the maximum penalty that a Court could impose in respect of an individual for the offence committed by the body corporate. (3) An executive officer of a body corporate contravenes this subsection if: (a) the body corporate contravenes a civil penalty provision; and (b) the officer knew that the contravention would occur; and (c) the officer was in a position to influence the conduct of the body in relation to the contravention; and (d) the officer failed to take all reasonable steps to prevent the contravention. (4) The maximum civil penalty for a contravention of subsection (3) is the maximum civil penalty that a Court could impose in respect of an individual for the civil penalty provision contravened by the body corporate. (5) In this section: executive officer of a body corporate means a person, by whatever name called and whether or not a director of the body, who is concerned in, or takes part in, the management of the body. Reliance is placed upon this provision in respect to Ms Jones. In the alternative to contending that she has contravened s 19D(1)(a)(i), the Secretary further contends that she has contravened s 54B(3). 12 A Statement of Agreed Facts was thereafter prepared by the parties and was filed on 2 May 2008. 13 That Statement sets forth the attendance on or about 21 February 2007 of officers of the Therapeutic Goods Administration upon premises at Matraville in Sydney for the purposes of searching a container transported by the Respondents from Manilla North Harbour in the Philippines to Australia in early February 2007. Gabriel Medicated Genuine Bleaching Beauty Soap (288 items); • Eskinol Naturals Papaya Facial Scrub (480 items); • Eskinol Classic Whitening Cream SPF-15 (120 items); • Block and White Radiance SPF 20 Whitening Lotion (120 items); • Chin Chun Su Face Cream (480 items); • Master Anti-Bacterial Facial Cleanser (432 items); and • Green Cross Isopropyl Alcohol (720 items). All of these goods were " therapeutic goods " for the purposes of s 19D(1) of the 1989 Act. The goods were seized under s 47(1)(c) of that Act. None of the goods were registered goods or listed goods; exempt goods; exempt under s 18A; the subject of an approval or authority under s 19; or the subject of an approval under s 19A of the 1989 Act. 14 It is agreed that the importation of the goods constituted a contravention by the First and Second Respondents of s 19D(1)(a)(i). It is also agreed, in the alternative, that the Second Respondent has contravened s 19D(1)(a)(i) by aiding, abetting, counselling or procuring the First Respondent to import the goods in contravention of s 19D(1)(a)(i) and, in the further alternative, that she has contravened s 54B(3). 15 It is further agreed that the First Respondent on 4 May 1998 was convicted at the St James Local Court of the offence of intentionally or recklessly importing various therapeutic goods into Australia in contravention of s 20(1)(a). The First Respondent on that occasion was fined $12,000 and an order for forfeiture was made under s 54(3). 16 In the case of an individual, the maximum civil penalty that may be imposed pursuant to the terms of the 1989 Act is 5,000 penalty units, ie $550,000; in the case of a body corporate, the maximum penalty is 50,000 penalty units, ie $5.5 million. 18 There has been no prior occasion upon which these provisions have been invoked. 19 In determining the quantum of any civil penalty, s 42Y(3) provides that the Court " must have regard to all relevant matters " and goes on to identify four specific matters. Those four matters are self-evidently not an exhaustive identification of the matters to be considered. 20 The terms of s 42Y(3), however, are the same as those set forth in s 481(3) of the Environment Protection and Biodiversity Conservation Act 1999 (Cth); s 125A(3) of the Health Insurance Act 1973 (Cth); s 205F(3) of the Broadcasting Services Act 1992 (Cth); and are comparable to s 76(1) of the Trade Practices Act 1974 (Cth) and s 24(2) of the Spam Act 2003 (Cth). 21 Proceedings to recover a civil penalty under s 42Y of the Therapeutic Goods Act , like proceedings under s 76 of the Trade Practices Act , are civil proceedings (s 42Y(4)) and by virtue of s 140 of the Evidence Act 1995 (Cth) attract the civil standard of proof, including for present purposes the principles in Briginshaw v Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336 at 361---3. (2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account: (a) the nature of the cause of action or defence; and (b) the nature of the subject matter of the proceeding; and (c) the gravity of the matters alleged. It has been said by the Full Court of this Court that the discussion by Dixon J in Briginshaw v Briginshaw " of how the civil standard of proof operates appositely expresses the considerations which s 140(2) of the Evidence Act now requires a court to take into account ": Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission [2007] FCAFC 132 at [31] , [2007] FCAFC 132 ; 162 FCR 466 at 480 per Weinberg, Bennett and Rares JJ. See also: Employment Advocate v Williamson [2001] FCA 1164 at [65] , [2001] FCA 1164 ; 111 FCR 20 at 40---1 per Branson J; Australian Competition & Consumer Commission v Construction, Forestry, Mining & Energy Union [2008] FCA 678 at [13] per Finn J. 22 Civil penalties -- such as those now invoked -- are increasingly becoming a legislative device to secure compliance with statutory provisions and, it may be noted, in a diverse range of areas of activity perceived to be in need of legislative control. In addition to those legislative provisions to which reference has already been made, the present diversity of legislative contexts is further reinforced by reference to the Superannuation Industry (Supervision) Act 1993 (Cth), s 196 ; the " civil penalty provisions " in Chapter 7 Part 1 of the Building and Construction Industry Improvement Act 2005 (Cth); and to " civil remedy provisions " such as those created by the Workplace Relations Act 1996 (Cth), and the ability to recover under that legislation " pecuniary penalties ": s 730. See also: Gillooly M and Wallace-Bruce N I, 'Civil Penalties in Australian Legislation' (1994) 13 Univ Tas L Rev 269. 23 General guidance as to the manner in which this Court has approached the task of assessment under civil penalty provisions may be gleaned from the manner in which other like provisions have been applied by this Court. 24 Thus, in Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 French J made the following observations in the context of assessing the penalty to be imposed pursuant to s 76(1) of the Trade Practices Act (at 52,152---52,153). The assessment of a penalty of appropriate deterrent value will have regard to a number of factors which have been canvassed in the cases. These include the following: 1. The nature and extent of the contravening conduct. 2. The amount of loss or damage caused. 3. The circumstances in which the conduct took place. 4. The size of the contravening company. 5. The degree of power it has, as evidenced by its market share and ease of entry into the market. 6. The deliberateness of the contravention and the period over which it extended. 7. Whether the contravention arose out of the conduct of senior management or at a lower level. 8. Whether the company has a corporate culture conducive to compliance with the Act, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention. 9. Whether the company has shown a disposition to co-operate with the authorities responsible for the enforcement of the Act in relation to the contravention. Those observations are both an elaboration of the terms of s 76(1) itself and directed to the legislative context set forth in the 1974 Act. Comparable principles have also been applied when assessing penalties under the Superannuation Industry (Supervision) Act : Australian Prudential Regulation Authority v Derstepanian [2005] FCA 1121 , 60 ATR 518 ; Australian Prudential Regulation Authority v Holloway [2000] FCA 1245 , 45 ATR 278. 25 In Minister for the Environment and Heritage v Greentree (No 3) [2004] FCA 1317 , 136 LGERA 89 Sackville J reviewed the authorities and likewise concluded that the specific legislative context in which a penalty is being sought must obviously prevail. His Honour was there considering the Environment Protection and Biodiversity Conservation Act 1999 (Cth). Obviously enough, for example, the degree of market power is a consideration likely to be highly relevant to a penalty for a contravention of Pt IV of the TP Act, but is not likely to be relevant to the imposition of a penalty under the EPBC Act. Similarly, the question of a corporate culture may not necessarily have relevance to proceedings under the EPBC Act, although whether a contravener has taken remedial action to minimise environmental damage may be significant on the question of penalty. On the other hand, there may be circumstances relevant to proceedings under the EPBC Act that have no relevance to proceedings under the TP Act. In the end, while the statutory criteria must of course be taken into account, each case must depend upon its own unique circumstances. His Honour's decision was affirmed on appeal: Greentree v Minister for Environment and Heritage [2005] FCAFC 128 , 144 FCR 388. The application by the trial judge of the " principles " he identified does not appear to have been the subject of debate on appeal: [2005] FCAFC 128 at [51] ---[57]. 26 Also of general relevance to most (if not all) civil penalty provisions is the significance that a pecuniary penalty may have for deterrence upon both the current offender and others: cf Trade Practices Commission v CSR Ltd (1990) ATPR 41-076 ; Australian Competition & Consumer Commission v D M Faulkner Pty Ltd [2004] FCA 1666 at [53] per Bennett J; Australian Competition & Consumer Commission v Gullyside Pty Ltd [2005] FCA 1727 at [34] per Kiefel J; Australian Competition & Consumer Commission v High Adventure Pty Ltd [2005] FCAFC 247 at [11] ; Australian Competition & Consumer Commission v Australian Safeway Stores Pty Ltd (No 4) [2006] FCA 21 at [15] per Goldberg J. A " civil penalty ", it has been said, " needs to be sufficiently high to deter contravention by others, but not so high as to be oppressive ": Vivian v Fitzgeralds [2007] FCA 1602 at [29] per Logan J. An apparent limited capacity of a respondent to pay cannot mitigate against the need for an appropriate pecuniary penalty to be applied: Australian Communications and Media Authority v Clarity1 Pty Ltd (No 2) [2006] FCA 1399 at [41] , [2006] FCA 1399 ; 155 FCR 377 at 386---7 per Nicholson J. See also: Beaton-Wells C, 'Recent corporate penalty assessment under the Trade Practices Act and the rise of general deterrence' (2006) 14 CCLJ 65; Yeung K, 'Quantifying Regulatory Penalties: Australian Competition Law Penalties in Perspective' (1999) 23 Melb Univ L Rev 440 (particularly at 468---74). 27 Although the form of words set forth in other legislative provisions may be the same or comparable to those employed in the 1989 Act, the legislative mandate that the Court " must have regard to all relevant matters " in s 42Y(3) assumes obvious importance. It is that mandate which directs attention to those more specific matters which can only be discerned from an analysis of the 1989 Act itself. Of central importance in identifying those matters which are " relevant " -- and which must therefore be taken into account -- are the objects and purposes of the 1989 Act. All of these matters place emphasis upon an important public interest in maintaining the integrity of the legislative regime in respect to therapeutic products. 29 These matters, it is considered, emerge from a proper construction of the Act itself. They are only reinforced by a recognition that s 42Y was inserted by way of an amendment effected by the Therapeutic Goods Amendment Act (No 1) 2006 (Cth). The inclusion in the act of civil penalties, alongside criminal penalties, will allow for an alternative and quicker process for dealing with a wide range of legislative breaches. Civil penalties are expected to be more effective in deterring and preventing non-compliance with regulatory requirements by body corporates, who represent the bulk of those regulated under the Therapeutic Goods Act 1989 and regulations. Higher penalty levels attach to civil penalties because they are designed to provide adequate incentives, especially in relation to well-resourced corporate entities, for deterring breaches of regulatory requirements under the act. The inclusion of alternative civil penalties and criminal offences is an effective strategy that has worked well under other Commonwealth legislation. 30 Prior to the commencement of the hearing on 7 October 2008, there was agreement between the parties as to the facts; but there was no agreement as to the relief to be granted. At that stage, the task of the Court was to apply the principles to such facts as were the subject of agreement and to those further facts set forth in three Affidavits filed by the Respondents and the cross-examination of those deponents. 