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federal_court_australia · 63.7k rows

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federal_court_of_australia:fca/single/2020/2020fca1492	decision	commonwealth	federal_court_of_australia	text/html	2020-10-16 00:00:00	Cromwell Corporation Limited v ARA Real Estate Investors XXI Pte Ltd [2020] FCA 1492	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2020/2020fca1492	2024-09-13T22:44:33.779908+10:00	FEDERAL COURT OF AUSTRALIA Cromwell Corporation Limited v ARA Real Estate Investors XXI Pte Ltd [2020] FCA 1492 File number(s): VID 513 of 2020 Judgment of: ANDERSON J Date of judgment: 16 October 2020 Catchwords: CORPORATIONS — takeover bid — whether this proceeding commenced contrary to s 659B of Corporations Act 2001 (Cth) — whether this application for preliminary discovery is a proceeding "in relation to a takeover bid" — s 659B(1) does not apply to this proceeding PRACTICE AND PROCEDURE — discovery — preliminary discovery — whether prospective applicants have satisfied each limb of r 7.23 of the Federal Court Rules 2011 (Cth) — whether prospective applicants reasonably believe that they may have a right to obtain relief — whether prospective applicants do not have sufficient information to decide whether to start a proceeding Held: prospective applicants did not satisfy rr 7.23(1)(a) and (b) of the Federal Court Rules 2011 (Cth). Application dismissed Legislation: Acts Interpretation Act 1901 (Cth), s 15AB Australian Securities and Investments Commission Act 2001 (Cth), ss 192 and 199 Corporations Act 2001 (Cth), ss 5C, 9, 12, 53, 606, 608, 610, 659AA, 659B, 671B Australian Securities and Investments Commission Regulations 2001 (Cth), reg 16 Corporations Regulations 2001 (Cth), reg 1.0.18(b) Federal Court Rules 2011 (Cth), r 7.23 Cases cited: Chief Executive Officer of Customs v AMI Toyota Ltd [2000] FCA 1343 Dyer v Hunter [1999] VSC 531 John Bridgeman Limited v National Stock Exchange of Australia Limited [2019] FCA 1127 Lionsgate Australia v Macquarie Private Portfolio [2007] NSWSC 318 McKerlie v Drillsearch Energy Ltd [2009] NSWSC 497 Nalini Asher Enterprises Pty Ltd v H&M Tracey Construction Pty Ltd [2019] FCA 2161 Optiver Australia Pty Ltd v Tibra Trading Pty Ltd [2008] FCAFC 133 Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd [2017] FCAFC 193 Poole v Australian Pacific Touring Pty Ltd [2017] FCA 424 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Re Application by the Chief Commissioner of Police (Victoria) [2005] HCA 18 St Barbara Mines Ltd v Australian Securities & Investments Commission [2001] FCA 119 SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362 Telstra Corporation Ltd v Minister for Broadband, Communications and the Digital Economy [2008] FCAFC 7 Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 145 Date of hearing: 6 October 2020 Counsel for the Prospective Applicants: Mr David Batt QC, Ms Kathleen Foley and Mr Huw Whitwell Solicitor for the Prospective Applicants: Minter Ellison Counsel for the First to Third Prospective Respondents: Mr Michael Borsky QC, Mr Mark Hosking and Mr Karan Raghavan Solicitor for the First to Third Prospective Respondents: Arnold Bloch Leibler Counsel for the Fourth to Ninth Prospective Respondents: Dr Catherine Button QC and Ms Kateena O'Gorman Solicitor for the Fourth to Ninth Prospective Respondents: Gilbert + Tobin ORDERS VID 513 of 2020 BETWEEN: CROMWELL CORPORATION LIMITED First Prospective Applicant CROMWELL PROPERTY SECURITIES LIMITED Second Prospective Applicant AND: ARA REAL ESTATE INVESTORS XXI PTE. LTD. First Prospective Respondent ARA ASSET MANAGEMENT LIMITED Second Prospective Respondent ARA ASSET MANAGEMENT HOLDINGS PTE. LTD. (and others named in the Schedule) Third Prospective Respondent order made by: ANDERSON J DATE OF ORDER: 16 october 2020 THE COURT ORDERS THAT: 1. The prospective applicants' application for preliminary discovery is dismissed. 2. The prospective applicants will pay the prospective respondents' costs of and incidental to the preliminary discovery application, to be assessed if not agreed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT ANDERSON J: INTRODUCTION The application and the parties 1 By originating application dated 31 July 2020, the prospective applicants, Cromwell Corporation Ltd and Cromwell Property Securities Limited (together, Cromwell), apply for a preliminary discovery order under r 7.23 of the Federal Court Rules 2011 (Cth) (Rules). 2 The first prospective applicant, Cromwell Corporation Ltd, and the Cromwell Diversified Property Trust, of which Cromwell Property Securities Ltd (the second prospective applicant) is the responsible entity, are together known as the "Cromwell Property Group". Cromwell Property Group is a real estate investor and manager with a substantial domestic and international investment asset portfolio. 3 Stapled securities in the Cromwell Property Group (Cromwell securities) trade on the Australian Securities Exchange. Each stapled security consists of one share in Cromwell Corporation Ltd and one unit in the Cromwell Diversified Property Trust. 4 The prospective respondents can be grouped into two categories: the ARA respondents (the first to third prospective respondents) and the Tang respondents (the fourth to ninth prospective respondents). 5 The first of the ARA respondents (ARA) is a Singaporean company. ARA is the largest single holder of Cromwell securities. ARA is a wholly owned subsidiary of the second of the ARA prospective respondents (ARA Asset Management), a company incorporated in Bermuda. ARA and ARA Asset Management are controlled entities of the third ARA respondent (ARA Holdings), a Singaporean company. 6 The Tang respondents are: (1) a Singaporean businessman, Mr Gordon Tang; (2) a Singaporean businesswoman and wife of Mr Tang, Mrs Celine Tang; (3) their daughter, Ms Jialei Tang; and (4) three companies, namely Haiyi Holdings Pte. Ltd, SingHaiyi Group Ltd and Senz Holdings Limited. 7 Cromwell, by its originating application dated 31 July 2020, applies for a preliminary discovery order under r 7.23 of the Rules on the basis that, in Cromwell's submission, the affidavits filed by Cromwell establish a belief by Cromwell that it may have a right to obtain relief in this Court from each of the prospective respondents for contraventions of s 606(1) and s 671B(1) of the Corporations Act 2001 (Cth) (Act). 8 On 21 August 2020, Moshinsky J made various orders requiring the prospective applicants and the prospective respondents to file evidence upon which they intend to rely and written submissions. The prospective applicants filed written submissions dated 18 September 2020. The prospective respondents filed written submissions dated 1 October 2020. On 5 October 2020, the prospective applicants filed written reply submissions concerning s 659B of the Act after I directed that they do so. 9 Cromwell relies upon the following affidavits: (1) an affidavit of the Managing Director and Chief Executive Officer of Cromwell, Mr Paul Louis Weightman, sworn 31 July 2020 (first Weightman affidavit); (2) an affidavit of Ms Christine Zoe Demiris sworn 18 September 2020 (first Demiris affidavit); (3) a further affidavit of Mr Weightman sworn 18 September 2020 (second Weightman affidavit); (4) a further affidavit of Ms Christine Zoe Demiris sworn 5 October 2020 (second Demiris affidavit), (collectively, the Cromwell affidavits). 10 The prospective respondents oppose the application for preliminary discovery and have filed the following affidavits: (1) Mitchell Coidan affirmed 20 August 2020 (first Coidan affidavit); (2) Stephen Lloyd dated 20 August 2020 (Lloyd affidavit); (3) David Blight affirmed 11 September 2020 (Blight affidavit); (4) Mitchell Coidan affirmed 11 September 2020 (second Coidan affidavit); (5) Justin Vaatstra sworn 1 October 2020 (Vaatstra affidavit); (6) Mitchell Coidan affirmed 2 October 2020 (third Coidan affidavit); (7) Raphael Leibler affirmed 5 October 2020 (Leibler affidavit), (collectively, the respondent affidavits). The context of the application 11 The affidavit material filed by the parties disclose the following relevant matters. 12 This application has been brought in the context of long-running disputes between Cromwell and the ARA respondents regarding the management and operation of Cromwell. By way of example: (1) ARA first acquired an interest in Cromwell securities in 2018. The CEO of the Australian business of ARA Asset Management, Mr David Blight, was appointed to Cromwell's board of directors as ARA's nominee. (2) On 30 April 2019, Mr John Lim, the CEO of the ARA Group, wrote to the then-Chair of the Cromwell Board, Mr Geoff Levy, requesting that he announce to the ASX that he would retire at Cromwell's 2019 annual general meeting. (3) On 26 June 2019, Cromwell announced that it would undertake an institutional placement (Placement) whereby $375 million of Cromwell securities would be issued to institutional investors who elected to participate in the Placement. On the same day, Mr Weightman announced that, based on legal advice Cromwell had received, ARA would not be entitled to participate in the Placement. ARA alleged that Cromwell's exclusion from the Placement was unlawful. (4) On 19 July 2019, Mr Blight resigned from Cromwell's board. Mr Blight deposes that he believes he had been excluded from decision-making by Cromwell's board in relation to the Placement. Mr Blight had been receiving redacted Board papers on the basis that the other Cromwell directors were concerned that Mr Blight had conflicts of interest relating to his role with ARA. (5) At the November 2019 Cromwell AGM, Cromwell's board opposed the election of ARA's nominee, Dr Gary Weiss, to the Cromwell Board. Cromwell's board also recommended a number of resolutions that were opposed by ARA. (6) In December 2019, Cromwell made an application to the Takeovers Panel (Panel Application) for a declaration of unacceptable circumstances based on the same matters which form the basis of Cromwell's application to this Court for preliminary discovery. Cromwell represented to the Takeovers Panel that there was a substantial body of evidence which established the existence of the alleged undisclosed association. The application was rejected by the Panel who declined to conduct proceedings in January 2020. (7) Mr Blight deposes that, in February 2020, Cromwell did not allow ARA to participate in Cromwell's distribution reinvestment plan in respect of its entitlement to a distribution for the December 2019 quarter, which led to ARA commencing Court proceedings against Cromwell in May 2020. (8) In March 2020, Cromwell opposed the election of Dr Gary Weiss at an extraordinary general meeting convened by ARA. Mr Blight deposes that, following a dispute about the adequacy of the inspection Cromwell had allowed ARA to make of proxy documents and other documents relating to votes cast at the November 2019 Cromwell AGM, ARA commenced Court proceedings against Cromwell seeking the production of those documents. (9) Cromwell commenced this proceeding approximately six months after its Panel Application was rejected. 13 On 21 July 2020, ARA Real Estate Investors 28 Ltd (ARA BidCo) lodged with the Australian Securities Exchange a bidder's statement enclosing an offer to Cromwell securityholders to purchase 29% of each securityholder's securities (the proportional takeover bid). ARA BidCo is a subsidiary of ARA Holdings and its related entities. 14 On 21 July 2020, Cromwell lodged with the ASX an announcement entitled "Response to ARA's Proportional Bid". The announcement stated, among other things: TAKE NO ACTION IGNORE ARA'S OPPORTUNISTIC PROPORTIONAL TAKEOVER OFFER AND MISLEADING STATEMENTS ARA'S BIDDER'S STATEMENT CONTAINS MATERIAL OMISSIONS AND FAILS TO DISCLOSE ARA'S TRUE INTENTIONS DON'T LET ARA SEIZE CONTROL WITHOUT PAYING A PREMIUM. (Capitals in the original.) 15 On 31 July 2020, Cromwell commenced the present proceeding. 16 On 11 August 2020, Arnold Bloch Leibler, the solicitors for ARA, wrote to MinterEllison, the solicitors for Cromwell, providing notice that ARA intended to requisition an extraordinary general meeting as soon as possible to consider the election of Dr Gary Weiss and Mr Joseph Gersh as directors of the first prospective applicant, Cromwell Corporation Ltd (CCL). 17 On 17 August 2020, Cromwell released an announcement to the ASX entitled "Stop ARA's Takeover by Stealth", which advised Cromwell securityholders to reject the proportional takeover bid, vote against the election of Dr Weiss and Mr Gersh to the CCL board, and to ignore all Proportional Offer documents issued by ARA. JURISDICTION 18 Before turning to whether Cromwell has satisfied the requirements of r 7.23, a question of jurisdiction was raised. It is the first rule of every court, where a real question is raised as to its jurisdiction and powers (or as to the exercise thereof), that the court must satisfy itself that the jurisdiction exists and that the powers may be exercised: Re Application by the Chief Commissioner of Police (Victoria) [2005] HCA 18; 214 ALR 422 (per Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ) at [68]. The ARA respondents' submissions 19 The ARA respondents made the following submissions. 20 The ARA respondents submit that Cromwell does not fall within any of the categories of persons identified in s 659B(1) who may commence court proceedings in relation to a takeover bid before the end of the bid period. 21 The ARA respondents submit that this proceeding is a court proceeding "in relation to … an action taken or to be taken as part of, or for the purposes of" ARA BidCo's proportional takeover bid, with the result that the proceeding was commenced in contravention of s 659B(1), for the following reasons: (1) the ARA respondents contend that the term "court proceedings in relation to a takeover bid or proposed takeover bid" is defined in s 659B(4) and, relevantly, s 659B(4)(a)(i) provides that the term includes "any proceedings before a court in relation to … an action taken or to be taken as part of, or for the purposes of, the bid or the target's response to the bid"; (2) the ARA respondents submit that, here, the relevant "action taken or to be taken as part of, or for the purposes of" ARA BidCo's proportional takeover bid is the acquisition by ARA BidCo of Cromwell securities as part of that takeover bid. The ARA respondents contend as follows: [t]his proceeding is a court proceeding "in relation to" that action because, the purpose of this proceeding is to enable Cromwell to commence a proceeding in which it will seek orders requiring the ARA respondents to divest themselves of any interests in Cromwell securities they obtained as part of ARA BidCo's proportional takeover bid. 22 The ARA respondents submit that is the position because, in the ARA respondents' submission, Cromwell has commenced this proceeding during the bid period for the following reasons: (1) Cromwell believes that the ARA respondents and the Tang respondents have been, and remain, associates within the meaning of the Act; (2) Cromwell believes that any acquisition of a relevant interest in Cromwell securities by the ARA respondents therefore constitutes, or may constitute, a contravention of s 606(1) of the Act; and (3) as a consequence, Cromwell believes that it has a right to obtain relief against the ARA respondents. 23 The ARA respondents submit that those matters "are sufficient for this proceeding to be characterised as a proceeding "in relation to" the acquisition by ARA BidCo of Cromwell securities as part of ARA BidCo's takeover bid". The ARA respondents submit that "in relation to" has a broad meaning. In this respect, the ARA respondents submit that: (1) the connection between this proceeding and ARA BidCo's takeover bid is neither accidental nor remote; (2) this proceeding was commenced 10 days after ARA BidCo lodged its bidder's statement, for the purpose of enabling Cromwell to establish that the acquisition of securities as part of that takeover bid contravened s 606(1) of the Act and to seek orders requiring the ARA respondents to divest themselves of interests in Cromwell securities obtained as part of the takeover bid; (3) the relationship between the proceeding and the acquisition of securities as part of ARA BidCo's takeover bid is clear and sufficiently close for this to be characterised as a proceeding "in relation to" the bid. 24 The ARA respondents then submitted that, on a proper interpretation of s 659B, if a proceeding is commenced in contravention of s 659B(1), this Court has "no jurisdiction to hear and determine it". Cromwell's submissions 25 Cromwell's submissions took issue with the way the ARA respondents characterised this proceeding. Cromwell submits that this proceeding is a preliminary discovery application under the rules of this Court, and is founded upon historical acquisitions and other matters. Cromwell submits that such a proceeding is simply not a proceeding "in relation to an action taken or to be taken as part of, or for the purposes of, the [takeover] bid". 26 Cromwell submits that the core of the ARA respondents' argument is the proposition that, as a matter of fact, this proceeding was commenced in response to the takeover bid. However, Cromwell submits that asserted position is not correct. Cromwell submits that: (1) the second Demiris affidavit deposes that it was on 19 June 2020 that Cromwell's solicitors, Minter Ellison, on instructions from Cromwell, instructed Counsel to prepare this preliminary discovery application; (2) ARA BidCo's intention to make a takeover bid was only announced on 23 June 2020; and (3) the bidder's statement was not lodged until 21 July 2020. 27 In these circumstances, Cromwell submits that the notion that this proceeding was commenced in response to ARA BidCo's takeover bid has, in Cromwell's submission, "no factual basis". 28 Cromwell accepts that the words "in relation to" are broad. However, Cromwell submits that, in circumstances where there is no evidence before the Court to suggest Cromwell was preparing the application in anticipation of a potential takeover bid and was in fact preparing the application before it knew of any takeover bid, it would be stretching the words "in relation to" beyond any conceivable limit to say that such a proceeding is "in relation to" the acquisition of securities as part of that bid. 29 Cromwell also submits that this Court should read s 659B to minimise any ouster of jurisdiction. In this respect, Cromwell referred to Lionsgate Australia v Macquarie Private Portfolio [2007] NSWSC 318; 210 FLR 106 at [27] (Lionsgate). 30 Cromwell then submits that, even if this proceeding falls within the terms of s 659B(1), s 659B(1) does not automatically oust this Court's jurisdiction. Cromwell submits that s 659B(1) imposes a timing restriction on the commencement of proceedings in relation to a takeover bid "before the end of the bid period" and, under s 659B(2), in the event of non-compliance with s 659B(1), a proceeding may be stayed "until the end of the bid period". 31 If, contrary to Cromwell's principal submission, this proceeding falls within s 659B(1), Cromwell submitted that this Court should not exercise its discretion to stay the proceeding. Cromwell submits that the purposes of s 602 would not be served by staying this proceeding. Cromwell submits that this proceeding is not seeking review of any decision by the Takeovers Panel, and the bid period of ARA BidCo's bid was due to expire imminently after the hearing of this application. In Cromwell's submission, there would be no utility in staying the proceeding for such a short period of time. Consideration Section 659B 32 Section 659B appears in Chapter 6 of the Corporations Act 2001 (Cth). Chapter 6 is titled "Takeovers". Section 659B appears in Division 3 of Part 6.10. That Division is titled "Court powers". 33 Section 659AA provides: 659AA Object of sections 659B and 659C The object of sections 659B and 659C is to make the Panel the main forum for resolving disputes about a takeover bid until the bid period has ended. 34 Section 659B provides: 659B Court proceedings before end of bid period Delay in commencing court proceedings until after end of bid period (1) Only the following may commence court proceedings in relation to a takeover bid, or proposed takeover bid, before the end of the bid period: (a) ASIC; (b) a Minister of the Commonwealth; (c) a Minister of a State or Territory in this jurisdiction; (d) the holder of an office established by a law of: (i) the Commonwealth; or (ii) a State or Territory in this jurisdiction; (e) a body corporate incorporated for a public purpose by a law of: (i) the Commonwealth; or (ii) a State or Territory in this jurisdiction; to the extent to which it is exercising a power conferred by a law of the Commonwealth or a State or Territory in this jurisdiction. Court power to stay proceedings that have already commenced (2) A court may stay: (a) court proceedings in relation to a takeover bid or proposed takeover bid; or (b) court proceedings that would have a significant effect on the progress of a takeover bid; until the end of the bid period. (3) In deciding whether to exercise its powers under subsection (2), the court is to have regard to: (a) the purposes of this Chapter; and (b) the availability of review by the Panel under Division 2. (4) For the purposes of this section: court proceedings in relation to a takeover bid or proposed takeover bid: (a) means any proceedings before a court in relation to: (i) an action taken or to be taken as part of, or for the purposes of, the bid or the target's response to the bid; or (ii) a document prepared or to be prepared, or a notice given or to be given, under this Chapter; and (b) includes: (i) proceedings to enforce an obligation imposed by this Chapter; or (ii) proceedings for the review of a decision, or the exercise of a power or discretion, under this Chapter; or (iii) proceedings for the review of a decision, or the exercise of a power or discretion, under Chapter 6C in relation to securities of the target of a takeover bid during the bid period; and (iv) proceedings under Part 2F.1A for leave to bring, or to intervene in, proceedings referred to in paragraph (a) or subparagraph (b)(i), (ii) or (iii). This is not limited to proceedings brought under this Chapter or this Act but includes proceedings under other Commonwealth and State or Territory laws (including the general law). (5) Nothing in this section is intended to affect the jurisdiction of the High Court under section 75 of the Constitution. 35 The Explanatory Memorandum to the Corporate Law Economic Reform Program Bill 1998 (Cth) (CLERP Explanatory Memorandum) provides context for this provision. It stated at [7.2]-[7.3]: Target companies often resort to litigation in hostile takeover bids, sometimes for tactical reasons. This can result in bids being delayed and, where a final hearing cannot be held within the bid period, the courts having to decide between disrupting the bid by granting an injunction without the benefit of full evidence and allowing the bid to proceed even though it may later be found to be defective. To meet these concerns, a reconstituted Panel will take the place of the courts as the principal forum for resolving takeover disputes under the Corporations Law, with the exception of civil claims after a takeover has occurred and criminal prosecutions. This will allow takeover disputes to be resolved as quickly and efficiently as possible by a specialist body largely comprised of takeover experts, so that the outcome of the bid can be resolved by the target shareholders on the basis of its commercial merits. Other benefits of an effective panel for dispute resolution include the minimisation of tactical litigation and the freeing up of court resources to attend to other priorities. The issue between the parties under s 659B(1) 36 As to the initial parts of s 659B, it was common ground between the parties that Cromwell is not a person referred to in ss 659B(1)(a)-(e). 37 The ARA respondents did not contend that this proceeding is, and it is self-evident that this proceeding is not, to be characterised as any of the following: (1) a proceeding "to enforce an obligation imposed by … Chapter" 6 of the Act: s 659B(4)(b)(i); (2) a proceeding "for the review of a decision, or the exercise of a power or discretion, under … Chapter" 6 of the Act: s 659B(4)(b)(ii); (3) a proceeding "for the review of a decision, or the exercise of a power or discretion, under Chapter 6C in relation to securities of the target of a takeover bid during the bid period": s 659B(4)(b)(iii); (4) a proceeding "under Part 2F.1A for leave to bring, or to intervene in, [certain] proceedings": s 659B(4)(b)(iv); (5) "a document prepared or to be prepared, or a notice given or to be given, under … Chapter" 6 of the Act: s 659B(4)(a)(ii). 38 As a consequence, the issue between the parties was whether this proceeding is a court proceeding "before a court in relation to … an action taken or to be taken as part of, or for the purposes of, the bid or the target's response to the bid": s 659B(4)(a)(i). Meaning of "in relation to a takeover bid, or proposed takeover bid" 39 In St Barbara Mines Ltd v Australian Securities & Investments Commission [2001] FCA 119; 110 FCR 550 (St Barbara), Hill J considered s 659B. In that case, ASIC objected to the jurisdiction of the Court and in so doing relied upon s 659B(1). 40 Hill J stated at [10]-[14]: 10. The terms of s 659B(1) of the Corporations Law are very broad. That section speaks of proceedings "in relation to a takeover bid". As the cases clearly show and counsel for St Barbara accepts, the words "in relation to" must take colour from the context in which they appear: see Chief Executive Officer of Customs v AMI Toyota Ltd [2000] FCA 1343 at paragraphs 30-31 (Hill, North and Merkel JJ); First Provincial Building Society Ltd v Commissioner of Taxation (1995) 56 FCR 320 at 333 per Hill J. In some cases they have been said to be so broad as to comprehend any relationship at all that may exist between two subject matters. In other cases, because of the context, a more narrow view has been accepted. 11. Queens Counsel for St Barbara submits that the present proceedings should not be seen to be proceedings in relation to a bid but rather proceedings relating to the act of non acceptance of bid documents by [ASIC]. With respect, that seems to me rather too narrow a view of the relationship to which s 659B(1) refers having regard to the legislative policy underlying the law. 12. The legislative policy of s 659B, and taking into account the object of the section as set out in s 659AA, is clear enough. If it be necessary, reference can be made to the explanatory memorandum which makes the legislative policy quite explicit. It is that the Panel take the place of the courts as the principal forum for resolving takeover disputes until the bid period has ended. However wide or narrow s 659B(1) may be, and it is not necessary in this case to explore the width of it, it clearly comprehends a proceeding which relates to a bid in the sense also that it is within the jurisdiction of the Panel to determine. 13. The present is an obvious example of such a case. As things stand at the moment, and indeed prior to the application made to the Court, St Barbara has a right to seek to have [ASIC]'s decision on the modification of the Corporations Law reviewed by the Panel. It seems to me that this is the kind of case which parliament contemplated should not be determined by the courts until such time at least as the bid period has terminated. On this view of the matter, the Court would have no jurisdiction at all to deal with the proceedings at this stage. 14. In saying this, I note the position of St Barbara that in its view there is nothing for [ASIC] to modify because the law should be interpreted as it suggests with the consequence that there could be nothing for the Panel to review. While I understand that is a respectable argument, the issue ultimately comes back to whether the present proceedings could be said to be in relation to a bid and although it is no doubt true in a very direct sense that the proceedings relate to the acceptance or non acceptance by the [ASIC] of documents, one has only to ask the question of documents about what. The answer is clearly enough documents which relate to the takeover bid and in my view s 659B(1) operates to exclude jurisdiction. 41 In McKerlie v Drillsearch Energy Ltd [2009] NSWSC 497 (Drillsearch), Beach Petroleum, as well as being a shareholder of Drillsearch, was the bidder under a takeover bid for Drillsearch under Chapter 6 of the Act. Beach Petroleum had made an application to the Takeovers Panel for a declaration of "unacceptable circumstances" in relation to its takeover bid. Beach Petroleum's complaint concerned circulars and statements made by a director of Drillsearch in the lead up to a proposed meeting of shareholders. 42 In Drillsearch, Barrett J stated at [11] to [15]: 11. The question of immediate relevance is whether s 659B(1) operates to preclude the commencement by Beach Petroleum of the proceedings it now wishes to commence and its joinder to these present proceedings. … 14. Section 659B(1) raises the question whether the steps Beach Petroleum now seeks to take in this court entail the commencement by it of proceedings "in relation to a takeover bid" as mentioned at the start of s 659B(1). 15. The submission made by Mr Sullivan QC on behalf of Beach Petroleum is that any such connection is lacking and that Beach Petroleum's standing as a shareholder of Drillsearch is such as to enable it, in any event, to complain about the particular statements in the context of the forthcoming meeting. He points out that one of the current plaintiffs, Glenluce Properties Pty Ltd, is a shareholder in Drillsearch and, in that respect, stands in the same position as Beach. He also points out that the wrong done from Beach Petroleum's point of view, in the particular context, is that often associated with the case of Bulfin v Bebarfald's Ltd (1938) 38 SR (NSW) 423; in other words, there has been a breach of the duty to give full, frank and fair information for the purpose of a meeting of members. 43 Barrett J stated at [18]-[19]: 18. Beach Petroleum has seen fit to invoke the jurisdiction of the Takeovers Panel in relation to the matters that it would wish to agitate in its proposed proceedings in this court, including by way of its becoming a party to the proceeding now before me. Having chosen that forum and decided to seek the assistance of the Takeovers Panel, according to the broad remedial jurisdiction that the Panel possesses, Beach Petroleum has clearly accepted that the matters in respect of which it wishes to obtain redress are really matters within the Panel's province. Indeed, by seeking orders here imposing certain restraints until its application to the Takeovers Panel has been determined and until any remedial action the Panel may order has been taken, Beach seeks, in a real sense, to make its court proceedings an adjunct to its Panel application. 19. The controversy that Beach Petroleum wishes to air in court has already been put before the Takeovers Panel by Beach. That controversy has clearly arisen "in relation to" the takeover bid now on foot. The proposed court proceedings therefore involve matters in respect of which s 659B displaces the jurisdiction of the court until such time as the bid period has ended. 44 In Lionsgate , Austin J considered whether, having regard to s 659B of the Act, a bidder under a takeover bid may commence court proceedings for specific performance of its contract with a substantial shareholder of the target company, under which the shareholder had undertaken to sell into the bid. 45 In Lionsgate, Austin J stated at [18]: … Lionsgate does not invoke any other provision of the Corporations Act, and relies instead on its common law and equitable rights of enforcement of a contract … 46 His Honour continued at [21]: In my view, the underlying policy concerns identified in the Explanatory Memorandum are not in evidence in the present case. Here Lionsgate wishes to enforce a contract, in circumstances where there is a dispute about the meaning of one of the clauses of the contract. The issue is about the meaning and enforceability of a contract, not about whether the takeover bid should be disrupted or allowed to proceed. If Macquarie is not required to sell into Lionsgate's bid, the bid will still proceed, subject to Chapter 6, and will either succeed or fail. The resolution of the dispute between Lionsgate and Macquarie may have an impact on whether the proposal for a scheme of arrangement proceeds, but schemes are not within the purview of s 659B in any case. The specialist body with the greatest expertise to resolve the dispute is a commercial court … Although the takeover tactics of both sides may lay behind the litigation, what brings the matter to court is the existence of a contract and (if the plaintiff is right) the defendant's threat to repudiate it. 47 Austin J stated at [29]-[30]: 29. Section 659B(1) has the effect of preventing a person, other than those listed, from commencing "court proceedings in relation to a takeover bid, or proposed takeover bid", before the end of the bid period. The quoted words are defined in subsection (4) in two steps: first, in subparagraph (a) there is what appears ex facie to be a definition of the scope of the quoted words; and secondly, there is in subparagraph (b) a list of things included (or, perhaps, deemed to be included) in the definition. The last sentence of subsection (4) is introduced by the highly ambiguous word "This", but in its context the word "This" probably refers to subparagraph (a), or both subparagraphs (a) and (b), rather than to subparagraph (b) alone. So construed, the last sentence operates to require that the definition as a whole be read so as to encompass court proceedings under the general law or any statutory provisions. 30. None of the inclusory provisions of subparagraph (b) is applicable here. The question is whether the present proceeding falls within subparagraph (a). Some of the submissions made on behalf of [the respondent in Lionsgate], particularly the written submissions, suggest that s 659B(1) raises a broad question as to whether the present proceeding is "in relation to" the pending takeover bid. But in my view that misunderstands the effect of s 659B(4)(a), which is an exhaustive definition of the words "court proceedings in relation to a takeover bid or proposed takeover bid". If subsection (4) does not apply, then the present proceeding is not a court proceeding "in relation to a takeover bid or proposed takeover bid" for the purposes of s 659B(1), and consequently there is no restriction on the plaintiff commencing or continuing the proceeding, even if in some more general sense the proceeding relates to the bid. 48 Austin J addressed the meaning of the words "in relation to" in s 659B at [34]-[37]: 34. I turn, first, to [s 659B(4)](a)(ii). However wide the words "in relation to" may be if considered in isolation, the present proceeding cannot be described as a proceeding "in relation to a document prepared or to be prepared, or a notice given or to be given" under Chapter 6. The present proceeding is in relation to the Deed between the parties, and in relation to the enforcement of [an] alleged contractual obligation. True it is that the Deed contemplates the takeover bid that has subsequently been made, and in particular the Bidder's Statement that has subsequently been issued by Lionsgate, and the time limits for the contractual obligations undertaken in the Deed are set by reference to the bid period. That may be enough to warrant the conclusion that the Deed is a document "in relation to" Lionsgate's takeover bid. But as I have pointed out, that is not the issue under subparagraph (a). For the purposes of subparagraph (a)(ii), the question is whether the court proceeding is in relation to a document or notice prepared or given under Chapter 6. The Deed is clearly not such a document. 35. … It would unduly strain even the wide words "in relation to" to say that a proceeding to enforce [a contractual clause] by requiring Macquarie to sell its shares into the bid is a proceeding in relation to the Bidder's Statement. 36. I turn to [s 659B(4)](a)(i). The question is whether the present proceeding is in relation to some action taken or proposed to be taken as part of or for the purposes of the takeover bid. The "action" to which the subparagraph refers cannot be the action of commencing the proceeding, because the commencement of the proceeding is the conduct prohibited by subsection (1), once it is established that there are court proceedings in relation to the bid as defined in subsection (4). In other words the "action" referred to in the definition must be something anterior to the commencement of the proceeding … 37. Senior counsel for the defendant submitted that there were several components of "action" for the purposes of the definition. First he submitted, in substance, that Macquarie's future performance of what Lionsgate contended was a binding obligation to sell the shares into the bid was "an action … to be taken as part of, or for the purposes of, the bid" … It seems to me, however, that if Macquarie sold into the bid, purportedly in performance of the contractual obligation, its action in doing so would not be action as part of or for the purposes of Lionsgate's bid, but rather it would be action in response to the bid. Senior counsel then submitted that Macquarie's actions included its promises in clause 5, its conduct subsequent to the announcement communicating its intention not to comply with clause 5.1(a), and the letters of demand that followed thereafter … Again, however, these matters seem to me to relate to the question whether an offeree shareholder should accept a takeover bid or proposed bid – that is, they relate to the offeree's response to the bid (or proposed bid), and are therefore not actions taken or to be taken as part of, or for the purposes of the bid (and they are obviously not taken as part of or for the purposes of the target's response to the bid). Therefore I have reached the conclusion that subparagraph (a)(i) does not apply to any of the actions identified by senior counsel for Macquarie in submissions. (Emphasis in the original.) 49 Austin J then concluded at [40]-[41]: 40. In the result, while I accept that the words "in relation to" are words of very broad connotation when considered in isolation, here they are combined (in subparagraphs (a)(i) and (ii)) with words of a more specific kind which are not apt to apply to the present situation. 41. In my view, the thrust of the definition in subsection (4) is to identify court proceedings that raise the sorts of issues typically invoked in the tactical takeover litigation of the 1980s and 1990s, to do with such matters as misleading Bidders' Statements and Targets' Statements, whether the litigation was based on the provisions of corporations legislation, or other statutory provisions (such as s 52 of the Trade Practices Act) or general law matters (such as the law of deceit). Is this proceeding a proceeding "in relation to a takeover bid"? 50 Guided by the text of s 659B and the authorities set out above, in my view, this proceeding is not a proceeding "in relation to a takeover bid". This is so for the following reasons. 51 First, the ARA respondents' submissions should not be accepted. 52 The ARA respondents submit that this proceeding is "in relation to" ARA BidCo's proportional takeover bid because, in the ARA respondents' submission, this proceeding should be characterised as "enabl[ing]" Cromwell to commence a future proceeding in which Cromwell "will" seek orders requiring the ARA respondents to divest Cromwell securities the ARA respondents obtained as part of that proportional takeover bid. The ARA respondents submit that Cromwell's belief – that it may have a right to obtain relief (in a future proceeding) by reason of the prospective respondents' potential contraventions of s 606(1) and s 671B(1) – is sufficient to characterise this proceeding as being "in relation to" a takeover bid. 53 That submission should not be accepted because it invalidly conflates this application for preliminary discovery and any potential future proceeding. Any potential future proceeding contemplated by Cromwell is not on foot and may not arise. It presumably may only arise if this preliminary discovery application is successful, Cromwell receives documents as a consequence, and then Cromwell decides to commence some future proceeding on the basis of those documents. Whether this proceeding is "in relation to a takeover bid" must be tested as at the date of this preliminary discovery application. It is not to be tested by reference to future possibilities or hypothetical scenarios. In addition, a preliminary discovery application is separate and distinct from any potential future proceeding. Rule 7.23 is in Part 7 of the Federal Court Rules 2011 (Cth), which is titled "Orders before start of a proceeding". Part 8 of the Federal Court Rules 2011 (Cth) is titled "Starting proceedings", and it is under that latter part that any future proceeding (which may or may not arise) would be commenced. 54 The ARA respondents also submitted that the requisite relation between this proceeding and ARA's takeover bid exists here. 55 The expression "in relation to" is "one of wide connotation" but "requires a relation between one thing and another": Chief Executive Officer of Customs v AMI Toyota Ltd [2000] FCA 1343; 102 FCR 578 at [30] (Hill, North and Merkel JJ); see also Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 (Project Blue Sky) at [87] (McHugh, Gummow, Kirby and Hayne JJ); St Barbara at [10]-[14] (Hill J). What "constitutes a sufficient connection or association to form the required relationship is a matter for judgment depending on the facts of the case": Project Blue Sky at [87] (McHugh, Gummow, Kirby and Hayne JJ). 56 The ARA respondents submit that this proceeding is related to ARA BidCo's takeover bid because it was commenced 10 days after ARA BidCo lodged its bidder's statement. However, Cromwell's evidence discloses that it briefed Counsel to prepare this application 4 days before that bid was announced. The second Demiris affidavit deposes that it was on 19 June 2020 that MinterEllison, on instructions from Cromwell, instructed Counsel to prepare this preliminary discovery application. ARA BidCo's intention to make a takeover bid was only announced on 23 June 2020 and the bidder's statement was not lodged until 21 July 2020. As a consequence, in the absence of evidence that Cromwell was preparing this application in anticipation of a takeover bid, the ARA respondents are not assisted by the temporal order of Cromwell's application for preliminary discovery and ARA BidCo's takeover bid. 57 The ARA respondents also submit that this preliminary discovery application is "for the purpose of enabling" Cromwell to establish that the ARA respondents and the Tang respondents have contravened s 606(1) of the Act, and to seek orders requiring the ARA respondents to divest themselves of interests in Cromwell securities obtained as part of the takeover bid. However, this application should not be characterised in that way. The purpose of an application under r 7.23 is obtaining documents to enable a decision to be made about whether or not to commence proceedings. Once that happens, the preliminary discovery proceeding comes to an end. While the ARA respondents assume a further, future proceeding will be commenced, it may well be that Cromwell never commences other proceedings against the prospective respondents in relation to the matters which underpin this preliminary discovery application. The ARA respondents also assume that any proceeding which Cromwell might commence will seek certain orders, but any such orders in a potential future proceeding have not yet been furnished to any court (let alone this Court). Such hypothetical orders do not provide a basis to characterise this application. 58 The ARA respondents' submissions failed to show that this application, properly characterised, relates to ARA BidCo's takeover bid. 59 Second, the cases referred to by the ARA respondents were not preliminary discovery applications. 60 St Barbara concerned a review of a decision of the Australian Securities and Investments Commission (ASIC) to refuse to accept for registration bid documents, relating to a proposed takeover offer, which St Barbara had sought to lodge with ASIC. Drillsearch concerned proceedings seeking an injunction restraining the holding of a proposed meeting of members of Drillsearch until the Takeovers Panel had determined an outstanding application made to the Panel based on allegations of "unacceptable circumstances" in relation to the takeover and until any remedial action ordered by the Takeovers Panel had been taken. 61 Those are cases which quintessentially relate to a takeover bid, but they are decidedly different to a preliminary discovery application, the consequence of which is the mere provision of documents to the prospective applicants by the prospective respondents. 62 Lionsgate concerned whether a bidder under a takeover bid may commence court proceedings for specific performance of its contract with a substantial shareholder of the target company, under which the shareholder had undertaken to sell into the bid. Even then, Austin J held that such a proceeding was not a proceeding "in relation to a takeover bid". Cromwell's application for preliminary discovery, which merely concerns the provision of documents, when compared to the facts of Lionsgate, is further removed from a proceeding which can be properly characterised as being "in relation to a takeover bid". 63 Third, this proceeding does not owe its existence to the Act. This proceeding arises under r 7.23 of the Rules. "Although the takeover tactics of both sides may lay behind the litigation, what brings the matter to court is the existence of" a rule of this Court, namely r 7.23: Lionsgate at [21]. This proceeding is about the provision of documents – it is not about "whether the takeover bid should be disrupted or allowed to proceed": Lionsgate at [21]. 64 Fourth, "courts will interpret any provision affecting their jurisdiction in such a way as to have the minimum effect on it": Lionsgate at [27]. The same approach "is to be taken where a statute purports to prevent proceedings from being commenced during a stated period, even if the provision does not in its terms deprive the court of jurisdiction": Lionsgate, [27]. That principle is contrary to the overly broad interpretation which the ARA respondents sought to ascribe to the words "in relation to" in s 659B. 65 Fifth, the "starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose": SZTAL v Minister for Immigration and Border Protection [2017] HCA 34, 262 CLR 362, [14] (Kiefel CJ, Nettle and Gordon JJ). Explanatory memoranda can be considered in interpreting s 659B: Acts Interpretation Act 1901 (Cth), s 15AB; Corporations Act 2001 (Cth), s 5C. 66 An obvious purpose of s 659B was avoiding "tactical litigation" that "can result in bids being delayed" and "the courts having to decide between disrupting the bid by granting an injunction without the benefit of full evidence and allowing the bid to proceed even though it may later be found to be defective": CLERP Explanatory Memorandum, [7.2]. There is no reason to suspect that granting Cromwell's application will result in any delay to ARA BidCo's proportional takeover bid, or this Court having to grant injunctions relating to that bid without the benefit of full evidence. If Cromwell's application for preliminary discovery is granted, all that will happen is documents will be provided to Cromwell by the prospective respondents. Granting this preliminary discovery application does not result in or cause the problem that s 659B sought to remedy. Like the position in Lionsgate, if Cromwell's preliminary discovery application is successful, the bid will still proceed: Lionsgate, [21]. 67 Sixth, the Takeovers Panel, when considering Cromwell's application to it, noted the following at [31]-[32]: 31. In Dragon Mining Limited [[2014] ATP 5 at [27]], the Panel stated that, in considering whether to conduct proceedings: … there must be a sufficient body of material demonstrated by the applicant, which together with inferences (for example from partial evidence, patterns of behaviour and a lack of a commercially viable explanation) support the Panel conducting proceedings. 32. The Panel went on to state: Dromana Estate Limited 01R acknowledges the difficulties that an applicant faces in gathering evidence in association matters. In deciding whether to conduct proceedings on an association case, this must be kept in mind. However, the Panel has limited investigatory powers which means, before we decide to conduct proceedings, an applicant must do more than make allegations of association and rely on us to substantiate them. An applicant must persuade us by the evidence it adduces that we should conduct proceedings. (Cromwell Property Group [2020] ATP 1; emphasis added.) 68 The Takeovers Panel also does not have the power to order broad discovery or preliminary discovery: Australian Securities and Investments Commission Act 2001 (Cth), ss 192 and 199; Australian Securities and Investments Commission Regulations 2001 (Cth), reg 16; Re Pinnacle VRB Ltd (No 8) (2001) 39 ACSR 55, 67. 69 In these circumstances, an application for preliminary discovery is not a matter which is "really … within the [Takeover] Panel's province": Drillsearch, [18]. Section 659B(1) does not apply 70 For the reasons given, in the particular context of this application, s 659B(1) has no application to this proceeding. 71 Given I have decided that s 659B(1) does not apply to this preliminary discovery application, it is unnecessary for me to consider the parties' submissions on the construction of s 659B(2). 72 However, the question remains whether Cromwell has satisfied r 7.23. RULE 7.23 73 The relevant principles to be applied in determining an application for preliminary discovery under r 7.23 of the Rules may be summarised as follows. 74 Rule 7.23 provides: (1) A prospective applicant may apply to the Court for an order under subrule (2) if the prospective applicant: (a) reasonably believes that the prospective applicant may have the right to obtain relief in the Court from a prospective respondent whose description has been ascertained; and (b) after making reasonable inquiries, does not have sufficient information to decide whether to start a proceeding in the Court to obtain that relief; and (c) reasonably believes that: (i) the prospective respondent has or is likely to have or has had or is likely to have had in the prospective respondent's control documents directly relevant to the question whether the prospective applicant has a right to obtain the relief; and (ii) inspection of the documents by the prospective applicant would assist in making the decision. (2) If the Court is satisfied about matters mentioned in subrule (1), the Court may order the prospective respondent to give discovery to the prospective applicant of the documents of the kind mentioned in subparagraph (1)(c)(i). 75 In Poole v Australian Pacific Touring Pty Ltd [2017] FCA 424 (Poole), Bromwich J summarised the applicable principles at [39]: … the general body of principles developed in relation to the requirements for an application for preliminary discovery in this Court, many of which were originally expounded in relation to the old rule, remain apposite and may be summarised as follows: (1) Rule 7.23 is to be beneficially construed and given the fullest scope that its language will reasonably allow, with the proper brake on any excesses lying in the discretion of the Court, exercised in the particular circumstances of each case: [Optiver Australia Pty Ltd v Tibra Trading Pty Ltd [2008] FCAFC 133; 169 FCR 435 (Optiver)] at [43] quoting with approval St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360; 211 ALR 147 [(St George Bank Ltd)] at 153 [26(a)] and Paxus Services Ltd v People Bank Pty Ltd (1990) 99 ALR 728 at 733. (2) Each of the pre-requisites set out in r 7.23(1) must be met before the discretion in r 7.23(2) is enlivened: St George Bank Ltd at [26(b)], citing Hooper v Kirella Pty Ltd (1999) 96 FCR 1 at 11 [38]. (3) Not every element of any relevant cause of action must be established, provided there exists a reasonable cause to believe the prospective applicant "may have" a right to obtain the relief: Optiver at [48]. (4) A "belief" requires more than mere assertion and more than suspicion or conjecture. The evidence must "incline the mind towards the matter of fact in question": Optiver at [48], citing, inter alia, John Holland Services Pty Ltd v Terranora Group Management Pty Ltd [2004] FCA 679 at [13], [14], [17] and [73]. (5) The rule does not speak in terms of a belief in the existence of a cause of action. It speaks of a right to relief. By reason of the expression "may have", the rule is concerned with a belief in the possibility (not the existence) of such a right: Sandhurst Trustees Limited v Clarke [2015] FCAFC 21; (2015) 321 ALR 1 at 16 [24], citing [EBOS Group Pty Ltd v Team Medical Supplies Pty Ltd (No 3) [2012] FCA 48; 199 FCR 533] at [31]. (6) The notion that an order for preliminary discovery is no longer appropriate once a prospective applicant has sufficient information to meet the threshold of "a bare pleadable case" is fundamentally inconsistent with the purpose of the rule, which is concerned not just with reasonable belief as to the possible right to relief, but also with whether the cost and risk of litigation is worthwhile: Optiver at [35]-[36]. It follows that the question posed by r 7.23(1)(b) is not whether the applicant has sufficient information to decide if a cause of action is available against the prospective respondent, but rather whether the applicant has sufficient information to make a decision whether to commence proceedings in the Court. (7) It is not an answer to an application to say that preliminary discovery is in the nature of a fishing expedition, because that is precisely what such a rule contemplates: St George Bank at 154 [26(h)]. (Emphasis in the original.) 76 The summary of applicable principles in Poole was recently adopted by Moshinsky J in Nalini Asher Enterprises Pty Ltd v H&M Tracey Construction Pty Ltd [2019] FCA 2161 (Nalini) at [11]. 77 In Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd [2017] FCAFC 193; 257 FCR 62 (Pfizer), Chief Justice Allsop cautioned that the "existing authorities appear to have been influencing these applications into a form of mini-trial where a form of fact finding takes place, well beyond the mandate of the words of the rule": Pfizer, [2]. Chief Justice Allsop observed that "[t]hese are summary applications not mini-trials": Pfizer, [2]. His Honour stated that "[r]ule 7.23 is a beneficial provision, the purpose of which is to enable a person who believes he, she or it may have a right to seek relief to obtain information to make a responsible decision as to whether to commence proceedings": Pfizer, [4] (emphasis added). 78 In Pfizer, Allsop CJ stated at [8]: There have been a large number of cases now (both at first instance and Full Court) dealing with and explaining the relevant rule. Those authorities should not be utilised to form a complex matrix of sub-rules for the operation and application of a tolerably straightforward provision … [T]here does appear to have been a tendency to create an overly abstracted conceptualisation of refined states of mind which, if the words of the rule are not kept in mind, can lead in application to a misstatement of the essence of the rule, focused as it is upon what may be the position. The foundation of the application in r 7.23(1)(a) is that an applicant (a person or a corporation) reasonably believes that he, she or it may have a right to relief. The belief therefore must be reasonable (expressed in the active voice that someone reasonably believes) and it is about something that may be the case, not is the case. It is unhelpful and likely to mislead to use different words such as "suspicion" or "speculation" to re-express the rule. For instance, it is unhelpful to discuss the theoretical difference between "reasonably believing that one may have a right to relief" and "suspecting that one does have a right to relief" or "suspecting that one may have a right to relief" or "speculating" in these respects. The use of such (different) words and phrases, with subtleties of differences of imprecise meaning, and not found within the rule itself is likely to lead to the proliferation of evidence and of argument, to confusion and to error. One must keep the words of the rule firmly in mind in examining the material that exists in order to come to an evaluation as to whether the relevant person reasonably believes that he or she may have a right to relief. That evaluation may well be one about which reasonable minds may differ. (Emphasis in the original.) 79 "The applicants must reasonably believe that they may have, not that they have, the right to obtain relief": Pfizer, [17] (Allsop CJ); bold text in the original. 80 Allsop CJ stated at [81]: … in my respectful view, the primary judge approached the matter by asking himself the wrong question. It was not a matter of which body of expert evidence to prefer; rather, it was whether Pfizer reasonably believed that it may have a right to relief. That involved the question whether Dr Ibarra's views were capable of giving a reasonable basis for a belief about that matter. 81 In Pfizer, Perram J stated, at [118]-[119]: … the Court has occasionally applied the necessity for the reasonable belief to relate to the existence of a right to obtain relief rather than a possible existence of a right to obtain relief … The practical effect of this misapprehension has been that, in recent times, applications under FCR 7.23 have tended to become in many instances mini-trials because of a perceived need to show the reasonableness of a belief that a right to relief exists rather than might exist. In my opinion, St George does not require this and, to the extent that John Holland does, it is difficult to reconcile with the text of the rule. (Citations omitted.) 82 Perram J stated at [120]-[121]: … the question of whether the belief is reasonable requires one to ask whether a person apprised of all of the material before the person holding the belief (or subsequently the Court) could reasonably believe that they may have a right to obtain relief; and … it is useful to ask whether the material inclines the mind to that proposition but very important to keep at the forefront of the inclining mind the subjunctive nature of the proposition. One may believe that a person may have a case on certain material without one's mind being in any way inclined to the notion that they do have such a case. In practice, to defeat a claim for preliminary discovery it will be necessary either to show that the subjectively held belief does not exist or, if it does, that there is no reasonable basis for thinking that there may be (not is) such a case. Showing that some aspect of the material on which the belief is based is contestable, or even arguably wrong, will rarely come close to making good such a contention. Many views may be held with which one disagrees, perhaps even strongly, but this does not make such a view one which is necessarily unreasonably held. Nor will it be an answer to an application for preliminary discovery to say that the belief relied upon may involve a degree of speculation. Where the language of FCR 7.23 relates to a belief that a claim may exist, a degree of speculation is unavoidable. The question is not whether the belief involves some degree of speculation (how could it not?); it is whether the belief resulting from that speculation is a reasonable one. Debate on an application will rarely be advanced, therefore, by observing that speculation is involved. 83 Perram J stated at [123] that "[u]ltimately, a degree of speculation on a preliminary discovery application is an inevitable consequence of the nature of [an] application [for preliminary discovery] itself" (emphasis added). 84 Perram J stated at [125]: … it may prove practically difficult to disprove a reasonable belief that a case may exist by seeking to demonstrate that the internal legal mechanics of the suspected case are faulty or contestable. In many cases this will have little impact on the question of whether the belief that a case may exist is reasonably held. More likely fruitful will be arguments to the effect that no reasonable person apprised of what the prospective applicant puts before the Court would think that a right to obtain relief might exist. Couched in those terms the difficulty confronting a prospective respondent on a preliminary discovery application may be clearer. 85 Pausing there, I note that the parties to this application adopted an approach which essentially entailed a "mini-trial". By way of example: (1) Cromwell's written submissions were 32 pages long, and were supported by the first Weightman affidavit, first Demiris affidavit, second Weightman affidavit and second Demiris affidavit. The first Weightman affidavit (including annexures) ran to approximately 1,200 pages; (2) the submissions of the ARA respondents were 20 pages in length and supported by the Lloyd affidavit, the Blight affidavit, the Vaatstra affidavit and the Leibler affidavit. The Blight affidavit ran to 422 pages. When combined, including annexures, the ARA respondents' affidavit material was approximately 700 pages in length; (3) the submissions of the Tang respondents were 38 pages long. The Tang respondents have filed 4 affidavits which, when combined, including annexures, ran to over 400 pages in length. 86 Submissions were made by the Tang respondents concerning the minutiae of what inferences were available on the basis of communications between the parties or representatives of the parties. By way of example, submissions were made about whether certain statements could "bear the weight" that Cromwell seeks to place on them, whether statements by Cromwell were "implausible", whether Cromwell's evidence indicates a "spiral of suspicion", whether Cromwell's evidence relating to a text message was a "plausible deduction" or supported the inference which Cromwell sought to derive from it. 87 Much of the affidavit material was totally unnecessary for an application of this kind, which is made under a rule that is "tolerably straightforward": Pfizer, [8] (Allsop CJ). Assessing some of the submissions based on much of this material would have required making determinations concerning nuanced inferences, without the benefit of cross-examination, and, in many cases, merely on the basis of affidavits of the parties' solicitors, not the parties themselves. Much of the material, at best, showed that matters in the first Weightman affidavit were "contestable" which, as Perram J stated in Pfizer, will "rarely come close" to showing that a matter has no reasonable basis: Pfizer, [121] (Perram J). The material was provided to the Court in the context of an application which essentially involves "examining the material that exists in order to come to an evaluation as to whether the relevant person reasonably believes that he or she may have a right to relief", and that "evaluation may well be one about which reasonable minds may differ": Pfizer, [8] (Allsop CJ). 88 The parties' approaching this application as if it were a "mini-trial", was contrary to Full Court authority. 89 With that summary set out, I do not propose to burden these reasons with the various competing submissions that were put by the parties. The written submissions of the parties may be found on the Court file. APPLICATION OF THE PRINCIPLES TO THE EVIDENCE First limb – r 7.23(1)(a) of the Rules 90 The first limb of r 7.23(1) requires that Cromwell "reasonably believe" that it may have a right to obtain relief from the prospective respondents. 91 Mr Weightman is the managing director and chief executive officer of Cromwell. Mr Weightman has filed two affidavits in which he deposes to his belief about an association between the ARA respondents and the Tang respondents: first Weightman affidavit at [15] and [136]. Mr Weightman's belief concerns alleged contraventions of s 606(1) and s 671B(1) of the Act. It is necessary to set out the operation of those provisions. Possible contravention of s 606(1) 92 Section 606(1) provides: (1) A person must not acquire a relevant interest in issued voting shares in a company if: (a) the company is: (i) a listed company; or (ii) an unlisted company with more than 50 members; and (b) the person acquiring the interest does so through a transaction in relation to securities entered into by or on behalf of the person; and (c) because of the transaction, that person's or someone else's voting power in the company increases: (i) from 20% or below to more than 20%; or (ii) from a starting point that is above 20% and below 90%. 93 The first element of s 606(1) is that a person has acquired a "relevant interest" in issued voting shares. Section 608 describes when a person has a "relevant interest" in securities. Relevantly, for present purposes: (1) a person has a "relevant interest" in securities where, while not holding the securities, the person has the power to exercise, or control the exercise of, a right to vote attached to the securities: s 608(1)(b); (2) "power or control" includes power or control that is indirect: s 608(2)(a); (3) where a person controls a body corporate, or has voting power in a body corporate above 20%, the person has a relevant interest in any securities which that body corporate has: s 608(3). 94 The second element of s 606(1) is that the person's acquisition of the relevant interest occurs through a transaction by or on behalf of that person. The third element is that, because of that transaction, the person's "voting power", or someone else's "voting power", increases as described in s 606(1)(c). 95 "Voting power" is defined in s 610. A person's "voting power" in a "designated body" (being a body, including a body corporate, or a managed investment scheme) is calculated according to the following formula (incorporating the definitions in s 610): (total number of votes attached to all voting shares in the designated body that the person or an associate has a relevant interest in / total number of votes attached to all voting shares in the designated body) x 100 96 Calculating a person's voting power involves counting not just the votes attached to all voting shares in which the person has a relevant interest, but also the votes attached to all voting shares in which any associates of the person have a relevant interest. 97 When a person is an "associate" of another is dealt with in s 12, which relevantly provides: (2) … a person (the second person) is an associate of the primary person if, and only if, one or more of the following paragraphs applies: (a) … (b) the second person is a person with whom the primary person has, or proposes to enter into, a relevant agreement for the purpose of controlling or influencing the composition of the designated body's board or the conduct of the designated body's affairs; (c) the second person is a person with whom the primary person is acting, or proposing to act, in concert in relation to the designated body's affairs. 98 Subparagraph (b) refers to a "relevant agreement". "Relevant agreement" is defined broadly in s 9 to mean "an agreement, arrangement or understanding", "whether formal or informal or partly formal and partly informal", "whether written or oral or partly written and partly oral", and "whether or not having legal or equitable force and whether or not based on legal or equitable rights". 99 Both subparagraphs (b) and (c) of s 12(2) refer to the "designated body's affairs". This concept is defined very broadly in s 53. The definition in s 53 applies for the purposes of s 12 of the Act by virtue of regulation 1.0.18(b) of the Corporations Regulations 2001 (Cth). 100 Mr Weightman deposes that Cromwell believes the ARA respondents and the Tang respondents: (1) have had and continue to have a "relevant agreement" for the purpose of controlling or influencing the composition of the board of Cromwell or the conduct of Cromwell's affairs; and (2) have acted and continue to act in concert in relation to Cromwell's affairs, such that they have been, and remain, associates within the meaning of s 12: first Weightman affidavit at [52]-[135]. 101 I address Mr Weightman's belief on this matter further below. Possible contravention of s 671B(1) 102 Section 671B(1) relevantly provides: (1) A person must give the information referred to in subsection (3) to a listed company, or the responsible entity for a listed registered scheme, or the operator of a listed notified foreign passport fund, if: (a) the person begins to have, or ceases to have, a substantial holding in the company, scheme or fund; or (b) the person has a substantial holding in the company, scheme or fund and there is a movement of at least 1% in their holding; … 103 There are two states of affairs that relevantly engage s 671B(1): beginning to have a "substantial holding" or a "movement of at least 1%" occurring in an existing substantial holding. 104 "Substantial holding" is defined in s 9 relevantly as follows: a person has a substantial holding in a body corporate, listed registered scheme or listed notified foreign passport fund if: (a) the total votes attached to voting shares in the body or voting interests in the scheme or fund, in which they or their associates: (i) have relevant interests; … is 5% or more of the total number of votes attached to voting shares in the body or interests in the scheme or fund; … 105 Calculating whether a person has a "substantial holding" involves counting not just the votes attached to voting shares in which the person has a relevant interest, but also the votes attached to voting shares in which "their associates" have a relevant interest. 106 The concept of a "movement of at least 1%" is dealt with in s 671B(2). That section provides that there is a "movement of at least 1%" in a person's holding if the percentage worked out using the following formula increases or decreases by 1 or more percentage points from the percentage last disclosed: (total number of votes attached to all voting shares in the company, interests in the scheme or interests in the fund that the person or an associate has a relevant interest in / total number of votes attached to all voting shares in the company, interests in the scheme or interests in the fund) x 100 107 This formula takes into account not just the votes attached to securities in which the person has a relevant interest, but also the votes attached to securities in which any associates of the person have a relevant interest. Thus, where a person has one or more undisclosed associates, that person's holding may experience a "movement of at least 1%" in circumstances where, on the face of the matter, this is not immediately apparent. 108 Where a person begins to have a substantial holding, or experiences a movement of at least 1%, s 671B(1) provides that the "information referred to in subsection (3)" must be given to the company concerned. That information includes the name of each associate who has a relevant interest in the securities and the nature of the association with that associate: s 671B(3)(d). Section 671B(6) relevantly provides that the person must give the information in subsection (3) within two business days after the person becomes aware of the information. 109 Mr Weightman deposes to occasions on which he believes, assuming association (to which I will come), that the first, fourth, fifth and seventh prospective respondents experienced a movement of at least 1% of their substantial holdings and failed to provide the information required by s 671B(3), thus contravening s 671B(1). Annexure PLW-32 to the first Weightman affidavit lists transactions which, if association between the ARA and Tang respondents is assumed, are said to contravene s 671B(1) of the Act. Summary of the prospective respondents' submissions on r 7.23(1)(a) 110 The ARA respondents' submissions did not concede that Cromwell has a reasonable belief that it has a right to obtain relief from the ARA respondents, but, for the purposes of this application, the ARA respondents did not contest the requirement in r 7.23(1)(a). 111 By way of summary, the Tang respondents submitted that: (1) Cromwell has not established a reasonable belief that they may have the right to obtain relief from any of the Tang respondents, so as to justify an order against that particular prospective respondent; (2) Cromwell has publicly and repeatedly asserted an association of the kind about which Cromwell says it is too uncertain to commence proceedings. Is Cromwell's belief reasonably based? 112 As to the Tang respondents' submissions that Cromwell's belief is not reasonable or is not reasonably based, I have read those submissions and considered the affidavit material which I was referred to during the hearing of this matter. I have evaluated all of the voluminous material filed by the parties. Having conducted that evaluation, I am satisfied that Cromwell's belief (as distinct from that belief's content, to which I will return) had a sufficient basis for the purposes of r 7.23(1)(a). 113 At best, the Tang respondents' submissions showed that the basis of Cromwell's belief was "contestable", but, as Perram J stated in Pfizer, that will "rarely come close" to showing that a subjectively held belief does not exist or, if it does, that there is no reasonable basis for it: Pfizer, [121]. In addition, as I have foreshadowed above, to properly test the Tang respondents' submissions would have required deciding between nuanced inferences asserted by the parties about "refined states of mind": Pfizer, [8] (Allsop CJ). It would have been necessary to do that without the benefit of cross-examination and, in the Tang respondents' case, merely on the basis of evidence affirmed by the Tang respondents' solicitor, Mr Coidan of Gilbert + Tobin, not the Tang respondents themselves or a representative of the corporate Tang respondents. 114 I was not in a position to make factual findings of that kind in this proceeding, which was a summary application, not a mini-trial. 115 In any event, as will become apparent, the main issue was not whether Cromwell's relevant belief was reasonably based. The more pressing question was the content of that belief, to which I now turn. Does Cromwell reasonably believe that it may have a right to the relevant relief? 116 I am not satisfied that Cromwell reasonably believes that it may have the right to obtain relief on the basis of the provisions of the Act as set out above. Rather, based on the affidavit material filed by the parties, it is tolerably clear that Cromwell believes that it has a right to obtain such relief. 117 If "the criteria [in the equivalent provision to r 7.23(1)(b) which appeared in Order 15A of the Federal Court Rules 1979 (Cth)] are too generously interpreted, preliminary discovery could be available in advance of the commencement of virtually any proceeding": Telstra Corporation Ltd v Minister for Broadband, Communications and the Digital Economy [2008] FCAFC 7; 166 FCR 64 at [59] (French, Weinberg and Greenwood JJ). 118 If the prospective applicant already believes that there is a cause of action, discovery is not available to enable the applicant to verify that belief or otherwise to ascertain the strength of the case for the right to relief: Dyer v Hunter [1999] VSC 531 at [7] (Beach J); Pfizer at [108] (Perram J). 119 I have set out above Allsop CJ's statements in Pfizer, where his Honour emphasised the word "may" in r 7.23(1)(a). Allsop CJ stated that "[t]he belief … is about something that may be the case, not is the case": Pfizer, [8] (emphasis in original). 120 Perram J also stated at [108] in Pfizer: FCR 7.23(1) is not about giving preliminary discovery to those who believe they do have a case. Its wording unequivocally shows that it is about those who do not know that they have a case but believe that they may. In terms, it authorises what traditionally have been referred to as fishing expeditions; that is to say, evidentiary adventures in which the goal is not to find proof of a case already known to exist, but instead to ascertain whether a case exists at all. (Emphasis added.) 121 In this respect, there can be little doubt that Cromwell has already formed the view that there is in fact an association between the ARA respondents and the Tang respondents such that Cromwell is entitled to relief under ss 1324 and 1325A of the Act. 122 Mr Weightman is the Managing Director and CEO of Cromwell and, for the purposes of this application, is the relevant decision maker for determining whether Cromwell commences proceedings to obtain relief under ss 1324 and 1325A of the Act. Mr Weightman in his first affidavit relevantly deposes to the following: 52. For the reasons set out in Part G below, Cromwell believes that the ARA respondents, on the one hand, and the Tang respondents, on the other: (a) have had and continue to have a "relevant agreement" for the purpose of controlling or influencing the composition of the board of Cromwell or the conduct of Cromwell's affairs; and (b) have acted and continue to act in concert in relation to Cromwell's affairs; such that they have been, and remain, "associates" within the meaning of the Act. 53. Cromwell's belief that there was, and continues to be, the association just described is based on a range of facts and matters of which I am personally aware. Those facts and matters are set out in paragraphs 57 to 135 below. … 143. In order for Cromwell to decide whether to commence a proceeding in this Court for relief against the prospective respondents under s 1324 and s 1325A of the Act, Cromwell needs to know whether it will be able to establish that the prospective respondents are associates of one another. I have explained above how establishing that the prospective respondents are associates of one another is a necessary step in establishing liability on the part of the prospective respondents under ss 606 and 671B of the Act (and thus a necessary step in establishing an entitlement to relief under s 1324 or s 1325A). … 145. Having made the inquires to which I have referred, I believe Cromwell does not have sufficient information to decide whether to start a proceeding in this Court to obtain relief under ss 1324 and 1325A from the prospective respondents. That is because Cromwell does not have sufficient information to determine whether it will be able to establish, in any substantive proceeding, that the prospective respondents are associates of one another. (Emphasis added.) 123 Mr Weightman at [52] of his first affidavit states unambiguously that Cromwell believes that the ARA respondents and the Tang respondents have had and continue to have a "relevant agreement" for the purposes of controlling or influencing the composition of the board of Cromwell or the conduct of Cromwell's affairs. Mr Weightman deposes to Cromwell's belief that the ARA respondents and the Tang respondents have acted and continue to act in concert in relation to Cromwell's affairs such that "they have been, and remain, "associates" within the meaning of the Act". There is nothing conditional, speculative or hypothetical about Cromwell's stated belief based on the matters deposed to by Mr Weightman at [52] of his first affidavit. 124 At [143] of his first affidavit, Mr Weightman deposes to Cromwell needing "to know whether it will be able to establish that the prospective respondents are associates of one another". Cromwell is needing to know that it can establish or prove against the prospective respondents that they are associates of one another not whether Cromwell may have a right to relief against the prospective respondents. 125 At [145] of his first affidavit, Mr Weightman deposes to Cromwell not having sufficient information to decide whether to start a proceeding because "Cromwell does not have sufficient information to determine whether it will be able to establish, in any substantive proceeding, that the prospective respondents are associates of one another" (emphasis added). Again, Mr Weightman deposes to Cromwell's need to obtain information to enable Cromwell to be able to establish or prove association against the prospective respondents. 126 As Perram J observed at [108] in Pfizer, r 7.23(1) is not about giving preliminary discovery "to those who believe they do have a case". The plain meaning of the text of the rule, which Allsop CJ observed in Pfizer at [8] is "tolerably straightforward", is about giving preliminary discovery to those who do not know that they have a case but believe that they may. The rule does not permit preliminary discovery to find evidence to establish proof of a case which is known to exist. The rule only authorises preliminary discovery where the applicants' belief is that they do not know whether they have a case but believe that they may. 127 Cromwell's belief that the ARA respondents and the Tang respondents are in fact associates such that Cromwell believes it is entitled to relief under ss 1324 and 1325A of the Act is further demonstrated in Cromwell's submissions to the Takeovers Panel. 128 Cromwell has positively asserted that there is such an association in its submissions to the Takeovers Panel. In the Panel Application, Cromwell made, by way of example, the following statements: (1) "[t]here is sufficient evidence ... to … infer, based on a substantial body of evidence as set out in this application, that the ARA Group has a relevant agreement and is associated, with Ms Jialei Tang in relation to, inter alia, the conduct of Cromwell's affairs"; (2) "[t]here is sufficient evidence ... to … infer, based on a substantial body of evidence, that the ARA Group has a relevant agreement and is associated with the Tang Group in relation to, inter alia, the conduct of Cromwell's affairs"; (3) "[t]he alignment of the ARA Group, Ms Jialei Tang and the Tang Group is not merely a common approach to one matter but is part of a broader arrangement, with the intention being to pursue an agreed joint approach and that proposals will continue to be pursued jointly by them if Cromwell's directors do not submit to the demands of the ARA Group and the Tang Group. This arrangement is in breach of the Corporations Act …"; (4) "the ARA Group had an understanding (which constitutes a "relevant agreement" within the meaning of the Corporations Act) with each of Ms Jialei Tang and the Tang Group in relation to the control of, the appointment of directors to, and the conduct of the affairs of, Cromwell"; (5) "[a]lthough some of the conduct upon which this application is based occurred more than two months ago; prior to Cromwell's 2019 AGM, there was at best only a suspicion on the part of Cromwell of an understanding and association existing between the ARA Group, Ms Jialei Tang and the Tang Group in relation to the affairs of Cromwell. Indeed, until very recently there was insufficient evidence to form the basis for an application of the type now made"; (6) "Cromwell has become fully aware of the depth and seriousness of the connection that exists between (a) the ARA Group and Ms Jialei Tang, (b) Ms Jialei Tang and the Tang Group, and (c) the ARA Group and the Tang Group …"; (7) "it is the cumulative effect of both the recent and past conduct of the ARA Group, Ms Jialei Tang and the Tang Group, … that when looked at in its totality has laid bare the understanding and association that exists between the ARA Group and Ms Jialei Tang together with the Tang Group in relation to the affairs of Cromwell" (emphasis added). 129 Cromwell has made public statements that there is an association between the ARA respondents and the Tang respondents. The following statements have appeared on Cromwell's webpage: (1) "Cromwell remains concerned about the relationship between ARA, Tangs, Straits Trading and Dr Weiss. Concerns about the relationships between the parties and their path to taking Cromwell over by stealth, without paying a premium for doing so, is [sic] documented on Cromwell's website"; (2) "Cromwell struggles to accept the assertion that Ms Tang is independent of, and has no association with, her parents, despite living at home with her parents, being in her early 20's and working from the family company"; (3) a statement by Mr Weightman as follows: [The ARA respondents proposed candidate for Cromwell's board of directors,] Dr Weiss[,] is now orchestrating the same playbook on behalf of ARA, and another Singaporean family with whom they have a close business relationship, the Tangs. The relationship between them is outlined on our website and we believe their co-incidental creep and voting patterns are designed, in our opinion, to circumvent compulsory takeover rules. These types of associations are difficult to prove to the extent required by the Takeovers Panel but I'm reminded of the old saying that if it walks like a duck, looks like a duck and quacks like a duck, it's a duck[.] (Emphasis added.) (4) "votes for Dr Weiss at the 2019 AGM were almost entirely made up of ARA's securityholding and that of another Singapore based family (the Tangs), with whom ARA has a "long-standing business relationship". It is incorrect for ARA to assert that Dr Weiss had anything other than very low support from non-affiliated Cromwell securityholders"; (5) there appear to have been various statements on Cromwell's webpage which count the ARA respondents' and Tang respondents' securityholdings in Cromwell as a "combined … securityholding" in Cromwell. 130 Allsop CJ observed in Pfizer that "[o]ne must keep the words of [r 7.23] firmly in mind in examining the material that exists in order to come to an evaluation as to whether the relevant person reasonably believes that he or she may have a right to relief", and such an "evaluation may well be one about which reasonable minds may differ": Pfizer, [8] (emphasis added). 131 Having evaluated the material filed by the parties, in my view, and for the reasons set out above, Cromwell's application does not satisfy the requirement in r 7.23(1)(a). Second limb – r 7.23(1)(b) of the Rules 132 I am also not satisfied that Cromwell "does not have sufficient information to decide whether to start a proceeding" in this Court to obtain relief from each of the prospective respondents for contraventions of s 606(1) and s 671B(1) of the Act. 133 I have set out above statements which Cromwell has made which make it tolerably clear that Cromwell believes it has a case against the ARA respondents and the Tang respondents. Notwithstanding these statements, Cromwell contends that it is entitled to preliminary discovery in order to ascertain "the extent and nature of the documentary evidence" relevant to its case. This is said to be necessary so that Cromwell can ascertain "whether it will be able to establish" that association. 134 The nature of that enquiry is directed towards assessing Cromwell's prospects of establishing an association which Cromwell has said exists. However, r 7.23 is not about assisting a party to find further "proof of a case already known to exist": Pfizer, [108]. 135 The obvious inference to be drawn from the statements by Cromwell set out above, and the affidavit material filed by the parties, is that Cromwell has already formed the view that it has a right to obtain relief on the basis of an association between the ARA respondents and the Tang respondents, and is impermissibly seeking to use the procedure of preliminary discovery to obtain evidence in order to better assess its prospects of success or perhaps bolster its pleading, prior to commencing a case it has already determined, and publicly stated, exists. That ensures Cromwell's application falls foul of rule 7.23(1)(b). 136 Cromwell relies on the following statement of Derrington J in John Bridgeman Limited v National Stock Exchange of Australia Limited [2019] FCA 1127; 139 ACSR 244 at [47]: [It was] submitted that in the application of r 7.23(1)(b) the question is whether after making reasonable enquiries the prospective applicant does not have sufficient information to decide whether they ought to start a proceeding … Importantly, the "sufficient information" includes that which might identify what defences may be available to the prospective respondent and the strength of those defences or to determine the extent of the prospective respondent's breaches … As was said by Perry J in ObjectiVision Pty Ltd v Visionsearch Pty Ltd (2014) 108 IPR 244 at [30], even where a prospective applicant may have reason to believe they have a right to relief, they may need further information to know whether the cost and risk of litigation is worthwhile and, in that respect, given its beneficial purpose, the rule should be given the fullest scope which its language will reasonably allow. (Citations omitted; emphasis added) 137 However, that passage deals with the circumstances in which a prospective applicant "may have reason to believe they have a right" to the relevant relief. It has minimal relevance to circumstances where, as here, the prospective applicant has positively asserted that the factual propositions underpinning the claimed relief in fact exist. Derrington J's statement should not be understood as meaning that a party who has already formed the view that it has a right to obtain relief is entitled to obtain, by way of preliminary discovery, documentary evidence to verify that belief or to confirm that it will succeed in proving its case, which is what Cromwell is seeking to do here. 138 Cromwell also submits that the preliminary discovery it seeks is necessary for it to form a view as to whether a proper basis exists for the making of allegations of contravention in this Court. Cromwell notes that there is a requirement that any pleading in this Court be accompanied by certification from a lawyer that there is a proper basis, on the material available, for each allegation made: Rules, r 16.01(c). Cromwell submits that, unlike Cromwell's Panel Application, any claim in this Court would be subject to the rules of evidence. 139 However, Cromwell has already made, in the Takeovers Panel, the allegations which underpin this application. There is no material before the Court which indicates that Cromwell did not know, or had a doubt about, whether those allegations had a proper basis before the Takeovers Panel. Cromwell has not identified what, if any, part of the "substantial body of evidence" it relied on in its application to the Takeovers Panel would be inadmissible in a court proceeding. It is also not clear why the preliminary discovery sought by Cromwell is needed in order for any eventual pleading to have a proper basis on the "factual and legal material available to [Cromwell]": Rules, r 16.01(c). As the Court observed in Optiver at [33], in relation to the former relevant rule, O 11, r 1B (which similarly provided that the factual and legal material available to (the practitioner) provided a proper basis for each allegation in the pleading), the certification required by a lawyer filing a statement of claim does not require the lawyer to make "some qualitative assessment of the prospects of success": Optiver, [33]. Provided that "there is some evidence and the gist of that evidence is properly pleaded and particularised, the pleading will not be merely "bare" but proper and adequate": Optiver, [33]; emphasis in the original. I am not persuaded that preliminary discovery is required for Cromwell to comply with r 16.01(c). 140 For these reasons, Cromwell's application does not satisfy r 7.23(1)(b). Third limb – r 7.23(1)(c) of the Rules 141 Given the findings set out above in relation to rr 7.23(1)(a) and (b), it is strictly unnecessary to consider the third limb, r 7.23(1)(c). However, if I am wrong about the first and second limbs (ie rr 7.23(1)(a) and (b)), I would deal with the third limb as follows. 142 The third limb of r 7.23(1) requires a reasonable belief that the prospective respondents are likely to have, or are likely to have had, documents directly relevant to the question whether Cromwell has a right to obtain relief, and that inspection of the documents would assist in making the decision whether to commence a proceeding. 143 I am satisfied on the basis of the affidavit material filed by Cromwell that the prospective respondents are likely to have, or likely to have had, documents which evidence the extent and nature of the association, if any, between the prospective respondents. The prospective respondents are the very parties to the alleged association. RULE 7.23(1) OF THE RULES IS NOT SATISFIED 144 For the reasons set out above, I am not satisfied that the prerequisites in rr 7.23(1)(a) and (b) are satisfied in this case. As a consequence, the discretion in r 7.23(2) is not enlivened and Cromwell's application must fail. DISPOSITION 145 The prospective applicants' application is dismissed, with costs. I certify that the preceding one hundred and forty-five (145) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Anderson. Associate: Dated: 16 October 2020 SCHEDULE OF PARTIES VID 513 of 2020 Respondents Fourth Prospective Respondent: MR GORDON TANG Fifth Prospective Respondent: MRS CELINE TANG Sixth Prospective Respondent: MS JIALEI TANG Seventh Prospective Respondent: HAIYI HOLDINGS PTE. LTD. Eighth Prospective Respondent: SINGHAIYI GROUP LTD. Ninth Prospective Respondent: SENZ HOLDINGS LIMITED	21,245
federal_court_of_australia:fca/single/2023/2023fca1430	decision	commonwealth	federal_court_of_australia	text/html	2023-11-16 00:00:00	AGV20 v Minister for Immigration, Citizenship and Multicultural Affairs [2023] FCA 1430	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2023/2023fca1430	2024-09-13T22:44:33.797742+10:00	Federal Court of Australia AGV20 v Minister for Immigration, Citizenship and Multicultural Affairs [2023] FCA 1430 Appeal from: AGV20 v Minister for Immigration & Anor [2020] FCCA 2980 File number(s): NSD 1241 of 2020 Judgment of: CHEESEMAN J Date of judgment: 16 November 2023 Catchwords: MIGRATION – application for leave to appeal from interlocutory decision of the then Federal Circuit Court of Australia – where applicant did not appear – Held: application dismissed Legislation: Federal Court of Australia Act 1976 (Cth) s 24(1A) Federal Court Rules 2011 (Cth) r 35.33 Division: General Division Registry: New South Wales National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 8 Date of hearing: 16 November 2023 Counsel for the Applicant: The applicant did not appear. Solicitor for the First Respondent Ms G Gutmann of MinterEllison Solicitor for the Second Respondent: The Second Respondent filed a submitting notice save as to costs. ORDERS NSD 1241 of 2020 BETWEEN: AGV20 Applicant AND: MINISTER FOR IMMIGRATION, CITIZENSHIP AND MULTICULTURAL AFFAIRS First Respondent ADMINISTRATIVE APPEALS TRIBUNAL Second Respondent order made by: CHEESEMAN J DATE OF ORDER: 16 November 2023 THE COURT ORDERS THAT: 1. The application for leave to appeal be dismissed. 2. The applicant pay the first respondent's costs of this application. 3. The first respondent is to provide a copy of these orders and the reasons for judgment to the applicant, using the means of communication which are known to the first respondent. 4. The first respondent's name be amended to Minister for Immigration, Citizenship and Multicultural Affairs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT Ex tempore (Revised from transcript) CHEESEMAN J 1 In this proceeding, the applicant applies for leave to appeal pursuant to s 24(1A) of the Federal Court of Australia Act 1976 (Cth) from an interlocutory judgment of the Federal Circuit Court of Australia, now the Federal Circuit and Family Court, in which the applicant's application for judicial review of the decision of the Administrative Appeals Tribunal was summarily dismissed. 2 The application for leave to appeal to this Court was filed on 13 November 2020. On 10 December 2020, orders were made for the conduct of the proceedings. The directions were communicated to the applicant in the first instance by the Registry of the Court and also, most recently, by the solicitors for the first respondent, the Minister. 3 The Registry sent further communications to the applicant concerning the listing of the matter for hearing and the details of today's hearing. Those emails began with an email sent by staff of the Court to the applicant, copied to the Minister's solicitors on 1 August 2023. That email was in response to an email received from the applicant on 31 July 2023. The email from the applicant confirmed that the applicant was available for the matter to be listed for hearing in the period from 6 to 28 November 2023. Following the exchange of emails with the applicant, in August 2023, the Court emailed the applicant and the Minister's representatives again on 27 September 2023, confirming the arrangements for the hearing of the leave to appeal application before the Court today. 4 A further copy of that correspondence was provided to the applicant by the Minister's solicitors by letter dated 28 September 2023. Included in that letter was a clear statement to the effect that if the applicant did not appear at the hearing, the Minister may apply to have the matter dismissed for non-appearance under the relevant provisions under the Federal Court Rules 2011 (Cth) with costs. 5 The applicant has not filed any outline of written submissions in support of this application, notwithstanding that orders were made to allow for that to occur. Given that the application was listed for hearing today and the applicant has not appeared, the matter was called three times outside the Court. After a short adjournment, at the Minister's solicitors' request, the matter was resumed and called outside the Court again. 6 The applicant has not appeared and has sent no communication to the Court explaining their non-appearance. The Minister moves the Court for the application for leave to appeal to be dismissed pursuant to r 35.33(1)(a)(i) of the Rules. In the circumstances which I have outlined, it is appropriate for that order to be made, and for an order that the applicant pay the Minister's costs. I will further order that the Minister notifies the applicant of the orders made today and provides a copy of these reasons to the applicant. 7 I note that in the event there is an explanation presently unknown to the court as to why the applicant has not appeared today, there is an opportunity for them to apply under subsection (2) of r 35.33 of the Rules. 8 Accordingly, I will make orders as I have indicated. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Cheeseman. Associate: Dated: 16 November 2023	1,184
federal_court_of_australia:fca/single/1998/1998fca1119	decision	commonwealth	federal_court_of_australia	text/html	1998-07-20 00:00:00	United Firefighters' Union of Australia v Metropolitan Fire Brigades Board [1998] FCA 1119	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1998/1998fca1119	2024-09-13T22:44:33.997527+10:00	FEDERAL COURT OF AUSTRALIA INDUSTRIAL LAW – application for imposition of a penalty for breach of an award – meaning of the word "district" in the award Industrial Relations Act 1988, s 178 United firefighters union of australia v metropolitan fire brigades board vg 729 of 1997 black cj, sundberg & north JJ melbourne 20 july 1998 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG 729 of 1997 BETWEEN: UNITED FIREFIGHTERS UNION OF AUSTRALIA AppElLant AND: METROPOLITAN FIRE BRIGADES BOARD Respondent JUDGES: BLACK CJ, SUNDBERG & NORTH jj DATE OF ORDER: 20 JULY 1998 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The appeal be dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG 729 of 1997 BETWEEN: UNITED FIREFIGHTERS UNION OF AUSTRALIA AppElLant AND: METROPOLITAN FIRE BRIGADES BOARD Respondent JUDGE: BLACK CJ, SUNDBERG & NORTH JJ DATE: 20 JULY 1998 PLACE: MELBOURNE REASONS FOR JUDGMENT THE COURT This is an appeal against a decision of Northrop J given on 2 December 1997. The proceeding concerns the proper construction and application of the word "district" in a clause of an award. The background and legislative context is set out in his Honour's judgment and need not be repeated. For present purposes it is sufficient to say that clause 25(c) of the Victorian Firefighters Industry Interim Award (1993) (the "Award") provides for an allowance for an employee detailed for duty to a fire station other than the fire station within the district in which the person usually worked. The Award was operative from the first pay period commencing after 25 November 1993. A decision to make the Award was made by the Australian Industrial Relations Commission on 9 March 1994. The Award was the first federal award covering particular employees. It followed the form of a pre‑existing state award. Prior to the making of the Award the respondent, Metropolitan Fire Brigades Board (the "MFB"), instituted a new organisational structure for its administration. The previous structure of five districts was abandoned and in its place a structure of four zones was implemented. The construction issue has arisen in the context of an application by the appellant, United Firefighters Union of Australia (the "Union") under section 178 of the Industrial Relations Act 1988, now the Workplace Relations Act 1996, for the imposition of a penalty on the basis that the MFB acted in breach of clause 25(c) of the Award by failing to pay the allowance to Mr Lyon, an employee of the MFB, who was detailed to work on eight occasions at a station outside his pre-December 1993 district but within his post-December 1993 zone. The issue is of limited importance because the Australian Industrial Relations Commission varied the Award with effect from 14 March 1996 to replace the word "district" in clause 25(c) with the word "zone". The Union contended before his Honour that the reference to "district" in the Award referred to the districts existing before the organisational change. His Honour rejected this construction. He held that the normal meaning of "district" is an area of land delineated for some administrative purpose, and there was no sufficient evidence to show that the word had anything but its normal meaning in the Award. We agree with his Honour that the normal meaning of the word "district" is an area of land delineated for administrative purposes. A cogent reason for favouring this construction in clause 25 of the Award is that it allows employees of the MFB who commenced work after the new Award was made to ascertain their entitlement to the allowance by reference to the then current administrative structure. The alternative construction would enable such employees to ascertain their entitlement only by reference to an historical structure which applied possibly many years in the past. We consider that the Union's argument gives too little weight to the notion that emerges from the text of clause 25 that the connection of an employee with a district has to be sufficiently close for it to be said that there can be a station "within his/her district". That language naturally suggests that at the time an entitlement to an allowance arises there is something that can sensibly be said to be the district of the employee. This concept does not sit easily with the notion implicit in the Union's argument that the district being referred to was an area with which the employee once had a connection when it existed or, if the employee is a new employee, would have had a connection if it still existed within the administrative framework of the MFB. Another problem with the interpretation that the Union would place upon clause 25 is it would deny effectiveness, for the purposes of clause 25, to even the slightest adjustment of district boundaries. On appeal the Union relied, in substance, on three arguments. First, it contended that when the parties agreed to the terms of the Award, at the earliest on 24 November 1993, a clear distinction, known to the parties, was drawn between the terms "district" and "zone". When the parties agreed to the use of the word "district" they must, in the circumstances, have intended to refer to the five districts existing prior to the re-organisation. We do not accept this analysis. It could be argued that prior to 25 October 1993 the MFB in a number of internal memoranda contemplated the existence of both the zones and the districts at the one time for different administrative purposes. However, in a memorandum dated 25 October 1993 the MFB stated that it had "decided to remove all district boundaries and create an additional zone" from 29 October 1993. Although the new structure was not put in place until 13 December 1993 the intention of the MFB to maintain only one administrative structure was made clear before the parties agreed to the form of the Award. From 25 October 1993 the parties knew that the administrative structure was to consist of four units only. There is no reason in these circumstances to regard the parties as having intended the use of "district" to refer to the pre‑existing structure rather than to the administrative units adopted from time to time. Second, the Union contended that his Honour did not give sufficient weight to the industrial context or history in which the federal award was made. Previous awards had used different terms such as "home station", "home sector", "zone" and "district" to refer to the particular administrative divisions then being used. This history, it was said, gave "district" a particular meaning in the context of this Award. His Honour concluded that "[t]here was no sufficient evidence to suggest that the word 'district' had any meaning other than its normal meaning." We were taken to that same evidence and we agree with his Honour's conclusions. Third, the Union contended that, by reason of the operation of clause 5 of the Award, the word "district" must have referred to the pre-December 1993 administrative divisions. Clause 5 provides as follows: "Nothing in this award shall be deemed or construed to: (a) Reduce the wages or allowances; or (b) Alter unfavourably the terms and conditions of employment, applying to any employee covered by this Award immediately prior to the commencement of operation of any provisions of this Award." In our view clause 5 does not assist in the interpretation of the word "district". If, as we think, the word refers to the administrative divisions in force for the time being then the Award does not have the effect of reducing the allowances paid to employees. On their proper construction both the State and the federal awards provided for an allowance payable when employees worked outside their then existing administrative area. That entitlement was not changed by the making of the federal award. Its application may have produced a different result by reason of a change to administrative divisions but that result came from a change made outside, and not by, the Award. The Union points out that adjustment of district boundaries, whether large or small, would involve an alteration in the industrial conditions and that we should not favour a construction that would have that effect. The answer, however, lies in the clear language used in clause 25 and also in the capacity of the Union, and the employer for that matter, to apply for an award variation immediately upon any alteration to district boundaries. In these circumstances the appeal should be dismissed. The order of the Court is that the appeal is dismissed. I certify that this and the preceding three (3) pages are a true copy of the reasons for judgment of the Court. Associate: Dated: 20 July 1998 Counsel for the Applicant: Mr H Borenstein appeared on behalf of the appellant Solicitor for the Applicant: Maurice Blackburn & Co Counsel for the Respondent: Mr L Kaufman appeared on behalf of the respondent Solicitor for the Respondent: Freehill Hollingdale & Page Date of Hearing: 20 July 1998 Date of Judgment: 20 July 1998	1,996
federal_court_of_australia:fca/single/2020/2020fca0168	decision	commonwealth	federal_court_of_australia	text/html	2020-02-21 00:00:00	Bickle v State of Victoria (Victoria Police) [2020] FCA 168	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2020/2020fca0168	2024-09-13T22:44:34.022084+10:00	FEDERAL COURT OF AUSTRALIA Bickle v State of Victoria (Victoria Police) [2020] FCA 168 File number: VID 937 of 2019 Judge: SNADEN J Date of judgment: 21 February 2020 Catchwords: PRACTICE AND PROCEDURE – interlocutory application to strike out points of claim – where applicant has brought proceedings against respondent alleging breaches of the Disability Discrimination Act 1992 (Cth) – whether or not Victoria Police provide a "service" – alleged failure to disclose a reasonable cause of action – whether points of claim are likely to cause prejudice, embarrassment or delay – interlocutory application allowed in part – parts of amended points of claim ought to be struck out Legislation: Disability Discrimination Act 1992 (Cth) ss 4, 5, 6, 24 Federal Court Rules 2011 (Cth) r 16.21 Cases cited: Carrigan v Honourable Senator Michaelia Cash [2016] FCA 1466 Commissioner of Police v Mohamed (2009) 262 ALR 519 Djime v Kearnes [2019] VSC 117 Farah v Commissioner of Police of the Metropolis [1998] QB 65 IW v City of Perth (1997) 191 CLR 1 Kavanagh v Victorian WorkCover Authority (2011) 215 IR 108 Secretary of the Department of Justice and Industrial Relations v Anti-Discrimination Commissioner (2003) 11 Tas R 324 Varasdi v State of Victoria [2018] FCA 1655 Date of hearing: 17 February 2020 Registry: Victoria Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 38 Counsel for the Applicant: Prof G Nash QC with Mr G J Grabau Solicitor for the Applicant: Gleeson & Co Lawyers Counsel for the Respondent: Ms E A Bennett Solicitor for the Respondent: Clayton Utz ORDERS VID 937 of 2019 BETWEEN: HAYDEN BICKLE BY HIS LITIGATION REPRESENTATIVE DANIELLE BICKLE Applicant AND: STATE OF VICTORIA (VICTORIA POLICE) Respondent JUDGE: SNADEN J DATE OF ORDER: 21 FEBRUARY 2020 THE COURT ORDERS THAT: 1. On or before Wednesday, 4 March 2020: (a) the parties are to confer and, if possible, agree on suitable orders by which the respondent's interlocutory application dated 24 October 2019 should be determined consistently with the attached reasons; and (b) in the event that such an agreement is reached, the respondent is to provide by email addressed to the chambers of Justice Snaden a minute of orders reflecting that agreement. 2. In the absence of agreement as per order 1 above, each party is to file and serve, by no later than Wednesday, 4 March 2020, a minute of the orders by which they propose that the respondent's interlocutory application dated 24 October 2019 should be determined consistently with the attached reasons. 3. Further orders will be made in chambers by way of determination of the respondent's interlocutory application dated 24 October 2019. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT SNADEN J: 1 By his amended points of claim dated 26 September 2019, the applicant charges the respondent with having subjected him to various forms of unlawful discrimination contrary to the Disability Discrimination Act 1992 (Cth) (hereafter, the "DD Act"). 2 The conduct at the centre of those allegations is an altercation that the applicant claims to have had in February 2018 with, amongst others, the principal of his school. The particulars of that altercation are not material—its significance lies in the fact that, nearly five months later, it was the subject of a complaint made by the applicant's mother to the respondent, Victoria Police. It is the conduct in which Victoria Police then engaged (or didn't engage) in response to that complaint (hereafter, the "Police Complaint") that is at the heart of these proceedings. 3 By paragraph 18 of his amended points of claim, the applicant pleads that (errors original): …in contravention of section 24 of the Disability Discrimination Act (Cth) 1992 the respondent has discriminated against the applicant directly, on the grounds of the applicant's disability; (a) by refusing to provide the services of investigation of a crime where the applicant was victim; (b) in the manner in which the respondent has provided the services of crime investigation. 4 By an interlocutory application dated 24 October 2019, Victoria Police moves the court for orders that that paragraph (and several others within the amended points of claim, none of which, in the interests of brevity, shall here be replicated) be struck out for want of a reasonable cause of action. It maintains that the bulk (but, for present purposes, not all) of the conduct that the applicant's amended points of claim attributes to it—comprising, in particular, the manner in which it investigated and determined the Police Complaint—was not conduct to which the DD Act applies. Whether or not that contention is true turns upon whether or not the conduct in question constituted the provision, non-provision or conditional provision of a "service" of a kind to which s 24 of the DD Act refers. 5 For the reasons that follow, I accept Victoria Police's contention. By conducting itself as it did by way of investigation of the applicant's Police Complaint, Victoria Police was not providing, nor declining to provide, a service to the applicant. Insofar as his case proceeds upon the contrary premise—and it was not in question that it does—it cannot succeed. 6 Additionally, the respondent complains that part of the applicant's amended points of claim is embarrassing and apt to mislead or confuse. That part concerns a police interview to which the applicant claims to have been subjected. It is said to be objectionable because it alleges, in only the most peremptory of ways, that the interview was conducted in the way that it was because of the applicant's disabilities. The respondent contends that it is unclear how that allegation is put. 7 For the reasons that appear below, I do not accept Victoria Police's contention in that regard. Although the applicant's amended points of claim is not well drafted—a reality that senior counsel for the applicant voluntarily conceded—it is sufficiently clear that he maintains that the conduct of the interview in question was discriminatory because it was conducted the way that it was (which is to say, in a manner that is alleged to have visited prejudice upon him) because of the applicant's disabilities. Legislation 8 Section 24 of the DD Act provides as follows: Goods, services and facilities It is unlawful for a person who, whether for payment or not, provides goods or services, or makes facilities available, to discriminate against another person on the ground of the other person's disability: (a) by refusing to provide the other person with those goods or services or to make those facilities available to the other person; or (b) in the terms or conditions on which the first-mentioned person provides the other person with those goods or services or makes those facilities available to the other person; or (c) in the manner in which the first-mentioned person provides the other person with those goods or services or makes those facilities available to the other person. 9 Sections 5 and 6 of the DD Act identify the circumstances in which a person is considered to have discriminated against another person. It is not necessary to replicate those provisions. 10 Section 4(1) of the DD Act defines what is meant by (amongst other things) "services". It relevantly provides as follows, namely: "services" includes: (a) services relating to banking, insurance, superannuation and the provision of grants, loans, credit or finance; or (b) services relating to entertainment, recreation or refreshment; or (c) services relating to transport or travel; or (d) services relating to telecommunications; or (e) services of the kind provided by the members of any profession or trade; or (f) services of the kind provided by a government, a government authority or a local government body. Relevant principles 11 The respondent's interlocutory application is made under r 16.21 of the Federal Court Rules 2011 (Cth). Before me, there was no material dispute as to the principles that I am bound to apply in determining it. In Varasdi v State of Victoria [2018] FCA 1655 (O'Callaghan J), the court made the following observations, which I gratefully adopt: 5 A pleading must ensure that the opposing party can know, with sufficient clarity, the case which it is required to meet; it must state all the material facts to establish a reasonable cause of action; and it must be in intelligible form. It cannot be vague, ambiguous, inconsistent or lacking in coherence. … 9 A pleading under the DDA must put the respondent on notice of the case it is required to meet, rather than asking the respondent or the court to identify a case for it. The pleading must do "more than scope out the nature of the problem, and leave it to the trial of the action for the content of the respondent's omissions to become apparent": Sievwright v State of Victoria [2013] FCA 964 at [48] (Jessup J). 12 The court may order that all or part of a pleading be struck out if it fails to disclose a reasonable cause of action, is likely to cause prejudice, embarrassment or delay in the proceeding, or is otherwise an abuse of the court's process. Such orders are not lightly to be made: Carrigan v Honourable Senator Michaelia Cash [2016] FCA 1466, [43] (White J). Evidence 13 Victoria Police's interlocutory application was supported by an affidavit affirmed by its solicitor, Mr Matthew Peter Garozzo, on 24 October 2019. It is not necessary to set out in detail the content of that affidavit. It was read without objection. 14 The applicant filed an affidavit affirmed on his behalf by his solicitor, Mr Bilal Katar, on 10 February 2020. To that affidavit were attached several documents originating from Victoria Police, in which various of its functions—including those to which the present proceedings relate—were described as "services". Again, that affidavit was read without objection. "Services" in the context of police work 15 It is not in contest (nor sensibly to be doubted) that the investigation of alleged criminal offending is one of the functions that Victoria Police is entrusted to perform. It does so with a view to discharging another, related function: namely, the detection and apprehension of alleged offenders. 16 The question upon which the present applicant turns is whether or not Victoria Police should be understood to be providing a service, for the purposes of s 24 of the DD Act, when it does (or does not do) certain things in the process of investigating allegations of criminal conduct. 17 Clearly enough, police conduct that is engaged in by way of investigation of alleged criminal wrongdoing will (or, at least, might) inure to the benefit of a person or persons who claim to have been its victim or victims. However, conduct does not qualify as a service merely because it is of benefit to one or more people: IW v City of Perth (1997) 191 CLR 1, 15 (Brennan CJ and McHugh J). 18 There are authorities that recognise that certain aspects of police work might amount to the provision of services. The New South Wales Court of Appeal, for example, has held that "…the initial investigation of complaints of violence and the protection of the victims of violence provide services to the victims": Commissioner of Police v Mohamed (2009) 262 ALR 519 ("Mohamed"), 536 [87] (Handley AJA, with whom, on that point, Spiegelman CJ and Basten JA agreed). There is English authority to like effect: Farah v Commissioner of Police of the Metropolis [1998] QB 65 ("Farah"), 78 (Hutchison LJ, with whom Otton and Peter Gibson LJJ agreed). With respect, such reasoning might readily be understood: in responding (by way of "initial investigation") to a call for assistance—and, thereby, delivering would-be victims of criminal offending from harm's way—police act in a manner that confers benefits uniquely upon those would-be victims in their capacities as such. 19 The same is not true in respect of subsequent investigation processes and the decisions that arise therefrom as to what, if any, action should be taken against those accused of criminal conduct. The investigation of alleged wrongdoing and the prosecution (or otherwise) of alleged wrongdoers are not functions that the police undertake so as to benefit alleged victims. They are undertaken because orderly civil society and the proper administration of criminal justice requires that they be undertaken. Plainly, that is of benefit to the community as a collective, as well as individually to those who might be the victims of particular wrongdoing. But those functions are discharged in satisfaction of a duty with which the police are entrusted; not so as to confer a benefit upon any particular individual (including those claiming to be the victims of the conduct under investigation). 20 In Djime v Kearnes [2019] VSC 117 (Cavanough J) ("Djime"), the Supreme Court of Victoria referred with apparent approval (at [130] and following) to reasoning adopted by an administrative tribunal that: Services are not provided when police investigate an alleged offence, question an alleged offender, arrest an alleged offender, deal with a bail application, decide whether or not to lay charges, decide whether or not to prosecute charges and decide how a matter will proceed in court… 21 In Mohamed, Handley AJA, in obiter (at [87]), distinguished requests for police assistance from "…the later stages of an investigation and decisions whether or not to prosecute or arrest…alleged perpetrators". The latter, he said, would generally not qualify as the provision of a service. That reasoning is consistent with Cavanough's J reasoning in Djime, and with other superior and inferior court and tribunal rulings: Secretary of the Department of Justice and Industrial Relations v Anti-Discrimination Commissioner (2003) 11 Tas R 324, 342 (Underwood J); Kavanagh v Victorian WorkCover Authority (2011) 215 IR 108 (Judge Lacava VP). 22 Conduct engaged in by police in the process of investigating alleged criminal wrongdoing is not conduct that amounts to the provision of a service, whether at large or to those who claim to have been the victims of particular wrongdoing. The same is true of the decisions that are made—and the conduct in which police engage in consequence of the decisions that are made—about how or if those investigations should proceed to the laying of charges or the prosecution of offenders. Application to the present case 23 The applicant alleges that there were aspects to the manner in which Victoria Police investigated his Police Complaint that subjected him to prejudice. In short, he is (or, perhaps more accurately, he and his litigation representative are) not happy with the way that that Police Complaint was investigated, nor with its apparent outcome (which was that nobody was held to account by way of criminal charges for the conduct upon which it focused). By the amended points of claim, the applicant attributes his various alleged disabilities (the particulars of which need not here be explored) as at least a reason as to why Victoria Police did the things that he accuses it of having done. 24 During the hearing of the interlocutory application, senior counsel for the applicant conceded that conduct comprising what might loosely be described as a police investigation was not conduct engaged in by way of the provision of a service. That concession was, he continued, consistent with the preponderance of authority, both in Australia and abroad. With respect (and for the reasons that I have set out above), that was a concession appropriately made. It necessarily requires excision of at least some passages of the amended points of claim with which the respondent takes issue. 25 Notwithstanding that concession, the applicant continues to contend that the respondent's response (or non-response) to his Police Complaint qualifies as conduct engaged in by way of the provision of a service. How that contention sits alongside the concession just referenced was not easy to follow. In summary form, the applicant suggests that that conduct (the response or non-response to his Police Complaint) was conduct in which Victoria Police engaged by way of initial response to his Police Complaint; and that, that being the case, it should be seen in the same light as was the conduct in cases such as Mohamed and Farrah. 26 I do not accept that submission. The incident (or incidents) to which the Police Complaint is said to have been directed were entirely historical, which is to say that they occurred nearly five months before the Police Complaint was made. There is no suggestion in the amended points of claim that the wrongdoing alleged by the Police Complaint was ongoing, or that the applicant was otherwise at risk of falling victim to ongoing conduct such as might require police assistance (as was the case in both Mohamed and Farrah). There is simply nothing about the conduct in which Victoria Police engaged after receipt of the Police Complaint in this case that is comparable to the police conduct with which those cases were concerned. Everything that is alleged to have been done (or not done) is alleged to have been done (or not done) in the course of investigating and/or determining (that is to say, deciding not to pursue charges in respect of) the Police Complaint. As the authorities make clear (and the applicant, in any event, conceded), that is not conduct that is properly understood as being directed toward the provision of a service. 27 That Victoria Police has seen fit to publish various documents in which it self-describes as "services" some of its functions—including some that are the subject of the present proceedings—is of little moment. One might speculate as to the reason or reasons for which Victoria Police communications (or other) personnel have seen fit to so describe—in my view, misdescribe—some police duties. It may simply be an erroneous conclusion that some within the organisation have formed. Alternatively, it may be "spin" designed to portray Victoria Police in a positive public light. Whatever the reasons might be, they do not alter the true character of the conduct that is presently in issue. The "VARE" interview 28 In the course of investigating his Police Complaint, the respondent is said to have subjected the applicant to what is known as a "VARE" (visual and audio recording of evidence) interview. The applicant complains that the respondent conducted that interview in a manner inconsistent with internal Victoria Police guidelines that are intended to regulate how those with disabilities should be interviewed. By its interlocutory application, the respondent seeks to have aspects of that part of the applicant's case struck out, not because it is said that the conduct in question was not conduct that amounted to (or that otherwise was engaged in as part of) the provision of a service; but, instead, because the amended points of claim does not properly allege a causal connection between the applicant's disabilities and the prejudice that the conducting of the interview is said to have visited upon him. 29 Paragraph 17 of the amended points of claim is in the following terms: In the premises set out in paragraphs 3 to 16A above, the applicant has been directly and unlawfully discriminated against contrary to s. 5 of the Disability Discrimination Act 1992 ("the DDA") in that he has been treated less favourably because of his disability: (a) he has been treated less favourably than Victoria Police would treat a person without a disability because the complaint made on his behalf was at first not investigated at all, and subsequently he was subjected to a VARE interview without a support person being present; (b) because of the lack of a support person he was not properly able to communicate with the interviewer and give clear answers or respond with a full understanding of what was happening; (c) the VARE process was not explained to him in a language and at a level of detail appropriate for a person with his disability (contrary to paragraph 6.2 of the VARE Procedural Guidelines) and no support person was allowed into the room (cf. the provision of an Auslan interpreter for a deaf person); (d) he was a child victim and under paragraph 11.3 of the VARE Procedural Guidelines a parent/guardian or independent person should have been present when the statement was being taken from him; but no such person was present, and no parent/guardian was able to monitor the interview. 30 There is an inherent circularity to the applicant's contention: he alleges, simultaneously, that he was denied the benefit of certain guidelines that are designed to protect the disabled (and was, thereby, subjected to relevant prejudice) and that his disabilities were at least a reason as to why he was denied them. It is unclear why a respondent might deliberately withhold the benefit of such guidelines because a person exhibits what might fairly be presumed are the very characteristics in respect of which they were adopted. 31 Therein lies the respondent's principal complaint on this aspect of the case that is alleged against it. It complains that the amended points of claim fails to properly associate the impugned conduct (namely, the VARE interview) with a prohibited attribute (namely, the applicant's disability). It is said that the mere mention of the applicant's disability as a motivation behind that conduct is insufficient. Counsel for the respondent relied in that regard upon the observations of O'Callaghan J in Varasdi v State of Victoria [2018] FCA 1655. His Honour there observed (at [37]): Paragraph [72] says that "[t]he reasonable adjustments were not provided due to and/or because of [the applicant's] disabilities". However, no particulars or material facts are relied on. The mere assertion of causation cannot establish causation. 32 His Honour went on (at [39]) to conclude that the pleading before him was deficient because: The failure to identify how the applicant was treated less favourably than a student without her disabilities in circumstances that are not materially different has the consequence that there is no proper cause of action pleaded. 33 Paragraph 17 of the amended points of claim, as senior counsel for the applicant voluntarily conceded, is not well pleaded. Nonetheless, I cannot agree that it fails to identify the attribute by reason of which the incidents of discriminatory conduct there enumerated are said to have contravened the DD Act. That attribute is identified in the chapeau of that paragraph: the relevant incidents are said to have been visited upon the applicant "…because of his disability". It might well be that proof of those discrete allegations will be difficult; and one might readily understand the respondent's criticism that the paragraph proceeds upon an unlikely circularity (namely, that the respondent would adopt procedures aimed at the protection of vulnerable witnesses and then not only fail to apply them to a particular person, but fail to apply them because that person has the very vulnerability for the protection against which they were adopted). But, that future, potential difficulty aside, I do not accept that paragraph 17 of the amended points of claim fails to identify why it is said that the various incidents of conduct were engaged in in contravention of the DD Act. It was, so it is said, because of the applicant's disability. Conclusions 34 The respondent, perhaps generously, does not presently suggest that the alleged subjection of the applicant to the VARE interview could not amount to conduct engaged in as part of the provision of a service (although, as was made clear, it will likely make that submission at trial). For present purposes, that submission is reserved for the remainder of the conduct that the applicant's amended points of claim alleges against it. 35 Having accepted that the bulk of the conduct alleged against the respondent is conduct that it is alleged to have engaged in by way of investigation and determination of the Police Complaint (and, therefore, is conduct that could not be said to have been engaged in in connection with the provision of a service), it follows that much of the amended points of claim should be struck out. Precisely how much is difficult to pinpoint, in part because of the rolled-up manner in which much of it has been pleaded. 36 The parts of the amended points of claim that pertain to the VARE interview, however, are not deficient in the way that the respondent contends and ought not now to be struck out. Again, given the overlapping way in which the amended points of claim deals with the VARE interview and the other conduct, it is difficult to precisely separate the objectionable aspects of the pleading from those that should survive. 37 That difficulty is potentially complicated by the more pervasive shortcomings that plague the amended points of claim. Senior counsel for the applicant candidly described that document as something of a "dog's breakfast". It might well be that, in light of the observations made above (and the orders that will have to be made on account of them), some effort is made to bring the applicant's pleading more into line with what the court's rules require. 38 With those observations made, I propose to give the parties time to confer as to a form of orders reflective of these reasons. In the absence of agreement as to suitable orders that the court should make in light of what is said above (including with respect to the question of costs arising from the respondent's interlocutory application), I will make further orders to that end in chambers. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Snaden. Associate: Dated: 21 February 2020	5,469