31 It was during the course of a prolonged adjournment of that hearing and (relevantly) after the cross-examination of the Second Respondent, that the parties reached substantial agreement as to the relief which they considered satisfactory. That agreement in broad terms embraced the making of appropriately drafted declarations; the imposition of a civil penalty upon the Respondents jointly in the sum of $100,000; the forfeiture of the imported goods; and an agreement that the Respondents pay the Applicant's costs on an indemnity basis. After the hearing was adjourned, the parties submitted a revised agreement relevantly providing for the penalty to be $130,000 (payable within 42 days) and submitting a form of a proposed declaration. AGREEMENT AS TO PENALTY: THE ROLE OF THE COURT? It is the responsibility of the Court to determine whether a penalty is " appropriate ". But effects upon the functioning of markets, and other economic effects, will generally be among the most significant matters to be considered as relevant, so that the Court is likely to be assisted greatly by views put forward by the Australian Competition and Consumer Commission, or by economists called on behalf of the parties. Since the decision in Trade Practices Commission v Allied Mills Industries Pty Ltd [(1981) 60 FLR 38], it has been accepted that both the facts, and also views about their effect, may be presented to the Court in agreed statements, together with joint submissions by both the Commission and a respondent as to the appropriate level of penalty. Because the fixing of the quantum of a penalty cannot be an exact science, the Court, in such a case, does not ask whether it would without the aid of the parties have arrived at the precise figure they have proposed, but rather whether their proposal can be accepted as fixing an appropriate amount. There is an important public policy involved. When corporations acknowledge contraventions, very lengthy and complex litigation is frequently avoided, freeing the courts to deal with other matters, and investigating officers of the Australian Competition and Consumer Commission to turn to other areas of the economy that await their attention. At the same time, a negotiated resolution in the instant case may be expected to include measures designed to promote, for the future, vigorous competition in the particular market concerned. These beneficial consequences would be jeopardised if corporations were to conclude that proper settlements were clouded by unpredictable risks. A proper figure is one within the permissible range in all the circumstances. The Court will not depart from an agreed figure merely because it might otherwise have been disposed to select some other figure, or except in a clear case. It appears to us that the authorities in both Australia and New Zealand have provided unanimous support for the approach we have outlined... They approved the general acceptance of a "negotiated settlement", reserving for further consideration only the case where a compromise was based, not on considerations bearing on the quantum of the penalty, but on doubts or difficulties attending the proof of the contravention. In Simsmetal [Trade Practices Commission v Simsmetal Ltd [1996] ATPR 41 ,510], Lee J, in approving agreed penalties, said (at 41,512) that "the approach adopted by the parties in fixing (the figures put to the Court) is not dissimilar to the approach that would have been adopted by the Court had it been necessary for the Court to undertake the penalty fixing exercise itself", and that he agreed with the approach of Lockhart J in another case of refraining from "stating whether the penalties to which the parties have agreed are the size of [those] which the Court itself would have imposed". I propose to endorse it. It is not done by the application of a formula, and, within a certain range, courts have always recognised that one precise figure cannot be incontestably said to be preferable to another. See also: Australian Competition and Consumer Commission v Midland Brick Co Pty Ltd [2004] FCA 693 at [15] ---[18], [2004] FCA 693 ; 207 ALR 329 at 332---3 per Lee J; Australian Competition & Consumer Commission v FChem (Aust) Ltd [2008] FCA 344 at [22] ---[27] per Cowdroy J. These comments were obviously directed to the specific statutory provisions and objectives of the 1974 Act. 35 But, and as noted by the Full Court in Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 at [59] ---[79] by Branson, Sackville and Gyles JJ, there have been decisions which " have expressed reservations about the approach taken in NW Frozen Foods ". In Mobil Oil a pecuniary penalty was sought in respect to a contravention of s 10 of the Petroleum Retail Marketing Sites Act 1980 (Cth). 36 That question was answered: " No, but the reasons in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134 ; (1996) 71 FCR 285 disclose no error of principle ". (ii) Determining the quantum of a penalty is not an exact science. Within a permissible range, the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another. (iii) There is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy. Accordingly, when the regulator and contravenor have reached agreement, they may present to the Court a statement of facts and opinions as to the effect of those facts, together with joint submissions as to the appropriate penalty to be imposed. (iv) The view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty. In particular, the views of the regulator on matters within its expertise (such as the ACCC's views as to the deterrent effect of a proposed penalty in a given market) will usually be given greater weight than its views on more "subjective" matters. (v) In determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case. Where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so. (vi) Where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court's view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range. As Jeremy Thorpe points out, a related advantage is that the savings in resources can be used by the regulator to increase the likelihood that other contraveners will be detected and brought before the courts. This has the effect of increasing deterrence which is one of the principal justifications, if not the only justification for imposing civil penalties under the TP Act or the Sites Act: J Thorpe, "Determining the Appropriate Role for Charge Bargaining in Pt IV of the Trade Practices Act" (1996) 4 Comp & Cons LJ 69, at 72---74. ... [54] Secondly, the sixth proposition drawn from the reasoning in NW Frozen Foods does not mean, in our opinion, that the Court must commence its reasoning with the proposed penalty and limit itself to considering whether that penalty is within the permissible range. A Court may wish to take that approach. However, it is open to a Court, consistently with the reasoning in NW Frozen Foods, first to address the appropriate range of penalties independently of the parties' proposed figure and then, having made that judgment, determine whether the prepared penalty falls within the range. [55] Thirdly, as has been noted, the appellant in NW Frozen Foods admitted contravening the TP Act and had reached agreement with the ACCC upon the facts to be put before the Court. There was no suggestion that the admissions or statement had been tailored or modified to reflect the difficulties faced by the ACCC in proving its case. The Full Court therefore acted on the basis of clear admissions and a detailed statement of agreed facts setting out how the contraventions had occurred. ... [56] Fourthly, as the Full Court in Australian Competition and Consumer Commission v Ithaca Ice Works Pty Ltd [2002] ATPR 41-851 , has pointed out, the regulator should always explain to the Court the process of reasoning that justifies a discounted penalty. ... ... [58] Fifthly, there is nothing in NW Frozen Foods that is inconsistent with any of the following propositions: (i) The Court, if it considers that the evidence or information before it is inadequate to form a view as to whether the proposed penalty is appropriate, may request the parties to provide additional evidence or information or verify the information provided. If they do not provide the information or verification requested, the Court may well not be satisfied that the proposed penalty is within the range. (ii) If the absence of a contradictor inhibits the Court in the performance of its duties under s 76 of the TP Act, s 13 of the Sites Act, or similar legislation, it may seek the assistance of an amicus curiae or of an individual or body prepared to act as an intervenor under FCR, O 6 r 17. (iii) If the Court is disposed not to impose the penalty proposed by the parties, it may be appropriate, depending on the circumstances, for each of them to be given the opportunity to withdraw consent to the proposed orders and for the matter to proceed as a contested hearing. See: Australian Competition & Consumer Commission v Admiral Mechanical Services Pty Ltd [2007] FCA 1085 at [13] ---[18] per Nicholson J. Most recently, it has been said that the " upshot of the authorities is that the Court should not depart lightly from a joint position put forward by the parties. The inquiry to be undertaken is not whether the Court would have arrived at the same figure as the parties, but whether the proposal fixes an appropriate amount 'within the permissible range' of penalties that might properly be imposed ": Australian Competition & Consumer Commission v Oobi Baby Pty Ltd [2008] FCA 1488 at [9] per Finkelstein J. See also: Beaton-Wells C, 'Judicial Scrutiny of Penalty Agreements to Increase' (2005) 13 TPLJ 59. 37 In the present proceeding it is considered that the principles expressed in NW Frozen Foods and Mobil Oil are equally applicable to a proceeding in which a civil penalty is sought under the Therapeutic Goods Act and where an agreement has been reached as between the Regulator and those against whom the penalty is sought. 38 Agreement between the parties as to both those facts relevant to a conclusion as to contravention of a civil penalty provision, and the quantification of any penalty to be imposed, is a course which has long been embraced (and encouraged) by this Court in respect to other statutory regimes. It is a course which it is considered should now also be embraced (and encouraged) in the context of the Therapeutic Goods Act . 39 Such a course may, in an appropriate case, avoid the necessity for prolonged, complex and lengthy litigation and may also usefully serve as a means whereby this Court may be informed of that which is relevant. The procedural difficulties potentially to be encountered in other statutory contexts have already been the subject of comment. See: Spender P, 'Negotiating the third way: Developing effective process in civil penalty litigation' (2008) 26 C&SLJ 249. In the present proceeding, and in the specific context of the 1989 Act, there was (for example) agreement as to the ingredients of the goods imported. In the absence of agreement, there was the potential for evidence as to those ingredients being the subject of contested evidence, including expert evidence. The potential for complex hearings under the current legislation is equally as real as it is in other statutory contexts. It is certainly not a theoretical consideration. 40 The use of civil penalties as a " quicker process for dealing with a wide range of legislative breaches " was obviously a matter in the mind of the Minister when securing the passage of the 2005 amending Bill. 41 Part of the agreement in the present proceeding, which has avoided potential difficulties and complexities, is that the First and/or Second Respondent pay a penalty in the revised sum of $130,000. The question remains as to whether the Court considers that such a sum is " appropriate " within the meaning of s 42Y(2). As was recognised by Burchett and Kiefel JJ in NW Frozen Foods , " the quantum of a penalty cannot be an exact science ": [1996] FCA 1134 ; (1996) 71 FCR 285 at 290. 42 The requirement for the Court itself to be satisfied as to the appropriateness of a penalty is a responsibility which ultimately derives from s 71 of the Commonwealth of Australia Constitution Act and is not a responsibility which can be circumscribed by private agreement: cf Australian Competition & Consumer Commission v Hobie Cat Australasia Pty Ltd [2008] FCA 402 at [19] per Finn J. And in discharging that responsibility in the context of the Therapeutic Goods Act the Court, as it is in the context of the Trade Practices Act when considering whether to make an order by consent, " is not merely giving effect to the wishes of the parties, it is exercising a public function and must have regard to the public interest in doing so ": cf Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc [1999] FCA 18 at [18] , [1999] FCA 18 ; 161 ALR 79 at 86 per French J. 44 Prior to the evidence of the Second Respondent's son, Mr John Jones, the Secretary had submitted that an appropriate quantification of the civil penalty for Pagasa Australia Pty Ltd was between $100,000 to $200,000. That quantification of penalty was previously said to take into account a number of factors, including the fact that the maximum penalty should be reserved for the most serious of offences and that the penalty proposed was approximately 1.8% to 3.6% of the maximum that could be imposed. 46 Those facts and admissions are considered to be a sufficient basis upon which the Court can also be satisfied that the Second Respondent, Ms Jones, contravened s19D(1)(a)(i) within the last 6 years (s 42Y(1)) and that that provision is a " civil penalty provision " for the purposes of s 42Y(2). Those facts and admissions are also considered to be a sufficient basis upon which the Court would also have been satisfied that the Second Respondent had also contravened s 54B(3). 47 The Secretary previously submitted, again prior to the evidence of Mr John Jones, that an appropriate penalty in respect to Ms Jones was in the range of $50,000 to $100,000. In particular, it would be of assistance to the Court, particularly where there are other proceedings pending, to hear submissions on the range of appropriate penalties and the discount which it is proposed should be allowed to take into account the level of co-operation afforded by the offender. ... The figure of $100,000 was such that submissions were sought from both Counsel. The caution previously expressed by Lockhart J, and other judges of this Court, as to the Court refraining from stating whether the penalty to which the parties have agreed was the same as that which the Court would have imposed, is nevertheless heeded. 49 Although not an " exact science ", and having had the benefit of oral submissions, the more recently proposed penalty of $130,000 in the circumstances is considered to be within the " permissible range " and the Court should give effect to the agreement as reached between the parties. A penalty of $130,000 is neither sufficiently small so as not to act as a deterrence nor so high as to be oppressive. Notwithstanding the prior agreement to the facts as set forth in that Statement, in cross-examination the Second Respondent maintained that only two of the goods were common to both the prosecution in May 1998 and the seizure in February 2007. For present purposes it matters not whether the Statement or the evidence of the Second Respondent is accepted. 51 In the absence of explanation from the Respondents, and none was provided, it is considered that such facts as are set forth in the Statement of Agreed Facts only establish a contemptuous disregard of the requirements imposed by the 1989 Act. No finding can be made that there were intervening contraventions as between 1998 and 2007. But a finding can be made that after the events of 1998 there was no compliance program put in place by the Respondents in order to give content to the " one last chance " which was sought by the Second Respondent. The only evidence of any attempt to inform the Court as to any steps being put in place to ensure compliance was the tender of an undated " Product and Ingredient Verification System ". That document did contemplate tasks being performed of liaising with the Therapeutic Goods Administration and performing a " final validation and verification of all incoming shipments against the list of prohibited items ". The " implementation schedule " that formed part of the document set forth the commencement date as being May 2008. Presumably there was no counterpart program prior to that date and the present program was only instituted subsequent to the commencement of the present proceeding in December 2007, presumably out of some final recognition on the part of the Respondents that some attempt to ensure compliance was now necessary. 52 The Second Respondent filed an Affidavit and was cross-examined. That cross-examination, it was properly accepted by Counsel on her behalf, had not progressed favourably -- at least from her perspective. The evidence given during that cross-examination, and there was no re-examination, did not provide any reason to question the facts as agreed or the inferences otherwise available to be drawn from the Statement of Agreed Facts . Her Affidavit as to her income, for example, was less than satisfactory. She disclosed her income derived from the First Respondent, but not other income. And yet she resisted the proposition that she had so stated her income so as to potentially derive a lower penalty being imposed. Ms Jones also stated that she had ceased importing goods at a particular point of time and yet her Affidavit clearly disclosed those goods being imported, albeit at minimal levels. Her explanation as to what she intended to convey to the Regulator by her correspondence in November 1997 was also unpersuasive. Although her Counsel resisted a finding being made that she had not been truthful in some of the answers she had provided in cross-examination, he again properly accepted that such an inference could be made. Counsel's preferred course was to suggest that an alternative characterisation of those answers may have been more accurately described as but uncertainty or confusion or an attempt by the Second Respondent to place the " best possible light " on her evidence. It is unnecessary to further address Ms Jones' evidence other than to observe that the penalty as agreed would not have been accepted by the Court had the available materials been confined to the Statement of Agreed Facts and her Affidavit and oral evidence. 54 There is considered to be considerable importance in fixing a penalty which is both a deterrent to the Respondents and a more general deterrent to others. The previous fine that was imposed in 1998 was obviously not sufficient in itself to ensure that there was no subsequent contravention by the First Respondent. Indeed, it would appear that the details of the May 2008 conviction assumed such little importance to the Respondents that details as to the conviction were not retained but " thrown out " with other papers after a period of seven years. 55 For the purposes of s 42Y(3)(b) , it may finally be noted, the Secretary does not maintain that there has been " any loss or damage suffered as a result of the contravention ". But, as was pointed out by Olney J in Trade Practices Commission v ICI Australia Operations Pty Ltd [1991] FCA 527 ; (1991) 105 ALR 115 in the context of pecuniary penalties being sought under s 76 of the Trade Practices Act for resale price maintenance, " an absence of loss or damage is not a mitigating factor ". The Act also requires that regard be had to any loss or damage suffered as a result of the act or omission. In the facts of the present case there appears to be no basis upon which any loss or damage can be identified. Whatever may have been the circumstances that induced all other Victorian distributors to agree to maintain retail prices at the levels nominated by ICI, it is the conduct in relation to MRW and Heinrich O'Loughlin which is the subject of these proceedings. Nothing has been said to indicate that either of these companies, nor indeed any of their customers, suffered loss or damage by the attempt to induce them to maintain a minimum price. However, I do not think that the absence of loss or damage is necessarily a mitigating factor. In a case where the breach of the Act is an attempt to induce a reseller to impose a minimum price for goods supplied to the reseller, the question of loss or damage will rarely, if ever, arise. The Act does not distinguish in terms of culpability between the various types of conduct which constitute the practice of resale price maintenance. The same conclusion was also reached by Nicholson J in Australian Communications and Media Authority v Clarity1 Pty Ltd (No 2) [2006] FCA 1399 at [29] , [2006] FCA 1399 ; 155 FCR 377 at 384 when considering s 24(2) of the Spam Act 2003 (Cth) . The same conclusion should also be reached in respect to s 42Y(3) of the 1989 Act now under consideration. 56 Although there may be no " loss or damage " in the present proceeding which may be quantified in terms of monetary value, of comparable importance is the fact that the conduct of both Respondents undermines the utility and effectiveness of a fundamental objective of the 1989 Act. That Act creates a Register: s 9A. It is that Register which records therapeutic goods which have been shown to be safe for human use or consumption. Any departure from the registration process only has the potential to expose consumers to risk. Counsel for the Secretary quite properly accepted that there was no evidence that the goods in question in the present proceeding posed any risk to public health or safety; the risk was confined to undermining the integrity of the registration process. 57 But the bastion in which Counsel for the Respondents justifiably sought refuge was the co-operation of the Respondents in the conduct of the present proceeding and the evidence of the Second Respondent's son, Mr John Jones. Considerable weight should be given to both of those factors when considering the agreement as reached between the parties. 58 Mr John Jones was one of the other deponents to the two further Affidavits as read on behalf of the Respondents. The remaining deponent, who was also briefly cross-examined, was the husband and father, Mr Peter Jones. Mr John Jones, it should briefly be noted, is a person trained as a Food Technologist and a person now employed full-time by the First Respondent, Pagasa Australia Pty Limited. His qualification in therapeutic goods was limited, but that limitation was readily accepted by him. He had attended one seminar on therapeutic goods and was attempting to inform himself as to the requirements imposed by the legislation. He was the person now entrusted with the responsibility of ensuring future compliance with the Therapeutic Goods Act and was accepted by Counsel for the Secretary as somebody in whom some level of confidence could be reposed to henceforth ensure that the company complied with its obligations. The deficiencies in the prior means implemented by the First Respondent to ensure compliance, if indeed there were any real means which had been put in place, was also accepted by Counsel for the Respondents, as was the fact that the steps put in place as recently as August 2008 were belated. 59 It is Mr John Jones' involvement -- and only his involvement -- in the conduct of the business of the First Respondent that provides a level of comfort that there will be future compliance. The decision that the sum of $130,000 is an " appropriate " penalty has necessarily taken into account his evidence and the fact that there was a Statement of Agreed Facts filed and, ultimately, agreement as to the relief to be granted. CONSENT TO FORFEITURE? The making of an order that a civil penalty be payed is thus a condition precedent to the exercise of the discretionary power, but not a necessary reason in itself for a further order to be made that the goods in issue be forfeited. 61 The conferral of a discretion by s 54(3) stands in contrast to other statutory regimes which more simply provide that identified categories of goods " shall be forfeited to the Crown ": eg, Customs Act 1901 (Cth), s 229(1) ; Excise Act 1901 (Cth), s 116(1). Section 229, it has been said, " gives rise to an immediate forfeiture of affected goods, without the need for any specific act on the part of Customs or the courts ": Pellegrino v Director of Public Prosecutions (Cth) [2008] NSWCCA 17 at [63] , 243 ALR 556 at 571 per Basten JA (Hidden and Barr JJ agreeing). See also: Judiciary Act 1903 (Cth), s 85. Some provisions, such as s 261A of the Migration Act 1958 (Cth), provide that goods " are forfeited to the Commonwealth ". That section is contained within Part 2 Division 13A to the 1958 Act, a Division headed " Automatic forfeiture of things used in certain offences ". Forfeiture effected by s 261A nevertheless remains " contestable ": Tran v Commonwealth [2008] FCA 901 , 103 ALD 290. Many other instances can also be provided of Commonwealth and State legislatures authorising forfeiture of goods: eg, Proceeds of Crimes Act 2002 (Cth); Confiscation of Proceeds of Crime Act 1989 (NSW); Confiscation Act 1997 (Vic). See also: Director of Public Prosecutions (Cth) v Mylecharane [2007] NSWSC 1174 , 215 FLR 18; Director of Public Prosecutions (Vic) v Nikolaou [2008] VSC 111 at [24] . 62 Statutory provisions operating so as to effect an " automatic forfeiture " may be " draconian " and may be a reason for construing such provisions in a strict manner: Murphy v Farmer [1988] HCA 31 ; (1988) 165 CLR 19. In the course of importing a motor vehicle into Australia an answer to a question on a customs form was there provided by the Respondent which was wrong, but not deliberately or intentionally so. The majority, Deane, Dawson and Gaudron JJ, construed the term " false " so as to mean purposely, deliberately or intentionally untrue. The effect of the penalty of automatic forfeiture under s 229(1)(i) can be devastating and quite disproportionate in that it applies regardless of the value of the goods or the importance or effect of the wrong statement which was made. 63 In the present statutory context there is no provision for automatic forfeiture but rather the conferral of a discretion. No question arises as to whether the " seizure " of the imported goods effects an " automatic " forfeiture of those goods to the Commonwealth. Whatever may be the effect of other statutory provisions as to forfeiture, the legislative scheme set forth in the Therapeutic Goods Act clearly contemplates that goods are not to be forfeited pursuant to s 54(3) unless either of the matters set forth in s 54(3)(a) or (b) are satisfied and this Court, in the exercise of its discretion, makes an order that the goods be forfeited. 64 The present difficulty is to determine the criteria by reference to which that discretion is to be exercised. 65 At a very general level, the discretion should be viewed as but one of the means whereby compliance with the Therapeutic Goods Act may be promoted. And compliance includes the deterrent effect that an order for forfeiture may achieve. Forfeiture of goods, if ordered, may occasion considerable financial hardship -- but that is a necessary consequence of securing compliance. 