federal_court_of_australia:fca/single/2003/2003fca0601	decision	commonwealth	federal_court_of_australia	text/html	2003-06-18 00:00:00	Australian Competition & Consumer Commission v George Weston Foods Limited & Anor [2003] FCA 601	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2003/2003fca0601	2024-09-13T22:44:34.094050+10:00	FEDERAL COURT OF AUSTRALIA Australian Competition & Consumer Commission v George Weston Foods Limited & Anor [2003] FCA 601 LEGAL PROFESSIONAL PRIVILEGE - inquiry into Part IV contraventions by present litigant – common law and statutory privilege claimed by present litigant – denied in parallel circumstances to other litigant by Full Federal Court – other litigant in Federal Court proceedings subsequently obtained special leave to appeal to High Court – claim to privilege maintained by present litigant pending outcome of High Court proceedings pursued by other litigant – special leave to appeal to High Court granted to other litigant – no injunction sought by present litigant to restrain inquiry pending outcome of High Court appeal by other litigant – High Court appeal by other litigant upheld – documents produced under compulsion – no waiver of privilege – production not voluntary. Trade Practices Act 1974 (Cth), s 155 Evidence Act 1995 (Cth), ss 117, 118, 122 Federal Court RulesOrder, 19 Rule 1 Australian Competition and Consumer Commission v Daniels Corporation International Pty Ltd and Another (2001) 108 FCR 123 Daniels Corporation International Pty Ltd & Anor v Australian Competition and Consumer Commission (2002) 192 ALR 561 Woolworths Limited v Fels; Coles Myer Limited v Fels [2002] HCA 50 Woollahra Municipal Council v Westpac Banking Corporation (1994) 33 NSWLR 529 Goldberg v Ng (1995) 185 CLR 83 AG Australia Holdings Ltd v Burton [2002] NSWSC 170 Lord Ashburton v Pape [1913] 2 Ch 469 Thomason v The Council of the Municipality of Campbelltown (1939) 39 SR (NSW) 347 Kabwand Pty Ltd v National Australia Bank (1987) 16 FCR 85 Yuill v Corporate Affairs Commission (1990) 20 NSWLR 386 Baker v Campbell (1983) 153 CLR 52 Grant v Downs (1976) 135 CLR 674 A M & S Europe Ltd v Commission of European Communities [1983] QB 878 Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49 Mann v Carnell [1999] 201 CLR 1 Telstra Corporation v Australis Media Holdings (No 1) (1997) 41 NSWLR 346 Ampolex Pty Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 40 NSWLR 12 Sovereign v Bevillesta [2000] NSWSC 521 The Adelaide Steamship Pty Ltd v Spalvins (1998) 81 FCR 360 Great Atlantic Insurance Co v Home Insurance Co [1981] 2 All ER 485 Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475 ERS Engines Pty Ltd v Wilson (1994) 35 NSWLR 193 Phillips v Walsh (1990) 20 NSWLR 206 Scott v Handley (1999-2000) 58 ALD 373 AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v GEORGE WESTON FOODS LIMITED AND PAUL BENEDICT LONERAGAN N 1295 OF 2002 CONTI J 18 JUNE 2003 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1295 OF 2002 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT AND: GEORGE WESTON FOODS LIMITED (ACN 008 429 632) FIRST RESPONDENT PAUL BENEDICT LONERAGAN SECOND RESPONDENT JUDGE: CONTI J DATE OF ORDER: 18 JUNE 2003 WHERE MADE: SYDNEY THE COURT DECLARES THAT: 1. Legal professional privilege and client legal privilege be upheld in respect of the material identified in paragraph 5 of the Affidavit of Wendy Wilson Peter sworn 20 February 2003 ('Privileged Material'). THE COURT ORDERS THAT: 1. The Applicant be restrained from referring to or adducing in evidence or examination in these proceedings any material that: (a) refers to the Privileged Material or the information contained in that material; (b) was created with the use of the Privileged Material; or (c) was based on or derived from the Privileged Material. 2. The Applicant be restrained from using, in relation to these proceedings: (a) any of the Privileged Material; (b) any material that refers to the Privileged Material; (c) any material that was created with the use of the Privileged Material; and (d) any material that was based on or derived from the Privileged Material. 3. The Applicant to pay the First Respondent's costs of the proceedings the subject of the Notice of Motion filed by the First Respondent. 4. The parties have liberty to apply on 3 days notice concerning the scope of relief as contemplated in paragraph 60 of these Reasons for Judgment. 5. No order be made as to the costs of the Second Respondent. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1295 OF 2002 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT AND: GEORGE WESTON FOODS LIMITED (ACN 008 429 632) FIRST RESPONDENT PAUL BENEDICT LONERAGAN SECOND RESPONDENT JUDGE: CONTI J DATE: 18 JUNE 2003 PLACE: SYDNEY REASONS FOR JUDGMENT Background 1 This is an application brought by way of Amended Notice of Motion of 14 April 2003 (the original having been filed on 21 February 2003) whereby the first respondent George Weston Foods Limited (GWF) moves to restrain Australian Competition and Consumer Commission (ACCC) from making use of documents protected by legal professional privilege in the subject proceedings, being documents which have already been produced by GWF under the compulsion of a s 155 Trade Practices Act 1974 (Cth) ('TP Act') notice issued by ACCC against GWF. The proceedings were commenced by statement of claim of ACCC filed on 5 December 2002 and relate to the alleged endeavour of the respondents to induce, or attempt to induce, a business competitor to make an arrangement or arrive at an understanding to the effect that GWF and that competitor would increase their wholesale price of wheaten flour. The second respondent ('Mr Loneragan') has been at all material times the Divisional Chief Executive of the GWF division known as 'Weston Cereal Industries'. This proposed arrangement or understanding is said by ACCC to contain provisions that have the purpose, and were likely to have the effect, of fixing, controlling or maintaining the prices for wheaten flour in contravention of s 45A of the TP Act. 2 The principal question raised in this interlocutory application is whether legal professional privilege, which was claimed by the respondents to attach to certain documents produced to ACCC under compulsion of law, was waived, either expressly or by necessary implication, when the current state of judicial authority at the time of production of the documents was that any document sought pursuant to a s 155 notice was required to be produced, notwithstanding the subsistence of legal professional privilege. The documents identified in this application as attracting legal professional privilege are: (i) a letter from Allens Arthur Robinson (Ms Peter) to Mr Pascoe dated 31 January 2000 to which was attached a file note prepared by Ms Peter dated 31 January 2000; (ii) a letter from Allens Arthur Robinson (Ms Peter) to Mr Pascoe dated 4 February 2000; and (iii) a letter from Allens Arthur Robinson (Ms Peter) to Mr Pascoe dated 10 February 2000. Each of those letters comprise the expression 'privileged material' used in these reasons for judgment. Mr Pascoe was then, and presumably still is, the Chief Executive Officer of GWF. 3 The facts, matters and circumstances relevant to the present application are traversed in affidavits made on 19 and 20 February 2003 by Rami Paul Greiss and Wendy Wilson Peter on behalf of ACCC and GWF respectively. Ms Peter is a member of the firm of Allens Arthur Robinson Lawyers of Melbourne. Mr Greiss is a senior lawyer employed in the Canberra office of the Australian Government Solicitor. The solicitors have had the care and conduct of the proceedings on behalf of their respective clients. 4 On 23 August 2001, ACCC issued a notice dated 22 August 2001 under ss 155(1)(b) and s 155(1)(c) of the TP Act to John Henry Pascoe, the Chief Executive Officer of GWF (the Pascoe notice). This notice required Mr Pascoe to produce to the Commission certain documents listed in the schedule to the notice, and for Mr Pascoe to appear before ACCC on 4 September 2001 to give oral evidence. A copy of that notice is attached to these reasons for judgment. 5 On 24 August 2001, ACCC issued a notice under ss 155(1)(a) and 155(1)(b) of the TP Act to GWF (the GWF notice). The GWF notice required GWF to produce to ACCC certain documents listed at schedule 1 to the notice, and to provide to ACCC certain information listed at schedule 2 to the notice. A copy of the GWF notice is also attached to these reasons for judgment. 6 Set out below is the full text of subsections (1), (2A) and (5) of s 155 of the TP Act, as in force at the material times: '(1) Subject to subsection (2A), if the Commission, the Chairperson or the Deputy Chairperson has reason to believe that a person is capable of furnishing information, producing documents or giving evidence relating to a matter that constitutes, or may constitute, a contravention of this Act, or is relevant to a designated telecommunications matter (as defined by subsection (9)) or is relevant to the making of a decision by the Commission under subsection 93(3) or (3A), a member of the Commission may, by notice in writing served on that person, require that person: (a) to furnish to the Commission, by writing signed by that person or, in the case of a body corporate, by a competent officer of the body corporate, within the time and in the manner specified in the notice, any such information; (b) to produce to the Commission, or to a person specified in the notice acting on its behalf, in accordance with the notice, any such documents; or (c) to appear before the Commission at a time and place specified in the notice to give any such evidence, either orally or in writing, and produce any such documents. … (2A) A member of the Commission may not give a notice under subsection (1) or an authorisation under subsection (2) merely because: (a) a person has refused or failed to comply with a notice under subsection 32(1) of the Prices Surveillance Act 1983 on the ground that complying with the notice would tend to incriminate the person, or to expose the person to a penalty; or (b) a person has refused or failed to answer a question that the person was required to answer by the member presiding at an inquiry under that Act, on the ground that the answer would tend to incriminate the person, or to expose the person to a penalty; or (c) a person has refused or failed to produce a document referred to in a summons under subsection 34(2) of that Act, on the ground that production of the document would tend to incriminate the person, or to expose the person to a penalty. … (5) A person shall not: (a) refuse or fail to comply with a notice under this section to the extent that the person is capable of complying with it; (b) in purported compliance with such a notice, knowingly furnish information or give evidence that is false or misleading; or (c) obstruct or hinder an authorised officer acting in pursuance of subsection (2). … (6A) A person who contravenes subsection (5) or (6) is guilty of an offence punishable on conviction: (a) in the case of a person not being a body corporate – by a fine not exceeding $2,000 or imprisonment for 12 months; or (b) in the case of a person being a body corporate – by a fine not exceeding $10,000.' The Pascoe Notice 7 On 29 August 2001, Ms Peter wrote to Mr Greiss in relation to the Pascoe Notice. This letter stated, so far as is material, as follows: 'The documents required by the notice are currently being identified and copied. However, there are a number of issues, which are raised by the terms of the request for documents, which we would like to clarify with you to assist Mr Pascoe in complying with the notice. These issues are as follows: 1. The document requests a number of documents which attract legal professional privilege. In accordance with the Full Court's decision in ACCC v Daniels, privilege is not a basis for refusing to provide documents required under a section 155 notice. However, we are of course aware that leave has been sought to appeal to the High Court from the Full Federal Court's decision in ACCC v Daniels and wish to make clear that Mr Pascoe is not waiving any privilege by producing documents under compulsion of a section 155 notice in circumstances where the current state of the law is that he must produce those documents. 2. All of the documents requested which attract legal professional privilege were created subsequent to the contravention alleged in paragraph 2 of the notice. Following comments by Sitesh Bohjani at the Law Council Trade Practices Workshop in Canberra two weeks ago, we understand that the Commission does not intend to require production of privileged documents created after the alleged contravention. Could you please confirm that Mr Pascoe may respond to the notice on this basis. …' Mr Bohjani is an ACCC Commissioner. As may be inferred from the above, the Federal Court's decision in Australian Competition and Consumer Commission v Daniels Corporation International Pty Ltd and Another (2001) 108 FCR 123 was to the effect that the giving of a notice by ACCC pursuant to s 155 of the TP Act was inconsistent with legal professional privilege and that therefore legal professional privilege could not be availed of so as to resist any such notice. Nonetheless: '…it is worth recording that from the commencement of the Act in 1974, the commission, as a matter of policy, did not press for documents declined on the "basis of a claim for legal professional privilege". The commission's policy had changed by 2000. However, in making the change, the commission explicitly acknowledged that such documents or information were unlikely to assist investigations. Compulsory disclosure of privileged communications would, in some cases, affect the ability and willingness of corporations and individuals to consult, without inhibition, with lawyers about complex legal issues affecting day to day business. It might also affect the preparedness and freedom of lawyers to advise clients concerning the TPA and especially in matters potentially giving rise to prosecutions' (DanielsCorporation International Pty Ltd & Anor v Australian Competition and Consumer Commission (2002) 192 ALR 561 at [109] per Kirby J). 8 On 31 August 2001, Mr Greiss responded by letter to Ms Peter which included the following: 'The Commissioner notes your position on the issue of waiver. … … we understand that the determinant as to whether the Commission will press for production of privileged documents is the likelihood that they will assist the Commission to form the view as to whether or not a contravention of the Act has occurred. Documents describing factual matters are likely to assist the Commission whereas documents setting out legal advice are not. This is consistent with the view expressed in the Commission's published guidelines dated October 2000. Returning to your enquiry as to the section 155 Notice issued to Mr Pascoe, the Commission requires production at this time of privileged documents whenever created which are called for under the Notice and which describe or evidence factual matters. The Commission does not require production at this stage of privileged documents in so far as the documents convey legal advice to your client. Would you please inform Mr Pascoe that he should respond to the Notice on this basis.' 9 Ms Peter forwarded to ACCC copies of the documents 'provided by Mr Pascoe in response to the Notice', under cover of a letter of 3 September 2001, whereby ACCC was put on notice, in similar terms as were set out in the above extracted letter of 29 August 2001, that Mr Pascoe and GWF were not waiving 'any privilege by producing documents under compulsion of a s 155 notice in circumstances where the current state of the law was that those documents must be produced', and further that '[i]n determining whether privileged documents are required, we have relied on the clarification of the Commission's views contained in your letter to me dated 31 August 2001'. The bundle of documents thus provided, and which were contended by Ms Peter to attract a claim of legal professional privilege, included the privileged material described in [2] above. On the following day, ACCC conducted an oral examination of Mr Pascoe pursuant to s 155(1)(c) of the TP Act. The transcript of the examination provided by ACCC to Allens Arthur Robinson disclosed, according to Ms Peter, that the examination was influenced by access to what had been claimed to be privileged material. Due however to confidentiality restrictions which were not removed until the institution of the present proceedings on 5 December 2002, Ms Peter did not obtain a copy of the transcript of interview until 5 January 2003. The GWF notice 10 On 5 September 2001 Ms Peter of Allens Arthur Robinson wrote to Mr Peter McDonald of ACCC in relation to the GWF notice, commencing as follows: 'As you know, I act on behalf of George Weston Foods Limited (GWF). I refer to your letter dated 24 August 2001 to GWF, serving a notice under s 155 of the Trade Practices Act requiring GWF to produce documents by 14 September (the Notice). GWF has asked me to seek further clarification of the following matters: 1. It is possible that some of the documents requested will attract legal professional privilege. In accordance with the Full Court's decision in ACCC v Daniels Corporation privilege is not a basis for refusing to provide documents required under a section 155 notice. However, we are of course aware that leave has been sought to appeal to the High Court from the Full Federal Court's decision in ACCC v Daniels Corporation and wish to make clear that GWF is not waiving any privilege by producing documents under compulsion of a section 155 notice in circumstances where the current state of the law is that it must produce those documents. We assume that the Commission's position on this issue is as outlined in Rami Greiss's letter to me dated 31 August 2001 (in relation to the notice served on John Pascoe). Could you please confirm that GWF may respond to the notice on this basis. 2. GWF believes that it will be able to produce the documents referred to in paragraphs 1, 3, 12, 25, 26, 27, 28, 29, 30, 31, 32 of Schedule 1 to the Notice by 14 September. The documents listed in paragraphs 33, 34, 35, 36 and 37 have already been provided to the Commission in response to the notice served on John Pascoe.' The documents secondly identified above as those '… listed in paragraphs 33, 34, 35, 36 and 37…' include the privileged material. 11 By letter dated 7 September 2001, ACCC responded to the letter of Ms Peter of 5 September 2001 from Mr Gregson of ACCC at some considerable length. After recording that '… you have sought clarification of various matters relating to the scope of the information and documents sought in the Notice', Mr Gregson continued as follows: 'As discussed, the Commission is prepared to address your concerns by limiting production under specific paragraphs of the Schedules to the Notice as detailed below. The purpose of this letter is not to alter or vary the Notice but simply to limit the number of documents required to be produced pursuant to the Notice on 14 September 2001. In this regard the Commission does not release your client from the requirement to provide the documents at a later date if pressed to do so. Legal Professional Privilege The Commission notes your advice that GWF does not waive any privilege by producing documents under compulsion of a section 155 Notice. …' After then setting out explanations and answers on a number of queries raised by Ms Peter concerning what may be described as factual matters, the letter concluded initially as follows: 'Additional Information In limiting the information which the Commission requires at this stage, the Commission maintains the position that it may press for the provision of additional documents falling within the terms of the Notice at a later point in time. However, the search for and provision of such additional documents should be held in abeyance until further notice. …' 12 On 14 September 2001, Ms Peter wrote again to Mr McDonald of ACCC and stated that certain documents requested by paragraphs 33, 34, 35, 36 and 37 of Schedule 1 to the GWF notice (see [10] above) had already been produced by Mr Pascoe in response to the Pascoe notice. As I have already mentioned, three of those five documents comprise the privileged material. The events which occurred after the initial responses to the Pascoe and GWF notices 13 The privileged material was the subject of extensive use by ACCC in the context of its investigations into the affairs of GWF. The extent of that use was described by Mr Greiss in his affidavit of 19 March 2003 as follows: 'Use of the Material by the Commission 8. On 4 September 2001 the Commission conducted an oral examination of John Pascoe. During the conduct of that examination, at which I was present throughout, Commissioner Bhojani and Counsel for the Commission made use of the three documents or information derived therefrom to ask certain questions of Mr Pascoe. 9. On 14 December 2001 the Commission conducted an oral examination of Paul Loneragan, the Second Respondent in these proceedings. During the conduct of that examination, at which I was present throughout, Commissioner Jones and Counsel for the Commission made use of the three documents or information derived therefrom to ask certain questions of Mr Loneragan. 10. On 17 December 2001 the Commission conducted an oral examination of Simon Ian McDowall, an employee of Goodman Fielder Ltd. During the conduct of that examination, at which I was present throughout, Commissioner Jones and Counsel for the Commission made use of the three documents or information derived therefrom to ask certain questions of Mr McDowall. 11. On 17 December 2001 the Commission conducted an oral examination of Douglass Alexander McKay, an employee of Goodman Fielder Ltd. During the conduct of that examination, at which I was present throughout, Commissioner Jones and Counsel for the Commission made use of the three documents or information derived therefrom to ask certain questions of Mr McKay. 12. On 18 December 2001 the Commission conducted an oral examination of Peter Faddy, an employee of George Weston Foods Ltd, the First Respondent in these proceedings. During the conduct of that examination, at which I was present throughout, Commissioner Counsins and Counsel for the Commission made use of the three documents or information derived therefrom to ask certain questions of Mr Faddy. 13. On 22 February 2002 the Commission conducted a voluntary interview with John Pascoe. During the conduct of that interview, at which I was present throughout, Scott Gregson and Peter McDonald of the Commission's staff made use of the three documents or information derived therefrom to ask certain questions of Mr Pascoe.' 14 Meanwhile on 7 November 2001, the High Court heard applications, brought in its original jurisdiction, by Woolworths Limited (Woolworths) and Coles Myer Limited (Coles Myer) and Liquorland (Australia) Pty Ltd (Liquorland) for interlocutory injunctions to restrain ACCC and its Chairman, Professor Allan Fels from requiring those applicants to produce documents, to which legal professional privilege was asserted to attach, in response to notices issued by ACCC pursuant to s 155 of the TP Act. Gaudron J granted the injunctions sought until 15 February 2002, being the date upon which the application to the High Court for special leave to appeal from the Full Federal Court's decision in Australian Competition and Consumer Commission v Daniels Corporations International Pty Ltd and Another (2001) 108 FCR 123 was due to be heard. On the same day, ACCC wrote to Allens Arthur Robinson as follows: 'Investigations to date suggest that Allens Arthur Robinson [the solicitors for GW] may be in the possession of two categories of documents relevant to the Commission's investigations and (sic) namely: (1) Documents created by or provided to Allens Arthur Robinson in relation to matters arising from the conduct of Mr Paul Loneragan in late 1999 and early 2000. The Commission understands that in this regard representatives of Allens Arthur Robinson conducted interviews of Mr Loneragan in respect to his conduct and may have briefed Counsel with respect to the matters. As you are aware certain documents meeting this description were provided by your client in response to notices issued pursuant to section 155 of the [Act]. (2) Documents provided to or created by Allens Arthur Robinson and relating to a review, or audit (and including interviews or other enquiries) undertaken by Allens Arthur Robinson in early to mid 2001 on behalf of your client regarding possible issues arising under section 45 of the Act. … The Commission appreciates the sensitivities of requesting information in the possession of legal advisers and is conscious of wider policy implications arising from such requests. Having considered these issues, however, and the nature of the matters under investigation, the Commission remains desirous of obtaining the relevant documents. In making any such request, consistent with previous communications, the Commission would limit any such request to documents evidencing or referring to factual matters rather than the provision of legal opinion. The Commission may also consider limitation concerning documents created or brought about by reason of the Commission's investigation. The Commission would not seek documentation which has been previously provided by your client. …' 15 On 15 February 2002, the respondents in the Daniels litigation were granted special leave to appeal to the High Court. At the same hearing, the injunctions previously obtained by Woolworths, Coles Myer and Liquorland were extended until further order. Nearly nine months later on 7 November 2002, the High Court in Daniels held that s 155 of the TP Act did not authorise the production of documents to which legal professional privilege attaches, and set aside the orders of the Full Court of the Federal Court made on 16 March 2001. On the same day, the High Court in Woolworths Limited v Fels; Coles Myer Limited v Fels [2002] HCA 50 answered in the negative the question, submitted in a case stated by Woolworths, Coles Myer and Liquorland, whether the production of documents to which legal professional privilege attached, and was maintained by the compelled party, could be compelled by ACCC pursuant to s 155 of the TP Act. 16 On 8 November 2002 Mr Gregson of ACCC informed Ms Peter of Allens Arthur Robinson that ACCC was considering how it would deal with the privileged material, and confirmed that ACCC was minded to bring proceedings against the respondents in respect of what was said to be the Loneragan incident alone. Ms Peter responded by asserting that the use which ACCC may have made of the privileged material had caused the investigation into the Loneragan incident to be 'irretrievably tainted'. Mr Gregson replied to the effect that ACCC had 'strong evidence in relation to the Loneragan incident other than the material for which privilege is claimed and could proceed on the basis of this evidence alone'. 17 On 25 November 2002 Ms Peter wrote to Professor Allan Fels, the Chairman of ACCC, in relation to the ACCC's investigation of GWF. On the basis of the High Court's decision in the Daniel's case, Ms Peter requested the immediate return of all copies and extracts of the privileged material provided to ACCC in response to the Pascoe and GWF notices (as I have earlier indicated, the material was in fact formally produced in relation to the Pascoe notice). Ms Peter also sought undertakings from ACCC in relation to identification and destruction of all documents and records which referred to or made use of, or were based upon or which were in any way derived from, or influenced or affected by, the privileged material or information provided to ACCC, and the use, dissemination, communication, reference to and reliance upon any of the privileged material or any material derived from or influenced or affected by the privileged material, in connection with any investigation or in any other way whatsoever. 18 Also on 25 November 2002, Ms Peter wrote to Mr Gregson of ACCC and sought an urgent response as to the steps which ACCC proposed to take to identify and destroy documents which referred to or made use of, or were in any way derived from or influenced or affected by, the privileged material and information provided to ACCC pursuant to the Pascoe and GWF notices, including s 155 examination transcripts and internal ACCC documents such as memoranda to the Enforcement Committee and to the Commissioners. 19 The written correspondence of Ms Peter of 25 November 2002 was the subject of a tentative written reply on 2 December 2002 from Mr Greiss of the Australian Government Solicitor, in which Mr Greiss acknowledged receipt of that correspondence and indicated his 'hopes to be in a position to respond to [Ms Peter] in writing by 4 December 2002'. 20 On 5 December 2002, the present proceedings were instituted against the respondents by the filing of the statement of claim of ACCC. Accompanying service of the court documents was a letter by Mr Greiss affirming that ACCC would not provide GWF with the undertakings sought in Ms Peter's correspondence of 25 November 2002, but nonetheless assuring GWF that ACCC would return the originals and copies of the privileged material produced to ACCC, save for copies of Ms Peter's letter to Mr Pascoe dated 31 January 2000 and Ms Peter's letter to Mr Pascoe dated 4 February 2000 together with attachments. Mr Greiss disclosed that those copy documents had been used in the course of ACCC's investigations, and that they formed part of the transcript of the oral examination of Mr Pascoe conducted pursuant to s 155 of the TP Act on 4 September 2001, and additionally formed part of the Note for File of the voluntary interview by ACCC of Mr Pascoe held on 22 February 2002, being an attachment thereto. Mr Greiss further stated that ACCC was checking whether there were any extracts from the privileged material which then formed part of other documents held by ACCC. 21 On 18 December 2002, Ms Peter wrote to Mr Greiss, in response to his letter of 5 December 2002, as follows: '… In respect of the two exceptions, namely, the copies of Privileged Documents 1 and 2 which form part of the section 155 transcript of the interview with Mr Pascoe held on 4 September 2001 and which form part of the Note for File of the voluntary interview with Mr Pascoe held on 22 February 2002, I confirm that these copies are being retained by ACCC so as to preserve the integrity of the transcript and the Note for File respectively. … It is regrettable that the Commission did not respond to my letter dated 26 November 2002 and instead issued proceedings without any discussion or consultation. To the extent that the Commission's allegations are based on evidence which is privileged or derived from privileged material, the Commission has compounded the damage caused by its access to and use of the privileged material. It is also regrettable that the Commission seeks now to assert a waiver of privilege, when the existence of privilege has been recognised in numerous conversations over the past 18 months by Commission officers, including the conversation which is referred to in your letter between Scott Gregson and me following the Daniels decision. It is difficult to see how this conduct is consistent with the Commission's commitment to act as a model litigant. In relation to the matters contained in your letter, GWF absolutely rejects the Commissioner's assertion that following GWF's production of privileged documents under the compulsion of a section 155(1)(b) notice it acted inconsistently with or waived the privilege attaching to the documents produced by either: • "allowing" the Commission to continue to conduct its investigation; or • failing to seek a High Court injunction. GWF has at all times asserted the privilege attaching to the privileged material and acted consistently with the existence of the privilege. The privileged material was provided to the Commission only after correspondence with the Commission in which the Commission indicated that it required the production of privileged material pursuant to section 155 notices if it contained references to factual material. Following the High Court decision in the Daniels case, GWF promptly requested that the Commission immediately return the privileged material and provide undertakings about the use of derivative material. I note that GWF's urgent request for the return of documents and undertakings from the Commission followed my conversation with Scott Gregson who had rung me the day after the Daniels decision was handed down to indicate that the Commission was preparing a letter outlining how it proposed to deal with the privileged material in view of the High Court's decision. I am instructed by GWF to require the immediate return of all of the privileged material provided to the Commission and to again request that the Commission provide the undertakings sought in my letter dated 26 November 2002. If these undertakings are not provided, GWF will seek appropriate orders from the Federal Court. …' 22 By letter dated 20 December 2002 Mr Greiss responded to Ms Peter's letter of 18 December 2002, inter alia, as follows: 'The Commission remains of the view that your client's conduct in relation to the production of the documents was inconsistent with the retrospective operation of the privilege now asserted by you. The Commission's action in considering the Privileged Documents as part of its proceeding with the investigation in the period up to the hearing of the application to the High Court for special leave to appeal and, following the grant of that leave, until the High Court's decision in the Daniels Case was fully consistent with the basis on which your client produced the documents. Your client was well aware that the investigation was continuing during this period and there was no suggestion by your client or the Commission that the Privileged Documents should/would be put to one side and not used pending the Daniels decision. The Commission is not aware of any communication by Commission officers prior to, or since, the production of the documents, including the conversation with Scott Gregson following the Daniels decision, which suggested that the Privileged Documents would not be/had not been used for the purposes of the Commission's investigation in the period pending the High Court's decision. Further, the Commission is of the view that its conduct in no way conflicts with the Model Litigant Policy.' Summary of GWF's submissions to the Court 23 GWF contended that because legal professional privilege had been at all material times claimed in respect of the privileged materials, legal professional privilege had been neither expressly nor impliedly waived, 'implicitly' being used in the sense of 'imputed'. Mr Jackman SC, who appeared for GWF, submitted that the production of documents under compulsion, or under the threat of compulsion, does not in principle amount to waiver of the privilege attaching to the documents, and cited in support of that submission Woollahra Municipal Council v Westpac Banking Corporation (1994) 33 NSWLR 529 (at 540) (Giles J), where it was held that legal professional privilege had not been waived by production of documents pursuant to a demand made under compulsion of the Local Government Act 1919 (NSW). That exception to the imputation of implied waiver was subsequently cited by the High Court with approval in Goldberg v Ng (1995) 185 CLR 83 (at 95) (Deane, Dawson and Gaudron JJ), (at 110) (Toohey J) and (at 122-123) (Gummow J); (at 123) Gummow J (in the minority with Toohey J) observed in my opinion uncontroversially that 'Giles J treated as very significant the circumstance that an alleged implied waiver of legal professional privilege involved making documents available to enable the recipients to carry out their statutory duties and that there existed statutory compulsory processes. I agree'. It was further submitted that the combined operation of s 155 of the TP Act and the Full Federal Court's decision in Daniels, for the period of time during which that decision remained authoritative,carried the consequence that the production to ACCC of the privileged material had occurred under compulsion, and that therefore there had not thereby taken place any waiver of privilege. Reference was made to the fact that ACCC had accepted from the outset the respective positions of GWF and Mr Pascoe that no waiver of the privilege was intended by the production of those documents, and that it was only following upon the High Court's reversal of the Full Federal Court's decision in Daniels,by finding that privilege could not be maintained in answer to a s 155 notice, that ACCC first asserted that both GWF and Mr Pascoe were not entitled to maintain that claim of privilege. 24 It was then contended by GWF that the appropriate relief to be granted, in circumstances where privileged or otherwise confidential information has been unlawfully obtained, should be formulated in accordance with the principles and forms of relief enumerated by Campbell J in AG Australia Holdings Ltd v Burton [2002] NSWSC 170 and also at 454, a case involving breach of a duty of confidentiality owed to the plaintiff by the voluntary provision of material in a witness statement concerning certain litigation. GWF submitted that reference by Campbell J to Lord Ashburton v Pape [1913] 2 Ch 469 indicated that the principles concerning the appropriate relief apply as much to privileged documents as they do to other kinds of confidential information. It was emphasised that GWF had sought orders to similar effect, on the basis that ACCC is not entitled to retain any benefit it may have received, or may in the future receive, from its access to GWF's privileged material. Consequently, so GWF's submissions continued, such orders should require 'at the very least' the destruction of first, all copies of the privileged documents, secondly, any notes or memoranda which contain material derived from those documents, and thirdly the transcripts of examinations or interviews in relation to which (on ACCC's express concession) ACCC had made use of all such documents. It was further contended that GWF was entitled to an order preventing ACCC, and its Commissioners, employees and legal advisers, having knowledge of the information contained in the privileged material, from being involved in or consulted in relation to, the subject matter of the proceedings against GWF. Summary of Loneragan's submissions to the Court 25 Mr. Tonking of Counsel, who appeared for the second respondent Mr Loneragan, adopted the submissions of Mr Jackman SC as to the operation of the doctrine of legal professional privilege in Australia and contended that there had been no intentional or imputed waiver established on the facts and circumstances placed in evidence before the Court. It was submitted on behalf of Mr Loneragan that the disclosures which occurred in the present case on the part of GWF and Mr Pascoe was not caused by any purported reliance on that material in order to justify their position or to dissuade ACCC from commencing the present or any related litigation, and further that GWF did not act inconsistently with the claim for privilege by refraining from taking any action against ACCC similar to that pursued by Coles Myer and the other companies in the High Court proceedings referred to in [14] above. It was also contended on behalf of Mr Loneragan that for the Court to find that GWF or Mr Pascoe had acted inconsistently with the claim for privilege, by failing to commence proceedings in the original jurisdiction of the High Court to restrain ACCC from compulsorily acquiring the privileged materials, pending determination of the special leave application in the Daniels litigation, would impose 'too high a standard even for a corporation which might be thought to have the required resources to do so'. I should formally record that ACCC did not object to Counsel for Mr Loneragan making submissions, notwithstanding that Mr Loneragan was not an applicant in relation to the proceedings the subject of the Amended Notice of Motion filed on 14 April 2003 for the relief sought by GWF. Summary of ACCC's submissions to the Court 26 ACCC's case in response may be summarised by the proposition that any privilege attaching to the correspondence listed in [2] above had been waived because of the principle of imputed or implied waiver. Alternatively it was contended that there had been limited waiver entitling ACCC to use the documents and the information derived therefrom with respect to its investigation and possible proceedings flowing from the investigation. It was contended that by reason of GWF and Mr Pascoe having acted inconsistently with any entitlement to claim privilege, to the extent of failing to initiate proceedings of the kind pursued in the High Court in the Daniels litigation or Woolworths and Coles Myer litigation, ACCC became thereby entitled or enabled to put to appropriate use the documents, and the information susceptible to being derived therefrom. By 'appropriate use', I refer of course to use in the context of any investigation into conduct of GWF and Mr Loneragan that may have constituted a contravention of the TP Act, and to do so in the further context of any proceedings open to be instituted by ACCC pursuant to that investigation. The following circumstances in particular were contended by ACCC to give rise to waiver of privilege on the part of GWF, given that ACCC had acted at all material times in accordance with the state of the applicable law and legal principles concerning the operation of s 155 of the TP Act, exemplifying thereby in particular the Full Federal Court's decision in Daniels: (i) no constraint was sought to be placed by GWF and Mr Pascoe on the use of the relevant documents by ACCC, whether by injunction or otherwise; (ii) in particular, no step or steps were taken by GWF and Mr Pascoe to obtain appropriate injunctions against ACCC, as occurred at the instance of Woolworths and Coles Myer in their dispute with ACCC, notwithstanding the context of the Full Federal Court's decision in Daniels, and the special leave application made to the High Court pursuant thereto; nor were any relevant steps taken by GWF and Mr Pascoe after Coles and Woolworths had obtained interim injunctive relief against ACCC from the High Court, or after special leave to appeal was granted by the High Court in Daniels; (iii) GWF and Mr Pascoe had produced documents to ACCC that fell outside the ambit of those requested by ACCC's s 155 notice, yet they took no steps to mask, seal or otherwise prevent the use of those portions which conveyed legal advice, whereof ACCC had not compelled production; reference was made to the decision of the Federal Court in Optus Communications Pty Ltd v Telstra Corporation Limited (BC9506137) (27 April 1995), where Lockhart J observed that '[i]t is well established that parts of documents may be masked so as to attract legal professional privilege'; (iv) following the grant of interim injunctions against ACCC in favour of Coles and Woolworths, ACCC had indicated that it would not press for further material that might have been the subject of legal professional privilege, yet no attempt was made by GWF or Mr Pascoe to restrain ACCC from continuing to use the documents which had already been produced from the custody of GWF or Mr Pascoe to ACCC, or to use the information capable of being derived therefrom; (v) GWF and Mr Pascoe were aware that ACCC required the privileged materials purportedly pursuant to its powers of investigation, and that those documents were likely to play a role in the GWF investigation, and any subsequent proceedings which might be taken by ACCC against GWF (and possibly Mr Pascoe) for contraventions of the TP Act; (vi) at the time of providing the privileged materials to ACCC, neither GWF nor Mr Pascoe asserted to ACCC that in the event that the High Court ultimately determined in the context of Daniels that s 155 of the TP Act did not entitle ACCC to demand documents the subject of legal professional privilege, they would adopt the stance that the GWF/Lonergan investigation, or any proceedings taken by ACCC pursuant thereto, was unlawful or an abuse of process, or otherwise 'irretrievably tainted', such that ACCC should be prevented by injunction from prosecuting any such proceedings; (vii) various persons within ACCC, including its legal advisers, have retained knowledge of the contents of the privileged documents, and ACCC has regulated its conduct in relation to the investigation and the commencement of proceedings in reliance upon the documents and the information contained therein (Thomason v The Council of the Municipality of Campbelltown (1939) 39 SR (NSW) 347 (at 356-358); Kabwand Pty Ltd v National Australia Bank (1987) 16 FCR 85 (at 87.5); and I would add that it was also submitted by ACCC that the injunctions sought by GWF's notice of motion, as to restraint upon ACCC using the privileged material, constituted more than the 'adducing of evidence', as that expression is used in the Evidence Act 1995 (Cth) but the ultimate significance of that submission was not apparent. 27 Reliance was thus placed by ACCC upon the doctrine of waiver, and the following dictum of Handley JA in Yuill v Corporate Affairs Commission (1990) 20 NSWLR 386 (at 413A): 'In my view, waiver of privilege by a client in producing or permitting his solicitor to product privileged documents to an inspector would constitute a final waiver of the privilege with respect to those documents for all purposes. The client ought to have in contemplation the uses which the inspector may make of those documents. These will include showing them to witnesses, reproducing them, in whole or in part, or otherwise referring to their contents in his report, that the report may be printed and published by the Minister or the Ministerial Council… and that finding of fact by the inspector will be prima facie evidence in civil proceedings." I interpolate to observe that the High Court (Gleeson CJ, Gaudron, Gummow and Hayne JJ) in Daniels observed at [35] that '…it may be that Yuill would now be decided differently'. Nor was any application made to the Court, so ACCC further submitted, to prevent ACCC gaining access to and using the documents, notwithstanding an awareness on the part of GWF concerning the reliance which ACCC was likely to place upon the documents in its investigation. That submission affords no significance to the circumstance that GWF has acted promptly, following upon the reversal by the High Court of the Full Federal Court's decision in the Daniels litigation. Principles arising for consideration and application 28 A convenient starting point is the precept that legal professional privilege at common law is a 'practical guarantee of fundamental rights' (Goldberg at 121 per Gummow J), and is not confined to judicial or quasi-judicial proceedings (Baker v Campbell (1983) 153 CLR 52). ACCC's processes undertaken to date in relation to the GWF, and also Messrs Loneragan and Pascoe, pursuant to s 155 of the TP Act, appear to have relevantly been neither judicial nor quasi-judicial. The jurisprudence of Australia is replete with explanations and illustrations of the precept of legal professional privilege, and its implications. For instance in Grant v Downs (1976) 135 CLR 674, the following dicta appears in the joint judgment of Stephen, Mason and Murphy JJ (at 685): 'The rationale of this head of privilege, according to traditional doctrine, is that it promotes the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisers, the law being a complex and complicated discipline. This it does by keeping secret their communications, thereby inducing the client to retain the solicitor and seek his advice and encouraging the client to make a full and frank disclosure of the relevant circumstances to the solicitor. As a head of privilege, legal professional privilege is so firmly entrenched in the law that it is not to be exorcised by judicial decisions.' 29 In Baker v Campbell,Deane J as one of the majority of the High Court spoke (at 114) of '[t]he importance of the principle that a person should be able to seek relevant legal advice and assistance without apprehension of prejudice', and his Honour further observed (at 115) that the principle '…could not even be sacrificed to promote the main purpose of the existence of courts of justice, namely the discovery, vindication and establishment of truth'. In more recent times, Kirby J in Daniels (at 584) cited with approval what was said byAdvocate-General Slynn in A M & S Europe Ltd v Commission of European Communities [1983] QB 878 (at 913) in relation to the principle as follows: 'Whether it is described as the right of the client or the duty of the lawyer, this principle has nothing to do with the protection or privilege of the lawyer. It springs essentially from the basic need of a man in a civilised society to be able to turn to his lawyer for advice and help, and if proceedings begin, for representation; it springs no less from the advantages to a society which evolves complex law reaching into all the business affairs of persons, real and legal, that they should be able to know what they can do under the law, what is forbidden, where they must tread circumspectly, where they run risks.' 30 In Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49, the High Court resolved, prior to the events the subject of the present notice of motion, the issue whether client legal privilege under the Evidence Act, as distinct from the common law of legal professional privilege, applied derivatively to ancillary legal processes such as the discovery, production and inspection of documents, in contrast to the adducing of testimony in the 'court room'. Gleeson CJ, Gaudron and Gummow JJ held that ss 118 and 119 of the Evidence Act applies only to the adducing of evidence and therefore not to any such ancillary processes (at [32-34]). The expression 'adducing of evidence' appearing in s 122 of the Evidence Act is not defined, and its limits did not fall for definition in Esso, though it was discussed in Esso by way of contrast to the ancillary processes of discovery and inspection of documents. McHugh J agreed at [64], and likewise Callinan J at [149]. Further, Gleeson CJ, Gaudron and Gummow JJ (at [60]-[61], and Callinan J at [166]-[167]), remoulded the operation of legal professional privilege, so as to subject the same to the dominant purpose test as expounded in the minority view of Barwick CJ in Grant v Downs at 677, and thus to the exclusion of the sole purpose test. 31 In the light of the High Court's reasons for judgment in Esso, the distinction should be drawn between legal professional privilege at common law and client legal privilege under the Evidence Act(see in that regard [6], [16], and [23] of the reasons for judgment of Gleeson CJ, Gaudron and Gummow JJ). One aspect of the distinction for present purposes is that '…the provisions of s 122 [of the Evidence Act] as to the circumstances in which privilege may be lost are not identical to the corresponding common law principles' (Mann v Carnell [1999] 201 CLR 1 at [23] (per Gleeson CJ, Gaudron, Gummow and Callinan JJ) (the High Court judgments in Esso and Mann were delivered contemporaneously). 32 Gleeson CJ, Gaudron, and Gummow JJ observed in Esso that '[o]ther legislatures have not yet enacted similar legislation' to the Evidence Act (ie legislatures other than those of the Commonwealth, the State of New South Wales and the Australian Capital Territory), and that '[f]urthermore, the legislation, even in the jurisdictions where it applies, in its terms leaves untouched certain areas in which the privilege may operate', and that therefore 'in such a setting, there is no consistent pattern of legislative policy to which the common law in Australia can adapt itself' (at [23]). Callinan J observed to similar effect that he '…would reject the theory that [the Evidence Act] operates to alter the common law, so as in some way to make its provisions applicable to circumstances other than the adducing of evidence' (at [44]), being an observation consistent with the view of the joint judgment of Gleeson CJ, Gaudron and Gummow JJ. 33 The dichotomy of operation of client legal privilege and legal professional privilege, since the coming into force of the Evidence Act, is of significance in the circumstances of this case because the relief sought is not limited to preventing the giving or adducing of evidence in the 'courtroom'. The process of inquiry by ACCC under s 155 is not yet apparently completed. Not only does GWF seek to restrain ACCC from 'adducing' evidence of the privileged material but also from 'referring, disseminating, communicating or making use of' the privileged material. Consequently, it becomes appropriate to consider the present application by reference to relevant principles of the common law, as well as to the operation of the Evidence Act. 34 The Evidence Act regulates client legal privilege by imposing a 'dominant purpose' test, in the context of resolving whether privilege attaches to a relevant communication or document.Thus ss 118 and 119 provide respectively as follows: '118. Legal advice Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of: (a) a confidential communication made between the client and a lawyer; or (b) a confidential communication made between 2 or more lawyers acting for the client; or (c) the contents of a confidential document (whether delivered or not) prepared by the client or a lawyer; for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client. 119. Litigation Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of: (a) a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made; or (b) the contents of a confidential document (whether delivered or not) that was prepared; for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party.' 35 In s 117(1) of the Evidence Act, 'confidential document' is defined to mean a document, 'prepared in such circumstances that, when it was prepared (a) the person who prepared it; or (b) the person for whom it was prepared; was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law'. The meaning of a 'confidential communication' is defined by s 117(1) in similar terms. A confidential document would normally of course extend to a document embodying legal advice. Both definitions are here material. 36 Loss of client legal privilege is provided for in s 122 of the Evidence Act, and stipulates as follows, so far as is presently material: '122 Loss of client legal privilege: consent and related matters (1) This Division does not prevent the adducing of evidence given with the consent of the client or party concerned. (2) Subject to subsection (5), this Division does not prevent the adducing of evidence if a client or party has knowingly and voluntarily disclosed to another person the substance of the evidence and the disclosure was not made: … (c) under compulsion of law; … (4) Subject to subsection (5), this Division does not prevent the adducing of evidence if the substance of the evidence has been disclosed with the express or implied consent of the client or party to another person other than: (a) a lawyer acting for the client or party …' 37 The relationship between subs 122(2) and (4) was considered by McLelland CJ in Equity in Telstra Corporation v Australis Media Holdings (No 1) (1997) 41 NSWLR 346 (at 351), his Honour holding that both subsections have discrete fields of operation in that: '… a disclosure by a client or party itself or by an employee or agent of the client or party (or by any other person within the s 117 definition of "client" or "party") is governed by subs (2) and not by subs (4), and a disclosure by any other person or entity is governed by subs (4) and not by subs (2).' I would observe that the disclosure by GWF of the privileged material was made in circumstances governed by subs (2) of s 122, namely under compulsion of law, being the compulsion inherent in the service by ACCC of the s 155 notices upon GWF and Mr Pascoe, and in the light of the Full Federal Court's determination in Daniels which prevailed at the times of disclosure. 38 In Ampolex Pty Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 40 NSWLR 12, in the context of the loss of privilege provisions of s 122 of the Evidence Act, Rolfe J gave (at 22) an illustration of the distinction between a voluntary disclosure and a disclosure made under compulsion of law: 'I assume that the word 'voluntary' is intended to mean something other than "under compulsion of law", which appears in par (c). I think the distinction is that the disclosure was made voluntary, in the sense that it was not made by way of mistake, it being possible that a disclosure may be made "knowingly" yet by way of mistake and, accordingly, perhaps not voluntarily.' 39 It has also been held that whatever may be the precise limits of the words 'knowingly and voluntarily', where used in s 122 of the Evidence Act, the same '…do not apply in a case where everything indicates an intention to claim privilege in respect of the document and what has gone wrong is attributable to sheer inadvertence or carelessness' (Sovereign v Bevillesta [2000] NSWSC 521 at [23] per Austin J). GWF have sought comfort from that dictum, because of the degree of uncertainty or ambiguity which may be distilled in the circumstances of the communications between GWF and ACCC, which have been extracted and/or summarised in [7-12] above. I do not think that the disclosure of documents made by GWF to ACCC could be described as 'inadvertence or carelessness'. The respondents pointed out further that the voluntary disclosure contemplated by s 122 is the disclosure of the 'substance of the evidence', to cite the subs 122(2) expression earlier extracted, and that the test has been described as a 'quantitative one, which asks whether there has been sufficient disclosure to warrant loss of the privilege' (The Adelaide Steamship Pty Ltd v Spalvins (1998) 81 FCR 360 at 371 per Olney, Kiefel and Finn JJ). GWF submitted that in the events which happened, its conduct and that of Mr Pascoe did not fall foul of any of these tests. I should record, incidentally, that no cross-examination was undertaken by ACCC of Ms Peter of Allens Arthur Robinson in relation to the production of the documents in question to ACCC on behalf of either GWF or Mr Pascoe, notwithstanding the comprehensive nature of them. 40 As to ACCC's case of waiver on the part of GWF and Mr Pascoe, although legal professional privilege is obviously an important right deserving of special protection, it is of course a right which may be waived by the party otherwise entitled to the privilege, in circumstances where that party performs an act which is inconsistent with the confidence otherwise susceptible to preservation, irrespective of the subjective intention of the party prima facie entitled otherwise to the privilege (Mann v Carnell at [28-29] per Gleeson CJ, Gaudron, Gummow and Callinan JJ). Waiver in any such circumstances may be in principle express or implied, deliberate or inadvertent (Great Atlantic Insurance Co v Home Insurance Co [1981] 2 All ER 485). In Attorney-General for the Northern Territory v Maurice (1986) 161 CLR 475 Mason and Brennan JJ (at 487) described the circumstances in which waiver of privilege may occur as follows: 'A litigant can of course waive his privilege directly through intentionally disclosing protected material. He can lose that protection through waiver by implication. An implied waiver occurs when, by reason of some conduct on the privileged holder's part, it becomes unfair to maintain the privilege.' 41 The circumstances in Goldberg provide an unusual but nevertheless possibly relevant example of the objective nature of the test of waiver of privilege, and its application. Those circumstances were that a solicitor, who had disclosed privileged material of a former client to the Law Society of New South Wales for the limited purpose of influencing the Society in relation to its investigation of a complaint made against the solicitor by that former client, was held not to have been entitled to claim privilege in respect of the material so provided to the Law Society, in the context of subsequent litigation between the solicitor and the former client. In relation to the circumstances giving rise to that litigation, the Evidence Act (NSW) had not yet taken effect, the commencement whereof having been on 1 September 1995. The following passages in the joint majority judgment of Deane, Dawson and Gaudron JJ in Goldberg describe the unusual circumstances in which legal professional privilege (ie at common law) may be lost and in which issues of fairness in a common law context as to maintaining the privilege may be rendered material: 'It is clear that there has been no express or intentional general waiver by Mr Goldberg of legal professional privilege in the present case. Any waiver of the privilege as against the Ngs, if there has been one, must have resulted from Mr Goldberg's disclosure of the relevant documents to an officer (Ms Shirvington) of the Law Society. That disclosure was for the limited purpose of dealing with inquiries made on behalf of the Law Society in relation to the complaint which had been made against Mr Goldberg by Mr Ng and was on the express basis that the documents would not be shown to anyone else. It could not properly be seen as constituting an express or intentional general waiver of legal professional privilege or as destroying the confidentiality which is necessary for its maintenance. Accordingly, if there was a waiver of the privilege as against the Ngs, it was a waiver imputed by operation of law in the particular circumstances. (95) … Necessarily, the basis of such an imputed waiver will be some act or omission of the persons entitled to the benefit of the privilege. Ordinarily, that act or omission will involve or relate to a limited actual or purported disclosure of the contents of the privileged material. When some such act or omission of the person entitled to the benefit of the privilege gives rise to a question of imputed waiver, the governing consideration is whether "fairness requires that his privilege shall cease whether he intended that result or not". That does not mean, however, that an imputed waiver must completely destroy the privilege. Like an express waiver, it can be limited so that it applies only in relation to particular persons, materials or purposes. (96) … It follows that the critical question in the present case is whether Mr Goldberg's disclosure of the privileged documents to the Law Society gave rise to a situation where ordinary notions of fairness required that he be precluded from asserting that those documents were protected from production for inspection by the Ngs in the related Equity proceedings between the Ngs and the Goldbergs. (98) … In the Court of Appeal, both Mahoney JA and Clarke JA concluded that the effect of the delivery of the relevant documents to the Law Society was that it would be unfair to permit reliance by Mr Goldberg upon legal professional privilege to prevent those documents being made available for inspection by the Ngs. Their Honours approached the question of fairness on the basis that, notwithstanding that it was at the request of Ms Shirvington. In that, they were fully justified. It is true that the Law Society possessed powers of compulsion. It is also true that a failure by a solicitor to respond adequately to a complaint of professional misconduct might, in some circumstances, be seen by the Law Society as itself constituting such misconduct. (100) … The disclosure of the relevant documents to the Law Society was not restricted to perusal by Ms Shirvington. Clearly, the documents were handed over on the understanding that Ms Shirvington and other officers of the Law Society could make whatever internal use of them was thought appropriate in dealing with the various aspects of Mr Ng's complaint. Presumably, they played some part in procuring that result. In that regard, it is relevant to note that it has not been suggested that Mr Goldberg provided any other written statement to the Law Society in answer to the complaint against him.' (101) The circumstances in Goldberg thus involved a voluntary production of documents to the (third party) Law Society, albeit for a limited purpose of Mr Goldberg, such as to have constituted an imputed waiver of privilege at common law. That was because having done so to service his own interests, ordinary notions of fairness were found to have precluded Mr Goldberg's reliance upon privileges. The respondents here contend that fairness should work in a sense conversely in their favour, because of the retroactive operation of the authority of the High Court's subsequent decision in Daniels on the occasions when they produced the privileged material, and when they were questioned in relation thereto. 42 In Mann, the Chief Minister of the Australian Capital Territory supplied documents containing legal advice relating to the Government's conduct in certain already comprised litigation to a member of the Legislative Assembly of the Territory. After considering those documents, the member returned the copies to the Chief Minister, but retained the covering letter. The covering letter, without the legal opinions, was forwarded by the member to the litigant who originally commenced the compromised proceedings against the Government. In the belief that the legal opinions identified in the covering letter might have been defamatory, the litigant applied for preliminary discovery of those opinions in the Supreme Court of the Australian Capital Territory. In the course of their majority judgment, Gleeson CJ, Gaudron, Gummow and Callinan JJ (at 13-15) made the following observations of potential significance to issues of implied waiver arising from inconsistent conduct: 'It is inconsistency between conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege … Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is "imputed by operation of law". This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the objective intention of the party who has lost the privilege. In Goldberg v Ng this court considered a case in which there was disclosure of a privileged communication to a third party, for a limited and specific purpose, and upon terms that the third party would treat the information disclosed as confidential. The court was divided upon whether, in the circumstances of the case, privilege was waived. However, the reasoning of all members of the court was inconsistent with the proposition that any voluntary disclosure to a third party necessarily waives privilege. … Disclosure by a client of a confidential legal advice received by the client, which may be for the purpose of explaining or justifying the client's actions, or for some other purpose, will waive privilege as such disclosure is inconsistent with the confidentiality which the privilege serves to protect.' GWF contends that in the light of the interpretation of the Full Federal Court in Daniels of s 155 of the TP Act, which prevailed until the High Court's reversal of that decision, there was no waiver of legal professional privilege at common law or client legal privilege confined by the Evidence Act, in relation to the compliance by GWF and Mr Pascoe with ACCC's demands for evidentiary and other disclosures etc in the meantime, and that it is unfair for ACCC to contend otherwise. Findings and conclusions 43 It is common ground that the privileged material constituted 'confidential communications' created for the dominant purpose of providing GWF with legal advice, and that the three documents comprising the privileged material, produced to ACCC, attracted the entitlement of GWF to legal professional privilege, or in terms of s 118 of the Evidence Act, client legal privilege, in the latter case to the extent that the privileged material might subsequently be adduced in evidence. No contention to the contrary was advanced by ACCC at the time of production of the privileged material, or thereafter in the course of ACCC's investigations, or at the hearing of the present application. I am satisfied that this is so. Ms Peter's letter of 31 January 2000 to Mr Pascoe, which attached a file note of 31 January 2000 concerning a conversation which took place in the later part of January 2000 between Ms Peter and Mr Loneragan, was brought into existence to advise GWF of the circumstances which may give rise to possible contraventions of the TP Act, and to thereby enable GWF and its legal advisers thereafter to consider GWF's approach to anticipated litigation. Similarly, Ms Peter's letter of 4 February 2000 to Mr Pascoe detailed the factual material to which GWF was to have regard in considering how it would approach possible contraventions of the TP Act, as well as various opinions expressed by Ms Peter as to avenues open to GWF to alleviate the likelihood of Part IV proceedings being commenced by ACCC against it. Ms Peter's letter to Mr Pascoe of 10 February 2000, which attached a signed opinion by Mr Neil Young of Queens Counsel in respect of the appropriate action to be taken by GWF in relation to alleged breaches of the TP Act, was similarly created for the purpose of providing GWF with legal advice in order to ameliorate the likelihood of contravention proceedings being brought against it. 44 It is sufficiently apparent from the conduct of the parties, including their correspondence, that privilege had been maintained by GWF from the time of service of ACCC's attached s 155 notices in relation to the privileged material, to the extent that privilege in respect thereof might subsequently become judicially recognised and enforceable, by reason of any future reversal by the High Court of the Full Federal Court's judgment in the Daniels litigation. A further inference I would draw in favour of GWF is that it did not by its conduct indicate to ACCC that its claim to privilege was not to be treated by ACCC as waived by virtue of GWF's responses in the meantime to the Pascoe and GWF notices by reason of the production to ACCC of the privileged material, or by reason of the examinations of GWF executives subsequently conducted by ACCC upon that material. 45 GWF produced the privileged material to ACCC under the compulsion of the Pascoe and GWF notices, being a compulsion authorised by the judicial interpretation of the operation of s 155 of the TP Act for the time being prevailing, pursuant to the authority of the Full Federal Court in Daniels (Mr Pascoe was of course an executive of GWF). That compulsion constituted a 'compulsion of law' within s 122(2)(c) of the Evidence Act, as well as at common law, notwithstanding that the decision in Daniels of the Full Federal Court was later reversed by the High Court. The purported reliance of ACCC upon Goldberg in denial of that proposition is I think misconceived, because the giving by the solicitor in that case (Mr Goldberg) of his client's documents to the Law Society was, by way of contrast to the circumstances of GWF at the material times, '…voluntary and for the calculated purpose of assisting him (ie the solicitor) in having the complaint against him resolved adversely to Mr Ng' (cited at 101 of the report of the joint majority judgment extracted in [41] above), whereas the same could not be said of the compulsory processes of production of the privileged material and the questioning in relation thereto, to which GWF was required to submit because of the state of the general law for the time being concerning the operation of s 155. In continuing thereafter with its investigation into the conduct of GWF and its officers, including Mr Loneragan, upon the footing that legal professional privilege had no application of relevance thereto, ACCC took merely advantage of the benefit for the time being of the Daniels decision of the Full Federal Court. By the time the High Court gave judgment adversely to ACCC in the Daniels litigation relating to legal professional privilege in respect of the documents the subject of the s 155 notices to produce, ACCC had enjoyed the advantage of access to the privileged material for about 13-14 months (ie from about September 2001 to 7 November 2002). Those circumstances are not to be compared, by way of further illustration, with those involved in Mann v Carnell. 46 I do not think that in the unique context of those events, GWF by its conduct waived its entitlement to legal professional privilege in respect of the privileged material produced to ACCC pursuant to the GWF and Pascoe notices, or in relation to the viva voce evidence subsequently given on behalf of GWF upon or otherwise referrable to the content of the privileged material. Nor do I think that there occurred waiver by inconsistent conduct on the part of GWF. It follows that such information as was obtained by ACCC as a result of the s 155 notices and the examinations conducted by ACCC in relation to the creation and content of that material has been at all times the subject of client legal privilege conferred by the Evidence Act, and of legal professional privilege at common law, depending on the context in which ACCC has used and may hereafter seek to use the same. 47 Until the delivery of the High Court's judgment on appeal in Daniels, GWFwas vulnerable to the imposition of the sanctions stipulated by s 155(6A) of the TP Act, in the event that GWF and its executives (for instance Mr Loneragan) would have sought to withhold from giving information, oral or documentary, to ACCC in the course of the GWF s 155 inquiry. Those sanctions, in the case of individual persons, constituted fines or imprisonment, and in the case of a body corporate, potentially larger fines than those applicable to individual persons. It follows that to the extent that GWF and any of its employees or other agents provided to ACCC information, oral or written, in relation to the privileged material, as well as delivered up to ACCC the privileged material per se, they did so under compulsion, or to use the description in Cross On Evidence (6th Australian Edition by J D Heydon) (at 673), in circumstances of 'a want of the necessary voluntariness'. 48 An illustration of the notion of compulsion to provide privileged evidence, of application to the circumstances of GWF here involved, may be found in Baker v Campbell, (ante). The circumstances there were that a member of the Australian Federal Police sought to seize certain business records held by a solicitor for a taxpayer purportedly pursuant to a search warrant issued under s 10 of the Crimes Act 1914 (Cth). Those documents were subsequently found by a majority of the High Court to have attracted a justifiable claim for legal professional privilege at common law. Wilson J as one of the majority observed (at 95) that 'the very existence of the privilege as providing any significant protection and thereby making its contribution to the public welfare must be threatened unless as a matter of principle the protection extends to all forms of compulsory disclosure'. Deane J (also in the majority) stated (at 111) as follows: 'A person is obliged to disclose or yield his information or property only to the extent that he is compelled to do so by some applicable common law principle or statutory provision. Where no such compulsion exists, there is no need for any special privilege protecting particular types of information or property from disclosure or seizure. The ordinary entitlement to remain silent and to retain one's information or property only constitutes a special privilege where it is preserved as an exception in circumstances where disclosure or cession would otherwise be compelled. In the absence of any such general compulsion, that entitlement represents no more than the ordinary position under the common law.' The compulsion exerted here by ACCC upon GWF took the form of course of the comprehensive notices of demand of ACCC attached to these reasons for judgment, and issued purportedly pursuant to s 155 of the TP Act (ie the Pascoe and GWF notices), and of the examination of GWF's executives pursuant thereto. That conduct occurred at a time when s 155 of the TP Act, concerning of course the exercise by ACCC of powers of investigation under the auspices thereof, by virtue of the Federal Court's decision in Daniels, operated to deny to both respondents in the principal proceedings (ie GWF and Mr Loneragan) privilege in respect thereof. As a consequence of the High Court's reversal of the Federal Court's decision in Daniels, the documents produced, and information given by oral examination in relation thereto, had been always subject in law to the benefit of legal professional privilege. 49 About 10 years after the High Court's decision in Baker v Campbell, the Supreme Court of New South Wales in Woollahra Municipal Council addressed the notion of implied waiver of legal professional privilege at common law in the analogous circumstances of documents produced to a local government inspector, pursuant to the threat of exercise by the inspector of his powers of requiring compulsory disclosure. In the course of the reasons for judgment which have since been cited with approval on a number of occasions (including in Goldberg (at 95) (footnote 27) by Deane, Dawson and Gaudron JJ, (at 110) (footnote 67) by Toohey J and (at 122-123) by Gummow J, Giles J held in that situation as follows: 'Albeit intentional, the disclosure was made under threat of compulsory process and for the purpose of enabling the inspectors to carry out their statutory duty. In the circumstances in which it occurred, I do not think that the provision of documents subject to legal professional privilege to the inspectors was a waiver of privilege.' The circumstances in Woollahra Municipal Council are not precisely parallel to the circumstances here of the production to ACCC of documents pursuant to a demand for the time being authorised by the general law relating to s 155 of the TP Act, by virtue of the Federal Court's decision in Daniels. Once however the legal principles relating to the scope of operation relevantly of s 155 had been subsequently declared by the High Court in Daniels to the contrary effect, the consequence was that the demands of ACCC for production of the privileged material, and the subsequent requirement for viva voce examination in relation thereto, in either case pursuant to s 155, fell to be characterised from the outset as evidence obtained by unlawful compulsion. 50 The circumstances that no 'masking' of the privileged material was undertaken by GWF prior to production thereof to ACCC, and further that GWF did not seek an injunction from the High Court to restrain ACCC from continuing with its investigative activities, in so far as the same related to or involved the use of the privileged material whether before or after Woolworths/Coles Myer had successively pursued the course of obtaining an injunction in analogous circumstances, do not warrant any different conclusion, contrary to ACCC's submissions. For one matter, any such masking exercise would have been undertaken in the face of the Full Federal Court's decision in Daniels, which prevailed of course at the time ACCC served the Pascoe and GWF notices. In addition by the time of the successful Woolworths and Coles Myer applications to the High Court for interlocutory relief on 7 November 2001, Mr Pascoe had already been examined by ACCC upon the basis of, or by reference, to the privileged material (see [13] above). It was open to GWF to think that its communications with ACCC, in response to its demand for documents pursuant to s 155, being the communications which I have earlier summarised in these reasons, afforded GWF the most favourable protection it could probably secure for the time being, pending the outcome of the Daniels appeal to the High Court. A fortiori was GWF's reticence in seeking any such interlocutory relief reasonable in the circumstances which prevailed before the Woolworths and Coles Myer applications. For the Court to apply the benefit of hindsight of the successful injunction course later pursued by those applicants would be in my opinion to imply to the circumstances of GWF prevailing at the time of ACCC's demands for production of the privileged material, an unrealistic application of the notion of waiver of legal professional privilege and client legal privilege. 51 In the light of the correspondence between Allens Arthur Robinson and ACCC which I have extracted or summarised earlier in these reasons, and the unusual circumstances giving rise to the present proceedings which I have already summarised, I do not think that ACCC can rightly invoke assistance from the dictum in Thomason (at 358). That correspondence is not susceptible to an interpretation to the effect that ACCC was 'led by the disclosure to regulate [its] conduct in relation to some matter which becomes relevant in subsequent litigation to which he is a party' (Jordan CJ with whom Halse Rogers and Bavin JJ agreed), despite the submission of ACCC to the contrary. That correspondence gave sufficient notice of the claim of privilege in the event that the Full Federal Court's decision in Daniels might subsequently be reversed by the High Court. Moreover there was no suggestion on ACCC's part that, absence of adducement of evidence, based upon or referrable to legal advice, explicit or implicit, contained in the privileged material, ACCC's investigation would as a consequence have been wholly or partly deferred pending the outcome of the application for special leave in Daniels, or of any subsequent appeal if special leave was to be granted. To the extent therefore that considerations of fairness might intrude, by reason of the implications of the correspondence initiated by GWF's lawyers with ACCC after service of the Pascoe and GWF notices to produce, I do not think that the relief to which GWF might otherwise be entitled in the present proceedings should be refused. The implications of the Allens Arthur Robinson correspondence framed by Ms Peter were sufficiently apparent for ACCC to appreciate the course of action which GWF would pursue, if ACCC was to proceed to use, in the context of its s 155 enquiry, any material which might correctly be characterised as privileged in consequence of an ultimately favourable appeal in the Daniels litigation. 52 Furthermore I do not accept the unqualified and unspecific proposition that the circumstances that ACCC and its legal advisers have necessarily retained knowledge of the contents of the privileged material, and have regulated their conduct in relation to the investigation and commencement of proceedings in reliance upon the privileged material, warrants the characterisation as futile the grant in principle of the relief sought by GWF. Moreover the proposition is somewhat at odds with ACCC's former policy to which reference is made in the passage cited from Daniels in [7] above. Given my finding of an absence of waiver on GWF's part, and the statements of high judicial authority relating to the need for upholding of the integrity of the principle of legal professional privilege (see the authorities cited for instance in [28-29] above), the public interest in upholding the integrity of the principle should here prevail, irrespective of the complexity and difficulty which might hereafter be encountered in so doing. 53 I have therefore reached the conclusion that GWF is entitled in principle to relief broadly of the nature sought by the Amended Notice of Motion, though subject to the modifications which I think should be made, in all the unique circumstances of the case. That relief is authorised upon the basis of client legal privilege arising in the circumstances of the case pursuant to the Evidence Act, and to the extent that the conduct of ACCC has extended or may hereafter extend beyond the adducing of evidence, that relief is authorised upon the basis of legal professional privilege conferred by common law. The disclosure of the privileged material was involuntary, and occurred in circumstances where GWF made efforts reasonably designed to protect and preserve its entitlements to privilege. In so far as that conclusion relates to privilege my conclusion has not been influenced by any considerations of fairness, so far as client legal privilege may extend in the particular contexts. I acknowledge that in Adelaide Steamship (at 425), it was said that the operation of s 122 of the Evidence Act is 'not concerned with any principle of "fairness", such as that developed by the common law and by which waiver may be imputed'. To the extent that the conduct of the GWF inquiry has involved thus far legal professional privilege, I am of the opinion that the conduct of GWF in purported protection of that privilege has been fair upon the footing of the common law principles. I would add for completeness that ACCC was of course as equally on notice as GWF that the Full Federal Court's decision in Daniels was the subject of challenge by High Court proceedings, and it was presumably open to ACCC to have proceeded with the GWF investigation, without resort to the use of the privileged material produced by GWF pursuant to the s 155 notices, pending the outcome of the High Court proceedings. I do not understand any evidence, or at least any compelling evidence, to have been provided by ACCC to the contrary of that latter observation. Viability or otherwise of notice of motion process 54 ACCC has submitted that in any event there is no procedural authority for GWF to have sought relief by notice of motion. 55 Order 19 Rule 1 of the Federal Court Rules provides: '(1) Any interlocutory or other application in any proceedings which has already been commenced in accordance with these Rules shall be made by motion…' 56 The ambit of the relief which may be claimed by notice of motion was considered by Young J in ERS Engines Pty Ltd v Wilson (1994) 35 NSWLR 193. His Honour observed (at 199-200) that '[g]enerally speaking, the authorities support the proposition in that if the ambit of the case has been defined by pleadings or otherwise, then a motion for injunction made within the proceedings must be made out by affidavits corresponding with the allegations in the statement of claim: see Kerr, A Treatise on the Law and Practice of Injunctions (1927) London, Sweet & Maxwell (6th ed) at 642. Thus a defendant who has not counter-claimed cannot seek interlocutory relief unless it relates to or arises out of the relief sought by the plaintiff…'. 57 The notice of motion procedure contained within Part 19 Rule 1 of the Supreme Court Rules 1970 (NSW) is in similar but not identical terms to Order 19 Rule 1 of the Federal Court Rules. The commentary in Ritchie's Supreme Court Procedure NSW (at 19.1.1) provides nevertheless a useful analysis of what relief may be obtained through the notice of motion process: 'The purpose of this rule is to prescribe the form in which applications in existing proceedings are to be made (namely by motion). It neither restricts nor enlarges the kind of applications that can be made in the proceedings. Whether a particular application can properly be made is to be determined according to general principles. An example of such a situation occurs where application is made to enforce a compromise of the proceedings. Although such an application may be made by notice of motion, the use of that procedure is not appropriate where substantial matters are involved that go beyond the ambit of the proceedings as they were originally constituted, or where the interests of justice otherwise indicate that it is desirable to institute separate proceedings: Phillips v Walsh (1990) 20 NSWLR 206 at 209.' I am of the opinion that the notice of motion is an 'interlocutory or other application in… proceedings… already commenced in accordance with [the Federal Court] Rules', and is also a '…matter arising in connection with… the conduct of the hearing'. The notice of motion procedure adopted by GWF is therefore duly authorised by the Federal Court Rules in the present circumstances. Relief 58 The relief sought by GWF in the Amended Notice of Motion is as follows: '1. The Applicant be restrained from referring to or adducing in evidence or examination in these proceedings the material identified in paragraph 5 of the affidavit of Wendy Wilson Peter sworn on 20 February 2003. 2. The Applicant be restrained from referring to or adducing in evidence or examination in these proceedings any material that: (a) in any way refers to the Privileged Material or the information contained in that material; (b) was created with the use of the Privileged Material or Privileged Information; or (c) was based on or in any way derived from, or influenced or affected by, the Privileged Material or the Privileged Information. 3. The Applicant be restrained from directly or indirectly using, disseminating, communicating, referring to or making use of in relation to these proceedings: (a) any of the Privileged Material or Privileged Information; (b) any material that in any way refers to the Privileged Material or Privileged Information; (c) any material that was created with the use of the Privileged Material or Privileged Information; and (d) any material that was based on or in any way derived from, or influenced or affected by, the Privileged Material or Privileged Information. 4. The Applicant identify and destroy: (a) all copies of the Privileged Material in its possession, custody or control; (b) all documents and records (including electronic records) in its possession custody or control that in any way directly or indirectly refer to the Privileged Material or the Privileged Information; (c) all documents and records (including electronic records) in its possession, custody or control that were created with the use of the Privileged Material or Privileged Information; and (d) all documents and records (including electronic records) in its possession, custody or control that were based on or in any way derived from, or influenced or affected by, the Privileged Material or Privileged Information. 5. The Applicant identify all Commissioners and Commission staff and legal advisers who have any knowledge of the Privileged Material and/or Privileged Information and must ensure that those persons are: (a) no longer involved in these proceedings in any capacity; (b) no longer involved in any further or additional investigation by the Applicant involving similar allegations against the First and Second Respondents; and (c) instructed in writing not to discuss or refer to or otherwise disseminate any of the Privileged Material or Privileged Information. 6. The Applicant file and serve on the First Respondent on or before 2 May 2003 an affidavit listing the documents referred to in Order 4 and listing the Commissioners and Commission staff referred to in Order 5. 7. Such further and other orders, directions or relief as the court thinks fit.' 59 The above orders are modelled on the relief granted by Campbell J in AG Australia Holdings Ltd to which brief reference has earlier been made. In that case an employee of AG Australia Holdings Ltd had breached his duty of confidentiality owed to his employer by voluntarily providing material, for compilation of a witness statement, to a firm of solicitors acting on behalf of an applicant in representative proceedings in the Federal Court of Australia brought against his employer. At (215) Campbell J said 'now that Mr Burton has talked with MBC and provided a draft statement, MBC is in the situation where it has information which it should never have had. Conscionable behaviour on its part requires that it give up the information it should not have had, and nor, in the future, obtain any benefit from having once had that information'. Later (at 218) Campbell J held that 'Mr. Burton is in breach of his contract, and MBC is, at least after absorbing this judgment, knowingly in receipt of the fruits of that breach of contract. It is not in accordance with equity's approach in giving remedies to allow the wrongdoer to retain the fruits of wrongdoing, on the ground that the plaintiff will not thereby be any worse off, unless it is very clearly the case that the granting of relief would be futile'. 60 In considering the scope of the relief sought, I bear in mind that the present application does not of course involve any claim giving rise to equitable remedies of the scope formulated in AG Australia Holdings. The context of the present proceedings involves the kind of considerations attending to investigations undertaken purportedly in the public interest, and not merely commercial considerations between two litigating parties. I think that the relief framed by GWF is unacceptably wide in scope. Moreover I bear in mind that ACCC as a Commonwealth agency assumes the mantle of a 'model litigant' in its prosecution of proceedings for infringement of the TP Act (Scott v Handley (1999-2000) 58 ALD 373 at [43]). I have modified the text of the relief framed by GWF, but will grant liberty to apply in the event that the orders I have framed, for example in the view of the docket judge, operate to produce for instance impracticality in particular circumstances. I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. Associate: Dated: 18 June 2003 Counsel for the Applicant: A Robertson SC, S White Solicitor for the Applicant: Australian Government Solicitor Counsel for the First Respondent: I M Jackman SC Solicitor for the First Respondent: Allens Arthur Robinson Counsel for the Second Respondent: A I Tonking Solicitor for the Second Respondent: Thomson Playford Date of Hearing: 14 April 2003 Date of Judgment: 18 June 2003 SCHEDULE 1 TRADE PRACTICES ACT 1974 SECTIONS 155(1)(a) and 155(1)(b) NOTICE TO FURNISH INFORMATION AND PRODUCE DOCUMENTS The Proper Officer George Weston Foods Limited Level 20 TWR A Zenith Centre 821 Pacific Highway CHATSWOOD NSW 2067 WHEREAS, I, ALLAN HERBERT MILLER FELS, Chairperson of the Australian Competition and Consumer Commission ('the Commission'), have reason to believe that George Weston Foods Limited ('the Company') is capable of furnishing information and producing documents relating to matters that constitute or may constitute contraventions of section 45 of the Trade Practices Act 1974 ('the Act'), namely: THE MATTERS THAT CONSTITUTE OR MAY CONSTITUTE CONTRAVENTIONS OF THE ACT 1. That the Company has made, and has given effect to contracts, arrangements or understandings, provisions of which have the purpose, or have or are likely to have the effect, of substantially lessening competition in contravention of sections 45(2)(a) and 45(2)(b) of the Act in so far as the Company did: (a) between about 1 January 1999 and the date of this Notice, make and give effect to contracts, arrangements or understandings with Goodman Fielder Limited and other competitors in the production and marketing of flour in Australia, under which the parties to the contracts, arrangements or understandings would agree and coordinate price increases and limit discounts and rebates in respect of wholesale prices for flour such contracts, arrangements or understandings having the purpose, or having the effect or being likely to have the effect, as the case may be, of fixing, controlling or maintaining the wholesale price for flour supplied by the parties in Australia; and (b) between about 1 January 1999 and the date of this Notice, make and give effect to contracts, arrangements or understandings with Goodman Fielder Limited and other competitors in the production and marketing of bread in Australia, under which the parties to the contracts, arrangements or understandings would agree and coordinate price increases and limit discounts and rebates in respect of wholesale prices for bread such contracts, arrangements or understandings having the purpose, or having the effect or being likely to have the effect, as the case may be, of fixing, controlling or maintaining the wholesale price for bread supplied by the parties in Australia. 2. That the Company has attempted to make a contract, arrangement or understanding, a provision of which had the purpose or would have or be likely to have the effect, of substantially lessening competition in contravention of sections 76(1)(b) and 45(2)(a) of the Act in so far as the Company did: (a) In about November or December 1999, through the conduct of a representative or representatives of the Company, attempt to enter into a contract, arrangement or understanding with Manildra Milling Pty Ltd, a competitor in the production and marketing of flour in Australia, under which the parties to the proposed contract, arrangement or understanding would increase the wholesale price of flour in Australia in or around late 1999, such contract, arrangement or understanding having the purpose, or having the effect or being likely to have the effect, as the case may be, of fixing, controlling or maintaining the wholesale price of flour supplied by the parties in Australia. ACCORDINGLY, I, ALLAN HERBERT MILLER FELS, CHAIRPERSON OF THE COMMISSION, pursuant to paragraphs 155(1)(a) and 155(1)(b) of the Act, HEREBY REQUIRE the Company to produce the documents specified in Schedule 1 to this Notice and to furnish the information specified in Schedule 2 to this Notice (in writing and signed by a competent officer of the Company) being documents and information which, I have reason to believe, the Company is capable of producing and furnishing and which relate to the said matters that constitute or may constitute contraventions of section 45 of the Act, by delivering the documents and information to the Commission's offices situated at 7th Floor, Angel Place, 123 Pitt Street, Sydney NSW 2000,between the hours of 9:00am and 5:00pm on any business day,on or before Friday the 14th day of September 2001. DEFINITIONS In this Notice, including Schedule 1 and Schedule 2 to this Notice, unless the contrary intention appears: 'the Company' means George Weston Foods Limited and includes, where the context permits, reference to any subsidiary or related company of George Weston Foods Limited; 'communication' includes oral or written communications; 'document' includes - (a) a book, plan, paper or other material on which there is writing or printing, or on which there are marks symbols or perforations, having a meaning for persons qualified to interpret them; (b) a disc, tape, paper or other device from which sounds or messages are capable of being produced including computer hard-drives, discs and tapes; (c) diary entries, invoices, correspondence, notices, circulars, memoranda, notes, facsimiles, electronic mail and records or oral conversations including conversations, speeches and addresses at meetings, by video transmission or by telephone; (d) electronic records (including computer files and electronic mail) which are stored on back-up tapes, hard disks, CD-Rom, DVD or other media by the Company or by third parties engaged by the Company; and (e) telephone account records; 'Goodman Fielder Limited' means Goodman Fielder Limited and includes, where the context permits, any subsidiary or related company of Goodman Fielder Limited; 'Manildra Milling Pty Limited' means Manildra Milling Pty Limited and includes, where the context permits, any subsidiary or related company of Manildra Milling Pty Limited; 'representative' includes but is not limited to the following: directors, employees, servants, contractors, agents and internal or external legal advisors. the singular includes the plural and the plural includes the singular; a reference to any corporation, whether expressly identified or not, includes a reference to any representative of that corporation. Insofar as any document referred to in Schedule 1 to this Notice has passed from your possession, power or control to that of another person, identify the document and state the full name and address of the person into whose possession, power or control it has passed. Dated this . . . . . . . . . . . . day of August 2001. . . . . . . . . . . . . . . . . . . . Allan Herbert Miller Fels Chairperson Australian Competition and Consumer Commission NOTICE UNDER SECTIONS 155(1)(a) and 155(1)(b) TO GEORGE WESTON FOODS LIMITED DOCUMENTS TO BE PRODUCED TO THE COMMISSION ON OR BEFORE FRIDAY 14 SEPTEMBER 2001 1. Price lists relating to the wholesale supply of flour in Australia or in any part of Australia valid for any time in the period 1 January 1999 to the date of this Notice. 2. Any document by which the Company has communicated (between 1 January 1999 and the date of this Notice) to any of its customers, an offer of discount or rebate relating to the wholesale supply of flour in Australia or in any part of Australia. 3. Price lists relating to the wholesale supply of bread in Australia or in any part of Australia valid for any time in the period 1 January 1999 to the date of this Notice. 4. Any document by which the Company has communicated (between 1 January 1999 and the date of this Notice) to any of its customers, an offer of discount or rebate relating to the wholesale supply of bread in Australia or in any part of Australia. 5. Any document brought into existence by the Company, or a competitor of the Company, which refers to a decision by the Company, or the contemplation or the consideration by the Company to vary the price at which it supplies flour and/or bread in Australia or in any part of Australia between 1 January 1999 and the date of this Notice. 6. Any document by which the Company has communicated (between 1 January 1999 and the date of this Notice) to any of its customers, increases in the prices at which it would supply flour in Australia or in any part of Australia. 7. Any document by which the Company has communicated (between 1 January 1999 and the date of this Notice) to any of its customers, increases in the prices at which it would supply bread in Australia or in any part of Australia. 8. Any document which refers to or evidences any meeting or communication (between 1 January 1999 and the date of this Notice) between the Company and Goodman Fielder Limited at which or in which reference was made to the price (or any discount or rebate) at or subject to which the Company or Goodman Fielder Limited supplies, supplied or would supply flour in Australia or in any part of Australia. 9. Any document which refers to or evidences any meeting or communication (between 1 January 1999 and the date of this Notice) between the Company and Goodman Fielder Limited at which or in which reference was made to the price (or any discount or rebate) at or subject to which the Company or Goodman Fielder Limited supplies, supplied or would supply bread in Australia or in any part of Australia. 10. Any document (other than a document produced pursuant to paragraph 8 above) which refers to or evidences any meeting or communication (between 1 January 1999 and the date of this Notice) between the Company and any of its competitors at which or in which reference was made to the price (or any discount or rebate) at or subject to which the Company or any of its competitors supplies, supplied or would supply flour in Australia or in any part of Australia. 11. Any document (other than a document produced pursuant to paragraph 9 above) which refers to or evidences any meeting or communication (between 1 January 1999 and the date of this Notice) between the Company and any of its competitors at which or in which reference was made to the price (or any discount or rebate) at or subject to which the Company or any of its competitors supplies, supplied or would supply bread in Australia or in any part of Australia. 12. Any document which evidences or refers to any meeting or communication (between 1 January 1999 and the date of this Notice) between the Company and Beltavia Pty Ltd trading as Ben Furney Flour Mills including but not limited to correspondence from Beltavia Pty Ltd in or around December 2000. 13. Any document which refers to or evidences any contract, arrangement or understanding between the Company and Goodman Fielder Limited between 1 January 1999 and the date of this Notice, under which the Company and/or Goodman Fielder Limited would agree upon discounts and/or price increases in respect of wholesale sales of flour in Australia or in any part of Australia. 14. Any document which refers to or evidences any contract, arrangement or understanding between the Company and Goodman Fielder Limited between 1 January 1999 and the date of this Notice, under which the Company and/or Goodman Fielder Limited would increase the wholesale price of flour in Australia or in any part of Australia. 15. Any document (other than a document produced pursuant to paragraph 13 above) which refers to or evidences any contract, arrangement or understanding between the Company and a competitor in the supply of flour in Australia or in any part of Australia, between 1 January 1999 and the date of this Notice, under which the Company and/or its competitor would agree upon discounts and/or price increases in respect of the wholesale sales of flour in Australia or in any part of Australia. 16. Any document (other than a document produced pursuant to paragraph 14 above) which refers to or evidences any contract, arrangement or understanding between the Company and a competitor in the supply of flour in Australia or in any part of Australia between 1 January 1999 and the date of this Notice, under which the Company and/or its competitor would increase the wholesale price of flour in Australia or in any part of Australia. 17. Any document which refers to or evidences an attempt by the Company to make any contract, arrangement or understanding of the nature referred to at paragraphs 13, 14, 15 or 16 above. 18. Any document which refers to or evidences an attempt by a competitor of the Company in the supply of flour in Australia or in any part of Australia to make any contract, arrangement or understanding of the nature referred to at paragraphs 13, 14, 15 or 16 above. 19. Any document which refers to or evidences any contract, arrangement or understanding between the Company and Goodman Fielder Limited between 1 January 1999 and the date of this Notice, under which the Company and/or Goodman Fielder Limited would agree upon discounts and/or price increases in respect of wholesale sales of bread in Australia or in any part of Australia. 20. Any document which refers to or evidences any contract, arrangement or understanding between the Company and Goodman Fielder Limited between 1 January 1999 and the date of this Notice, under which the Company and/or Goodman Fielder Limited would increase the wholesale price of bread in Australia or in any part of Australia. 21. Any document (other than a document produced pursuant to paragraph 19 above) which refers to or evidences any contract, arrangement or understanding between the Company and a competitor in the supply of bread in Australia or in any part of Australia, between 1 January 1999 and the date of this Notice, under which the Company and/or its competitor would agree upon discounts and/or price increases in respect of the wholesale sales of bread in Australia or in any part of Australia. 22. Any document (other than a document produced pursuant to paragraph 20 above) which refers to or evidences any contract, arrangement or understanding between the Company and a competitor in the supply of bread in Australia or in any part of Australia between 1 January 1999 and the date of this Notice, under which the Company and/or its competitor would increase the wholesale price of bread in Australia or in any part of Australia. 23. Any document which refers to or evidences an attempt by the Company to make any contract, arrangement or understanding of the nature referred to at paragraphs 19, 20, 21 or 22 above. 24. Any document which refers to or evidences an attempt by a competitor of the Company to make any contract, arrangement or understanding of the nature referred to at paragraphs 19, 20, 21 or 22 above. 25. Any diary, journal, appointment book, calendar or similar document (including electronic records) held or maintained by the persons listed below in respect of any time in the period 1 January 1999 to the date of this Notice: a) Marvin Weinman; b) Douglas Forgie; c) Peter Faddy; d) Brian Robinson; e) John Pascoe; and f) Paul Loneragan; referring or relating to any communication between a representative of the Company and: • Goodman Fielder Limited; • Manildra Milling Pty Ltd; • Peter J. Jackson of Associated British Foods Plc; or • any competitor of the Company. 26. Any document which refers to or evidences any meeting between or communication between Peter J. Jackson of Associated British Foods Plc and David Hearn of Goodman Fielder Limited (between 1 January 1999 and the date of this Notice) in which reference was made to the price (or any discount or rebate) at or subject to which the Company or Goodman Fielder Limited supplies, supplied or would supply flour and/or bread in Australia or in any part of Australia. 27. Any document which refers to or evidences any meeting between or communication between Peter J. Jackson of Associated British Foods Plc and Marvin Weinman of the Company (between 1 January 1999 and the date of this Notice) in which reference was made to the price (or any discount or rebate) at or subject to which the Company or Goodman Fielder Limited supplies, supplied or would supply flour and/or bread in Australia or in any part of Australia. 28. Any document which refers to or evidences any meeting between or communication between Marvin Weinman of the Company and David Hearn of Goodman Fielder Limited (between 1 January 1999 and the date of this Notice) in which reference was made to the price (or any discount or rebate) at or subject to which the Company or Goodman Fielder Limited supplies, supplied or would supply flour and/or bread in Australia or in any part of Australia. 29. Any document which refers to or evidences any meeting between or communication between Simon McDowall of Goodman Fielder Limited and Peter Faddy of the Company (between 1 January 1999 and the date of this Notice) in which reference was made to the price (or any discount or rebate) at or subject to which the Company or Goodman Fielder Limited supplies, supplied or would supply flour in Australia or in any part of Australia. 30. Any document which refers to or evidences any meeting between or communication between Don Taig of Goodman Fielder Limited and Brian Robinson of the Company (between 1 January 1999 and the date of this Notice) in which reference was made to the price (or any discount or rebate) at or subject to which the Company or Goodman Fielder Limited supplies, supplied or would supply bread in Australia or in any part of Australia. 31. Any document which refers to or evidences any meeting or communication between Marvin Weinman of the Company and David Hearn of Goodman Fielder Limited on or around 30 August 2000. 32. Any document recording a communication between all or any of the Company, the Company's legal advisers, Goodman Fielder Limited and the legal advisers of Goodman Fielder Limited which refers to any meeting between Marvin Weinman of the Company and David Hearn of Goodman Fielder Limited on or around 30 August 2000. 33. Any document which refers to or evidences any meeting or communication between Paul Loneragan of the Company and John Gary Honan and/or Peter Simpson of Manildra Milling Pty Ltd in or around November or December 1999. 34. Any document which refers to or evidences any meeting or communication between John Pascoe and/or Douglas Forgie of the Company and John Thomas Honan of Manildra Milling Pty Ltd in or around January 2000. 35. Any document which refers to or evidences any communication (between late 1999 and the date of this Notice) from John Pascoe and/or Douglas Forgie to the Company Board and/or other representatives of the Company with respect to possible communication between Paul Loneragan of the Company and any representative of Manildra Milling Pty Ltd. 36. Any document which refers to the Company's consideration or inquiries (between late 1999 and the date of this Notice) with respect to any communication between Paul Loneragan of the Company and any representative of Manildra Milling Pty Ltd in or around November or December 1999. 37. Any document which refers to the reasons or circumstances surrounding the dismissal or cessation of employment or directorship of Paul Loneragan and/or Douglas Forgie from the Company in 2000. 38. Any document created by the Company between 1 January 1999 and the date of this Notice which refers to the Company's or its representatives' compliance with the provisions of the Trade Practices Act 1974 in respect of the prices of flour and/or the prices of bread supplied by the Company. SCHEDULE 2 TO NOTICE UNDER SECTIONS 155(1)(a) and 155(1)(b) TO GEORGE WESTON FOODS LIMITED INFORMATION TO BE FURNISHED TO THE COMMISSION ON OR BEFORE FRIDAY 14 SEPTEMBER 2001 1. In relation to any document produced in response to the requirements of Schedule 1 to this Notice, state whether the Company disputes the authenticity of any such documents and, if so, identify the documents whose authenticity is disputed. 2. In relation to any document produced in response to the requirements of Schedule 1 to this Notice, state whether the Company contends that the contents of any such documents are inaccurate in so far as they relate to the conduct of the Company and, if so, identify the documents concerned and state the extent to which such documents are inaccurate in this respect. 3. For the period of 1 January 1999 to the date of this Notice, state the position(s) in the Company held by the persons listed below, the respective time frames the persons held those position(s) and describe the roles and responsibilities of that person in each such position: a) Peter J. Jackson; b) Marvin Weinman; c) Douglas Forgie; d) Peter Faddy; e) Brian Robinson; f) John Pascoe; and g) Paul Loneragan. 4. For the period of 1 January 1999 to the date of this Notice, provide the following information in relation to each of the persons referred to in paragraph 3 above: a) work telephone numbers b) work facsimile numbers; c) work email addresses; d) home facsimile numbers; e) home telephone numbers; and f) mobile phone numbers. 5. For the period of 1 January 1999 to the date of this Notice, state the name of each person and the persons' position within the Company who were responsible for making decisions or making recommendations as to the price (or any discount or rebate) at or subject to which the Company supplied: a) flour; and b) bread. 6. For each of the persons named in the response to paragraph 5 advise to whom that person reported within the Company. 7. Where any person named in the response to paragraph 5 is no longer employed by the Company advise of the date on which that person ceased employment with the Company. 8. For the period of 1 January 1999 to the date of this Notice, state the prices (being prices before discounts and/or rebates are applied) at which the Company supplied its various varieties of flour in Australia or in any part of Australia including details of the flour variety and dates to which those prices applied. 9. For the period of 1 January 1999 to the date of this Notice, advise of any discounts or rebates to the prices (being prices before discounts and/or rebates are applied) offered by the Company in relation to the supply of its various varieties of flour in Australia or in any part of Australia including details of the flour variety and dates on which those discounts or rebates applied. 10. For the period of 1 January 1999 to the date of this Notice, state the prices (being prices before discounts and/or rebates are applied) at which the Company supplied its various varieties of bread in Australia or in any part of Australia including details of the bread variety and dates to which those prices applied. 11. For the period of 1 January 1999 to the date of this Notice, advise of any discounts or rebates to the prices (being prices before discounts and/or rebates are applied) offered by the Company in relation to the supply of its various varieties of bread in Australia or in any part of Australia including details of the bread variety and dates on which those discounts or rebates applied. 12. Provide details of any meeting between Marvin Weinman of the Company and David Hearn of Goodman Fielder Limited on or around 30 August 2000 including: a) the date and time; b) the venue and location ; c) the name/s of the organiser/s; d) the attendees and their respective positions; e) the purpose; and f) the matters discussed. 139 TRADE PRACTICES ACT 1974 SECTIONS 155(1)(b) and 155(1)(c) NOTICE TO PRODUCE DOCUMENTS AND GIVE EVIDENCE John Henry Pascoe C/o- Wendy Peter Partner Allens Arthur Robinson Stock Exchange Centre 530 Collins Street MELBOURNE VIC 3000 WHEREAS, I, ALLAN HERBERT MILLER FELS, Chairperson of the Australian Competition and Consumer Commission ('the Commission'), have reason to believe that John Henry Pascoe ('the Addressee') is capable of producing documents and giving evidence relating to matters that constitute or may constitute contraventions of section 45 of the Trade Practices Act 1974 ('the Act'), namely: THE MATTERS THAT CONSTITUTE OR MAY CONSTITUTE CONTRAVENTIONS OF THE ACT 1. That George Weston Foods Limited ('the Company') has made, and has given effect to, contracts, arrangements or understandings, provisions of which have the purpose, or would have or be likely to have the effect, of substantially lessening competition in contravention of sections 45(2)(a) and 45(2)(b) of the Act in so far as the Company did: (a) between about 1 January 1999 and the date of this notice, make and give effect to contracts, arrangements or understandings with Goodman Fielder Limited and other competitors in the production and marketing of flour in Australia, under which the parties to the contracts, arrangements or understandings would agree and coordinate price increases and limit discounts and rebates in respect of wholesale prices for flour such contracts, arrangements or understandings having the purpose, or having the effect or being likely to have the effect, as the case may be, of fixing, controlling or maintaining the wholesale price for flour supplied by the parties in Australia; and (b) between about 1 January 1999 and the date of this notice, make and give effect to contracts, arrangements or understandings with Goodman Fielder Limited and other competitors in the production and marketing of bread in Australia, under which the parties to the contracts, arrangements or understandings would agree and coordinate price increases and limit discounts and rebates in respect of wholesale prices for bread such contracts, arrangements or understandings having the purpose, having the effect or being likely to have the effect, as the case may be, of fixing, controlling or maintaining the wholesale price for bread supplied by the parties in Australia. 2. That the Company has attempted to make a contract, arrangement or understanding, a provision of which had the purpose or would have or be likely to have the effect, of substantially lessening competition in contravention of sections 76(1)(b) and 45(2)(a) of the Act in so far as the Company did: (a) In about November or December 1999, through the conduct of a representative or representatives of the Company, attempt to enter into a contract, arrangement or understanding with Manildra Milling Pty Ltd, a competitor in the production and marketing of flour in Australia, under which the parties to the proposed contract, arrangement or understanding would increase the wholesale price of flour in Australia in or around late 1999, such contract, arrangement or understanding having the purpose, or having the effect or likely effect, of fixing, controlling or maintaining the wholesale price of flour supplied by the parties in Australia. ACCORDINGLY, I, ALLAN HERBERT MILLER FELS, Chairperson of the Commission, pursuant to sub paragraphs 155(1)(b) and 155(1)(c) of the Act, HEREBY REQUIRE John Henry Pascoe to produce the documents specified in the Schedule to this Notice by delivering the documents to the Commission's offices situated at 7th Floor, Angel Place, 123 Pitt Street, Sydney NSW 2000,between the hours of 9:00am and 5:00pm on any business day,on or before Monday the 3rd day of September 2001 and to appear before the Commission in the Commission's office situated at 7th Floor, Angel Place, 123 Pitt Street, Sydney NSW 2000,at 2:00pm on Tuesday the 4th day of September 2001 to give oral evidence relating to the said matters that may constitute contraventions of section 45 of the Act. DEFINITIONS In this Notice, including the Schedule to this Notice, unless the contrary intention appears: 'the Company' means George Weston Foods Limited and includes, where the context permits, reference to any subsidiary or related company of George Weston Foods Limited ; 'communication' includes oral or written communications; 'document' includes - (a) a book, plan, paper or other material on which there is writing or printing, or on which there are marks symbols or perforations, having a meaning for persons qualified to interpret them; (b) a disc, tape, paper or other device from which sounds or messages are capable of being produced including computer hard-drives, discs and tapes; (c) diary entries, invoices, correspondence, notices, circulars, memoranda, notes, facsimiles, electronic mail and records or oral conversations including conversations, speeches and addresses at meetings, by video transmission or by telephone; (d) electronic records (including computer files and electronic mail) which is stored on back-up tapes, hard disks, CD-Rom, DVD or other media by the Company or by third parties engaged by the Company; and (e) telephone account records; 'Goodman Fielder Limited' means Goodman Fielder Limited and includes, where the context permits, any subsidiary or related company of Goodman Fielder Limited; 'Manildra Milling Pty Limited' means Manildra Milling Pty Limited and includes, where the context permits, any subsidiary or related company of Manildra Milling Pty Limited; 'Representative' include but are not limited to the following: directors, employees, servants, contractors, agents and internal or external legal advisers the singular includes the plural and the plural includes the singular; a reference to any corporation, whether expressly identified or not, includes a reference to any representative of that corporation. Insofar as any document referred to in the Schedule to this Notice has passed from your possession, power or control to that of another person, identify the document and state the full name and address of the person into whose possession, power or control it has passed. Dated this . . . . . . . . . . . . day of August 2001. . . . . . . . . . . . . . . . . . . . Allan Herbert Miller Fels Chairperson Australian Competition and Consumer Commission NOTICE UNDER SECTIONS 155(1)(b) and 155(1)(c) TO JOHN HENRY PASCOE DOCUMENTS TO BE PRODUCED TO THE COMMISSION ON MONDAY 3 SEPTEMBER 2001 1. Any diary, journal, appointment book, calendar or similar document (including electronic records) held or maintained by John Henry Pascoe for any period within the period 1 January 1999 to the date of this notice, referring or relating to any communication between representatives of the Company and representatives of: § Goodman Fielder Limited; § Manildra Milling Pty Ltd; or § any other competitor of the Company 2. Any document which refers to or evidences any meeting between or communication between Paul Loneragan of the Company and John Gary Honan and/or Peter Simpson of Manildra Milling Pty Ltd in or around November or December 1999. 3. Any document which refers to or evidences any meeting or communication between John Pascoe and/or Douglas Forgie of the Company and John Thomas Honan of Manildra Milling Pty Ltd in or around January 2000. 4. Any document which refers to or evidences any communication (between late 1999 and the date of this notice) from John Pascoe and/or Douglas Forgie to the Company Board and/or other representatives of the Company with respect to possible communication between Paul Loneragan of the Company and any representative of Manildra Milling Pty Ltd. 5. Any document which refers to the Company's consideration or inquiries (between late 1999 and the date of this notice) with respect to any communication between Paul Loneragan of the Company and any representative of Manildra Milling Pty Ltd in or around November or December 1999. 6. Any document which refers to the reasons or circumstances surrounding the dismissal or cessation of employment or directorship of Paul Loneragan and/or Douglas Forgie from the Company in 2000. 7. Any document created by the Company between 1 January 1999 and the date of this notice which refers to the Company's or its representatives' compliance with the provisions of the Trade Practices Act 1974.	27,238