66 No submission was advanced on behalf of either of the Respondents that the form of an order that the Respondents pay a combined penalty of $130,000 did not satisfy the requirements of s 54(3)(b) and thereby denied to the Court the power to make an order for forfeiture. An exercise of discretion should not be " disproportionate " to the facts and circumstances of an individual case or the value of the goods imported. In short, other than the potential for the Second Respondent to use the imported goods personally, she cannot export the goods back to the country whence they came or even give the products away. 68 But it is nevertheless considered that care should be taken when exercising the discretion conferred by s 54(3) in placing too much weight upon those matters which are but a consequence of the manner in which the terms of the Act themselves otherwise operate. If goods cannot be exported or supplied, for example, that is but a consequence of the operation of s 19D; such facts alone cannot dictate the manner in which the discretion is to be exercised. To so conclude may substantially confine the ambit of the discretion conferred and convert the discretion into an almost inevitable consequence of an inability (for example) to export. If the conditions precedent to the exercise of the discretion are satisfied, the discretion conferred by s 54(3) remains otherwise unconfined. 69 But where in a particular case there has been a deliberate flouting -- or at the very least, a reckless disregard -- of the registration process, as it is considered has occurred in the present proceeding, it may well be that the discretion should more readily be exercised to order forfeiture. 70 Moreover, the exercise of the discretion to order forfeiture necessarily comes after a decision has been made to order the imposition of a pecuniary penalty. But a consideration as to the making of the two orders cannot completely be separated. It is considered to be also of relevance when exercising the discretion conferred by s 54(3) to take into account the quantum of the penalty to be imposed. The imported goods in the present proceeding may not be of any use to anyone other than the Second Respondent, but an order that they be forfeited does impose an additional financial consequence upon the Respondents. They have presumably paid their supplier and will be denied the benefit of such profits as would have been received on sale in Australia. 71 The fact that the Respondents consent to an order of forfeiture is also of relevance to the exercise of the discretion -- but consent is not a determining factor. The discretion remains to be exercised in accordance with law and not in accordance with the wishes of the parties. The fact of consent may, however, mean that in many cases the Court would exercise its discretion in the manner that has been agreed. But the Court in all cases must exercise the discretion by reference to the objects and purposes for which that discretion has been conferred. It was not understood that any of the parties contended that their consent to an order for forfeiture should dictate the manner in which the discretion was to be exercised; nor could such a contention have been advanced. 72 The factors to be taken into account need not presently be identified with any further precision and should be left to be determined by reference to future proceedings. Much will necessarily depend upon the circumstances of any individual case. In the present proceeding there were no detailed submissions as to the manner in which s 54(3) was to be construed or applied. It is thus prudent to express no more than tentative views as to the ambit of the discretion there conferred. It is unnecessary to go beyond reaching a state of satisfaction in the present proceeding that the occasion for the exercise of the discretion has arisen and that it would be a judicial exercise of that discretion to order forfeiture. 73 In the circumstances of the present case, it is considered that an order should be made pursuant to s 54(3) for the forfeiture of the goods imported in February 2007. DECLARATORY RELIEF: CONSENT? The power conferred is a discretionary power which is not to be limited by the laying down of rules as to the manner of its exercise: Ainsworth v Criminal Justice Commission [1992] HCA 10 ; (1992) 175 CLR 564 at 581---2. It is a discretionary power which "[i]t is neither possible nor desirable to fetter ... by laying down rules as to the manner of its exercise. " However, it is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have "a real interest" and relief will not be granted if the question "is purely hypothetical", if relief is "claimed in relation to circumstances that [have] not occurred and might never happen" or if "the Court's declaration will produce no foreseeable consequences for the parties" (citations omitted). 75 The factual basis upon which a declaration may be made, however, seems to have evolved over time. Even quite recently it has been observed that the granting of declaratory relief has " always been regarded with much respect... and ought not to be made on admissions of the parties or on consent, but only if the court was satisfied by evidence ": Wallersteiner v Moir [1974] 1 WLR 991 at 1029 per Buckley LJ. 76 But there has been a departure from such a confined view, at least in a statutory context where declaratory relief is sought as an adjunct to an order imposing a pecuniary penalty or involving a matter of public interest. Order 35A itself imposes no constraints upon the relief sought. Refusals to make declarations in cases of default are based upon a practice, not a rule of law. The practice is one of long-standing and might be seen as derived from views about litigation which pre-date more recent concerns expressed by the courts as to the costs of unnecessary litigation, the management of cases and efficiency overall. Views expressed in older cases may not take account of the increase in the use made of declaratory orders in developing areas of law which may involve matters of public interest. A caution with respect to the use of older authority is made in the White Book Service 2003 to the English Civil Procedure Rules 1998 (40.20.2). [59] It may no longer be correct to have a practice which operates as a prohibition in every case of default and preferable to consider the circumstances pertaining to the particular case and the purpose and effect of the declaration. Millett J made declaratory orders in Patten v Burke Publishing Co Ltd [1991] 1 WLR 541; [1991] 2 All ER 821 where justice to the plaintiff required it. The order, however, operated principally inter partes and it might be doubted whether it would be of interest to other persons. Cases such as this, involving the protection of consumers, are of public interest. Declarations are often utilised in such cases to identify for the public what conduct contributes a contravention and to make apparent that it is considered to warrant an order recognising its seriousness. It is however important that there be no misunderstanding as to the basis upon which they are made. This could be overcome by a statement, preceding the declarations, that orders are made: "upon admissions which [the respondent in question] is taken to have made, consequent upon non-compliance with orders of the court". An appeal has been dismissed: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2007] FCAFC 146 , 244 ALR 300. Her Honour's views as to the ability of the Court to grant declaratory relief upon the basis of deemed admissions has since been followed and applied by Mansfield J in Bank of Kuwait and the Middle East v Ship MV 'Mawashi Al Gasseem" (No 2) [2007] FCA 815 at [7] ---[16], [2007] FCA 815 ; 240 ALR 120 at 122---5. 77 Declarations have thus been made by consent by this Court in the context of a party admitting a contravention of the Trade Practices Act : eg, Australian Competition & Consumer Commission v Info4PC.com Pty Ltd [2006] FCA 1534 at [10] per Nicholson J. The authorities and the approach of this Court to the making of declarations by consent have also recently been usefully summarised by Reeves J in Australian Competition & Consumer Commission v EDirect Pty Ltd [2008] FCA 65 at [20] ---[30], ATPR 42-216. See also: Australian Competition and Consumer Commission v Goldy Motors Pty Ltd [2000] FCA 1885 at [30] , [34], ATPR 41-801. 78 In the present proceeding there has been agreement as to the facts, admissions made, and consent to the making of declaratory relief. The Court, it is considered, should not impede an expeditious resolution of a proceeding -- including a resolution by way of consent to declaratory relief -- but should remain cautious. 79 It is considered that declaratory relief may be granted, and should in the circumstances of the present proceeding be granted, upon the basis of the Statement of Agreed Facts. Albeit falling short of a judicial resolution of facts based upon evidence, s 21 of the Federal Court of Australia Act confers ample power to grant declaratory relief upon such a Statement. The granting of declaratory relief in such circumstances is not the resolution of an abstract or hypothetical question but rather an effective means of resolving a contravention of the 1989 Act, that contravention being a matter of public significance. Nor could it be questioned but that the Secretary has a " real interest " in seeking that relief. 81 As discussed with Counsel during the hearing on 7 October 2008, the course then proposed to be followed was to initially deal with the question as to whether this Court should accept the agreement between the parties as an appropriate resolution of the proceeding. If that was to be the outcome, as it has been, the course then further suggested was to publish reasons and to invite the parties to draft Short Minutes of Orders to give effect to those reasons. 82 In advance of judgment being delivered today, a proposed form of orders was submitted on 15 October 2008. The form of the proposed orders -- including the form of declaratory relief -- is considered to be appropriate and declarations and orders should now be made in accordance with the orders as submitted. C.Y. The First and Second Respondents are to pay to the Commonwealth a penalty in the amount of $130,000 within 42 days. 3. The First and Second Respondents are to pay to the Applicant within 42 days indemnity costs in the amount of $68,242.75. 4. The First and Second Respondents are jointly and severally liable to pay the said amounts referred to in Orders 2 and 3 above. 5. The Relevant Goods are to be forfeited to the Commonwealth pursuant to s 54(3) of the Act. I certify that the preceding eighty-four (84) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | civil penalties relevant matters to be considered agreement as to facts and penalty need to ensure a penalty is " appropriate " scrutiny given to agreements forfeiture discretion declaratory relief therapeutic goods |
His Honour gave judgment in the absence of the applicant who did not appear at the hearing. His Honour dismissed an application for an extension of time in which to apply for leave to appeal from a judgment of a Federal Magistrate of 31 May 2006. His Honour also refused leave to appeal. The Federal Magistrate dismissed as incompetent an application for judicial review of a decision of the Refugee Review Tribunal handed down on 26 May 2005. The order made by Lander J was entered on 8 November 2006. 2 Mr Markus, appearing for the Minister, appeared to accept that as a matter of jurisdiction a single judge exercising the Court's appellate jurisdiction had power to set aside the orders such as those made by Lander J, even though they had been entered. Reference was made to the judgment of the Full Court in Wati v Minister for Immigration and Multicultural Affairs (1997) 148 ALR 578 at 585. 3 In any event, this Court has what should probably be described as an implied statutory power to set aside an order made in the absence of a party where that absence was due to no fault of the party. Support for that view is found in the judgment of the High Court in Taylor v Taylor [1979] HCA 38 ; (1979) 143 CLR 1. 4 In support of her motion of 15 November 2006 the applicant has sworn an affidavit in which she deposed that she was mistaken as to where the proceedings were to be conducted and had gone to 88 Goulburn Street, Sydney rather than the Law Courts Building in Queens Square. I infer that the applicant was informed of the proper time, date and place of the hearing (Law Courts Building, Queens Square) both by letter dated 26 September 2006 from the Australian Government Solicitor and by letter dated 21 September 2006 from the Court.. Even accepting that the applicant was mistaken as to the venue for the hearing, it cannot be said that her absence was through no fault of her own. She was informed of the correct address but failed to appear there. 5 Turning to the Federal Magistrate's decision, her Honour found as a matter of fact that the applicant had been notified on 26 May 2005 of the Tribunal's decision. Under the transitional provisions of the Migration Litigation Reform Act 2005 (Cth), the applicant was deemed to have been notified of the Tribunal's decision on 1 December 2005. Pursuant to s 477(1) of the Act, any application for a review of the Tribunal's decision had to be made within 28 days, in this case, of 1 December 2005. That period could be extended by 56 days in certain circumstances. However, after 84 days from 1 December 2005, the Federal Magistrates Court had no jurisdiction to entertain an application or an application for an extension of time. The 84 days expired on 23 February 2006 . This was the conclusion reached both by the Federal Magistrate and Lander J. It is plainly correct. No occasion therefore arises to consider whether the order of Lander J should be reopened. 7 This is not a case where the party was absent through no fault of her own. There are no exceptional circumstances warranting the reopening of the order and, in any event, the application that might arise from the reopening of the order would be doomed to fail. Accordingly, I dismiss with costs the motion filed on 15 November 2006. I order that those costs be fixed in the sum of $500. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore J. | motion to reopen judgment of single judge where applicant did not appear at hearing where judge dismissed application and refused leave on basis of no prospects of success where orders entered discussion of court's power to set aside judgment of single judge exercising appellate jurisdiction migration |
The draft Notice of Appeal seeks to challenge the orders and judgment of a Federal Magistrate given 15 July 2009 (see SZNHN v Minister for Immigration and Citizenship [2009] FMCA 702) , dismissing an application for judicial review of a decision of the Refugee Review Tribunal (Tribunal) made on 2 February 2009. The decision of the Tribunal affirmed a decision of a delegate of the first respondent (the Minister) to refuse to grant the applicant a protection visa. The Minister opposes that application for reason of futility on the basis that no error in the reasons for judgment of the Federal Magistrate has been identified and there is no other ground of appeal with any apparent prospect of success. On 17 July 2008, the applicant lodged a protection visa application (PVA) with the Department of Immigration and Citizenship. In a statement accompanying his PVA, the applicant claimed to be an active member of the Dravida Munnetra Kazhagam political party (DMK) who actively support the rights of the Dalit caste. As a result, the applicant was persecuted and assaulted by the higher castes who disapproved of his support for Dalit rights, particularly his participation in the demolition of a wall between high-caste and scheduled caste areas in a nearby village. His application was refused by a delegate of the first respondent who found that the applicant's claims were vague, unconvincing and unsubstantiated by any evidence. The delegate found, in any event, that State protection was available and that relocation was a viable alternative. [4] The applicant sought review by the Tribunal. He did not provide any additional statement or supporting documentation to the Tribunal. [5] The Tribunal invited the applicant to attend a hearing on 18 December 2008. He did so and provided the Tribunal with a copy of his passport. By letter under s.424A of the Migration Act 1958 (Cth) of 24 December 2008 the Tribunal put to the applicant information consisting of certain inconsistencies between his responses to the delegate in the Departmental interview and in his protection visa application and inconsistencies between certain independent country information and his claims. The applicant was given until 21 January 2009 to respond and advised that if he could not respond by that time he may ask the Tribunal in writing for an extension of time. On 20 January 2009 the applicant wrote to the Tribunal providing comments as requested. He claimed that he was deeply traumatised being a victim of persecution and had stress and ongoing difficulties including recollection of past incidents, confusion and memory loss. He sought forgiveness for inconsistencies between his evidence to the Department and the Tribunal and claimed that what he said in his initial statement was true and correct. [6] In its reasons for decision the Tribunal set out the applicant's claims in his application, the Departmental interview and at the Tribunal hearing as well as the s.424A letter and the response and referred to relevant country information, in particular in relation to the wall between the high caste areas and the Dalit areas. [7] In its findings and reasons the Tribunal concluded that it did not find the applicant to be credible on some key aspects of his claims. It was not satisfied that he left India because of the fear of persecution described in his application and evidence before the Tribunal. It set out inconsistencies, implausibilities and contradictions that led it to conclude that the applicant was not truthful or credible, including inconsistent evidence from him about whether he had a membership card for the DMK and his failure to provide any documentation supporting that claim or his claim to have been hospitalised. In those circumstances the Tribunal was not satisfied that the applicant was a member of the DMK. It was of the view that if the applicant had been assaulted as claimed and admitted to hospital and treated for two days he would have provided such documentation. It was not satisfied that he was assaulted or treated for an assault as claimed. [8] The Tribunal also had regard to inconsistencies between the applicant's description of the caste wall and the independent country information in relation to when the wall was erected and its dimensions. The applicant had stated that the wall was erected in 2008. Country information stated that it was erected in 1989 or 1990 and that it was 12 feet high and 600 metres long. The applicant claimed it was about his height (5ft 8 inches) and 200 --- 300 feet long. The Tribunal considered the applicant's response when these issues were raised with him during the hearing. The Tribunal found the applicant's explanations relating to this incorrect information (that the police would not allow him to go there and that he was only interested in the demolition) to be unpersuasive. [9] It also had regard to inconsistencies in relation to whether and how the applicant had reported a claimed assault to police and as to what occurred in the incident when he claimed that a group of people had come to his family home after he had left India. The Tribunal was not satisfied that the applicant's wife was approached or questioned or harmed. The Tribunal also had regard to the applicant's evidence that he continued to live at his home address prior to leaving India and continued working for the party after a claimed assault. It was of the view that if he had been in fear as claimed, he would not have continued to live at his home address in India. [10] These matters collectively led the Tribunal to find that the applicant was not credible. It rejected his claim he was a member of the DMK in India and therefore all the claims that flowed from that claim, including any claims in relation to involvement in demolition of the wall, injury, assault and warnings and that he departed India because of a fear of persecution. [11] The Tribunal considered the applicant's claim in response to the s.424A letter that he was suffering from stress, was deeply traumatised and had difficulty recalling what had happened. However it also had regard to the fact that when it had asked the applicant questions in the hearing it would expect him to answer in relation to the wall, it was evident that he knew very little about it. It was of the view that his lack of knowledge in relation to the wall was not because he was traumatised or had difficulty recalling, but because he had not seen it and had not been involved in activities in relation to the wall or its destruction. It was the Tribunal's view that the inconsistencies arose because the applicant had forgotten what he mentioned in his protection visa application and in his Departmental interview. The Tribunal was not satisfied that the applicant had a well-founded fear of persecution for a Convention reason if he returned to India. On 19 May 2009, the applicant filed an amended application. The amended application contained two grounds of review. This is apparent from the applicant's written statement, the delegate's summary of the interview, the applicant's response to the s.424A letter (which again referred to an attack by high caste people) and the Tribunal's account of the applicant's claims made to the delegate and also at the Tribunal hearing. [14] In any event, in its findings and reasons the Tribunal considered the applicant's claim that he was a member of the DMK party, but having rejected that claim, rejected all claims that flowed from that claim. In those circumstances, even if the applicant had raised a claim to be at risk from political opponents of the DMK, as the first respondent submitted, the Tribunal would not have been required to make a finding on that claim because it rejected the factual premise on which such a claim rested (see WAEE v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 184 ; (2003) 75 ALD 630). The RRT failed to deal with the critical matters [which] arose in the 424A letter by calling for a second hearing. In oral submissions the applicant contended that he had asked the Tribunal at the Tribunal hearing for a second hearing and that had he had that hearing he would have been able to provide documents. [16] Dealing first with the ground as it appears in the amended application, as set out above, the s.424A letter raised a number of inconsistencies between the applicant's claims in his protection visa application, the Departmental interview and at the Tribunal hearing and also inconsistencies between his claims and independent country information. However those inconsistencies do not amount to fresh determinative issues such as to trigger any obligation to invite the applicant to a further hearing under s.425 of the [2006] HCA 63 ; Act (see SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152). [17] It is apparent that, according to the Tribunal account of what occurred in the Tribunal hearing, a number of these inconsistencies were explicitly raised with the applicant at the hearing, in particular in relation to his claims about the wall and country information, whether an assault was reported to the police and whether his wife had been assaulted. [18] Other inconsistencies resulted from the applicant's responses in relation to matters such as how he lost a membership card and whether he was present when the wall was demolished. These were also matters discussed at the hearing. The fact that the Tribunal identified inconsistencies between such claims and earlier accounts is not such as to give rise to an obligation to invite the applicant to a further hearing to address such inconsistencies. To the extent that such matters were in fact information within s.424A(1) of the Act, they were put to the applicant under that section. Her Honour found no jurisdictional error was made out. The reasons given by the applicant in support of his application for extension of time are found in his affidavit filed on 11 August 2009. I did not know that I should appeal before my judgment was given. I received my judgment on 29 July 2009 therefore I thought I had 21 days from 29 July 2009. Order 52, r 15(2) provides a flexible discretion to the Court as to what will constitute a "special reason" for the grant of an extension of time. Generally, it is accepted that the following factors should be considered: the integrity of the time limits; the adequacy of the explanation for the delay; questions of prejudice to a respondent, although mere lack of prejudice is not sufficient for leave to be granted; and the merits of the substantial application. See SZMNO v Minister for Immigration and Citizenship [2009] FCA 797 and authorities referred to at [12] --- [15]. The applicant's delay in filing was short. He was apparently unsure exactly when the appeal had to be lodged. No prejudice is evident or claimed by the Minister. The question here is whether the proposed grounds of appeal disclose any prospects of success in an appeal. The applicant has filed a draft notice of appeal. The draft notice of appeal does not directly identify any error of law in the reasons for judgment of the Federal Magistrate but repeats (in substance) grounds 1 and 2 of the amended judicial review application before the Federal Magistrate. At the hearing before the Court, the applicant confirmed he intended to repeat those earlier grounds. In these circumstances it is clear that the applicant means to contend that the Federal Magistrate erred by not making those findings of law in her decision. However, in my view, no error is apparent in the reasoning of the Federal Magistrate. Her Honour explained in relation to ground 1 that the findings of the Tribunal concerning his conduct being in relation to high caste people, and in any event, that he was not a member of DMK, meant that his claim to refugee status could not succeed. I agree. In relation to ground 2, there was, as the Federal Magistrate found, no obligation to constitute a fresh hearing on the issues mentioned in the s 424A letter, as they were live issues raised at the earlier hearing. None were fresh determinative issues. As a result no error is discernible in the reasons of the Federal Magistrate or the Tribunal. The application should be dismissed with costs to be taxed, if not agreed. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. | application for extension of time to appeal federal magistrate's decision no prospect of success on an appeal application dismissed migration |