federal_court_of_australia:fca/single/1995/1995fca0588	decision	commonwealth	federal_court_of_australia	text/html	1995-08-08 00:00:00	Commissioner of Taxation v Northumberland Development Co Pty Ltd [1995] FCA 588	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1995/1995fca0588	2024-09-13T22:44:34.131052+10:00	CATCHWORDS INCOME TAX - assessable income - compulsory acquisition by the Crown of a capital asset - award of undissected sum "in respect of coal" - compensation calculated in various components - whether incremental factor applied on value of coal up to the date of determination was in the nature of interest - no entitlement to compensation until determination had been made - proper basis required for dissection of income in an award of compensation - effect of omission of words "to the extent to which" in s.25 Income Tax Assessment Act 1936 (Cth) - essential character of payment - incremental factor not in the nature of interest COAL INDUSTRY LEGISLATION - statutory interpretation - compensation payable "in respect of coal" vested in the Crown - presumption that State legislation will not alienate vested proprietary interests without adequate compensation - whether Governor's discretion to make arrangements for compensation was obligatory - statutory right to compensation not lost by failure to prescribe manner in which right is to be exercised - mandamus would issue to compel exercise of discretion Income Tax Assessment Act 1936, s.25 Coal Acquisition Act 1981 (NSW), ss.5,6. Coal Acquisition (Compensation) Arrangements 1985 (NSW) Cases Considered: Legislative Construction Commonwealth v Huon Transport Pty Ltd (1945) 70 CLR 293 Downey v Pryor (1960) 103 CLR 353 C.J. Burland Pty Ltd v Metropolitan Meat Industry Board (1968) 120 CLR 400 Finance Facilities Pty Ltd v F.C.T. (1971) 127 CLR 106 Minister for Primary Industry v Davey (1993) 47 FCR 151 Commissioner of State Revenue v Royal Insurance Australia Ltd (1994) 126 ALR 1 Sisters of Charity of Rockingham v The King [1922] 2 AC 315 Taxation Principles Federal Wharf Company Limited v F.C.T. (1930) 44 CLR 24 California Oil Products Limited v FCT (1934) 52 CLR 28 Commissioner of Taxes (Vict.) v Phillips (1936) 55 CLR 144 Lomax v Peter Dixon & Sons Ltd (1943) 25 TC 353 Ronpibon Tin NL and Tongakah NL v FCT (1949) 78 CLR 47 Commissioner of Taxes(NZ) v Marshall (1952) 5 AITR 424 McLaurin v Commissioner of Taxation (1961) 104 CLR 381 Allsop v F.C.T. (1965) 113 CLR 431 Scott v Commissioner of Taxation (1966) 117 CLR 514 F.C.T. v Spedley Securities Ltd (1988) 88 ATC 4126 Allied Mills Industries Pty Ltd v Commissioner of Taxation (1989) 20 FCR 288 Hungerfords v Walker (1989) 171 CLR 125 Glenboig Union Fireclay Co. Ltd v The Commissioners of Inland Revenue (1922) 12 TC 427 IRC v Ballantine (1924) 8 TC 595 Van den Berghs Ltd v Clark [1935] AC 431 -2- Riches v Westminster Bank Ltd [1947] AC 390 Jefford v Gee [1970] 2 QB 130 COMMISSIONER OF TAXATION v NORTHUMBERLAND DEVELOPMENT CO. PTY LTD No. G795 of 1994 DAVIES, BEAUMONT, EINFELD JJ. SYDNEY 8 AUGUST 1995 IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No G 795 of 1994 ) GENERAL DIVISION ) On appeal from a single judge of the Federal Court of Australia BETWEEN: COMMISSIONER OF TAXATION Appellant AND: NORTHUMBERLAND DEVELOPMENT CO PTY LTD Respondent Coram: Davies, Beaumont & Einfeld JJ. Date: 8 August 1995 Place: Sydney MINUTES OF ORDER THE COURT ORDERS THAT: The appeal be dismissed with costs. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No G 795 of 1994 ) GENERAL DIVISION ) On appeal from a single judge of the Federal Court of Australia BETWEEN: COMMISSIONER OF TAXATION Appellant AND: NORTHUMBERLAND DEVELOPMENT CO PTY LTD Respondent Coram: Davies, Beaumont & Einfeld JJ. Date: 8 August 1995 Place: Sydney REASONS FOR JUDGMENT Davies J: It is not in dispute that a sum or sums received as compensation for the compulsory acquisition of property can be dissected or apportioned into capital and income elements if there is an appropriate basis for doing so. In Federal Wharf Co Limited v Deputy Federal Commissioner of Taxation (1930) 44 CLR 24, the appellant had received compensation for the acquisition of property under the Harbors Act 1913 (SA). Section 26 of that Act provided that:- "When any property is acquired by proclamation under this Part, interest at the rate of four pounds per centum per annum, or at such other rate as agreed, computed from the time when the Minister enters into occupation thereof on behalf of the Crown to the time when the compensation is paid, shall be added to the amount of any compensation to be paid in respect thereof." Rich J held that the sum added by way of interest was assessable income. At 27-28, his Honour said:- "In truth, sec. 26 does little more than express in precise legislative form the rule established by In re Pigott and Great Western Railway Co. (1881) 18 Ch.D. 146 that an authority compulsorily acquiring land is in the position of a purchaser in the absence of statutory provision to the contrary, and must pay interest upon the compensation as if it were purchase-money, from the date of possession until payment. It is quite clear that interest upon the balance of purchase-money payable upon a sale of real property is income (Hudson's Bay Co. v. Thew (1919) 7 Tax Cas. 206. The observation made by Rowlatt J. in that case (1919) 7 Tax Cas., at p.217 that if the vendors `had collected the money and had been paid it, they would have invested it and got interest,' and that `the purchaser has not paid it, and he therefore pays interest instead until he does pay it,' is a simple proposition which seems equally applicable to the payment of compensation. In my opinion, the character of the interest payable under sec.26 is that of recompense for loss of the use of capital during a period of time in which it would earn income. It represents the annual value of capital. It is paid because the owner has been deprived of a capital asset which he had and has not received the fund which is to be substituted for the capital asset. The interest is the flow of that fund. In my opinion it is income." In the United Kingdom, in earlier days, there was a view that damages by way of interest on a sum not ascertained before the date of the award were not assessable to income tax. In Federal Wharf, Rich J cited from Konstam on Income Tax, 4th ed., p.179. A similar passage appears in the 12th ed. at para 206 where the author states "But interest included with damages or compensation in an award may be in truth a part of the damages or of the compensation, and, if so, is not taxable as interest." IRC v Ballantine (1924) 8TC 595 and Glenboig Union Fire Clay Co v Commissioners of Inland Revenue (1921) 12 TC 427 strongly supported this approach. More recently, in the United Kingdom, the general approach has been to treat interest elements in a damages award as taxable. Thus Whiteman on Income Tax, para 18-07 states, "As a general rule, however, where interest figures as an element in damages, that element is taxable." The change in approach followed from the judgment of the House of Lords in Riches v Westminster Bank Ltd [1947] AC 390. In that case, the appellant, Mr E.H. Riches, had obtained a judgment in his favour in a dispute concerning certain shares. Oliver J. had given judgment in the sum of Ł36,295, together with a further sum of Ł10,028 which, in his Lordship's discretion, he awarded as pre-judgment interest under s.3 of the Law Reform (Miscellaneous Provisions) Act 1934 (UK). Their Lordships held that the pre-judgment interest was taxable and that the judgment debtor when paying the judgment debt was entitled to deduct income tax on the award of interest. Their Lordships distinguished Ballantine and Glenboig Union as being cases where, though certain sums were described as interest, in substance a capital sum of compensation was awarded, the element of interest being introduced in modum aestimationis. At 398, Viscount Simon LC said:- "But I see no reason why, when the judge orders payment of interest from a past date on the amount of the main sum awarded (or on a part of it) this supplemental payment, the size of which grows from day to day by taking a fraction of so much per cent. per annum of the amount on which interest is ordered, and by the payment of which further growth is stopped, should not be treated as interest attracting income tax. It is not capital. It is rather the accumulated fruit of a tree which the tree produces regularly until payment." Riches was referred to with approval and applied to in Jefford v Gee [1970] 2 QB 130 where Lord Denning MR, delivering the opinion of the Court, expressed the point that interest payable under the Law Reform (Miscellaneous Provisions) Act was not a part of the cause of action. A claim for interest need not be pleaded, his Lordship said, and, in future, defendants making a payment into Court should make a payment sufficient to satisfy the cause of action apart from interest. At 149, his Lordship said:- "Interest being no part of the cause of action, he cannot make a payment in respect of it." It must be kept in mind that, although many principles of taxation which are applied in the United Kingdom are given a like effect in Australia, the general structure of the Income Tax Acts in the United Kingdom are different from those in this country. Whiteman at 25-02 points out that s.329 of the Taxes Act 1988 (UK) provides that interest on damages for personal injuries, including the interest element of payments made in settlement of personal injury claims, is not to be regarded as income for income tax purposes. There is no like provision in this country, save s.160ZB of the Income Tax Assessment Act 1936 (Cth) which deals with capital gains. A court in this country would be unlikely to hold that an award of pre-judgment interest, included in an award of damages for personal injury, constituted a receipt in the nature of income. It is therefore unlikely that Riches would be applied in this country in terms of the ratio which it propounds. The Court has indeed not been referred to any reported instance in Australia where pre-judgment interest has been assessed to tax as income. One basis upon which Riches and Jefford proceeded, namely that the discretionary award of interest included in the damages claim forms no part of the award on the cause of action, was specifically rejected by the High Court of Australia in Hungerfords v Walker (1989) 171 CLR 125. At 148-9, Mason CJ and Wilson J pointed out that equity has adopted a broad approach to the award of interest and that the equitable right to interest exists independently of statute. Their Honours referred to the position in Canada where it has been held that there was no longer any reason to retain the common law rule against interest as damages. Their Honours referred also to the admiralty practice, which followed that of equity in including interest in damages. Their Honours said that, in principle, even at common law, damages in the nature of interest could be awarded where it was just compensation for foreseeable loss. An award of compensation or of damages is, moreover, very often an award of a single undissected sum, notwithstanding that various elements are taken into account in the calculation. That is because the award for compensation or damages is not an award dealing with the specific items of loss claimed, but an award compensating for the loss which has occurred. Unless there be a proper basis for dissection so that an element of the award can be identified as an award of income, a dissection or apportionment should not be made. In McLaurin v Federal Commissioner of Taxation (1960) 104 CLR 381, where there had been an acceptance by the appellant of a lump sum in full settlement of his claim, but the list of particulars from which the offer had been calculated was not revealed to the appellant, it was held that the sum received was a single undissected sum accepted in settlement of a claim for unliquidated damages and that no part of it was assessable. In Allsop v Federal Commissioner of Taxation (1965) 113 CLR 431, where the appellant, having sued for a number of matters, some of which if received separately would have had the character of income, but others of which did not have that character, had by deed released his cause of action for a single undissected lump sum which was less than the amount sued for, it was again held that no part of the lump sum was assessable income. The same principle was applied in Federal Commissioner of Taxation v Spedley Securities Ltd (1998) 88 ATC 4126 and Allied Mills Industries Pty Ltd v Commissioner of Taxation (1989) 20 FCR 288. It should also be noted that, unlike s.51(1) of the Act, s.25(1) does not contain the words "to the extent to which", words which provide for apportionment or dissection in accordance with the principles which have been enunciated in Ronpibon Tin NL and Tongkah Compound NL v Federal Commissioner of Taxation (1949) 78 CLR 47 at 58-60. The Coal Acquisition Act 1981 (NSW) came into operation on 1 January 1982 and, on that date, operated to vest all coal in the Crown discharged from all other interests therein. Accordingly, there was a divestment of all the relevant coal interests of Northumberland Development Co Pty Ltd ("Northumberland") on that day. There was not, however, on 1 January 1982 any right to compensation. Section 6(1) of the Act empowered the Governor to make arrangements for the examination of the cases, if any, in which compensation would be payable and for the determination of the amount and method of payment of any such compensation. It was not until 21 June 1985, that the Coal Acquisition (Compensation) Arrangements1985 were published in the Gazette and it was not until the following day that they took effect. Even subsequent thereto, there were negotiations between interested persons and the Government. Subsequently, the Coal Acquisition (Compensation) Arrangements were amended by instrument dated 27 June 1990 which was published in the Gazette on 29 June 1990. The amendments were substantial. Clause 19, under which Northumberland's claim was assessed, was significantly changed. It was after that amendment that the Board determined Northumberland's claim at $6,473,793. It is an important element in the present case that there was no entitlement to the compensation as it was determined as at 1 January 1982 until a little over a month before the date of the determination. Nor was any entitlement to interest expressed in the Compensation Arrangements. The term "interest" was not mentioned therein save in clause 24(1) which provided for interest on the amount determined from the date on which the determination was made up to and including the date of payment. Clause 3(1) of the Compensation Arrangements defined the "base date" as "the date on which coal vested in the Crown pursuant to s.5 of the Coal Acquisition Act 1981". Section 3 defined "relevant period" as "the period of six months beginning with 1st January 1982 or subsequent period of 12 months beginning with 1st July". It was on this basis that clause 19(1) operated so as to require the Board to estimate the number of tonnes of saleable coal "which has been or, in its opinion, will be extracted" from the holding to which the claim related, during each relevant period beginning with the base date and ending with the last day of the relevant period within which saleable coal within the colliery had or would become exhausted. Because of this provision and the provisions of clause 19(2), the Board was required first to estimate the likely productivity from the relevant holding and then to undertake a discounting calculation both in relation to the rent component of the compensation and the saleable coal component. In relation to Northumberland's saleable coal component, it was estimated that production would have commenced in 1991, that there would be a break of 4 years after the year 2006 so as to permit the reorganisation of the mine and that mining would commence again in the year 2011 and continue until the year 2026. The estimated production figures were then discounted so as to arrive at a value as at 1 January 1982. The rental component was likewise discounted back to that date. The total of the discounted sums was $2,095,248.86. Clauses 19(3) & 3A of the Compensation Arrangements, both of which were inserted by the amendments on 27 June 1990, then applied so as to require the total arrived at to be multiplied by "the appropriate incremental factor", which was an incremental factor taking the matter up to and including the date on which the Board made its determination. The effect of these provisions was to assess the compensation as at the date of the determination. This was entirely consistent with the point that the Coal Acquisition Act did not itself express an entitlement to compensation but merely empowered the Governor to make arrangements for determining the cases in which compensation was to be payable and for the determination of the amount and method of payment. In 1985, the Compensation Arrangements established the New South Wales Coal Compensation Board which was to exercise the functions conferred upon it under the Compensation Arrangements. Clauses 9, 10, 11 and 12 of the Compensation Arrangements provided for the lodgment of claims. Clauses 18 and 19 provided for the calculation of compensation. Clause 19 was the relevant provision in the present case. Clause 17 of the Compensation Arrangements provided that the Compensation Board should consider and determine claims and that, on the making of a determination in respect of a claim, the Compensation Board should cause a notice in writing setting out the determination to be served on the claimant. Clause 25 then provided:- "(1) Where an amount of compensation has been determined in respect of a claim that has been finally determined, the Compensation Board shall transmit the determination to the Minister who, on receipt of the determination, may authorise payment of the amount of compensation specified in the determination." It may be that clause 25 should be read as conferring both a power and a duty on the Minister. See Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106. But at least until the time when the Compensation Board made a determination, Northumberland had merely a right to lodge a claim and to have it determined in accordance with the Compensation Arrangements. And the Compensation Arrangements themselves were not brought into their final form until the execution of the instrument of 27 June 1990. In the circumstances, although the compensation was calculated by multiplying the discounted rent component and saleable coal component, which were precise sums, by the appropriate incremental factor, which itself was a factor fixed by reference to returns on investment, the sum so calculated was not interest or in the nature of interest. It was merely a figure which brought the calculation of compensation up to the date of the determination of the Compensation Board. An award of interest presupposes an entitlement to a sum and an award of interest or in the nature of interest made by reason of the late payment thereof. Northumberland had no such entitlement going back to 1 January 1982 and the Compensation Arrangements did not purport to award interest to any claimant. I agree with the trial Judge who said:- "... the present case, like Allied Mills, is merely one involving a single payment made and received by way of compensation. It does not involve a payment of a single undissected amount in satisfaction of multiple claims nor does it involve a payment capable of apportionment into different elements. The payment here was made and received as compensation for the coal interest forfeited to the Crown. That being its character it was received as capital and not income." In the present case, the amount added by multiplying the total of the rent and saleable coal components by the appropriate incremental factor was a step taken in the calculation of the compensation awarded. It was not a sum added on by way of interest to an award of compensation. I would dismiss the appeal with costs. I certify that this and the 9 preceding pages are a true copy of the reasons for judgment of the Honourable Justice Davies. Associate: Date: 8 August 1995 IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G.795 of 1994 ) GENERAL DIVISION ) ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: COMMISSIONER OF TAXATION Appellant AND: NORTHUMBERLAND DEVELOPMENT CO. PTY. LTD. Respondent CORAM: DAVIES, BEAUMONT AND EINFELD JJ. DATE: 8 AUGUST 1995 REASONS FOR JUDGMENT BEAUMONT J. INTRODUCTION This is an appeal from a judgment of Hill J. allowing the respondent taxpayer's objection against an assessment of income in the sum of $2,919,029 described in the adjustment sheet, in respect of the year of income ended 30 June 1991, as an amount "included in payment received from the Coal Compensation Board". The respondent was, prior to its compulsory acquisition by the Crown under the Coal Acquisition Act 1981 (NSW) ("the Act"), the beneficial owner of a two-thirds undivided interest in all coal and other minerals located in the Ellalong Colliery Holding (which was operated by another party), lying under certain lands near Ellalong, NSW known as the Ellalong Mine. It was common ground that its interest was a capital asset. The question for the learned primary Judge was whether one part of the amount received by the respondent under the compensation arrangements established upon the resumption taking effect was assessable under s.25(1) of the Income Tax Assessment Act (1936) as income in ordinary concepts. Hill J. held that it was not. The Commissioner now appeals from that judgment. THE BACKGROUND There was no dispute about the background matters. (a) The relevant provisions of the Act By s.5 of the Act, as from its commencement on 1 January 1982, all coal that, but for the Act, would have been vested in the Crown or any person other than the Crown, was vested in the Crown freed and discharged from all outstanding interests. By s.6(1) of the Act, the Governor may make arrangements (a) for the determination of the cases, if any, in which compensation is to be payable as a result of the enactment of the Act; and (b) if there are any such cases - for the determination of the amount and method of payment of any such compensation. (b) The provisions of the compensation arrangements made by the Governor's Instrument The Governor made arrangements under s.6(1) by Instrument published in the Gazette dated 21 June 1985. In Part II of the Instrument (cl.4), a Coal Compensation Board ("the Board") was established. Part III dealt with "compensation". The relevant provisions of this Part are as follows: By cl.8, it was provided: "Compensation in respect of coal referred to in cl.9(1) ... is payable in accordance with the provisions of this instrument and not otherwise." (Emphasis added) By cl.9(1), it was provided that any person was eligible to make a claim (in this case under cl.11 - see below) if (a) saleable coal was, immediately before the base date (i.e. 1 January 1982), vested in that person; and (b) that coal was situated within a colliery holding at any time during the period beginning with the base date and ending with 1 January 1986. Clause 11 dealt with claims for compensation by former coal owners who, as here, were not holders of relevant colliery holdings. Such claims were to be lodged with the Board before 30 April 1986 (cl.11(1)(d)). Consideration of claims and their determination by the Board were dealt with by cl.17. By cl.17(1), it was provided that, as soon as practicable after a claim was made, the Board was to proceed to consider and determine it in accordance with cl.18, 19, 20, 21 or 22, as the case warranted. Clause 19 (which was amended by an Instrument made by the Governor published in the Gazette on 29 June 1990) dealt with the calculation of compensation in respect of claims made under cl.11. By cl.19(1), the Board must - "estimate the number of tonnes of that saleable coal which has been, or in its opinion, will be extracted ... during each `relevant period' [defined [cl.3(1)] to mean the period of six months beginning with 1 January 1982, or a subsequent period of 12 months beginning with 1 July] beginning with the base date and ending with the last day of the relevant period within which saleable coal ... has or will, in its opinion, become exhausted." By cl.19(2), it was provided that, in respect of each relevant period, the Board was to proceed to determine an amount, which was in essence, the value as at 1 January 1982 of future rent and royalty from the coal interest, calculated in accordance with the following formula: "v(p) = [(n(p) x h) x d(p)] + [(r x t(p)) x e(p)] 1000 1000 where - 'v(p)' represents the amount to be determined, expressed in dollars and, where appropriate, a fraction of a dollar; `n(p)' represents, in relation to the first relevant period `(p)', the figure 2 and, in relation to each subsequent relevant period `(p)', represents the figure 4; `h' represents the area, measured in hectares, of that part of the colliery holding containing the coal that is the subject of the claim; `d(p)' represents the amount, applicable to the symbol `n(p)', which, if invested on the base date on terms (including terms as to a rate of interest) determined by the Compensation Board in relation to the particular case, would produce the sum of $1,000 at the median date of the relevant period `(p)'; `r' represents ... 0.9 of a dollar ... `t(p)' represents the number of tonnes of saleable coal estimated under subclause (1) in respect of the particular relevant period `(p)'; and `e(p)' represents the amount, applicable to the symbol `t(p)', which, if invested at the base date on terms (including terms as to a rate of interest) determined by the Compensation Board in relation to the particular case, would produce the sum of $1,000 at the median date of the particular relevant period `(p)'." (As Hill J. observed, this formula contemplates two components: (1) "Rent" (at $4 p.a. per hectare, except in respect of the initial six month period beginning with 1 January 1982, where the "rental" rate was $2 p.a. per hectare); and (2) "Royalty", calculated at the rate of 90 cents per tonne of the saleable coal estimated to be extracted from 1 January 1982 until exhaustion.) Sub-clauses 19(3) and (3A), which are central to this litigation, dealt with the calculation of an "appropriate incremental factor", in the event that no interim payment of compensation had been made. By cl.19(3), the Board was to calculate the total amount to be paid in respect of the claim: "(a)by ascertaining for all relevant periods to which subclause (1) applies the total of the amount represented by `v(p)', as determined in accordance with subclause (2); and (b) by multiplying that total by the appropriate incremental factor." Clause 19(3A) defined "the appropriate incremental factor" as - "... a number equivalent to the amount of money that would be accumulated from and including the base date up to and including the day before the date on which the Compensation Board makes its determination in respect of the claim if $1 were invested on terms (including terms as to a rate of interest) determined by the Treasurer for the purposes of this clause." A claim was regarded as finally being determined, where no appeal to the Compensation Review Tribunal was lodged under cl.27 at the conclusion of 30 days after notification of the determination (cl.23(a)). Interest on the amount of compensation was dealt with by cl.24. By cl.24(1), interest at a rate determined by the Treasurer was payable from the date of the determination up to the date of payment. There is no issue about this item as it is not disputed that this amount is income for taxation purposes. Payment of compensation was dealt with by cl.25. On being notified that the Minister had authorised payment, the Board was to pay to the claimant the amount of compensation determined, together with any interest payable (cl.25(2)). (c) The Board's determination of the respondent's claim for compensation By a determination made on 15 August 1990, the Board calculated that the total amount of compensation to be paid in respect of the claim was $6,473,793. The manner in which that amount was calculated was indicated as follows: "CALCULATION OF COMPENSATION - CCB 4329 PERIOD ENDING COMPENSATION INCREMENTAL FACTOR v(p) 2095248.855884 31-Dec-82 2423783.8764866 1.1568 31-Dec-83 2711487.0226256 1.1187 31-Dec-84 3019511.9483958 1.1136 31-Dec-85 3464588.0095894 1.1474 31-Dec-86 4025262.2871812 1.16183 31-Dec-87 4557240.9510551 1.13216 31-Dec-88 5097274.0037551 1.1185 31-Dec-89 5936198.6511152 1.164583 15-Aug-90 6473793.3498088 1.09056 AMOUNT OWING $6,473,793.35" The Board further indicated that the Treasurer had supplied the following interest rates, which had been used to calculate the "appropriate incremental factors": "Period Interest Rate 1/1/82 - 31/12/82 15.68% 1/1/83 - 31/12/83 11.87% 1/1/84 - 31/12/84 11.36% 1/1/85 - 31/12/85 14.74% 1/1/86 - 31/12/86 16.183% 1/1/87 - 31/12/87 13.216% 1/1/88 - 31/12/88 11.85% 1/1/89 - 31/12/89 16.4583%" By letter to the respondent dated 3 October 1990, the Board enclosed a copy of its determination dated 15 August 1990, and annexed calculations, together with a cheque for $6,599,732.32, representing $6,473,793 for compensation as determined on 15 August plus interest of $125,939.32 thereon from that date. (As has been noted, it was common ground that this amount of interest was assessable income.) THE BASIS OF THE COMMISSIONER'S ASSESSMENT In his assessment, the Commissioner sought to identify two separate components in the amount of compensation: (1) The sum determined under cl.19(2), being, in effect, the value as at 1 January 1982 of future rent and royalty from the coal interest (i.e. "V(p)" in the formula). The Commissioner did not attempt to claim that this was income. (2) The sum being the incremental factor determined under cl.19(3). This is the amount now in dispute. The Commissioner assessed this amount as income upon the footing that its character was, in effect, interest on the compensation, being, it was said, an amount to compensate the former coal owner for not having received the worth of the coal when it was acquired by the Crown on 1 January 1982. THE REASONING AT FIRST INSTANCE His Honour's reasons for concluding that the assessment should be set aside were, in essence, as follows: . This was not a case, as was, for instance, Federal Wharf Company Limited v Deputy Federal Commissioner of Taxation (1930) 44 CLR 24, of provisions for a statutory right to compensation and an independent right to interest calculated upon that compensation. There, the right to interest was a payment on account of the person (whose property had been confiscated) being kept out of the compensation from the date of acquisition to the date of payment. But there was no independent right of compensation here. Rather, the "incremental" element of the compensation, as calculated under cl.19(3), was but a component of an overall calculation, rather than an independent right to interest calculated by reference to some other amount owing. . Whether the "incremental" component was to be treated as income must be determined by reference to its essential character (that is, the nature of the payment, or "what it is for"), regard being had to all the circumstances which give rise to the receipt, without placing a disproportionate emphasis upon the form in which the transaction was structured. The question here as to the nature and quality of the payment in the hands of the respondent must be determined by reference to the Governor's Instrument, which created, for the first time, an eligibility to claim compensation for coal which had been forfeited. But the integers in the formula, including that described in cl.19(3), are of no assistance in determining the essential character of the receipt, which remains that of compensation for a capital asset. CONCLUSIONS ON THE APPEAL Although the proceeding raised some difficult questions, I am not persuaded that any error, of principle or application of principle, in the approach taken by the primary Judge, or in the decision arrived at, has been demonstrated. (a) The construction of ss.5 and 6 of the Act At the outset, questions arise as to the true interpretation of ss.5 and 6 of the Act; in particular, the question arises whether the Act conferred upon the respondent any right to claim compensation. In construing the Act, it should be borne in mind that, as Kitto J. said in C.J. Burland Pty. Ltd. v Metropolitan Meat Industry Board (1968) 120 CLR 400 (at 406), there is a - "...firmly established rule of law that a statute will not be read as authorizing the expropriation of a subject's goods without payment unless an intention to do so be clearly expressed." That is, even where the Federal Constitutional guarantee of "just terms" is not available, State legislation is presumed not to alienate vested proprietary interests without adequate compensation (see Statutory Interpretation in Australia by D.C. Pearce and R.S. Geddes, 3rd ed. at 101-2). At the same time, as the Privy Council has noted (see Sisters of Charity of Rockingham v The King [1922] 2 AC 315 at 322): "Compensation claims are statutory and depend on statutory provisions. No owner of lands expropriated by statute for public purposes is entitled to compensation, either for the value of the land taken, or for damage, ... unless he can establish a statutory right." It will be convenient next to set out in full the terms of ss. 5 and 6: "5. All coal that, but for this Act, would be vested in - (a)an instrumentality or agency of the Crown; or (b)any person other than the Crown, is vested in the Crown freed and discharged from all trusts, leases, licences, obligations, estates, interests and contracts. 6. (1) The Governor may make arrangements - (a)for the determination of the cases, if any, in which compensation is to be payable as a result of the enactment of this Act; and (b)if there are any such cases - for the determination of the amount and method of payment of any such compensation. (2) Except in the cases, if any, and to the extent, determined under subsection (1), compensation is not payable as a result of the enactment of this Act." It is clear that ss. 5 and 6 of the Act were intended to be read together, but a question then arises whether the use of the word "may" in s.6(1) ("The Governor may make arrangements ...") is a true or real discretion, in the sense that it is purely facultative, on the one hand, or, on the other whether, in certain situations it means "must" so that it is then mandatory to exercise the discretion and to make the arrangements (see Commissioner of State Revenue v Royal Insurance Australia Ltd. (1994) 126 ALR 1 at 7, 26, 33). In my view, given the present context and the legislative presumption in this area, it was intended that the Governor should make appropriate arrangements in those cases where, in the Governor's opinion, compensation ought to be paid. In this way the apparent discretion was rendered obligatory (see Finance Facilities Pty. Ltd. v F.C.T. (1971) 127 CLR 106). If the discretion were not exercised, mandamus would go (see Royal Insurance at 26). Where a statute confers a right and provides, as here, that the right is to be exercised in a manner to be prescribed by subordinate legislation, the right is not lost if there is a failure so to prescribe. The law may import a suitable method so that the right may be exercised in any manner that is appropriate and reasonable (see Downey v Pryor (1960) 103 CLR 353 per Kitto J. at 362). As Kitto J. there pointed out, a distinction is drawn, as a matter of statutory construction, between cases where the existence of the right is itself dependent upon the occurrence of the prescription of the methods of its exercise, on the one hand, and, on the other, cases where the statutory right is, as it were, free-standing or independently created. In the latter class of case, the failure to prescribe cannot destroy that right (cf. in the federal context, Commonwealth v Huon Transport Pty Ltd (1945) 70 CLR 293 at 309, 312, 316-7, 330; see also Minister for Primary Industry v Davey (1993) 47 FCR 151 at 166-7). In my opinion, when the Act is read as a whole, nothing appears which would contradict the ordinary presumption that the acquisition of the coal was not to take place except upon the basis that adequate compensation would be paid in those cases where justice so required. It is true that s.6(1)(a) speaks of "the cases, if any, in which, compensation is to be payable... ." (My emphasis.) But, in my view, this is consistent with the construction previously mentioned, that is, that the Governor was bound to provide machinery for the payment of adequate compensation in those instances where it was just to do so. The statutory arrangements were, in fact, made, and it is common ground that their provisions were within power. Certainly, though, the transaction was not a "voluntary" one, in the sense that the outcome was compelled by the terms of the applicable legislation. But it must be noted, for present purposes, that entitlement to require the Governor to exercise a discretion to make suitable arrangements is one thing; it is a different thing to say that, upon the enactment of the Act, the respondent was entitled to a particular sum of money, or even to the market value of the coal. Strictly speaking, there was no entitlement to any particular amount until the conclusion of the 30 day period after notification of the determination of the claim (see cl.23(a)), that notification not occurring here until 3 October 1990. (b) Interpretation of the Governor's Instrument It will be recalled that, by cl.8 of the Instrument, it was provided that compensation was payable "in respect of coal ... ." It follows, in my view, that compensation was paid for the coal, that is, for its acquisition. It may be accepted that cl.8 went on to provide, as has been seen, that the compensation was to be payable in accordance with the provisions of the Instrument. But, in my opinion, this did not detract from the circumstance that the compensation was payable "in respect of", i.e., for the coal. (c) The application of the relevant taxation principles It is settled, as Hill J. noted, that whether an amount should be treated as income must be determined by reference to its "essential character. That is only another way of saying that ... [the answer] will depend upon the nature of the payment or what it is for ... [and] the quality of that amount in the hands of the recipient [is important]." (See, for instance, Scott v Commissioner of Taxation (1966) 117 CLR 514 at 526.) In Glenboig Union Fireclay Co. Ltd v The Commissioners of Inland Revenue (1922) 12 TC 427, a railway company exercised its statutory powers to require part of the taxpayer's fireclay to be left unworked on payment of compensation. It was held that the amount received was not a profit earned in the course of the taxpayer's trade as the manufacturer of fireclay goods and as merchants of raw fireclay, but was a capital receipt, being a payment made for the sterilisation of a capital asset. In the Court of Session, the Lord President (Clyde) said (at 448-9): "... prima facie the sterilisation of parts of [the fireclay] seems to me to imply a capital loss, and the payment of compensation to repair the injury to the Company's undertaking which flowed from that sterilisation seems to me to be a restoration of capital. It was argued that the compensation payable to the Company, being measured by the present value of the profits which the Company might, and in all reasonable probability would, have made if the leasehold had not been interfered with, was really a consideration or substitute for profits. But, even so, it is a consideration or substitute, not for profits earned or capable of being earned, but for profits irretrievably lost and incapable of being ever earned. The taxing acts deal with profits made, not with profits lost - with actual, not with hypothetical profits - and it is by the words of the taxing acts that we are bound. As paid to and received by the Company, the compensation was the equivalent of a destroyed portion of one of its fixed assets: I do not think it was a profit which arose from the Company's trade or business at all." In the House of Lords, Lord Buckmaster said (at 463-4): "In truth the sum of money is the sum paid to prevent the Fireclay Company obtaining the full benefit of the capital value of that part of the mines which they are prevented from working by the Railway Company. It appears to me to make no difference whether it be regarded as a sale of the asset out and out, or whether it be treated merely as a means of preventing the acquisition of profit that would otherwise be gained. In either case the capital asset of the Company to that extent has been sterilised and destroyed, and it is in respect of that action that the sum of Ł15,316 was paid. It is unsound to consider the fact that the measure, adopted for the purpose of seeing what the total amount should be, was based on considering what are the profits that would have been earned. That, no doubt, is a perfectly exact and accurate way of determining the compensation, for it is now well settled that the compensation payable in such circumstances is the full value of the minerals that are to be left unworked, less the cost of working, and that is, of course, the profit that would be obtained were they in fact worked. But there is no relation between the measure that is used for the purpose of calculating a particular result and the quality of the figure that is arrived at by means of the application of that test. I am unable to regard this sum of money as anything but capital money ..." (Emphasis added) (See also Van den Berghs Ltd v Clark [1935] AC 431 at 442; Commissioner of Taxes (Vict.) v Phillips (1936) 55 CLR 144 at 156). In my view, the approach taken in Glenboig was equally applicable in the present case. Whatever be the position with respect to what is, in truth, interest (see, e.g. Federal Wharf Company Ltd. v F.C.T. (1930) 44 CLR 24 at 28; Riches v Westminster Bank, Ltd. [1947] AC 390 at 403, 409; Commissioner of Taxes (N.Z.) v Marshall (1952) 5 AITR 424 at 426, 433), the compensation in the present case was payable, as cl.8 of the Instrument provided, "in respect of [the] coal". The provisions of cl.8 are, in material respects, consistent with the Act. It will be recalled that the Act (s.6) provided that compensation would be payable, if at all, by reason of its enactment, having previously provided (s.5) for the acquisition of all interests in the coal. Accordingly, it was appropriate that cl.8 state that compensation would be payable in respect of the coal. That is to say, compensation was not payable in respect of any claim for loss of profits or of any other form of income. Nor, apart from the operation of cl.24 (an item not in issue here) was there any suggestion in the statutory scheme that a coal owner receive interest as a component of a compensation package. As has been noted, no entitlement to any compensation monies accrued before October 1990, whatever rights may have previously existed to enforce the performance of other public duties. It must follow that the "incremental factor" was not compensation for loss of the use of those monies. It may be accepted that it is possible, in some circumstances, for the Commissioner to apportion a sum paid by way of compensation into two distinct segments, one representing a capital item, the other representing a revenue item. But such an apportionment is not open here (cf. McLaurin v Commissioner of Taxation (1961) 104 CLR 381; and see, for instance, Allied Mills Industries Pty Ltd v Commissioner of Taxation (1989) 20 FCR 288 at 313). This compensation (notwithstanding the presence of the incremental factor in its computation) was paid in respect of a single capital asset, the coal. Specifically, the calculation of the "incremental factor" was no more than an abstract, or hypothetical, exercise which could not, and did not, purport to be an award of an amount by way of interest on monies then due. It must follow, in my view, that, however calculated, the essential character of the compensation payment was an amount paid for the acquisition of a capital asset. I would dismiss the appeal, with costs. I certify that this and the preceding seventeen (17) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Beaumont. Associate Dated: 8 August 1995 IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 795 of 1994 GENERAL DIVISION ) ON APPEAL from a single judge of the Federal Court of Australia Between: COMMISSIONER OF TAXATION Applicant And: NORTHUMBERLAND DEVELOPMENT CO PTY LTD Respondent Davies, Beaumont and Einfeld JJ SYDNEY 8 AUGUST 1995 REASONS FOR JUDGMENT EINFELD J: The relevant facts and statutory and regulatory provisions are set out in the judgments of Justices Davies and Beaumont which I have had the opportunity to read. There is no need to repeat them, but I wish to add some remarks of my own. Hill J found that there was no independent right to compensation and interest on the compensation. The significance of this finding is that Justice Hill was able to distinguish cases such as Federal Wharf Co Ltd v Federal Commissioner of Taxation [1930] 44 CLR 24, Riches v Westminster Bank Ltd [1947] AC 390 and Commissioner of Taxes (NZ) v Marshall [1952] 5 AITR 424, all of which had in substance held that interest paid on compensation was assessable income. His Honour said at AB 76 - 77: The incremental component of the compensation, as calculated under cl.19(3), is but a component of an overall calculation rather than, as was the case in Federal Wharf, an independent right to interest calculated by reference to some other amount owing. The appellant submitted that his Honour erred in this finding and in the conclusions that followed. His submissions were twofold: a) there was an independent right to interest; and b) even if there was not, the essential character of the increment had to be separately considered and should be found to be income. As mentioned in the judgment of Justice Beaumont, interest as calculated pursuant to cl. 24 is not the subject of contention. Hence any reference to interest should be taken as a reference to the incremental component of the calculations in cl. 19. The amount the appellant wished us to view as interest is the increment on the compensation amount. Was there an independent right to interest? Section 6 of the Coal Acquisition Act 1981 provided for the making of compensation arrangements. The appellant contended that this is both a power and a duty. If that were correct, the respondent's right to compensation would have come into existence on the date of proclamation of the Act. If compensation was indeed due and payable from that day, that may have lent weight to the appellant's submission that there was a separate right to interest, accruing from the delay between the occasion of the debt and its payment. The language of the section is permissive - the Governor `may'- and whilst it appears from the second reading speech of the Coal Acquisition Bill (1981) that the Government always intended paying compensation (Legislative Council "Hansard" 2 December 1981, page 1245), it cannot be inferred that they had a duty to pay compensation. Additionally, the use of the words `if any' in section 6(1)(a) points to an interpretation that compensation is payable at the Governor's discretion. This Act serves to vest significant assets in the Crown. The Government knew that ownership of coal would transfer out of the possession of companies and individuals and that they would suffer a pecuniary loss as a result. The reference `if any' cannot therefore be taken to mean `if there are any claims for compensation'. The words must be taken to mean, `if any compensation is to be offered the Governor may make arrangements for their determination'. The appellant conceded that this may not be a significant point since compensation was actually paid pursuant to the Instrument of 1985 as amended in 1990. Additionally, even if the section is read as a duty on the Crown, this does not determine that interest on the amount was separately due. On balance it is more likely that the section created a power and not a power and a duty. Thus at the time of vesting, no right to compensation accrued to the taxpayer, let alone a separate right to interest. The right to compensation dawned with the implementation of the arrangements set out in the Instrument in 1985. The next issue must then be whether the taxpayer received at that time a separate right to payment of interest on the compensation sum. It appears not. The taxpayer was entitled to the equivalent of the result of the calculations. Certainly, had the Government made a mistake in their addition, or performed only half of the calculations stipulated, the taxpayer would have had recourse to the full amount. However, this is not the same as saying that it had a separate right to interest on the compensation. Clearly, the legislature had the option of providing separately for interest and it chose not to do so. The taxpayer received no separate right to interest on the compensation amount. Was the incremental component nonetheless income? Justice Hill was well aware that determining that there was no separate right to interest did not answer the question of whether or not the incremental component was income. At AB 77 - 78, his Honour said: The question whether the incremental component on the present case is to be treated as income, must, I agree, be determined by reference to its essential character. That is only another way of saying that the question whether the payment is income or capital will depend upon the nature of the payment or what it is for. What is important is that the question whether the amount is income or capital will depend upon the quality of that amount in the hands of the recipient: Scott v Commissioner of Taxation (1966) 117 CLR 47 at 526; Hayes v Commissioner of Taxation (1956) 96 CLR 47 at 55; Federal Coke Co Pty Ltd v Federal Commissioner of taxation(1977) 34 FLR 375 at 402 per Brennan J; Commissioner of Taxation v Cooling (1990) 22 FCR 42 at 50. In considering the character of the receipt in the hands of the recipient the Court will have regard to all the circumstances which give rise to the receipt without disproportionate emphasis upon the form in which the transaction is structured: SP Investments Pty Ltd v Federal Commissioner of Taxation (1993) 41 FCR 282 at 295; Reuter v Federal Commissioner of Taxation (1993) 111 ALR 716 at 727-730, affirmed on appeal: (1993) 93 ATC 5030. With regard to the circumstances, his Honour concluded that the sum was capital. At AB 80: The incremental factor remains what it is, namely, an integer in a formula used by the authority to assess a lump sum compensation which is to be paid for the forfeiture of the interest of a person as at 1 January 1982. It follows, in my view, that the essential character of a payment remains that of compensation for a capital asset appropriated by the Crown rather than two elements; one compensation for that capital asset and the other interest. The formula in question is calculated by reference to three distinct components. The appellant asked us to view the formula in the following way. The first component is a notional rent estimated over the period then discounted back to present value at the date the coal vested in the Crown. The discount rate employed in that case is a flat rate of 7%. The second component is a notional royalty calculated along the same lines. The amount of royalty is estimated and then discounted back to produce the present value of the cash flow stream at the date of vesting. The discount rate is not fixed, but it appears that it varies period by period in accordance with the statutory interest rates provided by the NSW Treasury. In the appellant's submission, these two present values are then added together to achieve the present value on 1 January 1982 of the estimated future income streams and it is on this sum that the final calculation is performed. The appellant contended that this sum represents the amount of compensation that would have been paid by the Crown at the time of vesting if compensation had been paid at that date. The appellant further argued that the final calculation serves to increase the sum to compensate the respondent for the lack of the use of the funds and therefore is in the nature of interest. The final calculation effectively increases the sum at a rate which varies from period to period between 9% and 16%. The appellant's submission may have been and possibly is one explanation of the intention behind the formula, but it was nonetheless hypothetical as the Crown did not pay compensation at the date of vesting. The question remains whether the incremental payment was or was not part of the overall compensation. The primary Judge considered the authorities advancing that there is no necessary connection between the measure used to calculate an amount, its nomenclature or form, and the quality of the receipt: see Glenboig Union Fireclay Co v Commissioners of Inland Revenue [1922] SC (HL) 112 at 115; Van den Berghs Limited v Clark [1935] AC 431 at 442; Commissioner of Taxes (Victoria) v Phillips [1935] 55 CLR 144 at 156; and also California Oil Products Limited (In Liquidation) v Federal Commissioner of Taxation [1934] 52 CLR 28 at 46, 49 and 51. The appellant did not seek to challenge the general proposition but contended that the purpose and circumstances of the provision of the increment demonstrate that it is interest, whereas the respondent argued that the incremental sum was merely part of the compensation for a loss of a capital asset. There is no definitive clause in the Instrument to demonstrate which interpretation is in fact the correct one. In these circumstances it is necessary to look to the calculation and the surrounding circumstances. In Lomax v Peter Dixon & Son Ltd [1943] 25 TC 353, a loan was made with provision for interest at a commercial rate, a discount and a premium. In determining the nature of the various elements, Lord Greene MR set out some of surrounding circumstances that may be helpful at 367: (1) Where a loan is made at or above such reasonable commercial rate of interest as is applicable to a reasonably sound security, there is no presumption that a "discount" at which the loan is made is a premium at which it is payable is in the nature of interest. (2) The true nature of the "discount" or the premium as the case may be, is to be ascertained from all the circumstances of the case and, apart from any matter of law which may bear upon the question (such as the interpretation of the contract), will fall to be determined as a matter of fact by Commissioners. (3) In deciding the true nature of the "discount" or premium, in so far as it is not conclusively determined by the contract, the following matters together with any relevant circumstances are important to be considered, viz., the term of the loan, the rate of interest expressly stipulated for, the nature of the capital risk, the extent to which, if at all, the parties expressly took or may reasonably be supposed to have taken the capital risk into account in fixing the terms of the contract. In this summary I have purposely confined myself to a case such as the present where a reasonable commercial rate of interest is charged. Where no interest is payable as such, different considerations will, of course apply. In such a case a "discount" will normally, if not always, be a discount chargeable under para (b) of Rule 1 to Case III. Similarly a "premium" will normally, if not always, be interest. But it is not necessary or desirable to do more than point out the distinction between such cases and the case of a contract similar to that which we are considering. Justice Hill correctly identified that the answer to the question must come from the Instrument itself, his Honour concluding (at AB 80) that no particular assistance in characterisation could be gleaned from the integers in the formulae because in this case appearances are deceiving. Calculations required by the formulae to determine notional rent and notional royalty, which at first glance might be considered of an income nature, are treated by the Commissioner as capital, possibly for the reason that the amount, notwithstanding its method of calculation, represents compensation for the loss of a capital asset. His Honour rightly highlighted that the appearance of an integer in the formulae as interest does not necessarily mean that it is interest. On the one hand, despite the Government's declared intention in 1981 to provide compensation and the significant delay before doing so, no interest other than the increment was provided for between the years of appropriation and determination. Additionally, the calculation, though notional, appears to have tried to approximate a market value. The Coal Compensation Board, in making its determination, looked at the size and nature of the holdings and as the formulae called for, made an estimation of production rates. Furthermore, the increment was expressed in percentages that varied from period to period, appearing to match commercial interest rates that may have been available to the taxpayer if it had had the use of its money and had chosen to invest it during that period. The increment was time dependent. The time period was that between the date of vesting and the date of determination. Interest was payable pursuant to clause 24 for the time after determination. On the other hand, the increment may not have been for the purpose of compensating the taxpayer for being out of funds for the period, but merely to reflect the Government's intention to effect reasonable compensation and its attempt to bring the compensation for the asset up to the value of the day. With this in mind some of the pertinent elements of the transaction should be noted: 1. This case is not dealing with an investment or proposed investment by the taxpayer. In fact the taxpayer had no say at all in the transaction. It was not expecting interest on monies lent, nor had it entered into a sale of an asset whereby delayed settlement might mean it could expect interest to accrue. 2. The Government did not view the transaction as a commercial agreement. It had the option of providing for interest separately as was the case in Federal Wharf, but did not exercise it. 3. Moreover, the appropriation of the asset occurred in 1981, yet a right to compensation did not arise until many years later. These factors tend to indicate that the increment was not in the nature of interest, merely an aspect of the formulae, more specifically, a form of indexation, marking the compensation up to the value of the day. I therefore agree with Justices Davies and Beaumont that the increment represents capital. The nature of the payment was to compensate the taxpayer for the loss of a capital asset. The incremental component cannot be viewed as compensation for lack of use of monies, rather it was part of one capital sum. I agree with the order proposed. Counsel and Solicitors Mr. I. Gzell Q.C., with for Appellant: Mr. K. Connor instructed by Australian Government Solicitor Counsel and Solicitors Mr. D. Bloom Q.C. with for Respondent: Mr. R. Edmonds instructed by Gadens Ridgeway Date of hearing: 23 May 1995 Date Judgment delivered: 8 August 1995	13,574
federal_court_of_australia:fca/single/2002/2002fca0369	decision	commonwealth	federal_court_of_australia	text/html	2002-04-02 00:00:00	BWK Elders (Australia) Pty Ltd v Westgate Wool Company Pty Ltd (No.4) [2002] FCA 369	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2002/2002fca0369	2024-09-13T22:44:34.231037+10:00	FEDERAL COURT OF AUSTRALIA BWK Elders (Australia) Pty Ltd v Westgate Wool Company Pty Ltd (No.4) [2002] FCA 369 BWK ELDERS (AUSTRALIA) PTY LTD (ACN 000 320 794) v WESTGATE WOOL COMPANY PTY LTD (ACN 007 387 902) and PETER JOSEPH ANDERSON and MATT ILMARI KAINE and GRAEME JOHN MOYLE AND BETWEEN WESTGATE WOOL COMPANY PTY LTD and PETER JOSEPH ANDERSON and MATT ILMARI KAINE and GRAEME JOHN MOYLE v BWK ELDERS (AUSTRALIA) PTY LTD S.105 of 2001 MANSFIELD J 2 APRIL 2002 ADELAIDE IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY S.105 OF 2001 BETWEEN: BWK ELDERS (AUSTRALIA) PTY LTD APPLICANT AND: WESTGATE WOOL COMPANY PTY LTD FIRST RESPONDENT PETER JOSEPH ANDERSON SECOND RESPONDENT MATT ILMARI KAINE THIRD RESPONDENT GRAEME JOHN MOYLE FOURTH RESPONDENT AND BETWEEN: WESTGATE WOOL COMPANY PTY LTD FIRST CROSS-CLAIMANT PETER JOSEPH ANDERSON SECOND CROSS-CLAIMANT MATT ILMARI KAINE THIRD CROSS-CLAIMANT GRAEME JOHN MOYLE FOURTH CROSS-CLAIMANT AND: BWK ELDERS (AUSTRALIA) PTY LTD CROSS-RESPONDENT JUDGE: MANSFIELD J DATE: 2 APRIL 2002 PLACE: ADELAIDE REASONS FOR DECISION 1 The applicant sought leave to amend its Statement of Claim in terms of a document entitled "Further Amended Statement of Claim" filed on 8 March 2002 (the Statement of Claim). I gave that leave on 15 March 2002. At the request of the respondents, I now publish reasons for that decision. 2 The matter has a considerable history. Both that history, and the nature of the applicant's claim, is referred to in previous judgments: BWK Elders (Australia) Pty Ltd v Westgate Wool Company Pty Ltd and Ors [2001] FCA 1110; BWK Elders (Australia) Pty Ltd v Westgate Wool Company Pty Ltd and Ors [2001] FCA 1844; BWK Elders (Australia) Pty Ltd v Westgate Wool Company Pty Ltd and Ors (No.2) [2002] FCA 87; BWK Elders (Australia) Pty Ltd v Westgate Wool Company Pty Ltd and Ors (No.3) [2002] FCA 88. It is evident that the applicant's claim, although in substance easy to understand, in detail is very complex. That is reflected in the particularity contained in the Statement of Claim and the schedules attached to it. This is the third version of a Statement of Claim, but the essential allegations have not altered. What has altered or been added previously are details concerning particular transactions for the sale of wool. In my view, the amendments effected by the Statement of Claim similarly fall into those categories. 3 In considering whether to grant the leave sought, I have been guided by the principles recently reinforced by the High Court in State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 per Dawson, Gaudron and McHugh JJ at 154-155. Senior counsel for the respondent particularly referred me to the observations of Kirby J at 170 identifying, among the considerations which tend to argue against the grant of an indulgence to permit a pleading to be amended, the failure of a party to offer an explanation for the application or its timing. I did not require the applicant to seek leave to amend their Statement of Claim by issuing a fresh notice of motion for that purpose. It seemed to me appropriate, in the circumstances but particularly having regard to the desirability of the pleadings issues being resolved as soon as practicable, that I should entertain the application made at a directions hearing without that formality provided it could be entertained without prejudice to the respondents. Consequently, filing and service of an affidavit in support of the application was a matter for the applicant. No affidavit specifically explaining the amendments effected by the Statement of Claim, or its timing, was presented. However, the proposed amendments are essentially to matters of detail. In my view, they do not alter in any significant way the thrust of the applicant's claim as it has been maintained throughout. In adopting that course, I fixed a timetable which would ensure that the respondents had an opportunity to consider and address the Amended Statement of Claim as proposed and to respond to it, including any objections which they made to it. 4 As I have said, I consider that the amendments effected by the Statement of Claim are directed in part simply to correcting or amending certain particulars that (I infer) the applicant, as a result of further investigation, considered required correction, and are directed in part to expressing in a slightly different way or in a slightly fuller way the nature of the applicant's claims against the respondents. Although there is no affidavit in support of the application, the nature of the application and the particular terms of the amendments enable me to reach that view without affidavit evidence. There has been no undue delay on the part of the applicant in seeking the amendments. Indeed, I suspect that the need for them is largely a consequence of addressing requests for particulars from time to time received from the respondents: cp Australian Competition & Consumer Commission v Pacific Dunlop Limited [2001] FCA 740. 5 I shall deal with the respondents' objections to the Statement of Claim generally in the sequence they appear in the written objections. 6 The objections are largely common to each of the six purchases of wool separately alleged in the Statement of Claim. The allegations to which objection is taken, in essence, are parallel in relation to each of those purchases of wool. Each of the purchases of wool alleged in turn involved a number of transactions on different dates, which themselves are specified in the Statement of Claim and in schedules to it. The consideration of the respondents' objections can be addressed largely by reference to one of the purchases, as was done by senior counsel for the respondents in oral submissions. I will not refer separately to the clauses of the Statement of Claim which parallel the first alleged series of transactions concerning the Parkes wool, except where necessary. 7 The Statement of Claim now alleges that instead of the contract of purchase being an oral contract only, it is a contract partly oral and partly in writing (the amendment to cl 12.1). There are then express terms, and alternatively implied terms, alleged in each of the contracts that the wool agreed to be sold had a particular derivation, category, weight, and characteristics (new cl 12AA). It is then alleged by new cl 12B that: "12B.1 Insofar as the terms of the contract were in writing, they were comprised in the Parkes wool statements and in the AWTA certificates. 12B.2 Insofar as the terms were oral they comprised the oral agreement made between Hullick on behalf of the applicant and the second, third or fourth respondents (the applicant cannot presently be more particular) on behalf of the first respondent as to the price to be paid for the Parkes wool." In respect of the other five transactions, the oral agreement referred to in the analogues of cl 12B.2 in some instances refers to Hullick or other named persons, or in one instance to Hullick or another person whose identity is not at the time able to be given. 8 There are also new clauses numbered 14AA and 14AAA. Clause 14AA alleges that each of the brand property names and the identification numbers or letters against each of the wool lots was fictitious, was placed on the bales at the premises of the first respondent and not on a property bearing the name allocated to it, and was placed on the bales by one or other of the second, third or fourth respondents, or at their direction. It also alleges that such information: "… was inserted upon the AWTA Core Test Request by an employee or agent of the first respondent (the applicant cannot presently be more particular)." Clause 14AAA alleges further, or in the alternative, in breach of the Parkes contracts the first respondent did not deliver to the applicant wool which came from a property as identified, or which was of the particular category, weight or characteristics identified. The particulars of those breaches are said to be provided in pars 14.1-14.6 and par 14AA of the Statement of Claim. 9 The first objection is that the applicant has not justified why it now wishes to allege that the contracts were "partly oral and partly in writing" in par 12.1 and corresponding paragraphs of the Statement of Claim. In fact, as the particulars indicate, the documents which are said to constitute the written component of the contracts in each case were previously referred to in earlier versions of the Statement of Claim. All that the applicant has done has been to recognise that those documents are or may be part of the contract. I regard that as a minor change. It does not produce injustice to the respondents. It is not one which requires explanation by affidavit. The respondent has not asserted any injustice in respect of any of the proposed amendments to the Statement of Claim with one exception referred to below. 10 The injustice then alleged, however, was simply that the respondents did not have to confront a claim in terms in which it could not be made out, and so would not have the benefit, at the hearing, of having an advantageous decision on a small aspect of the case. It is hard to believe that that is put forward seriously as a ground of prejudice. The applicants, in the light of further consideration of the material before them, appear to have accepted that the claim as then expressed was not sustainable, but that it was sustainable by reference to different but not materially different facts. The other aspect of the "prejudice" was that the respondents would then succeed on that limited issue inevitably and recover costs at least of that limited issue. I propose to reserve the costs of this application, and to the extent to which the respondents are entitled to costs, by reason of the withdrawal or amendment of those claims, I will address it. It is a ridiculous proposition to say that the case which an applicant no longer wishes to express precisely in a way previously expressed should be obliged to go forward so that it can be lost and the costs at a much larger level secured. 11 The second ground of objection was that the allegation that the contract terms are "express, or in the alternative, … implied" (par 12A and corresponding paragraphs) does not include particulars of the circumstances in which the implication might arise, nor does it contain precisely the words of the conversations alleged to comprise the actual terms. It is not correct that the circumstances by which the implication might arise are not pleaded, although senior counsel for the applicants acknowledged that the "linking fact" may not have been explicitly asserted. Paragraphs 8 and 10 of the Statement of Claim plead the facts by which the implication might arise. Senior counsel for the applicants has now identified that it is alleged by the applicants that by reason of the facts in those paragraphs, the terms alleged are said to be implied. There can be no misunderstanding on the part of the respondents. In my view a reading of the Statement of Claim would have made apparent that which has now been made explicit. To avoid any risk of injustice to the respondents, however, I formally record that acknowledgment in these reasons for decision. But for the request on the part of the respondents for reasons for my decision, I would have required the applicant to confirm that explicit assurance by correspondence, to fortify that which had been said in the course of submissions. 12 The other aspect of this complaint is that pars 12B.1 and 12B.2 and corresponding paragraphs are "embarrassing" because they are introduced by the word "Insofar", so that the respondents do not know which of the terms proposed to be alleged are in writing and which are oral. In my view that represents a misreading of the Statement of Claim. The relevant oral term is that as to the price to be paid: see par 12.1 and par 89 in the first column to Schedule A therein of the Statement of Claim. 13 Further, I do not consider that it is necessary to the respondents having a fair trial that the precise conversations alleged to constitute the agreement as to the price be specified. It is apparent that there is no real issue as to the price to be paid for that which was agreed to be purchased. The real issue is as to what was agreed to be purchased, and whether that which was supplied met the description of that agreed to be sold and purchased. It is part of that submission that par 12B.2 and corresponding paragraphs is "embarrassing" because it alleges "what is apparently a further, wholly oral agreement, as to, 'the price to be paid for the … wool'". In my view that also represents a misreading of the Statement of Claim. It does not allege a separate and further agreement, but alleges a term of the agreement relating to the price, in a way which enables the respondents to know how it is alleged that the price came to be agreed. There is nothing embarrassing about that allegation. Senior counsel for the respondents noted in the course of submissions that the corresponding paragraphs to par 12B.2 were expressed in slightly different terms in relation to the several wool purchase contracts. Thus, par 68B.2 is in the same terms, but pars 27B.2, 42B.2, 57B.2 and 80B.2 refer to the person named in par 12B.2 plus another named person or persons and in one case that person or another employee of the applicant who is not identified. Having pointed out the variation in those terms, however, senior counsel did not then suggest that those variations caused any embarrassment to the respondents in knowing the case they had to meet, and the variations in my view simply reflect the applicant's allegations as to the slightly different ways in which the several contracts came to be made. They reinforce the point that there is no further wholly oral agreement alleged, but in each case an allegation as to how the oral term of the particular contract as to price came to be reached. 14 The respondents' next focus was upon par 14AAA and the corresponding paragraphs, which provide details of the breaches of the contracts in various ways, including by reason of the facts alleged in par 14AA and corresponding paragraphs. It is contended that the facts alleged in par 14AA and the corresponding paragraphs cannot in terms constitute particulars of breaches of the alleged contract since no such terms are alleged. By way of illustration, it may be noted that par 14AA.1 alleges that the particular source or supplier of the wool is "fictitious", and it is contended there is no term alleged that the identified source or supplier of the wool would not be a fictitious entity. In my judgment that complaint is specious. Paragraph 14AA pleads facts which, if established, would demonstrate that the terms of the contract (assuming they are made out) were breached. It puts the respondents on notice of facts which the applicants propose to prove at the hearing. It is not necessary that the applicant be restricted to asserting contraventions of breaches of the agreements in terms which reflect precisely the alleged terms of the agreement. It is legitimate for the applicants to allege facts which, if established, would demonstrate those breaches. The facts alleged in par 14AA are capable of doing so in the manner alleged, and fairly put the respondents on notice as to the case which they must meet. 15 The next objection concerns par 12AA.2 and par 12AA.3 which are respectively said to be inconsistent with pars 10.9 and 10.10 of the Statement of Claim. Whilst the terminology of those paragraphs is not exactly the same, it is quite clear that in slightly different ways they say the same thing. No inconsistency is made out. I find it difficult to understand how an inconsistency could be asserted. Indeed, senior counsel for the respondents did not positively submit that such an inconsistency was made out, but simply pointed out the different words by which the applicants expressed certain assertions. 16 The next objection is that the par 14AAA and corresponding paragraphs alleges breach of the contracts by the first respondent in not delivering to the applicant the wool subject of the contract. It is said that there is no term alleged that the first respondent would deliver the wool the subject of the contracts to the applicant. In my view that too is a specious objection. It is specious firstly because it is plain that the contract for the sale and supply of wool contemplated that the respondents would somehow provide the wool to the applicants. The precise means of delivery or supply is not important to the case. In the second place, par 28 of the Statement of Claim and its correspondents clearly assert the circumstances in which the wool came to be supplied by the first respondent to the applicant. I do not think that there is any unfairness or potential for ambiguity or uncertainty about the case the respondents must meet by use of the word deliver in par 14AAA or its correspondents. 17 The next objection concerns pars 12B.1 and 12B.2 and corresponding clauses. The complaint is that those pars do not identify to which contract, or in which terms, the paragraphs refer. Again, in my judgment, that contention is specious. It is a consequence of a reading of the Statement of Claim which I have rejected, namely that pars 12B.1 and 12B.2 refer to a "further, wholly oral agreement" when it is plain that they refer to a term of the agreements for the sale and purchase of the Parkes wool. There is no scope for misunderstanding. 18 The next complaint is that par 14AA.4 and corresponding paragraphs do not provide details of "the AWTA Core Test Request". It was not contended by senior counsel for the respondents that there was any misunderstanding about what document was referred to, or that there was any scope for such a misunderstanding. In my view, it is quite clear on the pleading. 19 In respect of the transaction involving the Marzotto wool, a further complaint is made that the applicant has withdrawn allegations which, by reason of cl 84 of the Statement of Claim, are said to be fraudulent. The representations concerning the Marzotto wool include: "59.1.1 70 bales (being BWKE Order Number IG0541) were combed into tops when the wool was sold to BWKE, WWC represented to BWKE that the average micron level of those bales was 19.1: 59.1.1.1 After combing, it could reasonably be expected by reason of the formula for the calculation of the mean fibre diameter as set out in the AWTA Ltd Wool Testing Hand Book (a copy of which is available for inspection on reasonable notice at the applicant's solicitor's office) that the wool tops would have a fibre diameter of 19.2 microns." The words deleted from par 59.1.1 were deleted by a previous amendment. The words underlined in par 59.1.1.1 were inserted by the Statement of Claim. Similar changes have been made to pars 59.1.2.1 and 59.1.2.2. 20 It is contended that the applicant should not be permitted to withdraw those allegations. In my view, the alterations do not amount to the withdrawal of allegations but are a re-casting of an allegation in a more precise way. There is no withdrawal of an allegation of fraud. The allegation of fraud is still maintained. In this instance, the respondents do allege prejudice by reason of the amendment. The prejudice which the respondents claim is said to be the loss of the opportunity to confront an allegation which is said to be unsustainable, and so would they have lost the opportunity of succeeding on issue which would entitle them to substantial costs. To state the proposition is to demonstrate its fallacy. If the allegation is not made in the terms they wish it to be made, they will not incur the costs involved in resisting it. I reject the contention that a particular allegation of fraud should be insisted upon being maintained so that the respondent can run up, and then recover, costs in opposing a hopeless case which is not sought to be pursued is a relevant prejudice on an application to amend a pleading. In any event, as I have indicated, I do not consider that those amendments make such a change to the allegations as would disadvantage the respondents in the preparation and presentation of their case. 21 Senior counsel for the respondents then took some further "less substantive objections" to the Statement of Claim. They were that the Statement of Claim uses a reference to the first respondent some times in a variable way. It was not suggested that it was used in a way which caused any embarrassment. It was also pointed out that each schedule referred to in the Statement of Claim is entitled "Amended Schedule". Again it was not suggested that there was any scope for misunderstanding or embarrassment. Thirdly it was pointed out that sometimes the word "contract" is used in the plural when it should not be. Again, there is no scope for any misunderstanding, at least in so far as those issues were pointed to me. I propose to grant leave to amend the statement notwithstanding those matters. 22 There were further objections to the Statement of Claim. It was contended that there are no allegations in it to support the relief sought in the Amended Application for damages for breach of warranty, for loss of reputation and goodwill, for exemplary damages, or for disbursements. In my view, those objections have no substance. Each of those claims are made not simply in the Amended Application, but in the Statement of Claim (pars 91.5, 91.8, 91.9 and 91.11). The complaint concerning the claim for "disbursements" is made out of context. It is simply part of the claim commonly found in a Statement of Claim for an order for recovery of costs and disbursements if the application is successful. Although there is no separate allegation of facts giving rise to a claim for damages for breach of warranty, the claim for damages for breach of warranty both in the Amended Application and in the Statement of Claim is expressed to be a claim for damages for "breach of contract and/or warranty". It is apparent that it is the breach of contract properly particularised which is the subject of those claims. It was not suggested by senior counsel for the respondents that there was any misunderstanding about that. There are allegations of fact in par 89.4 of the Statement of Claim to support the claim for damages for loss of reputation and goodwill as part of the applicant's damage. 23 Order 12, r 4(2) of the Federal Court Rules requires the applicants to have pleaded the facts upon which it claims to be entitled to be exemplary damages. Those facts, if such a claim arises, must be those in the Statement of Claim. If there is evidence sought to be adduced at the trial to fortify that claim, and it is evidence which does not relate to a pleaded fact or particular, then the respondents will be entitled to object to that evidence. I do not consider that there are no facts alleged in the Statement of Claim upon which a claim for exemplary damages might be made out, assuming that such a claim is sustainable in a proceeding such as the present. Senior counsel for the respondents did not contend that that was the case. In my judgment, the applicant has identified a claim for relief, and will be confined to evidence referable to a pleaded fact or particular to make out that claim. 24 Finally, the objection is taken that the applicants have refused to consent to an order to pay the respondents' costs of and occasioned by the amendment. I accept that that is the case. I indicated that I would deal with the costs of the application separately. I have fixed a time when, if necessary, those costs may be argued. If there is the need to make an order for costs in favour of the respondents in the circumstances of the case to do justice between the parties, such an order will be made. The fact that the applicant does not consent to such an order does not of itself provide a reason why the order granting leave to amend the Statement of Claim should not be given. It is a matter within the discretion of the Court. 25 For those reasons, the application for leave to amend the Statement of Claim was granted. I extend the time from which any application for leave to appeal from the order made on 15 March 2002 run from 3 April 2002 I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Decision herein of the Honourable Justice Mansfield. Associate: Dated: 28 March 2002 Counsel for the Applicant and Cross-respondent: Mr RC White and Mr R Kennett Solicitor for the Applicant and Cross-respondent: Kelly & Co. Counsel for the Respondents and Cross-claimants: Mr J Hammond QC and Mr N Russell Solicitor for the Respondents and Cross-claimants: Andrew Woolfe & Co. Date of Hearing: 15 March 2002 Date of Decision: 2 April 2002	5,399
federal_court_of_australia:fca/single/2018/2018fca0831	decision	commonwealth	federal_court_of_australia	text/html	2018-05-17 00:00:00	APG16 v Minister for Immigration and Border Protection [2018] FCA 831	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2018/2018fca0831	2024-09-13T22:44:34.463835+10:00	FEDERAL COURT OF AUSTRALIA APG16 v Minister for Immigration and Border Protection [2018] FCA 831 Appeal from: Application for leave to appeal: APG16 v Minister for Immigration & Anor [2017] FCCA 2846 File number: VID 1166 of 2017 Judge: RANGIAH J Date of judgment: 17 May 2018 Catchwords: MIGRATION – Protection Visa – application for leave to appeal from Federal Circuit Court's refusal of extension of time – proposed appeal would be incompetent – application dismissed Legislation: Migration Act 1958 (Cth) ss 36, 476 and 477 Date of hearing: 17 May 2018 Registry: Victoria Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 12 Counsel for the Applicant: The Applicant did not appear Solicitor for the First Respondent: Ms N Bosndale of Clayton Utz Counsel for the Second Respondent: The Second Respondent filed a submitting notice ORDERS VID 1166 of 2017 BETWEEN: APG16 Applicant AND: MINISTER FOR IMMIGRATION AND BORDER PROTECTION First Respondent ADMINISTRATIVE APPEALS TRIBUNAL Second Respondent JUDGE: RANGIAH J DATE OF ORDER: 17 MAY 2018 THE COURT ORDERS THAT: 1. The application is dismissed. 2. The applicant pay the first respondent's costs in the sum of $1756.00. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. EX TEMPORE REASONS FOR JUDGMENT RANGIAH J: 1 This is an application for leave to appeal against a judgment of the Federal Circuit Court of Australia delivered on 13 October 2017. 2 The primary judge dismissed the applicant's application for an extension of time to bring an application for judicial review of a decision of the Administrative Appeals Tribunal (the Tribunal). The Tribunal had decided to affirm the decision of a delegate of the first respondent to refuse the applicant a Protection Visa. 3 Section 477(1) of the Migration Act 1958 (Cth) (the Act) provides a time limit of 35 days for an application to the Federal Circuit Court for a remedy in that Court's original jurisdiction under s 476 in relation to a migration decision. As the applicant was outside that period, he applied for an extension of time under s 477(2). That was the application that was dismissed by the Federal Circuit Court. 4 Section 476A(3)(a) of the Act provides that an appeal may not be brought to the Federal Court of Australia from a judgment of the Federal Circuit Court that makes or refuses to make an order under s 477(2). Therefore, the applicant's proposed appeal would be incompetent. That matter alone is sufficient to require the refusal of the application for leave to appeal. For completeness, I will consider the merits of the proposed appeal. 5 The applicant is a citizen of Malaysia who arrived in Australia in April 2014. On 17 July 2015, he applied for a Protection Visa. On 27 October 2015, a delegate of the first respondent refused to grant the applicant a protection visa. 6 The applicant then applied for review to the Tribunal and, on 8 February 2016, the Tribunal affirmed the delegate's decision. 7 Before the Tribunal, the applicant claimed to have borrowed money from a money lender in Malaysia. He was unable to pay the money back and the money lender threatened to kill him. The police had been bribed and refused to help him. He was assaulted by the money lender. He claimed to fear that he would be harmed and tortured if he were to return to Malaysia. 8 The Tribunal noted a number of inconsistencies in the applicant's account and considered that his evidence was vague and implausible. It considered that the 14 month delay between the applicant arriving in Australia and claiming protection suggested that his claims were not true. The Tribunal did not accept that the applicant's claims were credible. It was not satisfied that the criteria in ss 36(2)(a) and (aa) of the Act were met and affirmed the delegate's decision. 9 The Federal Circuit Court dismissed the application for an extension of time on the basis that the applicant had not shown an arguable case in his proposed application for review of the Tribunal's decision. The primary judge considered that the applicant was merely seeking impermissible merits review and had not attempted to demonstrate jurisdictional error. 10 The applicant has not appeared at the hearing of his application. In his application, the applicant has set out a number of lengthy grounds of review. The grounds are somewhat garbled and difficult to understand. However, each of them asserts that the applicant will be in danger in Malaysia. This is said to be because the applicant is of Chinese background and that he has received threats from the Malaysian government because he is Buddhist and because his assailant is politically connected. 11 Although the applicant uses the language of jurisdictional error at times, when properly analysed the applicant merely seeks to raise new claims not raised before the Tribunal. He also asserts that the Tribunal ought to have found that he was credible and that his claims were true. The grounds do not, in truth, assert jurisdictional error. Therefore, even if the Court had jurisdiction to entertain an appeal against the judgment of the primary judge, the applicant could not ultimately succeed in demonstrating jurisdictional error on the part of the Tribunal. 12 The application for leave to appeal must be dismissed with costs. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rangiah. Associate: Dated: 6 June 2018	1,244
federal_court_of_australia:fca/full/2004/2004fcafc0198	decision	commonwealth	federal_court_of_australia	text/html	2004-08-03 00:00:00	SPLB v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 198	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2004/2004fcafc0198	2024-09-13T22:44:34.488912+10:00	FEDERAL COURT OF AUSTRALIA SPLB v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 198 MIGRATION – appeal from summary dismissal for failure to comply with orders, and on basis amended application cannot possibly succeed – failure of appellant to appear Federal Court Rules O 52 r 38(1)(a), (c) and (d) SPLB v MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS No S 23 of 2004 SPENDER, STONE AND BENNETT JJ ADELAIDE 3 AUGUST 2004 IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY S 23 OF 2004 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: SPLB APPELLANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS RESPONDENT JUDGES: SPENDER, STONE AND BENNETT JJ DATE OF ORDER: 3 AUGUST 2004 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The appellant pay the respondent's costs, to be taxed if not agreed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY S 23 OF 2004 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: SPLB APPELLANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS RESPONDENT JUDGES: SPENDER, STONE AND BENNETT JJ DATE: 3 AUGUST 2004 PLACE: ADELAIDE REASONS FOR JUDGMENT SPENDER J: 1 On 21 January 2004, Selway J dismissed the appellant's application for primary relief in relation to a decision of the Refugee Review Tribunal ("the RRT") given on 24 May 2001. 2 His Honour dismissed the application on two bases. 3 The background to the making of the orders by his Honour is summarised by him as follows: '(a) The applicant is an Indian citizen. He applied for a protection visa on the grounds that he feared persecution from the Indian government because of his involvement in anti-nuclear protests in the early 1990s. (b) A delegate of the Minister rejected his application for a protection visa. The applicant sought a review of that decision by the Refugee Review Tribunal ('the Tribunal'). As is set out in the Tribunal's reasons, the Tribunal made a number of attempts to obtain information from the applicant and to afford him an opportunity to give evidence. This included rescheduling hearing dates because of last minute contact from the applicant advising that he was unable to attend on the scheduled occasion. Eventually the Tribunal proceeded in the absence of the applicant. The Tribunal was not satisfied that the events described by the applicant in his written material did in fact occur. The Tribunal concluded: "On the basis of the country information and the limited and vague evidence provided by the applicant, the Tribunal is unable to be satisfied that the applicant faces a real chance of persecution from Indian authorities due to his opposition to its nuclear policies." The Tribunal confirmed the decision of the delegate. (c) Although not previously revealed in these proceedings, the affidavit of Ms White tendered on 13 January 2004, reveals that the applicant instituted proceedings in the High Court seeking judicial review of the Tribunal's decision (S 254 of 2002). The applicant accepted that he had done so. As the applicant also accepted, those proceedings were remitted to the Sydney Registry of the Federal Court on 6 February 2003 (N 262 of 2003). Ms White deposes that Emmett J summarily dismissed those proceedings on 6 June 2003, for failure of the applicant to attend a directions hearing (see [2003] FCA 1197). The applicant says that he does not know whether the application was dismissed - indeed, he suggested that the proceedings before me are a continuation of those proceedings. Nevertheless, I am satisfied that Emmett J did dismiss the proceedings and that they involve not only the same decision of the Tribunal, but the same issue of whether that decision was affected by jurisdictional error. (d) Fresh proceedings were instituted in this Court on 27 May 2003. The application sought certiorari, mandamus, prohibition and injunctions. Various jurisdictional errors were alleged. As seems to be common in proceedings of this nature there is no hint in either the application or the accompanying affidavit as to the relationship between those alleged errors and anything that the Tribunal actually did. On 21 October 2003, Mansfield J ordered that various steps be taken by the applicant by 18 November 2003 to remedy these deficiencies and get the matter ready for hearing, including the filing and serving of an amended application specifying precisely the error or errors complained of, an outline of submissions and various other matters. On 19 December 2003, the matter was adjourned to 6 January 2004, on the basis that the applicant's solicitor was yet to receive instructions from the applicant. On 5 January 2004 (the day before the matter was next due to come before the Court) the applicant informed the Court by facsimile that he was not aware of the orders made by Mansfield J on 21 October 2003 (it is noted that his solicitors informed the Court that they had forwarded a copy of the orders to him, but whether or not he received them is not presently a matter that I need to consider). The applicant also informed the Court that he was no longer represented and that he wished to have the matter transferred to the Victorian Registry of the Federal Magistrates Court. On 6 January 2004, when the matter came before the Court, his (former) solicitors attended, although they still had no instructions. Apparently they had not been informed that they were no longer acting. The applicant appeared by telephone and requested an interpreter. As none was available the matter was adjourned again to 13 January 2004, for the applicant to attend in Sydney so that the proceedings could be heard by video-link. In the meantime the Court sent to the applicant a copy of the orders made by Mansfield J. The Court also notified the applicant that the orders made by Mansfield J had not been complied with and, unless they were, the proceedings might be dismissed on the next occasion. On 8 January 2004, the respondent filed its Notice of Motion seeking to have the proceedings summarily dismissed pursuant to O 20 r 2 of the Federal Court Rules. On 12 January 2004, the applicant filed an amended application and informed the Court that he could not attend in Sydney. The terms of that amended application are discussed below. On 13 January 2004, the directions hearing finally proceeded. The applicant appeared by telephone. He was assisted by an interpreter.' 4 His Honour examined the amended application filed by the appellant on 12 January 2004 and referred to information given by the applicant by telephone about his application on 13 January 2004. The applicant at that time was assisted by an interpreter. 5 In written reasons given on 21 January 2004, his Honour set out the grounds of the appeal to the Federal Court in its original jurisdiction: '(1) The Tribunal denied procedural fairness and natural justice as in Muin. (2) The Tribunal's failure to consider relevant matters and consideration of irrelevant matters constitutes an error of law. (3) The Tribunal did not consider relevant information: Yusuf. (4) The Tribunal's decision was affected by an 'error of law'. (5) The Tribunal breached the requirements of s 424A of the Migration Act 1958 (Cth).' 6 His Honour commented in respect of those grounds at pars 4-5 of the reasons: 'There is nothing that connects any of these grounds with what the Tribunal in fact did or decided. The applicant explained that his complaint was that he could not return to India because of his fear as a result of his actions to oppose the testing of bombs. He said he had not been treated fairly by the Tribunal, but was unable to specify in what way he had been unfairly treated, other than that the Tribunal had not permitted him to stay in Australia. He could not identify any particular manner in which he had been misled by the Tribunal, other than his claim that he did not receive a letter (presumably from the Tribunal).' The applicant has failed to identify any jurisdictional error in the reasons, processes or decision of the Tribunal. It is clear that the applicant cannot succeed on the amended application. In these circumstances it is appropriate that the application be summarily dismissed both for failure to comply with the orders made by Mansfield J and on the basis that the amended application cannot possibly succeed. 7 His Honour also commented that it might have been possible to dismiss the application on the basis that it was an abuse of process for the proceedings to be continued after the same proceedings were dismissed by Emmett J. His Honour commented, however, that given that the application should be dismissed for the reasons he had already given, it was unnecessary to explore that question any further. 8 The notice of appeal filed by the appellant on 4 February 2004 asserted grounds of appeal as follows: '2. The learned judge erred in his judgement handed down on 21 January 2004 in not considering the relevant matters and infact had considered the irrelevant matters. – Denial of Natural Justice. 3. The learned Judge erred in not finding that the Refugee Review tribunal made errors in regards to the material facts of the case. 4. The learned Judge erred in not finding that the Refugee Review tribunal was in breach of a procedure that was required by the Migration Act 1958 to be observed in connection with the making of the decision of the tribunal. 5. The Tribunal was in breach of the requirements of s424A of the Migration Act 1958. 6. In a letter from the RRT the RRT invited me for a hearing. The RRT stated in that letter that it "has looked at all the material relating to your application". In fact, the RRT had not looked all the material relating to my application, giving rise to a denial of natural justice. Denial of natural justice is jurisdictional error of a type for which relief can be granted under Part 8A of the Migration Act as amended by the Migration Legislation Amendment (Judicial Review) Act 2001 and the Migration Legislation Amendment Act (No1) 2001. 7. Refugee Review Tribunal's decision involved an error of law, being an error involving incorrect interpretation of the applicable law to the facts as found by the department. 8. The learned Judge erred in finding that "it is clear that the applicant cannot succeed on the amended application".' 9 The first four grounds, and the ground numbered seven, are formulistic and devoid of any meaningful particularisation. The ground numbered six is mere assertion without any supporting factual basis in the material, and no particulars are given of the bald assertion of error on the part of the primary judge in the ground numbered eight as a "ground of appeal". 10 The outline of submissions filed by the appellant on 2 August 2004 asserts five ways in which the RRT is said to have erred. Nothing is said in those written submissions as to why the primary judge erred, let alone identifying in any respect that there was such error. The submissions are concerned exclusively with the proceedings in the RRT. 11 There is no material which suggests, and no basis for thinking, that the exercise of discretion by the primary judge miscarried in any way. 12 The appellant did not appear when the appeal was called on, either personally, or by telephone as had been arranged. In a facsimile which bears time 11.25 am of 3 August 2004, the appellant sent a message addressed to Federal Court of Australia, Level 8, 25 Grenfell Street, Adelaide, South Australia, 5000. It referred to this hearing at 2.45 pm on Tuesday, 3 August 2004. The 2.45 pm is the Victorian time at which this appeal was to be called on at 2.15 pm South Australian time. The body of that communication is as follows: 'I will not be able to conduct the hearing scheduled for Tuesday, 03 August 2004 at 2.45pm. I am medically sick and unfit. I hereby fax my medical certificate for your consideration. I kindly seek the indulgence of the Federal Court that another hearing date be facilitated. This hearing is extremely crucial and I wish to be present at the hearing. Your cooperation and kind consideration regarding this matter is highly appreciated.' The facsimile medical certificate attached to the original facsimile is under the letterhead of the Fawkner Family Medical Centre at an address in Fawkner, Victoria, and two doctors are referred to - Dr Jagjit S Rattan and Dr John Haddad. The certificate which bears a stamp, Dr J S Rattan, says: 'I certify that on 2/8/04 I examined [the appellant] He/She was, in my opinion, suffering from "a med condition" I conclude by the reason of this condition and/or patient's statement he/she will be/has been unfit for work/school on … from 2/8/04 to 3/8/04 inclusive.' 13 Nothing in that unhelpful and almost contemptuous medical certificate indicates a reason why SPLB would be unable to answer the telephone at 2.15 pm on today's date as had been arranged. 14 Subsequent to the receipt of the facsimile transmission from the appellant, the Registrar has made more than thirty attempts by telephone to contact him to indicate that the matter would be called on at 2.15 pm, and he would be contacted by telephone then. After the court convened to hear the hearing, a further telephone call was made. That call appeared to have been received, but was peremptorily terminated without any response by the person who answered the call. That simply confirms that, in my view, the appellant has been seeking to avoid the inevitable, a view reflected in the absence of any material, even of the slimmest kind, to support any suggestion of error in the primary judge's reasons for judgment. 15 The material at first instance on the application before the primary judge, in the notice of appeal, and in the written statements by the appellant on behalf of his appeal indicates that the history of this matter has been one of bald and unparticularised assertion without the slightest scintilla of material to support any of the complaints. In particular, nothing in the material - including the appellant's written submissions - suggests any error on the part of the primary judge. 16 Having regard to the history of the matter and in particular to O52 r 38(1)(a), (c) and (d) of the Federal Court Rules, it is in my opinion appropriate that the appeal be dismissed with costs. STONE J: 17 I agree with the orders proposed by Spender J for the reasons his Honour has given. BENNETT J: 18 I also agree with the orders proposed by Spender J for the reasons he has given. SPENDER J: 19 The appeal is 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 Justices Spender, Stone and Bennett Associate: Dated: 6 August 2004 There was no appearance by or for the appellant Counsel for the Respondent: Mr Tredrea Solicitor for the Respondent: Sparke Helmore Lawyers Date of Hearing: 3 August 2004 Date of Judgment: 3 August 2004	3,437
federal_court_of_australia:fca/single/2024/2024fca0248	decision	commonwealth	federal_court_of_australia	text/html	2024-03-15 00:00:00	Societe Civile et Agricole du Vieux Chateau Certan v Kreglinger (Australia) Pty Ltd [2024] FCA 248	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2024/2024fca0248	2024-09-13T22:44:35.374839+10:00	Federal Court of Australia Societe Civile et Agricole du Vieux Chateau Certan v Kreglinger (Australia) Pty Ltd [2024] FCA 248 File number: VID 252 of 2021 Judgment of: BEACH J Date of judgment: 15 March 2024 Catchwords: CORPORATIONS — Bordeaux wine — Tasmanian wine — passing off — extent of reputation of French wine in Australia — relevant date for assessing reputation — classes of consumers — evidence of confusion — characteristics or knowledge of ordinary and reasonable person — misleading or deceptive conduct — misrepresentation — contraventions of ss 18 and 29(1)(g) and (h) of Australian Consumer Law TRADE MARKS — cancellation of registered trade mark — ss 88(2)(a) and (c) of Trade Marks Act 1995 (Cth) — use of respondent's registered mark contrary to law — s 42(b) of the Act — respondent's registered mark likely to deceive or cause confusion — s 60 of the Act — s 88(2)(c) of the Act — residual discretion under s 88 of the Act Legislation: Competition and Consumer Act 2010 (Cth) sch 2, ss 18, 29 Trade Marks Act 1995 (Cth) ss 10, 42, 44, 60, 80 Cases cited: Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd (2018) 259 FCR 514 Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2020) 381 ALR 507 Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 397 Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 8) (2008) 75 IPR 557 Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd [1980] 2 NSWLR 851 CA Henschke & Co v Rosemount Estates Pty Ltd (1999) 47 IPR 63 CA Henschke & Co v Rosemount Estates Pty Ltd (2000) 52 IPR 42 Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45 Comité Interprofessionnel du Vin de Champagne v Powell (2015) 330 ALR 67 ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 Flexopack S.A. Plastics Industry v Flexopack Australia Pty Ltd (2016) 118 IPR 239 Hansen Beverage Co v Bickfords (Australia) Pty Ltd (2008) 75 IPR 505 Hashtag Burgers Pty Ltd v In-N-Out Burgers, Inc [2020] FCAFC 235 Homart Pharmaceuticals Pty Ltd v Careline Australia Pty Ltd (2017) 349 ALR 598 Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348 National Exchange Pty Ltd v Australian Securities and Investments Commission (2004) 49 ACSR 369 Nike International Ltd v Campomar Sociedad Limitada (1996) 35 IPR 385 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd (2021) 285 FCR 598 Peter Bodum A/S v DKSH Australia Pty Ltd (2011) 280 ALR 639 RB (Hygiene Home) Australia Pty Ltd v Henkel Australia Pty Ltd [2024] FCAFC 10 Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd (2023) 408 ALR 195 Southern Cross Refrigerating Company v Toowoomba Foundry Proprietary Limited (1954) 91 CLR 592 State Street Global Advisors Trust Company v Maurice Blackburn Pty Ltd (t/as Maurice Blackburn Lawyers) (No 2) (2021) 164 IPR 420 Trivago N.V. v Australian Competition and Consumer Commission (2020) 384 ALR 496 Verrocchi v Direct Chemist Outlet Pty Ltd (2016) 247 FCR 570 10th Cantanae Pty Ltd v Shoshana Pty Ltd (1988) 79 ALR 299 Division: General Division Registry: Victoria National Practice Area: Intellectual Property Sub-area: Trade Marks Number of paragraphs: 608 Dates of hearing: 9 to 11, 14 to 15, 18 August 2023 Counsel for the Applicant: Mr B. Caine KC and Mr L. Merrick Solicitor for the Applicant: Allens Counsel for the Respondents: Mr E. Heerey KC and Mr M. Fleming Solicitor for the Respondents: Minter Ellison ORDERS VID 252 of 2021 BETWEEN: SOCIETE CIVILE ET AGRICOLE DU VIEUX CHATEAU CERTAN Applicant AND: KREGLINGER (AUSTRALIA) PTY LTD (ABN 84 000 006 557) First Respondent PAUL DE MOOR Second Respondent PIPERS BROOK VINEYARD PTY LTD (ABN 52 009 499 754) Third Respondent order made by: BEACH J DATE OF ORDER: 15 march 2024 THE COURT ORDERS THAT: 1. Within 14 days of the date of this order, the applicant file and serve minutes of proposed orders to give effect to these reasons and short written submissions limited to 3 pages dealing with such orders and any costs question. 2. Within 7 days of the receipt of such minutes and submissions, the respondents file and serve minutes of proposed orders and responding submissions limited to 3 pages. 3. Costs reserved. 4. Liberty to apply. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT BEACH J: 1 This dispute concerns a conflict between wine producers where it is essentially said that a Tasmanian wine producer has wrongly represented and passed off its product as being affiliated or associated with a French wine producer. 2 The applicant, Societe Civile et Agricole du Vieux Château Certan (VCC), is the owner of the Bordeaux wine estate, Vieux Château Certan. For present purposes, VCC produces two types of expensive French red wine involving various up-market grape types. 3 The first and third respondents produce wine in Tasmania. They have promoted and sold a wine known as New Certan, which is a much cheaper pinot noir as compared with the expensive French wine produced by VCC. 4 The first respondent, Kreglinger (Australia) Pty Ltd (Kreglinger), was registered as a company in Australia on 30 October 1914 and is a sister company of Kreglinger Europe NV. 5 The third respondent, Pipers Brook Vineyard Pty Ltd (PBV), was established in August 1973. It was originally called Tamar Valley Wine Estate Pty Ltd. In 2001, Kreglinger acquired majority ownership of PBV. The vineyards of PBV are located in Tasmania, covering two hundred hectares of low-lying land. PBV owns nine vineyards and manages the Mount Pleasant estate under contract with Mr Paul de Moor, the second respondent, who owns the land. PBV produces and sells wines under or by reference to various names. 6 Mr de Moor was appointed a director of Kreglinger on 1 December 1995 and was appointed the CEO of Kreglinger in 1998. Mr de Moor also became a director of PBV on 21 December 2001 and was appointed its CEO on 1 December 2018. 7 VCC has brought claims against the respondents alleging contraventions of ss 18 and 29(1)(g) and (h) of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)) (ACL) and for the tort of passing off. It has also sought the cancellation of Kreglinger's registered New Certan trade mark. The essential elements of VCC's case include the following aspects. 8 First, VCC says that it has the necessary reputation to support its claim in passing off and to provide the factual foundation for its claim under the ACL. It is said that VCC's reputation is long-standing, and existed long before the commencement of the respondents' activities in relation to the New Certan wine. It is said that the reputation covers both the name Vieux Château Certan and the presentation of the wine sold under that name. I should say now that the question of the reputation of VCC and its wines in Australia was the subject of considerable contest before me at trial. 9 Second, it is said that when Mr de Moor set about developing the label for the first vintage of the New Certan wine, which was the 2011 vintage released in 2013, he did so by providing an example of VCC's wine to the respondents' designer, Ms Annette Harcus, with instructions to use it as inspiration. Now it is apparent that Mr de Moor was involved in the creation of the overall bottle presentation of the 2011 and 2016 vintages of the New Certan wine. He approved the final presentation and sale of the 2011, 2016 and subsequent vintages of the New Certan wine. There was little contest before me as to the accuracy of such matters. 10 Third, VCC says that as a result of Mr de Moor's involvement in the design of the overall presentation of the 2011, 2016 and subsequent vintages, there is a high degree of visual similarity between the presentation used to date by the respondents for the New Certan wine and the presentation of VCC's wine. This includes the use of the name Certan, the use of a pink cap and accent colour in the New Certan name, the use of a stately home, the French text, the fluted edge profile and the aged appearance of the label, and more generally the overall look and feel of the wine presentation. It is said that the similarity is so strong because the presentation of the New Certan wine has been copied from the presentation of VCC's wine. In large part I have accepted VCC's case on these aspects. But of course these propositions do not address the proposed new branding of the New Certan wine that in my view substantially removes many of these similarities. 11 Fourth, it is said that the respondents have promoted the New Certan wine by expressly referring to VCC and a family connection to it. In doing so, it is said that the respondents have availed themselves of the fame and reputation of VCC and its wines for their own commercial benefit. I will return to these matters later. But it is not in issue that there is no arrangement or authorisation in place between VCC and the respondents in relation to the New Certan wine. 12 Fifth, VCC says that the effect of the respondents' conduct is such that Australian consumers of fine wine and members of the fine wine trade have been led to erroneously believe that the New Certan wine was in some way connected with or approved by VCC. This has been a substantial area of contest before me and I will discuss this later. 13 Sixth, VCC says that the impression created by the respondents' conduct to date has been misleading and false in that it has been suggested that the New Certan wine was in a commercial way associated with VCC or its products. It is said that there is no commercial connection between VCC and the respondents, and VCC has not approved or authorised the respondents' conduct in connection with the New Certan wine. In summary, I would largely agree with VCC in relation to the respondents' past conduct. 14 Seventh, it is said that Mr de Moor has been the driving force behind the New Certan wine. It is said that the evidence establishes that it has been a highly personal project to him. It is said that his conduct is such that he has gone beyond his role as an officer and employee of Kreglinger and PBV and has been knowingly involved in the relevant sense. Generally speaking I have agreed with VCC on this aspect of the case. 15 Now for the reasons that follow, I have largely accepted VCC's case as to the respondents' past conduct. 16 But the present proposal by Kreglinger and PBV to adjust the presentation of the New Certan wine for future vintages and not to sell current stock in my view addresses any problems previously created by the respondents' conduct and will avoid any future infringing conduct. 17 There is one further matter. Kreglinger is the registered proprietor of Australian trade mark no. 815277 for the words New Certan in class 33 filed on 25 November 1999; class 33 concerns alcoholic beverages including wines. The registration of that trade mark was unopposed. But as part of its case, VCC now seeks its cancellation. But I have rejected this aspect of its case. 18 For convenience I have divided my discussion into the following sections: (a) Some relevant background ([20] to [86]); (b) The witnesses ([87] to [123]); (c) The presentation, sale and promotion of VCC's wines ([124] to [156]); (d) Evidence of reputation or consumer awareness ([157] to [214]); (e) The previous design and packaging of the New Certan wine ([215] to [263]); (f) The significant resemblance between the New Certan wine and VCC's wine ([264] to [318]); (g) The new branding for New Certan ([319] to [353]); (h) VCC's claims under the ACL and in passing off ([354] to [543]); (i) VCC's claim against Mr de Moor – accessorial liability ([544] to [551]); (j) Cancellation of Kreglinger's registered trade mark for New Certan ([552] to [601]); (k) Conclusion ([602] to [608]). 19 Let me begin with some further relevant background. Some relevant background 20 Let me begin by saying something further about the parties. Parties 21 The VCC vineyard estate is located in Pomerol in the Bordeaux region of France, and lies to the east of the Dordogne River. It is part of the wine making region of Bordeaux that is referred to as the Right Bank. 22 The VCC estate was originally granted by royal decree to a Scottish family – the de Mays – in the late sixteenth century. The name in its current form, "Vieux Château Certan", has existed in local records in Pomerol since 1745. It is one of several vineyards established in the original "Sertan" estate, which also include Château Certan de May and, until about 20 years ago, Château Certan-Giraud. "Certan" is recorded as the name of a place in the French equivalent of the Titles Office. 23 The modern history of VCC began in 1924 when Georges and Josephine Thienpont purchased the VCC wine estate. Georges Thienpont was working in the Thienpont family wine merchant business in Belgium at that time and travelled to Bordeaux to source wines. Georges Thienpont produced his first vintage of wine from the estate in 1924, and the wine was given the same name as the wine estate, Vieux Château Certan. In order to be precise I will from hereon refer to this particular product as the VCC Wine. The VCC Wine has been produced since that time, and is made from a mix of Merlot, Cabernet Franc and Cabernet Sauvignon grapes. 24 Further, in 1946, Georges Thienpont purchased an adjacent parcel of land known as Clos de la Gravette, which was amalgamated into the VCC wine estate. 25 The management of the VCC estate was passed from Georges Thienpont to his sons, Léon and George Thienpont, and in 1985 to Léon's son and the current manager, Mr Alexandre Thienpont, who gave evidence before me. Mr Thienpont and his immediate family have lived on the VCC estate since 1965. 26 Now VCC itself was incorporated in 1957. It is operated by way of a management committee, the membership of which is determined by the shareholders of VCC. It is convenient to note here that Mr de Moor is not and has never been a member of the management committee of VCC or an employee of VCC. 27 In 1985, Mr Thienpont introduced a second wine for VCC, which was the La Gravette de Certan. In order to be precise I will describe this as the Gravette Wine. The Gravette Wine is also made from Merlot, Cabernet Franc and Cabernet Sauvignon grapes. 28 The VCC Wine and the Gravette Wine are each the subject of limited annual production. Each year VCC produces between 30,000 to 50,000 bottles of VCC Wine and approximately 10,000 to 20,000 bottles of Gravette Wine. 29 But sales of VCC's wines in Australia have been very limited. The only evidence before me of sales of the VCC Wine shows that a few thousand bottles of the VCC Wine were sold over the past 25 years. Further, the only evidence of sales of the Gravette Wine shows that around eleven bottles were sold in the period 2012 to 2020. 30 The VCC Wine retails for between approximately $600 and $800 per bottle. To the extent the Gravette Wine has been sold in Australia, the most recent sale on the evidence is one bottle for $109 in 2020. 31 Let me now say something further about Mr de Moor. Mr de Moor is the great-grandson of Mr Georges Thienpont, the Belgian wine merchant who was responsible for acquiring the VCC estate in 1924. Mr de Moor is the grandson of Mr Georges Thienpont's only daughter, Mrs Marie-Louise Thienpont. Mrs Thienpont was the eldest child of Mr Georges Thienpont, and she chaired VCC's annual general meetings following his death in 1962 until she died in 1995. Mr de Moor's mother, Mrs Marie-Louise Heymans, is the eldest child of Mrs Thienpont. She chaired VCC's annual general meetings from her mother's death in 1995 until about 2016. Mr de Moor is a shareholder of VCC, which shares he received from his mother in 2010. 32 Now Mr de Moor claims a strong and authentic familial connection with VCC and members of the Thienpont family. And of course it cannot be disputed that Mr de Moor is a member of the Thienpont family. 33 So, to the extent that it is or has been represented by Mr de Moor or others that he has a familial connection with VCC, that would be correct. He does have such a connection. But statements about a familial connection do not represent or imply a commercial association or connection between Kreglinger and PBV on the one hand and VCC on the other hand or the parties' respective products. 34 Let me now deal with some general matters concerning the Australian wine industry and French imports. In that context I need to begin with some statistics. Australian wine and French wine – some statistics 35 Wine Australia is an Australian government statutory corporation funded primarily by industry levies, government contributions, voluntary contributions made by industry members, and costs recovered from regulatory activities undertaken by Wine Australia. 36 Wine Australia is empowered to coordinate and fund research and development for grapes and wine, facilitate the dissemination, adoption and commercialisation of the results of such research, control the export of wine from Australia and promote the sale and consumption of wine, both in Australia and overseas. 37 Wine Australia collects data relating to both the Australian and international wine markets including in relation to wine consumers, as well as the Australian wine sector including in relation to wine producers. Such data includes data regarding imports and exports of wine, as well as grape production and pricing, sales and supply and demand generally. 38 Wine Australia also analyses customs data made available by the Australian Bureau of Statistics (ABS), subscribes to third party data sources on the Australian and global wine market, such as IRI MarketEdge, the International Wine and Spirit Record (IWSR) and Statista, and purchases published reports from other organisations. Wine Australia provides analysis based on this data to Australian wine makers and grape growers, Australian wine exporters and other persons and entities. 39 Let me begin by saying something about the value of imported and domestic wine in Australia. 40 In evidence were screen captures of Wine Australia's "Market Explorer" interactive online tool. The screen captures showed data displayed in response to the drop down menu question "Which markets consume the most imported wine?". This data was made available by IWSR to Wine Australia in its capacity as a subscriber. The screen captures record the following. 41 In 2020, imported wines accounted for 31.4% of the Australian wine market by value, which equates to around US $1.907 billion. The remaining 68.6% of the market comprised domestic wines. Of the 31.4% market share that was imported, the majority of those wines originate from France (37.6% by value) and New Zealand (40.1%). 42 In 2021, imported wines accounted for 34.3% of the Australian wine market by value, which equates to around US $2.054 billion. The remaining 65.7% of the market comprised domestic wines. Of the 34.3% market share that was imported, the majority of those wines originate from France (39.7% by value) and New Zealand (37.7%). Italy supplied the third majority of imported stock (14.8%), followed by Spain (2.4%) and the USA (1.1%). 43 Let me say something about the on and off-premise consumption in Australia and France. 44 In evidence were screen captures of Wine Australia's "Market Explorer" interactive online tool concerning on-premise and off-premise consumption of wine, in both Australia and France. The screen captures showed data displayed in response to the drop down menu question "What is the share of on vs off-premise in each market?". This data was made available by IWSR. The data for this question is calculated by reference to the volume of 9 litre cases sold, which equates to twelve 750ml bottles. 45 It was recorded that in 2020, of the 58.2 million 9L cases of wine purchased for consumption in Australia, 8.9% was consumed on-premise, for example, in restaurants, bars, and other hospitality venues, and 91.1% was purchased for consumption off-premise, such as purchased at bottle shops or from online retailers. It was recorded that in 2020, of the 243.4 million 9L cases of wine purchased for consumption in France, 19.5% was consumed on-premise and 80.5% was purchased for consumption off-premise. 46 It was recorded that in 2021, of the 54.8 million 9L cases of wine purchased for consumption in Australia, 10.9% was consumed on-premise and 89.1% was purchased for consumption off-premise. It was also recorded that in 2021, of the 236.9 million 9L cases of wine purchased for consumption in France, 20.6% was consumed on-premise and 79.4% was purchased for consumption off-premise. 47 Let me say something about the importation of French wines into Australia by region. 48 Evidence was given that it is not possible to statistically determine the percentage of wine imported into Australia per region of France. However, the ABS customs data available to Wine Australia demonstrates that in 2021 approximately 23 million litres of wine were imported from France into Australia. Based on the information set out in the following tables, it is estimated that wine from the Bordeaux region accounts for approximately 3% to 4% of French wine imported into Australia. 49 Table 1 relates to customs data made available by the ABS to Wine Australia and shows that red table wine accounted for 29% of the volume of French wine imported into Australia in 2021. The ABS-supplied customs data does not specify the region of France of the imported wine, only that it was imported from France. Table 1: Share of wine import volume from France in 2021 by colour/wine style (source: ABS-supplied customs data) Wine style/colour Share Red table wine 29% White table wine 14% Sparkling 42% Other 15% 50 Table 2 relates to data collected by IRI MarketEdge, but it does not capture every individual wine sale made in off-premise retail channels. However, it was the most reliable data source available to Wine Australia in respect of off-premise retail channels. The data in Table 2 concerns off-premise retail sales of French wine in Australia, for example, wine sold in bottle-shops or online, for consumption elsewhere, for the year 2021. This data is broken down by region. Table 2: Share of French wine off-premise retail sales volume in Australia by region in 2021 (source: IRI MarketEdge) Region Share of French wine Percentage Estimated share of red wine sales sales red wine products Champagne 55% 0% 0% Languedoc-Roussillon 13% 29% 39% Loire Valley 8% 4% 4% Provence 8% 0% 0% Rhone 4% 30% 13% Unknown 3% 5% 2% Burgundy 3% 7% 2% Other Region 3% 90% 25% South West 1% 18% 2% Bordeaux 1% 97% 10% Alsace 1% 0% 0% Beaujolais 0% 100% 3% Cahors 0% 100% 0% 51 Table 2 shows that wines from the Bordeaux region accounted for 1% of total off-premise retail sales of all French wine of all varieties in Australia in 2021. Of this percentage, 97% was red wine. It shows that wines from the Bordeaux region accounted for 10% of total off-premise retail sales of French red wine in Australia in 2021. 52 Table 3 relates to data collected by consulting group Wine Business Solutions and published in its Wine On-Premise Australia 2022 report. The data shows a breakdown by region of France's wine listings in the on-premise channel, for example, restaurants, hotels, clubs and wine bars, for consumption on-site. Table 3: Share of France's wine listings in the on-premise channel by region (source: Wine Business Solutions) Region Share of listings 2022 Champagne 27% Loire Valley 14% Rhone 11% Burgundy 10% Bordeaux 8% Alsace 7% Provence 6% Chablis 6% Beaujolais 5% Languedoc-Roussillon 4% Other Regions 2% 53 Table 3 shows that wines from the Bordeaux region accounted for approximately 8% of the on-premise listings for French wines. The data was collected from a study which quantified the number of wines listed by region in France, on a sample of wine lists at a variety of on-premise venues. 54 In relation to the data in Tables 2 and 3 above, Bordeaux wines have a higher proportion of listings on wine lists and menus compared to Bordeaux's proportion of off-premise retail sales. However, the number of listings does not necessarily correlate with the volume of wine sold. 55 Let me now say something about the trends in the volume and value of French wines imported into Australia over the last 20 to 30 years. 56 Based on customs data made available by the ABS to Wine Australia as depicted in Figures 1 and 2 below, imports of French wine across all types into Australia have increased significantly in the last 20 years with respect to both volume and value. 57 In relation to ABS-supplied customs data, value is calculated by the "customs value", which is the transaction value actually paid or payable by the importer to the supplier. This is a measure of wholesale value, rather than retail value. 58 Figures 1 and 2 show that between 2000 and 2021, imports of French wine into Australia increased by 745% in volume and 1094% by value, and imports of French red wine specifically increased by 586% in volume and 1120% by value. Over this period, French red wine has consistently accounted for approximately 30% of imports by volume, and 17% by value. Red wine varieties grown in Australia 59 In Australia, shiraz is by far the most dominant red wine variety sold, followed by cabernet sauvignon and grenache. Pinot noir entered the market in the early 1980s, however, it represents a small proportion of the market by reference to sales volume. The total area of pinot noir vines planted in Australia is very small when compared to the other three varieties mentioned. 60 In evidence was Wine Australia's varietal snapshot which is based on data from the National Vintage Survey 2022 conducted by Wine Australia. It was recorded that the area of pinot noir vines in Australia was 4,948 hectares out of 135,133 hectares for all varieties, comprising 3.7% of the total area planted and 5.7% of the total area of all red varieties planted. Further, 44,271 tonnes of pinot noir grapes were crushed of a total of 1,734,260 tonnes for all varieties in Australia, comprising 2.6% of the total crush and 4.6% of the total crush of all red varieties. Further, ten percent of pinot noir crush was from Tasmania. Further, Tasmania has produced an estimated average winegrape crush of around 12,000 tonnes per year over the 6 years from 2017 to 2022, which equates to approximately 8 to 9 million litres of wine. This accounts for less than 1% of Australia's total wine production. 61 The typical Australian wine drinker to the extent there is such a consumer does not purchase or drink very much pinot noir. 62 Cheap pinot noir is typically priced at around $25 per bottle, whereas a good quality pinot noir is typically priced at between $40 to $65 per bottle or potentially higher. I note that New Certan wine has sold in the range of $75 to $95 per bottle. In contrast, the majority of all wine sold in Australia is priced at below $25 per bottle. 63 Let me turn more generally to the pricing of Australian wine. Prices of Australian wine 64 It is important to appreciate that wine is comparatively expensive in Australia, when compared to average prices in Europe. There is no international formalised set of definitions concerning market segments and prices of wine. 65 The pricing of expensive wine in Australia has shifted significantly. For example, around five years ago, Australian wine drinkers would not typically purchase a bottle of Australian wine for $150. However, presently, $150 is not an uncommon price for a "super premium" wine. 66 The price of iconic wines such as Penfolds Grange has increased dramatically over the years. In 1984 the then current vintage of Penfolds Grange was selling at a retail price of between around $50 to $70 a bottle. The 2018 Penfold Grange is currently $1,000 per bottle. Producers of such exclusive iconic wines have generally increased their price per bottle by around $50 each year. As an example, Henschke, a small family owned wine producer, followed this practice with their Hill of Grace wine. The increased price of wines such as Grange and Hill of Grace has the effect of creating room in the market for wines priced beneath that level. 67 The increase in the price of "premium" wines, that is, a wine sold for $25 or above, is due in part to the increased willingness of consumers, particularly Chinese consumers, to pay high prices for premium Australian wine. This practice has driven up the price of many premium wines. Consumers purchasing premium and non-premium wines 68 Now Mr Jeremy Oliver, one of the respondents' expert witnesses and whose evidence I have accepted on some topics, described the typical consumer of non-premium wines to the extent there is such a typical consumer. 69 He took the price point of less than $25 as describing a non-premium wine. A consumer purchasing a wine under $25 is someone who likes wine, but is not obsessed by it. For example, if you are buying three bottles per week, this would equate to spending around $75 a week on wine, which is, for many people, a large amount of money for a discretionary purchase. This type of consumer may buy a $50 bottle of wine for a gift or special occasion, but not very often. 70 Mr Oliver described the typical consumer of wines at a price point of $70 to $100 to the extent there is such a typical consumer. He considered that the purchaser of a $70 to $100 bottle of wine is likely to be either someone that has a cellar or collection, or a consumer who wants to buy a nice gift or otherwise has significant disposable income. Such consumers are generally better informed about wine than consumers of wine priced at $25 or less. To understand and justify spending $70 to $100 on a bottle of wine, such a consumer might have one or more characteristics such as being wealthier, being better educated about wine, being a subscriber to a wine publication or website, using wine apps such as Vino and Decanter to value and gain information about wine, being a member of a wine club or a wine group, or visiting wineries and showing off their knowledge of wine. 71 These types of people would regard themselves as being engaged with their purchase. That is, the purchase of wine at this price point will likely involve careful consideration of the wine being offered for sale, its characteristics, the "story" behind the vineyard, and critical reviews of that wine. Such matters will aid in justifying spending $70 to $100, when such consumers could otherwise purchase something drinkable at $25. 72 In relation to a consumer purchasing a $500 bottle of wine, these consumers would be a small subset of consumers purchasing a $70 to $100 bottle of wine in the sense that they would not exclusively buy $500 bottles; their everyday drinking wines will likely cost less than $500. However, that does not suggest that a typical consumer of $70 to $100 wine is likely to buy a $500 bottle of wine, but that the "$500 consumer" will also typically be prepared to spend less than this amount on wine. There are very few consumers who have both the disposable income and the interest to be spending $500 on a bottle of wine in the first place. 73 The above attributes would also apply to consumers at the $500 price point. Consumers of $500 bottles of wine are likely to purchase such a wine to be cellared for later consumption. Mr Oliver expected these consumers to be aware that by the time they take possession of the wine, it will be at least four to five years old, and might typically need another decade or more of cellaring before the optimum time to drink the wine arrives. These people will almost invariably have a very detailed knowledge about wines and be acutely aware of the wine that they are buying. These people will also often be looking to make a statement by purchasing and later serving such wine, for example, they might have a collection of Mouton Rothschild or vintages of Haut-Brion. 74 I will return to the question of consumer classes later. What do Australians know about Bordeaux and Bordeaux wines? 75 The average Australian wine consumer, that is, someone who typically purchases wine at $25 or less per bottle, would have minimal awareness and understanding of Bordeaux, its regions and estates. Amongst the average Australian consumer, only a small proportion are likely to have heard of some of the more famous brands from the Medoc region in Bordeaux, such as Lafite and Latour, and maybe Haut-Brion from Graves. Such consumers might be aware of the elite and therefore expensive châteaux but even if so are unlikely to be able to name many châteaux below that elite level. 76 Mr Oliver commented on the knowledge that Australian consumers typically buying wine for around $70 to $100 per bottle would have of Pomerol in Bordeaux, and further VCC. 77 Only a tiny percentage of Australian wine consumers would have heard of the Bordeaux sub-regions, less would be aware that there is a Right Bank area and a Left Bank area, less again would be aware of Pomerol, and less again would be aware of VCC. Serious wine collectors and people who buy Bordeaux wine every year will be aware of Pomerol. 78 Mr Oliver commented on the type of consumer who would purchase a bottle of wine from Pomerol at a price point of $500, and whether any cross-over might exist between this person and a consumer interested in buying a $75 to $95 Tasmanian pinot noir. In his view, which I accept, the likelihood of such a consumer "crossing over" is small, at best. The people interested in buying Bordeaux and Burgundy are often quite different people. If you are spending $500 buying a wine from Pomerol, you are a rare customer. People who collect wines from Pomerol and Right Bank châteaux are typically deeply engaged with Pomerol and its wine, which is what drives up the prices of Right Bank wines. People who are buying such Bordeaux wines at $500 will almost invariably have carefully selected cellars. That said, such a person may also be an enthusiast of pinot noir, and might be prepared to buy an expensive pinot noir, of which Tasmanian pinot noir represents only a tiny fraction of the market. 79 The evidence also establishes that a typical customer of a $500 Pomerol wine would generally obtain a personal allocation from a retailer or distributor importing these wines into Australia, known as a "negociant". Accordingly, they are likely to have connections with and be aware of who is importing the wines. 