On that date the Federal Magistrates Court dismissed an application to quash a decision of the Refugee Review Tribunal of 15 December 2005. It did so pursuant to r 13.03A(c) of the Federal Magistrates Court Rules, because the applicant did not then appear. Consequently, the decision of the Federal Magistrates Court was an interlocutory judgment requiring leave to appeal under s 24(1A) of the Federal Court of Australia Act 1976 (Cth): See MLGXAL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 966. The applicant has not appeared on his motion. He has been notified of the hearing date in accordance with the Court's direction by letter to his address for service dated 13 July 2006. He applied for a fee waiver to be able to file his application. On that document he provided a mobile telephone number. Efforts to contact him at that mobile telephone number, both today and on earlier occasions by the Court, have proved unsuccessful. Not only has the applicant not appeared today and not appeared before the Federal Magistrates Court on the hearing of his application then, but he also did not appear before the Tribunal at the hearing which it fixed for him to give oral evidence and to make submissions. He did not contact the Tribunal to explain his failure to attend. One cannot help but have the suspicion that the applicant is simply using the opportunities provided to him under the law to prolong his stay in Australia. His application for a protection visa was refused, first by a delegate of the first respondent on 15 September 2005, and then by the Tribunal on 15 December 2005, in essence, because his claims were not established to the satisfaction of the initial decision-maker or the Tribunal on the material before them. As the applicant has not appeared today on his own motion, I am entitled to proceed in his absence. I propose to dismiss the application. I note that his affidavit in support of the application does not explain why he did not attend before the Tribunal, or before the Federal Magistrates Court. It appears to misconceive the power of the Federal Magistrates Court to review the decision of the Tribunal in any event, as it speaks of seeking a review of the decision concerning his protection visa application 'on its merits'. It is not the function of the Federal Magistrates Court, or of this Court, to do so. The affidavit also asserts jurisdictional error on the part of the Federal Magistrates Court in depriving the applicant of the right to be heard in person. On the material before me, which I have extracted from the relevant file of the Federal Magistrates Court, that is simply incorrect. He was given notice of the hearing before the Federal Magistrates Court. If his point concerns the hearing before the Tribunal, he was given notice of that hearing. He indicated that he intended to attend the hearing. He simply did not do so. The material before me indicates that he then did not make any contact with the Tribunal to explain the reason for his failure to attend that hearing, or to seek any other relief by way of a further hearing, before the Tribunal adjudicated upon his claim. He also asserts in that affidavit that the Federal Magistrate failed to consider that the Tribunal made a jurisdictional error by failing to understand his genuine convention-based fear of persecution. It did not do so. It simply was not satisfied of the claims upon which that asserted fear of persecution was based on the material before it. The affidavit develops that proposition in a subsequent ground, but simply in an assertive way. The picture overall is that the applicant has simply brought proceedings for a protection visa. He has not attended the Tribunal or the Federal Magistrates Court, or this Court in support of his claims, despite having been notified of them and despite having had the opportunity to do so. In the circumstances I have no hesitation in dismissing his application for leave to appeal from the decision of the Federal Magistrates Court of 28 April 2006. The applicant must pay the costs of the first respondent. | application for leave to appeal summary dismissal failure to appear migration |
I have in consequence made orders allowing the appeal setting aside the Tribunal's decision and remitting the matter to the Tribunal to be re-heard and determined according to law. I indicated at the time that I would publish my reasons at a later date. These are those reasons. 2 In essence, the appeal turns on a very narrow question. It is whether the Tribunal, on a fair construction of its brief reasons, in fact found that Mr Parry had the "condition" described as "shortness of breath" or whether shortness of breath was merely an "impairment" which was caused by another condition, i.e. "diabetes mellitus". The appeal has proceeded upon the assumption that Mr Parry suffers at least from two conditions, diabetes mellitus and chronic liver failure. 3 It is the Secretary's contention that the Tribunal found as well a third condition described as "shortness of breath" and it is in respect of this alleged finding that the questions of law founding the appeal are said to arise. While three of the four questions of law said to arise build upon this finding, it will only be necessary for me to consider whether, on a proper construction of the Tribunal's reasons, this alleged finding was in fact made. It is clear on the face of the Tribunal's reasons that the Tribunal only addressed one of the two criteria prescribed, that was s 94(2)(a). It is its failure to address s 94(2)(b) that led to the concession that was made. Because the matter must be re-determined by the Tribunal and because the Tribunal's decision has been challenged on grounds other than the failure to which I have referred above, it is appropriate that I address briefly the question whether the Tribunal did make the finding of a condition of shortness of breath contended for by the Secretary. The essence of the Secretary's challenge is that if such a finding was made the Tribunal failed properly to apply cl 4 of the Introduction to the Tables for the Assessment of Work-Related Impairment to be found in Sched 1B of the Social Security Act . The tables have statutory force: see s 39(1) of the Act. 5 To understand the significance of this it is necessary to refer in a little detail to the statutory setting. The impairments assessed are functional impairments resulting from conditions that have been fully documented and diagnosed. 8 The question posed by the assessment to be engaged in is, as indicated in clause 2 of the Introduction, "which body systems have a functional impairment due to this condition? The condition must be considered to be permanent. Once a condition has been diagnosed, treated and stabilised, it is accepted as being permanent if in the light of available evidence it is more likely than not that it will persist for the foreseeable future. This will be taken as lasting for more than two years. A condition may be considered fully stabilised if it is unlikely that there will be any significant functional improvement, with or without reasonable treatment, within the next 2 years. 6. The respondent has faintly, but unconvincingly, contended to the contrary. The mandatory requirements of those clauses cannot be ignored. A single medical condition should be assessed on all relevant Tables when that medical condition is causing a separate loss of function in more than one body system. For example, Diabetes Mellitus may need to be assessed using the endocrine (19), exercise tolerance (1), lower limb function (4), renal function (17), skin disorders (18) and visual acuity (13) tables. When using more than one Table for a single medical condition the possibility of double assessment of a single loss of function must be guarded against. For example, it is inappropriate to assess an isolated spinal condition under both the spine table (5) and the lower limb table (4) unless there is a definite secondary neurological deficit in a lower limb or limbs. The bruising to the back settled as it was a temporary thing caused by a fall on rocks. His diabetes is poorly controlled by medication, but is stable and in the Tribunal's opinion it does not warrant a point score. At the time of the application his liver condition was also stable, but was causing him symptoms and the Tribunal finds that it was correctly assessed at 10 points under Table 11.1 of the Guide to the Tables to the Assessment of Work Related Impairment and for Disability Support Pension. The concern of the Tribunal is Mr Parry's inability to work at the time of his application, which should have covered a wider range of disabilities than his diabetes and liver function. In the treating doctor's report, dated 14 June 2005, filled in by his then GP, Dr Michael Lee, the diabetes and liver problems were mentioned and Dr Lee also states, under Condition 2, point H, 'Impact on ability to function', 'poor exercise tolerance'. He stated that this disability would impact on the patient's ability to function for more than 24 months and that the condition will deteriorate. it was addressing a functional impairment caused by diabetes. The applicant was questioned in relation to activities requiring 4-5 METs and 5-6 METs. He indicated he would not be able to shovel dirt, play tennis, dig in the garden, walk slowly but steadily upstairs or push a wheelbarrow containing 20 kilograms or more. The Tribunal accepts that his shortness of breath was causing significant difficulties at the time of his application and in looking at 5-6 METs under Table 1 (which relates to 'Loss of Cardiovascular and Respiratory Function: Exercise Tolerance'), one comes up with a score of 15. Adding 15 to the 10 points given for the liver problem under Table 11.1, one comes to 25 points and the applicant therefore qualifies under section 94(1)(b). 18 The Tribunal went on to find that Mr Parry had a continuing inability to work and he found "the impairments of themselves were sufficient to prevent him doing any work within the next two years". 19 The impairments referred to here would seem to relate to the 10 point rating given for his "liver problem" under Table 11.1 and 15 points given under Table 1 under which cardio vascular and respiratory function is measured by reference to "exercise tolerance". On the basis of the comments by Dr Martin he has only very mild shortness of breath on exertion and has unlimited exercise tolerance on the flat and the poor exercise tolerance noted by Dr Lee, which he said was going to deteriorate and would last for more than 24 months, there is sufficient evidence to say the applicant was/is suffering from shortness of breath and that this will continue to get worse. The shortness of breath was there at the time of his initial application and has continued and is now substantially worse. The Tribunal therefore sets aside the decision of the Social Security Appeals Tribunal, which had affirmed the decisions of Centrelink and in its place finds the applicant qualified for a disability support pension from the time of his application on 15 June 2005. Is the Tribunal there finding conditions or is it finding impairments? Given that I have set the decision aside in any event, it is in my view appropriate to make the following observations about the Tribunal's reasons. (ii) The Tribunal's reasons appear to refer inconsistently to Mr Parry's diabetes and his liver condition as being impairments or conditions. (iii) The medical conditions that were noted at the time of the application which are of present relevance, were simply diabetes mellitus and chronic liver failure. In this context it would be surprising for the Tribunal to find a third operative condition. If its finding was that shortness of breath was a condition then, for the reason I noted earlier, the decision would have to have been set aside for that reason. There was no evidence to support the conclusion that the requirements of clauses 4, 5 and 6 of the Introduction had been satisfied. If, however, the Tribunal was referring to shortness of breath as a disability in the sense of an impairment and that the causative condition of the impairment was diabetes, the decision would not suffer the same vice. This said the reasons themselves do not readily yield up any process of reasoning which could lead to the conclusion that the impairment was caused by diabetes. I have emphasised these matters because they will require the attention of the Tribunal on the re-hearing and determination of this matter. The important part of the function of reasons is to explain to the parties why a particular outcome was reached. It is difficult to suggest that the reasons in this case have adequately performed that function. The application be allowed. 2. The decision of the Administrative Appeals Tribunal of 18 December 2006 be set aside. 3. Remit the matter to the Tribunal for redetermination according to law. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn. | appeal from administrative appeals tribunal deciding the respondent qualified for disability support pension concession that the appeal must be allowed as tribunal failed to address s 94(2)(b) social security act 1991 (cth) ambiguity in tribunal's reasons administrative law |