80 The negociant and customer relationship is a very personalised one, in the sense that these consumers are not required to wait until the wines arrive in Australia to be sold at full price, but they often buy en primeur. The en primeur system is the traditional means by which trade and customers are able to buy wines from Bordeaux châteaux with a payment prior to delivery, but set at a lower price than later sales of the same wine. Additionally, these buyers would have typically read reviews of the vintage they are purchasing. This is because they are more engaged with the purchase decision, are seriously committed to it, and will often have favourite châteaux. For example, there are some Australian purchasers who buy wine in large volume and also have cellars in France or London used to initially store that wine before importing it to Australia. 81 Dealing with the reverse position, Mr Oliver commented on the type of consumer who would purchase a $75 to $95 Tasmanian pinot noir and the cross-over to the extent that it exists between this person and a person buying a $500 bottle of Pomerol wine. 82 Based on his experience and knowledge of the Australian wine market, he considered Tasmanian pinot noir to be somewhat niche. Production of Tasmanian pinot noir is minuscule in the context of Australia's national wine production. However, it is currently the subject of significant favourable media coverage. Tasmanian pinot noir does not have a substantial international reputation, but does have a local reputation within Australia. In his experience, a large proportion of Tasmanian pinot noir is drunk and sold within Tasmania or by people travelling through Tasmania. 83 In his experience, any cross-over between consumers purchasing $75 to $95 Tasmanian pinot noir and $500 Pomerol wine would be small at best. Based on his experience and knowledge of Australian consumers and their buying habits, and the market segments for Australian wine, he considered that if someone is spending $75 to $95 on a Tasmanian pinot noir, they are committed to pinot noir and in particular Tasmanian pinot noir. Accordingly, it would be unlikely for such a consumer to spend $500 per bottle on Bordeaux wine. 84 Further, Mr Oliver observed that consumers typically have specific preferences which narrow their interest to particular wine styles and varietals. Tasmanian pinot noir is typically light to medium body in structure and of medium flavour intensity, whereas the premium wines from the right bank in Bordeaux deliver significant depth of flavour and structure. In his opinion, they could hardly be more different. 85 Further, in his experience a Tasmanian pinot noir drinker would be more expected to gravitate to and be far more interested in Burgundy and Rhone wine, unless they are an individual who likes and purchases every style of wine, which is rare. 86 I accept his evidence on such matters. The witnesses 87 Let me say something more at this point concerning the witnesses. VCC's witnesses 88 As I have said, Mr Thienpont is the manager of VCC. He gave evidence about the history of the VCC wine estate, the history of VCC, the way in which VCC's wines have been labelled over time, the sale and promotion of the VCC wines, VCC's discovery and reaction to the New Certan wine and the absence of any commercial connection between VCC and the respondents. Mr Thienpont was cross-examined very briefly, but the substance of his evidence was not challenged. 89 Mr Huon Hooke is a professional wine writer and critic with more than 40 years' experience in the Australian wine industry. He gave expert evidence about the characteristics of Australian wine consumers, the Bordeaux region and the Pomerol sub-region and the extent of their reputation in Australia, the involvement of French wine producers in Australian wine businesses, the reputation of the VCC wine estate and its wines in Australia, the presentation of VCC's wines and his experience of the New Certan wine. Mr Hooke was cross-examined briefly. 90 Ms Jane Faulkner is a professional wine writer and critic with more than 20 years' experience in the Australian wine industry. She gave expert evidence about the reputation of the VCC wine estate and its wines in Australia, the presentation of VCC's wines and her experience of the New Certan wine. Ms Faulkner was cross-examined briefly. Ms Faulkner was a straight-forward witness. She gave short and sharp answers to the questions asked. 91 Mr Daniel Airoldi is a wine importer and distributor with more than a decade's experience in the Australian wine industry and a particular interest in Bordeaux wines. He gave evidence about how Bordeaux wines are typically sold, the reputation of the VCC wine estate and its wines in Australia, and his experience of the New Certan wine. Mr Airoldi was cross-examined. 92 Mr Andrew Caillard MW is a Master of Wine, which is a prestigious international wine qualification. His particular areas of expertise are the wines of Bordeaux and the Australian wine auction market. He gave expert evidence about how Bordeaux wines are typically sold, the reputation of the VCC wine estate and its wines in Australia, the presentation of VCC's wines and his reaction to the New Certan wine. Mr Caillard was cross-examined. 93 Mr Timothy Evans is the National Business Manager of Imported Wines at Negociants Australia, an Australian wine distributor; the business is operated by Samuel Smith & Son Pty Ltd. He gave evidence about the promotion and sale of Bordeaux wines in Australia, including the VCC Wine, but was not cross-examined. 94 Mr Philip Rich is a wine professional with more than 35 years' experience in the Australian wine industry, involving wine writing, wine judging and the importing and retailing of wine. He gave evidence about the reputation of the VCC wine estate and its wines in Australia, but was not cross-examined. 95 Mr John Myers is a director of Dunkeld Pastoral Co. Pty Ltd, which operates the Royal Mail Hotel at Dunkeld. He gave evidence about the availability and promotion of the VCC Wine at the Royal Mail Hotel, but was not cross-examined. 96 Ms Caroline Ryan is the solicitor for VCC who gave evidence in relation to publications available in Australia which refer to the VCC wine estate and its wines and publications referring to the New Certan wine. She was not cross-examined. 97 Let me at this point say something more about VCC's witnesses. 98 To support its claimed reputation in, or consumer recognition of, the VCC features and the word "Certan", VCC relied upon these various wine professionals. But none of these witnesses is representative of the ordinary and reasonable consumer. Each of them is an expert in wine, with a high degree of interest in, and level of knowledge of, French wines, including wines from the Bordeaux region. In fact, each of them has spent time in the Pomerol area, and many of them have visited and dealt directly with VCC in their professional capacity. Contrastingly, none of them are marketing or branding experts. 99 VCC suggests that this is a rare case in which the trade is involved and were or were likely to be misled. But the probative evidence about the nature or extent of that class was thin. 100 VCC's only attempt to identify the trade was to lead evidence from experts with a high degree of knowledge of and an interest in Bordeaux wines, many of whom have esoteric and idiosyncratic personal experiences. 101 In particular and as I have indicated, Ms Faulkner is a wine writer who has travelled to leading wine regions, including in the sub-region of Pomerol, since the late 1990s for her professional development which Ms Faulkner said are an important part of learning about these regions, the vineyards, the producers and their wines. She has read extensively on the Bordeaux region and its wines, including the VCC wines. She has written on wines and wine producers from the Bordeaux region, including the VCC wine. She attended the 2011 dinner at Jacques Reymond that I will discuss later. 102 Mr Hooke studied the Bordeaux wine region of France as part of an Associate Diploma in Wine Marketing and Production in 1980 and 1981. He now teaches about the Bordeaux region in masterclasses on wine. He has travelled extensively in connection with his work in the wine industry, including spending six months during 1985 visiting wine regions, including Bordeaux. He has written about French wines, including wines from Bordeaux, since 1983. He has published a number of reviews on the VCC wine. 103 As I have said, Mr Caillard is a Master of Wine. He has over 42 years of experience, which commenced with four months working in the Bordeaux region. He has read extensively about wine regions and wine producers. In 1989, he established and managed the Sydney office of Langton's Fine Wines, a specialist fine wine auction house. From 2003 onwards, Mr Caillard regularly travelled to Bordeaux to source wines for Langton's, including from VCC. He has visited the VCC estate on many occasions. 104 Mr Rich is a wine professional who has been involved in sourcing and selling a range of French wines, including from Bordeaux, from at least 1996 when he founded Prince Wine Store. He taught an introductory French wine course, which focused on Bordeaux, Burgundy, Champagne and Rhône. He attended Bordeaux en primeur week in 2011, which included tasting the VCC wine. 105 As I have said, Mr Airoldi is a wine professional who has a particular interest in Bordeaux wines. He is originally from Pessac, an outer suburb of Bordeaux, and would cycle around Pomerol from time to time and pass the VCC wine estate when he was growing up. He has experience in the French wine industry, in which context he was involved in the 2010 Bordeaux en primeur campaign. He has completed wine qualifications, which included studying Bordeaux wines. He is completing his Master of Wine studies. From 2012, he has travelled to Bordeaux each year for en primeur week and to visit négociants and Châteaux contacts. He has taught subjects on Bordeaux wines. 106 Mr Evans has worked in the wine industry since 1993. He has been the National Business Manager of Imported Wines at Negociants Australia since 2007. He travelled to Bordeaux including Pomerol in 1996 whilst in France working a vintage in another wine region, and in the last 22 years, has attended or hosted dozens of Bordeaux wine-tasting events. 107 And as I have said, Mr Myers is a director of the company which owns and operates The Royal Mail Hotel in Dunkeld, Victoria, a food and wine destination venue. In that role, he oversees a collection of more than 30,000 bottles of approximately 3,700 wines, which collection was started in the early 1970s by his father who apparently had an interest in French wine. According to Mr Myers, his father began purchasing and importing VCC wine in the mid-1980s. Mr Myers has travelled to Pomerol as recently as 2017, at which time he was given a tour of the VCC by Mr Thienpont. 108 Now each of these witnesses is very knowledgeable and is not representative of the ordinary and reasonable consumer of a $75 to $95 bottle of Tasmanian pinot noir. They are similarly not representative of the ordinary and reasonable member of the wine trade. I agree with the respondents that in assessing these witnesses' evidence on the question of whether the ordinary and reasonable person would have knowledge of wines from the Pomerol region generally, let alone knowledge of VCC or its wines specifically, and more particularly of the VCC features or the name Certan and any particular association between those features and VCC, caution must be exercised. 109 Let me say something about the respondents' witnesses. The respondents' witnesses 110 Mr Craig Devlin is a director of both Kreglinger and PBV. He gave evidence about the management of Kreglinger and PBV and the sale of the New Certan wine. Mr Devlin was cross-examined. 111 Mr Oliver is a wine author and critic. As I have indicated, he gave evidence about the Australian wine market and consumers, the Bordeaux and Burgundy wine regions, naming and labelling practices for Bordeaux wines, the VCC wine estate and its reputation in Australia and the New Certan wine and his reaction to it. Mr Oliver was cross-examined, and occasionally was a little testy. To the extent that there is a conflict between the evidence of VCC's experts, namely Mr Hooke, Ms Faulkner and Mr Caillard, and the evidence of Mr Oliver, on some topics I have preferred the evidence of Mr Oliver. 112 Mr de Moor is a director and the CEO of both Kreglinger and PBV. He gave evidence about the operations of Kreglinger and PBV, his family history, his shareholding in VCC, his understanding of the name Certan, his knowledge of VCC and its wines, and the development, promotion, labelling and sale of the New Certan wine. Mr de Moor was cross-examined. Some aspects of Mr de Moor's evidence were not reliable. 113 Ms Annette Harcus is the creative director of Harcus Design who gave evidence about the process of designing the packaging of the 2011 and 2016 vintages of the New Certan wine. She was not cross-examined. 114 Ms Sandra Hathaway is a senior analyst at Wine Australia who gave evidence about a range of wine industry statistics. She was not cross-examined. I have referred to some of these statistics earlier. 115 Mr Jonathan Kelp is the solicitor for the respondents who gave evidence in relation inter-alia to the third party use in Australia of the name Certan, and the use of pink or similarly coloured capsules on wine bottles and materials. He also gave evidence concerning textbooks and other materials referencing the name Certan or pink or similarly coloured capsules, but he was not cross-examined. 116 Ms Rebecca Pereira is also one of the solicitors for the respondents who gave evidence about a visit to a Dan Murphy's retail store in leafy upper middle-class Malvern East, Victoria and some wines that she observed during that visit. She was not cross-examined. 117 Ms Julia Kingwill is also one of the solicitors for the respondents. She gave evidence about visits to various retail wine stores in middle-class South Melbourne, Victoria and some wines that she observed during those visits. She was not cross-examined. Other matters 118 Let me refer to some other matters that it is convenient to deal with at this point. 119 First, during the trial VCC introduced a new foundation for its alleged misrepresentations, namely, the promotion of the New Certan wine on the basis of Mr de Moor being related to the Thienpont family of VCC and having a connection with the VCC wine estate. But that allegation relied upon various articles, all of which were published from July 2018 onwards and being after the relevant date. 120 Second, VCC also tendered copies of communications between employees of Kreglinger and representatives of Dan Murphy's, Coles and Winestate Magazine from November 2020 onwards in relation to the New Certan wine, but those communications also occurred after the relevant date. 121 Third, although VCC has relied on various documents as evidence of how the respondents promoted the New Certan wine to members of the wine trade, it does not allege that the publication of those articles or the sending of those communications themselves contravenes the ACL. 122 Fourth, during the trial there was an inordinately high level of evidence that was given from the Bar table. Perhaps this is explicable given the nature of the subject matter and the fact that counsel for the parties were drawn from the fashionable and expensive end of the Commercial Bar. Further, it seemed to be suggested that judicial notice could be taken as to the characteristics of some of the products and where they could be purchased and consumed. Unsurprisingly I declined that invitation. 123 Fifth, as far as the smorgasbord of expert evidence was concerned, much of it was nebulous and subjective. I have had to plate this together, taking bits and pieces from different witnesses for different purposes. The presentation, sale and promotion of VCC's wines 124 Although there have been some changes over time, the presentation of both the VCC Wine and the Gravette Wine have been largely consistent for decades. The presentation of VCC's wines includes the following distinctive features. 125 First, there is a pink capsule, with gold decoration around the base and on the top of the capsule. 126 Second, there is a label featuring the name Certan, as a prominent part of the names Vieux Château Certan and La Gravette De Certan. Further, the label uses a pink font for the first letters of the name of the wine (Vieux Château Certan and La Gravette de Certan). Further, as to the label, in the case of the VCC Wine, the name Vieux Château Certan means "Old Chateau Certan" or "Old Certan Estate", the words Grand Vin mean "great wine", and Mis En Bouteille Au Château mean "bottled at the estate", in pink font. Further, there is a centrally located image of a stately house known as the Vieux Château Certan, which is located on the wine estate owned by VCC. Further, there is a fluted edge profile. 127 These VCC features are in many respects distinctive and unusual. 128 The pink capsule appears as follows: 129 Earlier vintages of the VCC Wine and Gravette Wine were sold with the front labels depicted below: 130 Earlier vintages of the VCC Wine and Gravette Wine were sold with the rear labels depicted below: 131 Recent vintages of the VCC Wine and Gravette Wine are sold with the front label depicted below, with the year for the relevant vintage added to the centre of the label: 132 The overall presentation of both wines is as follows, with the year for the relevant vintage added to the centre of the label: 133 Mr Hooke gave evidence, which I accept, that the visual presentation of VCC's wines was distinctive and unusual. He said that the pink capsule used on the VCC Wine and Gravette Wine were distinctive and unusual. He also said that the labels of both the VCC Wine and Gravette Wine have other features that were distinctive and unusual, namely the fluted edging of the label and the use of pink font for the capitalised letters of the wine name. He said that taken together, the pink capsule, the fluted label and the pink font which features on the label were unusual and distinctive. I accept such evidence and observations. 134 Mr Caillard gave evidence that with respect to VCC, the name Vieux Château Certan appears prominently on the label, together with an image of the Château at the estate. The label itself has an aged appearance, which to him reflects the history of the wines. To him, these elements of the VCC wine labels convey a sense of history, place and prestige. He said that VCC is also distinguished by the use of the pink capsule. He regarded this capsule colour as unusual for Bordeaux wines, and when he saw VCC wines amongst other Bordeaux wines, they stood out to him for this reason. The pink capsule has become part of the narrative of the VCC wines as it has a widely reported historical story attached to it. I accept his evidence on these aspects. 135 Mr Caillard also agreed that the name of the wine, Vieux Château Certan or La Gravette de Certan, is important. However, he also considered that the overall visual appearance of the wine label and the pink capsule is how he would visually identify the bottle itself at first instance. To him, the label presentation of the VCC Wine and the Gravette Wine is unique for Bordeaux, and successfully conveys the product narrative and sense of history, place and prestige of VCC. The name of the wine is prominent, with pink font used as the first capitalised letter of each word in the name 'Vieux Château Certan' and 'La Gravette de Certan'. This same pink colour is used for the words Grand Vin and Mis En Bouteille Au Château. Further, the wine labels feature a reference to the Thienpont family. Further, he said that the pink capsule of the VCC wines is a significant and distinguishing feature of the estate's product presentation. Again, there is no basis not to accept his evidence on such matters. 136 Mr Rich also said that to his mind, VCC bottles are memorable, particularly when compared to other Bordeaux wines. He regarded the pink and gold wine capsule as eye catching when on a wine shelf in a retail store or on a tasting table with other Bordeaux wines. He also considered the serrated edge of the label to be unusual, as is the dusky pink font used to accent the first letter of the name of the wine. 137 Now Mr Oliver maintained that in respect of the VCC Wine, the most important aspect of its presentation was its name, rather than the distinctive aspects of its appearance. But Mr Oliver's approach did not give proper weight to the importance of the overall presentation of the VCC Wine for both consumers and the trade. Further, the body of evidence before me amply supports the conclusion that the overall presentation of VCC's wines is distinctive, notwithstanding that it shares some individual features in common with other wines. 138 Further, the name Certan has some association with VCC and its wines, but also other producers who use the name Certan. But VCC has no monopoly in that word, and any reputation that it may have does not derive wholly or substantially from that word. I will return to this later. 139 Let me now turn to how the VCC sells its wines. 140 VCC sells its wines through a structured market known as La Place de Bordeaux, which is widely used by the premium wine estates of Bordeaux. Within that market, courtiers are retained by wine estates to negotiate the sale of wines to négociants, which are wine brokers who on-sell the wines to distributors around the world. 141 The wines are primarily sold en primeur, meaning that they are purchased prior to being bottled and delivered some months later. Again, this is common amongst the premium wine estates of Bordeaux. The en primeur campaign is conducted annually. Over the course of several weeks from March to May, VCC typically hosts about 1,000 wine writers, journalists, negociants and wine merchants for tastings of the forthcoming wines. The outcome of those tastings informs the price that can be commanded for the vintage in question. 142 VCC retains a small number of courtiers for each vintage and its wines are typically sold through those courtiers to about 45 different négociants. This ensures that VCC's wines have the best opportunity to be as widely distributed as possible. The négociants then on-sell the wine to their customers, some of whom are also wine professionals who in turn sell the wine to their customer networks. As part of La Place de Bordeaux, VCC's wines are also sold through two separate wine negociant businesses that are operated by other members of the Thienpont family, namely Thienpont Wine in Etikhove, Belgium, and the Bordeaux based Wings. 143 VCC itself also engages in a range of promotional activities, including conducting promotional tours and tastings both as part of the en primeur campaign and otherwise, giving interviews to the wine media and conducting promotional events including in Australia. Many internationally renowned wine writers and critics have posted on social media or published articles on the internet about their visits to the VCC wine estate. 144 Further, the VCC wine estate and its wines have been referred to extensively in wine books and wine magazines including Wine Spectator, World of Fine Wine, The Wine Advocate and Gourmet Traveller Wine. These have been published internationally and in Australia. VCC and its wines have also featured in articles published in the Australian media. The extracts set out below from wine books are examples of how VCC has been described to international and Australian audiences over recent decades: 145 In Bordeaux by David Peppercorn (1982) it was said: Vieux Château Certan One of the few growths of Pomerol to boast a fine château. The oldest part is seventeenth-century and the whole building is very pleasing, with its two squat towers of differing ages and proportions at either end. It is beautifully kept by the Thienpont brothers, Belgian wine merchants whose father bought the property in 1924. Originally, it had belonged to the Demay family, who sold it in 1850 to Charles Bousquit. This has always been regarded as one of the top growths of Pomerol, and in recent years its reputation has spread to England and the USA, while the excellence of the wines has been equalled by their consistency … 146 In Grand Vins – The Finest Château of Bordeaux and Their Wines by Clive Coates (1995) it was said: Vieux Château Certan, it is said, dates back to the early sixteenth century, when it was a manor house and the centre of quite a large estate dominating a little plateau, about 35 metres above sea level, two or three kilometres north-east of the old port of Libourne. If this is so, it is probably the oldest property in the area. It is certainly one of the largest in a commune where few properties produce more than a few dozen tonneaux. And it is also one of the best. After Pétrus itself, Vieux Château Certan can compete, if it so wishes, with L'Evangile, La Conseillante, Lafleur and Trotanoy for the title of number two in the commune of Pomerol. … One curious detail is the capsule, which, unlike most clarets is not wine red or black, but shocking pink, with a gold band. This was Georges Thienpont's idea, in order to make the wine easy to pick out. The wine is matured for between 20 and 22 months and not filtered before bottling. The second wine is called La Gravette de Certan. … Vieux Château Certan has been producing excellent wines for decades. There were splendid bottles in the 1920s, a superlative 1947, a fine 1952 and 1959, and a notable 1964. Since Alexandre Thienpont has been in charge the intensity of the wine has, if anything, increased even more ... 147 In Pomerol by Neal Martin (2012) it was said: In recent years, a succession of fêted vintages has firmly installed Vieux Château Certan in the top echelon of Pomerol wine, with a loyal, devoted fan base that buys the wine year in and year out. It's not just a wine they are purchasing, but a bottle of history. Vineyard I regard Vieux Château Certan as the epicentre of Pomerol, perhaps due to its historical significance and its name, or maybe because it seems to stand like a sentry at an important junction on the plateau ... … After fining with egg whites, the wine is bottled with its distinctive pink capsule chosen by Georges Thienpont to make it stand out from the crowd ... 148 In relation to the documentary evidence tendered concerning third party publications, I admitted much of that material subject to a limitation under s 136 of the Evidence Act 1995 (Cth) such that third party statements contained in these publications were admitted not to prove the truth of the fact asserted or the opinion expressed, but rather as evidence of the fact that such views were held and expressed at the time of the relevant publication(s). 149 The VCC Wine has been to a limited extent sold in Australia since at least the 1980s, including through a major Australian wine distributor, Negociants Australia, and through auction houses such as Langton's. 150 In relation to the VCC Wine, the records of Negociants Australia date back to the sale of the 1995 vintage, which wines were delivered to customers in Australia in 1998. Those records show that the VCC Wine has been sold by Negociants Australia since that time. 151 Moreover, it has also been promoted and sold through prominent retailers such as The Prince Wine Store in Melbourne, through tasting events and restaurants. 152 PBV itself has promoted and offered for sale the VCC Wine, along with the wine of Château Le Pin in Australia. Kreglinger has been promoting the VCC Wine since at least 2011. It appears that Kreglinger obtained these wines from its Belgian parent company. 153 On 21 February 2011, Kreglinger invited guests to attend an Armadale Cellars dinner at Jacques Reymond in Melbourne which featured vintages of the VCC Wine with vintages of the Château Le Pin wine. The Kreglinger invitation included images of both the VCC Wine and Le Pin wine labels, and stated "[b]oth estates are recognised as two of Bordeaux's most prestigious producers. Their wines are highly sought after collector's items, held in high regard world-wide, and rarely available within Australia". 154 The VCC Wine and the Château Le Pin wine were also featured in trade brochures issued by PBV in 2016, 2017 and 2019. Those trade brochures contain images of the full bottle presentation of the VCC Wine and the following description of VCC and the VCC Wine: "[t]he Vieux Château Certan estate is located in the heart of the Pomerol plateau. Fermented in oak vats and aged in new French oak barrels, Vieux Château Certan is regularly ranked by the world's press and international tasting panels among the very top wines. With its brilliant dark garnet colour, outstandingly rich red fruit aromas, elegant, silky structure and beautiful balance, it displays inimitable style and finesse". 155 Further, the 2017 and 2019 versions of these trade brochures promoted both the VCC Wine and New Certan wine in the same document. But I do not accept VCC's assertion that this in and of itself suggests a commercial link between the New Certan wine and VCC and/or the VCC Wine. 156 Let me now turn more directly to the question of some of the evidence led concerning reputation. Evidence of reputation or consumer awareness 157 The wine industry experts who gave evidence on behalf of VCC gave evidence as to the nature and extent of the reputation of VCC and its wines in Australia. 158 Mr Hooke gave evidence that in his experience both VCC and the VCC Wine were known to Australian wine professionals and some consumers, and in particular those with an interest in very high quality French wines, from at least the 1980s. Further, he said that the reputation of VCC and its wines in Australia has increased over time and he also said that VCC and its wines had a significant reputation amongst Australian wine professionals and consumers, and in particular those with an interest in high quality French wines, both before and after 25 November 1999. And this was particularly applicable to wine consumers and professionals who have an interest in Bordeaux, such as the consumers and professionals who have attended his Bordeaux masterclasses and tasting events and those who read wine publications. Now I do not accept that there was a sufficient reputation as at 1999, but I do accept that there was one as at 2013. 159 Ms Faulkner gave evidence that in her experience in the wine industry, VCC is an internationally renowned wine estate in Pomerol. It has produced a famous red wine of the same name, the VCC Wine, for nearly a century, and since the mid-1980s has produced the Gravette Wine. 160 Further, Mr Caillard stated that based on his 42 years of experience in the wine industry, and in particular, his many years of experience selling Bordeaux wines at auction, he believed that VCC is regarded as one of the great producers of the Pomerol appellation by many wine writers, critics and consumers of fine wines. To him, it is an ultra-fine wine which has had for many decades now a very special reputation with wine professionals and consumers of Bordeaux wine, both in Australia and internationally. In his experience, the VCC Wine is a highly regarded, ultra-fine Bordeaux wine which is produced in very small quantities. The rarity and special reputation of its wines is reflected in the prices at which the wines are offered for sale. As such, he would not expect many Australian wine consumers to have bought or tasted the VCC Wine or the Gravette Wine. However, he did believe that many Australian wine consumers who have an interest in fine wines would know of and be interested in these two wines, without necessarily having the means or access to experience or purchase bottles. In his experience, this is quite common in the fine wine industry, where many consumers attend wine tasting events and read wine columns and books, but cannot necessarily purchase or experience the ultra-fine wines or visit the wine estates firsthand. 161 Mr Caillard also said that serious wine collectors and people who buy Bordeaux wine every year will be aware of the Pomerol sub-region of Bordeaux. However, he did not agree that, even amongst this cohort, recognition of VCC or its wines will be limited. He believed that those with an interest in Bordeaux wines who purchase vintages year on year would be aware of both the Pomerol sub-region and its most famous producers, which in his view included VCC. In his experience of working at Rushton and with Langton's, these consumers who purchase Bordeaux wines annually are likely to know of VCC, and are, in many cases, likely to have had the opportunity to purchase and taste its two wines. 162 Mr Oliver appeared to suggest that the reputation of VCC and its wines was less significant in Australia than the views of Mr Hooke, Ms Faulkner and Mr Caillard would indicate. However, he agreed that VCC is a well-known, respected château. He described it as prestigious. He also agreed that because of its cost, it is likely to be an aspirational product. However, he sought to confine this favourable reputation to a very small cohort of consumers who are highly engaged with Bordeaux wines. 163 Now VCC pleads that it has developed a valuable and distinctive reputation and substantial goodwill among wine consumers and the wine trade in Australia in relation to the VCC Wine and the Gravette Wine, the name Certan only, and the combination of the VCC features. But VCC has abandoned its claim concerning the name Certan only. It opened its case on the basis that it did not claim that its reputation accrues in relation to the name Certan simpliciter. It accepted that it kept company with the rest of the words and markings on the label and more generally the VCC features. 164 Let me elaborate further on some themes relevant to the question of reputation in Australia. And at the outset, let me again say that I am not satisfied that VCC had the requisite reputation as at 1999, but that it had it by 2013. The level of sales 165 I agree with the respondents that the scarcity of the VCC wines is reflected in the evidence of sales. When taken at its highest, the evidence shows that VCC has sold only a few thousand bottles of the VCC Wine in Australia since 1989, and the evidence shows that only around 190 bottles of the Gravette Wine have been imported into Australia during that period. 166 When measured against the Australian wine market, the volume of products sold is very small. These sales of the VCC Wine are likely to represent around 0.01% of Bordeaux red wine, and less than 0.002% of French red wine, sold in Australia since 1989. 167 Sales of Bordeaux wine comprised approximately 10% of off-premise retail French red wine sales in 2021. In that year, imports of French red wine totalled approximately 6.8 million litres. Assuming imports roughly approximate sales, this equates to approximately 680,000 litres or approximately 907,000 bottles of 750ml wine. At approximately 100 bottles of VCC sold per year, this equates to approximately 0.011% in 2021. 168 Imports of French red wine totalled approximately 4.2 million litres in 2013, 5.3 million litres in 2017 and 6.8 million litres in 2021. Taking the lowest of those values in 2013, this equates to approximately 5.6 million 750ml bottles of French red wine. At approximately 100 bottles of VCC per year, this represents less than 0.002%. Promotional or marketing activities 169 The evidence establishes that VCC does not engage in promotional or marketing activities in Australia or directed to Australian consumers. 170 VCC appears to accept this, but it relies upon the promotion of its products by Australian resellers or distributors, such as Negociants Australia and Airoldi Fine Wines, at auction houses such as Langton's, and at prominent retailers such as Prince Wine Store. 171 Negociants Australia has offered the VCC Wine for sale as part of its portfolio of Bordeaux wines since at least 1996. But there is no evidence of promotion of the VCC Wine by Negociants Australia in any relevant sense. The VCC Wine is one product in a long list of products which was available for purchase; more than 200 products are listed in each of the 2009 and 2020 lists. And the product itself is not depicted in the Negociants Australia lists. 172 Airoldi Fine Wines has offered the VCC Wine for sale as part of its portfolio of Bordeaux wines since 2012. Again, the VCC Wine is one product in a list of many other wines. The product itself is not depicted. Whilst Mr Airoldi gave evidence that he has hosted hundreds of educational activities such as wine dinners, tastings and masterclasses around Australia, he identified only two relating to the VCC Wine. In the first of those tastings in March 2016, the VCC Wine was featured as one of 30 wines on that evening. In the second in September 2018, the VCC Wine was one of 50 wines. And whilst Mr Airoldi gave evidence of conducting annual tours to Bordeaux, the only evidence of visiting the VCC estate relates to a small group of between 8 to 10 Australian customers in October 2017. On a similar tour in 2019, Mr Airoldi did not visit the Pomerol region, let alone the VCC estate, apparently for no specific reasons. VCC similarly did not feature on the brochure for the 2021 tour. 173 Now Langton's commenced its own Bordeaux en primeur campaign in 2004, and in that context sourced and imported wines from Bordeaux including the VCC Wine. It sold the VCC Wine at auction prior to that time from about 1989. The evidence includes a copy of the Langton's Vintage Price Guide published in 1991, which exemplifies how the VCC Wine was promoted at that time. In short, a few vintages of the VCC Wine are located amongst hundreds of listings in the "Red Bordeaux" section of a 200+ page book. Château Certan de May and Château Certan-Giraud also appear in the guide. The VCC Wine is now available via the Langton's website. I must say that the evidence of sales via Langton's was underwhelming. 174 Further, Prince Wine Store secured VCC's wines from time to time and offered them for sale to customers in Australia. This included as part of en primeur campaigns run by Prince Wine Store for its customers. In those campaigns, the VCC Wine appeared amongst a long list of Bordeaux wines, with no particular prominence and no images of the product. Mr Rich gave evidence that the VCC Wine was featured with other exclusive Pomerol wines such as Petrus and Château Lafleur on occasion at tastings and educational events, but he did not identify any specific events or suggest that this was a regular occurrence. His evidence also suggests that such events would typically feature between 20 to 30 Bordeaux wines. There is no evidence indicating the volume of sales of the VCC Wine via Prince Wine Store. 175 The other example of promotional activity is a VCC and Le Pin dinner at Jacques Reymond in February 2011. This event was hosted by Kreglinger, as it coincided with a visit to Australia by Jacques Thienpont and his wife to attend an event for Mr de Moor's 50th birthday. It was a one-off event which took place several years before the 2011 vintage of the New Certan wine was released onto the market. 176 Moreover, save for generalised assertions by Mr Rich, there is no evidence of any specific promotional events involving the VCC Wine in Australia prior to 1999. The relevance of the wine press? 177 VCC says that both itself and its wines have been promoted in Australia to Australian audiences extensively through what the parties referred to before me as the wine press. 178 Mr Hooke's evidence is that he and his team taste and review over 10,000 wines submitted by wine producers each year from around the world and that his website, The Real Review, now hosts his 50,000 tasting notes which he has published during the course of his career. Mr Hooke explained that, by around 2018, he was publishing about 5,000 wine reviews each year, roughly 100 wines per week. For a simple, straightforward wine he could sum it up very quickly, but for very complex wines, especially an aged red, he would come back several times over four or five minutes. 179 In 1983, Mr Hooke started writing a weekly wine column in the Australian Financial Review, and since then he has written and published thousands of articles, columns and other pieces about wine in various publications, including the Australian Financial Review, the Sydney Sun-Herald, Sydney Morning Herald and Decanter magazine. He has also been the Australian correspondent for the Oxford Wine Companion and World Atlas of Wine. His published articles have included many about wines from Bordeaux. Despite this, putting aside tasting notes, there is only one article in evidence written by Mr Hooke which refers to VCC. 180 Ms Faulkner's evidence is that she similarly tastes and reviews about eight thousand wines a year, being both international and local. Despite that evidence, Ms Faulkner did not encounter the New Certan wine until she was asked to review the 2018 vintage in January 2020. 181 Between 2009 and 2014, Ms Faulkner wrote around 250 weekly columns and 60 feature articles for The Age and The Sydney Morning Herald, only two of which (on 27 November 2007 and 8 March 2011) mentioned VCC at all. Neither of those two articles depicted VCC product labels. She also wrote feature articles for numerous other publications including Gourmet Traveller Wine magazine for around 10 years, Wine-Searcher, Halliday Magazine from 2016, Wine Companion from 2016, Meiningers Wine Business International, Le Pan and Falstaff, but did not suggest in her evidence that any article in any of those publications made any mention of VCC. 182 Mr Oliver's website has reviewed or referred to many thousands of wines since its inception. The VCC Wine is not mentioned on the website. At the time he reviewed the New Certan wine, Mr Oliver was receiving upwards of 10,000 bottles in a year and tasting about 4,000 a year or 150 wines in a day. 183 Mr Oliver has written articles about wine in Australian newspapers and magazines since the mid-1980s, including The Age and The Sunday Age, Winestate, Wine and Spirit Buying Guide, The Australian Way (Qantas' travel magazine), Gourmet Traveller Wine Magazine, Business Review Weekly, The Bulletin, Marie-Claire, and the Herald Sun. He produced a subscription newsletter between 1996 and 2003 and has also written hundreds of articles regarding Australian wine for overseas publications since around 1986. Mr Oliver has not written any articles or reviews in relation to the VCC wines. 184 Now there is no evidence indicating the number of consumers, if any, who have, in fact, read any reviews or tasting notes about the VCC wines. The presence of reviews of the VCC wines amongst the many thousands of reviews published every year does not establish consumer recognition of the VCC wines, let alone a reputation in the VCC features or the word "Certan" such that they distinctively indicate VCC or its products. Even if it is assumed that consumers of wines, or at least fine wines, take an interest in the wines they are consuming or purchasing, that would not rise any higher than the evidence of actual sales, which evidence is very limited. 185 The same can be said about articles in the wine press. Whilst the volume of material is not as extensive as wine reviews or tasting notes, the wine press is similarly flooded with articles. But in that context there is little evidence of publications about VCC or its wines in Australia. 186 Further, there is no evidence that any of those articles were actually read by any actual or potential purchaser of the New Certan wine. 187 Further, as at 1999, there is only one potential article in evidence. The article contains only a brief reference to Mr Thienpont and the VCC estate and does not include any images of the VCC Wine. The article, written by Julia Mann and titled 'Earliest Bordeaux Harvest since 1893', was apparently published in The Wine Spectator magazine in 1997 according to Mr Thienpont, but he does not give evidence of this publication. Mr Thienpont's evidence refers only to the article as published on The Wine Spectator website, accessed in around 2021 or 2022. The version of the article includes an advertisement for a "2022 Grand Tour", so cannot have been accessed materially earlier than 2021. 188 In the period from 1999 to 2013, there is evidence of no more than 25 wine industry articles referring to VCC, from anywhere worldwide. And of those articles, the following points may be made. 189 First, only one includes an image of the VCC Wine, and even in that case it is limited to the label alone not the full bottle presentation. 190 Second, 15 were published in a single specialist wine publication, The Wine Spectator. 191 Third, the remaining articles were published in print or online at jancisrobinson.com, which is an online wine publication that has a limited audience, The Age (in Ms Faulkner's Cellar Door column), The Sydney Morning Herald, The World of Fine Wine (an English magazine dedicated to wine), and Australian Gourmet Traveller. 192 Fourth, with the exception of The Sydney Morning Herald and The Age, these publications are specifically directed to consumers with an interest in fine wine, and not necessarily the ordinary reasonable consumer of the New Certan wine. 193 Fifth, as to the specialist publications, there is no evidence from any Australian who reads any of them, setting aside the wine industry specialists who have given evidence in this case. To the extent the wine industry specialists speculate about where such readership might exist, it would consist of very engaged or deeply committed consumers, which are likely to be a small number of people. 194 Sixth, as to mainstream media publications, the probability of even the deeply committed ordinary reasonable consumer reading every one of Mr Hooke's and Ms Faulkner's articles to stumble upon one that mentions VCC is remote. 195 Further, in the period from 2013 to May 2021, there is evidence of no more than 25 wine industry articles referring to VCC, none of which include an image of the packaging. Of these articles, seven were published in The Wine Spectator. With the exception of one article in The Tasmanian Times, the remaining publications are directed to consumers with an interest in fine wine: Gourmet Traveller Wine, the UK based website jancisrobinson.com, The Wine Advocate, The World of Fine Wine, Langton's, and Winetitles Media. The extent of social media? 196 Now VCC relies upon social media as a source of consumer knowledge or reputation, but as at the earliest relevant date, 1999, there was no social media evidence. 197 Further, as at 2013, the only social media evidence relating to VCC and its wines consisted of a handful of tweets, most of which were published by international wine writers. There is no evidence as to how many Australians followed these Twitter accounts, if these tweets were ever viewed or 're-tweeted' by other users, or if they received any 'likes'. 198 Further, the evidence after 2013 is also underwhelming. There is evidence of fewer than 15 social media posts referring to VCC in the eight-year period between 2014 and May 2021. Of these posts, only three depict the VCC Wine in its entirety, whilst the remainder include only a label or blurry image of wine bottles from a distance. The evidence consists primarily of social media publications by international wine critics, writers or consultants, not Australian authors. And there is no evidence to establish the extent to which Australian consumers or members of the wine trade follow any of these accounts, let alone whether they have viewed any of these posts. Between May 2021 and August 2023, the only social media evidence referring to VCC is an image taken by Mr Airoldi and posted to his Instagram account on 20 August 2021, which depicts cases of Bordeaux wines imported into Australia. Mr Airoldi states that these cases include the VCC wines, however the image is unclear. 199 Now there is a post of the VCC Wine alongside two other French wines on the Instagram and Facebook accounts of the Royal Mail Hotel in Dunkeld, Victoria on 18 January 2017 and 27 March 2018, respectively. This image was intended to promote the hotel's extensive Bordeaux, Burgundy and French wine collection. The posts do not reference VCC beyond including the image. As at May 2022, only 46 people had liked the Facebook post, and the Instagram post was just one of 1,866 Instagram posts accessible on the Royal Mail Hotel account. 200 Finally, let me say something about Mr Caillard's evidence. He could not remember posting an image of the New Certan wine on his own social media account, which had remained dormant since December 2017, in a case in which he was engaged to give expert evidence about the New Certan wine. Plainly, Mr Caillard did not see social media as an important tool for communicating with consumers about wine. A little about books 201 Now the VCC wines are mentioned in a number of wine books that have been published internationally, although much of this evidence is subject to a s 136 limitation as I have indicated. 202 But there is no actual evidence of readership other than by witnesses in this case. And having regard to the length of these texts, it cannot be reasonably suggested that readers would necessarily engage with the full text, nor that any such readers would recall a specific product such as the VCC Wine from the entirety of the text. 203 Further, fewer than ten of the books in evidence were published before 1999, and of those books only one includes an image of the VCC Wine, which does not include the fluting edging or a pink cap. And of the limited publications between 1999 and 2013, only one depicts the VCC features, which due to the quality of the image does not portray a pink cap. And for the period between 2013 and May 2021, there is only one book publication in evidence which includes an image of the VCC Wine, which is limited to the label alone. Wine lists at restaurants 204 Now VCC relies upon the presence of the VCC wines on wine lists at Australian restaurants. 205 Mr Myers gave evidence that the Royal Mail Hotel has promoted, offered for sale and sold the VCC Wine in Australia for many years. But otherwise there is no evidence of wine lists including the VCC Wine prior to 1999. 206 Further, as at 2013, the evidence of the VCC Wine appearing on restaurant wine lists in Australia rises no higher than Mr Airoldi's recollection of its inclusion on the Jacques Reymond wine list. Mr Airoldi gives examples of restaurants that purchased the VCC Wine during the period 2012 to 2021, but there are no wine lists in evidence to confirm the dates of inclusion in any wine list, if at all. 207 Further, as at May 2021, there is no further evidence of wine lists in Australia that include the VCC wines. In Ms Faulkner's evidence there was reference to an extract of a wine list from Jonah's Restaurant entitled 'Winter 2021', but there is no evidence to suggest it was available in May 2021. 208 There is, therefore, only limited evidence of the VCC Wine appearing on wine lists in Australia and no evidence regarding the Gravette Wine. In any event, the mere presence of the VCC Wine on wine lists in Australia is insufficient to establish a reputation in the VCC features. To the extent the VCC Wine appears on wine lists at restaurants, it appears in a written list by name only organised by region, subregion and grape variety amongst tens or hundreds of other products. 209 Further, to the extent that consumers are likely to be exposed to the VCC Wine on a wine list, they are also likely to be exposed to other wines that use the name "Certan". 210 Mr Hooke was taken in cross-examination to the current wine list for Catalina Rose Bay, a typical Sydney restaurant for the flashy or aspirational. That wine list has the highest "three wine glass" rating from 2008 through to 2021 from the Gourmet Travel and Wine List of the Year Awards. Mr Hooke noted the 1982 vintage Château Certan de May de Certan on that list for $2,200, which was one of the wines that he was selling at Halvorsen in the early 1980s. 211 That 1982 Château Certan de May also appears on the May 2022 wine list of the Royal Mail Hotel in Dunkeld, at the top of the section devoted to Pomerol wines. The Royal Mail Hotel won the World of Fine Wine magazine's 2021 award for Best Long Wine List in the world. 212 The 2010 vintage of Château Certan de May appears on the current wine lists of two upper middle-class Melbourne restaurants, Attica in Ripponlea and Donovans in St Kilda. 213 The 2015 vintage of Croix de Certan appears on the current wine lists of various restaurants around Australia including Aria Restaurant, an upmarket restaurant in Sydney, Bathers' Pavilion at Balmoral Beach, another apparently upmarket restaurant in Sydney, and Bouzy Rouge in Richmond, Melbourne. 214 Let me now say something concerning the New Certan wine. The previous design and packaging of the New Certan wine 215 The presentation of the New Certan wine has had the following features. I am not in this section dealing with the proposed re-branding for the New Certan wine which I will discuss later. 216 First, there is a pink screw cap and neck capsule, with gold decoration around the base and on the top of the capsule. 217 Second, there is a front label featuring the name Certan, as a prominent part of the name New Certan, and the use of a pink font for the first letters of the name of the wine (New Certan). Further, there appears the words Société Anonyme Kreglinger. Société Anonyme is a designation used for private companies in France. Further, there appears Mr and Mme Paul de Moor, Propriétaire Mount Pleasant Launceston. Propriétaire means owner in English. Further, there is a centrally located image of a stately house. Further, there is a fluted edge profile. 218 Third, there is a back label featuring the name Certan, as a prominent part of the name New Certan, the use of a pink font for the first letters of the name of the wine (New Certan), and since the 2016 vintage, the statement "… a passionate marriage of old world and new … hallmarking its European heritage". 219 Now the first vintage of the New Certan wine was the 2011 vintage, which was released in 2013. The following subsequent vintages of the New Certan wine have also been released: 2016, 2017, 2018, 2019 and, very recently, 2021. 220 The first vintage of the New Certan wine being the 2011 vintage was sold with the label depicted below, which featured the prominent depiction of Mr de Moor's family home on the Mt Pleasant Estate vineyard in Tasmania: 221 The next vintage of the New Certan wine being the 2016 vintage was sold in the packaging depicted below, which still featured the prominent depiction of Mr de Moor's home: 222 Later vintages of the New Certan wine were sold in the packaging depicted below: 223 Let me go back into the history a little more. 224 Mr de Moor gave instructions to Ms Harcus of Harcus Design in relation to the design and packaging of the New Certan wine at a meeting in around September 2012 at her office in Sydney. Apparently it was his intention to pay homage to his family heritage rather than to copy an existing brand. Apparently he did not intend to create a label which represented an association between the New Certan wine and VCC or its wines. 225 According to Mr de Moor, the development of the New Certan wine was to capture the sensual flavours and elegance of old world wine, while producing a cool climate pinot noir with the unique distinction of both new and old world characters. He wanted to produce a pinot noir in keeping with the traditional, old world style of Burgundy, that is, a wine that is lighter in colour, subtle and intense, but with the hallmark of what Tasmania can offer from a cool climate perspective. 226 Mr de Moor explained that his motivation for creating the New Certan wine, and the use of the word "Certan" as part of that name, was to create a wine of exceptional quality to pay homage to his great-grandfather, Georges Thienpont, and to the generations of the Thienpont family including his grandmother which inspire and motivate him in his commercial endeavours to this day. 227 The New Certan wine being the 2011 vintage was first offered for sale in 2013. It is made in very limited quantities, with on average around 150 cases produced annually. In the first vintage, only 12 cases were made available to the public. It is not produced every year. 228 The New Certan wine retails for around $75 to $95 per bottle. As of 30 June 2022, 10,510 bottles of New Certan wine had been produced from the 2011, 2016, 2017, 2018, 2019 and 2021 vintages, and 5,371 bottles of New Certan wine had been sold. By that time, sales of the New Certan wine generated a total of $193,934 in revenue. 229 VCC first became aware of the New Certan wine in about April 2014, when Mr Thienpont was told about the 2011 vintage by an American wine merchant based in San Francisco. When this came to his attention, he conducted some internet searches with the assistance of his son and discovered how the 2011 vintage of the New Certan wine was presented. 230 On 3 April 2014, Mr Thienpont sent an email to Mr de Moor in the following terms: Just a question to ask you: New Certan Pinot noir 2011, is this an April fool's joke or a new creation? I just heard about it from a San Francisco wine merchant whose friend is an expert on Tasmanian wines. 231 I should note that in this judgment I have used the English translations for the communications in French. 232 This email led to the following exchange of email correspondence between Mr de Moor and Mr Thienpont over the course of the next eight days. 233 On 5 April 2014 there was an email from Mr de Moor to Mr Thienpont saying: New Certan Pinot Noir is not an April Fool's joke, Alexandre, but my tribute to the living soul of my great-grandfather Georges Thienpont; a family for which I have a deep respect. It is not a creation either, that would be lacking in humility. It is a rebirth perhaps, like a formidable head of the family who left Etikhove to invest in Pomerol. I also have no doubt that his other descendants will share the immense pleasure I feel through this meeting with my history. … Ps. Production: 50 dozens. Distribution: 50% my private cellar/Australia. Trademark registered since 1999. 234 On 8 April 2014 there was a letter from Mr Thienpont to Mr de Moor saying: I received your email of 5 April and thank you very much. You tell me: "The New Certan Pinot Noir is not an April fool's joke". How I wish it was! I must admit that this confirmation, as manager of the Société Civile du Vieux Château Certan, not only shocks me, but also fills me with sadness because I will have to defend the image of the domain that you shamelessly plagiarise. That you transcend the past generations beyond all comprehension does not concern me. However to take advantage of the image of Vieux Château Certan to promote a copy for commercial purposes and for your own profit is in my eyes reprehensible. To have acted without the knowledge of everyone, whether or not they are wine professionals, and to have presented us only today with a fait accompli is already highly questionable. The quantity produced is not relevant for the purpose of reducing the damage. Before setting in motion an obvious and automatic procedure for any other wine of the level of Vieux Château Certan against any counterfeiter, I would like us first of all to be able to see eye to eye. Indeed, this is the kind of issue that the media feasts on to the major detriment of the infringer, not to mention the costs inevitably incurred, coupled with the loss of time and energy combined. That, dear Paul, is what your bottle, the branding of which is too close to that of the Vieux Château Certan, inspires in me. I look forward to hearing from you. 235 On 11 April 2014 there was an email from Mr de Moor to Mr Thienpont saying: So I reconfirm my honest intentions of homage, and deep respect on the one hand, combined with the immense pleasure that I experience every day through my programme, of which the New Certan is an integral part. I hereby acknowledge receipt of your attached letter, whose subtle interpretation of my intentions invites me to measure the opposition of values that we each hold today. Having said that, I had deliberately omitted any consideration of legal consequences, in designing New Certan, in my presumably naive belief that you might share my pleasure rather than attempt to downgrade it. On that note, I have instructed the immediate removal of all New Certan iconography from the network and you should note that the commercial production of 12 dozen 2011 New Certan Pinot Noir is sold out. I will also keep you informed in advance of any future branding initiatives. This should alleviate your sadness, which I believe to be sincere, and which I regret even if I do not understand it. 236 Mr de Moor in his evidence said that the assurance he provided related to the then current trade dress of the New Certan wine, but was not any form of assurance about the use of the name New Certan in the future. 237 Mr de Moor passed on the substance of his communications with Mr Thienpont to Mr Devlin at some point between April 2014 and January 2016. Mr Devlin could not recall exactly when this occurred, but he thought it was likely to be shortly after the exchange. 238 Now from VCC's perspective, having received Mr de Moor's assurance about the cessation of the conduct, the matter rested there until 2018, when Mr Thienpont became aware of the 2016 vintage of the New Certan wine. 239 However, almost immediately after this exchange of correspondence in April 2014, the respondents took various steps. 240 Mr de Moor set about making some very minor modifications to the label of the New Certan wine, namely, replacing the words "Mount Pleasant" with the word "Tasmania", removing the text "Appellation Tasmania Controlee", and replacing "Product of Australia" with "Fine Wine of Australia". 241 Once those changes were made, the front label of the New Certan wine remained the same for the 2016, 2017, 2018, 2019 and 2021 vintages. The respondents did not at any time consult Mr Thienpont or VCC about these changes to the label or the use of the modified label. 242 Further, on 17 April 2014 Kreglinger applied to register the following Australian trade mark in respect of inter-alia wine: 243 This trade mark application no. 1618270 was not accepted and was allowed to lapse. No notice of this application was given to Mr Thienpont or VCC. 244 Further, in May 2015, Mr de Moor instructed Mr Devlin to register the domain name newcertan.com. Again, no notice of this was given to Mr Thienpont or VCC. 245 Further, on 26 January 2016 Mr Devlin prepared a note of his advice about the New Certan wine for Mr de Moor. This advice concerned the overall branding of the New Certan wine, including the label and the pink screw cap. This advice was prepared against the backdrop of the plan to launch the 2016 vintage of the New Certan wine. The advice noted that the VCC Wine was available for sale through some Australian retailers (including United Cellars and Nick's). It also offered the following suggestions as to how the New Certan wine should be promoted and sold: To aid your future defence and to minimize their chances of any form of success, it is recommended that you: 1. Not advertise New Certan to any consumers that you do not have a relationship with (so only via Cellar Door, your email lists or Gold Club). 2. Not sell through standard retail outlets (Dan Murphy's, Liquorland etc). 3. Fly under the radar as much as possible. 4. Not compare your wine to VCC or mention VCC in any literature. 5. Make sure that it is crystal clear that this is a Tasmanian/Australian wine. 246 Further, on 26 July 2018, Mr Devlin prepared a further note of his advice about the New Certan wine for Mr de Moor. It stated: As we have always acknowledged, the look of the artwork echos the VCC labelling and that could be an issue. But they would be on weak ground Having said that, there is nothing stopping them having a crack at you. I suggest that you wait and see what happens. If they send a letter, we will respond with a short piece of advice that combines sex and travel. 247 Mr de Moor replied the same day, noting that "… travel advise [sic] would certainly be of use…". 248 On 22 March 2021, VCC's Australian lawyers issued a letter of demand. VCC's demands were not met. 249 Let me at this point say something more concerning the respondents' promotional activities concerning New Certan. 250 In an article dated 6 July 2018 reporting on the Pipers Brook Vine Improvement Program, the following statements appear in relation to the New Certan wine: Somewhat prosaically referred to as the Pipers Brook Vineyard Vine Improvement Program when first mooted in 2005, de Moor's privately-owned and funded initiative has since become the production base for a 200-case single vineyard Pinot Noir called New Certan. The wine had its first vintage in 2011. Its labelling and packaging—not to mention its Certan moniker and pastel pink neck capsule—have proved somewhat contentious in evoking de Moor's European ancestry and wine heritage. Great grandfather Georges Thienpont was a successful wine merchant in Belgium and purchased Pomerol's prestigious Vieux Château Certan in 1924. Almost a century later, the esteemed 16ha Bordeaux property remains in family hands, with cousin Alexandre making its wines, as well as managing a fabled vineyard down the road at Château Le Pin owned by garagiste winemaker and cousin, Jacques Thienpont. 251 A report on The Tasmanian Times website dated 6 February 2019 stated: The wine's labelling and packaging – not to mention its Certan moniker – reflect de Moor's family heritage. Great grandfather Georges Thienpont was a successful wine merchant who purchased Bordeaux's prestigious Vieux Château Certan in 1924. Nearly a century later, the 16ha Pomerol property remains in Belgian hands, with de Moor's cousin Alexandre Thienpont in charge. Celebrated Château Le Pin, located nearby, is owned by another cousin, Jacques Thienpont. Links to such esteemed properties help drive de Moor's unique viticultural quest. Like his European peers, he is keenly aware of the steadfast stewardship that historic properties invariably demand from their custodians. Indeed, de Moor believes many of the world's great wine estates enjoy their positions of pre-eminence because their owners did whatever was needed to optimise the quality and consistency of their production. 252 An article published online at Winestate Magazine and dated November/December 2021 stated: The de Moor family are related to the owners of the respected Chateau Vieux Certan in Bordeaux, owners of the respected Chateau Vieux Certan in Bordeaux, hence paying homage with the name New Certan for a premium single vineyard pinot noir. Pipers Brook has undergone several changes, and regular changes of winemaker, over its close to half a century of existence but Luke Whittle is the current chief winemaker with the business overseen by Paul de Moor … The de Moor family has wine links back through generations. Paul de Moor's great grandfather, Georges Thienpont, was a successful wine merchant who purchased Vieux Chateau Certan in 1924. Nearly a century later, the Pomerol property remains in the family's hands, with de Moor's cousin Alexandre Thienpont in charge. Highly regarded Chateau Le Pin, located nearby, is owned by another cousin, Jacques Thienpont, underlining the family's love of the wine industry. Pipers Brook is carrying on that tradition and is one of the largest Tasmanian-owned wine estates. Pipers Brook Vineyard is today home to five labels: Pipers Brook Estate, Ninth Island, Kreglinger Sparkling, New Certan Pinot Noir and the newest addition being the Pipers Tasmania range, which is a modern expression of the more traditional estate wines. 253 The PBV Cellar Door training manual and various Kreglinger documents in evidence also provide an indication of how Kreglinger and PBV intended to and have gone about promoting the New Certan wine. 254 In February 2019, PBV prepared a Cellar Door training manual. Mr de Moor agreed that one of the purposes of this document was to provide staff at the cellar door with information about the New Certan wine which would be of interest to consumers. On the page dedicated to the New Certan wine, the Cellar Door training manual contained the following text: The label features the Mount Pleasant family homestead which was built in 1865 on the vineyard's estate property, in Launceston. The name and the colour are inspired by old Chateau Certan, founded by family in Europe and the wine is produced in small quantities from the single Mount Pleasant vineyard around the house, that is 3.3 hectares in size, producing on average 200 cases per vintage. 255 Mr de Moor accepted that it was likely that Ms Rachel Boyd was involved in the preparation of the Cellar Door training manual. Mr de Moor also gave evidence that the National Sales Manager, Mr Callum Czyz must have been aware of it. Mr de Moor claimed that he had not seen this document before, and that he would have disapproved of the reference to "old Chateau Certan". 256 When Mr de Moor was asked to explain his objection to the old Chateau Certan text, his evidence was as follows: MR CAINE: It says the name is inspired by old Chateau Certan? MR DE MOOR: Yes. Q: Now, old Chateau Certan is a reference to my client's estate and wine, is it not? A: Correct. Q: So it's saying the name is inspired by VCC? A: Yes. It should say then it is inspired by Vieux Chateau Certan founded by a family, but all that is something that – that I – that I would have refused to put there because it is not my merit. … HIS HONOUR: What's the problem with that so far as your state of mind is concerned? A: My problem is fundamental with regards to the principle of – of – of doing that in a commercial document. That is my problem, fundamentally. When you want to go into detail, they could have said, yes, it inspired with the pink cap that you find on Vieux Chateau Certan found by a family, but I – all that, to me, is – is – is – I have a problem with all that, fundamentally. 257 On 11 February 2020, Ms Boyd, the Marketing and Wine Club manager for Kreglinger, sent a draft "New Certan brand story" document to Mr de Moor for his review as the summary of their discussion. The draft "New Certan brand story" reproduced the old Chateau Certan text that I have set out earlier. 258 Mr de Moor claimed under cross-examination that he was reading the document for the first time. He claimed that he would have removed the reference to "old Chateau Certan" in this document because it was "rubbish". However, he accepted that the document was compiled based on a discussion between him and Ms Boyd. 259 Between 29 October 2020 and 11 November 2020, Ms Boyd and Mr Czyz, the national sales manager for Kreglinger, exchanged emails with Mr Alex Scutt, assistant category manager of fine wine for the retailer Dan Murphy's. The emails related to the possibility of featuring the New Certan wine in a direct marketing promotion for Dan Murphy's customers. In the course of this exchange, Ms Boyd provided a tasting note, New Certan bottle shot and some marketing information to Mr Schutt. Her covering email to Mr Schutt reproduced the Old Chateau Certan text that I have set out earlier. 260 On 19 July 2021, Mr Czyz exchanged emails with Mr Nick McArdle of Coles. The emails related to the possibility of featuring the New Certan wine as a part of the "cellar section" of some of Coles' Victorian stores. In the course of this exchange, Mr Czyz provided a tasting note and some marketing information to Mr McArdle. His covering email to Mr McArdle reproduced the old Chateau Certan text that I have set out earlier. 261 Mr de Moor denied knowledge of either of the communications with Dan Murphy's or Coles. And he sought to distance himself from the development and use of the old Chateau Certan text. He was asked about this directly by me: HIS HONOUR: And yet you're saying these documents spanning February 2019 through to July 2021 contain a story that you say you had no knowledge of? MR DE MOOR: This – this text is the first time I read them, your Honour. … HIS HONOUR: If that had read the name and the colour are inspired by Vieux Chateau Certan - - -? A: Vieux Chateau Certan? Q: - - - that would have been - - -? A: Yes. Well, that - - - Q: - - - fine by you? A: It wouldn't be fine, because I still would have – have an objection by the whole – the whole fact – the – the whole topic is out of place. The – New Certan is not – it's – it's – it's inspired by it, but this is not the topic – certainly not in – when you – when you want to sell it. You don't want to sell something. It's like you don't want to win a game if you know you cheat. Where is the benefit to sell something and then you refer to another brand? 262 This aspect of Mr de Moor's evidence is problematic. The old Chateau Certan text appeared in the Cellar Door training manual, the draft "New Certan Brand Story", and each of the emails sent to Dan Murphy's and Coles. Those publications span the period between 11 February 2019 and 19 July 2021. 263 In my view and given the personal nature of the information contained in the old Chateau Certan text, it is improbable that Mr de Moor was not aware of the statement contained in the old Chateau Certan text. The significant resemblance between the New Certan wine and VCC's wine 264 Let me begin with Mr Oliver's evidence. 265 Mr Oliver had previously tasted and written a review of a later vintage of the New Certan wine and he recognised the label from doing so. At the time that he wrote his review, it never occurred to him that the New Certan wine had any association with VCC. Indeed, he did not think of VCC at all. In fact, he had initially spelled the name of the New Certan wine incorrectly in his review and on his website, spelling it "New Certain". 266 Mr Oliver commented on the main features of the New Certan front label (2016). 267 He noted that whilst there are some similar aspects to the VCC label, New Certan is clearly labelled as a wine from Tasmania and as a pinot noir. 268 On review of the front label, and undertaking a comparison with the label of the VCC Wine, the main common features appear to be the capitalisation and colour of the starting letter of each word of the name 'New Certan', the picture of the property, the colour wash through the label and the edges of the label. However, the property on the New Certan label did not remind him of a French château, but evoked a grand house. Upon close scrutiny, he observed that both capsules were coloured pink. There are some words on the New Certan label that are French, specifically 'Société Anonyme Kreglinger'. These words do not appear on the front label of the VCC Wine. Furthermore, Kreglinger is an Australian wine brand. 269 In his opinion, there is a sense of playfulness about the label. He considered it to be amusing, meaning that there is a little bit of fun brought to mind by the New Certan label. On a side by side comparison, he perceived that the New Certan label has likely taken inspiration from the VCC Wine label. However, in his view it is plainly different in that the New Certan label does not state that it is from Pomerol. Indeed, the New Certan label states that it is a 'Fine Wine of Australia', a 'Pinot Noir' and from 'Tasmania'. Furthermore, the wording of 'Pinot Noir' on the label is bold. He also found the label to be amusing because it says 'Anonyme', meaning anonymous, but it is made by Kreglinger. 270 He was asked to comment on whether he considered there was a risk that Australian consumers, encountering the New Certan wine, might believe the New Certan wine to be associated with VCC. 271 He considered that the main issue, when answering this question, was whether a pinot noir, the label of which announces it as a pinot noir from Tasmania, could be mistaken as, or associated with, a Bordeaux from Pomerol, which are producers of merlot or cabernet sauvignon, and which also have different bottle shapes. In his opinion, no Australian consumer of Tasmanian pinot noir would pick up a bottle of New Certan and think they that had picked up a bottle of VCC Wine. 272 In his opinion, there are five primary reasons why New Certan would not be confused with the VCC Wine. 273 First, he would expect that few Australian consumers of Tasmanian pinot noir would have heard of, far less be able to recall much if anything about, the VCC Wine. An ordinary Australian wine consumer will not have VCC Wine in mind when confronted with New Certan. 274 When he reviewed the New Certan wine, he never thought of VCC Wine, and he has more than thirty years' experience working in wine writing and consultancy in the wine tourism industry. At no time when reviewing the New Certan wine did it remind him of the branding feature of any other wines, nor did he think of VCC. If he had thought of VCC, he would likely have written something in his review to the effect of the label being humorous or a bit of fun. Furthermore, he spelled the name incorrectly on his website. 275 In his opinion, most buyers of Tasmanian pinot noir at the price point of $75 to $95 would buy New Certan without any knowledge of what the label "pokes fun" at. In his view purchasers of Tasmanian pinot noir are a smaller segment of the Australian wine market, due to pinot noir's small production and the fact that Tasmania produces less than 1% of Australia's wine. These buyers are generally different people to those who collect Bordeaux. There would be very few consumers who are both informed drinkers of $500 Bordeaux red wines, and consumers of $75 to $95 Tasmanian pinot noir. 276 Second, he considered that the name of the variety on the front label immediately indicates that New Certan is a pinot noir, which is a very different style to wines produced in Bordeaux. 277 Third, the front label identifies the location where the wine is produced as Tasmania and Australia. He was not aware of any Tasmanian producer of still table wine entering into any commercial arrangement with any French wine producer, far less a châteaux in Bordeaux. In his view, it would be quite incongruous for this to occur, as pinot noir produced in Tasmania is a radically different type of wine to that produced in Bordeaux. 278 Fourth, he also attached significance to the bottle shape. New Certan is sold in a Burgundy shaped bottle, which is the bottle shape used for pinot noir. Contrastingly, the VCC Wine is sold in a classic Bordeaux (cabernet sauvignon) shaped bottle. He said that it would be odd for a cabernet sauvignon or merlot such as VCC's wines to be offered for sale, or associated with, a Burgundy shaped bottle. In his experience, a consumer at the price point of $75 to $95 would be aware of the different types of bottle shapes and in his opinion would be shocked to see a cabernet sauvignon or merlot in a Burgundy shaped bottle. He said that the association between pinot noir and the Burgundy bottle shape dates back more than one hundred years, and applies in all but the rarest of cases. Similarly, he said that it is extremely rare to find a red wine from the Bordeaux varieties sold in a Burgundian bottle shape. 279 Fifth, when he looked at the front label of New Certan, there is no text on the label to suggest that the New Certan producer has a connection with VCC, and he could not recall reading about any such connection in the wine media. The VCC Wine is approximately five to six times higher in price than New Certan, the wines come from different families of grape varieties, and are produced on different sides of the planet. In his opinion, a Tasmanian pinot noir and an established Bordeaux blend from Pomerol are fundamentally different wines and are diametrically opposed. 280 Sixth, upon review of the back label (2016), he considered the wording to be typical marketing-type information, in the sense that it was both philosophical and historical. He said that the back label provides information that the wine was produced at a single vineyard in Tasmania. In his opinion, this further reduces the likelihood of anyone purchasing the New Certan wine thinking it was VCC Wine or associated with VCC. No reference is made anywhere on the label to VCC or Bordeaux. 281 Seventh, the three lines from the bottom of the label read: It is the passionate marriage of old world and new, capturing multiple sensual flavours and is an elegant expression of this profound site whilst hallmarking its European heritage. Crafted with emotional precision. 282 But in his opinion, this is a type of marketing hype commonly used on back labels of Australian wine. On this label, Tasmania, being located in Australia, is considered to be the particular source of new world wine. However, the techniques used to grow and craft the wine are inspired by techniques of the old world, being Europe. 283 Eighth, the back label also says "The privileged vineyard site; comprising of 64 Pinot Noir clones on five different root stocks…", which he considered to be reflective of the "mass selection" of clones within the vineyard. In essence, in his view the label is saying that it does not matter which clones are in the vineyard, but the wine is reflective of the whole site. In his opinion, that is the "passionate marriage" between old and new worlds that is being described in the back label. In short, he considered the old world is referring to the planting of the vineyard and to the wine making techniques deployed, whilst the new world is referring to the fact that the wine is grown and made in Australia. 284 Ninth, he was also asked to comment on the expression "is an elegant expression of this profound site whilst hallmarking its European heritage". In his opinion, this is typical language used in marketing wines. He said that he has observed that it is common for Australian winemaking families with a European heritage to use words to this effect, to seek to evoke their European heritage when marketing their wines. As he understood it, the sentence is indicating that the family who owns Kreglinger is European and this is reflected in the cultural approach underpinning the growing and the making of the wine. 285 Tenth, in his opinion, a notable feature of the 2011 front label is the phrasing 'Appellation Tasmania controlée', which he understood is a system that does not exist and therefore is a bit of fun. Another notable feature is that the label says it is a 'Product of Australia'. In comparison to the 2016 New Certan front label, this label includes the words 'Mis En Bouteille Au Chateau' but those words did not appear on the 2016 label. The label also says 'Pinot Noir' and 'Mount Pleasant'. 286 Eleventh, when reviewing the 2011 back label, he considered it to be a standard back label. It says that the wine is a pinot noir, made in Tasmania, and references Mount Pleasant. He could see that the producer is PBV. Because he was associated with the wine industry, he was aware that Kreglinger owns PBV. The back label told him that this wine is a new and different wine and not to be confused with other PBV wines. It is a single site and an addition of the already existing range produced by PBV. 287 Twelfth, Mr Oliver also commented on whether he considered New Certan could possibly be a brand extension of VCC. In his opinion, the label of New Certan does not suggest that it is a brand extension of VCC. This is reinforced with the inclusion of the name Kreglinger which he identifies as an Australian wine brand. 288 In his experience, it would have been significant high profile news if one of the owners of a Bordeaux château had implemented a brand extension on the other side of the world with an entirely different grape variety and wine making approach. 289 Further, based on his experience and knowledge of the Australian and French wine markets, it is rare for châteaux in Bordeaux to engage in overseas brand extensions, and therefore those that exist are relatively well-known. For example, he was aware that Lafite has a development in Yantai in China, and Mouton-Rothschild has a brand extension in the Yunnan province in the South of China, as well as its high profile Opus One development in the Napa Valley. In each of these instances the wines produced draw heavily on the varietal composition, style and bottle shape and design of the parent châteaux. 290 In his experience, whilst it is more common for sparkling wine producers to establish joint ventures and collaborations with producers in Australia, it is extremely rare for Bordeaux château or brand owners to do so. The nearest similar examples he was aware of are Dominique Portet (who was born in Bordeaux) establishing Taltarni in Victoria, and Jacques Lurton (whose family is a very significant owner of châteaux in Bordeaux) creating his own wines in various South Australian regions. However, in the first instance Taltarni is fully owned by an American citizen, and in the second, Lurton's businesses are fully owned by him. In neither case does pinot noir feature as a still red wine. 291 He considered that even if VCC was trying to capitalise on its reputation and launch a brand extension in Australia, it would make more sense to deploy the brand for a merlot-based red wine rather than a pinot noir. In other words, VCC would have ventured into a region more suited to merlot or cabernet varieties. VCC is not known for any specific experience with pinot noir, and thus it would not make sense for it to try making a pinot noir in Tasmania. 292 But in contrast with Mr Oliver's evidence, the evidence reveals how a number of experienced wine industry professionals have reacted to the presentation of New Certan wine by thinking that there is a connection between the New Certan wine and/or Kreglinger/PBV and the VCC wine estate. 293 Mr Hooke first encountered the New Certan wine being the 2017 vintage when he received a sample for tasting from PBV in late 2018. He recounted his reaction as follows. 294 He recalled that he received a number of wines from PBV for review together with a bottle of the 2017 vintage of New Certan. The bottle of New Certan immediately caught his attention because of its appearance, notably the pink screw top cap, the fluted edging to the label, the colour scheme that was selected and the name, all of which brought VCC and its wines to the front of his mind. 295 On 18 September 2018, he published an article which included a discussion on the 2017 New Certan, entitled "Pinot pleasures from 2017" for The Real Review. 296 In his article he discussed the 2017 New Certan, including stating the following: Also impressing from Tasmania is a new AUD$95 wine from Pipers Brook Vineyard: the 2017 New Certan. The name and label are peculiar, in that they evoke the owner's family connection with Bordeaux's Vieux Château Certan. The label is almost a carbon copy, and the name Certan has no resonance with Australia or Australian wine, and anyway, it's not from Bordeaux grapes, it's a pinot! The wine is very good, albeit young and a little hard to read, but I suspect it will grow into a ripper. Two other 2017 Pipers Brook Vineyard pinots, the Estate Bottling (AUD$45) and Single Block A10 (AUD$75) are also excellent wines, the trio making a strong statement about the changes in winemaking since Jim Chatto came on bord [sic] as part-time chief winemaker. These are all delicious, beautifully made pinots. 297 At the time that he received the bottle of 2017 New Certan to review, it did not cross his mind that the wine had not been approved and authorised by VCC. He regarded it as a whimsical brand extension by PBV, but one which connected the wine with VCC. He also knew at the time that Mr de Moor was involved in operating PBV and that he was related to Mr Alexandre Thienpont of VCC. His reaction to New Certan was to assume, incorrectly, that it had been approved by VCC. His assumption was only corrected as a result of his involvement with this proceeding. 298 Now Mr Oliver disagreed with Mr Hooke's views, but I am inclined to accept Mr Hooke's evidence. 299 Ms Faulkner first encountered the New Certan wine being the 2018 vintage which she received as a tasting sample. She recounted her reaction as follows. 300 When she first unpacked the New Certan 2018 bottle, at first glance she thought it was a bottle of the VCC wine with a screw top cap. In the wine industry, some brands have strong colour associations. For example, Veuve Clicquot's La Grande Dame Champagne is famous for having a colour association with a particular shade of orange which features on labels and associated merchandise. For her, there is a similar strong colour association with VCC's wines and its pink capsule. In her experience, the pink capsule is very unusual for a Bordeaux wine and for French wine more generally. Bordeaux wines are traditionally presented in a conservative way and the pink capsule used on VCC's wines is distinctive and, in her view, quite daring by comparison. At first glance, the pink and gold screw top cap of the New Certan 2018 wine that was submitted to her for tasting caused her to think that this was a bottle of the VCC Wine with a screw top cap. 301 She then examined the bottle and the front wine label, from which she understood that this was not a bottle of the VCC Wine, but rather a Tasmanian Pinot Noir called New Certan. When she considered the front wine label which features the name New Certan and a sketch of a château, in addition to the pink screw top cap, she thought that there must be a commercial association or connection of some sort between this wine and VCC. The name New Certan seemed to her to be a play on words of the name Vieux Château Certan, which translates in English as "Old Château Certan". 302 She then examined the back label, and saw that this Pinot Noir was produced by PBV, with Jim Chatto as the chief wine maker. This did not clarify for her how a PBV wine was connected to or associated with VCC or the VCC Wine. 303 Ms Faulkner then did some further on-line investigation in relation to the New Certan wine. She then gave evidence that whilst she was still confused as to what the nature of the relationship could be between PBV and VCC, as James Halliday's earlier reviews referenced a similar connection or association of some sort based on the appearance of the wine, she decided not to research the matter any further. 304 I have no reason to doubt her evidence. 305 Mr Airoldi first encountered the New Certan wine being the 2018 vintage in the liquor section of an IGA supermarket in New South Wales on 29 November 2021. Mr Airoldi recounted his reaction as follows. 306 From a distance, he saw a bottle with what he thought was the VCC pink capsule and a label that made him think that IGA First Liquor was selling a VCC Wine. This seemed surprising to him, given the rarity of the VCC Wine and Gravette Wine. When he was close enough to read the label and note that the bottle had a screw top cap and was not the traditional Bordeaux shape, he realised it was not the VCC Wine or the Gravette Wine, but rather a wine known as New Certan, a pinot noir from Tasmania. He took the following photo on his phone and asked one of the IGA First Liquor staff about this wine. The staff member he spoke with was not able to provide any further information about this particular bottle. 307 As he was surprised by the branding of this wine, he contacted one of his Bordeaux negociants, Ballande & Méneret, to ascertain if New Certan was connected or associated in any way with VCC of Pomerol. Mr Tugdual Iquel of Ballande & Méneret told him that he was not aware of the New Certan wine from Tasmania. 308 Again, I have no reason to doubt this evidence. 309 Further, Mr Caillard stated that he was immediately struck by the name New Certan and the product presentation. But his knowledge of Bordeaux is exceptional compared to other Australian wine trade and media. As a world expert on Bordeaux, his reaction is unlikely to be that of the typical Bordeaux consumer, both in relation to these specific products, but Bordeaux wines more generally. Mr Caillard above most others in Australia would know if any Bordeaux producer had an association or relationship with an Australian producer. 310 Now the respondents rely on the evidence of Mr Oliver to the effect that he did not personally have a similar reaction to the New Certan wine and that he did not consider that any relevant consumers would have such a reaction to it. But Mr Oliver's evidence on this matter is not to be preferred. 311 First, the evidence of Mr Hooke, Ms Faulkner and Mr Airoldi in relation to this issue was largely unchallenged. And their reactions were spontaneous and genuine. 312 Second, Mr Oliver encountered the New Certan wine during a very busy tasting period. His evidence suggested that he gave only cursory attention to the presentation of the New Certan wine. 313 Third, when Mr Oliver encountered the New Certan wine, the name Certan simply did not mean anything to him: HIS HONOUR: But what did you mean – what did you think "Certan" meant? MR OLIVER: I just wrote it down as the word "certain". I stuck an I in it and – and it was only when I was talking to the MinterEllison team that I had actually realised that I had made that mistake. I didn't make any – the word "Certan" meant absolutely zero to me. Q: Well, does that mean that the word "Certan" in VCC meant nothing to you suggesting that you didn't really know much about VCC? A: No, I – it – no. I just didn't – I – I didn't read the word as spelt that way. I just – I was typing and it was in a line-up with a lot of wine and I typed it as "New Certain", the English word. 314 It is therefore unsurprising that it did not call VCC to mind for him. However, he accepted that the use of the word "New" before the word "certan" infers that there is an "old" Certan. 315 Fourth, Mr Oliver's opinion in relation to the presentation of the New Certan wine was predicated on the assumed fact that there was no story behind the New Certan wine regarding an association with VCC. Mr Oliver did not do any searches, or request any materials from the respondents, to verify that. I agree with VCC that the evidence demonstrates that assumed fact to be problematic. 316 Fifth, a number of online retailers have also promoted the New Certan wine on the basis that there is connection between it and the Vieux Château Certan wine estate. For example, United Cellars described that connection as follows: The New Certan Pinot Noir, with it's recognisable pale pink cap, is a play on Vieux Chateau Certan, on [sic] of the most expensive wines of Bordeaux in France. Owners of that estate also own this Tasmanian estate. It is careful selection of only the best parcels across our Mount Pleasant Vineyard in Launceston. Mount Pleasant grows an ethereal Pinot noir of elegant intensity. A warm and dry vintage, with cold nights and bright sunny days; providing perfect growing conditions for Pinot Noir. Great tannin ripeness coupled with fruit intensity mark the 2017 vintage. 317 Now the respondents say that all of this evidence does not rise above the level of cause to wonder. But I disagree. 318 Now in my opinion, the presentation of the New Certan wine vintages promoted, offered for sale and sold to date bear a significant resemblance to the presentation of VCC's wines and, in particular, the VCC Wine. And it is unsurprising that this is so, given the evidence of Mr de Moor's involvement in the design of the packaging of the New Certan wine. The foundation of the design process was to provide Ms Harcus with a photo or a bottle of the VCC Wine including the pink capsule. The label clearly took inspiration from the label of the VCC Wine. The new branding for New Certan 319 With effect from the 2022 vintage, PBV intends to rebrand the New Certan wine. 320 Now in my view the proposed New Certan product looks very different from the previous design of the New Certan product. Other than the name "New Certan", the proposed New Certan product removes all of the New Certan features, including the pink capsule and the image of Mr de Moor's family home. The new branding is depicted as follows: 321 The new branding has the following features, in addition to other distinguishing features such as the classic Burgundy-style bottle shape, being a solid bronze capsule (the same as used for other PBV pinot noir wine) with the name 'Pipers Brook' in unfilled gold lettering printed onto the bottom half of the capsule, an off white, straight-edged label, and a centrally located lithograph of an artwork depicting the Tamar River in Launceston by Colonial era artist Joseph Lycett, with solid gold bordering. Further, the branding has the words "New Certan", "Tasmania", "single site", "pinot noir" and the vintage of the wine in deep green or gold text featured centrally on the front label. 322 The text on the back label of the new branding states: 323 A consumer encountering the new branding would have no doubt of the product's commercial origin. It prominently bears the name "Pipers Brook Vineyard", and its style is consistent with other wines produced by PBV. There are no references to "European heritage". It is a world away from the packaging of the VCC wines. 324 Mr Oliver commented on whether he would consider a bottle of New Certan presented differently, that is, without an image of a château and having different colours, but retaining the name 'New Certan', to be connected to VCC. 325 Having been directed to consider the New Certan label against the VCC Wine label, he would describe it as amusing and harmless fun. To him, the joke would "fall flat" if the name was retained but the presentation was otherwise different. However, it certainly would not make him think that New Certan was connected to VCC. 326 After he had expressed these opinions above, he was shown the following images: 327 This label is in the style of a label that he had associated with wines from the PBV range. 328 He observed that the font used for the words 'New Certan' is different to the labels on which he made comments in his affidavit. He noted that in the context of his affidavit and the questions that he had been asked to address, he was necessarily more focused on such design elements than he would normally be. The front and back labels for New Certan on which he commented above were, in his opinion, playful and humorous. He would not use either of those terms to describe this label. 329 Reviewing the back label closely, he observed that the references to European heritage have been removed. The label clearly identifies the wine as being produced by PBV. 330 He did not consider this bottle to be connected to VCC. It is clearly a PBV label. 331 Now VCC says that the proposed new branding of the New Certan wine would also be misleading. It says that the proposed branding prominently features the name New Certan. It says that it does so in a context where, over the course of several years, Kreglinger and PBV have promoted the New Certan wine and by reference to a connection with VCC, VCC's wines and/or the VCC wine estate. It says that the proposed re-branding will leverage and build upon the existing knowledge and reputation in the Australian marketplace of the New Certan wine. VCC says that the proposed re-branding does not and could not undo the false connection that has been conveyed by the respondents conduct to date. 332 Mr Thienpont explained the difficulty that is inherent in the proposed re-branding. 333 He said that whilst the proposed re-branding removes elements of the existing branding such as the use of the colour pink and the overall label presentation which he regarded as closely mimicking the labels of VCC's wines, the proposed re-branding continues to be of serious concern to him. 334 As to the respondents' proposal to continue such conduct into the future through their existing stock of wines and the as yet unreleased 2021 vintage, to him this conduct involves taking advantage of the name and goodwill of VCC and its wines. He said that the foundations of the market for the New Certan wine have been built upon this. 335 He said that the name New Certan is a very prominent part of the proposed re-branding. To him, this name continues to reference VCC. This is because the word Certan is the important part of the name Vieux Château Certan and the name New Certan, and the word "vieux" in French means "old", the opposite of, but a closely related concept to, the word "new". 336 He regarded the use of the name New Certan as a particularly important part of the respondents' conduct because it is the name by which the New Certan wine is likely to be identified and recalled by the trade and consumers. Accordingly, he believed that the use of that name would continue to evoke and reference VCC and its wines. This is particularly so against the background of how the New Certan wine has been presented and marketed to date. 337 Ms Faulkner said that her initial reaction to the new branding was that it still uses the name New Certan. The name New Certan creates an association for her with VCC. New Certan is prominently positioned on the front and back labels in green and bronze font, and, in her opinion, this is the name that will be referred to when the wine is spoken about and, in many cases, referred to in wine lists. 338 She said that whilst the wine name remains the same, the new branding uses a different colour scheme for the proposed screw top cap and a different label format which features a Joseph Lycett image. With the exception of the name, which creates an association for her with VCC, the new branding is in a style that she recognises as being consistent with wines produced by PBV. 339 She said that as the new branding retains the name New Certan, she associates it with her experience of reviewing New Certan 2018. She said that if she had not been involved in this proceeding and had encountered the new branding as a bottle of New Certan 2022, she thinks that it is highly likely that she would still believe that there was a connection or association of some sort based on the name of the wine, New Certan, and her previous experience with it. 340 Mr Hooke stated that the proposed branding is visually very different to the current New Certan wine presentation. This proposed branding does not draw his attention in the same way as the current presentation of the New Certan wine does – the bronze screw top cap includes the name Pipers Brook, the label featuring the Joseph Lycett image and green and bronze font are muted by comparison to the current label. He did not experience the same instant recognition of an association with VCC that he experienced when he first saw the bottle of the 2017 vintage of New Certan on 2 September 2018, and later saw the 2019 vintage on 18 February 2022. 341 However, he said that the name of the wine, New Certan, remains the same. It is prominently featured on the front and back label of the proposed branding. He would expect that the wine will continue to be referred to by that name, including when written or spoken. In his mind, this creates a clear link between any wine using the proposed branding and the New Certan wine that he is familiar with under the current branding. 342 He said that his assumption about a connection between the New Certan wine and VCC has been corrected because of his involvement in this proceeding. If he had not been told that this assumption was incorrect, he believes it is likely that he would still believe that the New Certan wine was connected with VCC. 343 Accordingly, if he were to receive or see a bottle with the proposed branding, he is confident that he would identify it as the New Certan wine that he is familiar with and recalls his previous experiences with the 2017 and 2019 vintages of New Certan. It is the on-going use of the name New Certan which would cause this to be the case. 344 Mr Caillard stated that the proposed branding still includes the name New Certan prominently on both the front and back labels. 345 He said that with the exception of the name, New Certan, the elements of the product presentation that he described in his affidavit as being strongly evocative of VCC are not included in the proposed branding. However, to his mind, the use of the name New Certan means that the wine will continue to be associated with VCC. 346 From his review of the proposed branding, he expects that the New Certan wine will continue to be referred to, both verbally and in writing, by the name New Certan. This means that the name New Certan will be used to refer to both the existing vintages which feature the current wine presentation, and any new vintages which feature the proposed branding. To his mind, this creates an ongoing connection between the two wine presentations. 347 In his experience of promoting and selling fine wines, the history and narrative of a wine and its wine producer is important. Wine professionals, such as Mr Oliver, who have already seen, reviewed and written about New Certan wines may be asked to review a future vintage with the proposed branding. 348 Further, he said that as can be seen by Mr Oliver's review of the 2017 vintage of New Certan, wine writers generally include in their reviews and articles wine images that have been supplied by the wine producer. In his experience, this creates for the reader a visual association of the wine presentation with the wine that is being reviewed. Wine reviews of fine wines are generally cumulative, in the sense that reviews remain available and accessible online for many years on the websites of wine writers and wine publications, and retailers promoting the wines. Past reviews of New Certan with the current wine presentation are likely to be accessible and included on website pages when wine writers review new vintages of New Certan with the proposed branding. 349 Further, in his view the name 'New Certan' is strongly evocative of VCC. In his opinion, the proposed branding will continue to communicate albeit more subtly, the New Certan product narrative, namely that there is some form of connection or association between New Certan and VCC's wines and their respective producers. Further, the use of the name Pipers Brook on the cap together with the name New Certan on the label of the proposed branding reiterates that there is a connection between the producer of the 'New' Certan, being PBV, and the producer of the 'old' Certan, being VCC. 350 Now Mr Oliver also gave evidence in cross-examination which VCC says highlights the difficulty with the proposed re-branding. 351 VCC says that the name New Certan, with all of the connotations it carries based on the respondents' conduct to date, is the primary identifier of the proposed new branding. It says that the wine is unlikely to be referred to as a PBV wine. 352 It says that the effect of this is that the respondents will continue to capitalise on the goodwill of VCC which they have called upon in their branding of the New Certan wine. 353 But I do not accept VCC's case and criticisms concerning the proposed new branding of New Certan. I will return to this later. VCC's claims under the ACL and in passing off 354 Let me deal with some general matters before getting into the detail. 355 VCC alleges that Kreglinger's and PBV's promotion and sale of the New Certan wine, both in bottles with the previous New Certan features and in bottles with the new branding, is misleading or deceptive or is likely to mislead or deceive consumers, in that it conveys that there is a connection between the New Certan wine and VCC or its wines. 356 VCC also alleges that Kreglinger's and PBV's promotion and sale of the New Certan wine, both in bottles with the previous New Certan features and in bottles with the new branding, falsely represents to consumers that the New Certan wine has the approval of VCC or that Kreglinger and/or PBV has an affiliation with VCC. 357 But VCC does not allege that consumers would be misled or deceived into thinking that the New Certan wine is either of the VCC wines. Clearly, the parties' respective products are distinguishable. They are different products (Bordeaux from Pomerol vs. Tasmanian pinot noir). They sell at different price points ($600 to $800 per bottle vs. $75 to $95 per bottle). And they are presented in different shaped bottles (traditional Bordeaux shape vs. Burgundy/pinot noir shape). 358 Further, VCC does not allege that consumers would be misled or deceived into thinking that the New Certan wine has been produced by VCC. They are clearly marked with the names of their respective and different producers. 359 Let me make some other general points before proceeding further. 360 The first point is that VCC does not have a monopoly over each or any of the branding features used on its products. 361 Now the VCC wines are sold in or with a combination of the following features being a pink capsule with gold decoration around the base and on top of the capsule, a label featuring the name Certan as a prominent part of the names Vieux Château Certan and La Gravette De Certan, the use of a pink font for the first letters of the name of the wine, in the case of the VCC Wine, the words Grand Vin and Mis En Bouteille Au Château in pink font, a centrally located image of a stately house known as Vieux Château Certan that is located on the VCC wine estate, and a fluted edge profile. But each of these features is not unique to VCC or its wines. 362 First, the use of an image of a stately house or château is common, particularly amongst Bordeaux wines. 363 Second, the words "Grand Vin" ("great wine") and "Mis En Bouteille Au Château" ("bottled at the estate") are mere descriptors and are used on wines other than the VCC Wine. 364 Third, as to the use of a pink capsule or other elements of pink on the packaging of the VCC wines, I accept that such a colour choice was unusual for Bordeaux wines. But even the use of a pink capsule in Bordeaux is not unique to VCC or its products. A number of producers of wines including French red wines use variations of pink on their respective capsules, including Château Haut-Brion, La Mission Haut-Brion and Château Lascombes. But I do accept that VCC has used a particular and unusual shade of pink. 365 The second point to make is that in assessing the existence of any reputation in the combination of the VCC features and VCC itself, it is relevant to have regard to the manner in which the VCC wines are sold in Australia. I have touched on some of these aspects earlier but it is useful here to note the following. 366 First, the process through which VCC sells its wines is known as La Place de Bordeaux. It involves the use of courtiers, who are retained by wine estates to negotiate the sale of wines to négociants, who are wine brokers who then on-sell wine to their distributor contacts. Wines sold through this process are primarily sold en primeur, which means that they are purchased prior to being bottled. The en primeur system is the traditional means by which trade and customers are able to buy wines from Bordeaux châteaux. This is not a typical retail setting. 367 Second, to the extent the VCC wines are sold in Australia, the evidence shows that they are typically sold via mailing lists or wine retail lists. These lists typically do not display pictures of any products. The name Vieux Château Certan on any such lists appears amongst tens or hundreds of other products, and in some cases also with Château Certan de May. 368 Third, in restaurant settings, to the extent that the VCC wines appear on wine lists at restaurants, they are likely to appear in a written list organised by region and sub-region amongst tens or hundreds of other products. For example, the wine list for the Royal Mail Hotel is 99 pages long. Various vintages of the VCC Wine appear on one page of that list. Château Certan de May also appears in that list on the preceding page. 369 The third point to make is that neither of VCC's wines is referred to solely as "Certan". And the evidence does not indicate that the wine consuming public or wine professionals refer to the VCC Wine by reference to Certan alone. Let me elaborate on these points and make other points concerning Certan. 370 First, there is no evidence that VCC has ever promoted or sold either of the VCC wines under or by reference to Certan alone. To the contrary, to the extent that VCC has used the term Certan, it has done so as part of the composite phrases Vieux Château Certan and La Gravette de Certan. The ordinary reasonable consumer is to be credited with awareness of this consistent usage (Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 8) (2008) 75 IPR 557 at [65] per Heerey J). So, in circumstances where VCC has never made any use of the term Certan alone in any branding or marketing activity divorced from the composite phrases Vieux Château Certan and La Gravette de Certan, there is not any secondary stand-alone reputation in the word Certan. 371 Second, there are other French wines which include Certan as part of their name, including Château Certan de May. The third-party usage of Certan by such wineries is against the proposition that VCC has acquired any independent reputation in that word. 372 The word Certan, or its alternative, Sertan, originates from the area in Pomerol granted by royal decree to the Demay family. It is not a word used exclusively to refer to VCC or the VCC estate. The word Certan has been for many years used in connection with the sale of wine by other winemakers who are independent of VCC and who are located on or near the original Sertan estate in Pomerol. The original form of Sertan described a large estate that was over time divided into smaller estates. 373 One notable example of this is Château Certan de May, previously called Petit Certan and Château Certan, and Croix de Certan, which is a second wine produced by Château Certan de May. 374 Château Certan de May is sold in bottles which prominently display the words Pomerol and Château Certan in large font above the text De May de Certan in smaller font. Château Certan de May has been sold in Australia since at least the early 1980s. It retails at prices between $200 to $300. Château Certan de May is sold through similar trade channels and in similar quantities to the VCC Wine but in excess of the Gravette Wine. 375 Further, the VCC Wine and Château Certan de May are listed for sale in close proximity to each other in both of the Negociants Australia "Imported Wine Portfolio" lists in evidence, are both listed for sale on the wine list for the Royal Mail Hotel under the Pomerol sub-heading, and both appear in close proximity in the "Red Bordeaux" section of the 1991 Langton's Vintage Price Guide. Both wines also appear in search results for "certan" on the Langton's Price Guide website and on the Dan Murphy's website. 376 Further, historically there were other wines which included the word Certan in their names, including Château Certan Giraud and Château Certan Marzelle, previously called Certan and Château Certan. The evidence relating to other "Certan" wines in Australia is more limited, but it does indicate that those products have been available for purchase in Australia. The Croix de Certan wine appears on various current wine lists, including at restaurants in Melbourne, Sydney, Canberra and Brisbane. 377 Third, in the context of French wines the evidence establishes that there are many French châteaux which have similar names, and so produce wines with correspondingly similar names or with common words. The practice of including common elements or words in names is very common amongst producers of French wines. There is often a shared common element, which can be reflective of the physical location or historical ownership or which are otherwise highly descriptive. And in my view this naming practice is something that wine experts or consumers willing to purchase a $500 bottle of Bordeaux would likely be aware of. 378 There are several châteaux with the name "Lafite" or with a near-identical word in them, including: Château Lafitte, Château Laffitte-Mengin, Château Laffitte Carcasset, Château Laffitte Laujac, Château Lafite Monteil, Château Lafite Rothschild, Château Lafitte Marceliln, and Château Smith Haut Lafitte. 379 Other examples of producers using a common word or words in their name include the following. 380 La Fleur: Château Lafleur, Chateau La Fleur-Petrus, Château Lafleur Brouard, Château Lafleur de Viaud, Château La Fleur des Houx, Château La Fleur du Mayne, Château Lafleur du Roy, Château Lafleur Gazin, Château Lafleur Grands- Landes, Château Lafleur Grangeneuve, Lafleur Laroze, Lafleur Mallet, Château Lafleur Naujan, Château Lafleur Saint-Jean, La Fleur Saint Julien, Château La Fleur-Vachon, Château Lafleur Vauzelle and Château Lafleur Vincent. 381 Mouton: Château Mouton Rothschild and Château Mouton Cadet. 382 Léoville: Château Léoville Barton, Léoville-Las Cases and Château Léoville- Poyferré. 383 Haut-Brion: Château Haut-Brion, Château La Mission Haut-Brion, Chapelle de la Mission-Haut-Brion, Château La Tour-Haut-Brion, Château Laville-Haut-Brion and Château Larrivet-Haut-Brion. 384 Pichon-Longueville: Château Pichon-Longueville-Baron (Grands Vins de Gironde) and Château Pichon-Longueville-Comtesse de Lalande. 385 La Croix meaning "the Cross", which usually has a religious connotation including that it may originally have been produced by monks: Château Lacroix, Château La Croix de Gay, Château la Croix-de-Gay, Château La Croix, Château de la Croix, La Croix-Barton, Château la Croix Bellevue, Château la Croix Saint-Pierre, La Croix de Beaucaillou, Château La Croix Canon, Château La Croix de Belair, Château la Croix de Bonneau, Château la Croix de Nauze, Château la Croix de Pez, Château la Croix du Chevalier, Château La Croix du Moulin, Château La Croix du Bos, Château la Croix du Breuil, Château la Croix du Casse, Château La Croix Figeac (Lamarzelle), Château la Croix Fourche Mallard, Château La Croix Morand, Château La Croix Moulinet. 386 Gay: Château La Croix de Gay, Château le Gay, Château Vray Croix de Gay, La Fleur de Gay, Château du Gay de Leyrat and Château Gay Moulins. 387 Cantenac: Château Clos de Cantenac, Château Boyd-Cantenac and Château Cantenac Brown. 388 Fourcas: Château Fourcas-Dumont, Château Fourcas Dupré, Château Fourcas Hosten and Château Fourcas Loubaney. 389 La Tour meaning "the Tower": Château Latour, Château Latour Camblanes, Château Latour Laguens, Château La Tour Blanche, Château La Tour Canon, Château La Tour Carnet, Château La Tour Cordouan, Château la Tour de Bessan, Château la Tour de Mons, Château la Tour de Perrigal, Château la Tour de Ségur, Château la Tour Figeac, Château La Tour Gayet, Château la Tour-Guillotin, Château la Tour Haut Brion, Château la Tour Léognan and Château la Tour-Marcillanet. 390 Cadet meaning "younger", which is usually used for a second or junior wine in a portfolio: Château Cadet-Bon, Château Cadet Bragard, Close Cadet D'Arthus, Le Cadet de Gombaude, Le Cadet de Larmadne, Le Cadet de Martinens, Le Cadet de Raymond-Lafon, Cadet du Château Claymore, Cadet du Grand Bos, Cadet Grange Bruleée, Château Cadet-la-Motte, Château Cadet La Vieille FranceChâteau Cadet-Peychez, Château Cadet-Piola, Château Cadet-Pontet, Château Cadet Soutard and Mouton Cadet. 391 Corbin: Château Corbin, Château Corbin-Michotte, Château Grand Corbin, Château Grand Corbin-Despagne and Château Haut-Corbin. 392 Pavie: Château Pavie, Château Pavie Decesse and Château Pavie-Macquin. 393 Doisy: Château Doisy Daene, Château Doisy-Védrines and Château Doisy- Dubroca. 394 Fourth, I note that there are French trade marks using the word Certan. The WIPO Global Brand database as at 27 May 2021 showed French trade marks containing the word Certan in class 33 of the Nice Classification, which relates to alcoholic beverages including wine. Extracts from the database show the details of the following French trade mark registrations recorded as active and containing the word Certan that are not related to VCC: trade mark registration 99821043 for Château Certan, trade mark registration 99827242 for Château Certan-Lafleur and trade mark registration 94506525 for Château Certan-Marzelle, which are registered in the name of Ets Jean Pierre Moueix, Société par Actions Simplifiée; trade mark registration 3089496 for Château Certan de May de Certan and trade mark registration 4290368 for Château Croix de Certan, which are registered in the name of Château Certan de May, Earl, M et Mme Pradel de Lavaux Michel et Isabelle, M. François Pradel de Lavaux, Mme Inès Boissarie et Mr Jean Axel de Lavaux, propriétaires en indivision; trade mark registration 4226864 for Vieux Plateau Certan, which is registered in the name of M et Mme Pradel de Lavaux Michel et Isabelle, M. François Pradel de Lavaux, Mme Inès Boissarie et Mr Jean Axel de Lavaux, propriétaires en indivision; trade mark registration 3473433 for Clos du Vieux Plateau Certan, which is registered in the name of Scea de Lavaux; and trade mark registration 3739942 for Clos du Vieux Plateau Certan Pomerol, which is registered in the name of M. François de Lavaux. 395 Fifth, the name Certan has no meaning in respect of Australian wine regions or wines. The name Certan evokes wines from Pomerol. But to the extent that any person has specific knowledge of wines from the Pomerol sub-region of Bordeaux, that person would likely be aware of the existence of other wines that use Certan, and in particular Château Certan de May. With that knowledge, and with knowledge of the practice of using similar names or common words amongst producers of French wines, it is problematic that such a person upon seeing the name Certan would automatically draw an association between that word and VCC alone. 396 In summary, in my view the use of Certan alone does not in and of itself indicate any connection or affiliation with VCC. 397 Let me now turn to identifying the principal legal principles to be applied. The relevant legal principles 398 Let me first say something concerning the principles relevant to asserted contraventions of ss 18 and 29 of the ACL. I should say as a preliminary observation that it is accepted that the promotion and sale of the New Certan wine by Kreglinger and PBV is conduct in trade or commerce for the purposes of the ACL. 399 In Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191, Gibbs CJ stated the general approach in the following terms (at 199 and 200): … Speaking generally, the sale by one manufacturer of goods which closely resemble those of another manufacturer is not a breach of s 52 if the goods are properly labelled. There are hundreds of ordinary articles of consumption which, although made by different manufacturers and of different quality, closely resemble one another. … In all of these cases, the normal and reasonable way to distinguish one product from another is by marks, brands or labels. If an article is properly labelled so as to show the name of the manufacturer or the source of the article its close resemblance to another article will not mislead an ordinary reasonable member of the public… 400 In Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd (2023) 408 ALR 195, the High Court recently set out the well-established principles for determining a breach of s 18 of the ACL (at [80] to [83]). Similar principles apply in the context of claims under s 29 of the ACL, as was said in Self Care at [84]. But of course I am applying these concepts in a factual setting involving a dispute between traders. Let me elaborate on some of the key themes. 401 The question whether conduct has a tendency to lead a person into error is an objective question of fact to be determined on the basis of the conduct of the respondent as a whole viewed in the context of all relevant surrounding facts and circumstances. These circumstances include the strength of the applicant's reputation, and the extent of distribution of its products, the strength of the respondent's reputation, and the extent to which the respondent has undertaken any advertising of its product, the nature and extent of the differences between the products, including whether the products are directly competing, the circumstances in which the products are offered to the public, and whether the respondent has copied the applicant's product or has intentionally adopted prominent features and characteristics of the applicant's product (Verrocchi v Direct Chemist Outlet Pty Ltd (2016) 247 FCR 570 at [61] to [72] per Nicholas, Murphy and Beach JJ). 402 The conduct is tested as against the ordinary or reasonable member of the public or relevant section of the public to whom the conduct is directed (Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45 at [102] and [103]). 403 The principles relevant to the classification of the relevant person or class of persons for the purpose of s 18 of the ACL were summarised in Self Care as follows (at [82] and [83]): The third and fourth steps require the court to characterise, as an objective matter, the conduct viewed as a whole and its notional effects, judged by reference to its context, on the state of mind of the relevant person or class of persons. That context includes the immediate context – relevantly, all the words in the document or other communication and the manner in which those words are conveyed, not just a word or phrase in isolation – and the broader context of the relevant surrounding facts and circumstances… Where the conduct was directed to the public or part of the public, the third and fourth steps must be undertaken by reference to the effect or likely effect of the conduct on the ordinary and reasonable members of the relevant class of persons. The relevant class of persons may be defined according to the nature of the conduct, by geographical distribution, age or some other common attribute, habit or interest. It is necessary to isolate an ordinary and reasonable "representative member" (or members) of that class, to objectively attribute characteristics and knowledge to that hypothetical person (or persons), and to consider the effect or likely effect of the conduct on their state of mind. This hypothetical construct "avoids using the very ignorant or the very knowledgeable to assess effect or likely effect; it also avoids using those credited with habitual caution or exceptional carelessness; it also avoids considering the assumptions of persons which are extreme or fanciful". The construct allows for a range of reasonable reactions to the conduct by the ordinary and reasonable member (or members) of the class. [footnotes omitted] 404 Conduct which merely causes confusion or uncertainty in the sense that members of the public might have cause to wonder whether the two products might have come from the same source is not misleading and deceptive conduct. The question is whether a consumer is likely to be misled or deceived. 405 There must be a logical causal connection between the conduct and alleged error. However, not every case involving a logical connection between conduct and alleged error will result in the conduct being regarded as misleading or deceptive for the purposes of the ACL. Even if, strictly speaking, a causal connection exists between conduct and error, where the error is based upon an erroneous assumption derived from, but not logically justified by, the conduct, the conduct will not ordinarily be treated as misleading or deceptive. 406 In Campomar it was observed at [105]: Nevertheless, in an assessment of the reactions or likely reactions of the "ordinary" or "reasonable" members of the class of prospective purchasers of a mass-marketed product for general use, such as athletic sportswear or perfumery products, the court may well decline to regard as controlling the application of s 52 those assumptions by persons whose reactions are extreme or fanciful. For example, the evidence of one witness in the present case, a pharmacist, was that he assumed that "Australian brand name laws would have restricted anybody else from putting the NIKE name on a product other than that endorsed by the [Nike sportswear company]". Further, the assumption made by this witness extended to the marketing of pet food and toilet cleaner. Such assumptions were not only erroneous but extreme and fanciful. They would not be attributed to the "ordinary" or "reasonable" members of the classes of prospective purchasers of pet food and toilet cleaners. The initial question which must be determined is whether the misconceptions, or deceptions, alleged to arise or to be likely to arise are properly to be attributed to the ordinary or reasonable members of the classes of prospective purchasers. 407 Let me linger on Campomar for the moment and the debate concerning the "not insignificant number" formulation. Let me also set out my starting point in Flexopack SA Plastics Industry v Flexopack Australia Pty Ltd (2016) 118 IPR 239 (at [270]): [I]n determining whether a contravention of s 18 has occurred, the focus of the inquiry is on whether a not insignificant number within the class have been misled or deceived or are likely to have been misled or deceived by the respondent's conduct. There has been some debate about the meaning of "a not insignificant number". The Campomar formulation looks at the issue in a normative sense. The reactions of the hypothetical individual within the class are considered. The hypothetical individual is a reasonable or ordinary member of the class. Does satisfying the Campomar formulation satisfy the "not insignificant number" requirement? I am inclined to the view that if, applying the Campomar test, reasonable members of the class would be likely to be misled, then such a finding carries with it that a significant proportion of the class would be likely to be misled. But if I am wrong and that a finding of a "not insignificant number" of members of the class being likely to be misled is an additional requirement that needs to be satisfied, then I would make that finding in the present case. For a discussion of these issues, see Greenwood J's analysis in Peter Bodum A/S v DKSH Australia Pty Ltd (ACN 005 059 307) (2011) 280 ALR 639; 92 IPR 222; [2011] FCAFC 98 at [206]–[210] and National Exchange Pty Ltd v Australian Securities and Investments Commission (2004) 61 IPR 420; 49 ACSR 369; [2004] FCAFC 90 at [70] and [71] per Jacobson and Bennett JJ. 408 Now Wigney, O'Bryan and Jackson JJ in their dicta in Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2020) 381 ALR 507 at [23] and [24] criticised the "not insignificant number" formulation including my own use thereof, whether as an alternative or an addition. They said that such a test is "at best, superfluous to the principles stated by the High Court in Puxu, Campomar and Google Inc". And they said that such a test is "at worst, an erroneous gloss on the statutory provision". They concluded (at [24]): Consistently with our view that the "significant number" test is at best superfluous and at worst an erroneous and distracting gloss, we consider it appropriate to approach the ACCC's arguments on the basis of the principles stated by the High Court in Puxu, Campomar and Google Inc and to ignore the "significant number" test. Nevertheless, we note that our conclusion would not change even if we were to apply the "significant number" test. 409 But as they said, "[n]o substantive argument was directed to the correctness of that test by the ACCC and our decision in this appeal does not turn upon it" (at [23]). 410 How should one proceed in circumstances where there are at least three binding Full Court authorities prior to TPG, and importantly after Campomar, that perhaps justify applying such a test? Such Full Court authority prior to TPG did not accept the suggestion that Campomar displaced such a test. Three examples will suffice. 411 In National Exchange Pty Ltd v Australian Securities and Investments Commission (2004) 49 ACSR 369, Jacobson and Bennett JJ said (at [67] to [71]): Mr Karkar submitted that the primary judge erred in failing to consider whether a "significant proportion" of shareholders would have been likely to have been misled. He relied on the use of those words by Wilcox J in 10th Cantanae Pty Ltd v Shoshana Pty Ltd (1988) 79 ALR 299 (10th Cantanae) at 302. Mr Karkar also pointed to a possible inconsistency between the remarks of Deane and Fitzgerald JJ in Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 (Taco Bell) and the test of the ordinary or reasonable shareholder stated by the High Court in [Campomar]. In a well-known passage in Taco Bell at 202, their Honours referred to the need to consider the question of whether conduct is misleading by reference to all those who come within the class including the astute and the gullible. In [Campomar] at [102] and [103] their Honours referred to the attribution of characteristics to the ordinary or reasonable members of the class and to the need to isolate the hypothetical member of the class who has those characteristics. The attribution is to be objective in order to allow for the wide range of persons who would, in fact, make up the class. It is also to allow for unreasonable reactions of members at either end of the spectrum which makes up the class. We see no difference between this approach and that which was contemplated by Deane and Fitzgerald JJ in Taco Bell. Indeed, the same view seems to have been taken by Gibbs CJ in Puxu at CLR 199; ALR 6 as follows: 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 regarded as contemplating the effect of the conduct on reasonable members of the class. Nor in our opinion is there any distinction between the words used by Wilcox J and the approach stated by the High Court in [Campomar]. In determining the effect of conduct on the reasonable members of the class, it is necessary for the court to consider objectively, as a question of fact, whether those persons have been, or would be likely to be, misled. A finding that reasonable members of the class would be likely to be misled carries with it the determination that a significant proportion of shareholders would be misled. In any event, 10th Cantanae was a decision of a Full Court. Pincus J observed (at 309) that it was not sufficient that "some readers" were affected. Gummow J (in dissent, but not as to the test) referred (at 314–15) to the need to prove that a substantial proportion of persons was misled, in contrast to a need to establish that almost all purchasers were of a particular view. Gummow J also referred (at 315) to "the usual manner in which ordinary people behave". Accordingly, it is apparent that the test stated in 10th Cantanae is not inconsistent with [Campomar]. We disagree with a suggestion to the contrary by Finkelstein J in Domain Names at [25]–[26]. 412 Further, Dowsett J said (at [23]): I consider that this approach misconceives the respective effects of Taco Bell and 10th Cantanae. In my view, the relevant passages in both cases merely express, in different forms, the test propound by the High Court in [Campomar]. The way in which such a test is propounded in a particular case may, to some extent, reflect the way in which the applicant has sought to satisfy it. An applicant may seek to prove misleading effect by showing that many representees were misled. To discharge the relevant onus, it may well be necessary to show that a significant proportion was misled. On the other hand, there will be cases, such as the present case, where there is little, or perhaps no evidence that any person was actually misled. Where a regulatory authority seeks to prevent conduct in breach of a provision such as s 52 of the TP Act or s 1041H(1) of the Act, this will often be the case. Such an applicant will rely upon the terms of the representation and the circumstances in which it was, or is to be made, looking to the notional representative class member as the basis for assessing the likely effect of the conduct in question. To speak of a reasonable member of a class necessarily implies that one is speaking of a significant proportion of that class. It is impossible to postulate a situation in which the reasonable member of a class is not representative of such a proportion. Thus the approach adopted by Wilcox J in 10th Cantanae is simply an alternative way of expressing the test now clearly prescribed in [Campomar]. 413 Now three points can be made. First, there was non-acceptance of the trial judge's doubts. Second, what is controlling is what Jacobson and Bennett JJ said. Third, the relevant formulation concerning "significant proportion of that class" was not seen as inconsistent with or superfluous to High Court authority such as Puxu and Campomar. And interestingly, but admittedly fleetingly, Campomar refers to 10th Cantanae Pty Ltd v Shoshana Pty Ltd (1988) 79 ALR 299 in footnote 145, which references Gummow J in 10th Cantanae at 324 to 325 (324 incorporates by reference aspects of 314 and 315), without any comment let alone criticism of 10th Cantanae. 414 Further, in Peter Bodum A/S v DKSH Australia Pty Ltd (2011) 280 ALR 639, Greenwood J, with whom Tracey J agreed, said (at [206]): Some debate has arisen in the authorities about whether the test adopted in Campomar by the High Court is inconsistent with the notion that s 52 looks in a normative sense to whether a not insignificant number of persons have been misled or are likely to be misled by the impugned conduct. In Campomar, as already indicated, the High Court observed that s 52 must be regarded as contemplating the effect of the impugned conduct on reasonable members of the class of prospective buyers and the question is answered by considering the reactions of the hypothetical individual within the class excluding assumptions which might be regarded as extreme or fanciful. The hypothetical individual is a reasonable or ordinary member of the class and once the responses of the notional hypothetical individual have been determined, they are determined for the class, that is, the whole class. Therefore, the Campomar question might be (in the context of conduct said to involve representations to a section of the public at large such as prospective retail buyers of a product sold by a respondent rival trader) whether the class, as a class, has been misled or deceived or is likely to be misled or deceived by the conduct rather than whether a not insignificant number of persons in the class, in fact or by inference, have been misled or are likely to be misled. The reference to a "not insignificant number of persons" in the formulation of the test in Full Court authorities of this Court, is taken to be a reference to a not insignificant number of reasonable or ordinary persons in the class. If a not insignificant number of such persons would be misled or deceived by the impugned conduct, s 52 is contravened. That may be a test that asks a different question from whether the class as a class is misled by reference to the hypothetical notional reasonable member of the class. 415 Greenwood J (at [207]) then set out some of the passages of the Full Court in National Exchange of Jacobson and Bennett JJ that I have set out, and then a passage from Dowsett J. It would seem that he also considered what was said by Jacobson and Bennett JJ to be controlling. Then he said at (at [209]): In the absence of a decision of the High Court expressly concluding that the proper approach to the construction of s 52 does not involve normative considerations of whether a not insignificant number of persons within the group would be misled by the impugned conduct, it seems to me appropriate to apply the test of whether a not insignificant number of persons within the relevant section of the public would be misled or be likely to be misled by reason of the impugned conduct. 416 Further, in Hansen Beverage Company v Bickfords (Australia) Pty Ltd (2008) 171 FCR 579, both Tamberlin J (at [46] and [47]) and Siopis J (at [66] to [72]) applied the "not insignificant number" or "significant number" test. 417 As far as I am aware, until the dicta in TPG there has been no Full Court authority or High Court authority which casts doubt upon the authority of what was said by Jacobson and Bennett JJ in National Exchange, Greenwood J (supported by Tracey J) in Peter Bodum and Tamberlin and Siopis JJ in Hansen Beverage. Now in TPG it was said that such cases "did not resolve the question whether it was a different and additional test to the principles stated by the High Court" (at [23(d)]). That is true. But what such cases do resolve is, first, that it is not a test which is inconsistent with or superfluous to the principles stated in Campomar and Puxu for that matter, second, that to apply it is not to put an inappropriate gloss on the statutory provisions and, third, that such a test is not a symptom of tort law infection. 418 My reading of Full Court authority prior to TPG is that the "not insignificant number" test is not being used to rewrite or gloss the words "likely to mislead or deceive". Rather, it is a formulation of the application of the statutory words. So, taking such words, which are of broad amplitude and enshrine the normative standard to be applied, the cases that I have referred to, which include Campomar itself, have been all about how such statutory words are to be applied and established in different types of circumstances. So in their application, different formulations have been used, the satisfaction of which has been found to have met the statutory requirement of "likely to mislead or deceive". The question then is whether the Campomar formulation is the only application test that should be used where conduct is directed towards the public or a class thereof rather than identified individuals. In other words, is it both a necessary and sufficient test in that context? Or is it a necessary application test but not sufficient, say, in passing off scenario cases? I do not consider, with respect to TPG, that Campomar defined away the second possibility. 419 Let me say something more general about the "not insignificant number" formulation in the context of passing off cases, which is my context and was not the context of TPG. And recall that one is looking at characterising conduct as "likely to mislead or deceive". One is not looking at causation. And one is not looking at the actual reactions of consumers or others to that conduct. 420 Now although this formulation's genesis was in cases discussing the tort of passing off, judges applying it in the old s 52 context were not making the mistake of applying common law tort concepts to the statutory provision. Rather, they were seeking to solve the problem of applying very broad statutory language "likely to mislead or deceive" to a context which was not straight forward. What do I mean? 421 In ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 380 and 381, French J explained: On the Trade Practices Act claim, his Honour adopted what may be in some circumstances a different test for the extent of ConAgra's product reputation necessary to show misleading or deceptive conduct on the part of McCain. Provided ConAgra could show on the balance of probabilities that "a not insignificant number" of persons knew of the ConAgra product, then it should be entitled to succeed. His Honour said: "If the number of persons with the necessary knowledge is insignificant, then a fortiori the conduct complained of will not be able to be characterised as conduct that is misleading or deceptive. Once it passes, however, the threshold of insignificance, then there is much to be said for the view that the conduct in question has become misleading." But accepting the possibility that the threshold of requisite reputation under the Act is lower than that required to support a claim in passing off, he did not think that ConAgra had satisfied the onus of showing that the number of persons for whom the name "Healthy Choice" and the package design would have the necessary secondary meaning was other than insignificant. The nature of the question to be asked about McCain's conduct for the purposes of s 52, Trade Practices Act is to be borne in mind in considering the correctness of the approach taken by his Honour. The question is one of characterisation of the conduct, not of the reactions of consumers or others to that conduct. So where some express representation is made and that representation is demonstrably false, it is not usually necessary to go beyond that finding in order to conclude that it is misleading or deceptive. The case of an obvious puff might be taken as an exception. Where conduct depends upon context or surrounding circumstances to convey a particular meaning, then those factors must be taken into account but only as a way of characterising the conduct. Where the name and get-up of a product are in issue, the question for the purposes of s 52 is whether they are misleading or deceptive in the circumstances. The fact that some members of the relevant public may be aware of a similar product in another country does not affect the characterisation of the conduct if that number is small. The word "insignificant" was used by his Honour to identify the threshold of public awareness below which such conduct is not misleading for the purposes of the section. That word is normative but not for that reason inappropriate. Attention must be paid to the policy of the relevant provision which, as the heading to Pt V and many of its provisions indicate, is one of consumer protection. If the similarity complained of is commercially irrelevant having regard to the number of people who know of it, then it can be concluded that the use of the name and/or get-up complained of is not misleading or deceptive. That is essentially the kind of evaluation which underpinned his Honour's finding in this case and on the primary facts that he found I am not persuaded that he erred in his approach. 422 What this is making plain is that in a passing off context, for the purposes of applying the statutory language one has to focus on the conduct considered in the circumstances. But in that context, the circumstances relevant to whether conduct is misleading or deceptive or likely to mislead or deceive include the level of public awareness of the applicant's product or service or indeed awareness of the applicant itself. That really explains the "not insignificant number" genesis. What is the level of public awareness of such matters? If you do not have such a threshold, the reasoning seems to proceed on the basis that you have not shown such an awareness. But if you have such a threshold, it is easy to see why one could conclude that in such a context, the rival's conduct considered in such circumstances is likely to mislead or deceive. 10th Cantanae and ConAgra so proceed and were not seen as inconsistent with Puxu. Peter Bodum and Hansen Beverage also so proceed and were not seen as inconsistent with either Puxu or Campomar. 423 Let me put the point another way to explain what I mean. 424 Say the class is all members of the public in Victoria. Now consider two scenarios. 425 First, take a simple case being a newspaper advertisement representing internet speeds of a service provider. Say it is said that the advertisement is misleading or deceptive or likely to mislead or deceive by reason of an exaggeration or a half-truth. The Campomar formulation could rightly be seen as necessary and sufficient, albeit that the High Court has frequently said in many fields that its own words are no substitute for the statutory language and should not be the subject of overly fine interpretation as if they were inscribed in some inflexible Talmudic text. But the Campomar formulation works well in such a context by considering a hypothetical reasonable member of that class. That is all you need. The "not insignificant number" formulation is superfluous. Indeed, satisfying the former would satisfy the latter. So far so good. 426 Second, now take the passing off scenario type case, but keep the class fixed as all members of the public in Victoria. Say the applicant and the respondent are rival boutique beer producers. Say the get-up for their products are similar and that they seek to target the workers, which I might add can be found at all echelons of Victorian society. Say that the respondent starts up its marketing and promotion throughout Victoria. And also assume, as one of the relevant circumstances, that the applicant's product and get-up is not well-known. So, the question is whether the promotion by the respondent using similar get-up is misleading or deceptive or likely to mislead or deceive. Now TPG would suggest that you only need apply the Campomar formulation, namely, whether a reasonable or ordinary member of the public in Victoria would be likely to be misled or deceived by the respondent's product and get-up. But that would be a hollow enquiry. And it would be divorced from part of the circumstances. What you also need to factor in is the public's awareness of the applicant's product and get-up; if you like, its reputation. That is part of the relevant circumstances within which to assess whether the respondent's conduct falls foul of the statutory standard. Hence the injection of the "not insignificant number" formulation. It is to recognise that conduct is not likely to be misleading or deceptive unless a "not insignificant number" knows of the applicant's reputation and therefore are likely to be misled or deceived by the respondent's use of its rival's product and get-up. So the potential effect of the respondent's rival get-up on such a "not insignificant number" can be seen as driving the analysis. Put another way, if only an insignificant number of the public in Victoria know of the applicant's product and get-up, the use by the respondent of rival get-up is unlikely to mislead or deceive members of the public in Victoria into thinking that the respondent's product is associated with the applicant's product. In other words, where reputation as a question of fact, rather than as a legal element for the statutory claim, is in issue, it is not sufficient to simply ask without more, in my example, what would be the likely reaction of a reasonable or ordinary member of the public when exposed to the respondent's conduct, being the promotion of its product and get-up. You would have left out an important part of the equation. And the obvious response would be: it all depends upon what they knew or likely knew of the applicant's product or get-up. That is why the proxy "not insignificant number" formulation is being used. It can be seen as creating a practical floor to address the factually relevant circumstances of reputation. Admittedly though, it is not conceptually pure. But with respect to TPG, it is nevertheless a useful proxy according to prior and binding Full Court authority. 427 It is neither heretical nor revolutionary to state the self-evident. A failure of an applicant to establish a relevant reputation in Australia for the purposes of the law of passing off may cause it to fail also in its case alleging a breach of the ACL as there is not a sufficiently substantial number of people in Australia aware of the applicant's product. In the absence of sufficient consumer knowledge or familiarity with the applicant's product at the relevant date, there can be no confusion or likely confusion. 428 So, in Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348 at 387 Gummow J noted that "reputation and likelihood of deception are distinct issues, the first preceding the second, so that if the plaintiff fails on reputation that is the end of the case"; he was commenting on a case concerning both passing off and also a contravention of s 52 of the then Trade Practices Act 1974 (Cth); see also Hansen Beverage Company v Bickfords (Australia) Pty Ltd (2008) 75 IPR 505 at [74] per Middleton J. 429 Well then if this is all good, why was this not discussed in Campomar? After all, it was a passing off case. That is a good question to ask oneself. And with respect, the answer to it is provided by the specific question that the High Court was addressing, which took the reputation of the suing party, Nike, as a given in that case; of course, it is not a given in the case before me. 430 The Campomar formulation appears in the section headed "Causation and erroneous assumption". It was said (at [101]): The other classes of case which their Honours had in mind include those of actual or threatened conduct involving representations to the public at large or to a section thereof, such as prospective retail purchasers of a product the respondent markets or proposes to market. Here, the issue with respect to the sufficiency of the nexus between the conduct or the apprehended conduct and the misleading or deception or likely misleading or deception of prospective purchasers is to be approached at a level of abstraction not present where the case is one involving an express untrue representation allegedly made only to identified individuals. 431 And it was said (at [103]): Where the persons in question are not identified individuals to whom a particular misrepresentation has been made or from whom a relevant fact, circumstance or proposal was withheld, but are members of a class to which the conduct in question was directed in a general sense, it is necessary to isolate by some criterion a representative member of that class. The inquiry thus is to be made with respect to this hypothetical individual why the misconception complained has arisen or is likely to arise if no injunctive relief be granted. In formulating this inquiry, the courts have had regard to what appears to be the outer limits of the purpose and scope of the statutory norm of conduct fixed by s 52. Thus, in Puxu, Gibbs CJ observed that conduct not intended to mislead or deceive and which was engaged in "honestly and reasonably" might nevertheless contravene s 52. Having regard to these "heavy burdens" which the statute created, his Honour concluded that, where the effect of conduct on a class of persons, such as consumers, was in issue, the section must be "regarded as contemplating the effect of the conduct on reasonable members of the class". 432 But in this context, Nike was suing Campomar and the case proceeded on the basis that Nike (the applicant) had a world wide reputation including in Australia and that Campomar (the rival) had no reputation in Australia. As Sheppard J said at first instance (Nike International Ltd v Campomar Sociedad Limitada (1996) 35 IPR 385 at 408): The documents to which I have referred and other documents in the case, particularly the letters written in 1985 and 1986, reinforce me in my conclusion that Mr Ruiz had for a number of years perceived the advantage his organisation could expect to gain by the worldwide marketing of its products under the Nike name in conjunction with, or with the approval of, Nike International or one or more of its associated companies. Campomar had no reputation in Australia when its marketing activities were commenced in 1993. Nike International Ltd had a worldwide reputation. By 1993 its products had become very well known in Australia. 433 So in the High Court, Nike's reputation was a given. The level of public awareness of Nike and its products was notorious. Clearly a "not insignificant number" of members of the public were well aware of Nike and its products' reputation. So, on this aspect the only issue that the Court had to address was the erroneous assumption question. And it was for that purpose that a criterion for the hypothetical member of the relevant class was being stipulated, which then backed out certain erroneous assumptions. That was what the Court was addressing at [105] when it said: Nevertheless, in an assessment of the reactions or likely reactions of the "ordinary" or "reasonable" members of the class of prospective purchasers of a mass-marketed product for general use, such as athletic sportswear or perfumery products, the court may well decline to regard as controlling the application of s 52 those assumptions by persons whose reactions are extreme or fanciful. For example, the evidence of one witness in the present case, a pharmacist, was that he assumed that "Australian brand name laws would have restricted anybody else from putting the NIKE name on a product other than that endorsed by the [Nike sportswear company]". Further, the assumption made by this witness extended to the marketing of pet food and toilet cleaner. Such assumptions were not only erroneous but extreme and fanciful. They would not be attributed to the "ordinary" or "reasonable" members of the classes of prospective purchasers of pet food and toilet cleaners. The initial question which must be determined is whether the misconceptions, or deceptions, alleged to arise or to be likely to arise are properly to be attributed to the ordinary or reasonable members of the classes of prospective purchasers. 434 But where the applicant's reputation in Australia is in issue and is one of the circumstances to consider, it seems to me that the "not insignificant number" formulation may have relevance because it is a proxy relevant to the applicant's reputation, which is part of the matrix on which you are posing the question of whether the respondent's conduct is likely to mislead or deceive. You are not posing that question devoid from the applicant's reputation. But as I say, in Campomar that was a given. And there was no need to consider cases such as ConAgra and 10th Cantanae on such matters. 435 And as so understood, one is not applying tort concepts to the statutory framework. Rather one is identifying the setting of the circumstances. ConAgra, 10th Cantanae, Peter Bodum and Hansen Beverage make this plain. Contrastingly, neither TPG nor Trivago NV v Australian Competition and Consumer Commission (2020) 384 ALR 496 involved the passing off scenario. 436 Now if only the dicta in TPG was to be matched against National Exchange (albeit not a passing off case), Peter Bodum and Hansen Beverage, which post-date Campomar, I would not have the option not to apply the earlier Full Court authority. But post TPG, Trivago would now seem to have enshrined the dicta from TPG in a manner that now binds me, although I am a little unclear as to what debate took place in Trivago (see at [192], [193] and [206] per Middleton, McKerracher and Jackson JJ). But now given Trivago, I do not think that I am entitled to draw any comfort from the even more recent Hashtag Burgers Pty Ltd v In-N-Out Burgers, Inc [2020] FCAFC 235 at [119] per Nicholas, Yates and Burley JJ where the matter was not debated. For completeness, I also note that the discussion in RB (Hygiene Home) Australia Pty Ltd v Henkel Australia Pty Ltd [2024] FCAFC 10 at [168] per Nicholas, Burley and Hespe JJ was not dealing with a classic passing off type scenario. Further, PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd (2021) 285 FCR 598 at [193] et seq per Jagot, Nicholas and Burley JJ does not relevantly add to the debate. 437 In all the circumstances, I will treat Trivago as binding and superseding earlier Full Court authority. So, in terms of the claims concerning ss 18 and 29 of the ACL, I will apply Campomar without any "not insignificant number" test. But if I were permitted to and did apply a "not insignificant number" test, whether as an alternative or an addition, then the result would not change. As I have indicated elsewhere, VCC succeeds on the ACL claims save and except for the proposed re-branded New Certan wine. 438 Let me make one other point. The Full Court in Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 397 observed at [99]: Whether or not there is a requirement for some exclusive reputation as an element in the common law tort of passing off, there is no such requirement in relation to Part V of the Trade Practices Act. The question is not whether an applicant has shown a sufficient reputation in a particular get-up or name. The question is whether the use of the particular get-up or name by an alleged wrongdoer in relation to his product is likely to mislead or deceive persons familiar with the claimant's product to believe that the two products are associated, having regard to the state of the knowledge of consumers in Australia of the claimant's product. 439 Let me conclude this section by saying something about the tort of passing off. For present purposes I repeat what I said in Flexopack at [278] to [282]. 440 In summary, the elements of this tort are the following concerning products. 441 First, there has to be the existence of a reputation, at the time of the respondent's impugned conduct, in the mind of the relevant purchasing class for the applicant's products or a reputation in the get-up of the applicant's products such that the get-up is recognised by relevant purchasers as distinctive of the applicant's products. 442 Second, there has to be a misrepresentation by the respondent, whether intentional or inadvertent, that its products are those of the applicant or affiliated with the applicant or a misrepresentation by the respondent's use of the same or a similar get-up to indicate that the respondent's products are the same as the applicant's products or come from or are associated with the applicant. 443 Third, the applicant must have suffered or be likely to suffer damage flowing from the erroneous belief engendered by the misrepresentation. 444 Let me now return to the topic of reputation in the context of the tort of passing off and add a little more. 445 On the question of reputation Gummow J said in ConAgra at 372: In my view, where the plaintiff, by reason of business operations conducted outside the jurisdiction, has acquired a reputation with a substantial number of persons who would be potential customers were it to commence business within the jurisdiction, the plaintiff has in a real sense a commercial position or advantage which it may turn to account. Its position may be compared with that of a plaintiff who formerly conducted business within the jurisdiction and has retained a reputation among its erstwhile customers, and with that of a plaintiff with a reputation which arises from its trade in the jurisdiction, but extends to goods or services which are not presently marketed by him. If the defendant moves to annex to itself the benefit of such a reputation by attracting custom under false colours, then the defendant diminishes the business advantage of the plaintiff flowing to it from the existence of his reputation. This is so whether the plaintiff is a party which may expand into a new field of business or resume a former business conducted in the jurisdiction, or a party which may enter the jurisdiction to establish a business for the first time. The immediacy and intensity of the intention of the plaintiff to commence or resume business is, in my view, a question going not so much to the invasion of the plaintiff's rights as to the imminence of a threat sufficient to justify an injunction. 446 Further, the required reputation is something more than a reputation among a small number of persons; there must be "a substantial number of persons who are aware of the plaintiff's product" (ConAgra at 346 per Lockhart J). 447 The relevant reputation must be determined having regard to all the relevant circumstances, including the history of the applicant's product, the circumstances in which the respondent's get-up was adopted, and the circumstances prevailing in the market at the relevant time. And the relevant circumstances include the nature and extent of the relevant consumers' awareness of the features of the applicant's packaging in which a reputation is said to inhere. 448 In a get-up case an applicant must establish that it has acquired the relevant reputation in the name or get-up such that the name or get-up has become distinctive of the applicant's business or products (see Burley J in Homart Pharmaceuticals Pty Ltd v Careline Australia Pty Ltd (2017) 349 ALR 598 at [22]). An applicant must show a reputation attached to goods in the mind of the purchasing public by association with the identifying get up under which his particular goods are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the applicant's goods. 449 Further, the relevant date for assessing whether the applicant has established the necessary reputation is the date on which the respondent's impugned conduct commenced (Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd [1980] 2 NSWLR 851 at 861 per Lord Scarman; Thai World Import & Export Co Ltd v Shuey Shing Pty Ltd (1989) 17 IPR 289 at 302 per Gummow J; Flexopack at [275]). 450 In the present case, for the pre-existing and previously offered New Certan wine the respondents say that the relevant date is about 2013, being the time at which the first vintage of the New Certan wine was sold in Australia. For the proposed New Certan product, the respondents say that the relevant date is the current date, or alternatively the date on which the proposed New Certan product bearing the new label will be released to the market being mid to late 2024. Relevant classes of consumers 451 I have touched earlier on Mr Oliver's evidence concerning this. Contrastingly, VCC submits that there are two relevant and potentially overlapping classes of consumers. 452 The first relevant class is Australian wine consumers who have an interest in premium wines, particularly from France (the consumer class). The second relevant class are members of the fine wine trade (the trade class). I should say now that generally speaking I would adopt VCC's position. Let me take the consumer class first. 453 It is said that the consumer class is an appropriate class because the VCC Wine, the Gravette Wine and the New Certan wine are all premium wines sold a high price points and, in the case of the VCC Wine, a markedly higher price point. It is said that it is not appropriate to limit the relevant class of consumers to those individuals who have bought or may buy one or other (or both) of the wines in question. I agree. 454 First, the VCC Wine and the Gravette Wine are scarce and expensive, yet acclaimed in the case of the VCC Wine. And many Australian consumers who are interested in premium wines may have heard of the VCC wine estate and its wines by having read or been told about them, rather than by having bought or tasted them. They could be considered to be aspirational products. 455 Second, the respondents conduct in relation to the New Certan wine cannot be said to be limited to a specific subset of wine consumers. Whilst the respondents might target aspects of their marketing to particular mailing lists or wine clubs, they have also promoted the wine through high street retailers in a manner that exposes the product to wine consumers who frequent such stores. The evidence also shows that the VCC Wine is available for sale through the same retail channels as the New Certan wine. 456 Now the respondents assert that the likely consumers of, on the one hand, cheaper Tasmanian pinot noir and, on the other hand, a premium Bordeaux wine are likely to fall into different groups that are unlikely to cross-over. The respondents also assert that even if a consumer existed whose interests straddled these two types of premium wines, that consumer would be too knowledgeable to fall within the relevant class of consumers. But in my view the buying and drinking habits of Australian premium wine consumers are not so rigidly divided, either in respect to the prices of the wines they consume or the varieties of wine that they buy. 457 Now as I have already indicated, Mr Oliver categorised Australian wine consumers into distinct groups. These groups include consumers who purchase wines under $25 and may buy a $50 bottle of wine for a gift or special occasion but not very often, consumers who purchase wines at a price point of $70 to $100, including consumers who would purchase a $75 to $95 bottle of Tasmanian pinot noir, and consumers who purchase a $500 bottle of wine, including Australian consumers of Bordeaux wines. And the effect of Mr Oliver's evidence appears to be that he regards the prospect of any cross-over between those groups of consumers as minimal. 458 Now Mr Hooke disagreed with Mr Oliver's views of the purchasing habits and interests of Australian wine consumers and wine professionals. He regarded those views as too narrow and he did not consider that many Australian wine consumers or wine professionals typically have such specific and focused habits. He said that Australia has a very accessible wine market for consumers. In his experience, many Australians purchase and drink wine as a regular part of their lives, and enjoy learning about different wines and wine producers from Australia and overseas through a range of publications, educational events, travel and the hospitality industry. In his experience, Australian consumers who are interested in good wine are more engaged, curious and eclectic in their purchasing and drinking habits. In his experience, many such consumers would buy and drink a wide range of Australian wines and imported wines. Having said that, he agreed that there may be some Australian wine consumers who have very specific interests and may only drink a very narrow range of wines such as only French wines. 459 I tend to agree with Mr Hooke's position, although whether any of this ultimately matters is another question. The fact that different types of consumers exist highlights the difficulty with the groupings proposed by Mr Oliver. An Australian consumer who would buy a $500 bottle of Bordeaux may also buy a premium Tasmanian pinot noir. However, such a consumer is in the minority of Australian wine consumers, given the costs of the wines in question. 460 Now Mr Caillard agreed that although Australian consumers with an interest in fine wines may have some of the characteristics listed by Mr Oliver, this characterisation overlooks those people who simply enjoy tasting and learning about wines and wine producers. What these people can afford to do and purchase in connection with their interest is linked to their specific socioeconomic circumstances and what they consider to be good value for money. So, many consumers with an interest in fine wine attend wine tasting events, subscribe to newsletters, read wine columns and books, but may not be able to purchase or experience the ultra-fine wines or visit the wine estates first hand. 461 I agree with Mr Caillard that the Australian fine wine market and the behaviour of the consumers who engage with it is complex and cannot be as easily categorised in the way that is described by Mr Oliver. If a consumer has an interest in fine wines, and has the opportunity and financial means to do so, they are likely to purchase and taste different styles of wines from different regions. Moreover, even if there are individuals who are interested in and collect a very specific style of fine wine such as Bordeaux or Burgundy wines, it does not follow that these consumers would not buy a cheaper Tasmanian pinot noir if given the opportunity to do so. 462 Generally speaking I am inclined to accept VCC's approach in identifying the consumer class, which is a broad church. 463 I also accept VCC's position that the trade class is an appropriate class. As the evidence in this case shows, Kreglinger and PBV have made a number of representations in the course of trade or commerce directed at the fine wine trade. The fine wine trade is also an appropriate class of consumers, although I accept that the boundaries and content of what is meant by the wine trade or fine wine trade lack precision. 464 Now assuming VCC's class divisions, how would a relevant class member react? The asserted reputation must be assessed against the objectively attributed characteristics and knowledge of the ordinary and reasonable member of the relevant class. And as I have indicated, the question is the reputation amongst two classes of persons being Australian wine consumers who have an interest in premium wines, particularly from France, and members of the fine wine trade. Now I would note here that VCC has not adduced any evidence from any member of the first class, but such evidence is not necessary for it to make out its case. 465 But let me take the purchaser or likely purchaser of the New Certan wine who must surely be part of the focus for analysis. 466 The New Certan wine is a single-vineyard pinot noir from Tasmania. As I have indicated, Tasmania accounts for a very small percentage of Australia's total wine production, and further, Tasmanian pinot noir accounts for a miniscule percentage of Australian wine production by volume. 467 Now consumers of Tasmanian pinot noir in the $75 to $95 range are likely to be committed to pinot noir and in particular Tasmanian pinot noir. And within that class VCC may need to establish that, in addition to being in the market to purchase a $75 to $95 bottle of Tasmanian pinot noir, the ordinary and reasonable member may also have to have the following characteristics. First, they may also have to be in the market for or have an interest in or knowledge of bottles of wine in the $500 plus range. Second, they may also have to be in the market for or have an interest in or knowledge of international wines, and specifically French wines from the Bordeaux region, including $500 plus bottles of Bordeaux wine, including wines from the Pomerol sub-region. Third, they would also have to have an interest in or knowledge of the VCC wines, and specifically recall the VCC wines and draw a connection between the name Certan or the VCC features and the VCC wines. 468 Now VCC asserts that Australian consumers' engagement with and therefore knowledge of the VCC Wine can be split into three concentric circles, being those fortunate few who can actually buy it, more broadly those who can taste it, and even more broadly a greater number of people who have an interest in fine wines and read the literature and know about the VCC Wine, who might aspire to purchase it. 469 Now clearly only a fortunate few can afford to purchase the VCC Wine in Australia. 470 Further, as to those who can taste the VCC Wine, the evidence about this group seems to be confined to members of the trade with an interest in French wines whose job it is to taste and judge these wines. 471 Further, the ordinary and reasonable member of the consumer class interested in fine wines is unlikely to have any knowledge of or interest in VCC or its wines. 472 First, the VCC Wine is variously described as "an ultra-fine wine", "a rare fine wine" and a wine which is "rare and can be expensive to purchase". There are few consumers with the disposable income and the interest to be spending $500 (or more) on a bottle of wine. Those that do are likely to take substantial care in their purchasing decisions. It cannot be assumed that a consumer with the means to spend $95 on a bottle of wine will also be in the market for a rare fine wine costing more than five times as much. 473 Second, the products have different target consumers. The people interested in buying Bordeaux and Burgundy are often different. A purchaser of Tasmanian pinot noir who is also interested in French wines would be more likely to be interested in wines from the Burgundy region, given their similar wine styles. Contrastingly, rather than having an interest in pinot noir or Tasmanian pinot noir, consumers of VCC's wines are likely to be committed to Bordeaux wines, and perhaps Australian wines of that style and grape type. In any event they would represent a small percentage of wine buyers in Australia. 474 Third, even if it is accepted that there is a general awareness amongst Australian wine consumers that Bordeaux is a wine-producing region of France, the consumer would also need to have knowledge of wines from Pomerol, a smaller and lesser-known sub-region within Bordeaux, including in particular the VCC wines, in addition to having an interest in or being in the market for a single-vineyard Tasmanian pinot noir. 475 Now I accept that there may be consumers who are both prepared to spend around $95 on a bottle of Tasmanian pinot noir and who are also prepared to spend more than $500 on a red wine from Bordeaux and, moreover, from the Pomerol sub-region of Bordeaux, and therefore have an interest in or knowledge of both parties' products. But they would be few in number. Further, any such person would necessarily be very knowledgeable. But he may not be representative of the ordinary and reasonable consumer. In Comité Interprofessionnel du Vin de Champagne v Powell (2015) 330 ALR 67 I said at [171]: [W]here the issue is the effect of conduct on a class of persons such as consumers (rather than identified individuals to whom a particular misrepresentation has been made or particular conduct directed), the effect of the conduct or representations upon ordinary or reasonable members of that class must be considered (Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45 at [102] and [103]). This hypothetical construct avoids using the very ignorant or the very knowledgeable to assess effect or likely effect; it also avoids using those credited with habitual caution or exceptional carelessness; it also avoids considering the assumptions of persons which are extreme or fanciful. Further, the objective characteristics that one attributes to ordinary or reasonable members of the relevant class may differ depending on the medium for communication being considered. There is scope for diversity of response both within the same medium and across different media. 476 Before drawing the threads together, let me say something further concerning reputation and the relevant time frame to be considered, which the parties agreed to be 2013 concerning the ACL claims and the tort of passing off. What was the reputation at the relevant date? 477 Now VCC's claimed reputation must be assessed as at 2013, when the respondents' impugned conduct commenced. But when the evidence of sales and promotion of VCC in Australia prior to 2013 is considered, I agree with the respondents that two general conclusions can be drawn. First, the overall sales and promotion were minor. Second, little of that promotion involved any depiction or exposure of the pink cap or other visual features of the VCC product's overall presentation. 478 Now as the respondents have pointed out, no witness has perceived a connection between any of the earlier New Certan products and VCC without reference to the pink cap and other visual features of the VCC product. And VCC's case is that it did not claim that its reputation accrues in relation to the name Certan alone. Its case has been that the name Certan keeps company with the rest of the words and the rest of the markings on the label. VCC's case is that there was some form of copying of the overall presentation. 479 Now the evidence of promotion of VCC by Negociants Australia prior to 2013 is limited to the Negociants Australia December 2009 price list, which included 7 pages listing 284 red Bordeaux wines, spanning 112 different brands, including five vintages of Certan de May and only two vintages of VCC, located on one page which alone lists 52 different wines under the single heading Pomerol, without any visual depictions of any products. 480 Further, there is no evidence indicating any volume of sales of the VCC Wine prior to 2013 by the Prince Wine Store. The most that Mr Rich can say is that the store did secure VCC wines from time to time. Mr Rich could only adduce one list for the Prince Wine Store en primeur campaigns, from June 2011. There is no evidence as to how many people or to whom that list was distributed, and in any event VCC appeared at the very end of a four page list including 75 different brands of Bordeaux wines, again without any visual product depictions. 481 Further, Airoldi Fine Wines did not commence offering the VCC Wine for sale in Australia until 2012, which it did by way of a 10 page list in which VCC appeared obscurely on one page as the 42nd out of 52 Bordeaux red wines, again with no visual depictions of any products. Chateau Certan de May appeared earlier in that list. There is no evidence as to how many people or to whom that list was distributed. Mr Airoldi's sales reports record sales of only two bottles of the VCC Wine before 2013. 482 Further, there is no evidence to establish the quantum of VCC Wine sold by the Royal Mail Hotel before 2013. 483 Further, Mr Caillard only gave vague evidence that the VCC Wine was sold at auction by Rushton's in 1986, and by Langtons in 1989, with no detail at all as to any volume of sale or how the VCC product was promoted. 484 Further, the main evidence of any tasting events in Australia prior to 2013 are two dinners being at Jacques Reymond in Melbourne in February 2011, and at Golden Century restaurant in Sydney in September 2011. There is no evidence as to how many people attended either event. The invitation to the event at Jacques Reymond noted that VCC wines were rarely available in Australia. VCC relies on Ms Faulkner's evidence of attending a tasting course from 3 to 7 November 2008, in which VCC was one of over 200 of wines tasted. VCC also relies on Mr Airoldi's vague evidence about tasting events held by Bordeaux Shippers in 2011. 485 Further, over the period 1999 to 2013, there is evidence of a total of only 22 media articles, from anywhere in the world, referring to VCC. Of those articles, only one, the English magazine The World of Fine Wine, included an image of the VCC Wine, and even in that case it was limited to the label and did not include the pink cap. There is no evidence as to the circulation or readership of that magazine in Australia prior to 2013, or of the US magazine The Wine Spectator on which VCC also relies. To the extent the wine industry specialists speculate about where such readership might exist, it would consist of very engaged or deeply committed consumers, which are a small number of people, not the ordinary reasonable consumer of the New Certan wine. Nor is there evidence that any such readers would have noticed, let alone remembered, a reference to VCC or its wines out of the hundreds of other articles appearing in these publications over that period. 486 Further, between 2009 and 2014, Ms Faulkner wrote around 250 weekly columns and 60 feature articles for The Age and The Sydney Morning Herald, only two of which mentioned VCC at all. Neither of those two articles depicted VCC's product label or pink cap. Similarly, in that period Mr Hooke wrote hundreds of columns and articles in Australian media about wine, none of which mentioned VCC at all other than a single report in The Sydney Morning Herald in September 2011 regarding the event at Golden Century, with reference to "Vieux Chateau Certan" but no depiction of the product. 487 Further, the only other reference to VCC in Australian media is one article in Australian Gourmet Traveller in 2009 which included references to the 2008 Chateau Certan de May de Certan and the 2008 VCC Wine as part of a review of 10 French wines, again without depicting any images of those products. 488 Further, there is an article published in 2001, which was 12 years before the relevant date, by a UK-based online wine publication jancisrobinson.com, which has a limited audience, without any depiction of the product. 489 Further, there are social media posts on 9 December 2009 by the UK writer James Suckling, on 20 October 2010 by the UK writer Neal Martin, and on 2 August 2011 by the Bordeaux based writer Jane Anson, all of which refer only to VCC, and do not depict any product. 490 Further, there is a collection of books written about wine, all published outside Australia, without any evidence as to anyone in Australia reading any of them other than the experts Mr Hooke, Ms Faulkner and Mr Caillard. 491 Now when one analyses the relevant class of consumers postulated by VCC, described by reference to three concentric circles that I have referred to earlier, the following may be noted. 492 As to the first concentric circle being the fortunate few who can actually buy VCC's wines, that was few people before 2013. 493 As to the second concentric circle being those who can taste it, this was limited to the unknown number of people who attended two tasting events at Golden Century and Jacques Reymond in 2011, plus immediate friends and family with whom the people within the first circle might share any VCC wines actually purchased. 494 As to the third concentric circle being those who have an interest in fine wines and read the literature and know VCC, this is necessarily limited by the small amount of literature referring to VCC or its wines prior to the relevant date. 495 So, a problem for VCC is that on the evidence of promotion before 2013, not many of those people outside the first two circles would have been exposed to the pink cap and other visual features of the overall presentation of the VCC product which played a significant role in leading Mr Hooke, Ms Faulkner, Mr Airoldi and Mr Caillard to perceive a connection with VCC. 496 Now VCC's case rests on the overall presentation of its product, but there is thin evidence to find that ordinary consumers and members of the trade in 2013 had knowledge of that overall presentation. 497 Now the respondents have pointed out that the evidence in the present case bears some resemblance to the evidence of reputation in CA Henschke & Co v Rosemount Estates Pty Ltd (1999) 47 IPR 63. Henschke claimed that Rosemount had infringed its Hill of Grace trade mark and engaged in misleading and deceptive conduct by use of the words Hill of Gold in relation to its wine of the same name. Henschke relied upon evidence from wine writers, commentators, restaurateurs and retailers in seeking to establish the existence of a reputation of the Hill of Grace wine amongst Australian wine consumers, described as an "icon wine" second only in reputation to Penfolds in Australia. Finn J admitted evidence from the so-called wine experts in which they expressed an opinion as to the reputation of the wine amongst the relevant segment of the wine consuming public, but attributed little if any weight to that evidence, which his Honour characterised as mere assertion, both as to reputation and as to the possibility that consumers would see an association between the wines. In relation to documents, Finn J commented that whilst there was a voluminous number of newspaper articles put into evidence, it was necessary to bear in mind the respective periods of time over which they appeared to put that volume in perspective. He noted that there was a very real question whether such consumers would have read and/or have taken any interest in, and/or have any memory of, the newspaper articles and of the reputation for the wine they communicated. His Honour held that, as reputation could not be established, neither could trade mark infringement or misleading or deceptive conduct. This reasoning was approved on appeal (CA Henschke & Co v Rosemount Estates Pty Ltd (2000) 52 IPR 42). But in my view there is little to be gleaned from factual scenarios dealt with by judges in other cases. 498 But on balance and not without considerable hesitation, in my view VCC has made out its reputation case as at 2013. 499 Although the evidence is thin, it seems to me that on the assumption that members of the fine wine trade are part of the relevant class, there was sufficient reputation in 2013 based upon the various types of evidence that I have discussed in some detail. 500 Let me turn to another topic. Was there copying with an intention to mislead? 501 In Verrocchi at [103], the Full Court noted that proof of "a subjective intention to mislead (in the sense that the respondents' get-up is adopted for the purpose of appropriating part of the trade or reputation of a rival) may be some evidence that in a borderline case the respondents' conduct is likely to mislead or deceive." It was emphasised that there is a distinction between an intention to copy and an intention to deceive. And the former does not establish the latter. 502 I am not able to conclude that Mr de Moor adopted a course intent on capitalising on the reputation and goodwill associated with VCC, let alone intended to mislead. 503 Mr de Moor explained to Ms Harcus that whilst he wanted the New Certan wine label to be inspired by VCC, he wanted it to remain within the legal boundaries and he did not want anyone to be confused. I accept this. 504 Mr de Moor's creative intention was to pay homage to family heritage, not to copy an existing brand, and he did not intend to create a label which represented an association between the New Certan wine and VCC or its wines. To Mr de Moor, the name New Certan is more than a brand. To him, this wine is a very personal project. He gave evidence that he was not interested in the commercial success of New Certan. And he was not interested in potential clients thinking that New Certan had an association or an agreement with or an approval of VCC. I accept his evidence as to this. 505 Mr de Moor accepted that he was the person in control of the ultimate label produced by the design process that he and Ms Harcus engaged in. He also accepted that he wanted the label of New Certan to be inspired by the VCC Wine. He explained that it was important to him that the New Certan wine featured a pink screwcap. He said that he wanted not just a pink cap. He wanted the pink cap that he had always known. 506 I accept that whilst the label of the New Certan wine was inspired by VCC, Mr de Moor did not intend to mislead consumers into thinking there was a commercial association or connection between the parties' respective products or businesses. He explained that in his mind, the words "New Certan" refer to the sense of a site in Tasmania, inspired by Certan in Pomerol. This is consistent with general references to new world wines, in contrast to old world wines, which can connote differences in, for example, geography, wine makers and wine making. Mr de Moor did not create the label for the New Certan wine as an implement for the purpose of misleading potential customers. His motivations for creating the New Certan wine were quite personal. I accept his evidence as to this. Interim conclusion 507 Clearly, on the evidence VCC has not established any relevant reputation as at 1999 concerning the two classes identified by VCC. The 1999 date will become relevant when I deal with the cancellation question concerning the relevant Kreglinger trade mark registration which I will discuss later. 508 But as to the reputation question as at 2013, on the evidence but just barely, VCC has established the requisite reputation in the two classes identified but only because of the composite of the VCC features including the distinctive pink cap. So, it has made out its case concerning breaches of ss 18 and 29 of the ACL and the principal liability questions on passing off concerning the sale and marketing of the pre-existing and past New Certan wine but putting damages to one side. 509 On the evidence, members of the fine wine trade being part of the relevant consumer class are likely to have been misled or deceived into thinking that the New Certan wine had some association with VCC. 510 I have discussed the evidence of VCC's witnesses including their approach and perceptions when first presented with New Certan. Their evidence in my view travels a little beyond having just a "cause to wonder". And there is little doubt as to the distinctive features of the VCC Wine including the peculiar and distinctive pink colour that in important respects were mirrored in the pre-existing and past New Certan wine as I have discussed. 511 But I should say now that such findings only assist VCC concerning its case as to the sale and marketing of the pre-existing and past New Certan wine. Such findings do not assist it concerning the proposed re-branded New Certan wine that is yet to be released. The proposed new labelling is sufficiently distinctive. I will return to this shortly. Is there damage? 512 Now VCC claims that it has suffered, and will continue to suffer, loss and damage as a result of the respondents' conduct. The nature of the loss and damage asserted by VCC is the diminution in the value of VCC's goodwill or rights in the name "Certan", the name "Vieux Château Certan" and the VCC features. 513 But I agree with the respondents that there is no evidence that VCC has suffered any loss or damage at all, and there is similarly no basis to infer that it would. In my view, in a case such as this, damages for the purposes of liability cannot readily be inferred. This is not a case of product substitution, where it might be inferred that the respondent's product might be purchased by a consumer in the mistaken view that he or she is purchasing the applicant's product. This is similarly not a case where an applicant makes money from a business which is based upon sales of character merchandise to the public. 514 VCC also asserts a diminution of goodwill arising from the sale of the New Certan wine. But in my view there is no basis to suggest that anyone would think less of VCC or its products as a result of the promotion and sale of the New Certan wine. 515 Now as at the time of trial, 1,755 bottles of New Certan wine in the existing packaging up to the 2021 vintage remained in stock. This old stock has been withdrawn from sale. It has been withdrawn from the website and all promotional activity relating to that stock has ceased. The first and third respondents have agreed not to sell any of the old stock. 516 I note that the following undertaking has been proffered to the Court, which, subject to further discussions with counsel, I am prepared to accept: UNDERTAKING Definitions: Halliday Wine Companion Website means the website owned and operated by HGX Pty Ltd ACN 612 186 946 and as at the date of this undertaking published online at www.winecompanion.com.au Prior Branded New Certan Wine means the product presented, promoted, offered for sale and sold by the First and Third Respondents under or by reference to the combination of features defined as the New Certan Features in paragraph 17 of the Further Amended Statement of Claim dated 18 November 2022 (FASOC), being the 2011, 2016, 2017, 2018, 2019 and 2021 vintages of New Certan. New Branded New Certan Wine means the product which the First and Third Respondents intend to present, promote, offer for sale and sell under or by reference to the name "NEW CERTAN" but without the other New Certan Features, as depicted in paragraph 20B of the FASOC. Undertaking: 1. Without admission, the First and Third Respondents undertake to the Court that: (a) from 14 August 2023, they will not advertise, offer for sale or sell any of the stock on hand of the Prior Branded New Certan Wine; (b) they will forthwith take all reasonable steps to procure the publisher of the Halliday Wine Companion Website to remove all images of the Prior Branded New Certan Wine from the Halliday Wine Companion Website, including those published at the following URLs: i. www.winecompanion.com.au/wineries/tasmania/tasmania/pipers-brookvineyard/wines/red/pinot-noir/new-certan-pinot-noir/2019 ii. www.winecompanion.com.au/wineries/tasmania/tasmania/pipers-brookvineyard/wines/red/pinot-noir/new-certan-pinot-noir/2018 iii. www.winecompanion.com.au/wineries/tasmania/tasmania/pipers-brookvineyard/wines/red/pinot-noir/new-certan-pinot-noir/2017 iv. www.winecompanion.com.au/wineries/tasmania/tasmania/pipers-brookvineyard/wines/red/pinot-noir/new-certan-pinot-noir/2017/1 v. www.winecompanion.com.au/wineries/tasmania/tasmania/pipers-brookvineyard/wines/red/pinot-noir/new-certan-pinot-noir/2016 Other matters: 2. Without admission, the First and Third Respondents note that, if so required by the Court, they will abide by any requirement to apply a disclaimer to the label of the New Branded New Certan Wine. 3. The First and Third Respondents confirm that, as at 14 August 2023, the stock on hand referred to in paragraph 1 above comprises 1755 bottles. 517 The undertaking has been proffered in circumstances where there have been very few sales of the New Certan wine, the New Certan wine has not made any profits, there is no evidence of any damage to VCC, and the commercial value of the remaining old stock is insignificant. In my view the undertaking is adequate to deal with the question of stock and any known on-line material. VCC has expressed concern about "old" images remaining on the internet. This concern was over-stated but in any event is met by the undertaking or any necessary modification. The proposed New Certan product 518 Now VCC says that the proposed re-brand will leverage and build upon the existing knowledge and reputation in the Australian marketplace of the New Certan wine. But as the respondents correctly point out, whilst PBV and Kreglinger have their own reputations as established and well-known producers of wine in the Australian wine industry, the New Certan wine does not. The product has been the subject of limited and targeted marketing activity. It has never been subject to a proper launch. 519 The New Certan wine has been promoted through the PBV Cru Club newsletter with 910 subscribers as at 6 September 2022, the PBV New Certan Club with 11 members as at September 2022, the PBV cellar door, and the PBV social media accounts (Facebook and Instagram) which do not have significant followings. 520 The New Certan wine has been promoted and sold in limited quantities primarily directly to consumers through the Kreglinger website and the PBV cellar door, to various outlets for retail sales, via the Qantas Frequent Flyer loyalty program, to the Kalis Hospitality Group and to certain restaurants in Tasmania through Kreglinger's distribution company. 521 Now although Mr Hooke, Ms Faulkner and Mr Oliver had reviewed the New Certan wine, this is not surprising given the volume of wines they are required to taste and review each year. 522 Mr Caillard had also encountered the wine in 2014, although significantly for present purposes he had forgotten about it by the time he gave evidence; he over-looked a tweet he had made on 15 May 2014. Further, that tweet was a little cryptic. 523 Further, none of Mr Rich, Mr Evans or Mr Myers had seen or heard of the New Certan wine prior to this proceeding. Further, whilst Mr Airoldi encountered the product in 2018, this was only by chance, and there is no evidence it was ever part of his portfolio of products. 524 In any event, the 2022 vintage of the New Certan wine, which bears the new packaging, is still some time away from sale. That stock, being 2,249 standard bottles and 20 magnums, has been bottled, but the products are currently unlabelled. And they all have a bronze cap on them. Whilst under normal circumstances the 2022 vintage would have been on the market by mid-2024, their labelling awaits the outcome of this proceeding. Those products will not reach the market until after this judgment. 525 The effect of this is that the respondents will not offer for sale or sell the New Certan wine bearing the previous packaging at the same time as the New Certan wine bearing the new packaging. Moreover, by the time the New Certan wine bearing the new packaging comes onto the market in its limited quantities, there will have been a substantial period since the respondents offered for sale or sold any New Certan wine. Further, the withdrawal from sale of the old stock further reduces any theoretical likelihood of consumers drawing any association between the new packaging and the old packaging, let alone between the new packaging and the old packaging and therefore VCC or its wines. 526 Moreover, the period in which there is no New Certan available for sale means that the memories of the few consumers who have encountered the product in the original packaging will necessarily fade before the 2022 vintage is released. And even if a theoretical consumer or member of the wine trade did draw an association between the new packaging and the old packaging, that person would notice the significant differences between the labels. 527 Now the respondents correctly point out in my view that VCC's case against the proposed New Certan product depends on ordinary reasonable consumers who have an interest in premium wines, particularly from France or members of the fine wine trade who may encounter the proposed New Certan product, at some point in the future having the following characteristics. 528 First, they have actually encountered an earlier vintage of the New Certan wine, despite it having been sold in limited numbers, through limited retail outlets, with no launch and limited promotion, and being no longer on sale. 529 Second, when they encountered such an earlier vintage of the New Certan wine, having had sufficient actual prior knowledge of not just the name "Vieux Château Certan" but also the pink cap and other product presentation of the VCC Wine so as to be likely to have perceived a connection between the earlier New Certan product and VCC or its products. 530 Third, they sufficiently remembered the first and second matters, including a detailed recollection of the visual features of both the earlier New Certan wine and the VCC Wine, so as then to be likely to perceive two matters. 531 The first matter is a connection between the proposed New Certan product and that earlier New Certan product, despite the stark differences between the proposed label and the earlier New Certan label, and the prominence given to "Tasmania", "Pinot Noir" and the Joseph Lycett colonial era landscape. 532 The second matter is a further connection between that earlier New Certan product and VCC, despite the absence of any reference to VCC and despite the clear identification of the product's source as PBV, one of the oldest and most important wineries in Tasmania and a respected producer of high quality wine in Australia. 533 But I agree with the respondents that this is all unlikely. Of the witnesses who had any knowledge of VCC, most of them had never seen or heard of the New Certan product after it went on sale in 2013 and before providing their evidence in this proceeding. This was the case with Mr Rich, Mr Evans and Mr Myers. Further, Ms Faulkner had not seen or heard of the New Certan product for seven years until it was sent to her to review in January 2020. Further, as to Mr Hooke, despite his considerable knowledge of and involvement in Tasmanian pinot noir, he did not encounter the New Certan pinot noir product for over five and a half years until it was sent to him to review in September 2018. Further, Mr Oliver did not encounter the New Certan product until he reviewed it in late August 2018, shortly before Mr Hooke's review was published. And he gave the New Certan product sufficiently little attention when he reviewed it that he mis-spelt its name as "New Certain". It never occurred to him that the New Certan wine had any association with VCC, indeed he did not think of VCC at all. The word "Certan" meant "absolutely zero" to him. 534 Now VCC relies on the respondents' conduct in promoting the earlier New Certan product. But such promotion was minor and had little actual effect in building a lasting recognition of the earlier New Certan product amongst potential customers of the proposed New Certan product, particularly the consumers who have an interest in premium wines, particularly from France and members of the fine wine trade identified by VCC as the relevant classes of consumers. 535 And even those people who actually encountered the earlier New Certan product and perceived a connection with VCC are likely to have forgotten it. 536 Mr Caillard had a special interest in VCC, having visited it 20 times since 2004, and had socialised with members of the Thienpont family who told him they had cousins in Tasmania. Yet he forgot having seen the New Certan product in May 2014, despite taking the time to post a photograph of it on his Twitter account. He said that "it didn't really have much of an impact on me in the long term … I must have seen it in 2014, but I didn't think very much about it afterwards". 537 Now to the extent VCC relies upon the evidence from Mr Hooke, Ms Faulkner and Mr Caillard as to their reactions when encountering the proposed New Certan product, each of them purports to draw a link between the proposed New Certan product and the previous branding of the New Certan wine, about which they have already given evidence. But there is no evidence as to the reaction to the proposed New Certan product by a person who has not been compromised by exposure to the previous branding in the context of this case. Further, that evidence is not representative of the reaction of an ordinary and reasonable consumer when encountering the New Certan wine as depicted in the proposed New Certan product for the first time. There is no evidence from an ordinary and reasonable consumer in relation to the proposed New Certan product. 538 Now Mr Airoldi is the only witness who encountered the New Certan product in an actual retail environment, which did not occur until 29 November 2021, almost eight years after it first went on sale. It was a chance encounter with no meaningful commercial context. He was not seeking to buy or sell the product. He only noticed it and drew a connection with VCC because of its pink cap, which he had known about from his many encounters with the VCC Wine from an early age. From a distance, Mr Airoldi was able to distinguish the particular VCC pink from other pink caps, including from the "copper pink" cap of Château Haut-Brion, another wine with which Mr Airoldi was familiar. Mr Airoldi was intimately familiar with the VCC Wine, having consumed it many times before, having visited VCC a dozen times, and having sold a small number of bottles of VCC Wine since he opened his premium Bordeaux wine business, Airoldi Fine Wines, in 2012. His evidence hardly carries the day for VCC. 539 Further, each of the witnesses who drew a connection between the earlier New Certan product and VCC did so by reference to the combination of features including the pink cap and other visual features of the product. It was the combination of features that led to that connection being drawn. But those visual features of the overall presentation of the VCC product would not be apparent to persons who were merely exposed to the name "Vieux Château Certan" in media articles, or on lists of Bordeaux wines, such as those distributed by Negociants Australia or the Prince Wine Store. Nor would those visual features be apparent to readers of restaurant wine lists. But in any event these features are to significantly change with the proposed re-branding. 540 Further, VCC's case in relation to the proposed New Certan product also depends in part upon VCC establishing some sort of reputation in Certan. But it cannot do this as I have already indicated. First, the word Certan has been for many years used in connection with the sale of wine by a number of winemakers who are independent of VCC. Second, as I have said, knowledgeable consumers would be familiar with the practice of French wines including common elements or words in names. Such consumers would not assume common ownership or a commercial connection between products merely as a result of the existence of a common word. 541 Further, whilst PBV and Kreglinger are both well-known wine producers, there is little evidence to suggest any established reputation in the New Certan wine itself. It is pushing the envelope to suggest that existing sales or marketing of the New Certan wine would provide a basis to find that sales of the New Certan wine with the redesigned label would be or be likely to be misleading or deceptive, in that it would leverage and build upon the existing knowledge and reputation in the Australian marketplace of the New Certan wine. 542 Finally, if there was any substance to VCC's concerns regarding the proposed re-branding, it can also be adequately dealt with by the inclusion of an appropriate disclaimer on the label as contemplated by the proposed undertaking. I will hear further from counsel on this question if necessary. 543 In summary, VCC's claims concerning the proposed New Certan product are not made out. VCC's claim against Mr de Moor – accessorial liability 544 VCC alleges that, as the controlling mind of Kreglinger and PBV, Mr de Moor has accessorial liability for their conduct in relation to the New Certan wine. As to the applicable principles, they are well established. In Flexopack, I said (at [333] to [340]): Let me first deal with what is required to establish that an individual director is a joint tortfeasor with the company. Keller v LED Technologies Pty Ltd (ACN 100 887 474) (VID 167 of 2009) (2010) 185 FCR 449; 268 ALR 613; 87 IPR 1; [2010] FCAFC 55 (Keller) elaborates on a number of different approaches to establishing such joint liability. They are variously that the alleged joint tortfeasor must have: (a) done something more than acting as a director and been involved in invading the applicant's rights (at [83] and [84] per Emmett J); (b) had a close personal involvement in the infringing acts of the company (at [291] per Besanko J); or (c) made the company's tort his own (at [405] per Jessup J). The variation between these particular formulations is of little moment in the present case although I note that there are conceptual differences but generally broad consistency (see Sporte Leisure Pty Ltd (ACN 008 608 919) v Paul's International Pty Ltd (ACN 128 263 561) (No 3) (2010) 275 ALR 258; 88 IPR 242; [2010] FCA 1162 at [108]–[118] per Nicholas J). In Complete Technology Integrations Pty Ltd v Green Energy Management Solutions Pty Ltd [2011] FCA 1319 at [94]–[105], Kenny J accepted (albeit in the context of a summary judgment application) that there was a strong prima facie case that two of the directors of the respondent who were "in effective control of the business of [the company]" and who were "intimately involved in the company's activities" were liable as joint tortfeasors and as persons involved in contraventions of applicable consumer law provisions. Relevantly, Kenny J found that the directors knew that the company's use of the applicant's trade mark on business cards and letterhead was, or was likely to be, infringing. Her Honour concluded that there was a strong case that the directors were personally involved in the trade mark infringements, passing off and statutory breaches of the applicable consumer law provisions by the company and used the company for their own wrongdoing. Similarly, in Taleb v GM Holden Ltd (ACN 006 893 232) (2011) 286 ALR 309; 94 IPR 459; [2011] FCAFC 168 at [18]–[23] per Finn and Bennett JJ, the Full Court upheld the conclusion of the primary judge that the appellant was liable as a joint tortfeasor for the trade mark infringement and passing off of the company. The appellant had established the business and directly controlled it until his son took over its day-to-day management. A further example of the manner in which these principles have been applied can be found in Bob Jane. Besanko J found that there was sufficient evidence to find both Mr Jane (who set up the companies) and Mr Rigon (who oversaw the impugned website), both directors of the relevant company, to be joint tortfeasors. His Honour summarised the various formulations in Keller at [142]–[148] and considered the liability of Mr Jane to follow from his involvement in the company to be "quite plain", his Honour apparently applying his preferred formulation of "a close personal involvement". In relation to accessorial liability concerning the contraventions of the Australian Consumer Law, the following may be noted. The grant of an injunction may include any person who is involved in a contravention. The Australian Consumer Law defines a person involved in a contravention in the following terms (s 2(1)): involved: a person is involved, in a contravention of a provision of this Schedule or in conduct that constitutes such a contravention, if the person: (a) has aided, abetted, counselled or procured the contravention; or (b) has induced, whether by threats or promises or otherwise, the contravention; or (c) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or (d) has conspired with others to effect the contravention. Further, damages can be awarded against persons involved in a contravention. It is necessary to show inter alia that the person had knowledge of the essential matters that make up the contravention: Yorke v Lucas (1985) 158 CLR 661 at 670; 61 ALR 307 at 312 per Mason ACJ, Wilson, Deane and Dawson JJ. Knowledge of each of the essential elements of the contravention on the part of the individual must be established: Keller at [334]–[337] per Besanko J. 545 The evidence shows that Mr de Moor has been instrumental in, and controlled, the development and promotion of the New Certan wine. While that wine is produced and marketed through Kreglinger and PBV, it is a very personal project for Mr de Moor. His deep involvement in that conduct is sufficient to found the accessorial liability alleged by VCC. 546 Mr de Moor readily accepted that the New Certan wine was a very personal project for him, and he also accepted that he was closely involved in, and controlled, the design of the New Certan label. 547 Mr Devlin's evidence was consistent with that of Mr de Moor. As Mr Devlin made clear, the New Certan wine is a very personal project driven by Mr de Moor. Mr Devlin himself was strongly opposed to the labelling of the New Certan wine that has been used to date. In his oral evidence, he said he "hated" it, did not think it was "appropriate" for the Australian market, and thought it was "crap". Mr Devlin asserted that he had previously told Mr de Moor this most emphatically. 548 As Mr Devlin explained under cross-examination: MR CAINE: Yes? MR DEVLIN: The normal process for a label is that you put the label out to the trade. You get a consensus of opinion: is this a good label? Is it – will it sell? Does it appeal to a consumer? This label did not go through that process. Mr de Moor had no interest in getting feedback on the market appeal of that label. And my comment was I believed it was not commercial. I did not think it would sell. I think I've been proven correct. I didn't like it. 549 Mr Devlin elaborated on this further in response to a question from me: HIS HONOUR: So you're allowing Mr de Moor as the CEO to engage in his own private passion - - -? MR DEVLIN: Well - - - Q: - - - in a manner which is not really commercially consistent with - - -? A: No, no. Sorry, that's not what I meant to say. Q: Right? A: There's two aspects. The first of all is the research project. Q: Yes? A: That's very important. Q: Sure? A: Fully support. Q: Yes, but you could have the research project without this particular product? A: Yes. Now, you have a wine that spins off it from the top. That wine is never going to be commercial. 550 It seems to me clear that Mr de Moor stepped outside his ordinary role as a director of Kreglinger/PBV in a manner that makes him personally involved in the promotion of the New Certan wine. 551 In summary, if and to the extent that Kreglinger and PBV have contravened ss 18 and 29 of the ACL and/or committed the tort of passing off, then in my view Mr de Moor has been knowingly concerned in such conduct and also should be treated as a joint tortfeasor. Cancellation of Kreglinger's registered trade mark for New Certan 552 Now Kreglinger is the registered owner of Australian Trade Mark Registration No. 815277 for New Certan in class 33 in respect of "alcoholic beverages including wines" (New Certan Mark). The New Certan Mark has a priority date of, and is registered with effect from, 25 November 1999 (the priority date). 553 VCC seeks cancellation of the New Certan Mark pursuant to s 88(2)(c) of the Trade Marks Act 1995 (Cth) on the basis that as at 11 May 2021, being the date this proceeding was commenced, the use of the New Certan Mark was likely to deceive or cause confusion. 554 VCC also seeks cancellation of the New Certan Mark pursuant to s 88(2)(a) on the basis that as at the priority date the use of the New Certan Mark would have been contrary to law (s 42(b)), and the New Certan Mark was likely to deceive or cause confusion within the meaning of s 60 as it stood at the priority date. 555 Let me address some aspects of s 88(2)(c) first. Cancellation under s 88(2)(c) 556 Under s 88(2)(c), a registered mark is liable to be cancelled, removed or amended if as at the date of the removal application it is likely to deceive or cause confusion. The focus in my context is on the question of confusion. 557 Now in this context, the test for confusion is not whether consumers may think that two marks in question are the same. Rather, it is sufficient that consumers will be caused to wonder whether the parties' goods or services might come from the same source or be connected in the course of trade. The threshold for confusion is relatively low. There is no requirement that it be more probable than not that the impugned mark will have this effect. All that is required is that there is a real and tangible danger of confusion or deception. 558 In Southern Cross Refrigerating Company v Toowoomba Foundry Proprietary Limited (1954) 91 CLR 592, Kitto J stated (at 595): It is not necessary … to prove that there is an actual probability of deception leading to a passing-off. While a mere possibility of confusion is not enough – for there must be a real, tangible danger of its occurring … it is sufficient if the result of the user of the mark will be that a number of persons will be caused to wonder whether it might not be the case that the two products come from the same source. It is enough if the ordinary person entertains reasonable doubt. … (footnotes omitted) 559 A more recent formulation of the principle was set out by French J in Registrar of Trade Marks v Woolworths Ltd (1999) 93 FCR 365 (at [50](ii)) as follows: A trade mark is likely to cause confusion if the result of its use will be that a number of persons are caused to wonder whether it might not be the case that the two products or closely related products and services come from the same source. It is enough if the ordinary person entertains a reasonable doubt. 560 Now the notion of confusion incorporates contextual confusion, where consumers might think that the product bearing the impugned mark is a variant of or related to an existing brand. 561 Now if a case for cancellation or removal has been made out, the Court retains a discretion not to make an order cancelling or removing the mark. But if the evidence does not disclose a sufficient reason not to do so, cancellation or removal should follow. And it is for the registered owner to persuade the Court that there is a sufficient reason not to cancel or remove the mark. In Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd (2018) 259 FCR 514, Nicholas, Yates and Beach JJ said (at [146] and [158]): All of this indicates to us that the broad discretion conferred by the use of the word "may" in s 88(1) was not intended to be confined unless the power to cancel depends on the application of s 24 or s 25 (s 88(1)(a)) or on a finding that the trade mark is liable to deceive or confuse (s 88(1)(b) and (c)). In our view, unless s 89 is engaged, the discretion under s 88(1) is at large, constrained only by the general scope and objects of the Act. … Leaving aside situations in which s 89(1) of the Act applies, when deciding whether to exercise the discretion under s 88(1), the correct approach is to ask, as McLelland J did in Charles of the Ritz, whether sufficient reason appears not to order the cancellation of a registered mark once the statutory discretion to make such an order has been enlivened. If the evidence does not disclose sufficient reason not to cancel the mark then it should be cancelled. In the ordinary course of events, it will be for the party that resists the cancellation of the registered mark to persuade the court that there is a sufficient reason not to order its cancellation. Cancellation under s 88(2)(a) 562 Let me turn to s 88(2)(a) and first the hypothetical opposition concerning s 42(b). 563 Section 42(b) provides: An application for the registration of a trade mark must be rejected if: … (b) its use would be contrary to law. 564 VCC says that the use of the New Certan Mark would as at the priority date have been contrary to law because it would have contravened the legislative predecessors to ss 18 and 29(1)(g) and (h) of the ACL. VCC says that the evidence shows that VCC had the relevant reputation as at the priority date. Accordingly, VCC says that the use of the New Certan Mark as at the priority date would have contravened such provisions. 565 Let me say something about the hypothetical opposition under s 60. 566 As at the priority date, s 60 in its then form provided: The registration of a trade mark in respect of particular goods or services may be opposed on the ground that: (a) it is substantially identical with, or deceptively similar to, a trade mark that, before the priority date for the registration of the first-mentioned trade mark in respect of those goods or services, had acquired a reputation in Australia; and (b) because of the reputation of that other trade mark, the use of the first-mentioned trade mark would be likely to deceive or cause confusion. 567 The clear purpose of s 60 is to provide protection for prior well-known marks, whether registered or not. The reputation required for the purposes of s 60 must exist at the priority date of the opposed application. And more than minimal reputation is required. 568 Now VCC says that it had the requisite reputation at the priority date, being 25 November 1999, to found an opposition under this section. It says that the evidence shows that VCC had the requisite reputation as at the priority date and, indeed, long before that date. It says that its reputation subsisted in both the full name of the Vieux Château Certan wine estate and its main wine (the VCC Wine) and the name Certan. It says that the New Certan Mark is substantially identical with the name Certan. It says that the New Certan Mark incorporates the name Certan and that the word New is descriptive and not distinctive. It says that New Certan is deceptively similar to the name Vieux Château Certan. It says that New Certan and the name Vieux Château Certan have a visual and aural similarity, and both end in the word Certan. It says that the word Certan is likely to be a memorable part of the name Vieux Château Certan. It says that the structure of the marks would suggest to Australians that there is a common source of trade. It says that the word Certan has no inherent meaning to Australians and would therefore cause Australians to consider these two marks to be related. Further, it says that the use of the New Certan Mark as at the priority date would have caused or would have been likely to cause confusion. Analysis 569 Let me turn to the analysis and begin with s 88(2)(a). 570 VCC's claims for cancellation under ss 88(2)(a), 42(b) and 60 must be determined as at the filing date of 25 November 1999. 571 Now each of those claims requires VCC to establish a sufficient reputation in Australia in Vieux Château Certan, La Gravette de Certan and/or Certan such that the use of New Certan at that time would be likely to confuse or mislead ordinary consumers or members of the trade. 572 But as I have already indicated, the evidence of promotion of the VCC wines prior to 1999 by Australian distributors is minimal. It is limited to the 1991 Langton's Vintage Wine Price Guide, which included 31 pages listing the names without any product depictions of 207 red Bordeaux wines, including the names of VCC's competitors Chateau Certan de May and Chateau Certan-Giraud and bare textual references to the name Vieux Château Certan on several pages. There is no evidence as to how many copies of this guide were published, or how or to whom it was distributed, let alone how many people read it. 573 Mr Hooke recalls selling a number of Bordeaux red wines at Halvorsen's in Paddington during the 1980s, including Chateau Certan de May, but not VCC. 574 Moreover, the evidence establishes no more than that by November 1999, 147 bottles of the VCC Wine had been sold by Negociants Australia, and there is no evidence that Negociants Australia had substantially promoted the VCC Wine in any substantial way. Further, by that time, save for generalised assertions, there is no evidence to establish the quantum of sales of VCC Wine by the Royal Mail Hotel or the Prince Wine Store. Further, there is no evidence before me of the Gravette Wine being sold or promoted in Australia before 2011. 575 Further, to the extent that any ordinary consumers of wine in Australia read articles in specialist international publications like The Wine Spectator, there is only one brief article in evidence prior to 1999, which contained only a passing reference to Mr Thienpont and the VCC estate and did not include any images of the VCC product. 576 I agree with the respondents that such evidence does not get anywhere close to establishing that VCC had any sufficient reputation of the type relied upon by VCC, particularly when assessed against the target audience defined by the scope of the registration, which specifies all "alcoholic beverages including wines" across Australia, rather than any particular segment of that market. As the respondents rightly point out, the relevant comparison is between the prior mark as actually used and a notional normal and fair use of the mark sought to be registered. 577 In these circumstances, the claim for cancellation under ss 88(1) and 88(2)(a), when based upon s 42(b), must fail. 578 Further, VCC's case under s 60 also does not succeed. 579 First, it did not have the requisite reputation as at November 1999 to establish any such ground of opposition, whether in relation to the name Vieux Château Certan or the name Certan alone. 580 Second, the comparison between New Certan and Certan is irrelevant. VCC did not have and does not have any rights in the name Certan alone. 581 Third, on any view the names New Certan and Vieux Château Certan are not deceptively similar. The existence of a common element, being the word Certan, does not make them so. For the purposes of the assessment, it is the impression of the respective trade marks as a whole which must be considered. It is not appropriate to ignore the presence of other elements in the marks (PDP Capital at [104] per Jagot, Nicholas and Burley JJ). And the evidence does not support the proposition that consumers would refer to VCC or its products by the name Certan alone. 582 Fourth, in 2021, and I must say very belatedly if it thought that it had the requisite reputation in Australia in 1999, VCC obtained registration of Vieux Chateau Certan (Registered Australian trade mark no 2156243) on the basis that the Registrar of Trade Marks did not consider it deceptively similar to the prior registration of New Certan so as to prevent registration under s 44. This conclusion incorporates or at least implies a finding that the two marks do not so nearly resemble each other so as to cause confusion. No party has asserted that the Registrar erred in that assessment. 583 Let me now turn to s 88(2)(c). 584 VCC's claim under s 88(2)(c) seeks cancellation of the New Certan Mark on the basis that as at 11 May 2021 the use of the New Certan Mark was likely to deceive or cause confusion. 585 Now VCC's claims under the ACL and passing off emphasised the resemblance in the get-up of the respective products and the respondents' promotional conduct and the effect of such conduct. But such matters of product get-up and promotional conduct are extraneous to and beyond the ambit of the registration of the plain words New Certan. I agree with the respondents that they are irrelevant to the statutory inquiry required by s 88(2)(c). 586 The question posed by s88(2)(c) is whether by reason of the circumstances applying at the time when the application for rectification is filed, and regardless of whether those circumstances existed pre-registration, the use of the trade mark "is likely to deceive or cause confusion". The phrase "likely to deceive or cause confusion" reflects the language of deceptive similarity. The word "likely" means a real and tangible danger; a mere possibility of confusion is not enough. 587 Now the question posed by s 88(2)(c) is whether the use of the trade mark which is the subject of the registration is likely to deceive or cause confusion, that is, in the present case, the plain words New Certan. 588 The question whether the use of a registered mark is likely to deceive or cause confusion is a question of fact, and must be considered in the context of any normal and fair use of the mark. And it is necessary to have regard to all legitimate uses to which the mark might be put by its owner. Regard is to be had to the use to which the trade mark owner could properly put the mark within the ambit of the registration. So, the question whether there is a likelihood of confusion is not answered by reference to the manner in which the trade mark owner has used its mark in the past. In Campomar it was said (at [72]): Further, the phrase … "would be likely", involved a particular prospective inquiry. The question whether there was a likelihood of confusion was not to be answered by reference to the manner in which the applicant for registration had used its mark in the past. Rather, regard was to be had to the use to which, within the ambit of the registration, the applicant could properly put the mark if the application were to be granted. The onus to show that there was no such likelihood was to be discharged by the applicant in respect of all of the goods coming within the specification in the application, not only in respect of those goods on which the applicant proposed to use the mark immediately. Thus, if registration were sought in respect of particular goods and there would be a likelihood of deception if the mark were used upon such goods marketed as expensive products, it was no answer that the applicant proposed to use the mark only upon goods to be sold as inexpensively produced items. But that is not to give s 28(a) the secondary or continuing operation for which the respondents contended on these appeals. (footnotes omitted) 589 Moreover, the consideration of use of other features external to the registered trade mark and beyond the ambit of the registration, such as product get-up or promotional materials, is not the main question. 590 For this reason, I agree with the respondents that it is wrong for VCC to emphasise under s 88(2)(c) consideration of the pink cap or other visual features of the respondents' product or statements made in promotional communications. None of those matters are within the ambit of the registration of the plain words New Certan. Further, normal use in this context means use for all goods covered by the trade mark registration, which in the present case extends to alcoholic beverages including wines across Australia. Normal use is not to be narrowed to any particular segment of that market. 591 Further, there are various other reasons why VCC's claim under s 88(2)(c) fails, as the respondents correctly point out. 592 First, VCC explicitly eschews any reputation in the word Certan alone. 593 Second, to the extent that any narrow class of consumers who have an interest in fine wines, particularly from France may have been exposed to the name Vieux Château Certan by way of restaurant wine lists and retailers' price lists, many of those lists include Certan De May and Croix De Certan, which are both also from Pomerol and compete with VCC. Any assumption that all such uses of Certan refer to VCC would be erroneous. The respondents' use of New Certan would not be the cause of any incorrect perception based on that erroneous assumption. 594 Third, as I have already indicated, the Registrar of Trade Marks in 2021 accepted and registered VCC's trade mark Vieux Chateau Certan on the basis that it is not likely to be confused with, and thus not deceptively similar to, the prior registration of New Certan. Whilst each of the names includes the word Certan, each of the marks must be considered as a whole. Vieux Château Certan is significantly longer than New Certan. Further, by the inclusion of the words Vieux Château, the name Vieux Château Certan is obviously French. There is no such connotation in the name New Certan, which has no obvious meaning in English or French, and is more likely to be mis-spelled "Certain" than assumed to be of French origin. 595 Fourth, each of VCC's witnesses who perceived a connection between an earlier New Certan product and VCC did so by reference to the combination of features which included the pink cap and other visual features of the respective products. But none of them perceived any real connection merely by reference to the plain words New Certan and Vieux Château Certan. 596 Fifth, VCC has made some play of the fact that "Vieux" means "old" in French. But this assumes that relevant Australian consumers would understand the meaning of that word, and that that understanding would form part of the hypothetical consumer's imperfect recollection of the name Vieux Château Certan when encountering a product bearing the registered mark New Certan. But there is insufficient evidence to establish a likelihood of any such understanding amongst consumers, particularly where the notional use extends to wine generally and other alcoholic beverages and is not limited to consumers with particular interest in or knowledge of French wines. 597 In summary, the s 88(2)(c) ground is not made out. Discretion 598 But even if any ground of cancellation was made out, I would exercise my discretion under s 88(1) not to cancel or remove the New Certan Mark, having regard to the following matters. 599 First, the New Certan Mark has been used in connection with the promotion and sale of the New Certan wine since at least 2013. 600 Second, VCC failed to oppose the registration of the New Certan Mark, and did not prior to the commencement of this proceeding make any attempt to cancel or remove the mark from the Register of Trade Marks. 601 Third, there has been a substantial delay by VCC in taking any steps to seek to restrain the use of the New Certan Mark or to apply to have the mark cancelled or removed. VCC has been on notice of the existence of the New Certan Mark since at least 5 April 2014, when it was referred to by Mr de Moor in correspondence with Mr Thienpont. Mr de Moor's email to Mr Thienpont on 11 April 2014 did not contain any statement that he would stop using the name New Certan, and in fact stated that he would keep Mr Thienpont informed of "toute initiative d'habillage future de la marque". Mr de Moor clarified in re-examination that "l'habillage" is a verb that means "getting dressed"; that is, Mr de Moor drew a distinction between the name of New Certan ("la marque") and the visual features of the product ("l'habillage"). While there was a period during which no New Certan wine was sold by the respondents, Mr Thienpont was aware that the product had re-entered the market by no later than mid-July 2018. Taken at best, from at least that time until the commencement of this proceeding, a period of approximately 3 years, VCC sat on its hands. Conclusion 602 For the foregoing reasons I have concluded as follows. 603 First, VCC has substantially succeeded on its case under ss 18 and 29 of the ACL concerning the past and present conduct up to the point of trial of the respondents concerning the New Certan wine. But I am not convinced that it has suffered any damage or is entitled to any injunction, particularly given the undertaking proffered by the respondents which I will discuss further with counsel. It is also follows that if no damage has been sustained or is likely, then the tort of passing off has not been established. 604 Second, to the extent that there has been infringing conduct, Mr de Moor is liable as an accessory. 605 Third, VCC has not made out its case concerning the proposed re-branded New Certan wine. Whether or not an express disclaimer is to be added to the labelling is something that I will discuss further with counsel. 606 Fourth, VCC has not succeeded on its case to cancel Kreglinger's trade mark registration concerning the New Certan Mark. 607 Fifth, given that each party has had some measure of success, I am inclined to order that each party bear their own costs of the proceeding. 608 I will hear further from counsel as to the appropriate orders. The various three-dimensional exhibits will be returned to the parties upon suitable security arrangements being made. I certify that the preceding six hundred and eight (608) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Beach. Associate: Dated: 15 March 2024	60,809
federal_court_of_australia:fca/single/2023/2023fca1448	decision	commonwealth	federal_court_of_australia	text/html	2023-11-23 00:00:00	AES20 v Minister for Immigration, Citizenship & Multicultural Affairs [2023] FCA 1448	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2023/2023fca1448	2024-09-13T22:44:36.318676+10:00	Federal Court of Australia AES20 v Minister for Immigration, Citizenship & Multicultural Affairs [2023] FCA 1448 Appeal from: AES20 v Minister for Immigration & Anor [2020] FCCA 2363 File number(s): NSD 1000 of 2020 Judgment of: CHEESEMAN J Date of judgment: 23 November 2023 Catchwords: MIGRATION – application for leave to appeal interlocutory decision of the then Federal Circuit Court of Australia – where judicial review application summarily dismissed at show cause hearing – whether decision attended by sufficient doubt – whether substantial injustice would result from leave to appeal being refused – Held: application dismissed Legislation: Federal Circuit Court Rules 2001 (Cth) rr 35.13, 44.12 Federal Court of Australia Act 1976 (Cth) s 24(1A) Migration Act 1958 (Cth) ss 36(2)(a), 36(2)(aa), 424AA(1)(b)(iii) Cases cited: Deputy Commissioner of Taxation v Miraki [2022] FCAFC 96 GFV18 v Minster for Home Affairs [2019] FCA 1817 SZLXE v Minister for Immigration and Citizenship [2008] FCA 1312 SZTKB v Minister for Immigration and Border Protection [2014] FCA 653 VAUX v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 158 Division: General Division Registry: New South Wales National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 36 Date of hearing: 14 November 2023 Counsel for the Applicant: The applicant appeared in person Solicitor for the First Respondent: Ms K Pieri of MinterEllison Solicitor for the Second Respondent: The Second Respondent filed a submitting notice save as to costs. ORDERS NSD 1000 of 2020 BETWEEN: AES20 Applicant AND: MINISTER FOR IMMIGRATION, CITIZENSHIP AND MULTICULTURAL AFFAIRS First Respondent ADMINISTRATIVE APPEALS TRIBUNAL Second Respondent order made by: CHEESEMAN J DATE OF ORDER: 23 NOVEMBER 2023 THE COURT ORDERS THAT: 1. The application for leave to appeal be dismissed. 2. The applicant pay the first respondent's costs. 3. The first respondent's name be changed to "Minister for Immigration, Citizenship and Multicultural Affairs". Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT CHEESEMAN J INTRODUCTION 1 The applicant, a citizen of India, seeks leave to appeal from a decision of the then Federal Circuit Court of Australia, now the Federal Circuit and Family Court of Australia, to dismiss an application for judicial review: AES20 v Minister for Immigration & Anor [2020] FCCA 2363 (PJ). The application for judicial review was in respect of a decision of the second respondent, the Administrative Appeal Tribunal, to affirm a decision of a delegate of the first respondent, the Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs to deny the applicant a protection visa. The primary judge convened a show cause hearing under r 44.12 of the Federal Circuit Court Rules 2001 (Cth) (FCC Rules) as then in force. The primary judge summarily dismissed the applicant's application for judicial review at the show cause hearing. 2 The primary judge's decision was interlocutory: r 44.12(2) of the FCC Rules. Therefore, the applicant requires leave to appeal: s 24(1A) of the Federal Court of Australia Act 1976 (Cth). The application for leave to appeal was filed within the 14-day period required by r 35.13 of the Federal Court Rules 2011 (Cth). BACKGROUND 3 The applicant arrived in Australia on 10 April 2016 with a visitor (subclass 600) visa. Soon after his arrival, on 30 June 2016, the applicant applied for a protection (subclass 866) visa. This application was denied by the delegate on 19 January 2017. The applicant applied to the Tribunal for review of the delegate's decision on 9 February 2017. The Tribunal affirmed the decision of the delegate on 20 December 2019: (T). 4 The applicant then applied to the Circuit Court for judicial review of the Tribunal's decision. As mentioned, as a result of a show cause hearing, the primary judge summarily dismissed the judicial review application on 26 August 2020. 5 On the hearing of this application for leave to appeal, the applicant appeared in person with the assistance of an interpreter. THE DELEGATE'S DECISION 6 The applicant claimed that he became involved with the Tamil cause in India and subsequently became politically active in the cause of the liberation of Sri Lankan Tamils and joined the Naam Tamilar Party (NTP). His evidence was that the major political parties in India opposed the NTP. He claimed that because of his involvement in the NTP cause, he was apprehended, manhandled and tortured without proper documentation by police on a few occasions. He gave evidence to the delegate that the police had threatened him and had filed false cases against him due to his support for Sri Lankan Tamils. The applicant claimed that he feared persecution if made to return to India on this basis. 7 The delegate refused the applicant's protection visa application. The delegate was not satisfied that the applicant's claims of political involvement were established. The delegate noted that there was a lack of evidence other than the appellant's own testimony. The delegate found (as written): Based on the above, including I am not satisfied that the applicant is a member of the Naam Tamilar Party, it follows that I am not satisfied that the applicant has been detained on any occasion by the Tamil Nadu State Police. I am not satisfied that he has been beaten, manhandled or otherwise abused by them, and I am not satisfied that he has ever been threatened by them. … 8 The delegate also noted a lack of evidence for several other claims made by the applicant as a reason for refusing the protection visa. THE TRIBUNAL'S DECISION 9 The applicant provided the Tribunal with a copy of the delegate's decision. On 6 November 2019 the Tribunal informed the applicant that it could not make a favourable decision based only on the material the applicant had provided to it and invited the applicant to a hearing. The applicant did not provide any further documents in support of his application in advance of the hearing before the Tribunal. 10 The hearing was held before the Tribunal on 17 December 2019. The applicant had the assistance of a Tamil interpreter. At the hearing, the applicant gave evidence that he did not feel he would be safe if he returned to India but did not give specific particulars other than that he had participated in protests in support of Sri Lankan Tamils in the past. He also gave evidence that he felt returning to India would affect his mental health. 11 In its reasons, the Tribunal expressed extensive concerns about the credibility of the applicant's evidence. The Tribunal made several observations about inconsistencies in the evidence the applicant gave. Ultimately, the Tribunal found that (at T[38]): 38 Considered cumulatively, the concerns the Tribunal holds about the applicant's credibility as discussed above lead the Tribunal to conclude that the applicant is not a witness of truth when claiming to hold fears, and concerning his character and past harm, upon which he has based his protection claims. 12 With respect to the applicant's claimed circumstances and past harm when in India, the Tribunal found (at T[39]): 39 …While [the Tribunal] is prepared to accept that some Sri Lankan Tamils moved into his family home area and that he may have been sympathetic to their plight, it does accept that he considers himself close to or aware of the issues facing Sri Lankan Tamils as claimed. It does not accept that he wanted to or did work to support Tamil causes, nor that he joined any political organisations or the NTP, nor that he attended meetings or attended/organised protests or was an active member or even low-level member or supporter of the party. It does not accept that he was imputed or believed by the authorities to have any such involvement, nor that he was warned/detained/arrested/tortured or otherwise harmed or subjected to adverse interest from the authorities. It does not accept any claims flowing from this, including attempted police complaints, false cases, nor that he was unable to make a complaint to the police or to other organisations about the behaviour against him. … 13 With respect to the applicant's claims of fear for his future in India, the Tribunal found (at T[41]): 41 The Tribunal does not accept that the applicant has a genuine fear of, nor that he faces a real chance or a real risk of, being apprehended, tortured, and killed by the police at the instigation of the ruling party or other major political parties due to his political affiliation and opinion. It does not accept that there is any reason for the authorities (or a neighbour) to have an adverse interest in the applicant or for him to face harm, whether due to his own activities, or because of anyone else's activities. The Tribunal does not accept that he has or will have the interest or motivation to engage in political activities in India. It does not accept any claims flowing from these claims. 14 For these reasons, the Tribunal found that the applicant did not satisfy the criteria set out in either s 36(2)(a) or s 36(2)(aa) of the Migration Act 1958 (Cth) and accordingly, affirmed the decision of the delegate not to grant a protection visa. PRIMARY JUDGE'S DECISION 15 The applicant sought judicial review in the Circuit Court on two grounds, expressed in substance as follows: (1) the Tribunal failed to provide the applicant with adequate opportunity resulting in a miscarriage of justice and the violation of the principles of procedural fairness; and (2) the Tribunal failed to consider the correct social group to which the applicant belongs and therefore applied an incorrect test for the need to grant a protection visa. 16 The first ground was particularised by reference to the Tribunal's alleged failure to adjourn the hearing despite accepting that the applicant could have been nervous throughout the proceeding. In dismissing the first ground, the primary judge observed that the applicant's claim that the Tribunal acted unreasonably by not adjourning the hearing to a later date was necessarily fact dependent. The primary judge found that: (1) there was no evidence that the applicant had sought an adjournment; (2) there was a nearly three-year period between the delegate's decision and the Tribunal hearing during which time the applicant could have prepared arguments and evidence in support of his application; (3) the applicant was on notice that the whole of his account was in issue; and (4) the Tribunal's preparedness to accept that the applicant was nervous was made in the context of its credit findings and did not suggest that the applicant was unable to articulate his claims before the Tribunal. Accordingly, the primary judge found that the Tribunal's decision not to consider an adjournment was not legally unreasonable. 17 Regarding the second ground, the primary judge found that the applicant had failed to establish jurisdictional error by reason of the Tribunal failing to consider the applicant's claim to fear harm on the basis of his membership of a particular social group. The applicant contended that his claim based on social group was independent of and separate to his claim to fear harm on the basis of his political opinion. The primary judge found this ground was misconceived. The particulars relied upon before the primary judge defined the applicant's "correct social group" as being "Indian citizen of Tamil ethnicity, young male, worker of NTP alleged to have links with banned LTTE organisation in India and [as] a protestor of NTP due to its political opinion". The applicant contends that "these aspect" put together were not considered by the Tribunal. The primary judge found that the applicant's protection visa application did not include any claim to fear harm due to membership of a particular social group. The claim advanced before the Tribunal was expressly confined to a fear of harm if returned "due to my political affiliation and opinion": PJ[23].The primary judge also noted that the basis of the applicant's claim was similarly confined in his interview before the delegate. The primary judge found that the applicant did not advance a claim based on alleged membership of a social group. Accordingly, there was no error on the part of the Tribunal in failing to engage with a contention that was not an essential integer of the claim advanced. The primary judge observed that the Tribunal had engaged in an 'active intellectual process' and 'gave genuine consideration' to the applicant's claims before affirming the delegate's decision: PJ[24]. The primary judge noted that the Tribunal had come to its conclusion on the basis of adverse credibility findings and independent country information. The primary judge added that in any event the factual premise that the purported claim based on social group was predicated was rejected — the Tribunal did not accept the applicant had any involvement with the NTP or had been imputed to have such involvement. The Tribunal was under no obligation to consider a claim in these circumstances whether or not the claim had been expressly articulated or one which arose in the materials: PJ[26]. 18 Accordingly, the primary judge summarily dismissed the applicant's judicial review application pursuant to r 44.12 of the FCC Rules, with costs. At the time of this decision, r 44.12(1)(a) of the FCC Rules provided for a show cause procedure whereby an application could be summarily dismissed if the court was not satisfied that the application raised an arguable case for the relief claimed. This was the basis upon which the primary judge summarily dismissed the judicial review application. LEAVE TO APPEAL AND DRAFT NOTICE OF APPEAL 19 In summary, the grounds for the application for leave to appeal are that the primary judge erred by dismissing the case at the show cause hearing by holding that: (1) there was no jurisdictional error; and (2) there was no jurisdictional error in failing to consider the applicant's alleged claim based on belonging to a social group. 20 Ground 1 is particularised by reference to information put to the applicant pursuant to s 424A of the Migration Act in the course of the Tribunal hearing. The applicant claims that the information originated from an external source not produced by the applicant, and as such the requirement under s 424AA(1)(b)(iii), that the Tribunal advise the applicant that he could seek additional time to comment or respond to the information, was enlivened. The applicant contends that he was not advised he could seek additional time to respond and that in failing to advise the applicant so, the Tribunal made a jurisdictional error. 21 Ground 2 is particularised by characterising the claims the applicant made based on his alleged membership of NTP, which were framed as fear of harm on the basis of political affiliation and opinion, as being claims for fear of harm based on membership of a social group. On this basis the applicant contends the Tribunal failed to, or failed to adequately, consider the claim advanced. 22 The applicant repeats these two grounds in his draft notice of appeal. LEAVE TO APPEAL 23 The principles which apply to an application for leave to appeal from an interlocutory decision are well established. The Full Court summarised these principles in Deputy Commissioner of Taxation v Miraki [2022] FCAFC 96 at [5] as follows (Perram, Moshinsky and Hespe JJ): 5 …In general, the tests to be applied are: (a) whether, in all the circumstances, the decision is attended with sufficient doubt to warrant its being reconsidered by the Full Court; and (b) whether substantial injustice would result if leave were refused, supposing the decision to be wrong: Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-400 per Sheppard, Burchett and Heerey JJ. The discretion to grant leave is not constrained by rigid rules. Leave to appeal has been granted where, for example, the questions posed for resolution on appeal "have general importance beyond the concerns of the parties": Australian Securities and Investments Commission v P Dawson Nominees Pty Ltd (2008) 169 FCR 227 at [10] per Heerey, Moore and Tracey JJ. See also ACE Insurance Ltd v Trifunovski (2012) 291 ALR 46 at [7]-[9] per Flick J. 24 The onus is on the applicant to prove that: (a) there is sufficient doubt; and (b) there would be substantial injustice if the application is refused supposing the decision to be wrong: SZTKB v Minister for Immigration and Border Protection [2014] FCA 653 at [7] to [8] (Flick J). CONSIDERATION Ground 1 — jurisdictional error 25 By his first ground the applicant claims that the Tribunal relied on information from an external source not produced by the parties when putting a question about the name of an NTP candidate, and that he should have been provided with additional time to comment or respond to that information per s 424AA(1)(b)(iii) of the Migration Act. He claims that he was unaware of any right to seek additional time to respond and had he known he was able to request such additional time he would have done so. 26 The claim that the Tribunal's decision was affected by jurisdictional error due to a failure to comply with s 424AA of the Migration Act was not put to the primary judge. Leave is required for the applicant to rely on this as a new ground: VAUX v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 158; 238 FCR 588 at [46] to [48] (Kiefel, Weinberg and Stone JJ). 27 The Minister submits that such leave should be refused, on the basis it would not be 'expedient in the interests of judgment to do so' as the proposed ground has no merit: VUAX at [46] to [49]. I agree. The Tribunal recorded that it put the information about which complaint is now made to the applicant 'pursuant to s.424AA of the Act' (at T[27]). In the absence of a transcript of the hearing, there is no reason to doubt that the Tribunal complied with the procedure set out in s 424AA as stated in its reasons: SZLXE v Minister for Immigration and Citizenship [2008] FCA 1312 at [19] (McKerracher J); GFV18 v Minster for Home Affairs [2019] FCA 1817 at [10] (Bromwich J). Ground 2 — finding of no jurisdictional error in consideration of social group 28 By his second ground, the applicant seeks to reagitate ground two of the judicial review application in the Court below. This ground is lacking in merit for the reasons given by the primary judge. The applicant has not demonstrated any error in the approach taken by the primary judge. Indeed, the applicant has not attempted to establish error but instead simply repeated the argument made below. 29 Leave to appeal must be refused. The applicant's grounds are not meritorious. The decision at first instance is not attended by sufficient doubt to warrant its reconsideration. 30 For completeness, and for the benefit of the applicant, I will address some discrete matters that were raised by the applicant that were not specifically directed to the grounds identified in the application. As mentioned, the applicant is a litigant in person. I am conscious of the difficulties experienced by litigants in person, particularly in a case such as this where the result of the proceeding will have a serious effect on his future. I have taken this into account when considering the oral submissions made by the applicant at the hearing. The applicant did not file written submissions. He did, however, include material in the nature of submissions in his affidavit sworn on 5 September 2020 (as written): 3 I state that the corroborative evidence , I furnished in relation to treatment of Nam Tamil Party leaders and cadres a pro LTTE lobby group before the Tribunal was not properly considered . I state that even without looking at the contents of the corroborative evidence it was brushed aside on grounds of credibility in relation to my evidence . 4 I further state that my evidence was wrongly interpreted by the Tribunal. 31 At the hearing, the Minister addressed the two assertions made by the applicant in his affidavit as follows. The first assertion, that proof which the applicant had furnished to the Tribunal was not properly considered, was refuted by the Minister. The Minister submitted that in fact no further evidence had been filed with the Tribunal or in the court below. There is no material before me to demonstrate that "corroborative evidence" was filed in the Tribunal or in the Court below. The second assertion, that the applicant's evidence was wrongly interpreted by the Tribunal, was refuted by the Minister on the basis that the applicant had not particularised or given evidence in relation to any alleged errors in the wrongly interpretation of his evidence. There was no material before me against which to assess the assertion in the applicant's affidavit that his evidence was wrongly interpreted before the Tribunal. 32 The applicant acknowledged that the evidence that he had been able to provide may have been insufficient, but reiterated his view that the Tribunal failed to adequately consider such evidence as there was. The applicant's contention was not supported by particulars or by reference to the material before the Tribunal. 33 Apart from the matters in his affidavit, the applicant's oral submissions were directed to his personal circumstances rather than to establishing jurisdictional error. He submitted that he did not have enough time to advance his claims at the time of the early considerations of his applications. He said he could not get help from anyone in India and he put in all the documents to which he had access. He complains that he does not understand how previous decision makers could have arrived at the decisions they did. He explained that at the relevant time, he had depression. He said that his mother had passed away and he could not attend the funeral. He said he was still struggling with depression. Leaving to one side whether the applicant raised any of these matters before the primary judge, if leave to appeal is granted, there is no evidence to support the assertions the applicant made in his oral submissions. 34 Taking all of the above into consideration, I am not satisfied that the primary judge's decision is attended by sufficient doubt. The applicant has not established that the primary judge's decision to dismiss both grounds of the judicial review application was attended by error. 35 I am also not satisfied, even assuming the decision to be wrong, that there would be substantial injustice if the application for leave was refused. I am sympathetic to the applicant's dismay at the refusal of his protection visa application and the dismissal of his judicial review application, however, the applicant's submissions on this application were in substance an entreaty for the Court to engage in impermissible merits review. This application must be dismissed with costs. CONCLUSION 36 For these reasons, the application for leave to appeal must be dismissed with costs. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Cheeseman. Associate: Dated: 23 November 2023	4,966
federal_court_of_australia:fca/single/1999/1999fca0634	decision	commonwealth	federal_court_of_australia	text/html	1999-05-10 00:00:00	Adlam v Bauer [1999] FCA 634	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1999/1999fca0634	2024-09-13T22:44:36.424378+10:00	FEDERAL COURT OF AUSTRALIA Adlam v Bauer [1999] FCA 634 Industrial Law – notice of motion to discharge rule to show cause – motion dismissed – no point of principle. Workplace Relations Act 1996 (Cth), s 209 Federal Court Rules, O 20, r 2(a) Australian Workers Union & Ors v Bowen & Ors (1947) 77 CLR 601 cited Dickason v Edwards & Ors (1910) 10 CLR 243 cited Matter No. SG 141 of 1998 CAROLYN JENNIFER ADLAM v PETER BAUER and OTHERS VON DOUSSA J 10 MAY 1999 ADELAIDE IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY SG 141 OF 1998 BETWEEN: CAROLYN JENNIFER ADLAM Applicant AND: PETER BAUER and OTHERS Respondents JUDGE: VON DOUSSA J DATE OF ORDER: 10 MAY 1999 WHERE MADE: ADELAIDE THE COURT ORDERS AND DIRECTS THAT: 1. Notice of motion filed on 13 April 1999 dismissed. 2. Question of costs, if any, reserved. 3. Direct the applicant to file and serve an affidavit identifying any further documents to be relied on in the applicant's case within seven days. 4. Liberty to the respondents and any of them to file affidavits in reply to the applicant's affidavits within twenty-one days. 5. Liberty to apply on three days' notice. 6. Confirm the date for trial as 21 June 1999 before Marshall J. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY SG 141 OF 1998 BETWEEN: CAROLYN JENNIFER ADLAM Applicant AND: PETER BAUER and OTHERS Respondents JUDGE: VON DOUSSA J DATE: 10 MAY 1999 PLACE: ADELAIDE EX TEMPORE REASONS FOR DECISION 1 On 22 December 1998 I made an order to show cause based on an affidavit that had been filed by Ms Adlam. I limited the order to show cause to paragraph 6 of that affidavit which raised as a challenge to the decision of the State Council made on 26 November 1998, the fact that three members of the Council were, so it was alleged, invincibly biased. Other grounds for attacking the validity of the decision were rejected by me. 2 At the time that the rule to show cause was made I observed: "The allegations of invincible bias put forward in the affidavit are, to adopt the language of counsel for Mr Cameron and Mr Noack, very thin. Indeed part of it is hearsay and in some respects it is put forward in an argumentative way. If this were the trial of the action the evidence in the affidavit in support of those matters would probably not be admissible and certainly would be entitled to little weight. However, this is not the trial. The purpose of the affidavit is rather to identify whether there are grounds upon which the argument can be reasonably asserted. Taking the allegations at face value and without passing any comment about their veracity it seems to me that the matters raised, or at least some of them, would leave the inference of invincible bias open. In my opinion a proper course is to grant an order nisi limited to paragraph 6 of the supporting affidavit and give directions requiring that affidavits in an admissible form be filed within a reasonable time by Ms Adlam to support the allegations made in paragraph 6. It must be understood by Ms Adlam that she seeks to raise a very serious matter. Correspondingly the evidence that she advances in support of it must be admissible and must be in proper form. Further, it must be understood that when the matter next comes before the Court, and indeed if it proceeds to trial, the Court will hold Ms Adlam to the matters of fact which are asserted; that is the affidavits will operate as pleadings." 3 In the meantime, affidavits in addition to those that were before the Court at the time of the order to show cause have been filed by Ms Adlam. There are two substantial affidavits by her, one filed in February and one in March 1999, and there are other affidavits by witnesses that she proposes to call. In addition, she has given notice through her counsel that she proposes to subpoena three witnesses who will give oral evidence on certain issues. 4 In respect of that additional material a notice of motion has now been filed seeking an order discharging the order to show cause on the ground that no reasonable cause of action is disclosed: FCR O 20, r 2(a). 5 The purpose of the rule to show cause was to institute an application order under s 209 of the Workplace Relations Act 1996 (Cth) for an order to comply with the Rules of the Union. In a sense, the order to show cause institutes an inquiry into what has happened and it is in the nature of litigation taken in the interests of the members of the Union, rather than being limited to the interests of the particular parties before the Court. I am not sure that it is appropriate to speak in terms of there being no cause of action disclosed. However, it is open to the respondents to come forward now and say that the additional material is not such as to warrant the order to show cause, and that it ought to be discharged on the basis that the material taken at its most favourable from the applicant's point of view could not support the relief sought. I have approached the matter on that basis. 6 There are really two aspects to the matter today: the first is whether the material now available, taken at its most favourable to the applicant, could lead to findings of invincible bias against one or more of the persons concerned. If the answer to that were, as a matter of fact, yes, there would be a further question of law as to whether the finding that only one, two or three members of the Council were invincibly biased inevitably leads to the setting aside of the decision. It has been put to me today that there are authorities both ways, but it seems to me clear from Dickason v Edwards and Ors (1910) 10 CLR 243 and Australian Workers Union & Ors v Bowen & Ors (1947) 77 CLR 601 that there is strong authority for the proposition that if there is a person invincibly biased sitting on a discipline tribunal of this kind, where principles of natural justice in one form or another apply, that is sufficient to vitiate the whole exercise. 7 Secondly, a further matter has been raised today and it was also raised on 22 December 1998, namely whether in any event Ms Adlam should be taken to have waived the complaint she now makes about the invincible bias of the three persons that she has identified. It is said that she was aware of the facts well before the hearing, and by that I take the respondents to mean aware that the three people were proposing to sit, and she should have done something more than she did to complain about their presence. 8 I indicate to the parties that in advance of this hearing I thought it was probably inevitable that things would be said in the course of argument today which might give the appearance that I had formed some view about some of the facts. I indicate that I have not, but nevertheless, in case there is any perception to that effect I have arranged for another judge to hear this case on 21 June 1999. 9 My conclusion, having heard the arguments today and having read the additional affidavit material, is that there remains a basis upon which it could be inferred from that evidence, if no other evidence were called, that each of the three people that are named were invincibly biased in the sense that not only were they people actively and strenuously of the same political persuasion as Mr Noack, but that they had become so involved with his cause that they would not be likely to be influenced by argument and reason to decide the matters before the State Council on their true merits. I emphasise that that is a view expressed in a theoretical sense having regard to the evidence put forward by one side only, and at this stage still unanswered. The only point that arises from my conclusion is that I think it is possible that adverse decisions to the respondent's interests could be made if the evidence remains as it is. Having said that, and because another judge is going to hear the case, I think the less said about the facts by me the better. 10 On the question of waiver, in making the order to show cause on 22 December 1998, I note, on re-reading what I said then, that I commented that the question of waiver was an open one but it was premature at that stage to address the facts. In the course of argument today it dawned on me that these proceedings are not strictly proceedings inter partes. They have the public interest element that I have already mentioned and I think there is a very serious question, worthy of debate and decision in a considered way, as to whether waiver is open at all. But even if it is, in my opinion it would be premature to strike out the proceedings on the basis that Ms Adlam had waived whatever rights might otherwise have existed under s 209. 11 Waiver is a matter that is customarily to be pleaded by the party that seeks to rely on it, not just by asserting in bald terms "waiver", but by giving particulars of the facts and circumstances that are said to give rise to that waiver. The plea is then followed by allowing the person against whom the allegation is made the opportunity to allege facts in answer to the particulars that are given and to offer any explanation. Then at trial the facts have to be determined. In the present case at this stage no answer has been given by Ms Adlam to the vague allegations of waiver that are being made against her. If waiver is to be raised that is something which needs to be raised by the respondents on the papers, and Ms Adlam should be given the opportunity to respond. That has not yet happened, so in my view, it is still premature to be taking any action that would determine the proceedings on the basis of waiver. 12 For those very brief reasons I think the notice of motion taken out by Mr Noack to discharge the order to show cause should be dismissed. The matter will proceed in the ordinary way to trial on 21 June 1999. 13 There is one further matter that I should mention. In the course of argument it was said by counsel for Ms Adlam that it would also be premature to discharge the order to show cause at this stage because discovery is still being given. It is true that discovery orders were made late and that there have been difficulties in complying with them. I can understand that the applicant is still receiving some papers by way of discovery, but it was the intention of the orders made on 22 December 1998, that Ms Adlam's affidavits would stand, as it were, as pleadings intended to identify the topics upon which evidence might later be given. The parties should bear that in mind. Insofar as discovery is still being given it should be discovery relevant to issues that are identified in the affidavits and not generally at large. No doubt when the case is tried, the relevance of questions, cross-examination and so on, will also be decided according to the topics that are already identified in the affidavits. 14 I will make the following orders and directions: 1. Notice of motion filed on 13 April 1999 dismissed. 2. Question of costs, if any, reserved. 3. Direct the applicant to file and serve an affidavit identifying any further documents to be relied on in the applicant's case within seven days. 4. Liberty to the respondents and any of them to file affidavits in reply to the applicant's affidavits within twenty-one days. 5. Liberty to apply on three days' notice. 6. Confirm the date for trial as 21 June 1999 before Marshall J. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice von Doussa. Associate: Dated: 10 May 1999 Counsel for the Applicant: Mr S J Howells with Mr J W Weatherill Solicitor for the Applicant: Lieschke & Weatherill Counsel for Mr P Noack: Mr G F Barrett QC with Mr F Di Fazio Solicitor for Mr P Noack: Moloney & Partners Counsel for Mr Cameron & Others: Mr J H Pearce Solicitor for Mr Cameron & Others: Taylor & Scott Counsel for Mr J Camillo, Mr P McMahon & Mr R Parham: Mr T D Bourne Solicitor for Mr J Camillo, Mr P McMahon & Mr R Parham: Stanley & Partners Date of Hearing: 10 May 1999 Date of Decision: 10 May 1999	2,824