An ex tempore judgment was delivered in respect to two of those matters. 2 The third of the matters was reserved. This matter concerned whether or not a number of documents were privileged from production, particularly by reason of an asserted " common interest privilege ". 3 Those documents fell within the terms of a Subpoena issued to the solicitor for the Fifth Respondent and (subject to one reservation) can adequately be described as documents recording communications as between the solicitor for the Fifth Respondent and the solicitor for the First, Second and Fourth Respondents, Mr Jordan. The description of each of the documents states that the solicitors were " communicating on evidence to be used in the proceedings ". These are the documents identified as being document 2 and documents 41---55 in the Affidavit of Ms Chylek sworn on 8 August 2008. 4 The First, Second and Fourth Respondents have consented to declaratory and injunctive relief; outstanding insofar as those Respondents are concerned is an assessment as to damages (if any). Mr Jordan, it should be noted, sought to withdraw from the proceeding on 11 August 2008 and informed the Court that he was no longer instructed to appear. The Fifth Respondent denies any entitlement to relief. 5 One of the issues being pursued by the Applicants is the role in fact being played by the Fifth Respondent in this proceeding -- it being alleged that it is the Fifth Respondent who is in fact controlling the proceeding. One of the contentions similarly being pursued by the Applicants in their Further Amended Statement of Claim is the contention that the Fifth Respondent is the " controller of PCA ", the First Respondent. This is put in issue by the Defence as filed by the Fifth Respondent. 6 The Applicants contend, in summary form, that there can be no common interest privilege -- that commonality being denied principally by the admission of liability of the First, Second and Fourth Respondents. 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. Potential differences in the respective positions of parties may lead to their not having a " common interest ": eg, Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 at 410. Thus, in Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526 , no common interest privilege arose as between the Commission and entities providing witness statements to the Commission in circumstances where the Commission was asserting that those entities had been involved in breaches of the Trade Practices Act 1974 (Cth). " In that respect they each had interests which were either adverse, or potentially adverse, to each other. In such circumstances common interest privilege cannot arise as there is no common interest ": (1998) 81 FCR at 564 per Goldberg J. 8 In the circumstances of the present proceeding, it is considered that there is a sufficient common interest such that each of the documents is privileged. Common interest privilege is not a concept " rigidly defined " and it is a question of fact in each case whether there is a sufficient mutual interest: Network Ten Ltd v Capital Television Holdings Ltd (1995) 36 NSWLR 275 at 280. 9 Common to the position of the Respondents is their alleged factual involvement in the breaches of copyright being pursued by the Applicants. The fact that one or other of them has decided not to put in issue an entitlement of declaratory and injunctive relief does not otherwise deny a common involvement. All resist relief in the form of damages or an account of profits. All of the relevant Respondents also have in common a Defence asserting the illegality of the sales of the films the subject of the proceeding. And there has been no Cross-Claim filed as between any of the Respondents. 10 A " mere common interest in the outcome of litigation will be sufficient to enable any party with that interest to rely on " common interest privilege: Farrow Mortgage Services Pty Ltd (in liq) v Webb (1996) 132 FLR 466 at 472 per Sheller JA (Waddell A-JA agreeing). No submission was advanced that for a common interest privilege to be sustained there had to be such an identity of interests that the parties concerned could (had they chosen to do so) have used the same solicitor. 11 It is not considered that such a clear distinction can be drawn between those issues going to liability as opposed to quantum as is contended by the Applicants. 12 Although not of immediate relevance, s 122(2) and (4) of the Evidence Act 1995 (Cth), it may be noted, provides for circumstances in which " client legal privilege " may be lost by reason of the disclosure of evidence. 13 Nor is there considered to be anything " unfair " in maintaining the privilege otherwise attaching to such legal advice or views as were being exchanged between the solicitors for the Respondents: Network Ten Ltd v Capital Television Holdings Ltd (1995) 36 NSWLR 275. The limited exchange of views as between the solicitors on a confidential basis could not be construed as a waiver of privilege: (1995) 36 NSWLR 275 at 286. 14 There remains outstanding those documents the subject of the reservation. These documents were described as " copies of tax invoices from Tzovaras Legal to the Fifth Respondent, including detailed narration of work undertaken by Tzovaras Legal on behalf of the Fifth Respondent in relation to the proceedings, including communications between Mr Tzovaras and Mr Armenis ". This is the document of 108 pages identified in the Affidavit of Ms Chylek as falling within paragraph [4] of the Subpoena . 15 Tzovaras Legal were lawyers formerly acting on behalf of the Fifth Respondent. 16 During the course of the hearing on 11 August 2008 it emerged that agreement had substantially been reached that these documents were to be produced, with some parts of those documents redacted. Reservation was expressed by Counsel for the Applicants as to what was in fact to be redacted. Future difficulties in respect to these documents (if any) can be resolved if and when they arise. The parties are to bring in Short Minutes of Orders to give effect to these reasons at 9.30am on 20 August 2008. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | common interest privilege common interest in defence and outcome of proceeding practice and procedure |
The Emerald Passport websites are, and at all material times were, located at the URLs www.emeraldpassport.cc and www.epassportinc.com (Emerald Passport website). The Emerald Passport website promotes products which are only sold through the Internet as part of the Scheme. (collectively, the Products). The process for qualifying as a Director is set out below. The Emerald Passport website promotes income earning opportunities for Distributors. (d) There are three levels of directorship which are available to participants and aligned with each phase of the Products. Distributors must first become a Phase 1 Director, after which they may then qualify to become a Phase 2 Director, and then a Phase 3 Director. A scheme may be a pyramid selling scheme even though goods or services are offered as part of the scheme. The Court declared that Cosic Holdings breached section 65AAC of the TPA by participating in a pyramid selling scheme known as Emerald Passport. The Court also declared that Cosic Holdings' director, Mr John Cosic, was a party to that conduct. The Court has made orders which prevent Cosic Holdings and Mr Cosic from participating in similar schemes. Should you require any further information, please contact me on [insert telephone number]. The declaration was made following court action taken by the Australian Competition and Consumer Commission. Pyramid selling is where people are induced to pay money to join a scheme by the prospect that they can make money primarily by getting other people to also pay to join the schemes. The participant's success depends on the number of other people they can recruit to the scheme, and in turn the people they can recruit. Such schemes are illegal. The Emerald Passport scheme ( Scheme ) was created by Emerald Passport Inc, a company incorporated in Panama. The Scheme involved the sale of various self help products. To earn income in the Scheme, participants were required to qualify as a 'Director' which involved making an annual payment to Emerald Passport Inc and recruiting other people to the Scheme. Once qualified, a Director was entitled to a commission when they recruited new participants and received further commissions from the qualifying sales that those people made. The Federal Court found that Cosic Holdings had contravened the pyramid selling provisions of the TPA by establishing or controlling websites relating to the Scheme, printing promotional material, and receiving payments from other participants in the Scheme. The Court also declared that the company's director, Mr John Cosic, was a party to that conduct. The Court has made orders which prevent Cosic Holdings and Mr Cosic from participating in similar schemes. The Court also ordered that Cosic Holdings publish this notice and pay the ACCC's costs of the court action. What follows are the reasons for the making of these orders by consent. In that regard, the parties through their solicitors signed a statement of agreed facts dated 4 December 2009. The Court received this statement of agreed facts at the hearing of the application. As explained further below it appears to the Court that it is appropriate to regard the statement of agreed facts in determining whether or not to make orders in the proceeding by consent of the parties. The statement of agreed facts provides as follows. The applicant (Australian Competition & Consumer Commission (ACCC)) is, and was at all material times, a body corporate established by s 6A of the Trade Practices Act 1974 (Cth) (Act). The second respondent (Mr Cosic) is and was at all material times a director of Cosic Holdings. Attached to the statement of agreed facts at Sch B and C (but not reproduced in this judgment) are a Compensation Plan Diagram and Terms and Conditions from the Emerald Passport website. The parties agree that the Compensation Plan Diagram accurately represents the structure of the Scheme that is, and was at all material times, operated by Emerald Passport and described further below (Emerald Passport Scheme). Attached to the statement of agreed facts at Sch D1 to F (but not reproduced in this judgment) are screen shots from websites established by the Respondents. Those screen shots are referred to and derived from the process described in the Affidavit of Duane Andrew Collinson (sworn 18 August 2009) and are printed from the DVD that is annexure SLK01 to the affidavit of Stephen Leigh Kinnersly (sworn 18 August 2009). The parties agree that the screen shots accurately represent the content of the relevant websites. The Phase 1 Product consists of eight Internet based, multi-module audio visual presentations entitled 'Real Estate', 'Negotiating', 'Forex', 'Anatomy of Success', 'Mastering Money', 'Success Fundamentals', 'Entrepreneur' and 'Wealth Fundamentals'. (ii) The 'Wealth & Self' conference which is sold to consumers for US$5,995 (Phase 2 Product). (iii) The 'Millionaires Club' conference which is sold to consumers for US$14,995 (Phase 3 Product). (collectively, the Products). (b) To purchase a Product, a person must pay the respective Product price to a participant in the Emerald Passport Scheme who has qualified as a Director for a particular product phase. The manner in which a Director becomes qualified in a particular product phase is explained below in [12(i)], [12(k)] and [12(m)]. (c) The Emerald Passport website promotes income earning opportunities for participants who have qualified as Directors. (f) Once a participant has registered as a Distributor, they can only earn commissions by becoming a "Director" (see Sch C (cl 14)). (g) There are three levels of directorship which are available to participants and aligned with each phase of the Products. Distributors must first become a Phase 1 Director, after which they may then qualify to become a Phase 2 Director, and then a Phase 3 Director. The payment of the Annual Fee referred to in [12(d)] above, which must be made by persons to become Distributors, is a payment to Emerald Passport Inc. At all material times, the Paramount Partners website (as defined in [17(b)(iv)] below) promoted the income earning potential of the Emerald Passport Scheme through recruiting new participants, to a much greater degree than it promoted the Products themselves. The following table sets out the sale price of the Products against the commissions retained for the sale of Products to participants. The Emerald Passport Scheme is promoted by making available to persons, including persons within Australia, information on the Internet and through the methods described in [17(c)] to [17(g)] above. The information referred to in [12] above is made available on the Emerald Passport website, and other websites to which the Emerald Passport website provides links. Information on the websites referred to in [17(b)] above was made available to persons within Australia by Cosic Holdings. Cosic Holdings promoted, participated and took part in the Emerald Passport Scheme. Mr Cosic was the person solely responsible for the acts and omissions of Cosic Holdings, and was party to all of the conduct engaged in by Cosic Holdings that is referred to in this document. Section 65AAC of the Act provides that a corporation must not participate in a pyramid selling Scheme and must not induce, or attempt to induce, a person to participate in a pyramid selling Scheme. The Emerald Passport Scheme promoted by the respondents contained three phases of self-help