federal_court_of_australia:fca/single/2003/2003fca0804	decision	commonwealth	federal_court_of_australia	text/html	2003-08-01 00:00:00	Australian Securities & Investments Commission v Southcorp Limited [2003] FCA 804	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2003/2003fca0804	2024-09-13T22:44:36.711189+10:00	FEDERAL COURT OF AUSTRALIA Australian Securities & Investments Commission v Southcorp Limited [2003] FCA 804 PRACTICE AND PROCEDURE – legal professional privilege – expert witness retained to provide report for use in anticipated litigation – expert's notes of things said by solicitors and counsel in relation to expert's draft report – counsel's annotations on a draft of the report – draft reports themselves – correspondence between solicitors and expert. Corporations Act 2001 (Cth) Esso Australia Resources Ltd v Commission of Taxation (1999) 201 CLR 49 cited Mann v Carnell (1999) 201 CLR 1 cited Wheeler v Le Marchant (1881) 17 ChD 675 cited Trade Practices Commission v Sterling (1979) 36 FLR 244 cited Interchase Corporation Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 1) [1999] 1 Qd R 141 cited Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 cited Spassked Pty Ltd v Commissioner of Taxation (No 4) (2002) 50 ATR 70 cited Attorney-General (NT) v Maurice (1986) 161 CLR 475 cited Goldberg v Ng (1995) 185 CLR 83 cited Instant Colour Pty Ltd v Canon Australia Pty Ltd [1995] FCA 870 cited Australian Competition and Consumer Commission v Lux Pty Ltd [2003] FCA 89 cited Dingwall v Commonwealth of Australia (1992) 39 FCR 521 cited Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd (No 2) (1998) 83 FCR 397 cited AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v SOUTHCORP LIMITED (ACN 007 722 643) N 3010 OF 2003 LINDGREN J SYDNEY 1 AUGUST 2003 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 3010 OF 2003 BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION PLAINTIFF AND: SOUTHCORP LIMITED (ACN 007 722 643) DEFENDANT JUDGE: LINDGREN J DATE OF ORDER: 1 AUGUST 2003 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The costs of the argument over legal professional privilege touching documents produced in response to a subpoena addressed to Frank Anthony Villante, be reserved. 2. Each party have liberty to apply generally on 24 hours' notice. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 3010 OF 2003 BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION PLAINTIFF AND: SOUTHCORP LIMITED (ACN 007 722 643) DEFENDANT JUDGE: LINDGREN J DATE: 1 AUGUST 2003 PLACE: SYDNEY REASONS FOR JUDGMENT (No 1) (Client Legal Privilege) INTRODUCTION 1 The plaintiff, the Australian Securities and Investments Commission ("ASIC"), alleges that the defendant, Southcorp Limited ("Southcorp"), contravened subs 674(2) of the Corporations Act 2001 (Cth) ("the Act") on or about 18 and 19 April 2002, by failing to notify Australian Stock Exchange Limited ("ASX") of some of the information ("the Information") conveyed in an email which Southcorp sent at 4.29 pm on 18 April 2002 to eleven named stock market analysts. The Information was that "the gross profit impact of the poor 2000 vintage from the sale of the super premiums (Penfolds and Wynns) ... on 2003 compared to 2002 ... was expected to be of the order of $30 million" (ASIC's originating process par 1.2; ASIC's statement of claim, par 5). 2 Pursuant to s 1317G of the Act, ASIC seeks a declaration of contravention and an order that Southcorp pay to the Commonwealth or to ASIC a pecuniary penalty. As well, ASIC seeks an order for costs. 3 These reasons for judgment relate to an interlocutory question: Is ASIC entitled to the benefit of legal professional privilege (client legal privilege) in relation to certain documents the subject of a subpoena for production which was issued on Southcorp's application. 4 The subpoena, issued on 6 May 2003, was addressed to Frank Anthony Villante, an expert witness retained by ASIC. Mr Villante had earlier sworn an affidavit on 26 February 2003, to which were annexed ASIC's letter of instructions to him dated 21 February 2003 and his report dated 26 February 2003 ("Final Report"). The Final Report answered questions posed in ASIC's letter. 5 ASIC's letter of instructions incorporated, by reference, documents identified as being variously located behind 38 numbered tabs in four lever arch folders. The Final Report comprised text of 21 pages (40 paragraphs) and annexures A to F of 53 pages. The bare statement of these facts indicates the improbability that Mr Villante would have been able, within only five days, to produce such a report in response to such instructions. ASIC's evidence explains that Mr Villante had in fact been retained much earlier, in response to which he had produced an earlier report dated 17 December 2002 ("First Report"). The First Report has been produced by ASIC to Southcorp. The evidence also shows that from that time down to the production of the Final Report, there was considerable interaction between Mr Villante and ASIC's lawyers in relation to the preparation of the Final Report. In fact Mr Villante's affidavit of 26 February 2003 referred to in [4] above accompanied the originating process which commenced this proceeding on that day. 6 The subpoena for production is in respect of documents described in it as follows: "1. All Documents which are or concern communications with Australian Securities & Investments Commission (ASIC) or anyone on its behalf in relation to the allegation that Southcorp Limited failed to disclose material information in connection with the 2000 vintage, including without limitation: (a) records of discussions; (b) instructions from or on behalf of ASIC; (c) requests for instructions; and (d) any document which records or constitutes any advice or opinion given by you to ASIC or anyone on its behalf. 2. In relation to your report to ASIC dated 21 February 2003 [sic – 26 February 2003]; (a) notes and working papers prepared in connection with that report; and (b) drafts of that report." 7 ASIC has produced, and has not opposed inspection of, many documents falling within the subpoena. The documents which remain in dispute are contained in a lever arch folder and constitute Confidential Exhibit A1 on the present hearing ("the Documents in Dispute"). 8 There is no motion before the Court. The present dispute over access arises as on the return of the subpoena. ASIC'S SUBMISSION 9 ASIC submits that disclosure of the Documents in Dispute would result in disclosure, in breach of the privilege to which it is entitled in accordance with common law principles, of confidential communications which took place for the dominant purpose of the obtaining or giving of legal advice or assistance, or of use in connection with legal proceedings, or both; cf Esso Australia Resources Ltd v Commission of Taxation (1999) 201 CLR 49 at [35], [61] per Gleeson CJ, Gaudron and Gummow JJ; Mann v Carnell (1999) 201 CLR 1 at [27] per Gleeson CJ, Gaudron, Gummow and Callinan JJ. Ultimately, ASIC pressed its claim as one of litigation privilege alone. Adapting the terms of s 119 of the Evidence Act 1995 (Cth), ASIC claims that disclosure of the Documents in Dispute would result in disclosure of: (a) a confidential communication between lawyers acting for ASIC and Mr Villante, that was made; or (b) the contents of confidential document (whether delivered or not) that was prepared, for the dominant purpose of ASIC being provided with professional legal services relating to the (then proposed) present proceeding. EVIDENCE 10 The evidence before the Court consists of the Documents in Dispute, which I have read without objection; two affidavits of Helen Tot, a lawyer employed by ASIC, sworn 24 June 2003 and 11 July 2003; and Ms Tot's cross-examination. 11 The Documents in Dispute fall into two categories: 1. Three draft reports of Mr Villante dated 16 December 2002, 19 February 2003 and 26 February 2003. (It will be recalled the First Report was dated 17 December 2002 and the Final Report, 26 February 2003, both of which have been made available to Southcorp); 2. Correspondence and emails between lawyers at ASIC having the conduct of the matter and Mr Villante over a period from 16 December 2002 to 10 April 2003. 12 The evidence shows the general nature of the documents in dispute to be as follows. 13 The draft report dated 16 December 2002 was produced as a result of a conference between Mr Villante, Ms Mira Vucic, a "Senior Lawyer" employed by ASIC, and counsel. It bears the handwritten notations of Mr Villante. He made the notations in the course of discussing the draft with Ms Vucic and counsel as a step directed to production of the First Report on 17 December 2002. More precisely, Mr Villante told Ms Tot that he made the annotations following a conference with Ms Vucic and counsel, for the purpose of enabling him to ask questions at the next conference which was to take place the following day. The notes consist of handwriting and symbols, such as ticks, underlining and sidelining. 14 On the basis of Ms Tot's testimony and the nature of the annotations, I infer that the annotations represent Mr Villante's notes of a mixture of: · advice given by Ms Vucic and counsel; · various outcomes of his discussion with them; · reminders to himself; and · queries which he wished to raise with them. 15 The Draft report dated 19 February 2003 addressed far fewer questions than the draft report of 16 December 2002 (and, no doubt, than the First Report, which I have not seen) had done. Those responsible had decided that it was not necessary for Mr Villante to cover as extensive a field as the First Report had done. The change of instructions to Mr Villante meant that the draft of 19 February 2003 differed from that of 16 December 2002, which had preceded by one day the First Report. 16 That draft was discussed at a conference between Mr Villante, Ms Vucic, counsel and Ms Tot. The draft bears both annotations of Mr Villante and annotations of counsel. Ms Tot's understanding was that counsel's annotations were made by him during the conference as a record of things said by Mr Villante. Mr Villante's annotations were made after the conference as a result of further discussion of the draft by him with Ms Vucic, counsel and Ms Tot. 17 On the basis of my inspection of the manuscript, I cannot distinguish between the annotations which were made by counsel and those which were made by Mr Villante. The annotations are again in the form of handwriting and symbols. I do not infer that counsel's notes were literally of words uttered by Mr Villante. The presence of symbols demonstrate that they were not. Rather, I understand Ms Tot's testimony to be that her understanding was that counsel's notes were made in response to things said by Mr Villante and represented attempts by counsel to summarise what Mr Villante had said. An element of selection and interpretation by counsel would have been involved. 18 The draft report dated 26 February 2003 contained notations which Ms Tot made in the form of her electronic "marking up" for the purpose of transmission to counsel by email for his consideration. In cross-examination Ms Tot explained that, although the letter of instructions pursuant to which the Final Report was produced was dated 21 February 2003, Mr Villante had in fact been instructed over the period since producing the First Report on 17 December 2002, to prepare a further "narrower" report which would inevitably contain "much of the same detail". The "instructing" of Mr Villante commenced well prior to 17 December 2002. Consideration 19 In response to the subpoena, ASIC has already produced, and not opposed inspection of: (a) Mr Villante's working papers; (b) Mr Villante's First Report (not to be relied upon by ASIC in the proceeding); (c) Certain correspondence between ASIC and Mr Villante; (d) Printouts generated by ASIC of trading activities of other companies. 20 As noted at [4], Southcorp also has ASIC's letter of instructions dated 21 February 2003 and the voluminous documents referred to in it, and the Final Report, including its annexures. Those annexures include a list of assumptions made by Mr Villante and a list of the documents with which he was briefed by ASIC. 21 I will apply the following principles which I did not understand to be in dispute: 1. Ordinarily the confidential briefing or instructing by a prospective litigant's lawyers of an expert to provide a report of his or her opinion to be used in the anticipated litigation attracts client legal privilege: cf Wheeler v Le Marchant (1881) 17 ChD 675; Trade Practices Commission v Sterling (1979) 36 FLR 244 at 246; Interchase Corporation Ltd (in liq) v Grosvenor Hill (Queensland) Pty Ltd (No 1) [1999] 1 Qd R 141 ("Interchase") at 151 per Pincus JA, at 160 per Thomas J. 2. Copies of documents, whether the originals are privileged or not, where the copies were made for the purpose of forming part of confidential communications between the client's lawyers and the expert witness, ordinarily attract the privilege: Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 ("Propend"); Interchase, per Pincus JA; Spassked Pty Ltd v Commissioner of Taxation (No 4) (2002) 50 ATR 70 at [17]. 3. Documents generated unilaterally by the expert witness, such as working notes, field notes, and the witness's own drafts of his or her report, do not attract privilege because they are not in the nature of, and would not expose, communications: cf Interchase at 161—162 per Thomas J. 4. Ordinarily disclosure of the expert's report for the purpose of reliance on it in the litigation will result in an implied waiver of the privilege in respect of the brief or instructions or documents referred to in (1) and (2) above, at least if the appropriate inference to be drawn is that they were used in a way that could be said to influence the content of the report, because, in these circumstances, it would be unfair for the client to rely on the report without disclosure of the brief, instructions or documents; cf Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 481 per Gibbs CJ, 487—488 per Mason and Brennan JJ, 492-493 per Deane J, 497—498 per Dawson J; Goldberg v Ng (1995) 185 CLR 83 at 98 per Deane, Dawson and Gaudron JJ, 109 per Toohey J; Instant Colour Pty Ltd v Canon Australia Pty Ltd [1995] FCA 870; Australian Competition and Consumer Commission v Lux Pty Ltd [2003] FCA 89 ("ACCC v Lux") at [46]. 5. Similarly, privilege cannot be maintained in respect of documents used by an expert to form an opinion or write a report, regardless of how the expert came by the documents; Interchase at 148—150 per Pincus JA, at 161 per Thomas J. 6. It may be difficult to establish at an early stage whether documents which were before an expert witness influenced the content of his or her report, in the absence of any reference to them in the report; cf Dingwall v Commonwealth of Australia (1992) 39 FCR 521; Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd (No 2) (1998) 83 FCR 397 at 400; ACCC v Lux at [46]. 22 Counsel for Southcorp submitted that, upon analysis, the Documents in Dispute have the character of instructions to Mr Villante; notes of Mr Villante's unilateral musings; or documents relied on by Mr Villante in preparing the Final Report. Whether they do raises a question of fact, or a mixed question of fact and law, to be resolved by reference to the testimony of Ms Tot and the inferences properly to be drawn from the Documents in Dispute themselves. 23 Applying the above principles, I will state my conclusions in relation to the Documents in Dispute. 1. Letter dated 2 December 2002 from ASIC (signed by Ms Vucic) to Mr Villante and "Contract for Provision of Consultancy Services" dated 9 December 2002 between ASIC and Mr Villante 24 Client legal privilege is not established in respect of these documents. If ASIC desires that access be limited for reasons of commercial confidentiality, I would be favourably disposed towards making an appropriate order. 2. Letter dated 26 February 2003 from ASIC (signed by Ms Tot) to Mr Villante enclosing a copy of his affidavit sworn that day 25 Client legal privilege is not established in respect of this letter. 3. Draft report of Mr Villante dated 16 December 2002 26 Client legal privilege is not established in relation to the draft report itself. I am not dissuaded from this view by the evidence that the draft was produced as the result of a conference between Mr Villante, Ms Vucic and counsel. It is consistent with the evidence that the draft was, nonetheless, relevantly, the expression of Mr Villante's own thinking. I do not infer from the evidence that the draft constitutes or reveals a communication between Mr Villante and ASIC's lawyers. 27 The privilege is, however, established, and has not been waived, in relation to all the annotations on the draft. I do not regard them simply as a record of instructions to Mr Villante or of unilateral musings of Mr Villante. While it is not possible to be certain in relation to every annotation, I am satisfied that the annotations record Mr Villante's understanding of communications, to and fro, between him on the one hand and Ms Vucic and counsel on the other, and that they include or expose expressions of legal opinion. 4. Draft report of Mr Villante dated 19 February 2003 28 In substance the same observations apply to this draft report as I have made above of that dated 16 December 2002. Counsel for Southcorp invites me to find that Mr Villante's writing records the lawyers' instructions to him, and that counsel's annotations record statements made unilaterally by Mr Villante. But a glance at the many symbols on the document (circles, brackets, ticks, question marks, arrows, deletion lines, linkage lines) shows that the true position is more complex. While I cannot be satisfied as to what every annotation signifies, or even who wrote each one of them, I am satisfied that they point to confidential communications, to and fro, between Ms Vucic, Ms Tot and counsel on the one hand and Mr Villante on the other. 29 I am not satisfied that the unannotated draft itself, however, is other than the product of Mr Villante's mind. Client legal privilege is not established in relation to that unannotated document. 5. Draft report of Mr Villante dated 26 February 2003 30 There is no evidence as to the significance of the "marking up" or "tracking" within the document. I infer that it was intended to indicate changes made from the last preceding draft. It can be argued that since the two drafts by Mr Villante would not be exempt from Southcorp's right of access, the marking up or tracking should not be either. Although the marking up or tracking was carried out by Ms Tot, she was apparently merely highlighting the changes made by Mr Villante as between drafts. 31 On the other hand the fact remains that the marking up or tracking is a confidential communication from solicitor to counsel. If the making of copies of otherwise unprivileged documents for the purpose of such a confidential communication attracts the privilege (cf Propend), I do not understand why Ms Tot's marking up or tracking changes for the same purpose should not do so. Consistently with principle, I think it is privileged. (I presume that access to the last preceding and new drafts themselves had been or will be given.) 6. Correspondence and emails between the lawyers at ASIC and Mr Villante over the period from 2 December 2002 to 10 April 2003 32 My conclusion is that the privilege is or is not sustained in relation to the various items of correspondence and emails as follows: Not sustained Sustained email dated 16 December 2002 at 2.44 pm from Vucic to Villante email dated 30 January 2003 at 10.25 am from Vucic to Villante email dated 11 February 2003 at 4.04 pm from Vucic to Villante email dated 20 February 2003 at 10.13 pm from Villante to Tot email dated 20 February 2003 at 3.29 pm from Tot to Villante email dated 21 February 2003 at 3.06 pm from Tot to Villante and first enclosure, but not enclosed letter of instructions dated 21 February 2003 email dated 21 February 2003 at 3.28 pm from Tot to Villante email dated 23 February 2003 at 8.44 pm from Villante to Tot email dated 24 February 2003 at 09.04 am from Villante to Tot email dated 24 February 2003 at 9.27 am from Tot to Villante email dated 24 February 2003 at 8.04 pm from Villante to Tot email dated 24 February 2003 at 4.25 pm from Tot to Villante and enclosures Not sustained Sustained email dated 25 February 2003 at 3.01 pm from Tot to Villante email dated 26 February 2003 at 12.39 pm from Tot to Villante email dated 26 February 2003 at 8.10 pm from Villante to Tot email dated 1 April 2003 at 1.48 pm from Tot to Villante email dated 1 April 2003 at 1.48 pm from Gail Gorham to Tot email dated 24 April 2003 at 7.54 am from Tot to Villante email dated 10 April 2003 at 9.30 am from Tot to Villante CONCLUSION 33 I will publish these reasons and make no order at present other than an order reserving costs. I am presently inclined to think that there should be no order as to costs. There will be leave for either party to have the matter listed if that party seeks the making of orders, including an order as to costs. There also will be liberty to apply generally. Advantage might be taken of that liberty if, for example, there is a physical difficulty in ASIC's producing for inspection the draft reports dated 16 December 2002 and 19 February 2003 without disclosing the annotations. If that physical difficulty exists application may be made to me in that respect on 24 hours' notice. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate: Dated: 1 August 2003 Counsel for the Applicant: D B Studdy Solicitor for the Applicant: Jan Redfern of Australian Securities and Investments Commission Counsel for the Respondent: Dr A Bell Solicitor for the Respondent: Allens Arthur Robinson Date of Hearing: 17 July 2003 Date of Judgment: 1 August 2003	5,387
federal_court_of_australia:fca/single/2020/2020fca1182	decision	commonwealth	federal_court_of_australia	text/html	2020-08-12 00:00:00	Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 7) [2020] FCA 1182	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2020/2020fca1182	2024-09-13T22:44:37.122987+10:00	Federal Court of Australia Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 7) [2020] FCA 1182 File number: NSD 464 of 2020 Judgment of: MIDDLETON J Date of judgment: 12 August 2020 Date of publication of reasons: 18 August 2020 Catchwords: PRACTICE AND PROCEDURE – application for joinder of parties to proceedings – application for extension of convening period for second meeting of creditors – application to allowing administrators to require creditors to lodge documents using certain software by particular dates – applications allowed Legislation: Corporations Act 2001 (Cth) Insolvency Practice Rules 2016 (Cth) Cases cited: ABC Learning Centres Limited, in the matter of ABC Learning Centres Limited; application by Walker (No 8) [2009] FCA 994 Billingsley (Administrator), in the matter of B K Chemists Pty Ltd (Administrators Appointed) (No 2) [2020] FCA 1059 Chamberlain, in the matter of South Wagga Sports and Bowling Club Ltd (Administrator Appointed) [2009] FCA 25 El-Saafin v Franek (No 2) [2018] VSC 683 Gothard, in the matter of Sherwin Iron Ltd (Administrators Appointed) (Receivers and Managers Appointed) (No 2) [2015] FCA 401 Hughes, in the matter of Vah Newco No. 2 Pty Ltd (in liq) [2020] FCA 1121 Hutson (liquidator), in the matter of WDS Limited (in liq) (Receivers and Managers Appointed) [2020] FCA 299 In the matter of Acquire Learning Pty Ltd (ACN 168 523 279) (administrators appointed), Acquire Learning & Careers Pty Ltd (ACN 159 509 323) (administrators appointed) and Acquire Retail Pty Ltd (ACN 167 927 693) (administrators appointed) [2017] VSC 572 In the matter of Equiticorp Australia Ltd (in liq) and Ors [2020] NSWSC 143 In the matter of Harrisons Pharmacy Pty Limited (Administrators Appointed) (Recs and Mngrs Apptd) [2013] FCA 1102 In the matter of Hawden Property Group Pty Ltd (in liq) (ACN 003 528 345) [2018] NSWSC 481 In the matter of SurfStitch Group Limited [2018] NSWSC 164 Kaso, in the matter of Speedpanel Australia Ltd (Administrators Appointed) (No 2) [2017] FCA 862 Krejci, in the matter of Union Standard International Group Pty Ltd (Administrators Appointed) (No 2) [2020] FCA 1111 Lombe re Australian Discount Retail Pty Ltd [2009] NSWSC 110 Mentha, in the matter of The Griffin Coal Mining Company Pty Ltd (administrators appointed) (No 2) [2010] FCA 499 Owen, in the matter of RiverCity Motorway Pty Limited (Administrators Appointed) (Receivers and Managers Appointed) v Madden (No 5) [2013] FCA 1443 Re Ansett Australia Limited and Korda (No 3) (2002) 115 FCR 409 Reidy, In the Matter of eChoice Limited (Administrators Appointed) [2017] FCA 1582 Strawbridge (Administrator), in the matter of CBCH Group Pty Ltd (Administrators Appointed) (No 4) [2020] FCA 671 Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 2) [2020] FCA 717 Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 41 Date of hearing: 11 August 2020 Counsel for the Plaintiffs: Dr R C A Higgins SC with Mr D R Sulan and Mr D Krochmalik Solicitor for the Plaintiffs: Clayton Utz Counsel for interested person: Mr I Jackman SC with Mr P Kulevski Solicitor for interested person: Corrs Chambers Westgarth ORDERS NSD 464 of 2020 IN THE MATTER OF VIRGIN AUSTRALIA HOLDINGS LTD (ADMINISTRATORS APPOINTED) ACN 100 686 226 & ORS BETWEEN: VAUGHAN STRAWBRIDGE, SALVATORE ALGERI, JOHN GREIG AND RICHARD HUGHES, IN THEIR CAPACITY AS JOINT AND SEVERAL VOLUNTARY ADMINISTRATORS OF EACH OF VIRGIN AUSTRALIA HOLDINGS LTD (ADMINISTRATORS APPOINTED) First Plaintiff VIRGIN AUSTRALIA HOLDINGS LTD (ADMINISTRATORS APPOINTED) ACN 100 686 226 Second Plaintiff VIRGIN AUSTRALIA INTERNATIONAL OPERATIONS PTY LTD (ADMINISTRATORS APPOINTED) ACN 155 859 608 (and others named in the Schedule) Third Plaintiff order made by: MIDDLETON J DATE OF ORDER: 12 August 2020 THE COURT DECLARES THAT: 1. The Halo Platform (as defined in the affidavit of David Michael Orr sworn 29 July 2020) is a suitable technology for the purposes of sections 5(1)(a) and 5(1)(f) of the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (Cth) ('Coronavirus Determination'). THE COURT ORDERS THAT: 2. The Interlocutory Process filed on 7 August 2020 be made returnable at 2.15pm on 11 August 2020. 3. Pursuant to rule 9.05 of the Federal Court Rules 2011 (Cth), each of VAH Newco No. 2 Pty Ltd (in liquidation) (Administrators Appointed) ACN 160 881 354 (VAH Newco 2) and VB Investco Pty Ltd (in liquidation) (Administrators Appointed) ACN 101 961 095 (VB Investco) be joined to this proceeding as the Forty-First Plaintiff and the Forty-Second Plaintiff respectively. 4. The Orders made on 11 August 2020 in respect of the Interlocutory Process filed on 29 July 2020 in the proceedings be deemed to apply to the Forty-First and Forty-Second Plaintiffs in the proceedings, as if they were a party to the proceeding at the time the Orders were made. 5. Pursuant to section 90-15 of the Insolvency Practice Schedule (Corporations) (IPSC), to the extent not permitted specifically by sections 75-30, 75-35 and 75-75 of the Insolvency Practice Rules (Corporations) 2016 (Cth) (IPR) and the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (Cth) (Coronavirus Determination), the First Plaintiffs in their capacity as joint and several administrators of each of VAH Newco 2 and VB Investco are justified in holding meetings of creditors during the administration of each of VAH Newco 2 and VB Investco by telephone or audio-visual conference only at the place of the First Plaintiffs' offices (without creditors of VAH Newco 2 and VB Investco being able to attend physically at that place), with such details of the arrangements for using the telephone or audio-visual conference facilities to be specified in each of the notices issued to creditors. 6. Pursuant to section 447A(1) of the Corporations Act 2001 (Cth) (Corporations Act), Part 5.3A of the Corporations Act is to operate in relation to each of the Second to Fortieth Plaintiffs as if section 439A(6) provided that the period for convening the second meeting of creditors of each of the Second to Fortieth Plaintiffs, be extended (from 18 August 2020) to 31 August 2020. 7. Pursuant to section 447A(1) of the Corporations Act, Part 5.3A of the Corporations Act is to operate in relation to each of the First to Fortieth Plaintiffs and the proposed Forty First and Forty Second Plaintiffs (Virgin Companies) such that, notwithstanding section 439A(2) of the Corporations Act, the second meeting of the creditors of each of the Virgin Companies (Second Meetings) required under section 439A of the Corporations Act may be convened at any time before, or within, five (5) business days after, the end of the convening period as extended by paragraph 6 above (provided that the First Plaintiffs give notice of the meetings to eligible creditors of each of the Virgin Companies (including the persons claiming to be creditors of the Virgin Companies) at least five (5) business days before the meeting). 8. Pursuant to section 90-15 of the IPSC, the First Plaintiffs in their capacity as the joint and several administrators of each of the Virgin Companies (the Administrators) would be justified in permitting only those persons who have lodged particulars of a debt or claim in the administration of one or more of the Virgin Companies, in accordance with Order 4 of the Orders made 11 August 2020 in respect of the Interlocutory Process filed 29 July 2020 in the proceedings, and by no later than at 5.00pm on the fifth business day before the Second Meetings are held (POD Lodgement Date), to participate and vote at the Second Meetings. 9. Pursuant to section 90-15 of the IPSC, in respect of any particulars of a debt or claim submitted by a person to the Administrators in respect of the Virgin Companies: a. prior to the POD Lodgement Date, the Administrators are justified in entering the information provided by the person into the Halo Platform and registering the relevant creditor's details on the Halo Platform; and b. after the expiry of the POD Lodgement Date, the Administrators are justified in disregarding any such debt or claim. 10. Pursuant to section 90-15 of the IPSC, the IPR operate in relation to the Virgin Companies such that persons (or their proxy or attorney) may not at any time after the POD Lodgement Date, without the express written consent of the Administrators, amend or replace any proof of debt lodged on the Halo Platform. 11. Order 5 of the orders made by the Court on 24 April 2020 and Order 7 of the orders made by the Court on 13 May 2020 be vacated. 12. Pursuant to section 90-15 of the IPSC, to the extent not permitted specifically by section 75-35(2)(b) of the IPR and the Coronavirus Determination, the creditors of the Virgin Companies who wish to participate or vote on resolutions at the Second Meetings (other than persons not voting by proxy or attorney), must lodge with Administrators: a. a specific proxy form containing the information in section 75-35(2)(b)(i)-(iii) of the IPR; and / or b. an appointment of power of attorney containing the information in section 75-35(2)(b)(i)-(iii) of the IPR, in accordance with Order 4 of the Orders made 11 August 2020 in respect of the Interlocutory Process filed 29 July 2020 in the proceedings, and by no later than at 5.00pm on the third business day before the Second Meetings are held (Proxy Lodgement Date). 13. Pursuant to section 90-15 of the IPSC, the Administrators would be justified in permitting only those persons who have lodged in the administration of one or more of the Virgin Companies a specific proxy form and / or an appointment of power of attorney, in accordance with paragraph 12 above, to participate and vote by proxy or attorney at the Second Meetings. 14. Pursuant to section 90-15 of the IPSC, the requirements of sections 75-25 and 75-35(2) of the IPR will be satisfied in relation to the Virgin Companies by the Administrators including a link to an electronic appointment of proxy or attorney form to be completed and submitted on the Halo Platform in the notice to be issued to creditors pursuant to section 75-225 of the IPR. 15. Pursuant to section 90-15 of the IPSC, in respect of any appointment of proxy or attorney forms submitted by a person to the Administrators in respect of the Virgin Companies: a. prior to the Proxy Lodgement Date, the Administrators are justified in entering the proxy or attorney details provided by the person into the Halo Platform and registering the relevant creditor's details on the Halo Platform; and b. after the expiry of the Proxy Lodgement Date, the Administrators are justified in disregarding any such proposed nomination of proxy or attorney. 16. Pursuant to section 90-15 of the IPSC, the IPR operate in relation to the Virgin Companies such that: a. to the extent not required specifically by section 5(1)(c) of the Coronavirus Determination, all resolutions put to a vote at the Second Meetings will be decided by a poll as if requested by the person presiding at the Second Meetings pursuant to section 75-110(1) of the IPR; and b. for the purposes of section 75-110(5) of the IPR, each poll is to be taken by tallying votes cast on the Halo Platform. 17. Pursuant to section 90-15 of the IPSC, the requirements of 75-30 and 75-75 of the IPR and section 5 of the Coronavirus Determination may be satisfied, in the case of the Virgin Companies, by the creation of an "event" on the Halo Platform and the Administrators holding the Second Meetings via Microsoft Teams technology. 18. Pursuant to section 90-15 of the IPSC, the Administrators would be justified in counting all votes lodged through the Halo Platform on any poll taken during the Second Meetings, regardless of whether it can be shown that those creditors (or their proxy or attorney) were present at the meeting. 19. The Administrators take all reasonable steps to cause notice of the Court's orders to be given, within one (1) business day of the making of the orders, to: a. creditors (including persons or entities claiming to be creditors) of the Virgin Companies, in the following manner: i. where the creditor is a registered user on the Halo Platform, by publishing a notice via the Halo Platform; ii. where the creditor is not a registered user on the Halo Platform but the Administrators have an email address for a creditor, by notifying each such creditor, via email, of the making of the orders and providing a link to a website where the creditor may download the orders and the Interlocutory Process; iii. where a creditor is not a registered user on the Halo Platform and the Administrators do not have an email address for a creditor but have a postal address for that creditor (or have received notification of non-delivery of a notice sent by email in accordance with paragraph (a)(ii) above), by notifying each such creditor, via post, of the making of the orders and providing a link to a website where the creditor may download the orders and the Interlocutory Process; iv. where a creditor is not a registered user on the Halo Platform and the Administrators do not have an email address for a creditor but have an email address for a trustee, custodian or other agent who represents or may act on behalf of that creditor, by notifying each such trustee, custodian or other agent, via email, of the making of the orders and providing a link to a website where the trustee, custodian, other agent or creditor may download the orders and the Interlocutory Process; and v. by placing scanned, sealed copies of the Interlocutory Process and the orders on the website maintained by the Administrators at https://www2.deloitte.com/au/en/pages/finance/articles/virgin-australiaholdings-limited-subsidiaries.html; and b. the Australian Securities and Investments Commission. 20. Any person who can demonstrate a sufficient interest have liberty to apply to vary or discharge the declaration in paragraph 1 and any orders made pursuant to paragraphs 4 to 18 above, on three (3) business day's written notice to the Plaintiffs and to the Associate to Justice Middleton. 21. The Plaintiffs have liberty to apply on one (1) business day's written notice to the Court in relation to any variation or discharge of the Court's orders. 22. The Plaintiffs' costs of the application be treated as costs in the administrations of each of the Virgin Companies, jointly and severally. 23. The hearing of the Plaintiffs' Interlocutory Process dated 7 August 2020 be adjourned until 11.15am on Monday, 17 August 2020. 24. The Court's orders be entered forthwith. THE COURT NOTES THAT: 25. Orders 8 to 18 do not apply to those creditors (or the debt or claim made by or on behalf of such creditors) who are USD Noteholders (as defined in Order 5 of the Orders made 11 August 2020 in respect of the Plaintiffs' Interlocutory Process dated 29 July 2020). Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MIDDLETON J: INTRODUCTION: 1 On 12 August 2020 I made a number of orders on the application of the Plaintiffs in this proceeding. These are the reasons for those orders. 2 The Plaintiffs, including the First Plaintiffs, Vaughan Strawbridge, Salvatore Algeri, John Greig and Richard Hughes of Deloitte (together, the 'Administrators') in their capacity as: (1) administrators of each of the Second to Fortieth Plaintiffs; and (2) the administrators of each of VAH Newco No 2 Pty Ltd (in liquidation) (Administrators Appointed) ('VAH Newco 2') and VB Investco Pty Ltd (in liquidation) (Administrators Appointed) ('VB Investco'), the proposed Forty-First Plaintiff and Forty-Second Plaintiff respectively, (together, the 'Virgin Companies'), make an application to the Court by Interlocutory Process filed on 6 August 2020. 3 In support of their application, the Plaintiffs rely upon the affidavits of: (1) David Michael Orr sworn 29 July 2020 and 6 August 2020; (2) Vaughan Neil Strawbridge sworn 7 August 2020; and (3) Kassandra Suzann Adams sworn 7 August 2020. 4 The application seeks, in summary: (1) the joinder to the proceedings of VAH Newco 2 and VB Investco; (2) a further brief extension of the period in which the Administrators are to convene the second meetings of creditors of each of the Virgin Companies (the 'Convening Period') for the purposes of s 439A(5)(b) of the Corporations Act 2001 (Cth) (the 'Corporations Act'); and (3) orders with respect to the Halo Platform, including: (a) to prescribe the dates by which creditors of the Virgin Companies must lodge proofs of debt or claim, proxies, or attorney forms on the Halo Platform; and (b) to clarify that the Halo Platform may be used for voting purposes. JOINDER OF VAH NEWCO 2 AND VB INVESTCO 5 On 26 April 2019, Mr Hughes (one of the Administrators) was appointed as the liquidator of each of VAH Newco 2 and VB Investco pursuant to s 491(1) of the Corporations Act. 6 As explained in Mr Strawbridge's evidence, on 30 July 2020, pursuant to orders made in Federal Court of Australia proceedings number NSD 818 of 2020 (the 'MVL Proceedings'): (1) leave was granted for the Administrators to be appointed as joint and several administrators of each of VAH Newco 2 and VB Investco; and (2) the winding up of each of VAH Newco 2 and VB Investco was stayed until further order. 7 As noted in the reasons for judgment in the MVL Proceedings (Hughes, in the matter of Vah Newco No. 2 Pty Ltd (in liq) [2020] FCA 1121 at [18]-[20]), each of VAH Newco 2 and VB Investco: (1) have large (albeit likely contingent) liabilities to creditors, who are also creditors of a number of the other Virgin Companies; and (2) may be included as part of any deed of company arrangement proposal being advanced by BC Hart Aggregator, L.P. and BC Hart Aggregator (Australia) Pty Ltd, entities associated with Bain Capital Private Equity LP and Bain Capital Credit LP (together, 'Bain Capital'). 8 On 3 August 2020, in accordance with the orders made in the MVL Proceedings, the Administrators were appointed as joint and several administrators of each of VAH Newco 2 and VB Investco pursuant to s 436B of the Corporations Act. The Administrators' intention is to hold the second meeting of creditors of VAH Newco 2 and VB Investco simultaneously with the second meeting of creditors of the other Virgin Companies (together, the Second Meetings). 9 In that regard, it was submitted that each of VAH Newco 2 and VB Investco ought to be joined to these proceedings as these entities will be subject to the proposed orders sought with respect to the Halo Platform and any other orders that may be sought in the proceedings in any future applications concerning the Virgin Companies as a whole. 10 I observed in Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 2) [2020] FCA 717 ('Virgin No 2') at [33]-[34], with respect to the earlier joinder of another of the Virgin Companies, that: Rule 9.05(1)(b)(iii) of the Rules (which applies by reason of r 1.3(2)(a) of the Federal Court (Corporations) Rules 2000 (Cth)), permits the Court to join a person to existing proceedings if the person proposed to be joined 'should be joined as a party in order to enable determination of a related dispute and, as a result, avoid multiplicity of proceedings'. Tiger 1 should be joined to these proceedings as it is part of the group of Virgin Companies now in external administration and common issues have and will continue to arise in the course of the various administrations. 11 For the same reasons, each of VAH Newco 2 and VB Investco should be joined to the proceedings. FURTHER EXTENSION OF THE CONVENING PERIOD 12 The Court has power to make orders under s 447A(1) of the Corporations Act to extend, on a subsequent occasion, the convening period for the second meeting of creditors of a company: Lombe re Australian Discount Retail Pty Ltd [2009] NSWSC 110 at [32]; Chamberlain, in the matter of South Wagga Sports and Bowling Club Ltd (Administrator Appointed) [2009] FCA 25 ('South Wagga Sports and Bowling Club'); ABC Learning Centres Limited, in the matter of ABC Learning Centres Limited; application by Walker (No 8) [2009] FCA 994 at [53]. 13 There are many occasions in which Courts have granted further extensions of the convening period (that is, after an initial extension): eg, Mentha, in the matter of The Griffin Coal Mining Company Pty Ltd (administrators appointed) (No 2) [2010] FCA 499 at [36]; In the matter of Harrisons Pharmacy Pty Limited (Administrators Appointed) (Recs and Mngrs Apptd) [2013] FCA 1102; Owen, in the matter of RiverCity Motorway Pty Limited (Administrators Appointed) (Receivers and Managers Appointed) v Madden (No 5) [2013] FCA 1443; Gothard, in the matter of Sherwin Iron Ltd (Administrators Appointed) (Receivers and Managers Appointed) (No 2) [2015] FCA 401 at [33]; In the matter of Acquire Learning Pty Ltd (ACN 168 523 279) (administrators appointed), Acquire Learning & Careers Pty Ltd (ACN 159 509 323) (administrators appointed) and Acquire Retail Pty Ltd (ACN 167 927 693) (administrators appointed) [2017] VSC 572 ('Acquire Learning'); Strawbridge (Administrator), in the matter of CBCH Group Pty Ltd (Administrators Appointed) (No 4) [2020] FCA 671 ('CBCH Group'); Billingsley (Administrator), in the matter of B K Chemists Pty Ltd (Administrators Appointed) (No 2) [2020] FCA 1059. 14 The principles that apply when considering a further extension are the same as those that apply for any extension of the convening period: South Wagga Sports and Bowling Club at [9]; Acquire Learning at [12]; Kaso, in the matter of Speedpanel Australia Ltd (Administrators Appointed) (No 2) [2017] FCA 862 at [19]; CBCH Group at [25]. These principles are summarised in Virgin No 2 at [64]-[68]. 15 For the reasons that follow, I will make the orders sought to further extend the Convening Period. 16 First, the extension is only for a brief period of 13 days from 18 August 2020 (the present expiry date) to 31 August 2020 (the date now sought). 17 Secondly, the administration of the Virgin Companies has been complex and the report to creditors in advance of the Second Meeting, pursuant to r 75-225 of the Insolvency Practice Rules 2016 (Cth) (the 'IPR'), will be detailed. Consequently, the Administrators wish to ensure that the report to creditors accurately and comprehensively summarises the affairs of the Virgin Companies and the sale process which culminated in the sale and implementation deed concluded between the Virgin Companies and Bain Capital. 18 Thirdly, the extension will permit the Administrators to issue their report to creditors eight business days ahead of the Second Meeting (which is greater than the statutory minimum of five business days likely to be provided in the absence of an extension). This will provide the creditors with more time to consider the contents of the report and make an informed decision, at the Second Meeting, on the future of the Virgin Companies. 19 Fourthly, the extension sought will address, in large part, the timing concerns raised by the solicitors for Bank of New York Mellon, the trustee named in the indenture for the USD denominated bonds, and facilitate the timing of voting by the USD Noteholders (which is administered through the Depositary Trustee Company process in the United States). 20 Fifthly, given the interaction of the dates by which the Administrators seek to require creditors to lodge, on the Halo Platform, both their proofs of debt or claims and their proxy or attorney forms (as to which, see below), the provision of the report to creditors with more notice in advance of the Second Meetings will provide creditors with greater time, following receipt of the report, to lodge proofs of debt and proxy forms. 21 Sixthly, following the entry into the transaction with Bain Capital, discussions have been ongoing between Bain Capital and its representatives and a range of contractual counterparties and stakeholders, as part of the proposed completion of the transaction. The relatively short extension of the Convening Period sought would assist in enabling these negotiations to be finalised in advance of the Second Meetings. 22 Seventhly, the Committee of Inspection has been notified of the proposed extension sought and no member of that Committee has expressed any disagreement. 23 Eighthly, the Noteholder Consultative Committee (the 'NCC') has been notified of the proposed extension sought and no member of the NCC has expressed any disagreement. 24 Ninthly, there is not likely to be any prejudice to creditors from a further brief extension as Bain Capital has assumed economic risk for the business conducted by the Virgin Companies on and from 1 July 2020 and is funding the ongoing trading of the business. Accordingly, the net assets realised before that date for the benefit of creditors have been preserved, and a modest extension of the convening period will not expose the Virgin Companies to any additional financial risk and are funded to meet all trading liabilities. PROPOSED MODIFICATION OF THE INSOLVENCY PRACTICE RULES AND ASSOCIATED FURTHER DIRECTIONS WITH REGARD TO THE HALO PLATFORM 25 Section 90-15 of the Insolvency Practice Schedule (Corporations) 2016 (the 'IPSC') (being Sch 2 to the Corporations Act) confers power to make orders modifying the operation of the IPSC and the IPR and, generally, to give directions to external administrators. 26 In In the matter of Hawden Property Group Pty Ltd (in liq) (ACN 003 528 345) [2018] NSWSC 481 at [8], Gleeson JA (sitting at first instance) noted that: In Walley, In the Matter of Poles & Underground Pty Ltd (Admin Apptd) [2017] FCA 486 at [41], Gleeson J remarked that the question of whether to exercise the power in s 90-15 was "to be answered by reference to the principles applied to the exercise of the discretions previously contained in s 479(3) and s 511 of the Act". That may be accepted insofar as the external administrator seeks the directions of the Court, but the power under s 90-15 to "make such orders as it thinks fit in relation to the external administration of a company" (s 90-15(1)) including "an order determining any question arising in the external administration of a company" (s 90-15(3)(a)), is wider and accommodates the determination of substantive rights. Of course, the Court would not do so without affording potentially affected parties an opportunity to be heard: Meadow Springs Fairway Resort Ltd (in liq) v Balance Securities Ltd [2007] FCA 1443, at [49]-[51] (French J, referring to Australian Securities Commission v Melbourne Asset Management Nominees Pty Ltd (1994) 49 FCR 334 at 352 (Northrop J)); Re Willmott Forests Ltd (No 2) [2012] VSC 125; (2012) 88 ACSR 18 at [45]-[46] (Davies J); In the Matter of ICS Real Estate Pty Ltd (in liq) [2014] NSWSC 479 at [25] (Brereton J). 27 In Hutson (liquidator), in the matter of WDS Limited (in liq) (Receivers and Managers Appointed) [2020] FCA 299 at [66], Markovic J made similar observations: The Court's power to make orders under s 90-15(1) is unconstrained: Deputy Commissioner of Taxation v Italian Prestige Jewellery Pty Ltd (in liq) (2018) 129 ACSR 115; [2018] FCA 983 at [36]. The subsection "contains no express words of limitation" and is "intended to facilitate the performance of a liquidator's functions": Re Octaviar Ltd (in liq) [2019] QSC 235 at [10]. 28 The power to give directions to an administrator under repealed s 447D(1) of the Act is now conferred by s 90-15 of the IPSC: Reidy, In the Matter of eChoice Limited (Administrators Appointed) [2017] FCA 1582 at [27]; El-Saafin v Franek (No 2) [2018] VSC 683 ('El-Saafin') at [110]. 29 The function of an application for directions is to give an administrator advice as to the proper course of action to take in the administration. As Goldberg J explained in Re Ansett Australia Limited and Korda (No 3) (2002) 115 FCR 409 at [44]: When liquidators and administrators seek directions from the Court in relation to any decision they have made, or propose to make, or in relation to any conduct they have undertaken, or propose to undertake, they are not seeking to determine rights and liabilities arising out of particular transactions, but are rather seeking protection against claims that they have acted unreasonably or inappropriately or in breach of their duty in making the decision or undertaking the conduct. They can obtain that protection if they make full and fair disclosure of all relevant facts and circumstances to the Court. In Re G B Nathan & Co Pty Ltd (1991) 24 NSWLR 674, McLelland J said at 679-680: The historical antecedents of s 479(3) ..., the terms of that subsection and the provisions of s 479 as a whole combine to lead to the conclusion that the only proper subject of a liquidator's application for directions is the manner in which the liquidator should act in carrying out his functions as such, and that the only binding effect of, or arising from, a direction given in pursuance of such an application (other than rendering the liquidator liable to appropriate sanctions if a direction in mandatory or prohibitrary form is disobeyed) is that the liquidator, if he has made full and fair disclosure to the court of the material facts, will be protected from liability for any alleged breach of duty as liquidator to a creditor or contributory or to the company in respect of anything done by him in accordance with the direction. Modern Australian authority confirms the view that s 479(3) 'does not enable the court to make binding orders in the nature of judgments' and that the function of a liquidator's application for directions 'is to give him advice as to his proper course of action in the liquidation; it is not to determine the rights and liabilities arising from the company's transactions before the liquidation'… 30 The applicable principles were most recently summarised by Stewart J in Krejci, in the matter of Union Standard International Group Pty Ltd (Administrators Appointed) (No 2) [2020] FCA 1111 as follows, at [7]-[11]: A court is empowered by s 90-15(1) of the Insolvency Practice Schedule to "make such orders as it thinks fit in relation to the external administration of a company". The power conferred by s 90-15(1) is "very broad": Kelly (in the matter of Halifax Investment Services Pty Ltd (in liquidation) (No 8) [2020] FCA 533; 144 ACSR 292 at [51] (Gleeson J). It includes a power to make orders determining any question arising in the external administration of a company: s 90-15(3)(a). An administrator of a company may apply for such an order: s 90-20(1)(d), read with s 9 of the Act (paragraph (d) of the definition of "officer"). The court's power under s 90-15(1) includes a power to give directions about a matter arising in connection with the performance or exercise of an administrator's functions or powers: Reidy, in the matter of eChoice Ltd (Administrators Appointed) [2017] FCA 1582 at [26]-[27] (Yates J). In this respect, s 90-15(1) confers a power to give directions that was previously conferred by ss 447D(1) and 479(3) of the Act concerning administrators and liquidators, respectively: see Carter Holt Harvey Woodproducts Australia Pty Ltd v Commonwealth [2019] HCA 20; 93 ALJR 807 at [166] (Gordon J); Reidy at [27] (Yates J); and Kelly (liquidator), in the matter of Australian Institute of Professional Education Pty Ltd (in liq) [2018] FCA 780 at [30] (Gleeson J). The principles governing directions to administrators and those governing directions to liquidators are relevantly analogous: Re Ansett Australia Ltd (No 3) [2002] FCA 90; 115 FCR 409 at [43] (Goldberg J). The function of a judicial direction of this kind is not to determine rights and liabilities arising out of a particular transaction, but to confer a level of protection on the administrator. An administrator who acts in accordance with a judicial direction, having made full and fair disclosure to the court of the material facts, has "protection against claims that they have acted unreasonably or inappropriately or in breach of their duty in making the decision or undertaking the conduct" proposed: Ansett at [44]. A court may give a direction on an issue of "substance or procedure" or "of power, propriety or reasonableness": Ansett at [65]. Although a court will not give a direction on a decision that is purely commercial, a direction may be provided where there is a "particular legal issue raised for consideration or attack on the propriety or reasonableness of the decision in respect of which the directions are sought": Ansett at [65]. As Black J observed in In the matter of RCR Tomlinson Ltd (administrators appointed) [2018] NSWSC 1859, a decision may have a "commercial character" but nonetheless be amenable to judicial direction. His Honour said (at [14]) of the application before him (which sought a direction as to whether a company should borrow loan funds): The Court has been prepared to give directions of this kind, where the decision is a complex one, and where it has to be made, as here, under circumstances of time pressure, in respect of a very large corporate group, and by balancing different interests. The Court's preparedness to grant such a direction in those circumstances reflects the intrinsic unfairness of leaving a voluntary administrator to be at risk of liability, in respect of a complex decision of that kind, where any decision that is made, including making no decision, will have inevitable risks for some or all of the affected constituencies. Because the effect of a direction under s 90-15 is to exonerate the liquidator or administrator if full disclosure is made, it will usually necessitate consideration by the court of the liquidator's or administrator's reasons and decision making process: see Re ONE.TEL Ltd [2014] NSWSC 457; 99 ACSR 247 at [36] per Brereton J (referring to former s 511 of the Act). 31 The proposed application of the Halo Platform to the administrations (including the adjudication of proofs of debt or claims and the voting process), and the prescription of dates by which proofs of debt and proxies must be lodged, are matters of procedure. This is an appropriate subject matter on which directions may be given by the Court under s 90-15 of the IPSC: El-Saafin at [113]; In the matter of Equiticorp Australia Ltd (in liq) and Ors [2020] NSWSC 143 at [45] (Gleeson JA, sitting at first instance). 32 Details of the Halo Platform are identified in Mr Orr's evidence (which I accept) and were summarised in the Administrators' written submissions dated 29 July 2020. 33 An earlier application sought orders that the Administrators would be justified in: (1) requiring creditors to register on the Halo Platform; (2) utilising the Halo Platform to communicate with creditors as to proofs of debt and the adjudication process; and (3) ascertaining who is a creditor of any of the Virgin Companies for voting purposes at the Second Meetings based on the material provided by persons or otherwise entered in the Halo Platform. 34 This further application concerning the Halo Platform seeks orders that: (1) the Administrators would be justified in: (a) permitting only those persons who have lodged, on the Halo Platform, particulars of a debt or claim in the administrations, by 5.00pm on the fifth business day before the Second Meetings are held (the 'POD Lodgement Date'), to participate and vote at the Second Meetings; (b) otherwise disregarding a debt or claim not lodged on Halo by the POD Lodgement Date; (2) the IPR operate such that creditors who wish to participate or vote on resolutions at the Second Meetings (other than persons not voting by proxy or attorney), must lodge, on the Halo Platform, a specific proxy form and an appointment of power of attorney by 5.00pm on the third business day before the Second Meetings are held (the 'Proxy Lodgement Date'); (3) the Administrators would be justified in: (a) permitting only those persons who have lodged, on the Halo Platform, a specific proxy form and an appointment of power of attorney by the Proxy Lodgements Date, to participate and vote by proxy or attorney at the Second Meetings; (b) entering the proxy or attorney details submitted by a person to the Administrators into the Halo Platform and registering the relevant creditor's details on the Halo Platform; (c) otherwise disregarding specific proxy form and an appointment of power of attorney not lodged on Halo by the Proxy Lodgement Date; (4) the requirements of rr 75-25 and 75-35(2) of the IPR will be satisfied by the Administrators including a link, in their report, to an electronic appointment of proxy or attorney form on the Halo Platform; (5) a poll is to be taken at the Second Meetings by tallying votes lodged on the Halo Platform (as being suitable technology to take such a poll); and (6) the Second Meetings be held by Microsoft Teams technology and the creation of an event on the Halo Platform. 35 The evidentiary basis for these orders is set out in Mr Orr's evidence. 36 For the reasons that follow, I am of the view that the orders sought should be made. 37 First, the Halo Platform is a practical way of assisting the Administrators to manage the very large number of creditors in the administrations. 38 Secondly, in circumstances where customers whose flights were cancelled due to the COVID-19 pandemic may also seek to lodge claims or proofs in the administrations, the Administrators could confront a situation of hundreds of thousands of creditors in total. In order to manage a creditor pool of that size, it is necessary to impose cut-off dates by which both proofs and proxy, and attorney forms must be lodged (otherwise the Administrators may be unable to cope with a significant number of proofs or proxies lodged immediately prior to the Second Meetings). 39 In that regard, r 75-225(2)(b)(vii) of the IPR envisages that the report to creditors may specify the date by which such proofs and proxies are to be submitted. The orders sought are in conformity with this principle, in that they require creditors to take these steps by lodging the claim or form, on the Halo Platform, by a particular date (and otherwise disregarding the proofs or proxies). Such a direction was provided by Brereton J (as his Honour then was) in In the matter of SurfStitch Group Limited [2018] NSWSC 164, where his Honour noted at [13]: In my view, it is implicit in clause 2(g) [Corporations Regulation, reg 5.3A.03AB(2)(g), the then equivalent of section 75-225(2)(b)(vii) of the IPR] that proofs and proxies submitted after the specified time are not validly submitted and may be disregarded. While I do not consider it appropriate to engage s 447A to modify the operation of Part 5.3A in this respect, lest there be doubt I am prepared to advise the administrators, under (former) s 447D, that they would be justified in rejecting proofs and proxies received after the date and time so specified. 40 Thirdly, the proposed POD Lodgement Date and Proxy Lodgement Date provide sufficient time for the creditors to lodge requisite forms on Halo after receipt of the report to creditors (which is envisaged to be issued eight business days before the Second Meetings (assuming that the Convening Period is further extended)). In the case of the POD Lodgement Date, creditors will have three business days from receipt of the report to lodge their proofs of debt or claims (which will enable them to register as a creditor). In the case of the Proxy Lodgement Date, creditors will have five business days from receipt of the report to lodge their proxy or attorney forms (which will enable them to vote on their preferred resolutions). 41 Finally, the evidence establishes that the combination of Microsoft Teams technology and the Halo Platform permits the Second Meetings to be adequately conducted and carried on by audio-visual means. Such electronic platforms are necessary in the light of the current COVID-19 pandemic which will preclude the possibility of a physical meeting. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Middleton. Associate: Dated: 18 August 2020 SCHEDULE OF PARTIES NSD 464 of 2020 Plaintiffs Fourth Plaintiff: VIRGIN AUSTRALIA INTERNATIONAL HOLDINGS PTY LTD (ADMINISTRATORS APPOINTED) ACN 155 860 021 Fifth Plaintiff: VIRGIN AUSTRALIA INTERNATIONAL AIRLINES PTY LTD (ADMINISTRATORS APPOINTED) ACN 125 580 823 Sixth Plaintiff: VIRGIN AUSTRALIA AIRLINES (SE ASIA) PTY LTD (ADMINISTRATORS APPOINTED) ACN 097 892 389 Seventh Plaintiff: VIRGIN AUSTRALIA AIRLINES HOLDINGS PTY LTD (ADMINISTRATORS APPOINTED) ACN 093 924 675 Eighth Plaintiff: VAH NEWCO NO.1 PTY LTD (ADMINISTRATORS APPOINTED) ACN 160 881 345 Ninth Plaintiff: TIGER AIRWAYS AUSTRALIA PTY LIMITED (ADMINISTRATORS APPOINTED) ACN 124 369 008 Tenth Plaintiff: VIRGIN AUSTRALIA AIRLINES PTY LTD (ADMINISTRATORS APPOINTED) ACN 090 670 965 Eleventh Plaintiff: VA BORROWER 2019 NO. 1 PTY LTD (ADMINISTRATORS APPOINTED) ACN 633 241 059 Twelfth Plaintiff: VA BORROWER 2019 NO. 2 PTY LTD (ADMINISTRATORS APPOINTED) ACN 637 371 343 Thirteenth Plaintiff: VIRGIN TECH PTY LTD (ADMINISTRATORS APPOINTED) ACN 101 808 879 Fourteenth Plaintiff: SHORT HAUL 2018 NO. 1 PTY LTD (ADMINISTRATORS APPOINTED) ACN 622 014 831 Fifteenth Plaintiff: SHORT HAUL 2017 NO. 1 PTY LTD (ADMINISTRATORS APPOINTED) ACN 617 644 390 Sixteenth Plaintiff: SHORT HAUL 2017 NO. 2 PTY LTD (ADMINISTRATORS APPOINTED) ACN 617 644 443 Seventeenth Plaintiff: SHORT HAUL 2017 NO. 3 PTY LTD (ADMINISTRATORS APPOINTED) ACN 622 014 813 Eighteenth Plaintiff: VBNC5 PTY LTD (ADMINISTRATORS APPOINTED) ACN 119 691 502 Nineteenth Plaintiff: A.C.N. 098 904 262 PTY LTD (ADMINISTRATORS APPOINTED) ACN 098 904 262 Twentieth Plaintiff: VIRGIN AUSTRALIA REGIONAL AIRLINES PTY LTD (ADMINISTRATORS APPOINTED) ACN 008 997 662 Twenty-first Plaintiff: VIRGIN AUSTRALIA HOLIDAYS PTY LTD (ADMINISTRATORS APPOINTED) ACN 118 552 159 Twenty-second Plaintiff: VB VENTURES PTY LTD (ADMINISTRATORS APPOINTED) ACN 125 139 004 Twenty-third Plaintiff: VIRGIN AUSTRALIA CARGO PTY LTD (ADMINISTRATORS APPOINTED) ACN 600 667 838 Twenty-fourth Plaintiff: VB LEASECO PTY LTD (ADMINISTRATORS APPOINTED) ACN 134 268 741 Twenty-fifth Plaintiff: VA HOLD CO PTY LTD (ADMINISTRATORS APPOINTED) ACN 165 507 157 Twenty-sixth Plaintiff: VA LEASE CO PTY LTD (ADMINISTRATORS APPOINTED) ACN 165 507 291 Twenty-seventh Plaintiff: VIRGIN AUSTRALIA 2013-1 ISSUER CO PTY LTD (ADMINISTRATORS APPOINTED) ACN 165 507 326 Twenty-eighth Plaintiff: 737 2012 NO.1 PTY. LTD (ADMINISTRATORS APPOINTED) ACN 154 201 859 Twenty-ninth Plaintiff: 737 2012 NO. 2 PTY LTD (ADMINISTRATORS APPOINTED) ACN 154 225 064 Thirtieth Plaintiff: SHORT HAUL 2016 NO. 1 PTY LTD (ADMINISTRATORS APPOINTED) ACN 612 766 328 Thirty-first Plaintiff: SHORT HAUL 2016 NO. 2 PTY LTD (ADMINISTRATORS APPOINTED) ACN 612 796 077 Thirty-second Plaintiff: SHORT HAUL 2014 NO. 1 PTY LTD (ADMINISTRATORS APPOINTED) ACN 600 809 612 Thirty-third Plaintiff: SHORT HAUL 2014 NO. 2 PTY LTD (ADMINISTRATORS APPOINTED) ACN 600 878 199 Thirty-fourth Plaintiff: VA REGIONAL LEASECO PTY LTD (ADMINISTRATORS APPOINTED) ACN 127 491 605 Thirty-fifth Plaintiff: VB 800 2009 PTY LTD (ADMINISTRATORS APPOINTED) ACN 135 488 934 Thirty-sixth Plaintiff: VB LEASECO NO 2 PTY LTD (ADMINISTRATORS APPOINTED) ACN 142 533 319 Thirty-seventh Plaintiff: VB LH 2008 NO. 1 PTY LTD (ADMINISTRATORS APPOINTED) ACN 134 280 354 Thirty-eighth Plaintiff: VB LH 2008 NO. 2 PTY LTD (ADMINISTRATORS APPOINTED) ACN 134 288 805 Thirty-ninth Plaintiff: VB PDP 2010-11 PTY LTD (ADMINISTRATORS APPOINTED) ACN 140 818 266	11,045
federal_court_of_australia:fca/single/2001/2001fca0377	decision	commonwealth	federal_court_of_australia	text/html	2001-04-05 00:00:00	Pegasus Gold Australia Pty Ltd v Bateman Project Engineering Pty Ltd [2001] FCA 377	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2001/2001fca0377	2024-09-13T22:44:37.143088+10:00	FEDERAL COURT OF AUSTRALIA Pegasus Gold Australia Pty Ltd v Bateman Project Engineering Pty Ltd [2001] FCA 377 COSTS – security for costs sought in relation to cross-claim – the cross-claim is essentially defensive in nature – most issues raised in cross-claim already raised in proceedings – application refused. PEGASUS GOLD AUSTRALIA PTY LTD v BATEMAN PROJECT ENGINEERING PTY LIMITED & ORS NG 471 of 1998 MATHEWS J 5 APRIL 2001 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG471 OF 1998 BETWEEN: PEGASUS GOLD AUSTRALIA PTY LIMITED APPLICANT AND: BATEMAN PROJECT ENGINEERING PTY LIMITED FIRST RESPONDENT KINHILL PACIFIC PTY LIMITED SECOND RESPONDENT KILBORN ENGINEERING PACIFIC PTY LIMITED THIRD RESPONDENT JUDGE: MATHEWS J DATE OF ORDER: 5 APRIL 2001 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1) I decline to make the order sought in paragraph one of the Notice of Motion dated 5 October 2000. 2) I order PGA to pay BKK's costs of the application for security for costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG471 OF 1998 BETWEEN: PEGASUS GOLD AUSTRALIA PTY LIMITED APPLICANT AND: BATEMAN PROJECT ENGINEERING PTY LIMITED FIRST RESPONDENT KINHILL PACIFIC PTY LIMITED SECOND RESPONDENT KILBORN ENGINEERING PACIFIC PTY LIMITED THIRD RESPONDENT JUDGE: MATHEWS J DATE: 5 APRIL 2001 PLACE: SYDNEY REASONS FOR JUDGMENT 1 By Notice of Motion dated 5 October 2000, the third applicant Pegasus Gold Australia Pty Limited ("PGA") sought security for costs from the respondents ("BKK") in relation to the seventh cross-claim which BKK had lodged against PGA. In the cross-claim BKK sought contribution and/or equitable contribution in relation to any liability it might be found to have to the first and second applicants ("PGI/PGC"). 2 BKK has conceded that it would be unable to meet an adverse costs order if it were unsuccessful under the seventh cross-claim. The primary basis upon which it resists an order for security is that the cross-claim is, in substance, a defensive one. BKK has already raised, as a defence to PGA's claim, that any damage suffered by PGA was the result of PGA's contributory negligence. There is a further defence that PGA has failed to mitigate its losses. Most of the issues raised under the cross-claim will be traversed in any event pursuant to these defences, according to the submissions of BKK's counsel, Mr McDougall QC. 3 Mr Gee QC, who appears for PGA, urges that there are a number of matters raised under the cross-claim additional to those which would need to be litigated in the principal proceedings. In particular, the cross-claim is dependent upon the proposition that PGA owed a duty of care to PGI/PGC or otherwise had a co-ordinate liability to make good any loss suffered by PGI/PGC. These are new issues which would not need to be ventilated without the cross-claim. 4 BKK's solicitor, Michael Dawson, gave evidence on the application and was cross-examined by Mr Gee. Mr Dawson said that it was unlikely that the cross-claim would necessitate the calling of additional witnesses. Existing witnesses might need to be asked additional questions, but the evidence under the cross-claim would by and large be similar to that raised in the main proceedings. Mr Dawson pointed out that the need for BKK to mount a cross-action against PGA was occasioned by the fact that there were two sets of applicants (PGI/PGC on the one hand, and PGA on the other) seeking essentially the same damage in two separate proceedings which raised different causes of action. In order to "join the circle", as Mr Mc Dougall described it, it was necessary to lodge a cross-claim against PGA. 5 In my view insufficient grounds have been shown for ordering security for costs, at least at this stage of the proceedings. On the evidence before me, the issues raised under the seventh cross-claim are essentially defensive. The litigation of these issues will, it seems, do little to increase the costs of the proceedings, either at pre-trial or hearing level. If in due course this assessment is shown to be wrong it will always be open to PGA to make a further application for security for costs. 6 I decline to make the order sought in paragraph one of the Notice of Motion dated 5 October 2000. I order PGA to pay BKK's costs of the application for security. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mathews. Associate: Dated: 5 April 2001 Counsel for the Applicant: CG McGee QC and M Dempsey Solicitor for the Applicant: Allen Allen & Hemsley Counsel for the Respondents: RC McDougall QC Solicitor for the Respondents: Tress Cox Maddox Date of Hearing: 2 March 2001 Date of Judgment: 5 April 2001	1,243
federal_court_of_australia:fca/single/2011/2011fca1067	decision	commonwealth	federal_court_of_australia	text/html	2011-09-15 00:00:00	Statewide Secured Investments Pty Ltd v Tarrant [2011] FCA 1067	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2011/2011fca1067	2024-09-13T22:44:37.556133+10:00	FEDERAL COURT OF AUSTRALIA Statewide Secured Investments Pty Ltd v Tarrant [2011] FCA 1067 Citation: Statewide Secured Investments Pty Ltd v Tarrant [2011] FCA 1067 Parties: STATEWIDE SECURED INVESTMENTS PTY LTD (ACN 004 682 517) v SANDRA TARRANT File number: NSD 1529 of 2011 Judge: FLICK J Date of judgment: 15 September 2011 Catchwords: CORPORATIONS – application to set aside statutory demand – interlocutory application for substituted service Legislation: Corporations Act 2001 (Cth) ss 459G, 459H, 459J Federal Court Rules 2011 (Cth) r 10.24 Federal Court Rules (Cth) O 7 r 9 Uniform Civil Procedure Rules 2005 (NSW) Cases cited: Alstom Ltd v Sirakas [2010] NSWSC 669, considered Hadgkiss v Aldin [2006] FCA 1164, cited Humane Society International Inc v Kyodo Senpaku Kaisha Ltd [2007] FCA 124, considered Ricegrowers Co-Operative Ltd v ABC Containerline NV (1996) 138 ALR 480, considered St George Bank – A Division of Westpac Banking Corporation v Active Property Investment Pty Ltd [2010] NSWSC 736, 77 NSWLR 148, cited Takapana Investments Pty Ltd v Teco Information Systems Co Ltd (1998) 82 FCR 25, cited Date of hearing: 15 September 2011 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 16 Counsel for the Plaintiff: Mr P G Cutler Solicitor for the Plaintiff: Mr S Naidu (Carrolls Lawyers) Counsel for the Defendant: The defendant did not appear IN THE FEDERAL COURT OF AUSTRALIA NSW DISTRICT REGISTRY GENERAL DIVISION NSD 1529 of 2011 BETWEEN: STATEWIDE SECURED INVESTMENTS PTY LTD (ACN 004 682 517) Plaintiff AND: SANDRA TARRANT Defendant JUDGE: FLICK J DATE OF ORDER: 15 SEPTEMBER 2011 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Pursuant to Rule 10.24 of the Federal Court Rules 2011 (Cth) the Plaintiff is ordered to effect service of: (a) the Originating Process filed on 8 September 2011; and (b) the Affidavit of Mr Neils Edward John Neale sworn on 6 September 2011; and (c) a copy of these Orders on the Defendant on or before 5.00 pm on Friday 16 September 2011 by: (i) delivering those documents to the Defendant at 61 Myola Road, Newport Beach in the State of New South Wales; and (ii) transmitting a scanned copy of the documents (in PDF format) to the last known email address of the Defendant being [email protected]; and (iii) sending a copy of the documents by express post to the last known postal address of the Defendant being Post Office Box 743, Newport Beach, in the State of New South Wales. 2. For the purpose of Rule 10.24 of the Federal Court Rules 2011 (Cth), upon the Plaintiff satisfying the terms of Orders 1(i) to 1(iii) inclusive, the documents will be taken to have been personally served upon the Defendant, Sandra Lee Tarrant. 3. These Orders may be entered forthwith and an authenticated copy is to be provided to the Plaintiff. 4. Costs reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NSW DISTRICT REGISTRY GENERAL DIVISION NSD 1529 of 2011 BETWEEN: STATEWIDE SECURED INVESTMENTS PTY LTD (ACN 004 682 517) Plaintiff AND: SANDRA TARRANT Defendant JUDGE: FLICK J DATE: 15 SEPTEMBER 2011 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The Plaintiff in the present proceeding (Statewide Secured Investments Pty Ltd) and the Defendant (Ms Sandra Tarrant) have apparently been involved in litigation since about 2008. 2 For present purposes it is sufficient to note that Ms Tarrant served a statutory demand upon the Plaintiff in late August 2011. The Originating Process as filed by the Plaintiff in this Court on 8 September 2011 seeks an order pursuant to either s 459H or 459J of the Corporations Act 2001 (Cth) setting aside that statutory demand. The affidavit presently filed in support of the Originating Process is an affidavit of Mr Neale. 3 Section 459G of the Corporations Act, it should be further noted, provides as follows: Company may apply (1) A company may apply to the Court for an order setting aside a statutory demand served on the company. (2) An application may only be made within 21 days after the demand is so served. (3) An application is made in accordance with this section only if, within those 21 days: (a) an affidavit supporting the application is filed with the Court; and (b) a copy of the application, and a copy of the supporting affidavit, are served on the person who served the demand on the company. The Plaintiff maintains that the statutory demand was served upon it on 30 August 2011 and that the 21 day period prescribed by s 459G expires next Tuesday 20 September 2011. 4 Given the constraint as to time, the Plaintiff brings the present interlocutory application as "the cautious approach". That application is pursuant to Rule 10.24 of the Federal Court Rules 2011 for substituted service upon Ms Tarrant of the Originating Process, the Affidavit of Mr Neale and the Orders to be now made. 5 The Orders as sought should be made. 6 Rule 10.24 provides as follows: Substituted service If it is not practicable to serve a document on a person in a way required by these Rules, a party may apply to the Court without notice for an order: (a) substituting another method of service; or (b) specifying that, instead of being served, certain steps be taken to bring the document to the attention of the person; or (c) specifying that the document is taken to have been served: (i) on the happening of a specified event; or (ii) at the end of a specified time. The counterpart to Rule 10.24 was previously to be found in Order 7 r 9 of the now repealed Federal Court Rules. Rule 9 was expressed in terms of it being "impractical to serve a document in the manner set out in the Rules". 7 When construing the former Order 7 rule 9, Tamberlin J in Ricegrowers Co-Operative Ltd v ABC Containerline NV (1996) 138 ALR 480 at 482 observed: Substituted service The meaning of the expression "practicable" for the purpose of a substituted service application under the corresponding UK rule was considered by the Court of Appeal in Paragon Group Ltd v Burnell [1991] 2 All ER 388. Lloyd LJ considered that the word "practicable" should be given a wide meaning and that the simple question was whether it was "practicable" to serve by one of the prescribed methods (at 390). The expression "not practicable" is in my view essentially identical in meaning to the term "impractical". In order to establish impracticality some attempt, at least, should be made to effect service in accordance with the rules or evidence should be led that it is so obviously futile as not to warrant an attempt at service. … In O'Neil v Acott (1988) 59 NTR 1, the Full Court of the Supreme Court of the Northern Territory considered the words "impracticable to serve". Asche CJ with whom Nader and Rice JJ concurred, referred to the remarks of Mason J in Foxe v Brown (1984) 58 ALR 542 at 547, where his Honour said: Furthermore, the question is not whether reasonable effort has been shown by the plaintiff over a particular period but whether at the date on which the application for substituted service is made, the plaintiff, using reasonable effort, is unable to serve the defendant personally. (Emphasis added) This decision has been applied by other Judges of this Court: e.g., Takapana Investments Pty Ltd v Teco Information Systems Co Ltd (1998) 82 FCR 25 at 26 per Goldberg J. When commenting upon Ricegrowers, Allsop J in Humane Society International Inc v Kyodo Senpaku Kaisha Ltd [2007] FCA 124 observed as follows that the term "impractical" may not be subject to the constraint suggested by Tamberlin J: [14] In Ricegrowers Co-operative Ltd v ABC Container Line NV (1996) 138 ALR 480 at 482 Tamberlin J said that "not practicable" in an English Rule to which he was referred was "essentially identical" in meaning to "impractical" in O 7 r 9. In that case, Tamberlin J seemed to express the view that futility or inability to serve was an essential requirement for invocation of the rule. Whether that gives full breadth to the language of the rule may be open to debate. On one view of the language of the rule, "impractical" may be wide enough to cover circumstances where in the light of the nature of the claim and the circumstances of the applicant and respondent service through the method provided for by following the Rules is not sensible or realistic, even if it is possible or feasible. It is unnecessary to deal with this question here. … 8 When commenting upon the requirement imposed by the Uniform Civil Procedure Rules 2005 (NSW) that documents "cannot practicably be served", Palmer J in Alstom Ltd v Sirakas [2010] NSWSC 669 observed: [40] "Impracticable" does not mean "impossible": see eg Re Conan Doyle's Will Trusts [1971] Ch 982, at 994; nor does it mean "inconvenient": see eg Syndicate Mortgage Solutions Pty Ltd v El-Sayed [2009] NSWSC 207. Whether personal service is "impracticable" must be decided according to the particular circumstances of the case at the time that the application for substituted service is made and must have regard to: - the requirement to do justice to a plaintiff who has demonstrated a prima facie case which may be defeated or frustrated if personal service of the originating process upon the defendant is insisted upon; and - the requirement to do justice to a defendant who is entitled to receive proper and efficacious notice of proceedings commenced against him or her. [41] One factor, out of an infinite variety of possible factors which may affect the question whether personal service is practicable is whether the evidence in support of an application for substituted service satisfies the Court there is a real possibility — not a remote or fanciful possibility — that an attempt at personal service of originating process will result in the defeat or frustration of the plaintiff's proceedings. Just as freezing orders are often made ex parte for fear that a forewarned dishonest defendant will remove assets before the Court's orders fasten upon them, so also may substituted service be ordered if there is a real possibility that the defendant, forewarned by an attempt at personal service, will take measures to ensure that further attempts are unsuccessful. Another factor may be that the time taken in effecting personal service may result in a delay which will completely frustrate the plaintiff's proceedings … [42] In all cases, the practicality or impracticality of personal service will be coloured by the degree to which the Court can be assured that substituted services will efficaciously bring the proceedings to the proper notice of the defendant. The more likely it is that substituted service will not be efficacious, the more difficult it will be to persuade the court to dispense with personal service. 9 Notwithstanding the difference in language now employed in the current Rules, there is no reason why the expression in Rule 10.24, namely "not practicable", should be given any meaning more constrained than that previously given to Order 7 r 9. Concurrence is expressed with the views tentatively set forth by Allsop J in Humane Society. Rule 10.24 should not be given any meaning requiring the necessity to prove the impossibility of service of documents upon a party in accordance with the Rules or any requirement to prove that further attempts to effect service in accordance with the Rules would otherwise be futile or not sensible or feasible. 10 An order for substituted service pursuant to Rule 10.24, as with the former rule (Hadgkiss v Aldin [2006] FCA 1164 at [3] per Nicholson J), must be based on a reasonable probability that it will inform the person served as a result of the form of service identified. 11 Rule 10.24 would in all probability not permit substituted service of a statutory demand upon a corporation: cf. St George Bank – A Division of Westpac Banking Corporation v Active Property Investment Pty Ltd [2010] NSWSC 736, 77 NSWLR 148 per Barrett J. But where a proceeding has been instituted by the corporation seeking to have a statutory demand set aside, Rule 10.24 does permit substituted service to be ordered upon the person who served the statutory demand. 12 In support of the application for substituted service, the Plaintiff has provided a copy of a letter dated 24 August 2011 from Ms Tarrant addressed to the Plaintiff. That letter enclosed the statutory demand now sought to be set aside. The heading to that letter set forth Ms Tarrant's address at Newport Beach, a Post Office Box number and an email address. The Plaintiff's evidence included evidence as to attempts to serve Ms Tarrant at that Newport Beach address and at her place of employment at the Mater Hospital in Crows Nest. The process server who attempted service at the Newport address on 9 and 12 September 2011 deposed to having attended at that address, having seen at that address a person identified as the "life-partner" of Ms Tarrant and having unsuccessfully attempted to gain access to the property after having engaged a "security intercom" at the front gate, he was unable to elicit a response despite "prolonged and persistent activation of the button on that intercom". A side gate, according to the process server, appeared to have been "barricaded to keep out callers". Lights which were observed to have been on at the outset were apparently turned off. Evidence of a different process server was also relied upon. That evidence was as to attendance at the Mater Hospital on 13 September 2011 when the process server was advised that Ms Tarrant was "in Theatre all morning" and that it was unknown whether she would be working that afternoon. No attempt was made to serve Ms Tarrant at the Mater Hospital on any other occasion. 13 Such evidence may fall short of establishing an "inability" or "impossibility" to personally serve Ms Tarrant in accordance with the Rules. 14 A conclusion should nevertheless be reached that it is "not practicable" to serve upon Ms Tarrant the Originating Process and the affidavit of Mr Neale in the manner otherwise required by the Rules. "[A]nother method of service" should be ordered. Orders should be made as authorised by Rule 10.24. 15 The methods of service suggested by the Plaintiff, it is concluded, will bring to the notice of Ms Tarrant the fact that the present proceeding has been commenced and bring to her notice the Originating Process and the Affidavit relied upon in that proceeding. 16 As suggested by Palmer J in Alstom Ltd, the discretion to order substituted service may more easily be exercised in circumstances where the Court can be reasonably satisfied that the methods of substituted service which are ordered will bring documents to the attention of the party to be served. The Orders now made will do justice as between the parties: they will ensure that the interests of the Plaintiff are protected and will also ensure that Ms Tarrant is properly informed as to the present proceeding seeking to have her statutory demand set aside. ORDERS The Orders of the Court are: 1. Pursuant to Rule 10.24 of the Federal Court Rules 2011 (Cth) the Plaintiff is ordered to effect service of: (a) the Originating Process filed on 8 September 2011; and (b) the Affidavit of Mr Neils Edward John Neale sworn on 6 September 2011; and (c) a copy of these Orders on the Defendant on or before 5.00 pm on Friday 16 September 2011 by: (i) delivering those documents to the Defendant at 61 Myola Road, Newport Beach in the State of New South Wales; and (ii) transmitting a scanned copy of the documents (in PDF format) to the last known email address of the Defendant being [email protected]; and (iii) sending a copy of the documents by express post to the last known postal address of the Defendant being Post Office Box 743, Newport Beach, in the State of New South Wales. 2. For the purpose of Rule 10.24 of the Federal Court Rules 2011 (Cth), upon the Plaintiff satisfying the terms of Orders 1(i) to 1(iii) inclusive, the documents will be taken to have been personally served upon the Defendant, Sandra Lee Tarrant. 3. These Orders may be entered forthwith and an authenticated copy is to be provided to the Plaintiff. 4. Costs reserved. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. Associate: Dated: 16 September 2011	3,952
federal_court_of_australia:fca/single/2011/2011fca0049	decision	commonwealth	federal_court_of_australia	text/html	2011-02-04 00:00:00	Australian Competition and Consumer Commission v Jones (No 5) [2011] FCA 49	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2011/2011fca0049	2024-09-13T22:44:37.813432+10:00	FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Jones (No 5) [2011] FCA 49 Citation: Australian Competition and Consumer Commission v Jones (No 5) [2011] FCA 49 Parties: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v DARRYL PETER JONES File number: QUD 54 of 2010 Judge: LOGAN J Date of judgment: 4 February 2011 Catchwords: HIGH COURT AND FEDERAL COURT – Apprehension of bias as a result of past findings as to credit of the respondent – Where application for Judge to not conduct trial was withdrawn – Whether Judge should of his own motion not to conduct the trial – Where no findings as to credit were required to be made in the course of the trial Held: No need in circumstance to refrain from hearing trial PRACTICE AND PROCEDURE – Application by respondent to adjourn the trial – When trial dates had been fixed six months in advance – Where proceeding involved a matter touching on public health – Where respondent also requested that the case be dealt with as soon as possible – Where next available hearing date would have involved considerable delay – Where no offer was made by the respondent to pay the applicant's costs thrown away by any adjournment Held: In the interests of justice not to adjourn the trial EVIDENCE – Affidavit evidence – Admissibility of opinions in articles annexed to affidavit (of the respondent) which were not authored by the deponent – Where applicant would not have had opportunity to cross-examine the authors of the articles in question – Where unfairness to the applicant could have occurred were the opinion evidence to be admitted Held: The articles not be admitted into evidence TRADE PRACTICES – Misleading or deceptive conduct – Whether respondent engaged in misleading or deceptive conduct in the contravention of s 52 or s 53(c) of the Trade Practices Act 1974 (Cth) – Where respondent represented that his "program" could be followed to cure cancer – Where representations were admitted – Where the applicant led medical opinion evidence probative of a conclusion that the admitted representations were misleading or deceptive – Where respondent led neither compelling medical evidence nor evidence to support the kind of intuitive reasoning outlined in EMI (Australia) Ltd v Bes (1970) 2 NSWR 238 Held: The representations were misleading or deceptive Legislation: Evidence Act 1995 (Cth) s 79 Federal Court of Australia Act 1976 (Cth) ss 21, 37M Trade Practices Act 1974 (Cth) ss 6, 52, 53 Cases cited: Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 cited Australian Competition and Consumer Commission v Jones (No 3) [2010] FCA 908 cited Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 cited EMI (Australia) Ltd v Bes (1970) 2 NSWR 238 considered Foster v Australian Competition and Consumer Commission (2006) 149 FCR 135 applied George v Rockett (1990) 170 CLR 104 cited Johnson v Johnson (2000) 201 CLR 488 cited Jones v Australian Competition and Consumer Commission [2010] FCAFC 136 cited ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 followed Date of hearing: 31 January 2011 - 1 February 2011 Place: Brisbane Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 57 Counsel for the Applicant: Mr M Brady Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondent: The Respondent appeared in person IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 54 of 2010 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: DARRYL PETER JONES Respondent JUDGE: LOGAN J DATE OF ORDER: 4 FEBRUARY 2011 WHERE MADE: BRISBANE THE COURT ORDERS THAT: Declaratory Relief 1. The respondent, in trade or commerce, and in relation to the supply or possible supply or promotion of the supply of goods and services by the respondent, by making representations on the internet that: 1.1. the reduction or elimination of glucose from the diet; 1.1.1. was effective in the treatment or prevention of cancer; 1.1.2. had been proven to bring even the worst cancers under control; and 1.1.3. was, together with an exercise program recommended by him, more effective in treating cancer than pharmaceutical drugs, radium therapy, surgery and chemotherapy; 1.2. taking laetrile, also known as amygdalin, also referred to as "vitamin B17"; 1.2.1. was effective in the treatment or prevention of cancer; 1.2.2. had been proven to bring even the worst cancers under control; and 1.2.3. was, together with an exercise program recommended by him, more effective in treating cancer than pharmaceutical drugs, radium therapy, surgery and chemotherapy; 1.3. there were reasonable grounds to make the representations referred to in paragraph 1.1 and 1.2 hereof; and 1.4. there was a reliable and current scientific or medical basis to make the representations referred to in paragraph 1.1 and 1.2 hereof; when: 1.5. the reduction or elimination of glucose from the diet; 1.5.1. was not effective in the treatment of cancer; 1.5.2. had not been proven to bring even the worst cancers under control; and 1.5.3. was not, together with an exercise program recommended by him, more effective in treating cancer than pharmaceutical drugs, radium therapy, surgery and chemotherapy; 1.6. the taking of laetrile; 1.6.1. was not effective in the treatment or prevention of cancer; 1.6.2. had not been proven to bring even the worst cancers under control; and 1.6.3. was not, together with an exercise program recommended by him, more effective in treating cancer than pharmaceutical drugs, radium therapy, surgery and chemotherapy; 1.7. there were no reasonable grounds for making any of the representations referred to in paragraph 1.1 and 1.2 hereof; and 1.8. there were no reliable, current scientific or medical bases for any of the representations referred to in paragraph 1.1 and 1.2 hereof; in the case of each of the said representations at 1.1, 1.2, 1.3 and 1.4 hereof: 1.9. engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of section 52 of the Trade Practices Act 1974 (Cth) (TPA); and 1.10. represented that his goods or services have uses or benefits they do not have in contravention of section 53(c) of the TPA. Injunctive Relief 2. The respondent be restrained permanently, whether by himself or his servants or agents or otherwise howsoever: 2.1. in the course of trade or commerce between Australia and places outside Australia, among the States, within a Territory, between a State and a Territory or between two Territories; and 2.2. in trade or commerce involving the use of internet, postal, telegraphic or telephonic services or taking place in a radio or television broadcast; from making any representation to the effect that the occurrence or growth of cancer or any medical condition can be prevented or successfully treated by any means whatsoever unless the respondent: 2.3. first has obtained: 2.3.1. from a person then registered with a medical practitioners board to practice medicine in Australia; or 2.3.2. from a professor, associate professor, reader, senior lecturer, or lecturer then teaching or researching in medicine at an Australian university; written advice certifying that the proposed treatment is in the opinion of that person supported by reliable scientific evidence or expert medical opinion and is believed to be effective and safe; and 2.4. at the time of making the representation, prominently discloses details of the said advice, including the name, qualifications and position of the person providing the said advice; and 2.5. retains a copy of the said advice and provides a copy of the same to the applicant within 7 days of him receiving the certificate. 3. The respondent be permanently restrained, whether by himself or his servants or agents or otherwise howsoever, from knowingly being involved with, consenting to or encouraging the making of, by: 3.1. any person or unincorporated entity: 3.1.1. in the course of trade or commerce between Australia and places outside Australia, among the States, within a Territory, between a State and a Territory or between two Territories; or 3.1.2. in trade or commerce involving the use of internet, postal, telegraphic or telephonic services or taking place in a radio or television broadcast; or 3.2. any corporation, in trade or commerce; any representation to the effect that the occurrence or growth of cancer or any medical condition can be prevented or successfully treated by any means whatsoever unless the respondent: 3.3 first has obtained: 3.3.1 from a person then registered with a medical practitioners board to practice medicine in Australia; or 3.3.2 from a professor, associate professor, reader, senior lecturer, or lecturer then teaching or researching in medicine at an Australian university; written advice certifying that the proposed treatment is in the opinion of that person supported by reliable scientific evidence or expert medical opinion and is believed to be effective and safe; and 3.4. at the time of making the representation, prominently discloses details of the said advice, including the name, qualifications and position of the person providing the said advice; and 3.5. retains a copy of the said advice and provides a copy of the same to the applicant within 7 days of him receiving the certificate. Ancillary Relief 4. Should the respondent become aware that any natural person or entity is: 4.1. representing expressly or impliedly to be him, or to be associated with him, or to be acting with his consent or on his behalf; and 4.2. making a representation in circumstances that, if made by the respondent would contravene paragraph 2 of these orders; the respondent shall forthwith: 4.3. fully inform the applicant of those matters; 4.4. take all steps reasonably available to him to cause the person or entity to cease representing themselves to be him or to be associated with him, or to be acting with his consent, or on his behalf as the case may be, and to cease making representations referred to in paragraph 4.2 above; 4.5. furnish a copy of these orders to the person or entity as soon as he is able to do so and inform the person or entity that the person or entity may be committing contempt of these orders by their actions; 4.6. inform the applicant in writing that he has taken the steps required by paragraph 4.5 of these orders as soon as he has done so; and 4.7. refuse to treat and refuse to accept any payment from any person who, to the respondent's knowledge, sought his services as a result of the making of representations of the type referred to in paragraphs 4.1 and 4.2 of these orders. 5. The respondent, at his own expense, shall, within 7 days of this order, cause a notice in the form of Schedule 1 attached hereto to be published and to remain continuously in place, for a period of 3 months from the date of this order, on the home page of the following websites: 5.1. www.darryljoneshealth.com.au; and 5.2. any other website that at the date of this order is, or within 3 months of the date of this order becomes, controlled, owned, operated or maintained by the respondent that offers or promotes goods or services associated with the treatment or prevention of cancer or any other medical condition whatsoever; and shall take all reasonable steps to ensure that such notice shall: 5.3. be a size that consists of at least 40% of the web page; 5.4. be published on the web page in text format; 5.5. be clearly viewable immediately on screen after the web page is accessed; 5.6. not be blocked by a pop up blocker; 5.7. remain on screen until closed by the person accessing that website; and 5.8. not require a further selection of hyperlinks or scrolling on the screen to be seen. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. SCHEDULE 1 COURT RESTRAINS DARRYL JONES FROM MAKING CANCER TREATMENT CLAIMS On 4 February 2011, the Federal Court of Australia made declarations and orders including injunctions in relation to representations about the prevention and treatment of cancer made by Mr Darryl Jones through The Darryl Jones Health Resolution Centre. The proceedings were instituted by the Australian Competition and Consumer Commission (ACCC) in relation to claims made on a website at http://www.darryljoneshealth.com.au and in an electronic book titled The Truth About Overcoming Cancer, sold through that website. The Court declared that certain representations made by Mr Jones were false, misleading or deceptive under the then sections 52 and 53(c) of the Trade Practices Act 1974 (Cth). (The Trade Practices Act 1974 is now known as the Competition and Consumer Act 2010 and the equivalent provisions are Schedule 2, sections 18 and 29(g)). The injunctions permanently restrain Mr Jones from making, or being involved in others making, or encouraging others to make, any claim concerning means of treating or preventing cancer or any medical condition unless Mr Jones has first obtained written medical or scientific advice to support the claim. A copy of the Court's orders can be obtained by calling the ACCC on 1300 302 502 (Australian callers) or + 612 6243 1305 (overseas callers). The ACCC urges anyone who wishes to take steps to treat or prevent cancer or other medical conditions to seek advice from a suitably qualified medical practitioner. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 54 of 2010 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: DARRYL PETER JONES Respondent JUDGE: LOGAN J DATE: 4 FEBRUARY 2011 PLACE: BRISBANE REASONS FOR JUDGMENT 1 The respondent, Darryl Peter Jones has been a full time, professional personal trainer and body builder for some twenty years. In following that vocation over that period he has owned a fitness centre and a gym at various times. These he describes as having been highly successful. Some thirty years ago, he commenced theological studies in New South Wales graduating in 1984 from the Assemblies of God College at Katoomba with a Diploma of Ministry. Since then he has always maintained involvement in part time and voluntary aspects of Christian churches and fellowships both in New South Wales and in Queensland. 2 Over time, a combination of Mr Jones' experience in the field of personal training and body building, his particular interest in natural body building, ie the development of the human body to the optimum strength and muscular presentation without the use of steroids or performance enhancing drugs and his theological studies and religious beliefs led more recently to his establishing a business known as the Darryl Jones Health Resolution Centre (the Centre). 3 Aspects of Mr Jones' conduct in the course of his carrying on business at the Centre excited the interest of the Australian Competition and Consumer Commission (the Commission). The Commission came to institute proceedings in this Court against Mr Jones alleging contraventions on his part of s 52 and s 53(c) of what was known at the time as the Trade Practices 1974 (Cth) (the Act). On the basis of these alleged contraventions the Commission claims against Mr Jones declaratory, injunctive and ancillary relief. 4 Read in isolation from other provisions in the Act, s 52 and s 53(c) each appear to be directed to corporate, not individual behaviour. Section 52 prohibits corporate conduct in trade or commerce that is misleading or deceptive or likely to mislead or deceive. Section 53(c) of the Act provides: 53. A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services: … (c) represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have; 5 These provisions must though be read in conjunction with, materially, s 6 of the Act. Within that section, s 6(3)(b) extends their reach to individuals by providing, "a reference in those provisions to a corporation [includes] a reference to a person not being a corporation". Further, whatever operation these provisions might otherwise have, s 6(3)(a) renders them applicable "to the extent to which the conduct involves the use of postal, telegraphic or telephonic services or takes place in a radio or television broadcast". In addition, without prejudice to their effect apart from the operation of s 6, s 6(2)(a) renders the provisions applicable to, materially, conduct in trade or commerce: (i) between Australia and places outside Australia; (ii) among the States; (iii) within a Territory, between a State and a Territory or between two Territories. 6 It is via the operation of these paragraphs of s 6 of the Act that the Commission alleges that each of s 52 and s 53(c) apply to conduct by Mr Jones. 7 The representations which form the basis of the Commission's case are detailed in its statement of claim. They are alleged to be misleading or deceptive or likely to mislead or deceive on the basis that they were not true. 8 Mr Jones admits the making of these representations in his defence but denies that they were misleading or deceptive or likely to mislead or deceive. Further, in so far it is an element of a representation that he had reasonable grounds for making a particular statement, his position is that he did indeed have reasonable grounds. 9 Given the extent of the admissions on the pleadings, it is convenient to set out an extract from the statement of claim which records the admitted representations: 2. The respondent (Jones): 2.1. from at least about July 2009 has conducted business under the registered business name Darryl Jones Health Resolution Centre (BN21267005) (DJHRC); and 2.2. since about July 2009 has, in trade or commerce, carried on the business of supplying goods and services to persons in Australia, namely: 2.2.1. treatment and prevention services in relation to medical conditions including cancer (the DJHRC services); and 2.2.2. goods including a book in electronic form entitled "The Truth about Overcoming Cancer" written by Jones (the e-book). Jones Conduct 3. Since at least 12 August 2009, Jones was: 3.1. the owner of; and 3.2. responsible for all operations relating to; the domain name "darryljoneshealth.com.au" (domain name). 4. By at least 8 January 2010 and until 3 March 2010, Jones, by means of a website with the domain name: 4.1. promoted the DJHRC services; and 4.2. promoted and offered a means of purchasing and downloading the e-book; (the website) 5. Between at least 8 January 2010 and 3 March 2010, the website could be accessed by the general public. Representations by Jones 6. By means of the website and the e-book, between at least 8 January 2010 and 3 March 2010, Jones represented, in the course of promoting the DJHRC services and the e-book, that: 6.1. the reduction or elimination of glucose from the diet: 6.1.1. was effective in the treatment or prevention of cancer; 6.1.2. had been proven to bring even the worst cancers under control; and 6.1.3. was, together with an exercise program recommended by him, more effective in treating cancer than pharmaceutical drugs, radium therapy, surgery and chemotherapy. 6.2. he had reasonable grounds to represent the matters alleged in paragraph 6.1 hereof; and 6.3. there was a current and reliable scientific basis to represent the matters alleged in paragraph 6.1 (the representations pleaded in sub-paragraphs 6.1, 6.2 and 6.3 are collectively, the glucose representations). Particulars The glucose representations are to be implied from the use of the following words on the website: 6.3.1 "Nobel Peace Prize Winner Dr Otto Heinrich Warburg Links The Fermentation of Sugar As The Prime Cause Of Cancer"; 6.3.2. "The following is taken from a revised Lindau lecture: The Prime Cause and Prevention of Cancer by Otto Warburg, Director, Max Planck Institute for Cell Physiology, Berlin-Dahlem, Germany adapted from a lecture delivered by Otto himself at the 1966 annual meeting of Nobelists at Lindau, Germany. '… for cancer, there is only one prime cause. Summarized in a few words, the prime cause of cancer is the replacement of the respiration of oxygen in normal body cells by a fermentation of sugar. All normal body cells meet their energy needs by respiration of oxygen, whereas cancer cells meet their energy needs in great part by fermentation."; 6.3.3. "The Darryl Jones Health Resolution Centre methodology is based on the resolution of life-threatening diseases without dispensing pharmaceutical drugs, advocating radium therapy, surgery or harmful chemotherapy – focusing instead on a 3-step "Triune Wellness Offensive' – utilizing nutrition, exercise and vitamins along with close, professional, personal accountability. The Darryl Jones Health Resolution Centre – committed to your total victory over modern-day life-threatening diseases – with time-proven personal strategies, empowering you with the tools you need for a prolonged life, greater health and real hope for the future."; 6.3.4. "Darryl Jones and his staff – many members being over corners of life threatening diseases themselves (known as "Champions") – offer an effective and personalised mentoring regimen for all sufferers. Their methodology is based on the resolution of modern illnesses and other diseases naturally, without dispensing pharmaceutical drugs, advocating radium therapy, surgery or harmful chemotherapy. No nasty side effects here!"; 6.3.5. "Founder Darryl Jones from the Darryl Jones Health Resolution Centre says the simple secret is a strict regime of diet and exercise which has been proven to bring even the worst cancers under control. In fact, Darryl helps clients gain success in even terminal cases – cancer patients whose doctors have told them there is nothing more that traditional healthcare medicine can do.", in the context of the website as a whole. Further, the representations are to be implied from the following words in the e-book: 6.3.6. "So now we come to cancer's 'Achilles heel' … it is totally dependent on the nutrients given it by its host. The point here is that modern 21st century hosts (i.e. us) are culturally submerged in and ADDICTED to the foods that cancer likes. The crux of the problem is that Cancer Loves Glucose* and Glucose is easily obtainable from many of the vast majority of foods that we ingest daily. So to take away its major source of nutrition will deprive it of 'its life-source' and therefore compromise it ability to persist and grow. This access to Glucose helps to explain the awesome rise in new cases of cancer, at a rate which is unprecedented at any time in our history. It is a modern-day epidemic!" 6.3.7 "What do we really need to consider? 1. Sugar feeds cancer" Claim outlined in "The Physician's Handbook of Clinical Nutrition", Henry Osiecki, pg. 22. We say that the rocket-like acceleration of cancer in our culture is definitely the result of lifestyle behaviour. It is beyond doubt in my mind that cancer's main food is Glucose" in the context of the website and the e-book as a whole. A printout of the website and a copy of the e-book are contained in the affidavit of Shane Denzil Dallas affirmed and filed in these proceedings on 24 February 2010 and are available for inspection at the offices of the solicitors for the Applicant, by appointment. 7. By means of the website and the e-book, between at least 8 January 2010 and 3 March 2010, Jones represented, in the course of promoting the DJHRC services and the e-book, that: 7.1. the taking of laetrile, also known as amygdalin, also referred to as "vitamin" B17 (laetrile): 7.1.1. was effective in the treatment or prevention of cancer; 7.1.2. had been proven to bring even the worst cancers under control; and 7.1.3. was, together with an exercise program recommended by him, more effective in treating cancer than pharmaceutical drugs radium therapy, surgery and chemotherapy; 7.2. he had reasonable grounds to make the representations referred to in paragraph 7.1 hereof; 7.3. there was a current and reliable scientific basis to make the representations referred to in paragraph 7.1 hereof (the representations pleaded in sub-paragraphs 7.1, 7.2 and 7.3 are collectively, the laetrile representations). Particulars The laetrile representations are to be implied from the use of the following words on the website: 7.3.1 "The pre-eminent senior cancer researcher in America was Dr. Kanematsu Segiura – who possibly holds the greatest respect in which scientific research on cancer is regarded. It has been said by a visiting cancer researcher from Russia that "when Segiura publishes, we know we do not have to repeat the study, for we would obtain the same results he has reported." Among the conclusions of Sugiura's work was that laetrile inhibited the growth of tumors. It stopped the spreading (metastasising) of cancer of mice. It acted as a cancer preventative."; 7.3.2. "It is also widely recognised and promoted by other non-orthodox sources that B17 (Laetrile) amygdalin is key for the human body when it comes to building the immune system. This is essential to overcome any form of modern-day cancers such as melanoma, leukaemia, bone cancer, prostate cancer, breast cancer, ovarian cancer and so on."; 7.3.3 the words at paragraphs 6.3.5, 6.3.6 and 6.3.7 hereof; in the context of the website. Further, the laetrile representations are to be implied from the use of the following words in the e-book: 7.3.4. "3. Lack of nutrition Following is a direct transcript of a speech presented by Ernst Krebs Jr. before the second Cancer Control Society Convention at the Ambassador Hotel in Los Angeles, California. This speech can easily be found on a search engine on the Internet. This man's name can be found in any decent medical book because of the discoveries regarding the cellular source of energy, which to this very day is credited to him in the name of the "Krebs cycle".* By Ernst Krebs, Jn. … As I look back through the years marketing (sic) the emergence of these two fine Societies, I can recall the number of miraculous victories we have had in those intervening years; that it is as true today as it was eleven years ago that Laetrile, Vitamin B17, is the first and last final hop in the prophylactics in therapy of cancer in man and animals. The reason for this is that Laetrile is a vitamin. It is the 17th of the B vitamins We hear a great deal about its use in terminal cancer, but the time to start with vitamin B17 is now before the disease has become clinical. The time to start is the same with any matter of adequate nutrition and that is right now. … And when we fail in view of our knowledge now to take Vitamin B17 this is a sin against our physical nature. And when we develop cancer we will receive the results of this transgression in the old fashion Biblical sense that the 'wages of sin are death.' If you are not getting Vitamin B17 in your food the best way to get it is in the pure form. If you have cancer, the most important single consideration is to get the maximum amount of Vitamin B17 into your body in the shortest period of time. … We believe the use of vitamin B17 is vital in cancer control. But we also see that poor nutrition in general, i.e. lacking in good proteins, fats etc and overbalanced with sugar – leaves our body vulnerable to the formation of cancer." in the context of the website and the e-book. A printout of the website and a copy of the e-book are contained in the affidavit of Shane Denzil Dallas affirmed and filed in these proceedings on 24 February 2010 and are available for inspection at the offices of the solicitors for the Applicant, by appointment. [emphasis in the original] 10 On the basis of the admissions on the pleadings, I find that Mr Jones made each of the representations as alleged. His use of the internet for that purpose in itself means that, via, s 6, s 52 and s 53(c) apply to his conduct in making those representations. 11 Mr Jones' defence was settled by counsel. In the result though he was not legally represented at the trial conducted earlier this week. 12 When the trial was called on, Mr Jones was initially disposed to object to my conducting that trial on the basis that there existed a reasonable apprehension of bias. The circumstances giving rise to that submission arose from my past association with the case not only as docket judge in accordance with the usual practice of this Court but also included my dealing with him upon a charge of contempt brought by the Commission on the basis of alleged contraventions of interlocutory orders. I found that some of these allegations were proven: see Australian Competition and Consumer Commission v Jones (No 3) [2010] FCA 908. As it happens, the Full Court disagreed with this outcome: Jones v Australian Competition and Consumer Commission [2010] FCAFC 136. When the matter came back before me in accordance with the Full Court's order, I voiced some concern to the parties about whether, notwithstanding the lack of concern by the Full Court evidenced by the remitter, I should continue to hear the contempt case. The occasion for that concern was that, in the course of the plea in mitigation which had been made before me, admissions had been made as to the conduct concerned in the course of explaining the motivation for that conduct. It was unnecessary further to pursue the merits of that concern in light of well settled principles concerning when an apprehension of bias might arise (qv Johnson v Johnson (2000) 201 CLR 488 and Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337) because the Commission chose not further to pursue its contempt case. 13 Mr Jones did not in the end pursue his objection to my hearing the trial. He chose not to even after I had expressly drawn to his attention that to abandon the application might be regarded as a waiver of objection and preclude his pursuing the point on any appeal. This warning notwithstanding, Mr Jones determined not to pursue the objection. 14 I should record, as I did at the time to Mr Jones, that I do not consider his objection to have been a frivolous one. While, in light of his abandonment of the point it is not necessary to explore the subject of apprehended bias in any detail, I should also record that, notwithstanding the abandonment, I considered whether I should of my motion not undertake the trial of the proceeding. In light of the admissions on the pleadings and the evidence which each party proposed to lead, no question of credit in relation to Mr Jones arose. Further, the test for whether the admitted representations are misleading or deceptive or likely to mislead or deceive is an objective one. In those circumstances I did not consider that it was necessary of my own motion to raise with the parties the question of whether I should conduct the trial. 15 Another application which Mr Jones made at the commencement of the trial was that the trial should be adjourned. The trial dates had been fixed since August last year. At that time, pre-trial directions in respect to the filing of affidavits were made. These were varied on 29 November 2010 and 10 December 2010, materially so as to allow Mr Jones more time to undertake particular steps. 16 Mr Jones' adjournment application was not filed until 24 January 2011, one week before the start of the trial. That, in itself, was after the date which I had specified by direction for the filing of any such application. He had not as required given notice of any intention to cross-examine the Commission's proposed witnesses by 23 December 2010. At the directions hearing on 10 December 2010, I gave Mr Jones' then legal representative a very particular reminder of the need to give any such notice by that date. One of the Commission's proposed witnesses was Dr Snyder whose affidavit had been filed and served by the Commission in October 2010 in accordance with pre-trial directions. Dr Snyder is a specialist oncologist who holds a senior position at St Vincent's Hospital in Melbourne. The giving of notice of an intention to require his attendance for cross-examination had an obvious, particular importance so far as he was concerned in terms of minimising the impact of the litigation on his availability to provide clinical services to the public. Mr Jones had earlier failed to deliver particulars in accordance with pre-trial directions. He had likewise failed to file and serve affidavit evidence in chief in accordance with the time specified by pre-trial directions. Such directions are not, of course, an end in themselves. Their aim is to ensure the timely and efficient use of limited judicial resources and to afford procedural fairness to each party to litigation. 17 Were the case to have been adjourned it could not have been relisted for its originally estimated time of one week for some months, given the demands of other cases. That, in turn, would have entailed an opportunity cost in terms of any such time being available for the listing of the cases of other litigants. Touching as it does upon public health issues I considered that there was a considerable and particular public interest in the final determination of the merits of allegations made by the Commission as soon as possible. Even though there was an interlocutory injunction in place which had a certain inhibiting effect, that was necessarily only provisional and an interrogative note necessarily remained about the merits of the Commission's allegations pending trial. To adjourn the trial would necessarily have delayed a determination of the merits of those allegations. It would also have been unfair to Mr Jones (who also professed to want the case decided as soon as possible and made reference to the adverse impact of the interlocutory injunction) not to determine the merits of the allegations made against him as soon as possible. There was a contingency that an adjournment might have lead to Mr Jones being represented by counsel but this was nothing more on his evidence than a bare possibility. Mr Jones did not make any offer to pay the Commission's costs thrown away by any adjournment. The worth of any such offer even if made, would have been moot as Mr Jones made it plain that his circumstances were such that he could not afford representation. Further and in any event, the making of any such offer is not, if indeed it ever was, a complete palliative, much less determinative, on the subject of whether there ought to be an adjournment. 18 Taking into account these factors, together with the overarching purpose of civil practice and procedure provisions as described in s 37M of the Federal Court of Australia Act 1976 (Cth) and the observations made by the High Court in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 at [6], [25], [27] and [30] per French CJ and at [90], [92]-[93], [97] and [102] per Gummow, Hayne, Crennan, Kiefel and Bell JJ in relation to the relevance of case management and public interest in the timely and efficient conduct and disposal of litigation, I considered that, on balance, the trial should not be adjourned. 19 Upon my refusing the adjournment application, the Commission's case was opened. Affidavits of the Commission's investigating officer, Mr Dallas and of Dr Snyder were read for the Commission. Materially, a "snap shot" of the content of the website and a copy of the "e-book" authored by Mr Jones were exhibited to Mr Dallas' affidavit. In his affidavit, Dr Snyder confirmed that he adhered to opinions expressed in reports prepared by him in February and October 2010 respectively. 20 Upon Dr Snyder's affidavit being read for the Commission, Mr Jones stated that, notwithstanding his failure to give notice as required in respect of an intention to cross-examine Dr Snyder, he nonetheless wished so to do. Upon further reflection though, he did not in the end pursue this request. In the result then, none of the opinions expressed by Dr Snyder in his reports was challenged by cross-examination nor was the content of Mr Dallas' affidavit factually controversial. 21 It will be necessary later in these reasons for judgment to detail the opinions expressed by Dr Snyder. 22 Mr Jones' evidentiary case comprised an affidavit on his part and a number of affidavits from persons who had at one stage being clients of his at the centre. 23 The Commission took objection to the exhibiting by Mr Jones to his affidavit of various journal articles. Some of these articles post dated the making of the admitted representations. Such articles axiomatically could not provide a foundation for there having been reasonable grounds at the time when the representations were made for making such representations. Others of the exhibited articles did pre-date the making of the admitted representations but Mr Jones did not state in his affidavit that he had relied upon them in making those representations. 24 The authors of the various journal articles were apparently persons who, in terms of s 79(1) of the Evidence Act 1995 (Cth) (Evidence Act), had specialised knowledge based on their training, study or experience. While it was possible to see how, had such persons been called, the exception to the "opinion rule" for which that sub-section provides would have been engaged, Mr Jones did not propose to call any of those authors. Just to have admitted into evidence opinions expressed in those articles in the way in which Mr Jones sought to introduce them would have left the Commission in the position of being unable to test those opinions by cross-examination of their authors. And this in circumstances where it had led opinion evidence from Dr Snyder whom Mr Jones had decided not to cross-examine. To have permitted the reception of the opinions in the articles without the calling of the authors would not have been fair to the Commission. For these reasons I ruled the various journal articles exhibited to Mr Jones' affidavit to be inadmissible. Effectively, this left nothing in his affidavit evidence in chief other than his opening narrative as to his career and a general closing statement as to his treatment philosophy. He there stated: The approach that I offer is an holistic one, which is explained in [the e-book]. It is based on the foods to be eaten, the foods not to be eaten, positive attitudes, support from family and friends. The program aims to bring the client to total wellness with processes that include diet and exercise, so that the body is able to fight the cancer. The program does not administer any prescription drugs, and does not recommend any supplements, other than food. 25 As to the affidavits of various clients of Mr Jones, in each the deponent attests to having being diagnosed (or a spouse being having diagnosed) with cancer and to the adherence by that person to Mr Jones' program of diet and exercise with, as they perceived it, beneficial effects. There is, as the Commission correctly highlighted in its submissions, a varying absence of detail in these affidavits as to exactly what parts of Mr Jones' program as detailed on his website or in his "e-Book" were followed by those unfortunately afflicted with cancer. Strictly also, there is even an element of hearsay in the relating by each of these lay clients that the condition from which they suffered was indeed cancer. I am prepared though to act on the basis of the correctness of his or her statement of the condition from which they (or as the case may be a spouse) suffered. I have no reason to doubt that each of these persons made his or her affidavit honestly and in good faith. The Commission did not seek to cross-examine any of them and there is something intensely personal and confronting about the receipt of such a diagnosis that makes it one unlikely to be forgotten. The latter feature also causes me to refrain from naming the deponents. It is not necessary so to do in order to do justice in this case. I consider that they are entitled in the circumstances to anonymity. 26 Mr Jones, in turn, relies upon his experience of the beneficial affects described by these persons as constituting the "reasonable grounds" where these form part of an admitted representation. Has the Commission made out its case? 27 In answering this question it is convenient and also, in the circumstances of this case, especially desirable, to detail at some length Dr Snyder's background and the opinions which he has come to express. 28 Dr Snyder has been a medical practitioner for over forty years and a medical specialist since 1983 when he was admitted to membership of the Royal Australasian College of Physicians. He became a Fellow of that college in 1977. He has been a specialist oncologist at St Vincent's Hospital, Melbourne since 1986. In the proceeding year, he completed post-graduate studies in the field of "Prognosis Factors in Pancreatic Cancer", his thesis on which led to his being awarded the degree of Master of Medicine by the University of Melbourne. He has long held teaching positions at that University in addition to his clinical appointment at St Vincent's Hospital. Since 2002, he has been a Principal Fellow (Associate Professor) in the Department of Medicine at that Hospital. From 2004 until 2007 he was Co-director of Cancer Services at that Hospital and since 2007 he has been Director of Cancer Services at that hospital. He is the author or co-author of very many learned articles relating to cancer. I am well satisfied that he is both by training and experience qualified to express the opinions which he gives in reports. There is no reason whatsoever to doubt Dr Snyder's reliability as a witness. I accept the opinions which he expresses unreservedly. 29 In so doing I have taken into account the cautionary note sounded by Mr Jones in his submission as to the risk of a person with a particular training and background experience coming, without any question of bad faith or bias, to view a problem only through the prism of that training and experience to the exclusion of lateral solutions or approaches. That possibility is one which, as a matter of fairness, ought to have been put by him to Dr Snyder in the course of cross-examination for comment. It would be wrong to discard his opinions on the basis of an untested inference as to sub-conscious bias, even were I prepared to draw the same. This apart, Dr Snyder has expressly stated that he has considered and adhered to this Court's practice note concerning expert evidence, which emphasises the role of an expert being to assist the Court. My reading of his reports, evident in my opinion from the explanations he gives in the excerpt which I have quoted, is that he has endeavoured to address the merits of each of the admitted representations having regard to what is contemporary scientific thought. He seems to me to have been astute to highlight where there might or might once have been a view supportive of some of those representations and to explain why that no longer was considered valid. 30 Materially, Dr Snyder's opinions [as expressed in his October 2010 report] were these: This second report results from a review of the material provided as Annexure A (Documents provided by Darryl Jones). I will provide an opinion on each [allegation in the statement of claim]. There are no matters contained in the first report [that of February 2010] that require revision. In addition to the provided material, I have searched medical and general databases for evidence to support the claims of prevention and treatment of cancer with altered glucose intake, laetrile, and each combined with exercise. Unless specifically stated, no reliable scientifically valid evidence has been found. 2.1 (a) The reduction or elimination of glucose from the diet is effective in the treatment of cancer. i) This statement is not correct. None of the papers in Annexure A provide any data about the effectiveness of altering glucose intake in the treatment of cancer. Instead, the papers provided in Annexure A are reports on investigations into a possible association or causal relationship between carbohydrates in general, or glucose in particular, and the risk of developing certain cancers. Some of the papers eg Terry et al (page 1) fail to show any relationship. Other reports eg Franceschi et al (page 4) do show a relationship. In my opinion, a causal relationship has not yet been established. Nether-the-less, the matter of whether there is a relationship or not in the development of cancer has no bearing at all on the claim that exclusion of glucose is effective in the treatment of an established cancer. With rare exceptions, the removal of cancer causing agents does not reverse the malignant process. I know of no evidence that glucose is one of the rare exceptions. The article on Otto Warburg from Wikipedia is provided in support of the claim that glucose is important as a cause of cancer. As stated in my previous report, this is based on the (mistaken) belief by Otto Warburg in 1930 that abnormal glucose metabolism in malignant cells is the cause of cancer. Modern scientific opinion is that this is an epiphenomena (that is, altered glucose metabolism occurs in cells as a consequence of becoming malignant, but is not a cause of cancer). All cells whether normal or malignant require glucose for survival, and can make glucose from other nutrients if necessary. (There is a the incorrect assertion (page 163) in support of Warburg that states this theory was the reason he received the Nobel prize in 1931. He received the Nobel Prize in Physiology or Medicine "for his discovery for the nature and mode of action of the respiratory enzyme". http://nobelprize.org/nobel_prizes/medicine/laureates/1931/press.html) However there have been views expressed by Craig Thompson, Chi Dang and others that glucose has a primary role in the development of malignancy. However the general scientific view at this time is that altered glucose metabolism is not the cause of cancer. To demonstrate the complexity of this situation, a recent report from Yun et al has shown that low levels of glucose around cancer cells can increase the levels of mutations in some genes that control growth (Science. 2009 Sept 18; 325(5497):1555-9). This effect will lead to increased malignant activity in such cells. 2.1 (b) The reduction or elimination of glucose from the diet is effective in the prevention of cancer. i) This statement is not correct as it is not supported by any scientific evidence. The fallacy of the argument that glucose is the cause of cancer has been discussed above. In the literature looking at the relationship between dietary glucose and cancer, as described above, demonstration of a relationship does not prove causality. Even if glucose is causal, it must be demonstrated in a suitable experiment in humans (as a clinical trial) that alteration in glucose intake alters the cancer risk. I have searched medical databases and can find no evidence of such a study. The complex relationship between glucose, insulin and the development of cancer is discussed in a recent editorial (Diabetes May 2010 vol. 59 no. 5 1129-1131). The authors believe that any relationship between glucose and cancer reflects the effects of other hormones such as insulin and insulin-like growth factors rather than glucose primarily. In addition, some glucose reducing drugs can influence cancer risk while others do not (http://webcast.easd.org/press/glargine/download/090831Smithfinalproofs.pdf). Therefore the common pathway is not via the level of glucose but some other mechanism. 2.1 (c) The reduction or elimination of glucose from the diet is proven to bring even the worst cancers under control. i) This statement is not correct as it is not supported by any scientific evidence. This is discussed in 2.1(a). The "severity" of the cancer is not relevant in this context. If it had been shown to be effective, it would be expected to work even better for less severe cancers. No evidence has been found in the medical literature for benefit in cancers of any severity. 2.1 (d) The reduction or elimination of glucose from the diet together with an exercise program is more effective in treating cancer than pharmaceutical drugs, radium therapy, surgery and chemotherapy. i) This statement is not correct as it is not supposed by any scientific evidence. Survival is the best measure of effectiveness of cancer treatment. Overall, 60% of all cancer patients are alive at 5 years with scientifically based treatments ("Cancer Survival Victoria 2007", Cancer Council Victoria 2007). For some cancers, eg large cell lymphoma, testicular cancer, high cure rates (more than 90%) are achieved with conventional treatments, even when the cancer is very advanced at diagnosis. … I have been unable to find any detailed statistics for the survival of patients with cancer who undertake reduction in dietary glucose combined with exercise. In the absence of such data, there is no scientific basis for the claim that such interventions are more effective as conventional therapies (drugs, radiotherapy and surgery) as shown in many reports (two examples above). In my opinion, on the basis of the provided information (Annexure A), there is no reason to believe that interventions with glucose reduction and exercise have any beneficial effect at all. (I presume that the term "radium therapy" is used synonymously with radio-therapy, which is no longer produced by radium sources). Similar arguments would apply for other measures of effectiveness of cancer treatment (eg. quality of life, tumour regression, time to tumour recurrence after primary treatment). 2.1 (e) The taking of laetrile (also known as amygdalin or "vitamin" B17) is effective in the treatment of cancer. i) This statement is not correct as it is not supported by any scientific evidence. The provided papers (Annexure A) describe claimed benefits of laetrile without any specific supportive information that is interpretable. Summaries of the background and the evidence about the lack of effectiveness of laetrile can be found in the papers by Wilson http://www.quackwatch.org/01QuackeryRelatedTopics/Cancer/laetrile.html and the National Cancer institute (USA) http://www.cancer.gov/cancertopics/pdq/cam/laetrile/healthprofessional/allpages. The two main clinical papers in the scientific literature are: A clinical trial of amygdalin (Laetrile) in the treatment of human cancer. Moertel C et al. New Engl J Med 306:201-206, 1982. This describes a non-randomised non-controlled study of amygdalin plus a metabolic therapy program that failed to produce any remission in 178 patients with various cancers. On the basis of lack of activity, further comparative studies were not undertaken. Special Report on Laetrile: The NCI Laetrile Review – Results of the National Cancer Institute's Retrospective Laetrile Analysis. Ellison NM et al. N Engl J Med 1978; 299:549-552, 1978 This describes a program seeking case histories of patients who had benefitted from laetrile. Despite the large number of patients in the USA who have been so treated, insufficient cases were obtained to justify concluding that this was an effective therapy. There is a great deal of published material on laetrile reproduced in Annexure A. This describes a conspiracy to suppress its use, its allegedly efficacy, and various controversies surrounding its promotion. This material does not provide scientifically interpretable data in support of the claims of benefit of laetrile. Another problem with this material is its fails to address the toxicity of the agent. Laetrile is toxic, especially if taken orally, where cyanide is released in the bowel after degradation by intestinal organisms. (It is of interest that such degradation results in the production of glucose). Because of its toxicity, the Therapeutic Goods Administration of the Commonwealth Department of Health have placed it on a Appendix C (Poisons Standard 2010) as a "Substances of such danger to health as to warrant prohibition of sale, supply and use". Furthermore, certain states, such as Queensland restrict its use by regulation. There is a lot of discussion in the Annexure papers about the controversy surrounding the results of experiments by K Sugiura. Whatever the truth, these experiments in transplanted tumours in mice do not support the claims of the benefits of laetrile in treating cancer in humans. Such claims must be made on the basis of objective observations in humans under controlled conditions. I have not identified any scientifically valid reports that support the claims about the benefits of laetrile in treating humans with cancer. 2.1 (f) The take of laetrile is effective in the prevention of cancer. i) This statement is not correct as it is not supported by any scientific evidence. The provided papers claim that laetrile is a vitamin (vitamin 17) and its deficiency leads to cancer. There is no scientific evidence to support the claims that it is a vitamin. In fact, studies of rats feed a cyanogeic glycoside diet for several generations failed to show any associated deficiency disease (Greenberg D, Cancer 45;799-807, 1980). Furthermore, there is no scientific data to support the claim that it can prevent cancer. The information provided about the Hunza people does not support the claim that they have a low rate of cancer, and that if they did, that their consumption of amygdalin was responsible. 2.1 (g) The taking of laetrile is known to bring even the worst cancers under control. i) This statement is not correct as it not supported by any scientific evidence. Refer to 2.1(c)i). 2.1 (h) The taking of laetrile together with an exercise program is more effective in treating cancer than pharmaceutical drugs, radium therapy, surgery and chemotherapy. i) This statement is not correct as it is not supported by any scientific evidence. The comments in 2.1(d)i) also apply to the claims for exercise and laetrile. 31 It was common ground in the case that the bundle of articles referred to in this extract as Annexure A had been furnished by Mr Jones to the Commission. 32 In so far as an admitted representation includes a statement that he had "reasonable grounds" for its making, it is necessary to construe what that entails. That expression must of course be read in the context in which it appears. That is not a statute but rather in a publication written by a layman, albeit an educated one with a facility for English expression both in the written word and also, to my direct observation in the course of Mr Jones' conduct of his defence, orally. There is nothing about that context which would suggest that what is meant by "reasonable grounds" is anything different to the settled meaning which that expression usually carries when used in a statute. As to that meaning, in George v Rockett (1990) 170 CLR 104 at 112, in a unanimous joint judgement of a Full Court constituted by each of the seven judges of the High Court, it was observed: When a statute prescribes that there must be "reasonable grounds" for a state of mind — including suspicion and belief — it requires the existence of facts which are sufficient to induce that state of mind in a reasonable person. That was the point of Lord Atkin's famous, and now orthodox, dissent in Liversidge v. Anderson: see Nakkuda Ali v. M.F. De S. Jayaratne; Reg. v. Inland Revenue Commissioner; Ex parte Rossminster Ltd.; Bradley v. The Commonwealth; W.A. Pines Pty. Ltd. v. Bannerman. That requirement opens many administrative decisions to judicial review and precludes the arbitrary exercise of many statutory powers: see, e.g., Attorney-General v. Reynolds. [Footnote references omitted] I propose to give the expression the same meaning where it is used in the admitted representations. That means that, where it is used, the representation will not be true where, at the time of making, Mr Jones' did not have facts sufficient to induce in the mind of a reasonable person a basis for the making of the statement concerned. What might constitute such "facts" might but need not necessarily be or even include opinions expressed in learned articles. Whether or not such "facts" amount to reasonable grounds is a question to be answered objectively, not by reference to Mr Jones' subjective statement of mind. 33 Where an admitted representation is not qualified by the expression "reasonable grounds", the nature of the Commission's case requires a finding that those representations were not true if that case is to be found proved. That, too, is a matter to be determined objectively. It is for the Commission to prove, on the balance of probabilities, all of the factually controversial elements of its case. 34 As noted above, Mr Jones pointed to the experience of each of the clients who gave evidence of engaging with him and his program as providing him with reasonable grounds for making representations which included that expression. Even where a representation did not, include this expression his case, as I understood it, was that I should find that the representation was true on the basis of that experience. 35 Mr Jones did not confine the foundation for his claim to reasonable grounds just to the experience of these clients. Nor did he so confine his case as to the truth of representations not qualified by this expression. In each instance, in accordance with the excerpt from his affidavit which I have quoted, he pointed to faith. He made particular reference to Chapter 15, verse 26 in the Book of Exodus in the Bible. As found in The Bible for Today – Contemporary English Version (The Bible Society in Australia Inc), that verse is in these terms, "Then he [the Lord] said, 'I am the Lord your God and I cure your diseases. If you obey me by doing right and by following my laws and teachings, I won't punish you with the diseases I sent to the Egyptians.'" 36 This case is not to be determined by any extensive theological discourse as to what is meant by this verse. The verse does though admit of an interpretation that the Lord may cure a disease by providing an individual with the occasion and inspiration for a scientific breakthrough. What some might call coincidence, a Christian might very well call an Act of God. Perhaps, for example, the serendipitous sequence of events that saw the great 20th century Scottish biologist and pharmacologist, Sir Alexander Fleming, come to receive medical training, pursue a career in research, witness first hand as an Army medical officer in World War One the deaths from sepsis of wounded soldiers, be thereby inspired during and after that war to direct his research to the subject of how such infections might be cured and then observe and test why a laboratory culture of staphylococci accidentally contaminated by fungus showed signs of bacterial destruction, leading to the discovery of penicillin might be so explained. An additional interpretation of part of the verse might also be that one does not "do right" by engaging in conduct that is misleading or deceptive of one's fellow man or likely to be so, irrespective of whether there is an Act of Parliament which so provides. 37 However this may be, faith, Christian or otherwise, does not provide a basis by which, objectively, the truth or otherwise of the admitted representations is to be judged any more than, where a statement as to the possession of reasonable grounds forms an element of the representation, it constitutes a fact sufficient to induce in the mind of a reasonable person a sufficient basis for making that representation. Objectively, to return to the example which I have given, the destruction of staphylococci is attributable to penicillin, not faith. 38 Mr Jones' observation of the experiences of his clients who came to give evidence also does not persuade me, in the face of the opinions expressed by Dr Snyder, that the Commission has not proved its case on the balance of probabilities. There is substance in the Commission's submission that, even if their evidence is considered collectively, it is impossible to judge whether those experiences offer a statistically reliable sample, even in respect of the total number of Mr Jones' clients afflicted with cancer, that his "approach" or "program" has any of the qualities represented by him in the admitted representations. That is to say nothing of there not being any evidence that their experiences offer a statistically reliable sample when measured against outcomes in the general population in respect of those so afflicted who did not follow his "approach" or "program". Further, in the absence of any evidence of any such reliability, I am not satisfied that the experiences of these clients offered reasonable grounds for the making of such of the admitted representations as included this expression. 39 Absence of evidence of statistical reliability apart, the evidence of the clients as to exactly what aspects of Mr Jones' "approach" or "program" they followed or undertook makes it difficult, if not impossible, to relate their evidence to what is alleged to be untrue in respect of particular representations. Even assuming that I should infer that the generality of their statements is but a shorthand way of describing adherence to all elements of Mr Jones' "approach" or "program" as described in his website and e-book, to associate benign outcomes in respect of cancer with a reduction or elimination of glucose or a particular consumption by one means or another of laetrile Mr Jones has not introduced any admissible evidence of any contemporary scientific support for this. Further, in the absence of any such support, the experiences alone do not provide even a reasonable ground for making such of the representations which contain that expression. Neither does reliance on superseded theory, no matter how eminent in his or her time its author, e.g. Dr Otto Warburg, provide any such ground. 40 Mr Jones did not, in terms, state in his affidavit that the material which admittedly emanated from him and came to comprise the material termed "Annexure A" by Dr Snyder also constituted the grounds upon which he made representations in which he stated that he had reasonable grounds for making a statement in that representation. Even though if, as a matter of fairness, this is how "Annexure A" should be understood, this material does not, having regard to the critique made of it by Dr Snyder constitute "reasonable grounds" for the making of the statements in these representations. 41 None of this is to suggest that Mr Jones is under any onus to disprove the alleged contraventions, much less that he must do so with scientific certainty. The onus of proving the contraventions on the balance of probabilities always lies on the Commission. In demonstrating why the Commission had not discharged that onus it would be open for Mr Jones, with an appropriate evidentiary foundation, to call in aid the kind of intuitive reasoning described by Herron CJ in EMI (Australia) Ltd v Bes (1970) 2 NSWR 238 at 240: Medical science may say in individual cases that there is no possible connexion between the events and the death, in which case, of course, if the facts stand outside an area in which common experience can be the touchstone, then the judge cannot act as if there were a connexion. But if medical science is prepared to say that it is a possible view, then, in my opinion, the judge after examining the lay evidence may decide that it is probable. It is only when medical science denies that there is any such connexion that the judge is not entitled in such a case to act on his own intuitive reasoning. It may be, and probably is, the case that medical science will find a possibility not good enough on which to base a scientific deduction, but courts are always concerned to reach a decision on probability and it is no answer, it seems to me that no medical witness states with certainty the very issue which the judge himself has to try. The evidence led by Mr Jones does not admit of a conclusion, reached by the application of this kind of intuitive reasoning, that the Commission has not discharged its onus. The areas of the curing of cancer and cancer survivorship are not ones where common experience could be a permissible touchstone for deciding the truth (or, strictly, a failure by the Commission to prove the untruth) of the admitted representations. 42 Intention is not an element of a contravention of either s 52 or s 53(c) of the Act. Neither, more particularly, is a fraudulent intention such an element. Mr Jones voiced a concern in the course of his submissions that the Commission alleged the same against him. I can well understand how, as a layman, he might perceive this but such an allegation does not form part of the case pleaded against him by the Commission in its statement of claim and, for the reasons just given, such an allegation would be irrelevant, even were it made, to the proof of a contravention. 43 On the basis of the opinions expressed by Dr Snyder, I am satisfied that the Commission has proved each of the alleged contraventions. The representations were not true and, insofar as any contained the assertion of there being reasonable grounds for their making, there were no grounds which were reasonable. It follows that I am also satisfied that Mr Jones represented that his services had performance characteristics, uses or benefits in relation to cancer that they did not in fact have. There is no reliable evidence, scientific or otherwise, to support the admitted representations or even to provide reasonable grounds for making them. 44 In reaching these conclusions I have taken into account disclaimers or qualifying statements which appear both on the website and in the e-book. 45 On the website one finds, apart from the admitted representations, this statement (in bold but otherwise standard sized text), self evidently one attributable to Mr Jones: I cannot say that I, or my staff actually heal these life-threatening diseases per se – but what I can say is that we have a marvellous body that fights for us autonomously every day. We can only walk with you to assist in developing your bodies [sic] resolve to battle with disease with a 'full arsenal' and let our former patient's successes speak for themselves! No disclaimer, in itself, affords absolution from committing a contravention of s 52 or, materially for the present, s 53(c) of the Act. Each must be considered in the context of the conduct as a whole, which in this case means considering any disclaimer in the context of the website or, as the case may be, the e-book as a whole. So far as the website is concerned, on the very same page that the statement attributed to Mr Jones appears the following also appears: The Darryl Jones Health Resolution Centre – committed to your total victory over modern-day life-threatening diseases – with time-proven strategies, empowering you with the tools you need for a prolonged life, greater health and real hope for the future. Overall, the tone of the website is to extol the virtues of Mr Jones' approach and deprecate the practice of oncology and the use of pharmaceutical remedies. Reading the website as a whole, the misleading or deceptive quality (or likelihood to mislead or to deceive) of the admitted representations remains. 46 The same conclusion follows in relation to such of the admitted representations as appear in the e-book. That book is entitled, "The Truth About Overcoming Cancer". On its inside cover and under the bold capitals heading "Disclaimer", the following appears: All thoughts and comments in this book are that of the author, they are not meant as medical advice. Observations are those of the author. Testimonies are those of the patients involved. In respect of the important work of the health care industry, the Darryl Jones Health Resolution Centre strongly advises that that the contents of this booklet are a reflection of the author's strong beliefs gained through over 18 years of observation. When taking responsibility for your own health, we advise those reading this book/manual to seek advice and accountability from your health professional. [sic] Insofar as this seeks to convey that all that follows, including such of the admitted representations as appear in the e-book, are just Mr Jones' beliefs, there is no reasonable ground for those beliefs. This apart, the end to which the book is directed is not the seeking of "advice and accountability", whatever the latter may mean, from the reader's "health professional" but rather, as the last page openly reveals a "big plug for [the Centre]". In conveying that "big plug", especially when one reads the passages which appear under the headings "Sugar feeds cancer" and "Lack of nutrition" the vice of glucose and the virtue of laetrile (said to be the 17th of the B vitamins) is extolled emphatically and at length. Read in context, the disclaimer does not remove the misleading or deceptive quality of the admitted representations in the e-book. 47 Such contraventions having been proved, should the Commission be granted any of the relief which it claims? As presented at trial the orders sought by the Commission were these. Declaratory Relief 1. The respondent, in trade or commerce, and in relation to the supply or possible supply or promotion of the supply of goods and services by the respondent, by making representations on the internet that: 1.1. the reduction or elimination of glucose from the diet; 1.1.1. was effective in the treatment or prevention of cancer; 1.1.2. had been proven to bring even the worst cancers under control; and 1.1.3. was, together with an exercise program recommended by him, more effective in treating cancer than pharmaceutical drugs, radium therapy, surgery and chemotherapy; 1.2. taking laetrile, also known as amygdalin, also referred to as "vitamin B17"; 1.2.1. was effective in the treatment or prevention of cancer; 1.2.2. had been proven to bring even the worst cancers under control; and 1.2.3. was, together with an exercise program recommended by him, more effective in treating cancer than pharmaceutical drugs, radium therapy, surgery and chemotherapy; 1.3. there were reasonable grounds to make the representations referred to in paragraph 1.1 and 1.2 hereof; and 1.4. there was a reliable and current scientific or medical basis to make the representations referred to in paragraph 1.1 and 1.2 hereof; when: 1.5. the reduction or elimination of glucose from the diet; 1.5.1. was not effective in the treatment of cancer; 1.5.2. had not been proven to bring even the worst cancers under control; and 1.5.3. was not, together with an exercise program recommended by him, more effective in treating cancer than pharmaceutical drugs, radium therapy, surgery and chemotherapy; 1.6. the taking of laetrile; 1.6.1. was not effective in the treatment or prevention of cancer; 1.6.2. had not been proven to bring even the worst cancers under control; and 1.6.3. was not, together with an exercise program recommended by him, more effective in treating cancer than pharmaceutical drugs, radium therapy, surgery and chemotherapy; 1.7. there were no reasonable grounds for making any of the representations referred to in paragraph 1.1 and 1.2 hereof; and 1.8. there were no reliable, current scientific or medical bases for any of the representations referred to in paragraph 1.1 and 1.2 hereof; in the case of each of the said representations at 1.1, 1.2, 1.3 and 1.4 hereof: 1.9. engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of section 52 of the Trade Practices Act 1974 (TPA); and 1.10. represented that his goods or services have uses or benefits they do not have in contravention of section 53(c) of the TPA. Injunctive Relief 2. The respondent be restrained permanently, whether by himself or his servants or agents or otherwise howsoever: 2.1. in the course of trade or commerce between Australia and places outside Australia, among the States, within a Territory, between a State and a Territory or between two Territories; and 2.2. in trade or commerce involving the use of internet, postal, telegraphic or telephonic services or taking place in a radio or television broadcast; from making any representation to the effect that the occurrence or growth of cancer or any medical condition can be prevented or successfully treated by any means whatsoever unless the respondent: 2.3. first has obtained: 2.3.1. from a person then registered with a medical practitioners board to practice medicine in Australia; or 2.3.2. from a professor, associate professor, reader, senior lecturer, or lecturer then teaching or researching in medicine at an Australian university; written advice certifying that the proposed treatment is in the opinion of that person supported by reliable scientific evidence or expert medical opinion and is believed to be effective and safe; and 2.4. at the time of making the representation, prominently discloses details of the said advice, including the name, qualifications and position of the person providing the said advice; and 2.5. retains a copy of the said advice and provides a copy of the same to the applicant within 7 days of him receiving the certificate. 3. The respondent be permanently restrained, whether by himself or his servants or agents or otherwise howsoever, from knowingly being involved with, consenting to or encouraging the making of, by: 3.1. any person or unincorporated entity: 3.1.1. in the course of trade or commerce between Australia and places outside Australia, among the States, within a Territory, between a State and a Territory or between two Territories; or 3.1.2. in trade or commerce involving the use of internet, postal, telegraphic or telephonic services or taking place in a radio or television broadcast; or 3.2. any corporation, in trade or commerce; any representation to the effect that the occurrence or growth of cancer or any medical condition can be prevented or successfully treated by any means whatsoever unless the respondent: 3.3 first has obtained: 3.3.1 from a person then registered with a medical practitioners board to practice medicine in Australia; or 3.3.2 from a professor, associate professor, reader, senior lecturer, or lecturer then teaching or researching in medicine at an Australian university; written advice certifying that the proposed treatment is in the opinion of that person supported by reliable scientific evidence or expert medical opinion and is believed to be effective and safe; and 3.4. at the time of making the representation, prominently discloses details of the said advice, including the name, qualifications and position of the person providing the said advice; and 3.5. retains a copy of the said advice and provides a copy of the same to the applicant within 7 days of him receiving the certificate. Ancillary Relief 4. Should the respondent become aware that any natural person or entity is: 4.1. representing expressly or impliedly to be him, or to be associated with him, or to be acting with his consent or on his behalf; and 4.2. making a representation in circumstances that, if made by the respondent would contravene paragraph 2 of these orders; the respondent shall forthwith: 4.3. fully inform the applicant of those matters; 4.4. take all steps reasonably available to him to cause the person or entity to cease representing themselves to be him or to be associated with him, or to be acting with his consent, or on his behalf as the case may be, and to cease making representations referred to in paragraph 4.2 above; 4.5. furnish a copy of these orders to the person or entity as soon as he is able to do so and inform the person or entity that the person or entity may be committing contempt of these orders by their actions; 4.6. inform the applicant in writing that he has taken the steps required by paragraph 4.5 of these orders as soon as he has done so; and 4.7. refuse to treat and refuse to accept any payment from any person who, to the respondent's knowledge, sought his services as a result of the making of representations of the type referred to in paragraphs 4.1 and 4.2 of these orders. 5. The respondent, at his own expense, shall, within 7 days of this order, cause a notice in the form of Schedule 1 attached hereto to be published and to remain continuously in place, for a period of 3 months from the date of this order, on the home page of the following websites: 5.1. www.darryljoneshealth.com.au; and 5.2. any other website that at the date of this order is, or within 3 months of the date of this order becomes, controlled, owned, operated or maintained by the respondent that offers or promotes goods or services associated with the treatment or prevention of cancer or any other medical condition whatsoever; and shall take all reasonable steps to ensure that such notice shall: 5.3. be a size that consists of at least 40% of the web page; 5.4. be published on the web page in text format; 5.5. be clearly viewable immediately on screen after the web page is accessed; 5.6. not be blocked by a pop up blocker; 5.7. remain on screen until closed by the person accessing that website; and 5.8. not require a further selection of hyperlinks or scrolling on the screen to be seen. 6. The respondent: 6.1. attend, at his own expense, within 3 months of the date of the order, a trade practices compliance seminar which is designed to ensure an awareness of the responsibilities and obligations contained in Schedule 2, Chapters 1, 2 and 3 of the Competition and Consumer Act 2010 (Cth); and 6.2. within 7 days of attending the seminar referred to in the preceding order, shall notify the applicant in writing of the title of the seminar, the date or dates attended and the name of the person who conducted the seminar. 48 The proceeding being one in which the jurisdiction of the court has been invoked and the alleged contraventions having been proved, there is clear power to grant an injunction: s 21 of the Federal Court of Australia Act 1976 (Cth). Whether or not that power should be exercised is a matter of discretion. That this case touches upon an issue of public health is a public interest factor which tells decisively in favour of the granting of the declaratory relief sought. The terms of the declaration proposed by the Commission reflect the case of statutory contravention by Mr Jones which it has proved. There will therefore be declarations accordingly. 49 Whether or not to grant injunctive relief in the exercise of the power conferred by s 80 of the Act is also a matter for discretion. Here again, the nature of the proven contraventions and the public interest tells decisively in favour of the granting of injunctive relief. In that regard, I also take into account as a factor in favour of the granting of injunctive relief that, in September 2009, the Commission, by its solicitor, sought and obtained from Mr Jones an undertaking that he would not, without giving 14 days prior written notice to it make or cause or permit to be made any representations to the effect that his "Health Resolution Program": I. Can cure cancer, or reverse, stop or slow it progress II. Will prolong the life of a person suffering cancer III. Is supported by empirical scientific evidence IV. Is supported by generally accepted medical opinion V. Can or will, if used by a person who has cancer, cure that person's cancer, or reverse, stop or slow its progress VI. Can or will, if used by a person who has cancer, prolong that person's life VII. Any other representation to the same purport or effect as any of the representations referred to in paragraphs (i) to (v) above VIII. Any other representations to the same purport or effect as any of the representations referred to in paragraph 3 above The contraventions which the Commission has proved show that he did not adhere to the terms of an undertaking given administratively. An order of this Court is not lightly to be disobeyed, given the sanctions which may thereby be attracted. 50 As to the terms of that relief, there is an allegation in the defence which, in effect, advances a contention that any injunctive relief ought to be confined to conduct which would fall within the purview of s 6 of the Act. As to this, "The appropriate terms of an injunction in a particular case are not, as a matter of construction, limited by reference to the conduct in which the Court has been satisfied the respondent has engaged or is proposing to engage": Foster v Australian Competition and Consumer Commission (2006) 149 FCR 135 at 147; see also ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 at 267. 51 In his oral submissions Mr Jones put forward that the granting of the injunctive relief in the terms proposed by the Commission would effectively forbid his carrying on any business relating to those suffering from cancer. This is not so. If so ordered, he will be enjoined from carrying on business in a particular way but that is a way in which I am firmly convinced is not merely appropriate but necessary in the circumstances of this case. Anything less would not offer adequate protection to the public in general and those suffering from or whose loved ones are suffering from cancer. 52 In respect of the relief claimed by the Commission in paragraph 4 of its proposed orders, Mr Jones objected to what he described as its "dob in" quality. Section 86C(2)(c) of the Act, if not in its breadth s 80 in any event, provides power to make such an order. In my opinion, it is reasonably necessary in this case, again for the protection of the public, that the Commission be given information by him of indirect means by which members of the public might be drawn to him via representations that, if made by him, would contravene paragraph 2 of the orders sought by the Commission. I could not help but note in the course of the trial the applause from a number in the public gallery which attended the conclusion of his oral submissions. Inferentially, Mr Jones has adherents. 53 The ordering of the corrective advertising sought by the Commission is within power (s 86C(2)(d) of the Act) and both appropriate and necessary in the circumstances of this case. 54 That leaves the question of whether or not to make a compliance seminar attendance order either as proposed in paragraph 6 of the orders sought by the Commission or otherwise? I accept that there is power so to do but, again, whether or not to exercise that power requires the making of a discretionary value judgement. 55 I observed Mr Jones closely in the course of the trial. That observation, together with my reading of the website and the e-book, the administrative undertaking which he gave to the Commission and the conclusions which I have reached concerning the admitted representations persuades me that he is something of a zealot. I do not mean any disrespect by that description, only that he is full of zeal in respect of the admitted representations. I consider that these proceedings have themselves had an educative effect for him in relation to his compliance responsibilities in respect of statutory consumer protection provisions. It is not a want of understanding of the prohibition of misleading or deceptive conduct on his part that is lacking but rather a want of understanding on his part about cancer and its treatment which is evident to me. Further, in light of his experience in the course of the case, I doubt that he needs any reminding that imprisonment is one consequence that, in a proven case, can attend a breach of a court order. I am not persuaded that there is likely to be any benefit either to him or to the public in his case in the making of the order sought. 56 That is reason enough not to make this particular order. I additionally take into account that the Commission does not, so I was informed by its counsel, itself offer any such training, even for those who might not otherwise be able to afford to pay to attend the same by a private provider. There is no direct evidence from Mr Jones as to his present economic circumstances. Statements from the Bar table by him on that subject, are not, in the absence of concession by the Commission, evidence. I was not though left with the impression from the trial that his absence of legal representation was contrived, as opposed to a manifestation of his inability to afford the same. Equally, I do not have any evidence from the Commission as to the cost of such training by a private provider. I should not wish to order Mr Jones to undertake training for which he could not reasonably afford to pay. I am left with an interrogative note in my mind on that subject. 57 There will be orders in terms of paragraphs 1 to 5 inclusive of those proposed by the commission, but not in respect of the undertaking of compliance training either as proposed in paragraph 6 or otherwise. It remains to hear the parties as to costs. I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. Associate: Dated: 4 February 2011	18,755
federal_court_of_australia:fca/full/2002/2002fcafc0021	decision	commonwealth	federal_court_of_australia	text/html	2002-02-14 00:00:00	Abu-Loughod v Minister for Immigration & Multicultural Affairs [2002] FCAFC 21; [2002] FCA 133	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2002/2002fcafc0021	2024-09-13T22:44:37.910071+10:00	Abu-Loughod v Minister for Immigration & Multicultural Affairs [2002] FCAFC 21 Abu-Loughod v Minister for Immigration & Multicultural Affairs [2002] FCA 133 NOTE: CHANGES TO THE MEDIUM NEUTRAL CITATION (MNC) The Federal Court adopted a new medium neutral citation (FCAFC) for Full Court judgments effective from 1 January 2002. Single Judge judgments will not be affected and will retain the FCA medium neutral citation. The transitional arrangements are as follows: * All Full Court judgments delivered prior to 1 January 2002 will retain the FCA medium neutral citation. * All Full Court judgments delivered between 1 January 2002 to 30 April 2002 have been assigned parallel medium neutral citations in both the FCA and FCAFC series. * All Full Court judgments delivered from 1 May 2002 will contain the FCAFC medium neutral citation only. FEDERAL COURT OF AUSTRALIA Abu-Loughod v Minister for Immigration & Multicultural Affairs [2002] FCA 133 MIGRATION - appellant denied protection visa by Refugee Review Tribunal - whether appellant is a "refugee" - interpretation of Art 1D of the Convention relating to the Status of Refugees - extension of time to file notice of appeal refused Migration Act 1958 (Cth), s 476 Minister for Immigration and Multicultural Affairs v Quiader [2001] FCA 1458, considered Jaber v Minister for Immigration and Multicultural Affairs [2001] FCA 1878, considered Convention relating to the Status of Refugees 28 July 1951, as amended by the Protocol relating to the Status of Refugees 31 January 1967, Arts 1A and 1D ABRAHIM ABU-LOUGHOD v MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS W 347 OF 2001 DRUMMOND, MANSFIELD AND EMMETT JJ 14 FEBRUARY 2002 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W 347 OF 2001 ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: ABRAHIM ABU-LOUGHOD APPELLANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS RESPONDENT JUDGES: DRUMMOND, MANSFIELD AND EMMETT JJ DATE OF ORDER: 14 FEBRUARY 2002 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. Leave to file the notice of appeal out of time be refused. 2. The appeal be dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W 347 OF 2001 ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: ABRAHIM ABU-LOUGHOD APPELLANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS RESPONDENT JUDGES: DRUMMOND, MANSFIELD AND EMMETT JJ DATE: 14 FEBRUARY 2002 PLACE: PERTH REASONS FOR JUDGMENT 1 DRUMMOND J: This is an appeal from a decision of Heerey J dismissing an application for review under s 476 the Migration Act 1958 (Cth) of a decision of the Refugee Review Tribunal ("the Tribunal") refusing the appellant a protection visa. The decision was given on 26 June 2001. To be in time, the appellant's notice of appeal should have been filed by 17 July. It was not filed, according to the Court's records, until 6 August, although the original notice of appeal does bear what appears to be a Court facsimile receipt dated 31 July 2001. 2 The Minister objects to the appeal being heard unless the appellant can obtain the necessary extension of time from the Court for the filing of his late notice of appeal. The first of the issues relevant to whether the extension of time should be granted is whether there is an acceptable explanation for the delay. No notice challenging the competency of the appeal was filed by the Minister. 3 The appellant is in detention and is not legally represented. The first indication he could therefore have had that the point would be taken was when the Minister served him with the statement of argument a couple of days before this hearing. When asked about the delay, the appellant told this Court he took action to file his notice of appeal within two weeks, ie, within either two weeks of receiving Heerey J's written reasons or within two weeks of the actual judgment itself being pronounced. Given the late raising of the objection to the competency of the appeal, the Court is now in a situation where, for practical reasons, it is unable to form a view on whether there may be good reasons for the delay. 4 The second issue governing whether the extension of time should be granted is whether the appeal has sufficient prospects of success to justify extending time for appealing. In the circumstances, if this is the case, it would be appropriate, in my view, to grant the extension of time. 5 The notice of appeal, however, does not identify any ground for questioning the correctness of Heerey J's decision. Despite this, I have examined the judgment and also the reasons of the Tribunal to see if there may be any basis for challenging Heerey J's decision. It is appropriate to refer to the Tribunal's statement of relevant facts and to what the appellant had to say in his own written statement which he gave to the Tribunal. 6 The appellant is a stateless Palestinian born in 1969 in Syria to Palestinian refugee parents who were resident there. In 1985 he left school in Syria, aged 15 years, to go to the Lebanon. He did that to join the People's Front for the Liberation of Palestine General Command ("PFLP"). From then until 1988 he was in Lebanon. Throughout this period he says he was engaged with other members of the PFLP in armed conflict with the Amal movement. 7 In 1988 he determined to return to Syria but was detained at the border. The Syrian authorities, however, only held him in detention for five days and soon thereafter he commenced what appears to be the normal two years of military service required of residents of Syria. After completion of his military service in Syria in 1991 he joined a PFLP group in Libya. 8 In 1995 he became disenchanted with the plans of action of the PFLP group and determined to leave the group. He said that he unsuccessfully applied for a visa to Malta and attempted to enter Egypt but was turned back at the Egyptian border. He tried to depart from Libya to enter Germany and Italy but his attempts were unsuccessful. Accordingly, he remained from 1995, when he left the PFLP group in Libya, in that country until 1999. 9 In 1999, when he learned of his father's death, he returned to Damascus for the funeral. From his return he remained living in Damascus until August 2000 when he left Syria. He entered Australia in September 2000. He claimed that he fears persecution, if returned to Syria, at the hands of the PFLP. He disavowed any fear of ill-treatment by the Syrian authorities themselves. His claim in effect was that the Syrian authorities would be unable or perhaps unwilling to protect him from the PFLP, who have a strong presence in Syria and close links with elements of the Syrian government. 10 The Tribunal rejected his claim to a protection visa for a number of reasons. Firstly, it noted that while living in Syria the appellant, as a stateless Palestinian, had the protection of the United Nations Relief and Works Agency for Palestinian Refugees in the Near East ("UNRWA"). Article 1D of the Convention relating to the Status of Refugees 28 July 1951, as amended by the Protocol relating to the Status of Refugees 31 January 1967 ("the Convention"), provides: "This Convention shall not apply to persons who are at present receiving from organs or agencies of the United Nations other than the United Nations High Commissioner for Refugees, protection or assistance. When such protection or assistance has ceased for any reason, without the position of such persons being definitively settled in accordance with the relevant resolutions adopted by the General Assembly of the United Nations, these persons shall ipso facto be entitled to the benefits of this Convention." 11 UNRWA is such an organisation or agency. 12 The Tribunal made a number of findings, to which I now turn. It is accepted that both the appellant and his family are registered with UNRWA and that UNRWA registered Palestinians resident in Syria have nearly the same status as Syrian nationals. It also found that Palestinians resident in Syria are entitled to obtain a travel document which allows them to travel abroad and return without a re‑entry permit. 13 The Tribunal noted the appellant's claim that he lost his permanent residence in Syria when he went to Lebanon in 1985 or perhaps to Libya in 1991; but the Tribunal said that it was apparent that he retains the right to return to Syria as evidenced by his return from both those other countries - the one in 1988; the other in 1999. For those and other reasons which the Tribunal set out, it concluded that the appellant can have a replacement travel document issued to him by the UN or by the Syrian authorities, if he wishes. It also concluded from the material that I have referred to that the Syrian authorities recognised the appellant's right to reside in Syria as a Palestinian refugee. 14 The Tribunal recorded the appellant's statement that he was still registered with UNRWA and would have no difficulty returning to Syria from the point of view of the government of that country. The Tribunal said that the appellant's mother and a number of his brothers and sisters continue to live in Syria under UNRWA protection, and that if the appellant does not currently have that protection, he could regain it on return to Syria, as he had on previous occasions. 15 The Tribunal then considered the question of whether Syria could be regarded as the appellant's country of former habitual residence for the purposes of the definition of "refugee" in Art 1A of the Convention, which provides: "For the purposes of the present Convention, the term 'refugee' shall apply to any person who : (1) Has been considered a refugee under the Arrangements of 12 May 1926 and 30 June 1928 or under the Conventions of 28 October 1933 and 10 February 1938, the Protocol of 14 September 1939 or the Constitution of the International Refugee Organization ; Decisions of non-eligibility taken by the International Refugee Organization during the period of its activities shall not prevent the status of refugee being accorded to persons who fulfil the conditions of paragraph 2 of this section ; (2) As a result of events occurring before 1 January 1951 and owing to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country ; or who, not having a nationality and being outside the country of his former habitual residence as a result of such events, is unable or, owing to such fear, is unwilling to return to it. In the case of a person who has more than one nationality, the term 'country of his nationality' shall mean each of the countries of which he is a national, and a person shall not be deemed to be lacking the protection of the country of his nationality if, without any valid reason based on wellfounded fear, he has not availed himself of the protection of one of the countries of which he is a national." 16 The Tribunal concluded at this point that the appellant was a former habitual resident of Syria and that he had a right to resume residence in that country. 17 The Tribunal then turned to a consideration of Art 1D of the Convention in relation to the appellant. The Tribunal said that while it was obvious that the appellant does not have "the complete protection", as the Tribunal put it, and the assistance of UNRWA while he is in Australia, it is also clear that he retains a current entitlement to that protection that can be realised should he return to Syria. Accordingly, the Tribunal concluded that the appellant came within the provisions of Art 1D and was not entitled to a protection visa for that reason. 18 The Tribunal then proceeded to explain why there was a second, quite separate justification for refusing the applicant the protection visa. The Tribunal held that even if it was wrong in thinking that the appellant came within Art 1D and was not entitled to a protection visa because of that, the appellant did not come within Art 1A because there was not a real chance that he faced persecution should he return to Syria, his country of former habitual residence. In this context the Tribunal noted the appellant's evidence that he has never encountered any problems with the Syrian authorities and that his fears related to the PFLP. 19 It made findings that there was no basis for such fears of ill-treatment at the hands of the PFLP sufficient to bring the appellant within the definition of refugee in Art 1A. It referred to the appellant's evidence that he lived for a number of years after 1995 in Tripoli in Libya where the PFLP had a strong presence and could easily have harmed him if that was its wish. It also referred to the appellant's evidence that very quickly after he returned to Syria in 1999 the PFLP discovered his presence there and in fact made contact with him. Despite this, the PFLP made no attempt to harm him, ie, during the period of his return in 1999 until his departure in August 2000. The Tribunal also noted that there was no suggestion that the PFLP had sought to put pressure on or harm any member of his family living in Syria. 20 The Tribunal then dealt with a further basis upon which the appellant claimed he feared persecution if he were to return to Syria. It said that he claimed that his chances of being persecuted by the PFLP had been increased because its members will know that he has "talked", ie, talked about them, since he came to Australia. It noted the opportunities he had had, after separating from the group in 1995, to reveal information about the PFLP and the absence of any reprisal or attempt to harm the appellant by that group. It did not accept that he had any increased chance of being harmed because he might be suspected of talking about the PFLP in Australia. 21 The Tribunal accordingly held that the appellant had failed to show he had a well-founded fear of persecution if he were to be returned to Syria sufficient to bring him within the Convention. Accordingly it rejected his claim for a protection visa. 22 Heerey J affirmed the Tribunal's decision. He agreed with the Tribunal's interpretation of Art 1D of the Convention. He said that, given the findings of fact that the applicant can obtain UNRWA documents and return to Syria where he would enjoy the rights that were set out by the Tribunal, it is correct to say that he is "at present receiving" protection or assistance from UNRWA in the sense that he has the immediate right to practical assistance in the ways mentioned. As to the second basis for the Tribunal's decision Heerey J said: "The remainder of the Tribunal's decision was plainly a question of fact. The applicant, who is not legally represented, could do no more than assert contrary factual claims." 23 His Honour gave some examples of the contrary claims the appellant made in the proceedings before him. He held, however, that no error of law or other error within s 476 the Migration Act had been shown. Accordingly, he dismissed the application for review. 24 The appeal, in my opinion, has no prospect of success. Nothing has been advanced by the appellant to show that Heerey J was wrong in rejecting the attack on the Tribunal's second ground for decision, ie, what the Tribunal had to say about there being an absence of a well-founded fear of persecution if the appellant were returned to Syria, and thus a failure by the appellant to show that he was a refugee within Art 1A of the Convention. 25 At this hearing the appellant advanced a number of new factual claims. As Heerey J pointed out, the Federal Court is not able to form a view on the merits of the case by considering all the factual claims that a person may make at any time. The Court cannot consider the claims that the appellant put to it today. 26 I should, however, note that in the information the appellant gave to the Court today he repeated his claim, put to the Tribunal, about fearing persecution if he returned to Syria because PFLP members might suspect that he had spoken about the group in Australia. In doing this, he showed the Court an outline of argument prepared by the Minister in another case involving an applicant named Sahtout. In the Sahtout outline, the Minister argues that Heerey J's interpretation of Art 1D of the Convention in the present appellant's case was the correct one. The appellant expressed concern that this reference in the Minister's outline in Sahtout may be seen as showing that the appellant has co-operated with the Department of Immigration in giving information to it. I do not think the reference to his case by name in the Sahtout submission is likely to have any such consequence. But, in any event, it adds little to what he had already told the Tribunal about being seen as a person who had given information about the PFLP after he came to Australia, a claim that the Tribunal rejected. This, like the other new claims that the appellant made to the Court today, cannot, in any event, be taken into account by the Court in this appeal. 27 I have already referred to Heerey J's conclusion that Art 1D of the Convention excludes from general Convention protections not only those Palestinians living in the Middle East who are actually under UNRWA protection, but also Palestinians, like the appellant, who seek asylum in a country outside the Middle East. That is so, according to Heerey J, provided a Palestinian outside the Middle East can, on return to that area, obtain UNRWA protection. 28 The appellant challenged the correctness of what Heerey J had to say about Art 1D at the hearing today. The Minister submitted that Heerey J's interpretation was correct. But the Minister, by his counsel, further submitted that it was not necessary to rule on the point. This was so because of the second ground upon which the Tribunal relied to refuse the visa, viz, the absence of a well-founded fear of persecution. 29 The Minister declined the Court's invitation to develop an argument in support of his favoured interpretation of Art 1D. It is to be noted that in decisions given subsequent to Heerey J's decision in this case, two judges of the Court have disagreed with Heerey J's interpretation. In Minister for Immigration and Multicultural Affairs v Quiader [2001] FCA 1458, French J made a detailed examination of Art 1D, including the preparatory works, and held that Art 1D did not exclude from the protection of the Convention a Palestinian entitled to protection and assistance from UNRWA who was nevertheless at risk of persecution if returned to his home region, notwithstanding that region was within the territorial competence of UNRWA. His decision is inconsistent with Heerey J's view that a Palestinian outside the Middle East, ie, outside the area in which UNRWA operates, is excluded by Art 1D from the general protection provisions of the Convention if he can, on return to the Middle East, obtain that organisation's protection. 30 In Jaber v Minister for Immigration and Multicultural Affairs [2001] FCA 1878, Carr J dealt with the proper interpretation of Art 1D. He said: "I do not think that the words 'at present receiving' [in the Article] should be construed as meaning 'at present entitled to receive' even though the relevant person may not be within the area of UNRWA's operations. To the extent that this opinion differs from the views expressed by Heerey J in Abou Loughod … I respectfully differ from those views, to the degree which entitles me not to follow them." 31 He further held that the second paragraph of Art 1D should be construed as providing that, when a person who has been receiving protection and assistance from a relevant United Nations organisation or agency has ceased, for any reason, to receive such protection and assistance, then that person will be entitled to claim the general benefits of the Convention. 32 In view of the Minister's failure to support his contention that Heerey J's interpretation of Art 1D is correct, and given that the appeal can be disposed of without this Court ruling on that issue, I will not express my own opinion on the proper operation of Art 1D. Nothing I have said should, of course, be taken as favouring Heerey J's interpretation. 33 I have explained why I can see no error in Heerey J's decision that the Tribunal was free of reviewable error in holding that he was not a refugee within Art 1A of the Convention. That is sufficient to show that if an extension of time to lodge the appeal were now granted, it would serve no purpose. The appeal would be doomed to fail. For these reasons, I would refuse the extension of time to file the appeal and would dismiss the appeal. 34 MANSFIELD J: I agree with the reasons for decision of the learned presiding judge and the orders he proposes. In particular, in the circumstances referred to by his Honour, I share the view that it is neither necessary nor appropriate to express any view as to the proper construction and scope of operation of Art 1D of the Convention. 35 EMMETT J: I agree with my brother Drummond J, that leave should not be given to file the notice of appeal out of time. There was an unequivocal finding by the Tribunal that the appellant did not fall within Art 1A of the Convention because there is no real chance of persecution upon his return to Syria. 36 Heerey J demonstrated no error in rejecting any argument that that finding was flawed. It follows that his Honour was correct in dismissing the application. I also agree that it is inappropriate that this Court express any view as to the proper construction of Art 1D. There has been no argument on that question but the dismissal of the appeal should not be taken to be an endorsement of the view of Heerey J. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Drummond, the Honourable Justice Mansfield and the Honourable Justice Emmett. Associate: Dated: 18 March 2002 Counsel for the Appellant: Appellant appeared in person. Counsel for the Respondent: Mr P MacLiver Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 14 February 2002 Date of Judgment: 14 February 2002	5,025
federal_court_of_australia:fca/single/2013/2013fca1034	decision	commonwealth	federal_court_of_australia	text/html	2013-10-11 00:00:00	Construction, Forestry, Mining and Energy Union v State of Victoria (No 2) [2013] FCA 1034	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2013/2013fca1034	2024-09-13T22:44:38.561670+10:00	FEDERAL COURT OF AUSTRALIA Construction, Forestry, Mining and Energy Union v State of Victoria (No 2) [2013] FCA 1034 Citation: Construction, Forestry, Mining and Energy Union v State of Victoria (No 2) [2013] FCA 1034 Parties: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION v STATE OF VICTORIA CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION v MCCORKELL CONSTRUCTIONS PTY LTD (ACN 094 764 584) and STATE OF VICTORIA File number(s): VID 1097 of 2012 VID 10 of 2013 Judge: BROMBERG J Date of judgment: 11 October 2013 Catchwords: INDUSTRIAL LAW – contraventions of ss 340 and 343 of Fair Work Act 2009 (Cth) – adverse action – coercion – civil pecuniary penalties – whether a pecuniary penalty may be imposed on a respondent where the applicant does not press its claim for a penalty – whether the Crown is amenable to the imposition of a pecuniary penalty for a breach of a civil remedy provision – discussion of presumption in Cain v Doyle that absent a clear indication to the contrary, Parliament did not intend that a sanction of a criminal nature should be imposed on the Crown by an enactment – whether presumption in Cain v Doyle has application to an enactment providing for civil pecuniary penalties – purposes underlying the imposition of pecuniary penalties under the Fair Work Act –considerations relevant to the imposition of a pecuniary penalty under the Fair Work Act – whether the State of Victoria is a "body corporate" within the meaning of s 546(2) of the Fair Work Act – whether it is necessary to impose a penalty on the Crown – extent of penalty to be imposed – whether and the extent to which a prior or contemporaneous contravention not recorded at the time that the contravening conduct at issue occurred may be taken into account – whether pecuniary penalties imposed ought be paid to the applicant – stay of orders pending appeal. Legislation: Acts Interpretation Act 1901 (Cth) ss 2C(1), 15AA, 22(1)(a) Building and Construction Industry Improvement Act 2005 (Cth) Competition and Consumer Act 2010 (Cth) Conciliation and Arbitration Act 1904 (Cth) Corporations Law (Cth) ss 183, 282 Fair Work Act 2009 (Cth) ss 30G(1), 30R(1), 37, 37(1), 37(2), 40A, Pt 3-1, 336, 338(2)(b), 340(1), 340(1)(a)(i), 341(1), 343, 343(1), 343(1)(a), 539(1), 539(2), 545(1), 546, 546(1), 546(2), 546(2)(a), 546(2)(b), 546(3), 546(3)(b), 549 Industrial Relations Act 1988 (Cth) Interpretation of Legislation Act 1984 (Vic) s 46A Public Administration Act 2004 (Vic) s 20 Re-establishment and Employment Act 1945 (Cth) Trade Practices Act 1974 (Cth) ss 46, 76 Workplace Relations Act 1996 (Cth) ss 6, 6(2), 10, 178, 178(4), 178(4)(a), Pt XA, 298K(1), 298K(2)(d), 298U, 298U(a)(i), 298X, 719(4), Pt 16, 807, 807(2) Workplace Relations Amendment (WorkChoices) Act 2005 (Cth) Cases cited: Construction, Forestry, Mining and Energy Union v State of Victoria [2013] FCA 445 Construction, Forestry, Mining and Energy Union v McCorkell Constructions Pty Ltd (No 2) [2013] FCA 446 Cain v Doyle (1946) 72 CLR 409 Jacobsen v Rogers (1995) 182 CLR 572 State Authorities Superannuation Board v Commissioner of State Taxation (WA) (1996) 189 CLR 253 Telstra Corporation Ltd v Worthing (1999) 197 CLR 61 Wurridjal v Commonwealth of Australia (2009) 237 CLR 309 McKellar v Container Terminal Management Services (1999) 165 ALR 409 Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 75 FCR 238 Rich v Australian Securities and Investment Commission (2003) 203 ALR 671 R v Valentini (1980) 2 A Crim R 170 Bropho v Western Australia (1990) 171 CLR 1 Townsville Hospitals Board v Townsville City Council (1982) 149 CLR 282 Rich v Australian Securities and Investment Commission (2004) 220 CLR 129 Trade Practices Commission v CSR Limited (1991) ATPR 41-076 NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 Australian Competition and Consumer Commission v Ithaca Ice Works Pty Ltd [2001] FCA 1716 J McPhee and Son (Australia) Pty Ltd v Australian Competition and Consumer Commission (2000) 172 ALR 532 Australian Competition and Consumer Commission v SIP Australia Pty Ltd [2003] FCA 336 Australian Competition and Consumer Commission v Hire Adventure Pty Ltd [2005] FCAFC 247 Australian Securities and Investments Commission v Adler [2002] NSWSC 483 Australian Securities Commission v Donovan (1998) 28 ACSR 583 Australian Securities and Investments Commission v Vizard (2005) 145 FCR 57 Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357 McIlwain v Ramsey Food Packaging Pty Ltd (No 4) (2006) 158 IR 181 Draffin v Construction, Forestry, Mining and Energy Union (2009) 189 IR 145 Finance Sector Union of Australia v Commonwealth Bank of Australia (2005) 147 IR 462 Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228 Ponzio v B & P Caelli Constructions (2007) 158 FCR 543 Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2011] FCA 810 Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Visy Packaging Pty Ltd (No 4) [2013] FCA 930 Director of the Fair Work Building Industry Inspectorate v Abbott (No 6) [2013] FCA 942 Australian Federation of Air Pilots v Skywest Airlines Pty Ltd (1996) 70 IR 284 Construction, Forestry, Mining and Energy Union v Coal and Allied Operations Pty Ltd (No 2) (1999) 94 IR 231 Kelly v Fitzpatrick (2007) 166 IR 14 Stuart-Mahoney v Construction, Forestry, Mining and Energy Union (2008) 177 IR 61 Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 McDonald v Australian Building and Construction Commissioner (2011) 202 IR 467 Coochey v Commonwealth (2005) 149 FCR 312 Community and Public Sector Union v Commonwealth of Australia (2007) 168 IR 107 Frearson v Minister for Public Sector Management (Tas) (1998) 82 IR 211 Inglis v Commonwealth Trading Bank of Australia (1969) 119 CLR 334 NT Power Generation Pty Ltd v Power and Water Authority (2002) 122 FCR 399 Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 Sue v Hill (1999) 199 CLR 462 Re Patterson; Ex parte Taylor (2001) 207 CLR 391 Williams v Commonwealth of Australia (2012) 288 ALR 410 WorkCover Authority (NSW) v Police Service (NSW) (2000) 50 NSWLR 333 Conroy v Carter (1968) 118 CLR 90 Commonwealth v Rhind (1966) 119 CLR 584 Melbourne Harbour Trust Commissioners v Colonial Sugar Refining Co Ltd (1925) 36 CLR 230 Electrolux Home Products v Australian Worker's Union (2004) 221 CLR 309 Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 Crowther v Queensland [2007] 1 Qd R 232 M v Home Office [1994] 1 AC 377 Greater Dandenong City Council v Australian Municipal Clerical and Services Union (2001) 112 FCR 232 Maritime Union of Australia v Burnie Port Corp Pty Ltd (2000) 101 IR 435 Australian Licensed Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd (No 2) (2011) 205 IR 465 Williams v Construction, Forestry, Mining and Energy Union (No 2) (2009) 182 IR 327 Hadgkiss v State of Victoria (Unreported, Federal Court of Australia, Merkel J, VID 111/2005, 19 September 2005) Setka v Gregor (No 2) (2011) 195 FCR 203 Date of hearing: Determined on the papers Place: Melbourne Division: FAIR WORK DIVISION Category: Catchwords Number of paragraphs: 164 VID 1097 of 2012 Counsel for the Applicant: Ms R Doyle SC with Mr M Harding Solicitor for the Applicant: Slater & Gordon Lawyers Counsel for the Respondent: Mr S Wood SC with Mr P Willis and Mr M Felman Solicitor for the Respondent: Ashurst Australia VID 10 of 2013 Counsel for the Applicant: Ms R Doyle SC with Mr M Harding Solicitor for the Applicant: Slater & Gordon Lawyers Counsel for the First Respondent: Mr P Wheelahan Solicitor for the First Respondent: McCluskys Lawyers Counsel for the Second Respondent: Mr S Wood SC with Mr P Willis and Mr M Felman Solicitor for the Second Respondent: Ashurst Australia IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY FAIR WORK DIVISION VID 1097 of 2012 BETWEEN: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION Applicant AND: STATE OF VICTORIA Respondent JUDGE: BROMBERG J DATE OF ORDER: 11 october 2013 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The respondent pay a pecuniary penalty of $25,000. 2. The penalty imposed upon the respondent be paid to the applicant within 14 days of the making of these orders. 3. Order 2 be stayed pending the hearing and determination of the appeal in proceeding VID 437 of 2013 or further order. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY Fair Work DIVISION VID 10 of 2013 BETWEEN: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION Applicant AND: MCCORKELL CONSTRUCTIONS PTY LTD (ACN 094 764 584) First Respondent STATE OF VICTORIA Second Respondent JUDGE: BROMBERG J DATE OF ORDER: 11 october 2013 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The second respondent pay a pecuniary penalty of $28,000. 2. The penalty imposed upon the second respondent be paid to the applicant within 14 days of the making of these orders. 3. Order 2 be stayed pending the hearing and determination of the appeal in proceeding VID 436 of 2013 or further order. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY FAIR WORK DIVISION VID 1097 of 2012 BETWEEN: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION Applicant AND: STATE OF VICTORIA Respondent IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY FAIR WORK DIVISION VID 10 of 2013 BETWEEN: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION Applicant AND: MCCORKELL CONSTRUCTIONS PTY LTD (ACN 094 764 584) First Respondent STATE OF VICTORIA Second Respondent JUDGE: BROMBERG J DATE: 11 october 2013 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 In earlier reasons for judgment published as Construction, Forestry, Mining and Energy Union v State of Victoria [2013] FCA 445 ("the Lend Lease proceeding") and Construction, Forestry, Mining and Energy Union v McCorkell Constructions Pty Ltd (No 2) [2013] FCA 446 ("the McCorkell proceeding"), I made declarations that the State of Victoria ("the State") and McCorkell Constructions Pty Ltd ("McCorkell") contravened Part 3-1 of the Fair Work Act 2009 (Cth) ("the FW Act"). 2 Following the making of those declarations, the question of whether penalties ought to be imposed in respect of each contravention remained for determination. Submissions in relation to penalty in the Lend Lease proceeding and the McCorkell proceeding were heard together and issues common to both proceedings were raised. It is convenient that I deal with all issues raised in both proceedings in these reasons for judgment. These reasons should be read with my earlier reasons for judgment in each proceeding. Unless otherwise stated, the terms defined in those reasons are here continued. 3 In the Lend Lease proceeding I made a declaration that in contravention of s 340(1)(a)(i) of the FW Act, between 19 November 2012 and 5 April 2013, the State took adverse action against employees of Lend Lease by threatening to refuse to engage or make use of the services of Lend Lease for the construction of the New Bendigo Hospital because those employees were entitled to the benefit of the Lend Lease Enterprise Agreement. 4 In the McCorkell proceeding I made a declaration that in contravention of s 340(1)(a)(i) of the FW Act, McCorkell took adverse action against employees of Eco by refusing to engage or make use of the services of Eco because those employees were entitled to the benefit of the Eco Agreement. I also made a declaration in that proceeding that the State contravened s 343(1)(a) of the FW Act by taking action against Eco with intent to coerce Eco and its employees to exercise their workplace right to vary the Eco Agreement. 5 The position in the McCorkell proceeding regarding the imposition of a penalty on McCorkell is straightforward and can be dealt with in brief at the outset. Although the CFMEU initially applied for a penalty to be imposed upon McCorkell, by its submissions on penalty, the CFMEU informed the Court that it no longer pressed for the imposition of any penalty upon McCorkell. The reason given was that the CFMEU regarded McCorkell to be a victim of economic pressure imposed upon it by the State. 6 The CFMEU's reason for not pressing its application for a penalty is of no relevance. Whilst the course taken at this late stage is somewhat surprising, the position the Court should take is clear. In a civil suit, an applicant is ordinarily entitled to withdraw from the relief it has sought and, subject to any order for costs being made in an appropriate case, the Court should not stand in the way. In the instant case, s 546(1) of the FW Act empowers the Court to, "on application, order a person to pay a pecuniary penalty" (emphasis added). The terms of s 545(1) are broader and may empower the Court to act on its own motion but, in relation to the imposition of a penalty, s 545(1) ought to be read with s 546(1). I doubt therefore that the Court has the power to impose a penalty on its own motion despite its finding of contravention. If I have the power I would not exercise it in circumstances where the applicant does not apply for a penalty to be imposed. 7 That leaves the following issues for determination: (1) Is the State amenable to the imposition of a pecuniary penalty for a contravention of the FW Act? (2) What penalty, if any, ought to be imposed for the contravention found against the State in each proceeding? Is the State amenable to a civil pecuniary penalty? 8 Whether the State is amenable to the imposition of a civil pecuniary penalty for contraventions of ss 340(1) and 343(1) of the FW Act is to be considered in the statutory context provided for by the FW Act. The CFMEU relies upon the following provisions to contend that the State is liable to be penalised for a contravention of a civil remedy provision: (i) Sections 340(1) and 343(1) are "civil remedy provisions". (ii) Section 546(1) of the FW Act empowers the Federal Court to order "a person to pay a pecuniary penalty that the Court considers is appropriate if the Court is satisfied that the person has contravened a civil remedy provision". (iii) The State is "a person". Section 40A of the FW Act provides that the Acts Interpretation Act 1901 (Cth) as in force on 25 June 2009 ("the Acts Interpretation Act") applies to the interpretation of the FW Act. Section 22(1)(a) of the Acts Interpretation Act provided that: (1) In any Act, unless the contrary intention appears: (a) expressions used to denote persons generally (such as "person", "party", "someone", "anyone", "no-one", "one", "another" and "whoever"), include a body politic or corporate as well as an individual; … (iv) The FW Act binds the Crown. Section 37 of the FW Act provides: (1) This Act binds the Crown in each of its capacities. (2) However, this Act does not make the Crown liable to be prosecuted for an offence. (v) A contravention of a civil remedy provision is not an offence (s 549). 9 Whilst the State accepts that it is bound by the FW Act, it denies that it is liable to have a pecuniary penalty imposed upon it for a contravention of a civil remedy provision. In making that contention, the State relies on the terms of s 546(2). 10 Section 546(2) of the FW Act provides: The pecuniary penalty must not be more than: (a) if the person is an individual – the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2); or (b) if the person is a body corporate – 5 times the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2). (Emphasis added.) 11 The State contends that when s 546(1) is read in context with s 546(2), the reference in s 546(1) to the Court's capacity to impose a penalty on "a person" must be read down by reference to the only kinds of persons identified in s 546(2), namely, "an individual" or "a body corporate". As the State is a body politic and not "an individual" or "a body corporate", the State contends that it is not amenable to the Court's power to impose a penalty on "a person". 12 To bolster its contention, the State relies upon the presumption explained by Dixon J in Cain v Doyle (1946) 72 CLR 409 and which has been approved by the High Court in Jacobsen v Rogers (1995) 182 CLR 572 at 587 (Mason CJ, Deane, Dawson, Toohey and Gaudron JJ); State Authorities Superannuation Board v Commissioner of State Taxation (WA) (1996) 189 CLR 253 at 270 (Brennan CJ, Dawson, Toohey and Gaudron JJ); Telstra Corporation Ltd v Worthing (1999) 197 CLR 61 at [22] (the Court); and Wurridjal v Commonwealth of Australia (2009) 237 CLR 309 at [164] (Gummow and Hayne JJ). At 424, Dixon J said: There is, I think, the strongest presumption against attaching to a statutory provision a meaning which would amount to an attempt to impose upon the Crown a liability of a criminal nature. It is opposed to all our conceptions, constitutional, legal and historical. Conceptions of this nature are, of course, not immutable and we should beware of giving effect to the strong presumption in their favour in the face of some clear expression of a valid intention to infringe upon them. But we should at least look for quite certain indications that the legislature had adverted to the matter and had advisedly resolved upon so important and serious a course. 13 The State contends that the presumption applies to the imposition of a civil pecuniary penalty upon the Crown. The CFMEU contends that the presumption is confined to the question of whether the Crown may be convicted of a criminal offence. 14 Given that the Cain v Doyle presumption is, as Dixon J said "a rule of interpretation" (at 425) and given the contest between the parties as to whether or not it may be deployed in the interpretive task which the Court is called upon to consider, it is best that I commence my consideration with the question of whether the Cain v Doyle presumption applies in relation to the imposition upon the Crown of a civil pecuniary penalty. 15 The State concedes that the Cain v Doyle presumption is not applicable in relation to all civil remedies which may be imposed upon the Crown. There are observations in Cain v Doyle itself which make that proposition plain: at 419 (Latham CJ) and at 425 (Dixon J). The State says however that the civil remedy of a pecuniary penalty stands in a different position. 16 The State contends that the Cain v Doyle presumption is based on the rationale that absent a clear indication that the legislature has resolved to the contrary, the Crown should not be punished. The State then reasons that the imposition of a civil pecuniary penalty involves punishment and therefore, the State argues, the Cain v Doyle presumption is applicable. 17 The issue in Cain v Doyle concerned whether the Commonwealth could, as an employer, be convicted for an offence against the Re-establishment and Employment Act 1945 (Cth). Dixon J commenced that interpretive task by referring to the presumption the nature of which is identified in the passage quoted above. The first observation to be made about the Cain v Doyle presumption is that it is not an immunity and as Dixon J said "not immutable". The presumption identifies a "rule of interpretation". It provides a starting point for interpreting whether a particular enactment was intended to "impose upon the Crown a liability of a criminal nature". The starting point is that it should be presumed that it is inherently unlikely that, in the ordinary case, Parliament intended to impose criminal liability upon the Crown. That is the rationale at the core of the presumption. As Brennan CJ, Dawson, Toohey and Gaudron JJ said in State Authorities Superannuation Board at 270, the Cain v Doyle presumption is a "presumption based upon the inherent unlikelihood that the legislature should seek to render the Crown liable to a criminal penalty". 18 There were a range of reasons identified in the judgment of Dixon J in Cain v Doyle as to why, in the absence of a clear indication to the contrary, it should be presumed that Parliament did not intend to impose a criminal penalty upon the Crown. What appears to be the central reason relied upon by Dixon J for the existence of the presumption is that the imposition of criminal liability upon the Crown "is opposed to all our conceptions, constitutional, legal and historical" (at 424). That was said in the context of Dixon J's observation (at 425) that he was unaware of any statute which had ever provided a criminal remedy against the Crown itself. Other specific reasons referred to by Dixon J as "only minor considerations" were outlined at 424-425. Some of those were particular to the Act there under consideration and included that no court of summary jurisdiction had jurisdiction over the Crown; the fine imposed upon the Crown would be payable by the Crown; and that the Crown may remit fines. 19 Latham CJ did not expressly rely on a presumption but in the process of interpreting the Act in question, identified a number of reasons why he considered that the Crown was not amenable to a criminal sanction. Those reasons (outlined at 417-419) were: the application of the rule that "the King can do no wrong" and is thus not liable for a civil or criminal wrong unless made liable by statute; it has never been suggested that the criminal law binds the Crown; as the Crown is ordinarily the prosecutor, it would be impossible for the Crown to prosecute the Crown; the fundamental idea of the criminal law is that "breaches of the law are offences against the King's peace, and it is inconsistent with this principle to hold that the Crown can itself be guilty of a criminal offence"; and the Crown cannot be imprisoned and there would be little utility in requiring the Crown to pay a fine to itself. Further, the Commonwealth has the power to remit any penalty imposed for a breach of federal law. 20 The common law immunity of the Crown to which Latham CJ referred (in the first reason listed above) was also a matter reflected upon in passing by Weinberg J in McKellar v Container Terminal Management Services (1999) 165 ALR 409. At [224] Weinberg J explained that the "King's unquestioned immunity from prosecution for crime" was based upon "the somewhat arcane legal fiction that the Sovereign was incapable of possessing the requisite mens rea". 21 Weinberg J continued at [225]: A more modern and less dubious justification for the doctrine is that the Sovereign is immune from punishment, rather than being incapable of committing a crime. 22 Relying upon that observation of Weinberg J, the State submitted that the most modern rationale for the Cain v Doyle immunity is that the Crown is immune from punishment. As the imposition of a civil pecuniary penalty involves punishment, the State argues that there is no material difference in the character of punishment between criminal penalties and civil pecuniary penalties. Those matters, so the State contends, enable the Court to conclude that the principle that the Crown is immune from criminal penalty in the absence of an express statement to the contrary, extends to civil pecuniary penalties under current Commonwealth law. It is contended that the function and effect of criminal and civil penalties are in substance sufficiently the same for the principle to apply to civil penalties of the kind found in s 546 of the FW Act. 23 There are a number of propositions which underpin the conclusion for which the State contends which require closer examination. 24 Contrary to the State's submission, it is not correct to speak of the Cain v Doyle presumption as an "immunity". As I have already observed, it is not an immunity. It is an expression, as Gummow and Hayne JJ observed in Wurridjal v Commonwealth at [164], of "accepted principles of statutory construction" for discerning whether a legislative purpose exists to impose a criminal sanction upon the Crown. 25 Weinberg J in McKellar was dealing with a common law immunity and said nothing directly about the Cain v Doyle presumption. Weinberg J's observation at [224] that immunity from punishment is the justification for the Crown's immunity from "a serious common law offence" does however provide a reason (the Sovereign is not ordinarily punished for a crime), which supports the Cain v Doyle presumption. 26 The parties have not been able to identify and I am not aware of any case in which the Cain v Doyle presumption has been considered or applied in relation to a civil pecuniary penalty. There are however a number of cases (to which I will shortly refer) where, by reference to predecessor provisions to s 546 of the FW Act, this Court has imposed civil pecuniary penalties upon the Crown without the Cain v Doyle presumption being applied and in circumstances where the applicability of that presumption was not raised by the Crown. 27 I am not persuaded that it would be appropriate to extend the application of the Cain v Doyle presumption to civil pecuniary penalties on the basis that punishment is a common feature of both criminal sanctions and civil pecuniary penalties. Reliance upon that commonality is too simplistic a basis for the direct and unqualified extension of the principle. First, very different perceptions and consequences arise in relation to criminal offending than those that attach to a civil contravention. Those differences must be taken into account. Secondly and in relation to the commonality of punishment, what needs to be considered is not punishment per se but the extent of commonality of retributive punishment. The extent to which retributive punishment is an objective for the imposition of a civil pecuniary penalty for a contravention of Part 3-1 of the FW Act differs from the extent to which retributive punishment is an objective of a criminal sanction. As I will explain, those differences make the direct and unqualified extension of the presumption inappropriate. However, the rationale for the Cain v Doyle presumption is nevertheless informative of the approach to be taken to the task of statutory construction. 28 As a rule of construction, the rationale for the Cain v Doyle presumption is that it ought to be assumed that what historical experience and long held conceptions suggest would be an inherently unlikely objective, is not the objective which Parliament has pursued in an enactment. The notion that Parliament intended that the Crown be amenable to conviction and punishment for a crime sits most uncomfortably with what may be described as long held conceptions. In contrast, the same or similar level of discordance does not necessarily arise in relation to the Crown's involvement in a civil contravention. 29 Criminal behaviour is conduct which is morally or socially reprehensible although that formulation does not define what is a crime. Views may differ as to the extent of reprehensibility required. What constitutes a crime is ultimately provided by the law. A crime is what the law (usually through Parliament) has designated to be a crime. That designation is important. It marks conduct out as being sufficiently reprehensible to warrant a high degree of social condemnation and deserving of a criminal sanction. The stigma of a criminal conviction is a stamp of society's disapproval of both the conduct and the person who engaged in it. 30 Other kinds of wrongdoing, including the contravention of a civil penalty provision, stand apart. They are distinguished by the fact that the wrongdoing concerned has not been designated a crime. The conduct will not be regarded as criminal conduct, the wrongdoer will not be branded a criminal and the stigma of a criminal conviction will not be the stamp of society's disapproval. 31 The high degree of moral culpability and social condemnation attached to the commission of a crime, is a powerful distinguishing feature between a crime and a civil contravention in an exercise designed to distil whether or not Parliament intended to impose a sanction of a "criminal nature" upon the Crown. Whilst criminal sanctions and civil pecuniary penalties may share some commonality, the distinction between a crime and a civil contravention remains, in my view, a highly significant factor in the determination of the issue at hand. It is significant because there is an obvious relationship between the character of the wrongdoing as identified by its legal designation and the inherent unlikelihood of Parliament having intended to sanction the Crown. 32 Turning then to the commonality upon which the State relies, the State's contention that civil pecuniary penalties are like criminal sanctions because both involve punishment is correct but of itself not very helpful. Many forms of civil remedies involve an element of punishment, such as the loss of property or the loss of a right, privilege or other benefit. If the existence of punishment in a sanction is sufficient to attract the application of the Cain v Doyle presumption, then the presumption ought be extended to all manner of civil remedies. Nor is the form of punishment determinative. Pecuniary penalties exist as a criminal sanction but may also be imposed administratively and contractually. As Goldberg J observed in Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 75 FCR 238 at 241, the ordinary dictionary meaning of "penalty" is "a punishment for contravention of law, rule or contract". 33 The word "punishment" may be used to refer to the consequence of a sanction as well as the purpose of a sanction. In examining whether a relevant commonality exists between criminal punishment and the punishment imposed by a civil pecuniary penalty, it is purpose rather than consequence which is relevant to the comparative exercise here being undertaken. But the context in question demands, in my view, further specification of the sense in which "punishment" is to be compared. 34 Spigelman CJ identified in the last sentence of the extract below, the sense of the word "punishment" which it seems to me is germane to the comparison which here needs to be made. At [89] of Rich v Australian Securities and Investment Commission (2003) 203 ALR 671, Spigelman CJ said: There is an ambiguity, in the sense of inexplicitness, in the use of general terms such as "punitive", "punishment" or "penalty". Each of these words may signify different matters in different contexts. A criminal sentence, for example, is often referred to as a "punishment" or as a "penalty". That is so even though the sentence is to serve a number of disparate objectives including retribution, specific and general deterrence and/or rehabilitation. Another sense of the word "punishment" would be to restrict that term to the retributive element in a sentence. 35 At [4.3] of the Australian Law Reform Commission's report, Same Crime, Same Time, Report No 103 (2006), the ALRC observed that retribution is often referred to as "punishment" in legislation and case law. At [4.4] the ALRC identified retribution as being based on the belief that those who engage in criminal activity deserve to suffer. However the biblical 'eye for an eye' justification for retributive punishment has been overtaken by the modern form of retribution. In the modern cases, the word retribution is generally used in the sense of the infliction of a just punishment to express the moral outrage of the community: R v Valentini (1980) 2 A Crim R 170 at 174 (Bowen CJ, Muirhead and Evatt JJ). 36 Retribution may not be the exclusive domain of a criminal sanction, the imposition of punitive damages has a retributive objective, but retribution is a hallmark of criminal punishment. The infliction of punishment on the Crown, as an expression of community outrage for conduct sufficiently morally or socially reprehensible to have been designated as criminal conduct, tends to offend long held conceptions about the status of the Crown and the extent to which the laws and the courts may impinge upon its special position as a non-subject. It is for that reason that it may be presumed that it is inherently unlikely that Parliament would intend to impose retributive punishment upon the Crown for the commission of a crime. 37 In contrast, when the aim or objective of the imposition of a statutory sanction is utilitarian or functional such as the objective of deterrence, the application of that aim to the activities of the Crown is not inherently abhorrent to legitimate expectations about the extent to which Parliament intended that the sanction apply to the Crown. That is particularly so when the conduct involved is not criminal but liable only to a civil sanction and when recognition is given to the contemporary role of the Crown. As the High Court recognised in Bropho v Western Australia (1990) 171 CLR 1 at 19 (Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ), the activities of the Crown in contemporary Australia "reach into almost all aspects of commercial, industrial and developmental endeavour and…it is a commonplace for governmental commercial, industrial and developmental instrumentalities and their servants and agents...to compete and have commercial dealings on the same basis as private enterprise". 38 A wide range of statutory regimes exist in Australia which are designed to protect public welfare across a range of subject matters from occupational health and safety to the protection of the environment to fair trade and competition. It is commonly the case that these schemes bind the Crown in relation at least to their commercial, industrial and developmental endeavours. It is commonly the case that civil sanctions are utilised to enforce compliance. That Parliament would seek to impose effective statutory sanctions to deter wrongdoing and thereby prevent further wrongdoing by all persons whose activities are regulated, is unsurprising. That motivation suggests an intent that the Crown be treated the same as any other person who is the subject of the regulation. Such an intent is supported by the principle of equality before the law. An expression of that principle was articulated by Gibbs CJ (with whom the other members of the Court agreed) in Townsville Hospitals Board v Townsville City Council (1982) 149 CLR 282. In construing the applicability of a legislative scheme to a public sector statutory corporation, Gibbs CJ said at 291: All persons should prima face be regarded as equal before the law, and no statutory body should be accorded special privileges and immunities unless it clearly appears that it was the intention of the legislature to confer them. 39 The difficulty is that sanctions are often motivated by a mix of objectives and attempts at classification are likely to be unstable because the drawing of mutually exclusive distinctions are likely to prove elusive. That is because there will likely be an overlap of objectives for the imposition of a sanction as explained in Rich v Australian Securities and Investment Commission (2004) 220 CLR 129 at [32] and [35] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ). 40 In its report entitled Principled Regulation: Federal, Civil and Administrative Penalties in Australia, Report No 95 (2003), the Australian Law Reform Commission identified and considered the different objectives for the imposition of a penalty. It did so in the context of identifying differences between the imposition of criminal and civil penalties. 41 At [3.5] of that report, the ALRC characterised the possible objectives of the imposition of a penalty as: retribution ('just deserts' for having committed the contravention); social condemnation (expressed through the stigma of a criminal record or severe penalty such as imprisonment); specific deterrence (deterrence of the person sanctioned from repeating the contravention); general deterrence (deterrence of others from engaging in the prohibited behaviour); protection of third parties or the public at large; and payment of reparation or compensation. 42 As the ALRC observed at [3.6], more than one of these aims is usually present in any particular penalty. Nevertheless, the ALRC considered that social condemnation and retribution had a more dominant role to play in relation to the imposition of a criminal penalty than in relation to a civil penalty. As the ALRC said at [3.6]: The aim of social condemnation, or stigma, traditionally applies to criminal penalties, and remains one important criterion for distinguishing between criminal and non-criminal penalties. The remaining aims apply both to civil and criminal regulatory penalties but retribution plays a less important role in civil penalties than in criminal ones. 43 Observations to a similar effect were made by French J in Trade Practices Commission v CSR Limited (1991) ATPR 41-076. That case was concerned with a contravention of s 46 of the former Trade Practices Act 1974 (Cth) (now the Competition and Consumer Act 2010 (Cth)). The section was directed to procuring and maintaining competition in trade and commerce. 44 French J considered that moral or amoral components of a contravener's behaviour in a contravention of s 46 had no part to play in determining the appropriate sanction and that this conclusion reflected the purpose of the pecuniary penalties imposed for restrictive trade practices under s 76. At 52,152 his Honour said: Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV. Nor, if it be necessary to say so, is there any compensatory element in the penalty fixing process – Trade Practices Commission v Mobil Oil Australia Ltd (1984) 4 FCR 296 at 298 (Toohey J). The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act. 45 Those observations of French J, as Goldberg J noted in Safeway Stores at 241-242 may have influenced the view of the majority in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 at 296-297 where Burchett and Kiefel JJ said: But the penalties imposed by s 76 are, as we have said, not criminal sanctions, and their purpose, established now by a long line of cases, is not punishment. The third member of that Full Court, Carr J, preferred to leave that question open (at 299). The issue was also left unresolved by a Full Court in Australian Competition and Consumer Commission v Ithaca Ice Works Pty Ltd [2001] FCA 1716 at [50] (Wilcox, Hill and Carr JJ) and in J McPhee and Son (Australia) Pty Ltd v Australian Competition and Consumer Commission (2000) 172 ALR 532 at [170] (Black CJ, Lee and Goldberg JJ). 46 In Safeway Stores, Goldberg J said that he had difficulty with the proposition that the fixing of a penalty for a contravention of a statutory provision such as that found in Part IV of the Trade Practices Act should not be regarded as a punishment (at 242). In Australian Competition and Consumer Commission v SIP Australia Pty Ltd [2003] FCA 336, Goldberg J at [24] referred to what he termed "an unresolved issue as to whether the element of punishment has a role in the imposition of a penalty pursuant to s 76". 47 Whilst there may be differing views about whether retributive punishment is a relevant consideration for the imposition of a civil pecuniary penalty under the Competition and Consumer Act, each of the authorities to which I have referred have made it abundantly clear that the object or primary object of the imposition of a penalty under that Act and its predecessor is specific and general deterrence: see Safeway Stores at 240; SIP Australia at [22] and the authorities there cited; and Australian Competition and Consumer Commission v Hire Adventure Pty Ltd [2005] FCAFC 247 at [11], where the Full Court described deterrence (especially general deterrence) as "the primary purpose lying behind the penalty regime". 48 The availability of retributive punishment as an aim for the imposition of a civil penalty under the Corporations Act 2001 (Cth) is well accepted. In Australian Securities and Investments Commission v Adler [2002] NSWSC 483 at [125] Santow J observed that "It is well established that the principal purpose of a pecuniary penalty is to act as a personal deterrent and a deterrent to the general public against a repetition of like conduct". At [126] his Honour acknowledged that the pecuniary penalty "has a punitive character". That observation is consistent with an earlier observation made by Cooper J in Australian Securities Commission v Donovan (1998) 28 ACSR 583 at 608 where his Honour said that the purpose of the pecuniary penalty was "in an appropriate case…to punish, but principally imposition of a pecuniary penalty is to act as a personal deterrent or a deterrent to the general public against a repetition of like conduct". 49 In Rich v Australian Securities and Investment Commission (2004) 220 CLR 129, McHugh J explained that a disqualification order made against a director may be imposed not only for protective purposes but also by way of punishment (at [41]-[42]). In Australian Securities and Investments Commission v Vizard (2005) 145 FCR 57, Finkelstein J dealt with civil contraventions of the Corporations Law (Cth) relating to the improper use by a director of information to gain an advantage contrary to ss 183 and 232 of that Act. At [29], Finkelstein J characterised a breach of those provisions as carrying with it "a significant degree of moral blameworthiness…because a contravention involves a serious breach of trust". His Honour continued at [30]: It is appropriate now to make mention of the principles that underlie sentencing, being principles that also guide the determination of civil penalties. This is not the occasion upon which to discuss in any detail the four concepts that inform sentencing: general deterrence and personal deterrence (where punishment is imposed to avert future harm), and rehabilitation and retribution (where punishment is imposed simply because the offender deserves it). It is important, however, to make this point. For most offences (and contraventions of ss 232(5) and 183(1) are no exception) the punishment imposed by the Court is the means by which society expresses its moral condemnation of the offender. It also affirms that the particular law is worthy of obedience. If the punishment is unduly lenient there is the risk that the Court will be perceived as endorsing the offender's conduct. 50 At [33], Finkelstein J observed that "While retribution is important as a stamp of society's disapproval of particular conduct, the governing principle of 'sentencing' in cases of the kind with which we are concerned is general deterrence". 51 The extent to which the purpose of the penalty regime provided by the FW Act is retributive, has not been the subject of any close consideration. 52 Broadly speaking, the FW Act establishes a scheme for regulating workplace relations between employers and their employees. It provides for minimum terms and conditions of employment (the "National Employment Standards") which an employer must provide its employees. It provides regimes for the making and enforcement of 'modern awards', 'enterprise agreements' and 'workplace determinations' which are intended to specify additional terms and conditions of employment and regulate other aspects of relations between an employer and its employees. 53 Relevantly to the contraventions to which this proceeding relates, the FW Act also regulates industrial behaviour including by conferring workplace rights and imposing responsibilities upon employers, employees, industrial organisations and other persons. The rights protected by Part 3-1 include fundamental human rights such as the right to freedom of association. The objects of Part 3-1, as specified by s 336, are to protect workplace rights including freedom of association, to provide protection from workplace discrimination and to provide effective relief for persons who have been discriminated against, victimised or otherwise adversely affected as a result of contraventions of the Part. 54 Part 3-1 establishes behavioural norms which the legislature has sought to secure through a regulatory scheme dealing with both individual rights and public welfare. The legislature has sought to secure the objectives of that scheme including through the device of civil sanctions. The primary objective of those sanctions is functional. It is to deter proscribed conduct by placing a cost upon the contravener and thereby deterring both the contravener and others from future contravention. So much was recognised in Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357, by Branson and Lander JJ at [70] who endorsed the view expressed by Greenwood J in McIlwain v Ramsey Food Packaging Pty Ltd (No 4) (2006) 158 IR 181 at [108] that the imposition of a penalty (under the WR Act) was "designed fundamentally to serve the public interest in acting as a deterrent to the particular Respondents and others generally" from engaging in contravening conduct: see also Plancor at [37] (Gray J); Draffin v Construction, Forestry, Mining and Energy Union (2009) 189 IR 145 at [89] (Goldberg, Jacobson and Tracey JJ); Finance Sector Union of Australia v Commonwealth Bank of Australia (2005) 147 IR 462 at [41] and [60] (Merkel J); and Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228 at [8]-[9] (Finkelstein J). 55 Subject to the reach of Commonwealth constitutional power, the FW Act is an Act of general application. It binds the vast majority of employers and employees in Australia including "the Crown in each of its capacities" (s 37(1)). The Crown in right of the Commonwealth is undoubtedly Australia's largest employer of employees. Each of Australia's States and Territories are very substantial employers. 56 There is no indication in the FW Act that in its capacity as an employer or as a person otherwise bound by Part 3-1, the FW Act seeks to treat the Crown differentially to other persons. The Crown in right of the Commonwealth is a 'constitutional covered entity' (s 338(2)(b)) and is subject to Part 3-1. Sections 30G(1) and 30R(1) provide that Part 3-1 applies to action taken in a 'referring State'. There is no indication that the conduct of the Crown is not subject to the behavioural norms set by Part 3-1 and insofar as civil sanctions seek to promote compliance with those behavioural norms, there is no basis for supposing that securing the intended behavioural norms from the Crown was not intended as part of the regulatory scheme. 57 Nevertheless, retributive punishment seems to me to be an available objective for the imposition of civil pecuniary penalties for a contravention of Part 3-1. Whilst a contravention of Part 3-1 is not conduct that is likely to attract the odium of criminality, it is conduct that is capable of being regarded as socially reprehensible and deserving of retributive punishment. The workplace rights protected by Part 3-1 are important rights, the loss of which can lead to severe disadvantage to individuals and serious social disruption. A contravention of Part 3-1, particularly where deliberateness, defiance or wilfulness is involved, may well require a response involving retributive punishment. 58 A number of authorities have recognised that retributive punishment is an available objective for imposing a penalty for a contravention of the FW Act, its predecessors and also similar legislation such as the Building and Construction Industry Improvement Act 2005 (Cth). 59 In Ponzio v B & P Caelli Constructions (2007) 158 FCR 543 at [93], Lander J speaking generally, but addressing the correctness of the primary judge's decision not to impose a pecuniary penalty under the WR Act, said: There are three purposes at least for imposing a penalty: punishment; deterrence; and rehabilitation. 60 That Lander J had retributive punishment in mind is apparent from the sentence which followed, where Lander J said: The punishment must be proportionate to the offence and in accordance with the prevailing standards of punishment: R v Hunter (1984) 36 SASR 101 at 103. Therefore the circumstances of the offence or contravention are especially important. 61 That observation of Lander J has been followed in a number of other cases including Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2011] FCA 810 at [26] (Gilmour J); Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Visy Packaging Pty Ltd (No 4) [2013] FCA 930 at [16] (Murphy J); and Director of the Fair Work Building Industry Inspectorate v Abbott (No 6) [2013] FCA 942 at [16] (Gilmour J). Observations have often been made in the cases that flagrant, wilful or deliberate conduct is deserving of a higher penalty: see for example Australian Federation of Air Pilots v Skywest Airlines Pty Ltd (1996) 70 IR 284 at 286 (Marshall J); and Abbott (No 6) at [28] (Gilmour J). 62 Most of the authorities that have considered the imposition of a penalty under the FW Act and its predecessors have done so by reference to a list of general (but not exclusive) considerations. An early 'list' was formulated by Branson J in Construction, Forestry, Mining and Energy Union v Coal and Allied Operations Pty Ltd (No 2) (1999) 94 IR 231 at [7]-[8]. The observations of Branson J were made in relation to s 298U of the Workplace Relations Act 1996 (Cth) ("the WR Act"), a provision by which civil pecuniary penalties were imposed for contraventions of Part XA of the WR Act, which contained many of the predecessor provisions now set out in Part 3-1 of the FW Act. 63 As Merkel J noted in Finance Sector Union v Commonwealth Bank at [24] the observations of Branson J have been cited and applied in relation to penalties under s 298U and other sections of the WR Act. Those observations, which Merkel J himself applied, were as follows: The Act gives no explicit guidance as to the circumstances in which an order imposing a penalty under s 298U of the Act will be appropriate or as to the circumstances in which a penalty of or near the maximum, or alternatively of a lesser amount, may be called for. The Court is simply directed to consider what is appropriate in all the circumstances of the case. The following matters, which are not intended to comprise an exhaustive list, seem to me to be considerations to which the Court may appropriately have regard in determining whether particular conduct calls for the imposition of a penalty, and assuming that it does, the amount of the penalty: (a) The circumstances in which the relevant conduct took place (including whether the conduct was undertaken in deliberate defiance or disregard of the Act); (b) Whether the respondent has previously been found to have engaged in conduct in contravention of Pt XA of the Act; (c) Where more than one contravention of Pt XA is involved, whether the various contraventions are properly seen as distinct or whether they arise out of the one course of conduct; (d) The consequences of the conduct found to be in contravention of Pt XA of the Act; (e) The need, in the circumstances, for the protection of industrial freedom of association; and (f) The need, in the circumstances, for deterrence. 64 A more recent 'list' of relevant factors which has very often been applied by other judges of this Court in relation to the fixing of penalties under the Building and Construction Industry Improvement Act 2005 (Cth) and the FW Act and its predecessors is that formulated by Tracey J in Kelly v Fitzpatrick (2007) 166 IR 14 and restated by Tracey J in Stuart-Mahoney v Construction, Forestry, Mining and Energy Union (2008) 177 IR 61 at [40]. 65 That list, as Tracey J acknowledged at [39] and [40] of Stuart-Mahoney was derived from a number of judgments dealing with the Trade Practices Act and from the judgment of Branson J in Coal and Allied Operations. The non-exhaustive relevant factors identified by Tracey J are: • The nature and extent of the conduct which led to the breaches. • The circumstances in which that relevant conduct took place. • The nature and extent of any loss or damage sustained as a result of the breaches. • Whether there had been similar previous conduct by the respondent. • Whether the breaches were properly distinct or arose out of the one course of conduct. • The size of the business enterprise involved. • 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. • Whether the party committing the breach had cooperated with the enforcement authorities. • The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements. • The need for specific and general deterrence. 66 The use of 'lists' of this kind has been the subject of some criticism: Plancor at [35] (Gray J) and at [58] (Branson and Lander JJ); and Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at [91] (Buchanan J); see also McDonald v Australian Building and Construction Commissioner (2011) 202 IR 467 at [30] (North, McKerracher and Jagot JJ). Their deployment tends to mask the extent to which retributive punishment is an aim of the sanction. A number of considerations on the 'list' including the nature and extent of the conduct, the circumstances in which it took place and the deliberateness of the conduct are, it seems to me, directed at least in part to retribution. 67 Nevertheless as I have sought to explain, the principal objective for the imposition of a penalty for a breach of Part 3-1 is deterrence. Other features of the penalty regime support that functional objective including that penalties can be sued for by affected employees, employers, unions or other persons identified in column 2 of the table in s 539(2) and that any penalty imposed can be and is ordinarily ordered to be paid to such a person in their role as a common informer: s 546(3); Plancor at [39] and [41]-[44] (Gray J); and Finance Sector Union v Commonwealth Bank at [65]-[71] (Merkel J). The existence of deterrence as the primary objective does not suggest that Parliament was unlikely to intend to make the Crown amenable to a penalty. To the contrary, the significant participatory role of the Crown in the activities regulated by the FW Act and Parliament's obvious intent to put in place an effective regulatory scheme, suggests the opposite. The availability of retributive punishment as an objective for the imposition of a penalty militates in the opposite direction. In that regard the rationale for the Cain v Doyle presumption is informative with the qualification that the conduct being addressed is civil and not criminal. 68 In the task of construing whether Parliament intended that the Crown should be amenable to the imposition of a penalty for a contravention of Part 3-1, each of those considerations should be taken into account. When the availability of retributive punishment is taken into account it should be recognised that though available, retributive punishment is unlikely to be imposed upon the Crown other than in extraordinary circumstances. It will rarely be necessary to provide redress for the moral outrage of the community, which retributive punishment serves to address, in relation to the conduct of the Crown. The Crown acts in furtherance of the public interest rather than any personal interest. Any unlawful conduct taken on behalf of the Crown is likely to be well intentioned but misguided rather than so reprehensible as to be deserving of the community's moral and social condemnation. 69 Nevertheless, in terms of the relative strength of the two considerations I have identified, I consider that on their own those two competing considerations are finely balanced. However, there are other indicators of Parliament's intent which, in my view, strongly negate the effect of the availability of retributive punishment as an objective for the imposition of a civil pecuniary penalty for a contravention of Part 3-1. 70 In Cain v Doyle at 426 Dixon J adverted to an important indicator of Parliamentary intent in the following passage: At all events, where it is uncertain whether the legislature adverted to the special position of the Crown, it is the very case in which the presumptive rule of interpretation should prevail and the application of the penalty clause should be restricted to the subject to the exclusion of the Crown. 71 The FW Act is not legislation in relation to which it may be said that there is uncertainty as to whether Parliament adverted to the special position of the Crown. In that regard it is worth repeating the terms of s 37: (1) This Act binds the Crown in each of its capacities. (2) However, this Act does not make the Crown liable to be prosecuted for an offence. 72 The liability of the Crown to be sanctioned is expressly addressed by the terms of s 37 and has been limited by reference to the special position of the Crown. The word "however" and the qualification which follows it in s 37(2) shows that Parliament turned its mind to the extent of the limitation intended. Section 37(2) reflects the presumed intent of Parliament as articulated by the Cain v Doyle presumption. There can be no doubt that the special position of the Crown was adverted to. The fact that when doing so, Parliament did not impose a limitation upon the Crown's exposure to a civil pecuniary penalty is a strong indicator that Parliament did not intend such a limitation. Section 37 should not be regarded as being silent as to whether the Crown is amenable to a pecuniary penalty because the extent to which Parliament sought to qualify the amenability of the Crown to the full force of the FW Act is expressly addressed. That conclusion is reinforced by the declaration made in s 549 that a contravention of a civil remedy provision is not an offence. It is also supported by authority. 73 In Coochey v Commonwealth (2005) 149 FCR 312, Madgwick J imposed a pecuniary penalty upon the Commonwealth for a contravention of the WR Act. The contravention in question was a breach of a certified agreement which bound the Commonwealth in its capacity as an employer. Section 6 of the WR Act was in the same terms of s 37 of the FW Act. Referring to s 6(2) of the WR Act, Madgwick J said at [64]: The terms of subs (2) appear to underline that the Commonwealth might be sued for a penalty. 74 The other decision in which a civil pecuniary penalty has been imposed upon the Crown for breaches of Commonwealth industrial relations legislation is Community and Public Sector Union v Commonwealth of Australia (2007) 168 IR 107. In that case, Branson J found that the Commonwealth had contravened s 298K(1) of the WR Act (a predecessor provision to the current s 340) and was involved in further contraventions of that Act by reason of the breach of industrial instruments to which the Commonwealth was a party. The penalty phase of the proceeding was determined by reference to an agreed minute from the parties as to the declarations to be made and written submissions as to penalty. At [3], Branson J indicated her preparedness to make a declaration in the form proposed by the parties, save that her Honour declined to include a statement to the effect that the Commonwealth is liable to have a penalty or penalties imposed on it. Her Honour declined to do so on the basis that she saw "no utility in making a declaration as to the plain effect of the WR Act". Although Branson J did not refer to s 6 of the WR Act, it is likely that her reference to the "plain effect" of the WR Act was a reference to that provision. 75 It is necessary then to consider the terms of s 546(2) and the State's contention that s 546(2) exhaustively identifies those persons who are amenable to a pecuniary penalty and does not provide that the State is amenable, because the State is neither "an individual" nor "a body corporate". The State's contention is based on the proposition that although the Crown is a person capable of being found to have contravened a civil remedy provision, the terms of s 546(2) deliberately exclude the Crown from the description of persons upon which penalties may be imposed. 76 In my view, if Parliament held that intent, it is unlikely that it would not have been earlier expressed in the statute. The most obvious place to have given expression to such an intent is s 37 where the subject matter of the Crown's amenability to the full force of the FW Act is specifically addressed. For reasons I have already indicated, the manner in which that subject matter is addressed strongly suggests the opposite intent to that which the State seeks to attribute to Parliament. If the State's contention is correct, s 37 is to be read down by reference to s 546(2). 77 It is s 546(1) which gives an eligible court the power to impose a pecuniary penalty upon a person who has contravened a civil remedy provision. If that power was to be restricted to exclude the Crown, the next most obvious place to have done so would have been in s 546(1) because that provision deals directly with the issue of who may be the subject of a pecuniary penalty. There is no restriction to be found in the words of s 546(1). The provision confers a power to order "a person" to pay a pecuniary penalty where the Court is satisfied that "the person" has contravened a civil remedy provision. Section 22(1)(a) (now s 2C(1)) of the Acts Interpretation Act (set out above) provides that unless the contrary intention appears, "person" includes "a body politic or corporate". 78 The State contends that a contrary intention appears so as to exclude the Crown from the expression "a person". For the State's contention regarding s 546(1) to be correct, s 546(1) needs to be read down by reference to s 546(2). 79 Section 546(2) does not deal directly with the question of which contraveners are amenable to a penalty. Its direct subject matter is the maximum penalty that may be imposed on particular contraveners. 80 On the State's approach to construction, the tail seems to be wagging the dog. Rather than working backwards from s 546(2), an alternative approach to construction would be to interpret s 546(2) by reference to the intent found in s 37 and s 546(1). However the preferable course to take to the task of construction is to consider all of the indicators of Parliamentary intent together, ascribing the appropriate weight to each indicator. In doing so it is permissible to assume Parliament's intent has been rationally ordered and expressed by the draftsperson and that it is most likely that an expression of intent on a particular subject matter will have been dealt with directly in provisions addressing that subject, rather than indirectly in a provision on a related subject. 81 In my view, the positive indicators of Parliament's intent that the Crown is amenable to a pecuniary penalty found in s 37 and s 546(1), outweigh any contrary indication found in s 546(2). I will address the contrary indicator in more detail shortly. But there are other positive indicators of Parliament's intent which reinforce my conclusion. 82 First, if it was intended that the Crown be shielded from exposure to a pecuniary penalty, it is difficult to reconcile why the Crown in all of its manifestations is not shielded. The State accepted that its construction of s 546(1) and (2) results in some parts of the Crown, namely statutory corporations representing the Crown, being amenable to a civil penalty. Those corporations are bodies corporate and there is no issue that s 546(2)(b) would apply. Why Parliament should have intended such a result is not apparent. 83 Overwhelmingly, it is conduct taken in the capacity of an employer that it is capable of exposing the Crown or its agencies to contravention of a civil remedy provision under the FW Act. Public sector employees may not be directly employed by the Crown. Often they are employed by a statutory corporation representing the Crown or by individuals designated by statute to be their employer on behalf of the Crown. An example of the latter is provided by s 20 of the Public Administration Act 2004 (Vic) which designates "a public service body Head" to have all of the rights, powers, authorities and duties of an employer in respect of the employees in the Department or public service body which that person is charged to manage. A Minister may also be the subject of such a designation in respect of the public servants in the Department assigned to the Minister. That was the position in Tasmania in relation to the employment of government school teachers as Heerey J recorded in Frearson v Minister for Public Sector Management (Tas) (1998) 82 IR 211. In Frearson Heerey J applied a predecessor provision to s 546(2) (s 178(4)(a) of the WR Act) to impose a penalty on the relevant Minister as an individual (at 216). 84 On the State's construction, the exposure of the State as an employer to a penalty for contravention of the FW Act, will depend upon whether or not the State has chosen to directly employ public employees. The same peculiarity will apply across the whole range of Crown activities. 85 The State suggested that this position may be explained by the special position of the Crown itself which is reflected in the Cain v Doyle presumption. However it does not follow that when Parliament creates an agent of the Crown, whether by a public corporation or by an office held by a natural person, that the agent does not possess the attributes of the Crown including its privileges and immunities. That may or may not be the case. Much depends upon the terms of the governing statute by which the Crown agent has been established: Inglis v Commonwealth Trading Bank of Australia (1969) 119 CLR 334 at 337-338 (Kitto J, with whom Barwick CJ and Windeyer J agreed); Townsville Hospitals Board v Townsville City Council at 289 (Gibbs CJ, with whom Murphy, Wilson and Brennan JJ agreed); NT Power Generation Pty Ltd v Power and Water Authority (2002) 122 FCR 399 at [79]-[80] (Branson J) and [126] (Finkelstein J); see also s 46A Interpretation of Legislation Act 1984 (Vic). 86 If the draftsperson had sought to shield from exposure to a penalty all of the limbs of the Crown entitled (on the State's case) to the benefit of the Cain v Doyle presumption, the draftsperson would not have chosen the incorporation of a limb of the Crown as the discriminating characteristic for determining whether or not an aspect of the Crown was exposed to a penalty. The draftsperson would most likely have chosen the characteristic utilised by s 37(2) where an immunity is provided to the Crown which necessarily extends to all of its statutory corporations and other agents entitled to the privileges and immunities of the Crown. That analysis serves to reinforce the contention that if there was an intent to shield the Crown from exposure to a penalty, that intent would have been made plain by the terms of s 37(2) rather than indirectly and imperfectly by the terms of s 546(2). 87 Secondly, the legislative history does not support the State's contention. Part 3-1 contains what have traditionally been referred to as the 'freedom of association' provisions in Commonwealth industrial legislation. The name emanates from the title to Part XA of the WR Act enacted in 1996, although provisions protecting freedom of association were part of Commonwealth industrial legislation going back to the enactment of the Conciliation and Arbitration Act 1904 (Cth) ("the C&A Act"). 88 The enactment of the WR Act first exposed a contravener of the freedom of association provisions to civil pecuniary penalties. Prior to that point, the freedom of association provisions contained in the C&A Act and later the Industrial Relations Act 1988 (Cth) ("the IR Act") were criminal offences. For that reason the historical survey should begin with the WR Act. 89 As earlier observed, s 6 of the WR Act was in the same terms as s 37 of the FW Act. Section 298X provided that a contravention of Part XA was not an offence. Remedies for a breach of Part XA of the WR Act were dealt with in that Part. Section 298U empowered this Court to impose (amongst other orders) a penalty upon a person whose conduct contravened a provision of Part XA of not more than: (i) in the case of a body corporate - $10,000; or (ii) in any other case - $2,000. 