products, sold through the internet by people who had registered as "Distributors" or who had qualified as "Directors" in that Scheme. The Scheme promoted income earning opportunities for Directors through the introduction of new participants to the Scheme. Participants could only earn an income by becoming a Director and inducing new participants to the Scheme. The details of the operation of the Scheme are set out in [12] above. To take part in the Scheme the participants were obliged to first register as Distributors through the Emerald Passport website. To register as a Distributor, participants were required to pay an annual fee of US$99 (annual fee). This fee constitutes a participation payment under s 65AAD(1)(a) of the Act. This is because participants must pay this fee annually to take part in the Scheme. As noted, s 65AAD(1)(b) requires that a participation payment made by a new participant be entirely or substantially induced by the prospect held out that they will be entitled to a recruitment payment for introducing further participants to the Scheme. The payment itself must be in relation to the introduction and it must be the predominant inducement: see Australian Competition and Consumer Commission v Wordplay Services Pty Ltd [2004] FCA 1138 ; (2004) 210 ALR 562 at [110] . But the question of whether payments made, eg, under a multi-level marketing scheme as a result of post-introduction activities of the members introduced by participants were also intended to be recruitment payments requires consideration of whether such payments were also considered to be part of that vice or mischief. This analysis requires an objective inquiry: Australian Competition and Consumer Commission v Australian Communications Network Pty Ltd (2005) 146 FCR 23 at [24]. In this case, on an objective view, it is open to the Court to find the annual fee participation payment which people were required to make to participate in the Scheme was substantially induced by the prospect held out to new participants that they would be entitled to payments, or commissions, in relation to the introduction of new participants to the Scheme. These commission payments constitute recruitment payments under s 65AAD(1)(b) because the only reason a participant would pay the annual fee participation payment is so that they could participate in the Scheme and earn the frequent payments by introducing other participants to the Scheme. In this regard, the terms of the agreed facts set out at [12], [13] and [14], above, are relevant. It should also be said that on this basis the Scheme would constitute a pyramid selling scheme and not a marketing scheme for the following reasons: Between 18 September 2006 and November 2007, the first respondent: Between 18 September 2006 and November 2007, the second respondent: It is therefore open to the Court to declare that by its conduct in relation to the Scheme, Cosic Holdings participated in a pyramid selling Scheme in contravention of s 65AAC(1) of the Act. The parties concur that this declaration should be made. It is also open to the Court to declare that by his conduct in relation to the Scheme, Mr Cosic knew of the elements of the contravention of s 65AAC(1) by Cosic Holdings and was a party to Cosic Holdings' contravention of s 65AAC(1). The parties also concur that this declaration should be made. In determining whether to make the orders sought, the Court must be satisfied that what is proposed is in the public interest. The Court must weigh the public interest and the desirability and agreed resolution of enforcement proceedings such as these commenced by the ACCC: see Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc [1999] FCA 18 ; (1999) 161 ALR 79. The Court's power to make orders extends to making orders in proceedings resolved between the parties by consent. However, after being satisfied as to the appropriateness of the orders, the Court should be slow to impede final settlement of such matters, particularly those involving public interest considerations. Moreover, the public has an interest in the mutual resolution of litigation, and subject to the foregoing the Court should be careful not to refuse to make orders simply because the orders may have been different had it been the Court's task to formulate them. A question first arises as to the appropriateness of the declarations that the parties have proposed by consent. By the proposed declarations, the Court would declare certain conduct of the respondents to be in contravention of the pyramid selling provisions of the Act. The power of the Court to make a declaration in this case is found in s 21 of the Federal Court of Australia Act 1976 (Cth). Ordinarily speaking, declarations should determine a legal controversy and not answer abstract or hypothetical questions: see Forster v Jododex Australia Pty Ltd [1972] HCA 61 ; (1972) 127 CLR 421 ; Australian Competition and Consumer Commission v Goldy Motors Pty Ltd [2000] FCA 1885 at [30] . In a case such as the present, it seems to me that the proposed declarations deal with real issues with real consequences and do not involve abstract or hypothetical questions. In particular: Furthermore, Cosic Holdings and Mr Cosic are proper contradictors because they are persons whose conduct is referred to in the proposed declarations and who have an interest in opposing them. Finally, the making of the proposed declarations is in the public interest and serves to mark the Court's disapproval of the particular conduct engaged in, in contravention of the Act. While there is a well understood rule of practice that a Court should be slow to grant a declaration involving a public right in the absence of "evidence" that supports the declaration (as to which see BMI v Federated Clerks Union of Australia (1983) 51 ALR 401 at 413 - 414; Australian Competition and Consumer Commission v Allergy Pathway Pty Ltd [2009] FCA 960, Finkelstein J at [18] --- [19]), I am satisfied that on the material before the Court and in light of the statement of agreed facts to which the parties to this proceeding have subscribed and the Court has received, it is appropriate for the Court to make the declarations sought without requiring the taking of evidence in a more formal way. In taking this practical approach it seems to me relevant to note that the application is that of the ACCC, a public agency charged with the administration of these relevant consumer provisions of the Act, and that the agreement between the parties of the facts that are relevant to the outcome of the case and the orders that should be made follow pleadings filed and served by the parties. It is appropriate in such circumstances for the Court to treat the information put forward if not strictly "evidence" then as sufficiently reliable for the Court to act upon. Further, the parties are represented by experienced, competent solicitors and counsel and are fully aware of the consequences of the making of the declarations. To the extent that there are parties not directly involved in these proceedings who may be interested in or affected by the proposed orders , the declarations are sufficiently narrowly couched so as to direct attention to the conduct of the named respondents in this proceeding and no others. In general terms I consider that enforcement proceedings under the Act brought by the ACCC, the objects of the Act, and the overarching principles that ought govern a proceeding such as this, in terms of expedition and costs, all support the view that the Court should be prepared to entertain the making of declarations by consent on the basis of the sort of information currently before the Court. I note that in Australian Competition and Consumer Commission v Allergy Pathway Pty Ltd , Finkelstein J of this Court, at [16], noted a number of New South Wales Supreme Court decisions that have followed the course that I now propose to adopt, but different from what his Honour there proposed. In those other decisions the Court had acknowledged the general rule that a declaration on a matter relating to a public or analogous right should not be made by consent. However, those cases considered that a declaration could be made if the Court was satisfied by evidence that it ought to be made, the "evidence" to which regard may be had, including "facts" admitted to be true about which there is no direct evidence --- facts, for example, contained in a statement of agreed facts. I am persuaded that the approach adopted in such cases as Australian Securities and Investments Commission v Rich [2004] NSWSC 836 ; (2004) 50 ACSR 500 , referred to by Finkelstein J at [16], provide useful guidance in this regard. I am therefore satisfied that it is appropriate in a case such as the present to make the declarations sought by the parties. The parties also consent to the making of injunctions. Injunctions granted pursuant to s 80 of the Trade Practices Act 1974 (Cth) are in the nature of public interest injunctions. They are in a category different to and not subject to the same constraints as injunctions granted pursuant to the Court's equitable jurisdiction. As s 80(4) and (5) suggest, the Court has a wider jurisdiction to grant an injunction under s 80 than under the general law, although traditional principles of equity may not be irrelevant: see Australian Competition and Consumer Commission v 4WD Systems Pty Ltd [2003] FCA 850 ; (2003) 200 ALR 491 at [216] ; ICI Australia Operations Pty Ltd v Trade Practices Commission [1992] FCA 474 ; (1992) 38 FCR 248. Conduct of the kind proscribed by both Pts IV and V may be detrimental to the public interest because many persons can be affected and considerable loss or damage may be sustained by them. The public interest may warrant the making of an injunction notwithstanding that the contravener is not likely to engage in the contravening conduct again: see Trade Practices Commission v Mobile Oil Australia Ltd [1984] FCA 363 ; (1984) 4 FCR 296 at 300, per Toohey J; Australian Competition and Consumer Commission v Dimmeys Stores Pty Ltd (2001) ATPR 41 --- 811 at [32]. In this case, the proposed injunctions are in the public interest to reduce the risk that Cosic Holdings and Mr Cosic will engage in conduct in the future that would contravene Pt V , Div 1AAA of the Act, even though the Court is informed they are no longer engaged in the promotion of the Scheme. The admitted facts disclose a sufficient nexus between the conduct alleged and the orders sought: compare Australian Competition and Consumer Commission v Z-Tek Computer Pty Ltd (1987) 148 ALR 339. The respondents admit to engaging in conduct of the specific type referred to in the proposed injunctions. The injunctions are, in my view, sufficiently clearly stated to be capable of being complied with and do not require any additional supervision of the Court: see Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc. I am satisfied that the injunctions should go. The parties also request the Court to make orders pursuant to s 86C of the Act so that letters are sent to all Australian participants who were introduced to the Scheme by the respondents, advising them of the Court's judgment and the findings and the remedies granted; and also requiring the respondents to publish advertisements in named newspapers advising of this judgment, the findings and the relief granted. I am satisfied that these orders will inform participants of the Scheme and the general public about the outcome of the proceedings and in doing so will protect consumers and help to prevent further incidence of the conduct. The orders will also help to educate recipients of that information about features of pyramid selling Schemes and the prohibitions on such Schemes in Pt V of the Act. This is consistent with the purpose of s 86C, which is raising awareness of the type of conduct that may contravene the Act and the outcome of particular cases : see, in this regard, Australian Competition and Consumer Commission v On Clinic Australia Pty Ltd (1996) ATPR 41 --- 517. I am advised that the ACCC has not sought an order requiring Mr Cosic to participate in a trade practices compliance program because it is informed that he is no longer involved in the Scheme nor in any business of a remotely similar nature to the Scheme. This was confirmed by counsel for the respondents and I act on this basis. I was further informed by counsel for the ACCC that this is not a case the ACCC considered should require any orders for compensation to be paid by the respondents to any other person. In cases such as this, the ACCC has discovered by experience that it is difficult to obtain any information concerning any loss suffered by persons who may have dealt with promoters such as the respondents of pyramid selling Schemes. I accept that regulatory experience and proceed on that basis in this case. They properly reflect the public interest in the enforcement of the Trade Practices Act provisions governing pyramid selling Schemes. They also bring to an end, in an efficient and cost effective manner, these civil enforcement proceedings commenced by the ACCC. I certify that the preceding sixty-four (64) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. | breach of section 65aac of trade practices act 1974 (cth) illegal pyramid selling scheme whether proposed consent orders should be made public interest consideration appropriate for court to make declarations and injunction sought trade practices |
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