90 Substantial amendments were made to the WR Act by the Workplace Relations Amendment (WorkChoices) Act 2005 ("the WorkChoices amendments"). Following those amendments and consequent upon further renumbering, s 807 of the WR Act dealt with the imposition of civil pecuniary penalties in relation to a contravention of the freedom of association provisions, which at that time were contained in Part 16. Section 10 of the WR Act (post the WorkChoices amendments) was in the same terms as s 37 of the FW Act. Each of the relevant provisions of Part 16 capable of giving rise to a contravention were identified as civil remedy provisions. Section 807 empowered the Court to make orders including an order imposing a pecuniary penalty on "a person" who had contravened a civil remedy provision in Part 16. Section 807(2) provided: (2) The maximum pecuniary penalty under paragraph (1)(a) is 300 penalty units if the defendant is a body corporate and otherwise 60 penalty units. (Emphasis added.) 91 The legislative history shows that in relation to a contravention of Part 3-1 and its predecessor civil remedy provisions, each of s 37 and its predecessors and s 546(1) and its predecessors remained constant and were unchanged so far as indication is there given as to Parliament's intent to expose the Crown to a penalty. The only relevant change which has occurred with the introduction of the FW Act, is in relation to s 546(2) where the category of "body corporate" continues to appear, but where "other cases" or "otherwise" no longer appear and the category of "an individual" first appears. 92 The State has no answer to the proposition that the categories of "other cases" or "otherwise" were capable of encompassing a body politic such as the State. The other relevant indicators of Parliament's intent as to whether the Crown was amenable to a penalty under the WR Act (either pre or post the WorkChoices amendments) which may be gleaned from the predecessors of s 37 and s 546(1), are consistent with the positive indication which I have identified in relation to the current provisions. The State has not sought to suggest that other provisions of the WR Act absolved the Crown from liability for a penalty for a contravention of the freedom of association provisions and I have not been able to identify any. 93 It seems then that the Crown was amenable to the imposition of a pecuniary penalty for a contravention of the predecessor provisions of Part 3-1 from 1996 when such penalties were first introduced until at least 2009 when the FW Act was enacted. It is difficult to accept that the Crown gained an immunity that it did not enjoy under the previous statutory regime in the absence of any indication of such a significant change in the Explanatory Memorandum or elsewhere. It is particularly difficult to accept that to effectuate such a significant change, the draftsperson chose the imperfect mechanism of s 546(2) rather than the obvious step of adding a further qualification to s 37(1) in s 37(2). 94 Turning then to the State's reliance upon s 546(2), the State's position is based upon the contention that the term "body corporate" does not encompass the Crown. That contention is put by reference to the ordinary meaning of "body corporate" and is said to be illustratively reinforced by the disjunctive "or" between "body politic" and "[body] corporate" in s 22(1)(a) of the Acts Interpretation Act. 95 I accept that ordinarily, the Commonwealth and each of the various States and Territories are more likely to be described as a "body politic" rather than a "body corporate". However, there are three possible explanations, beyond that relied upon by the State, which if correct, support the rejection of the statutory intent contended for by the State by reference to the terms of s 546(2). They are: (i) a maximum penalty for a contravention by the Crown is elsewhere provided for in the FW Act; (ii) the expression "body corporate" in this instance was intended to encompass body politic; or (iii) no maximum penalty for a contravention by the Crown has been provided for. 96 The first possibility is to be rejected. It is based on the idea that column 4 of the table in s 539(2) sets out, by way of a general provision, the maximum penalty to be imposed on a contravener and that s 546(2) is a specific provision which applies "if the person" is of the type there dealt with. On that construction, if the State is not a "body corporate" and is not dealt with by the specific provision, it is nevertheless dealt with by the general provision. 97 There are two difficulties with that construction which justify its rejection. The first is that the text of s 539(2) which introduces the table refers to the maximum penalties listed in column 4 as the maximum penalties which may be applied for. The setting of a maximum penalty is there dealt with in indirect terms which suggests that column 4 was intended to be no more than a convenient reference point in which all of the various maximum penalties are collected. That function is confirmed by the text of s 546(2) which uses the table for that purpose. 98 The second and perhaps more telling basis for rejecting this construction is that if the table was intended to be a general provision which substantively set (rather than merely listed) the maximum applicable penalties, there would be no reason for the inclusion of s 546(2)(a). That paragraph would be entirely unnecessary because the maximum penalties there set would only repeat those set in the table. If the table was intended as a substantive general provision, the intended maximum penalty for "an individual" would have been left to be addressed by the table. That analysis suggests that s 546(2) is not a provision qualifying a general provision for specific categories of contraveners but is the only provision which substantively sets the applicable maximum penalties which may be imposed. 99 The Commonwealth and the various States and Territories are often described by the term "body politic". The State referred to a number of judgments where that descriptor was applied including Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at [22]-[23] (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ); Wurridjal v Commonwealth at [164] (Gummow and Hayne JJ); Sue v Hill (1999) 199 CLR 462 at [84]-[85] (Gleeson CJ, Gummow and Hayne JJ); Re Patterson; Ex parte Taylor (2001) 207 CLR 391 at [13] (Gleeson J); and Williams v Commonwealth of Australia (2012) 288 ALR 410 at [154] (Gummow and Bell JJ) and at [495] and [500] (Crennan J). 100 The judgments referred to exemplify the common use of "body politic" to describe the Commonwealth and each of the various States or Territories. They are helpful in support of the proposition, which I accept, that "body politic" rather than "body corporate" is ordinarily used to describe the Crown. However, those authorities do not directly address the appropriateness of the use of the term "body corporate" to describe the Crown. It may be that what was said by Gummow and Hayne JJ at [164] of Wurridjal was intended to address a distinction between "body corporate" and "body politic" but that is not clear. If that was the intent then the observation there made only suggests that their Honours regarded the reference to "body corporate" in the legislation there under consideration, was not the "clearest indication" of an intention to refer to the Commonwealth. The authorities relied upon do not provide a basis for distinguishing Coochey, as the State contends. 101 The issue for determination in Coochey was whether, for the purpose of the imposition of a pecuniary penalty under the WR Act, the Commonwealth fell into the category of "body corporate" or "other cases". The Commonwealth contended that it was in the second category and thus liable to the lower maximum penalty provided for by s 178(4). The Commonwealth referred to and relied upon the distinction drawn in s 22(1)(a) of the Acts Interpretation Act between a "body corporate" and a "body politic". 102 Whilst Madgwick J accepted at [59] that the Commonwealth was "undoubtedly" a body politic, he went on to reject the Commonwealth's contention that it was not also a "body corporate" within the meaning of s 178(4) of the WR Act. Madgwick J considered that the provisions of the Constitution created the Commonwealth as a body of people which may be sued as such and that, at least for the purposes of s 178, the Commonwealth was a "body corporate" (at [66]). His Honour thought it "entirely consistent with s 6" (the equivalent of s 37 of the FW Act) to regard "body corporate" as "including entities with a governmental character, provided they also have the necessary corporate character" (at [67]). 103 Madgwick J considered that the governmental character of a body did not deny its character as a body corporate. He said at [67]: As a matter of ordinary language and legal possibility, a body politic may also be a body corporate or be equated to such: they are not mutually exclusive categories. A body corporate may have a governmental character: various types of local government bodies both here and elsewhere in countries of the common law tradition are examples of this, as are some instances of specific-purpose, trading corporations set up by governments. There is no reason why a body politic, in the sense of an organised State or part of a State, might not also be a body corporate. A State legislature could proclaim local government entities as bodies politic and bodies corporate. 104 Madgwick J was assisted by the approach taken by Hungerford J in WorkCover Authority (NSW) v Police Service (NSW) (2000) 50 NSWLR 333. Referring to that judgment, Madgwick J said at [71]: Section 187 of the Evidence Act 1995 (NSW) abolished the privilege against self-incrimination for bodies corporate. His Honour held that such abolition was effective against the State. In particular, his Honour rejected (at [22]) the notion that the concepts of a body politic and a body corporate "were mutually exclusive". Indeed, as his Honour showed (at [23]), there is much to be said for the view that, in a legal context, as distinct from general modern usage, if such be the preferable view of the context, "a body politic is a body corporate … established for a public purpose". 105 The legislative policy relied upon by Madgwick J to support the construction he preferred was that it was unlikely that Parliament intended that the maximum penalty imposed against the Commonwealth would be equivalent to that of a natural person or one fifth of that which may be imposed on a small family company. Whilst his Honour took a purposive approach to construction, he acknowledged that an inferred legislative policy may have to give way to an intractable statutory text. Madgwick J was of the view that there was no such obstacle (at [57]-[58]). 106 I am not persuaded that the interpretation of "body corporate" adopted by Madgwick J is erroneous and ought not be followed. Nor am I persuaded that Coochey is distinguishable. 107 The approach to construction which Madgwick J took, relied upon s 15AA of the Acts Interpretation Act. The form of that provision relevant to the interpretation of the FW Act (see s 40A(1) of the FW Act) is as follows: In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object. 108 As I said at [110] of my reasons for judgment in the Lend Lease proceeding, the task of statutory construction must focus on the text of the provisions in question, but the meaning of that text requires consideration of the purpose and policy of the provision in the context of the legislation as a whole. 109 The Oxford English Dictionary defines a body corporate as "an entity legally authorised to act as a single individual and having legal rights and duties; a corporation". The term "body politic" is defined as "a nation regarded as a corporate entity". 110 Butterworths Australian Legal Dictionary defines "body corporate" as: An artificial legal entity having a separate legal personality. It includes bodies created by common law (such as a corporation sole and corporation aggregate), by statute (such as the Australian Securities Commission) and by registration pursuant to statute (such a company, building society, credit union, trade union and incorporated association). 111 Those references suggest that a body politic (a nation regarded as a corporate entity) may be encompassed by the term "body corporate". That is so because a body politic is an artificial legal entity having separate legal personality. It is not grammatically wrong to speak of a body politic as a body corporate. There are examples which illustrate that use. In Conroy v Carter (1968) 118 CLR 90, Taylor J spoke of the Commonwealth in these terms at [101]: But the Commonwealth, being a body corporate must, if it is to be collected, collect the levy through its servants or agents. (Emphasis added.) 112 In Commonwealth v Rhind (1966) 119 CLR 584, Taylor J referred to the "corporate capacity" of the Commonwealth in the following observation in which his Honour pointed out that it was unnecessary for the legislation there in question to have deemed the Commonwealth to be a body corporate. At 603 his Honour said: The enactment of such a provision was entirely unnecessary as the Commonwealth itself has a corporate capacity in that the Constitution which established the Commonwealth quite clearly contemplates it as having a capacity to sue and be sued, to hold lands and other property and to bind itself by the making of agreements. 113 In Melbourne Harbour Trust Commissioners v Colonial Sugar Refining Co Ltd (1925) 36 CLR 230 at 279, Isaacs J referred to bodies politic as species of bodies corporate in the following observation: The expression "body politic", as distinguished from "body corporate", indicates to my mind a body created for some public purpose. For instance, the Hudson's Bay Company and the East India Company, invested with public functions, were bodies politic. The Sovereign is a body politic (see Magdalen College Case). In Attorney-General for Ontario v Attorney-General for the Dominion (1896) AC 348 at 361, Lord Watson used the expression "body politic" to denote the Dominion of Canada. 114 In CPSU v Commonwealth Branson J imposed penalties upon the Commonwealth by reference to the maximum penalty permitted to be imposed on a "body corporate" by s 298U(a)(i) of the WR Act. Whether the Commonwealth was a "body corporate" does not appear from the judgment to have been the subject of any contest. Nor, is it apparent that her Honour was referred to Coochey. Nevertheless, her Honour needed to be satisfied that the Commonwealth was a "body corporate" within the meaning of s 298U(a)(i) and appears to have had no difficulty in regarding the Commonwealth as falling within that conception. 115 It can be seen both from the ordinary meaning of "body corporate" and the occasional use of that term in the cases to describe entities with a governmental character, that the expression "body corporate" is grammatically capable of including a body politic such as the State. On the other hand, the descriptor "body corporate" is not usually applied to an entity such as the State and the term "body politic" is more apt and thus more likely to be used if a reference to such an entity is intended. The two competing available constructions call for the application of s 15AA of the Acts Interpretation Act. 116 When that is done, it is clear that the construction that "would promote the purpose or object underlying the Act" is that "body corporate" includes the Commonwealth and each of the States and Territories. The legislative policy which Madgwick J referred to in Coochey in support of that conclusion applies equally in this case. However, there are more significant policy considerations here in play because the construction for which the State contends concerns not only the extent of the penalty which may be imposed, but whether a penalty may be imposed at all. I have already identified those considerations which suggest that the purpose or object of the FW Act would be best achieved by the Crown being amenable to a penalty. The maintenance of an effective regulatory scheme is an obvious purpose of the FW Act. That purpose is best effectuated if the conduct of a major labour market participant such as the Crown can be the subject of effective sanctions applied indifferently and free of the anomalous outcomes that would result from the State's preferred construction. 117 The State did not identify any purpose or object of the FW Act that would be best achieved by its construction. I do not accept, for the reasons already addressed, that an object of the Act was to provide the unincorporated emanations of the Crown an immunity in relation to the imposition of a penalty. 118 The conclusion I have reached is somewhat fortified by the legislative history of s 546(2). That the term "body corporate" had been interpreted to include the Commonwealth in Coochey and the Commonwealth's apparent acceptance of that interpretation in CPSU v Commonwealth may well explain the draftsperson's approach, firstly to the terms of s 719(4) of the WR Act (post the WorkChoices amendments), when the categories of "individual" or "body corporate" were first introduced to some of the penalty provisions in Commonwealth industrial legislation and then to the extension of that use to all such provisions in s 546(2) of the FW Act. 119 The presumption which may be made about Parliament's knowledge of the interpretation given by the courts to a statutory term which has been re-enacted was considered in Electrolux Home Products v Australian Worker's Union (2004) 221 CLR 309 at [81] where McHugh J said: The principle that the re-enactment of a rule after judicial consideration is to be regarded as an endorsement of its judicial interpretation has been criticised, and the principle may not apply to provisions re-enacted in "replacement" legislation. However, industrial relations is a specialised and politically sensitive field with a designated Minister and Department of State. It is no fiction to attribute to the Minister and his or her Department and, through them, the Parliament, knowledge of court decisions – or at all events decisions of this Court – dealing with that portfolio. Indeed, it would be astonishing if the Department, its officers and those advising on the drafting of the Act would have been unaware of Re Alcan. (Footnote omitted.) See further Gummow, Hayne and Haydon JJ at [162] 120 On its own, I would not have placed determinative weight on this consideration. That is so despite the fact that the Department that it may be presumed was directly involved in the drafting of the WR Act and the FW Act was the very Department which was involved in the contraventions dealt with in CPSU v Commonwealth. Nevertheless, those facts reinforce the conclusion I have reached. 121 Finally, if I am wrong as to that conclusion, there remains the possibility that the draftsperson simply omitted to include the Crown when addressing the maximum penalty which may be imposed upon the different categories of contraveners. That possibility seems to me to be a more likely explanation for the absence of a specific reference to the Crown in s 546(2) than the proposition contended for by the State that the absence is the deliberate expression of Parliament's intent to provide an immunity to so much of the Crown that remains unincorporated. 122 For those reasons, I reject the State's contention that it is not amenable to the imposition of a civil pecuniary penalty for a contravention of Part 3-1. What, if any, penalty should be imposed? 123 I have already discussed the relevant principles relating to the imposition of a pecuniary penalty for a contravention of the FW Act. As that discussion reveals, the primary objective for the imposition of a penalty is deterrence. The rationale is obvious. The maintenance of the behavioural norms required by the regulatory scheme established by Part 3-1 relies upon misbehaviour being discouraged. The principal tool provided by the FW Act to discourage contravention is the imposition of a penalty, so that the cost of contravention will discourage a contravener from engaging in further contraventions (specific deterrence) and send a message to others that contravention carries a cost (general deterrence). In Ponzio at [93], Lander J said: The penalty must recognise the need for deterrence, both personal and general. In regard to personal deterrence, an assessment must be made of the risk of re-offending. In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend: Yardley v Betts (1979) 22 SASR 108. The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like minded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section. However, the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat. In some cases, general deterrence will be the paramount factor in fixing the penalty: R v Thompson (1975) 11 SASR 217. 124 In my view each of the proceedings before me raise circumstances where the objective of deterrence, and primarily general deterrence, is the paramount consideration in the determination of an appropriate penalty. Rehabilitation (if ever of any significance in relation to a contravention of the FW Act) is of no significance here. Retribution is, for reasons earlier discussed, an available objective but, in relation to the Crown, would only be deployed in exceptional circumstances. No such circumstances are here applicable. 125 I do not accept the State's contention that the imposition of a penalty is unnecessary. Relying upon Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 582 (Mason CJ, Dawson, Toohey and Gaudron JJ) and Crowther v Queensland [2007] 1 Qd R 232, the State contends for a general principle that in cases where the Crown has breached the law, it is a sufficient vindication of the interests of justice for the court to make a declaration of the contravention of the law by the State. 126 Ainsworth has nothing to say in support of the principle contended for. Crowther concerned whether the Crown could be prosecuted for and subjected to a penalty for contempt. The Queensland Court of Appeal held that all proceedings for contempt are criminal in nature and that the Crown's common law immunity from prosecution for contempt was not abrogated by the statutory provisions upon which the appellant there relied for the imposition of a penalty. The Crown could therefore not be prosecuted or penalised. The judgment does not address or support a general principle that the imposition of a penalty upon the Crown is inappropriate. 127 The State drew attention to a reference by Gerrard JA at [43] to Lord Wolf's judgment in M v Home Office [1994] 1 AC 377. In that judgment, Lord Wolf made observations to the effect that whilst the Crown could not be fined or have its assets sequestrated for contempt, a finding of contempt was permissible under the common law of the United Kingdom. In that context an observation was made by Lord Wolf at 424-425 that a finding of contempt would not be pointless because the very fact of making such a finding would vindicate the requirements of justice. 128 The observation made by Lord Wolf as to the common law position in the United Kingdom in the context of the limited remedies available against the Crown for contempt, is no foundation for the general principle for which the State contends nor is there any analogy with the statutory remedy provided by s 546(1) of the FW Act. 129 There is no impediment under the FW Act to the imposition of a penalty on the Crown for the reasons I have explained and no basis for treating the Crown differently to any other contravener in respect of a breach of Part 3-1. That is not to say that the particular characteristics of the contravener ought not be taken into account. A penalty may be regarded as unnecessary to secure future compliance by a contravener, but that position may equally be true of any contravener and is not limited to the Crown. Even if that is the case, the need for a clear message to be sent to potential contraveners will ordinarily remain and the interests of general deterrence are unlikely to be vindicated by a mere declaration. 130 I should add that the principle which the State contends for is not supported by the approach previously taken to the imposition of pecuniary penalties against the Crown for a contravention of Commonwealth industrial legislation. A penalty was imposed on the Commonwealth in Coochey and in CPSU v Commonwealth and a penalty was imposed on the Tasmanian Minister for Public Sector Management in Frearson. 131 I turn then specifically to the State's contravention of s 340(1)(a)(i) of the FW Act in the Lend Lease proceeding. 132 The entitlement to the benefit of a workplace instrument is a workplace right recognised by s 341(1) of the FW Act which many millions of Australians hold. These are valuable entitlements which the long experience of industrial relations in Australia has shown are not infrequently subjected to challenge. 133 As I observed at [252] of my reasons for judgment in the Lend Lease proceeding, the purpose of the FW Act conferring this workplace right is to protect against employers and others taking "adverse action" which is motivated by the content of the workplace instrument to which the target of the adverse action is entitled. The protection of this workplace right serves to guard the integrity of industrial instruments made by industrial parties. It also protects one of the primary objects of Part 3-1. If the fruits of freedom of association are not able to be enjoyed free of adverse action, that fundamental freedom is undermined to the prejudice of the FW Act's scheme for industrial bargaining: Greater Dandenong City Council v Australian Municipal Clerical and Services Union (2001) 112 FCR 232 at [71] (Wilcox J); Maritime Union of Australia v Burnie Port Corp Pty Ltd (2000) 101 IR 435 at [51]-[52] (Ryan J); Australian Licensed Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd (No 2) (2011) 205 IR 465 at [19]-[20] (Barker J). 134 Merkel J in Finance Sector Union v Commonwealth Bank made observations to the same effect at [42]-[43]: The WR Act strikes a balance between employers and their organisations on the one hand, and employees and their organisations on the other hand. Irrespective of whether the legislative pendulum has moved, or is moving, away from or towards awards, enterprise bargaining agreements or individual contracts, the one legislative constant has been the protection conferred by the freedom of association provisions, or their statutory predecessors in Pt XA. It is the freedom guaranteed by those provisions that has enabled the balance previously struck by the legislature to continue to provide a framework that supports fair agreement making under the applicable legislative regime. CBA's conduct struck at the heart of that process because it undermined that freedom of association by discriminating against CBA employees because of their entitlement to the benefit of EBAs and AWAs that CBA had negotiated and agreed to with the FSU (the EBAs) or its managerial employees (the AWAs). At a time when employees' entitlements under industrial instruments might be shrinking to the most basic entitlements, it becomes more, rather than less, important that all employers, and particularly large employers, are deterred from injuring or prejudicially altering the position of their employees because of the industrial entitlements the employers had agreed to provide in accordance with the procedures laid down in the WR Act. The penalty that is appropriate in all the circumstances is one that deters not only CBA, but also other employers, from implementing schemes analogous to that created by CBA in order to prejudicially alter the position of employees because of their entitlements under industrial instruments made under the WR Act. 135 The opportunities for adverse action to be taken in a way that undermines entitlements to the benefits of workplace instruments are widespread in today's labour market. A clear message needs to be sent that a contravention will be accompanied by a substantial cost. That message needs to reflect the nature and extent of the contravention for which the penalty is imposed. 136 Beyond the importance of the workplace right involved, there are a number of additional reasons why I consider that the State's contravention is serious and that a penalty at the higher end of the range is justified. The conduct was not inadvertent or transient. It was pursued over a substantial period from 19 November 2012 to 5 April 2013. That pursuit was deliberate and determined. It was not resiled from despite the fact that the State was on notice as to its potential unlawfulness; despite the pressure that the conduct was exerting on others (Lend Lease, its employees, the proponents for the efficient and timely redevelopment of the New Bendigo Hospital); and despite the State being offered a range of alternative courses by Lend Lease. 137 It was not conduct without impact or consequence. It exerted a high degree of pressure, as Lend Lease's preparedness to accede to the State's demands and its preparedness to offer substantial undertakings to the State demonstrated. The threat to Lend Lease's capacity to secure the tender for the New Bendigo Hospital Project was a threat to the security of employment of its employees. The conduct resulted in Lend Lease taking steps to effectuate a plan to remove provisions in the relevant industrial instrument in accordance with the State's demands. Those preparations were continuing in mid April 2013 after the judgment in this proceeding was initially reserved. 138 Furthermore, the conduct was endorsed, if not directed, by the highest levels of government. It was carried out by a governmental unit which took on the role of an industry regulator. The conduct was neither aberrant nor isolated. It was taken in furtherance of an industry wide policy by a highly influential, highly visible participant in the Victorian building industry, who other participants would have rightly expected to provide leadership and promote exemplary practice. The conduct was more egregious by reason of the influence, leadership status and standing in the industry of the contravener. The size of the contravener is also a significant factor which supports a heavier penalty. 139 I have taken into account that the conduct was a single course of conduct and that the applicable maximum penalty is $33,000. I have also taken into account that the threat of Lend Lease's and Exemplar's exclusion was not ultimately carried through, although the reason why the State changed its position was not given. 140 The period in which the contravention by the State of s 340(1)(a)(i) of the FW Act occurred (the subject of the Lend Lease proceeding) overlapped with the period in which the State's contravention of s 343(1)(a) of the FW Act occurred (the subject of the McCorkell proceeding). The impact of a prior contravention is more cogent as an aggravating factor where a prior contravention had been recorded at the time of the second contravention, but the existence of prior or contemporaneous contravening conduct is nevertheless relevant to the imposition of a penalty: Williams v Construction, Forestry, Mining and Energy Union (No 2) (2009) 182 IR 327 [26]-[28] (Jessup J). The State's contravention of s 343(1)(a) of the FW Act is an aggravating factor which I have taken into account. 141 There are two prior contraventions of the WR Act by the State. The first related to a breach of an award. The second and most recent occurred in 2004. In that matter (Hadgkiss v State of Victoria, VID 111 of 2005) a declaration was made by Merkel J in this Court on 19 September 2005 that the State had contravened s 298K(2)(d) of the WR Act by refusing to engage an independent contractor including because of that contractor's entitlement to the benefit of an industrial agreement. No reasons were published to accompany that declaration and the nature and extent of the conduct which led to the declaration is not apparent. I note however that no penalty was sought or imposed. 142 That antecedent history of contravening conduct serves to diminish the confidence which might otherwise have been held about the likelihood of future compliance and indicates that specific deterrence is a relevant consideration. 143 As Lander, Tracey and Yates JJ said in Setka v Gregor (No 2) (2011) 195 FCR 203 at [46]: One factor, of great importance, in all sentencing exercises is the maximum available penalty fixed by the legislature. As Gleeson CJ, Gummow, Hayne and Callinan JJ observed in Markarian v The Queen (2005) 228 CLR 357 at 372: It follows that careful attention to maximum penalties will almost always be required, first because the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and thirdly, because in that regard they do provide, taken and balanced with all of the other relevant factors, a yardstick. 144 I do not regard the contravention in question as the worst possible case, but I do regard it as serious and deserving of a penalty towards the upper end of the range. I have concluded, having regard to all of the circumstances including the need to impose a penalty which is proportionate to the gravity of the contravention, that a penalty of $25,000 should be imposed on the State. 145 I turn then to the State's contravention of s 343(1)(a) of the FW Act in the McCorkell proceeding. 146 Like s 340(1), s 343(1) is concerned with the protection of workplace rights recognised by the FW Act. As I observed at [253] of my reasons for judgment in the McCorkell proceeding, the plain purpose of s 343(1) when applied in relation to workplace rights associated with the making, varying or termination of enterprise agreements, is that of proscribing conduct which might result in an agreement which is not the product of free bargaining. 147 As I further observed at [250]-[255] of my reasons for judgment in the McCorkell proceeding, the regime established by the FW Act contemplates free bargaining between employers and their employees or organisations. The FW Act permits industrial parties to decide for themselves the content of the enterprise agreements they make within the parameters dictated by the Act. Conduct which seeks to dictate different parameters for the content of enterprise agreements, serves to undermine the purposes of the FW Act. 148 It can be seen therefore that s 343(1) is an important provision upon which, at least in part, the integrity of the scheme for industrial negotiations relies. 149 The capacity for action to be taken which serves to undermine the freedom of industrial parties to bargain, free of the coercion which s 343 proscribes, is widespread. Every industrial negotiation is capable of being subjected to that kind of interference. A clear message needs to be sent to all persons who might engage in that kind of interference that it will be accompanied by a substantial cost. 150 There are other aspects of the nature and extent of the State's contravention which persuade me that the contravention is serious and justifies a penalty at the higher end of the range. 151 The contravention was not inadvertent or some aberration. It arose out of a course of conduct which was part of a standard approach consistent with a detailed policy deliberately adopted by the State and deliberately applied by the CCCU to all tenderers for Victorian Government building work across the whole building industry in Victoria. As I found, the role of the CCCU involved the application of economic pressure upon tenderers in order to induce compliance with the State's policy, which, amongst other matters, sought to require that industrial agreements made between industrial parties satisfy the State's policy requirements. In the particular instance which led to the contravention of s 343(1), the State's conduct involved an intent to coerce Eco through the application of economic pressure to have its industrial agreement varied so that it was compliant with the State's requirements regarding the content of industrial agreements. 152 The State's interference with the rights of Eco and its employees to freely bargain was grave. A high level of pressure applied by the State was experienced by Eco and its employees. The future of Eco's demolition business and the security of the employees who worked in it was put at risk. In the absence of the intervention brought about by this proceeding, there was a substantial risk that the Eco Agreement would have been varied so as to replace content freely agreed between the parties with content induced by coercion. 153 The contravention occurred in circumstances where the policy which the State required adherence to included a requirement prohibiting pressure or coercion being applied upon industrial parties in relation to the form or content of their industrial agreements. 154 That aspect of the State's policy makes it apparent that the State may be taken to have appreciated the mischief for industrial bargaining that s 343(1) of the FW Act is directed to. Secondly, the coercive conduct engaged in by the State in the context of its own prohibition on others engaging in such conduct, leads to a perception that the State saw itself as beyond the reach of the behavioural norms to which others had to adhere. The exceptionalist attitude therein revealed is an aggravating factor which indicates that specific deterrence is warranted. 155 The observations I have made in relation to the Lend Lease proceeding as to the involvement of the State at its highest levels, the size, influence, leadership status and standing of the State apply equally, as do the observations made about the State's history of contravening conduct. 156 It is accepted that the conduct here in question was a single course of conduct. The maximum applicable penalty is $33,000. 157 Whilst the conduct is short of the worst possible case of contravention, it is sufficiently serious to warrant a penalty at the upper end of the range. I have concluded, having regard to all of the circumstances, including the need to impose a penalty that is proportionate to the gravity of the contravention, that a penalty of $28,000 should be imposed on the State. 158 I should also record one further consideration which is relevant to each proceeding. I have taken into account the evidence before me that the State's policy which the contravening conduct was taken in furtherance of, was altered on the next working day after the Court published its judgments on 17 May 2013. There is no issue that the alterations made responded appropriately to the Court's findings. 159 There is however an issue as to the extent to which appropriate corrective action was taken by the State in relation to four tender processes. Those processes, in which the State was involved, had commenced prior to the Court's judgment but were incomplete. Whether those tender processes were completed by reference to the old or corrected policy was in contest and the subject of an evidentiary dispute. It is however a dispute I need not resolve. Even if I was satisfied that the corrective action did not extend to the four tender processes at issue, the evidence before me was sufficient to satisfy me that the corrective action taken was intended to be comprehensive and that genuine efforts were made to that end, at least by those directly responsible. 160 In determining the appropriate penalty in each case, I proceeded on the basis that the taking of corrective action by the State was a mitigating factor. 161 Finally, the CFMEU seeks an order in each case that any penalty ordered by the Court be paid to it pursuant to s 546(3)(b) of the FW Act. As the authorities to which I earlier referred show, an order of that kind is an order that is usually made in civil pecuniary penalty proceedings under the FW Act. The State did not contend that the usual order ought not be made and I see no reason why such an order ought not be made in each case. 162 No party sought an order for costs. 163 For all of those reasons, I will make orders in the Lend Lease proceeding that impose a penalty upon the State of $25,000 and that require the penalty to be paid to the CFMEU within 14 days. In the McCorkell proceeding I will make orders imposing a penalty of $28,000 upon the State and that require the penalty to be paid to the CFMEU in 14 days. 164 As, in each proceeding, the State has instituted an appeal in relation to my judgment of 17 May 2013, it is appropriate that the orders for payment of the penalty to the CFMEU be stayed pending the disposition of the appeal or further order. I will make further orders to that effect. I certify that the preceding one hundred and sixty-four (164) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg. Associate: Dated: 11 October 2013	24,457
federal_court_of_australia:fca/single/2022/2022fca0888	decision	commonwealth	federal_court_of_australia	text/html	2022-07-28 00:00:00	BNO19 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] FCA 888	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2022/2022fca0888	2024-09-13T22:44:38.765877+10:00	Federal Court of Australia BNO19 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] FCA 888 Appeal from: BNP19 as Litigation Guardian for BNO19 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (SYG922/2019, Orders dated 17 October 2019) File number: NSD 1800 of 2019 Judgment of: NICHOLAS J Date of judgment: 28 July 2022 Legislation: Migration Act 1958 (Cth) s 36 Division: General Division Registry: New South Wales National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 26 Date of hearing: 28 July 2022 Counsel for the Appellant: The appellant appeared in person with the assistance of an interpreter Solicitor for the First Respondent: Mr A Taverniti of Sparke Helmore Counsel for the Second Respondent: The second respondent submitted save as to costs ORDERS NSD 1800 of 2019 BETWEEN: BNO19 Appellant AND: MINISTER FOR IMMIGRATION, CITIZENSHIP, MIGRANT SERVICES AND MULTICULTURAL AFFAIRS First Respondent ADMINISTRATIVE APPEALS TRIBUNAL Second Respondent order made by: NICHOLAS J DATE OF ORDER: 28 july 2022 THE COURT ORDERS THAT: 1. The appellant's mother identified as BNP19 in the Notice of Appeal from the Federal Circuit Court of Australia filed on 4 November 2019 be appointed the appellant's litigation guardian, which appointment is deemed to take effect from when the Notice of Appeal was filed. 2. The name of the first respondent be changed to Minister for Immigration, Citizenship and Multicultural Affairs. 3. The appeal be dismissed. 4. The appellant's litigation guardian (BNP19) pay the first respondent's costs of the appeal fixed in the amount of $4,000. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT (Revised from Transcript) NICHOLAS J: 1 Before the Court is an appeal filed on 4 November 2019, brought by the appellant's litigation guardian, her mother, from the judgment of the Federal Circuit Court of Australia delivered on 17 October 2019. The primary judge (Judge Street) dismissed the appellant's application for judicial review of a decision of the second respondent ("the Tribunal") dated 1 April 2019, affirming the decision of a delegate of the first respondent ("the Minister") to refuse to grant the appellant a protection visa under s 36 of the Migration Act 1958 (Cth). The delegate's decision was dated 12 November 2015. 2 The appellant is a minor born in Australia in October 2014 to Chinese parents. The appellant and her parents are citizens of China. The appellant's mother arrived in Australia in December 2007 on a student visa that ceased on 9 January 2008. The mother applied for another student visa on 9 January 2008 which ceased on 8 April 2009. She applied for a protection visa on 6 August 2013. The mother's application for a protection visa was refused and that decision was affirmed by the Refugee Review Tribunal. 3 On 21 October 2014 the appellant's mother lodged the appellant's application for a protection visa. The claims made in the appellant's protection visa application included that, if she was sent to China, she would be deprived of basic human rights because her mother was a Roman Catholic who had been baptised in 2005 and was involved in a secret youth group run by a nun of the underground church. The appellant's claims included that, in 2007, her mother had been arrested for praying with rosary beads and had been detained for 15 days during which time she had been abused. The claims also detailed the arrest of the mother's friends and associates and indicated that as a result of these associations, the mother had come to the attention of the Chinese authorities. It was further claimed that the appellant's grandparents and uncle had been implicated somehow in the mother's religious activities and that they were the subject of investigation by the Chinese authorities. 4 The mother appeared before the Tribunal on 17 October 2018 on behalf of the appellant with the assistance of a migration agent. At that time the appellant was approximately five years of age. The Tribunal heard evidence from the appellant's mother and also from Father McGee and the appellant's godmother. Father McGee stated that he believed that the appellant's mother was a genuine Catholic, because she attended Church regularly, and was familiar with its practices. The appellant's godmother also stated that she frequently saw the mother at Church. 5 The Tribunal questioned the appellant's mother as to why she had not had a Catholic marriage, and she stated (among other reasons) that her husband was not Catholic. According to the Tribunal, this was something the mother had not stated before the Refugee Review Tribunal previously. This was a matter that concerned the Tribunal as well as the fact that before the Refugee Review Tribunal, the appellant's mother had expressed an intention to get married in the Catholic Church, and some four years later, this had still not occurred. The Tribunal also questioned the appellant's mother at the hearing regarding the length of time she was in Australia prior to applying for a protection visa, her confirmation, the various events that she alleged occurred in China, including her arrest and how she could be implicated in her friends' arrests, and why she would be in danger if she returned to Fujian given that the country information indicated that it applied its religious regulations more liberally than other provinces in China. On 22 October 2018 the appellant's migration agent provided to the Tribunal links to a number of reports concerning human rights practices in China. 6 Following the hearing, the appellant was sent a letter dated 26 November 2018 raising these matters. She was given the opportunity to provide further information in relation to all these matters. The mother responded to this letter by providing a statutory declaration dated 30 November 2018. 7 The Tribunal concluded that the appellant's mother was not a credible witness. In its reasons, it referred to various inconsistencies in her claims and evidence, before both the Tribunal and the Refugee Review Tribunal, including in relation to her confirmation and her marriage. In relation to the matter of her confirmation, the Tribunal noted that she told it she had been confirmed, but that she had previously stated that she had not been confirmed. The Tribunal did not accept her explanation as to the inconsistency, nor did it accept her explanations concerning the fact that she had still not been married in the Catholic Church. 8 The Tribunal found that the mother's account of what happened to her in China, including her alleged arrest for possessing rosary beads and a Bible, were all fabricated to assist her application for a protection visa. It did not accept that the mother had converted to Roman Catholicism in China, or that she was a member of a secret underground church. Nor did it accept her claims regarding the arrest of her friends and associates. It is apparent that the Tribunal did not accept the mother's explanation for the time it took her to apply for a protection visa (some six years after she left China) and it considered that her delay in applying for a protection visa was inconsistent with her having left China out of fear that she would suffer harm on account of her religion. 9 The Tribunal accepted the mother had attended Catholic Church in Sydney, but that she had done so to strengthen her prospects of being granted a protection visa. The Tribunal did not accept that she had been attending that Church since 2008 as she claimed. It was not satisfied that she is a genuine Catholic or that she had any intention to practice the faith in the reasonable foreseeable future were she to return to China. The Tribunal considered the evidence of Father McGee, and the appellant's godmother, however, it is apparent from the Tribunal's reasons that it did not regard their evidence, when considered in light of the evidence as a whole, as sufficient to overcome its doubts as to the veracity of the mother's evidence. 10 The Tribunal did not accept that the appellant's or her mother's attendance at the Catholic Church in Sydney would be known to the Chinese authorities, and did not accept that the appellant or her mother would be at risk of harm if they returned to China. 11 In her application for judicial review filed on 12 April 2019, four grounds of review were relied on. All four grounds alleged that the Tribunal was biased. Amongst other things, the appellant asserted in this document that the Tribunal favoured certain country information that was harmful to the interests of the appellant and her mother, and disregarded other information that was helpful to the appellant's protection visa application. A complaint was also made as to the emphasis placed by the Tribunal on the mother's delay in applying for a protection visa, and also the finding that the appellant's mother's religious practice in Australia was engaged in to strengthen her claims for a protection visa for either herself or her daughter. All of these matters were relied on in support of what would appear to be an allegation of actual bias on the part of the Tribunal. 12 The appellant was not legally represented in the proceeding before the primary judge. The appellant's mother made submissions to the primary judge and sought to tender two documents, which were marked for identification. His Honour rejected the tender of the two documents, MFI-1 and MFI-2, and returned them to the appellant's mother. 13 In relation to these documents his Honour said in his reasons at [19]-[20]: 19. The two documents were marked MFI1 and MFI2 and returned to the litigation guardian and the tender was rejected on the grounds of being irrelevant. Material that was not before the Tribunal in relation to the claims is not admissible to establish jurisdictional error. Accordingly, the two documents sought to be tendered were not relevant and are not capable of establishing any relevant error by the Tribunal. From the bar table, the litigation guardian took issue with the Tribunal's adverse findings in relation to the practice by her and the child of the Catholic faith. 20. In that regard, the litigation guardian sought to advance submissions relying upon the change in law that was the subject of the document marked MFI1. As that document was not relevant to establishing any error, the applicant's submissions concerning that document are not capable of identifying any jurisdictional error. The applicant also suggested that the Tribunal did not give the applicant an opportunity to present her claims and evidence. No evidence has been adduced in support of that contention. The reasons of the Tribunal identifying what occurred at the hearing are inconsistent with that contention. I will say more about MFI-1 and MFI-2 shortly. At this stage, I merely note that his Honour rejected the tender of these documents on the basis that they were not before the Tribunal and were therefore irrelevant to the appellant's application for judicial review. 14 So far as the allegations of bias are concerned, the primary judge rejected these and concluded that the conduct relied upon by the appellant in support of them consisted of nothing more than the fact that the Tribunal had made findings adverse to the appellant which could not, in itself, constitute conduct which might lead a fair-minded lay observer to reasonably apprehend that the Tribunal might not bring an independent and impartial mind to the determination of her application on the merits. 15 As I have mentioned, the grounds of review relied upon by the appellant took issue with the Tribunal's evaluation of the country information, the mother's delay in filing her application for a protection visa, the evidence of Father McGee, and, more generally, the findings made by the Tribunal regarding the mother's religious practice and the motivation behind it. His Honour considered that none of the matters relied on could support a finding of bias and that no ground of jurisdictional error had been made out. 16 The appellant's Notice of Appeal identifies three grounds, each of which ultimately suggest that the primary judge failed to consider "crucial information". The crucial information is said in the Notice of Appeal to be a revision to the regulation on religious affairs which took effect in China on 1 February 2018. The Notice of Appeal suggests that this new regulation prohibits the appellant from practicing her religion in China and is direct evidence that if the appellant was sent to China, she would be subjected to persecution due to her religious beliefs. 17 There are two principal difficulties that arise in relation to the appellant's grounds of appeal. 18 First, it is not apparent how the information referred to in the Notice of Appeal could have had any bearing on the question whether the appellant's mother was a genuine Roman Catholic, whether she had any intention to practice that religion if she were to return to China, and whether the appellant was at risk of any harm in China on account of her mother's religion in circumstances where the Tribunal did not accept the mother was a genuine Roman Catholic. 19 Secondly, neither MFI-1 or MFI-2 is before the Court. I asked the appellant's mother whether she could produce them and I was told that she could not. The primary judge's reasons indicate that these documents were returned to the mother after the tender was rejected. I considered whether it was desirable to adjourn the hearing for a short time in order to allow the appellant to retrieve those documents. However, I did not see any point in delaying the hearing of the appeal because the Tribunal's reasons, and the other documentary information contained in the appeal book, including the appellant's migration agent's written communications with the Tribunal, indicate that the appellant did not provide the documents to the Tribunal or otherwise bring them to its attention. 20 At its highest, these documents contained country information which, assuming they were authentic, may have been open to the Tribunal to ascertain but which it was not obliged to ascertain. In the circumstances, I agree with the primary judge's finding that the documents, as they have been described, were not relevant to the appellant's application for judicial review. 21 It is well established that it is a matter for the Tribunal to determine what country information it will have regard to and what weight it will give to that country information. Of course, there are some cases in which jurisdictional error may arise if the Tribunal fails to consider some significant piece of country information relied on by an applicant in support of his or her claims. However, in the present case, there is no reason to think that the documents referred to in the appellant's notice of appeal were ever brought to the Tribunal's attention. 22 In oral submissions, the appellant's mother referred to what she claimed was the unfairness of the Tribunal's decision. She spoke about her and her daughter's continuing involvement in the Catholic Church and also referred to what were said to be recent developments in China and their significance for members of the Catholic Church. Although it is apparent that the appellant's mother strongly disagrees with the conclusions reached by the Tribunal, nothing that was said by the mother in support of the appeal provided any support for any of the appellant's grounds of appeal or any other basis for finding that the Tribunal's decision was affected by jurisdictional error. 23 It is not suggested in the Notice of Appeal that the primary judge ought to have found that the Tribunal's decision was legally unreasonable. Nevertheless, having considered the Tribunal's reasons, and the various inconsistencies in the evidence which it identified upon which it relies, the Tribunal's decision cannot be characterised as legally unreasonable in the sense that it was manifestly unjust, arbitrary or irrational, or lacking an intelligible justification. 24 In all the circumstances, I am satisfied that the primary judge's decision was correct, and that the appellant has failed to demonstrate any jurisdictional error on the part of the Tribunal or any legal error on the part of the primary judge. 25 In the result, the appellant's appeal will be dismissed. There will also be an order that the appellant's mother, the appellant's litigation guardian, pay the Minister's costs of the appeal. 26 Orders accordingly. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Nicholas. Associate: Dated: 1 August 2022	3,378
federal_court_of_australia:fca/single/2011/2011fca0134	decision	commonwealth	federal_court_of_australia	text/html	2011-02-23 00:00:00	Forest Marsh Pty Ltd v Pleash [2011] FCA 134	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2011/2011fca0134	2024-09-13T22:44:39.360054+10:00	FEDERAL COURT OF AUSTRALIA Forest Marsh Pty Ltd v Pleash [2011] FCA 134 Citation: Forest Marsh Pty Ltd v Pleash [2011] FCA 134 Parties: FOREST MARSH PTY LTD (ACN 009 545 733) and STEPHEN MICHAEL POWELL v BLAIR PLEASH and BIBBY FINANCIAL SERVICES AUSTRALIA PTY LIMITED (ACN 101 657 041) File number: NSD 1328 of 2009 Judge: YATES J Date of judgment: 23 February 2011 Catchwords: CORPORATIONS – application to remove receiver and manager – appointment pursuant to charge – alleged breaches of statutory duties – alleged breach of general law duties - alleged breach of duty to act in good faith – alleged breach of duty to terminate receivership – discussion of duties of receiver to chargor – discussion of content of receiver's duty to terminate receivership – whether breaches made out on facts relied on CORPORATIONS – application for inquiry into receiver's conduct – alleged improper conduct in continuing receivership – whether inquiry would be ordered when grounds for inquiry have been fully litigated CONSUMER LAW – consumer protection – misleading or deceptive conduct in relation to payout amount – initial failure to notify of contingent claim – consideration of what constitutes relevant conduct – trifling, ephemeral and inconsequential conduct COSTS – indemnity costs – adjournment of hearing to replead case Legislation: Corporations Act 2001 (Cth) s 180, s 181, s 182, s 423 Competition and Consumer Act 2010 (Cth) Sch 2 s 18 Cases cited: Australian Securities & Investments Commission v Lanepoint Enterprises Pty Ltd (2006) 64 ATR 524 Bank of New South Wales v Federal Commissioner of Taxation (1979) 145 CLR 438 Bowesco Pty Ltd v Cronin (2008) 223 FLR 21 Expo International Pty Ltd (Receivers and Managers Appointed) (In Liquidation) v Chant [1979] 2 NSWLR 820 Re S & D International Pty Ltd (In Liquidation) (Receivers and Managers Appointed) v MIG Property Services Pty Ltd [2009] VSC 225 Date of hearing: 29 July 2010, 23-24 August 2010 Date of last submissions: 24 August 2010 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 143 Counsel for the Applicants: Mr S Cairns Solicitor for the Applicants: Bradfields Counsel for the Respondents: Mr R Glasson Solicitor for the Respondents: ERA Legal IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1328 of 2009 BETWEEN: FOREST MARSH PTY LTD (ACN 009 545 733) First Applicant STEPHEN MICHAEL POWELL Second Applicant AND: BLAIR PLEASH First Respondent BIBBY FINANCIAL SERVICES AUSTRALIA PTY LIMITED (ACN 101 657 041) Second Respondent JUDGE: YATES J DATE OF ORDER: 23 FEBRUARY 2011 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application be dismissed. 2. The second applicant pay, on an indemnity basis, the respondents' costs thrown away by the adjournment granted on 29 July 2010. 3. Subject to the order made in paragraph 2, the applicants pay the respondents' costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1328 of 2009 BETWEEN: FOREST MARSH PTY LTD (ACN 009 545 733) First Applicant STEPHEN MICHAEL POWELL Second Applicant AND: BLAIR PLEASH First Respondent BIBBY FINANCIAL SERVICES AUSTRALIA PTY LIMITED (ACN 101 657 041) Second Respondent JUDGE: YATES J DATE: 23 FEBRUARY 2011 PLACE: SYDNEY REASONS FOR JUDGMENT 1 In this proceeding the applicants allege that the first respondent, as receiver and manager of the first applicant, breached duties he owed to the first applicant under the Corporations Act 2001 (Cth) (the Corporations Act) and at general law, and contravened s 52 of the Trade Practices Act 1974 (Cth) (the Trade Practices Act): see now s 18 in Sch 2 of the Competition and Consumer Act 2010 (Cth) providing for the Australian Consumer Law. 2 The applicants seek orders that the first respondent cease to act as receiver of the first applicant and of certain other companies. The applicants also seek certain declaratory relief and damages against the first respondent. 3 Alternatively, the applicants seek an inquiry under s 423 of the Corporations Act into the conduct of the first respondent in continuing his receivership after 10 October 2008 and in respect of what they assert to be excessive and unreasonable fees incurred by the first respondent since that date. 4 The applicants do not plead any cause of action against the second respondent. They do, however, seek an order that the second respondent release and discharge all securities it currently holds over certain real property called the Forest Marsh land and a declaration that the applicants are not indebted to the second respondent. background 5 On 21 December 2007 RR & SM Powell Holdings Pty Limited (Holdings) and Mountain Maid Pty Limited (Mountain Maid) entered into a factoring agreement (called a Full Service Factoring Agreement) with the second respondent. On the same day certain collateral securities were granted to the second respondent, specifically: (a) a deed of guarantee and indemnity by Holdings, Mountain Maid, the first applicant and the second applicant; (b) a fixed and floating charge by the first applicant (the charge); (c) a mortgage over the Forest Marsh land by the first applicant (the mortgage); (d) a fixed and floating charge by Holdings; (e) a fixed and floating charge by Mountain Maid. 6 The second applicant is the sole director, secretary and shareholder of Holdings, Mountain Maid and the first applicant. It is convenient, therefore, to refer to these companies as the second applicant's companies. 7 On 1 April 2008 a company called Business Expansion Capital Pty Limited (B E Capital) appointed Mr Rick Leighton and Mr Michael Gawler as joint and several managing controllers of Holdings pursuant to a Deed of Charge granted by Holdings to B E Capital on 1 November 2007. This charge was a first-ranking charge over the assets and undertaking of Holdings. Consequently, on 4 April 2008, the second respondent appointed the first respondent as receiver and manager of Holdings and the first applicant and, on 10 April 2008, as receiver and manager of Mountain Maid. These appointments were made pursuant to the collateral securities that had been granted to the second respondent by the second applicant's companies in respect of the factoring agreement. 8 At the time the first respondent was appointed as receiver and manager of the first applicant, Holdings was engaged in the production and distribution of beverages. Under the factoring agreement, Holdings would invoice its customers at the time of supplying the beverages. A copy of the invoice would be sent to the second respondent. The second respondent would pay Holdings a percentage of the invoices and Holdings' customers would pay the second respondent the full amount of the invoice. This business was sold in about June 2008 pursuant to the powers conferred on the first respondent in the charge granted by Holdings. However the funds derived from the sale were insufficient to discharge the debt due to B E Capital. 9 At the time of the first respondent's appointment, Mountain Maid was the owner of certain trade marks. These were subsequently sold in June 2008 as part of the receivership. The first applicant was the owner of the Forest Marsh land. The land was comprised in a number of certificates of title issued under the provisions of the Land Titles Act 1980 (Tas). The land was subject to a registered mortgage in favour of National Australia Bank Limited (Mortgage No. C743450). It was also subject to a registered mortgage in favour of B E Capital (Mortgage No. C829979). The mortgage over the land granted to the second respondent (Mortgage No. C837779) ranked in priority to the mortgage granted to B E Capital but was subject to the mortgage granted to National Australia Bank Limited. Furthermore, the charge granted by the first applicant created a fixed charge over the first applicant's freehold property, and hence over the Forest Marsh land. 10 In the course of his receivership the first respondent has attempted to sell the Forest Marsh land to satisfy the indebtedness of the second applicant and his companies to the second respondent. It is in that context that the events giving rise to the allegations now made by the applicants occurred. It is to those events that I now turn. 11 Much of the correspondence to which I will refer in that regard was personalised by the applicants' solicitors to the second applicant, rather than to Holdings, Mountain Maid and the first applicant. This seems to have been because the second applicant, as sole director, secretary and shareholder, was the personification of those companies. The correspondence should be understood as referring to and dealing with the arrangements entered into by the second applicant and his companies with the second respondent, which I have described above. FINDINGS IN RELATION TO events from june 2008 12 The Forest Marsh land was listed for sale on 27 June 2008, with an auction scheduled for 18 August 2008. As events transpired, the auction scheduled for that date was postponed. Prior to the land being rescheduled for auction, the second applicant sought to have the land withdrawn from sale on the basis that the debts due to the second respondent under the factoring agreement and the collateral securities, including the costs of the receivership, would be paid. To this end, correspondence passed, variously, between the second applicant or the applicants' solicitors and the first respondent or the respondents' solicitors, including correspondence stipulating payout amounts at various times. The correspondence makes clear that, in each case, the payout amount would need to be updated when settlement was to occur. 13 On 1 October 2008 the applicants' solicitors informed the respondents' solicitors, by email, that they had funds in their trust account "sufficient to discharge any alleged liability or debt to your client", no doubt intending to refer to the second respondent. On 7 October 2008 the respondents' solicitors responded by letter. This letter assumes considerable importance in this case. The body of the letter was as follows: I refer to your email of 1 October 2008 and confirm that you now have sufficient funds in your Trust account to discharge the liability to my client's appointor Bibby Financial Services Pty. Limited ("Bibby"). Accompanying this letter is a spreadsheet setting out the amount required for your clients to discharge the debt to Bibby as at 30 September 2008. The amount being $309,423.26. As discussed in our telephone conversation on 29 September 2008, your client will need to determine whether or not it requires Bibby to simply retire the Receiver at this stage or requires a discharge of the securities that Bibby has over the companies and the real property. If your client requires the securities to be discharged, then as a precondition of the discharge, your clients will be required to enter into a Deed of Release and Indemnity in terms similar to those particularised in the draft Deed which has previously been forwarded to your clients and their advisors. Attached is a copy of the current draft of the Deed. Obviously, given that your clients are now paying out the indebtedness, there will need to be some amendments to the Deed. We do not wish to embark upon that process until such time as we receive your clients [sic] instructions as to how they wish to proceed, that is, by way of discharge or merely through the retirement of the Receiver at this stage. As you will appreciate, as a result of the receivership process our client and Bibby may have accrued certain contingent liabilities. In the circumstances Bibby is not prepared to release the securities, unless and until it receives the indemnities and releases which are generally outlined in the draft Deed. Would you please let us have your comments in this regard. In the meantime, we advise that until such time as the amount required to payout Bibby as indicated above, $309,423.26 is paid into this firms [sic] Trust account, the Receiver intends to continue to [sic] with the marketing of the Forest Marsh property for sale. We note that the auction of the Forest Marsh property is currently scheduled for 16 October 2008. Should you wish to discuss then please do not hesitate to contact the writer. [Capitalisation, emphasis and definition in original] 14 The evidence discloses that a copy of this letter was sent by email to the applicants' solicitors at 3.25pm on 7 October 2008. Having regard to the date of the letter, the sum of $309,423.26 stated as the amount to discharge the debt to the second respondent as at 30 September 2008 (the September payout amount) was indicative of the amount that would be required at settlement (whenever that came to be appointed) to discharge the then indebtedness of the second applicant and his companies to the second respondent. Objectively considered, the letter could not reasonably be understood as stating otherwise. Apart from anything else, in the context of the first respondent actively seeking to sell the Forest Marsh land, it could be confidently predicted at that time that costs and expenses were continuing to be incurred in relation to the receivership. There is in fact evidence before the Court as to the work being carried out by the first respondent in the period 30 September to 13 October 2008. Interest was also accruing. The sum identified as the September payout amount would need to be updated and finalised when settlement was actually appointed. Nevertheless, it was implicit in the letter of 7 October 2008 that, if the September payout amount was paid, the first respondent would desist from marketing the Forest Marsh land for auction. The auction date was fast approaching. 15 Later in the afternoon on 7 October 2008 (at 4.31pm) the respondents' solicitors sent another email to the applicants' solicitors confirming that the first respondent would continue to market the Forest Marsh land with a view to it proceeding to auction on 16 October 2008, pending payment of the September payout amount into the respondents' solicitors' trust account. 16 This particular email or its contents was apparently passed on to the second applicant. On 8 October 2008, he sought to engage in correspondence with the respondents' solicitors directly, apparently in the absence of Mr Saric (the solicitor handling the matter on behalf of the second applicant and his companies) due to illness. In an email sent at 10.56 am on 8 October 2008, the second applicant informed the respondents' solicitors (amongst other things) that: Jim Saric also advised you that as a result of his holding adequate funds in Bradfield's Trust Account that any further expenditure that you care to make on this matter prior to us settling your alleged debt (which WILL be before your proposed auction date) will need to be on your own account. Trusting that you understand that with you furnishing your alleged account balance as of close of business yesterday, coupled with Jim's unavailability today, that payment of said alleged amount will be expedited in order to finalise this stage of our relationship, without the need for further unnecessary costs to be incurred by you. [Emphasis in original] 17 This email indicates that the second applicant was well aware of the likelihood that costs and expenses in relation to the receivership were being incurred on a daily basis, particularly in relation to the intended sale by auction of the Forest Marsh land. The reference to the "account balance" being "as of close of business yesterday" misstates the fact that the September payout amount was given as the amount that would have discharged the indebtedness as at 30 September 2008, not at a later date. 18 In the meantime, on 6 October 2008, the managing controllers appointed by B E Capital had written to the first respondent demanding payment of the sum of $116,650.77 (the managing controllers' claim). This amount was said to represent payments made to the second respondent by Holdings' customers arising from the sale of goods by Holdings during the appointment of the managing controllers which they (the managing controllers) claimed were payments properly due to B E Capital. Plainly any payment erroneously received by the second respondent which was required to be refunded to the customer or paid to B E Capital would result in a corresponding increase in the indebtedness of the second applicant and his companies to the second respondent. This claim (the managing controllers' claim) was coupled with a threat to sue the second respondent for the claimed amount and to sue the first respondent personally for consequential costs incurred by B E Capital should the managing controllers' administration be unnecessarily prolonged. This demand was sent by facsimile to the first respondent at 5.45pm on 6 October 2008. 19 When armed with this demand, the respondents' solicitors sent an email to the applicants' solicitors at 11.57 am on 8 October 2008 enclosing a copy of the managing controllers' letter dated 6 October 2008 and advising that, as a result of the managing controllers' claim, the amount required to discharge the indebtedness to the second respondent "will be increased by $116,650.77 to $426,074.03, plus the additional costs incurred by the Receiver and Bibby since 30 September 2008". 20 Later on 8 October 2008 at 12.05 pm the respondents' solicitors sent another email to the applicants' solicitors, attaching a copy of the second applicant's email to the respondents' solicitors earlier on 8 October 2008 from which I have quoted. Amongst other things, the email confirmed that until the sum of $426,074.03 was paid into the respondents' solicitors' trust account, with a direction that it be unconditionally released to the second respondent, the marketing of the Forest Marsh land for auction would continue. 21 On 9 October 2008 the applicants' solicitors responded by email. They advised the respondents' solicitors that the sum of $116,650.77 claimed by the managing controllers on behalf of B E Capital was disputed and that there was an "ongoing legal dispute between our client and B E Capital which is currently before the Tasmanian Supreme Court". The applicants' solicitors proposed settlement on the following basis: Therefore as a result of the above we believe settlement can be reached in a matter [sic] that protects both of our client's [sic] mutual interests. We propose that we deposit the sum of $309,423.26 into your trust account. The receiver could then be retired. Furthermore the ongoing advertising regarding sale of Forest Marsh and the scheduled auction can both be cancelled. Your client can then retain the security it holds over Forest Marsh as security for any contingent liability which may arise as a result of this demand which has been made by Michael Gawler. That way your clients [sic] interests are protected, the receiver can be retired and for all intensive [sic] purposes our respective clients will have settled all matters between them up until and as at the date of settlement. 22 The reference in this email to "your client" retaining security over the Forest Marsh land was clearly a reference to the second respondent. The first respondent held no such security. The effect of this proposal was that, on payment of the September payout amount, the first respondent should retire as receiver and manager, notwithstanding that the September payout amount was only current as at 30 September 2008, and notwithstanding the existence of the managing controllers' claim (which directly related to the amount of the indebtedness of the second applicant and his companies to the second respondent) and the threat to sue both the first and second respondents in relation to that claim. 23 The respondents' solicitors responded by email on the same day (9 October 2008), saying (in part): The ongoing legal dispute between your client and BE Capital is not a matter with which our clients' [sic] wish to become embroiled. To do so will only add to the cost of the receivership and it is in everyone's interest that same be avoided. We acknowledge that your clients strongly disputes [sic] the demand being made by BE Capital. Similarly, BE Capital disputes your clients' position – this is self evident from the fact that the dispute between your clients and BE Capital is still being litigated before the Supreme Court of Tasmania. In the circumstances, my clients' position is that until such time as the $426,074.03 referred to in my email of 8 October 2008 is paid into this firm's Trust account, the receivership and the marketing campaign for the auction on 16 October 2008 will continue. However, as a partial compromise, my client will agree to this firm to hold [sic] $116,650.77 of the $426,074.03 in Trust pending the claim by BE Capital being properly reconciled and determined. In the absence of this occurring the receivership will continue. [Capitalisation in original] 24 On 10 October 2008 the applicants' solicitors responded by email. After recounting the history of the correspondence that had passed between 6 and 9 October 2008, and after stating again that the retention of the security over the Forest Marsh land would be more than adequate to cover the amount of the managing controllers' claim, the applicants' solicitors said: The sum of $309,423.26 will be deposited into your firms [sic] trust account before the 16th of October 2008. We have firm instructions to issue proceedings in the Supreme Court of Tasmania seeking an injunction and damages against the receivers [sic] for this attempted sale. We will also be seeking costs of the application. We are in the process of drafting that documentation and also considering adding Bibby Financial as a third respondent. Please note that unless you confirm in writing that your client will accept the sum of $309,423.26 as sufficient to retire the receiver then proceedings will be filed without further notice to you. To that end could you please confirm whether or not you have instructions to accept service of the Court process with respect to the receivers Hall Chadwick [sic] and Bibby Financial. If you do not confirm in writing that you accept our clients [sic] offer as listed above to have the receiver retired and/or alternatively confirm you have instructions to accept service of the Court process referred to above, we will do the following actions; 1. File the proceedings in the Supreme Court of Tasmania. 2. Have your client [sic] served personally. We look forward to hearing from you. 25 The second applicant then sought to force the issue. On 10 October 2008 his solicitors deposited the September payout amount in the respondents' solicitors' trust account. In an email dated 13 October 2008, the respondents' solicitors acknowledged the deposit and stated that, provided the funds were cleared, the auction of the Forest Marsh land would be called off, thereby obviating the need for any application for interlocutory relief restraining the sale of the land. However they made clear that, until such time as the additional sum of $116,650.77 was paid into their trust account or the managing controllers' claim was withdrawn, the first respondent would not be retired. The auction scheduled for 16 October 2008 was subsequently called off. 26 I pause at this stage to make the following observations. At this time the respondents were in an unenviable position. The managing controllers had made a claim for a significant sum of money ($116,650.77) for which they sought immediate payment, failing which they had threatened proceedings, including against the first respondent personally for unspecified consequential damages. On the other hand, the second applicant disputed that claim and sought the immediate retirement of the first respondent as receiver and manager, upon payment of the September payout figure, leaving the respondents to deal with the managing controllers' claim with recourse by the second respondent, if necessary, to the security it held with respect to the Forest Marsh land. The second applicant had then threatened to sue the first respondent in respect of the attempted sale of the Forest Marsh land and the second respondent should it fail to revoke the first respondent's appointment as he (the second applicant) had required. It is clear on the correspondence that the legitimacy of the managing controllers' claim was disputed by the applicants. But I am satisfied that, at that time, prudence and reason dictated that, failing agreement, the claim needed to be investigated and that such an investigation would require, as a minimum, a reconciliation of the invoices and receipts giving rise to it. Apart from anything else, the managing controllers' claim needed to be resolved before the indebtedness of the second applicant and his companies to the second respondent could be determined. The issue at the heart of the present proceeding is: what were the respondents to do in these circumstances? Specifically, was the first respondent required, as a matter of legal obligation, to retire as receiver and manager on his own motion, simply because the September payout amount was paid into the respondents' solicitors' trust account? The second respondent's position on that issue is clear: at the time, it instructed the first respondent to deal with the managing controllers' claim. The respondents' solicitors also advised the respondents that the first respondent should not be retired "until such time as a sufficient amount was isolated to cover that potential claim". 27 On 24 October 2008 the applicants put forward another proposal to "settle matters between our clients". The applicants proposed that: (a) the first respondent would retire as receiver and manager; (b) the second respondent's security over the Forest Marsh land would be discharged except for one parcel which would stand as security in respect of the sum claimed by the managing controllers; (c) the applicants' solicitors would prepare a deed providing for the retirement of the first respondent as receiver and manager, which would include a clause that provided that the first respondent would make his best efforts to cooperate in contesting the managing controllers' claim, and (d) the second applicant would bear the legal costs of and be responsible for running any litigation with the managing controllers in respect of that claim. 28 This proposal was not acceptable to the respondents. On 31 October 2008 the respondents' solicitors sent an email to the applicants' solicitors stating this fact and stating that the first respondent would not be retired until the managing controllers' claim was paid or withdrawn or the sum of $116,650.77 was deposited in the respondents' solicitors' trust account and the balance of the costs of the receivership paid in full. The email continued: Furthermore, we have made plain that the Securities will not be discharged until Bibby is satisfied that all contingent liabilities accruing to it or its Receiver have been met, or, it is otherwise appropriately indemnified in relation to same. We note that your client's constant threats to sue our clients only fortify them in their resolve that this is necessary in order to protect their interests in the matter. [Capitalisation in original] 29 The email noted that no details had been given of the terms of the proposed deed and stated that the respondents would not under any circumstances agree to any litigation between the managing controllers and the respondents being "run" by the second applicant. The email also advised that the second respondent was continuing to determine the validity of the managing controllers' claim and that the applicants' solicitors would be advised of progress in that regard. 30 On 7 November 2008 the second applicant commenced a proceeding in this Court against the first respondent's firm (Hall Chadwick), seeking an order that the first respondent be removed as receiver. Following a mediation the proceeding was, by consent, discontinued on 15 December 2008 with an order for costs against the second applicant. The second applicant's own evidence is that it was agreed at that time that the first respondent "would look into" the managing controllers' claim. 31 It would seem that, at this time, resolution of the managing controllers' claim was the only substantial remaining matter delaying the retirement of the first respondent as receiver and manager. The respondents' solicitors pursued resolution of the claim by letter to the managing controllers dated 18 February 2009, seeking further particulars of the claim. 32 Despite their persistence, this letter and other correspondence from the respondents' solicitors to the managing controllers seem to have fallen on deaf ears until 3 April 2009, when the managing controllers wrote directly to the second respondent informing it that the claim was now for $122,469.20, covering 70 separate alleged debtors who were said to have incorrectly paid the second respondent. In this correspondence the managing controllers advised that 11 debtors represented 87.01% of the total sum allegedly paid in error. Rather than seeking to deal with the respondents (either directly or through their solicitors) in respect of that revised claim, the managing controllers stated that they had been advised to commence debt recovery proceedings in an appropriate court or tribunal in Tasmania against each of the alleged debtors, informing those debtors that they should commence their own proceedings against the second respondent or otherwise join the second respondent in the proceedings commenced by the managing controllers. The managing controllers also told the second respondent that, in Tasmania, debts under $5,000 were dealt with in a Small Claims Tribunal in which representation was not permitted, company representatives were required to attend, and costs could not be recovered. The managing controllers then said that they proposed to write immediately to all the alleged debtors informing them of the advice that the managing controllers had received. 33 The managing controllers made clear in their letter that they were informing the second respondent of this intended strategy to induce it to explore "the potential for a commercial solution" to the dispute. Plainly enough, if the managing controllers' threat was carried out, the second respondent would be exposed to multiple legal proceedings in respect of multiple small claims, at obvious cost and inconvenience. 34 By letter dated 7 April 2009, the respondents' solicitors again pressed the managing controllers for the information they had previously sought in respect of the claim "so that our clients may assess the legitimacy of your claim". However, it would seem that, after initially agreeing to provide particulars, the managing controllers then wrote to the alleged debtors as they had originally threatened to do. 35 The managing controllers did, in fact, commence proceedings in the Magistrates Court of Tasmania against some of those who had allegedly incorrectly paid the second respondent rather than the managing controllers or their appointor, B E Capital. By way of illustration, one debtor was sued for $3,645.89 in respect of 17 invoices issued between 14 April 2008 and 30 June 2008 that were said by the managing controllers to have been unpaid. It would seem that the defendant to that claim had also unsuccessfully sought particulars from the managing controllers of their claim before the commencement of that proceeding. Unfortunately the particulars only came to be provided as particulars in the initiating process served on that defendant. That defendant advised the respondents' solicitors that, unless the claim could be resolved, the second respondent would be joined as a party to the debt recovery proceedings. A broadly similar pattern emerges with respect to other proceedings brought by the managing controllers against other alleged debtors. 36 The evidence shows that, inexplicably, at no time did the managing controllers provide the respondents with the particulars that they had sought in order to assess the managing controllers' claim. Rather, the managing controllers left the respondents to deal with individual debtors after the managing controllers had either commenced or threatened to commence recovery proceedings against those debtors. 37 On 15 October 2009 a barrister and solicitor acting on behalf of the managing controllers sent a letter of demand to the first respondent seeking payment of the sum of $49,133.00 in relation to one debtor (Berri Limited) who was said to have erroneously deposited that sum in an account controlled by the first respondent as receiver and manager. This resulted in the respondents' solicitors again seeking details of all payments alleged by the managing controllers to have been incorrectly received by one or other of the respondents. 38 In the meantime, and despite his discontinuance of the proceeding commenced in the Court on 7 November 2008, the second applicant continued to press for the retirement of the first respondent as receiver and manager. In a letter dated 5 March 2009 the applicants' solicitors sought: (a) a full reconciliation of receipts and payments; (b) a "formal and acceptable document" showing a payout figure; and (c) a detailed explanation as to the status of the managing controllers' claim. In that letter the applicants' solicitors continued to assert that that claim was "vehemently denied" and that "it would seem fair, reasonable and prudent if the $116,000.00 [sic] which had been allowed for by Hall Chadwick as a contingent liability be deducted from the final payout figure". 39 The evidence indicates that, during March 2009, discussions occurred between the applicants' solicitors and the respondents' solicitors. It was proposed that the second applicant's companies would pay approximately $240,000.00 and enter into a Deed of Release and Indemnity. In return, the first respondent would retire and the second respondent would discharge its security, with the sum of $116,650.77 being "isolated" in case the managing controllers' claim was "made out". Apparently by email dated 3 April 2009, the applicants' solicitors advised that payment of the $240,000.00 could be made "within 10 working days". However, it seems that no further communication was made to arrange settlement. 40 In a letter dated 11 September 2009 the respondents' solicitors informed the applicants' solicitors of the difficulties that they had faced with the managing controllers, including the fact that the managing controllers had not provided the respondents with details of the claims but had embarked on a strategy of simply commencing proceedings against alleged debtors. They put forward a proposal whereby: (a) the sum of $162,000.00 be paid to discharge the obligations of the second applicant and his companies to the second respondent (which included the first respondent's costs); (b) the sum of $116,650.77 (or such other sum claimed by the managing controllers) be paid to the first respondent so that he could then pay that amount to the managing controllers, and (c) a Deed of Release and Indemnity be entered into with the respondents. 41 In putting forward this proposal the respondents' solicitors said: Both Bibby and the Receiver are anxious to extricate themselves from the matter as soon as possible. Given the belligerence of the Managing Controllers and in particular their refusal to communicate with either this firm, the Receiver, or Bibby, in any sensible manner, our clients consider that the only way that they can effectively extricate themselves from the matter and avoid as far as possible any further litigation with the Managing Controllers' [sic] is for the amount claimed by the Managing Controllers' [sic] to be paid. 42 The respondents' solicitors concluded by saying: If the arrangement proposed above is not acceptable to your client then the Receiver will have little alternative but to proceed to realise the remaining security to discharge the balance of the debt due to it, with the amount claimed by the Managing Controllers' [sic] being paid into court. [Capitalisation in original] The letter enclosed a reconciliation statement. 43 The applicants' solicitors responded in a letter dated 14 September 2009, saying: Thank you for your letter and attached reconciliation of 11 September last. We along with our client are sympathetic to your plight regarding correspondence, negotiations and reasonableness not being forthcoming from the Managing controllers in any way, shape or form. We agree with your aforementioned correspondence that it is certainly not in our mutual clients' interests for your client to commence proceedings in a superior Court with respect to the allegations made by the Managing Controllers. Could you please forward us copies of the correspondence which give rise to your comments in the aforementioned correspondence. We would be grateful for the same. As you are aware our client has at all times disputed the ambit claim made by the Managing Controllers. We also note the contents of your aforementioned correspondence in that the Managing Controllers have failed to provide you with any particulars or evidence with respect to the alleged outstanding sums owing to the Managing Controllers. Our client's position has not changed with respect to the attitude [sic] of the claim and allegations made by the Managing Controllers. That is, the claim remains disputed. Notwithstanding the above, our client certainly is of the view that he wishes to work with you in order to negotiate a mutually beneficial outcome. [Capitalisation in original] 44 After seeking clarification of the reconciliation statement that had been earlier sent, the applicants' solicitors then put forward a counterproposal whereby: (a) a Deed of Release and Indemnity would be entered into with the respondents; (b) the amount of $162,000.00 would be paid to discharge the obligations to the second respondent (including the first respondent's costs); (c) the first respondent would retire as receiver and manager; and (d) the second respondent would discharge its security over the Forest Marsh land. 45 The apparent rationale for this proposal was that, if the managing controllers were successful in obtaining judgment in respect of their claim, that judgment "could be enforced as per their existing charge on Forest Marsh in their favour". However, that proposal ignored the fact that any such judgment would be one (presumably) against the second respondent personally. The fact that the managing controllers (or, more accurately, B E Capital) had a charge in respect of the Forest Marsh land would be of little comfort to the second respondent, especially when the second respondent was being asked by the second applicant to discharge its own security in respect of that land. The proposal also ignored: (a) the fact that the managing controllers had urged others to sue the second respondent in respect of allegedly incorrect payments; (b) the fact that the managing controllers had threatened separate proceedings against the first respondent for consequential loss and damage; and (c) the fact that the position remained that the amount of the indebtedness of the second applicant and his companies to the second respondent depended on finalisation of the managing controllers' claim. 46 The respondents rejected that counterproposal. In a letter to the applicants' solicitors dated 23 October 2009 the respondents' solicitors resubmitted the proposal of 11 September 2009, and stated: The Receiver and Bibby are not prepared to wait any longer to resolve the matter. Both the Receiver and Bibby are keen to conclude the Receivership and in the circumstances intend to proceed with the sale of the remaining security, including the land. If your client wishes to take up the Receivers [sic] offer and a final settlement can be agreed upon prior to a sale of the land being concluded then our clients are happy to work with your clients to achieve same. [Capitalisation in original] 47 The respondents' solicitors subsequently forwarded copies of their correspondence with various parties (including the managing controllers) in respect of the managing controllers' claim, to the applicants' solicitors. 48 This proceeding was commenced on 23 November 2009. I will say something more about the conduct of the proceeding in a later part of these reasons. The matter of present relevance is that, both before and after the commencement of this proceeding, the respondents sought to resolve the managing controllers' claim as best they could. Without descending into detail, that claim has now been resolved in relation to three debtors on the basis of the second respondent making certain refunds to those debtors. The total amount refunded was $28,442.94. 49 On 30 April 2010 the respondents' solicitors wrote to the managing controllers informing them of the resolution of the three claims to which I have referred. They asked whether the managing controllers sought to maintain any other claim, including the one that had already been threatened in relation to Berri Limited. They raised the prospect that, in the absence of a response, they would seek to join the managing controllers as parties to the present proceeding. The managing controllers made a somewhat Delphic response. The respondents' solicitors wrote again to the managing controllers on 20 May 2010. The managing controllers later advised that they did not intend "to make any claims of the kind and against the claimants specified in the first two paragraphs of your letter of 20 May 2010". Significantly, that position was only achieved well after the commencement of the present proceeding and shortly before the commencement of the hearing of the matter. THE FACTORING AGREEMENT AND CHARGE 50 It is convenient at this stage to record some of the more relevant provisions of the factoring agreement and of the relevant charge. The parties did not draw my attention to any particular clause of the mortgage as bearing on the claims made in this proceeding. 51 The Full Service Factoring Agreement entered into between Holdings and Mountain Maid (as "the Client") and the second respondent was for a minimum term of 24 months commencing on 21 December 2007. It provided for the assignment by Holdings and Mountain Maid of certain debts to the second respondent and the payment by the second respondent to Holdings and Mountain Maid of a purchase price for those debts under detailed and complex arrangements which I do not need to describe. 52 Under clause 15.6, the second respondent had a right to resolve disputes with customers. Clause 15.6 provided as follows: At all times (whether before or after proceedings) [the second respondent] has the right, at the expense of the Client, to resolve any dispute with a Customer on such terms as [the second respondent] may in its absolute discretion consider appropriate and the Client will be bound by such resolution. 53 By clause 26(a), Holdings and Mountain Maid granted a general indemnity to the second respondent, in the following terms: (a) The Client must indemnify [the second respondent] from any loss, expense, cost, damage, loss of profit or contingent or actual liability which [the second respondent] may incur which arises either directly or indirectly from: (i) any default in payment of any amount due under this Agreement; (ii) the occurrence of any Termination Event; and (iii) otherwise as a consequence of [the second respondent's] entry into this Agreement. 54 The applicants accept that the charge was granted by the first applicant to secure the obligations of Holdings and Mountain Maid under the factoring agreement. 55 It is not necessary for present purposes to descend to the detail of the complex inter-related clauses in the charge that create various liabilities on the part of the first applicant to the second respondent. It is sufficient to note the following matters. 56 First, by definition, Holdings and Mountain were "Security Providers" and the factoring agreement was a "Collateral Security" for the purposes of the charge. 57 Secondly, by clause 5(a) of the charge, the first applicant guaranteed the due and punctual payment of moneys from time to time owing by any Security Provider to the second respondent and the due and punctual performance and observance of "each and every covenant, provision and obligation contained or implied in any Collateral Security on the part of any Security Provider to be performed or observed". This plainly included the covenant in clause 26(a) of the factoring agreement to indemnify the second respondent in respect of "any loss, expense, cost, damage, loss of profit or contingent or actual liability" arising directly or indirectly from or as a consequence of the second respondent entering into the factoring agreement with Holdings and Mountain Maid. 58 Thirdly, by clause 5(b) of the charge, the first applicant covenanted to indemnify the second respondent against "any loss, costs, charges and expenses it might incur by reason of breach, neglect or non-performance by any Security Provider in the terms and conditions of any Collateral Security". Clause 5(b) expressly included an indemnity in respect of "the due and punctual payment" to the second respondent of "all moneys from time to time owing to" the second respondent "under any Collateral Security". 59 Fourthly, by clause 7.1, the first applicant agreed to observe and perform "all the covenants, agreements, stipulations and obligations expressed or implied under each and every Collateral Security…". 60 Fifthly, clause 7.10 of the charge provided that the first applicant would pay to the second respondent a range of costs and expenses, including "costs and expenses arising from or caused by any default by … any Security Provider" and costs and expenses in relation to "the exercise, purported or attempted exercise, preservation or aid of any of [the second respondent's] rights or powers under this Deed or any Collateral Security". 61 Sixthly, the first applicant covenanted to pay the second respondent the "Secured Money". Clause 1.1 of the charge defined "Secured Money" in very wide terms. Secured Money included, for example, "all money which is or may become payable" by the first applicant "under this Deed or any Collateral Security"; "costs, charges and expenses" which the second respondent might incur or become contingently liable to pay "in the defence or in aid of its rights and powers under … any Collateral Security"; and all money which the first applicant "may now or in the future actually or contingently be indebted or liable to" the second respondent "on any account whatsoever, including without limitation by guarantee, indemnity or otherwise". 62 Clause 3.2(a) of the charge, dealing with the application of payments made by or on behalf of the first applicant, provided as follows: [The second respondent] may appropriate any payment towards satisfaction of any money due by the [first applicant] under this Deed as it sees fit in its absolute discretion. 63 Clause 4.6 of the charge, dealing with discharge, provided as follows: Upon the [first applicant] paying to [the second respondent] the whole of the Secured Money and provided that the [first applicant] has performed and observed all obligations under this Deed and any Collateral Security, [the second respondent] will at the cost of the [the first applicant] discharge the charge and execute all documents prepared by the [first applicant] as it may reasonably require to effect the discharge. 64 The charge also provided for a plenary grant of power to any receiver appointed by the second respondent. For example, by clause 12(c) the first respondent was granted "all the powers and authorities vested in" the second respondent by the charge. However, by clause 12(d), the first respondent was required "in the exercise of his powers authorities and discretion" to "conform to the regulations and directions from time to time made and given by" the second respondent. 65 Clause 12(e) of the charge provided as follows: The Receiver is entitled to receive and to deduct and retain from moneys from time to time in his hands disbursements properly made and expenses properly incurred by him and also the remuneration for his services as may from time to time be fixed or approved by [the second respondent]. 66 Clause 12(h) provided as follows: [The second respondent] may pay over to the Receiver any moneys constituting part of the Mortgaged Property to the intent that they may be applied for the purposes of this Deed by the Receiver and [the second respondent] may from time to time determine what funds the Receiver is at liberty to keep in hand with a view to the performance of his duties as Receiver. 67 Clause 12(i) provided as follows: The Receiver will be the agent of the [first applicant] and the [first applicant] will be solely responsible for his acts and defaults and for his remuneration. 68 Finally, clause 12(k) provided as follows: [The second respondent] may at any time by an instrument in writing revoke wholly or partially the appointment of any Receiver and appoint another Receiver in his place. the applicants' clai ms The Corporations Act claims and related claims 69 By an amended statement of claim filed on 23 August 2010 (the amended statement of claim) the applicants allege that the first respondent owed the first applicant the duties imposed by ss 180, 181 and 182 of the Corporations Act (the statutory duties). 70 Section 180 provides as follows: Care and diligence—directors and other officers (1) A director or other officer of a corporation must exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they: (a) were a director or officer of a corporation in the corporation's circumstances; and (b) occupied the office held by, and had the same responsibilities within the corporation as, the director or officer. Business judgment rule (2) A director or other officer of a corporation who makes a business judgment is taken to meet the requirements of subsection (1), and their equivalent duties at common law and in equity, in respect of the judgment if they: (a) make the judgment in good faith for a proper purpose; and (b) do not have a material personal interest in the subject matter of the judgment; and (c) inform themselves about the subject matter of the judgment to the extent they reasonably believe to be appropriate; and (d) rationally believe that the judgment is in the best interests of the corporation. The director's or officer's belief that the judgment is in the best interests of the corporation is a rational one unless the belief is one that no reasonable person in their position would hold. (3) In this section: business judgment means any decision to take or not take action in respect of a matter relevant to the business operations of the corporation. 71 Section 181 provides as follows: Good faith—directors and other officers (1) A director or other officer of a corporation must exercise their powers and discharge their duties: (a) in good faith in the best interests of the corporation; and (b) for a proper purpose. (2) A person who is involved in a contravention of subsection (1) contravenes this subsection. 72 Section 182 provides as follows: Use of position—directors, other officers and employees (1) A director, secretary, other officer or employee of a corporation must not improperly use their position to: (a) gain an advantage for themselves or someone else; or (b) cause detriment to the corporation. (2) A person who is involved in a contravention of subsection (1) contravenes this subsection. 73 It may readily be accepted that, as an "officer" of the first applicant (see s 9 of the Corporations Act), the first respondent owed the duties imposed in ss 180, 181 and 182. 74 The applicants also allege that the first respondent owed the first applicant certain general law duties, which they defined in paragraph 13 of the amended statement of claim as follows: (a) "a duty to pay over to the second Respondent the amount secured by the mortgage, and to pay over, or surrender, to the mortgagors [sic] any surplus money or other assets"; (b) "to exercise his powers in good faith and for a proper purpose, including the duty not to sacrifice the mortgagor's interests recklessly"; (c) "a duty to act strictly within, and in accordance with, the conditions of his appointment"; (d) "to account to the mortgagor after the mortgagee [sic] security has been discharged, not only the surplus money or other assets, but also for his conduct of the receivership"; (e) "a duty to terminate the receivership by handing over the money and other surplus assets to the mortgagor as soon as the debt of the mortgagee has been paid". [Capitalisation in original] 75 The applicants' formulation of these duties appears to be based on the observations of Needham J in Expo International Pty Ltd (Receivers and Managers Appointed) (In Liquidation) v Chant [1979] 2 NSWLR 820 at 828 and 834. 76 At 828 Needham J said: The receiver has a duty both to the mortgagee and the mortgagor. He is appointed for the purpose of enforcing the security. He has a duty to the mortgagee to pay over to it the amount secured by the mortgage; he has a duty to the mortgagor to pay over or to surrender to it the surplus assets… 77 At 834 Needham J said: … The conclusion I draw from the authorities to which I have referred is that the receiver in a case such as the present (as distinct from a case where the receiver is appointed by the court, and, possibly, a case where he is the agent of the mortgagee) has certain duties towards the mortgagor which are enforceable by the latter directly against the receiver. Those duties include the duty to exercise his powers in good faith (including a duty not to sacrifice the mortgagor's interests recklessly); to act strictly within, and in accordance with, the conditions of his appointment; to account to the mortgagor after the mortgagee's security has been discharged, not only for the surplus assets, but also for his conduct of the receivership. The latter duty, in my opinion, involves the duty to terminate the receivership by handing over the surplus assets to the mortgagor as soon as the interests of the mortgagee have been satisfied. I think the receiver would be acting outside his powers, or mala fide, if he failed to terminate the receivership because of some extraneous or collateral consideration… 78 The duties articulated in Expo have been referred to in more recent times as "well established": see Re S & D International Pty Ltd (In Liquidation) (Receivers and Managers Appointed) v MIG Property Services Pty Ltd [2009] VSC 225 at [161]. 79 Although pleading five general law duties, the applicants allege that only two of those duties have been breached by the first respondent in the present case, namely those set out in (b) and (e) above: see paragraph 25 of the amended statement of claim. 80 The duty of a receiver to exercise his or her powers in good faith set out in (b) would now seem to be subsumed by the duty imposed by s 181 of the Corporations Act. It is most unlikely that a breach of the duty pleaded in (b) would not equally be a breach of the duty imposed by s 181. 81 The duty stated in (e) to terminate the receivership requires closer attention. The statement of the duty by the applicants is an embellishment of what Needham J actually said in Expo. In Expo Needham J at 834 conditioned his statement of that duty on the interests of the mortgagee having been satisfied. His Honour gave colour to this state of affairs by the further observation that a receiver would be acting outside power in failing to terminate a receivership because of "some extraneous or collateral consideration". By expressing himself in terms of satisfaction of the mortgagee's interests, his Honour (unlike the applicants) was not conditioning the duty simply on payment of the secured debt. Rather, his Honour was invoking a wider set of considerations affecting the mortgagee's or chargee's interests, including what the security document itself might provide in that regard. It is the security document that sets out the expressly agreed rights, powers and responsibilities of the receiver affecting the mortgagor or chargor. It represents the formal bargain made between the mortgagor or chargor and the secured creditor: Bank of New South Wales v Federal Commissioner of Taxation (1979) 145 CLR 438 at 454. The security document may well impose or provide for, as here, a broad range of liabilities and obligations on the part of the mortgagor or chargor for the benefit of the secured creditor extending beyond what might be ordinarily understood as being "the secured debt". Indeed, as I will later describe, the applicants' submissions, in effect, give the expression "the secured debt" (as used by them) a somewhat limited meaning in light of the liabilities and obligations that were actually imposed on the first applicant by the charge. And, plainly, the primary duty of the receiver is to the mortgagee or chargee under the mortgage or charge in respect of which he or she has been appointed: Australian Securities & Investments Commission v Lanepoint Enterprises Pty Ltd (2006) 64 ATR 524 at [39]. If, therefore, by their formulation, the applicants seek to allege the existence of a duty that differs in scope to the duty stated by Needham J in Expo, then I would reject the applicants' formulation of the duty. 82 There is, however, another matter. In Bowesco Pty Ltd v Cronin (2008) 223 FLR 21 at [12]-[17] Master Sanderson identified what his Honour saw to be a difficulty with Needham J's formulation of the duty, namely that, absent a contractual right to do so, it may not be within the power of a receiver to terminate unilaterally his or her appointment and that, although a receiver might take that step, he or she might do so at the risk of being sued by the appointor: see also O'Donovan J, Company Receivers & Administrators (Lawbook Co., subscription service) at [15.50] (update 81) to the same effect. Thus, on this reasoning, the receiver may be confronted with a legal dilemma. 83 In the present case neither the charge nor the instrument actually appointing the first respondent as receiver and manager of the first applicant confers any contractual right on the first respondent to resign his appointment. Clause 12(k) of the charge confers on the second respondent (and on no other person) the power to revoke the first respondent's appointment. The second respondent has not exercised that right. 84 In my respectful opinion, there may be no necessary inconsistency between Needham J's formulation of the receiver's duty to the mortgagor or chargor to terminate the receivership and a receiver's duty to his or her appointor. It is significant that Needham J saw the receiver's duty to the mortgagor or chargor to terminate the receivership as an incident of the duty to account to the mortgagor or chargor after the security has been discharged. In my view, Needham J's formulation of the duty carries with it that necessary limitation. After that time it is difficult to see what legitimate interest of the appointor the receiver could possibly serve by continuing the receivership. Arguably, the receiver would be acting "because of some extraneous or collateral consideration": Expo at 834. Plainly the contractual position between the receiver and his or her appointor will be governed by the instrument of appointment. But, as a practical matter, it is difficult to conceive of circumstances where the instrument of appointment would stipulate that the receivership was to continue after the security has been discharged. 85 In the present case it is clear that, under the terms of the instrument by which the first respondent was appointed by the second respondent as receiver and manager of the first applicant, the appointment was only in relation to the property of the first applicant while that property was encumbered by the charge: see clause 2.1 and Schedule 1 of the Deed of Appointment of Receiver and Manager dated 4 April 2008. The Forest Marsh land is still encumbered by the charge. Clause 4.6 of the charge provides for the right of the first applicant to obtain a discharge of the charge. It is not argued by the applicants that, at any relevant time, circumstances existed which required the second respondent to discharge the charge under clause 4.6, although the evidence plainly reveals that the second applicant had sought to negotiate a discharge. Thus the dilemma referred to in Bowesco does not exist in the present case. Nevertheless these considerations provide another reason to reject the applicants' particular formulation of the first respondent's alleged duty to terminate the receivership in the present case. 86 In paragraph 25 of the further amended statement of claim the applicants rely on the following particulars of conduct as constituting breaches of the duties on which they rely: (a) "Failing to utilise the money paid by the Applicants, Mountain Maid and R R & S M Powell on 10 October 2008 first to discharge the entire indebtedness of the Applicants to the second Respondent"; (b) "Allowing the outstanding debt to the second Respondent to continue to accrue interest when it should have been discharged in full on or about 10 October 2008"; (c) "Retaining all or part of the said sum of $112,579.00 for his own benefit"; (d) "Failing to retire on or about 10 October 2008 and thereafter incurring or purporting to incur unnecessary and unreasonable fees"; (e) "Continuing the receivership on the basis of an extraneous or collateral consideration, and/or for a collateral purpose, namely the furtherance of his own interests, and the interests of Mr Gawler, at the expense of and contrary to the interests of the applicants and the second Respondent". [Capitalisation in original] 87 As to the matter referred to in particular (e), the applicants separately allege that the first respondent knew or ought to have known that the managing controllers' claim for $116,650.77 "was without reasonable foundation, and vexatious, and/or made for a collateral purpose, namely to prolong the receivership and to thereby prevent the applicants from regaining control of their property": see paragraph 19 of the further amended statement of claim. 88 The applicants allege that, as a consequence of the pleaded breaches, fees should not have been incurred by the first respondent since 10 October 2008. Alternatively, they allege that the fees that have been incurred are excessive and unreasonable. Consideration 89 It is convenient to make the following preliminary observations before dealing with the particularised conduct on which the applicants rely for the alleged breaches of duty. 90 First, it can be assumed that the second applicant caused the first applicant to enter into the charge on terms which he, as sole director, secretary and shareholder, considered to be acceptable and in the first applicant's interests. Secondly, there is no challenge to the validity of the factoring agreement or of the charge or of any of the other collateral securities identified in the charge. Thirdly, the applicants do not dispute the validity of the first respondent's appointment by the second respondent as receiver and manager of the first applicant. Fourthly, the applicants do not bring a case that the second respondent has acted contrary to the terms of the factoring agreement or of the charge or of any of the identified collateral securities. Fifthly, the applicants do not bring a case that involves any allegation that the first respondent acted in breach of the terms of his appointment by the second respondent or has acted contrary to any direction or instruction given to him by the second respondent. 91 In the course of submissions the applicants accepted that the matters identified in particulars (a) to (c) went hand-in-hand. They were aspects of a broader contention. The broader contention, simply put, was that the payment of the September payout amount into the respondents' solicitors' trust account on 10 October 2008 was sufficient to discharge the first applicant's indebtedness to the second respondent as at that date. 92 In my view there are a number of difficulties which stand in the way of the acceptance of that contention, not the least of which is that the applicants have not established that the September payout amount was sufficient to discharge the first applicant's indebtedness under the charge at the date it was paid. 93 The applicants' contention focussed on the fact that, when the September payout amount was provided in the 7 October 2008 letter, it was accompanied by a spreadsheet showing, as a separate item, that the outstanding debt to the second respondent as at 30 September 2008 was $286,000.00. The gravamen of the applicants' argument was that the sum of $309,423.26 was sufficient to pay that debt, as itemised. However, this argument ignores the fact that the spreadsheet also showed, as separate items, significant outstanding amounts, as at 30 September 2008, for the first respondent's remuneration and disbursements, legal fees and disbursements, selling costs and insurance costs, all of which were debts due under the charge as part of the Secured Money. 94 In any event, it is clear on the evidence that, as at 10 October 2008, not even the sum of $309,423.26 was sufficient to discharge the first applicant's indebtedness under the charge because, by that time, further interest had accrued and further costs and expenses had been incurred. That would continue to be the case while any indebtedness by the first applicant to the second respondent under the charge remained. 95 Moreover, the respondents were faced with the managing controllers' claim. If the second respondent was contingently liable to B E Capital for $116,650.77 then so too was the first applicant contingently liable to the second respondent for the same amount. All money for which the first applicant was contingently liable to the second respondent was, by definition, part of the Secured Money. Any sum properly due to B E Capital was a sum that the second respondent had erroneously applied in reduction of the first applicant's indebtedness under the charge and remained owing. 96 Another aspect of the applicants' argument is that, when the sum of $309,423.26 was paid into the respondents' solicitors' trust account on 10 October 2008, the first respondent was thereafter required to apply it in discharge of the itemised debt of $286,000.00. What in fact happened was that, from the amount deposited, $179,218.23 was paid to the second respondent and the balance was retained by the first respondent for existing and future costs and expenses. 97 The difficulty that confronts the applicants with this aspect of their argument is that, by clause 3.2(a) of the charge, the second respondent had the right to appropriate, in the manner it saw fit, all payments made towards satisfaction of the indebtedness under the charge. Furthermore, under clause 12 of the charge, the second respondent was entitled to determine what funds the first respondent was at liberty to keep in hand with a view to the performance of his duties as receiver, and the first respondent was entitled to retain moneys in hand for his remuneration and expenses. It is not suggested by the applicants that, in retaining the funds he did, the first respondent was acting otherwise than in accordance with the directions of the second respondent who, the evidence shows, had also instructed the first respondent to deal with the managing controllers' claim. Moreover, by 10 October 2008, the first respondent was threatened with the prospect of separate legal proceedings being brought against him personally by the second applicant and B E Capital, with all the cost that that would involve. This aspect of the applicants' argument therefore fails at the outset, given the specific powers of appropriation under the charge and the first applicant's liability under the charge not only for costs and expenses relating to the exercise, preservation or aid of the second respondent's rights and powers under the charge, but also for the first respondent's costs and expenses as receiver, as well as his remuneration. 98 Related to this aspect of the applicants' argument is the further allegation that the first respondent retained a sum of $112,579.00 "for his own benefit". This argument also fails at the outset. The first respondent did not, in fact, retain the sum of $112,579.00. This amount refers to the amount of the first applicant's indebtedness to the second respondent as at 9 September 2009. The applicants' reasoning appears to be that, because payment of the September payout amount should have discharged the first applicant's indebtedness to the second respondent under the charge as at 10 October 2008, any subsequent indebtedness should be treated as money that had been paid by the first applicant to the first respondent but retained improperly by the first respondent. I reject that reasoning. 99 For these reasons it seems to me that particulars (a) to (c) proceed upon a misapprehension of the facts, as I have found them to be. These particulars also proceed upon a misapprehension of the rights and powers of the second respondent under the charge, and of the first respondent as the receiver and manager of the first applicant. 100 The allegation in particular (d) is also related to the allegations in particulars (a) to (c). In my view, on the facts which I have found, the first respondent was under no duty to the first applicant, as at 10 October 2008, to retire as receiver and manager simply because the second applicant, in furtherance of his own apparent strategy to seek that outcome, caused the September payout amount to be paid into the respondents' solicitors' trust account. In cross-examination, the applicants obtained the first respondent's acceptance of the proposition that the first respondent could have retired as receiver and manager once the September payout amount had been paid. This was on the basis that the second respondent's "vulnerability" in relation to the managing controllers' claim could have been met by the second respondent's security over the Forest Marsh land. It seems to me, however, that that proposition misses the point. The first respondent had been validly appointed by the second respondent as receiver and manager of the first applicant because of the first applicant's default under the charge. The first applicant remained indebted to the second respondent under the terms of the charge. For so long as that position remained, the second respondent was entitled to have the first respondent act as receiver and manager of the first applicant, and the first respondent was entitled to continue to so act. Indeed, the second respondent required him to do so in order to deal with the managing controllers' claim. 101 As to the allegation that the first respondent incurred unnecessary fees, the applicants' contention appears to be that the fees incurred by the first respondent after 10 October 2008 were unnecessary because the first respondent should have retired, as a matter of legal obligation, on 10 October 2008. For the reasons I have given, I reject that contention. 102 As to the allegation that the fees incurred by the first respondent were unreasonable or excessive, the applicants have not demonstrated how, why or in what respect or respects the first respondent's fees after 10 October 2008 were unreasonable or excessive. The first respondent made an affidavit summarising the amounts paid and payable by the second applicant and his companies under the factoring agreement and the collateral securities, including his fees and disbursements (rendered and unrendered) and the respondents' solicitors' fees and disbursements (rendered and unrendered). Both the first respondent and the respondents' solicitor, Mr Anderson, were cross-examined, but not on any of these matters. The applicants' allegation in this regard rests simply in assertion and fails for want of proof. 103 The allegation in particular (e) calls into question the purpose for which the receivership was conducted from 10 October 2008. At the heart of the allegation is the contention that the managing controllers' claim was "without reasonable foundation", "vexatious" and "made for a collateral purpose" (to prolong the receivership) and that this was known by the first respondent. That contention has not been made good. 104 As I have found, in the circumstances in which the respondents were placed, prudence and reason dictated that the managing controllers' claim be investigated. The second applicant asserted that the managing controllers' claim was without substance, but the evidence does not reveal whether, and if so how, he sought to substantiate that position at the time. Certainly, despite their efforts, the respondents' solicitors were unsuccessful in obtaining from the managing controllers proper particulars of payments to enable the respondents to properly investigate the managing controllers' claim. Unfortunately, on the face of the evidence, the managing controllers adopted a belligerent and unhelpful stance, manifested by the threat of commencing multiple small claims proceedings against alleged debtors, encouraging them at the same time to sue the second respondent. This threat became a reality when the managing controllers commenced proceedings against some of those debtors. I have no doubt that this strategy delayed the receivership significantly and subjected the respondents (and ultimately the second applicant and his companies) to cost and expense (including legal costs) that could well have been avoided had a more helpful and conciliatory attitude been displayed by the managing controllers. As it turns out, the commencement of proceedings by the managing controllers against those debtors provided the only real opportunity to the respondents to investigate and consider that part of the managing controllers' claim, because it was those debtors who apparently supplied the respondents with the necessary particulars to enable that to occur. The evidence shows that, when provided with those particulars, the respondents, through their solicitors, dealt with those claims in an appropriate manner. I have no reason to doubt that those claims were handled as expeditiously as circumstances then allowed. Moreover, far from revealing that those claims were spurious, the respondents determined that, in those cases, certain sums that had been paid to the second respondent were properly due to B E Capital. Refunds were made accordingly. 105 The applicants have not sought to demonstrate that those particular refunds were not properly made. Moreover, they have failed to make good the allegation that the first respondent "knew or ought to have known" that the managing controllers' claim was "without reasonable foundation", "vexatious" and "made for a collateral purpose" at the time it was made. As it turns out, the refunds made by the second respondent were significantly less than the amount originally claimed by the managing controllers. But the respondents, and the first respondent in particular, had no means of knowing that outcome in advance. 106 The evidence enables me to conclude that, as things transpired, the managing controllers' claim was, in part, well-founded. However, because of the strategy adopted by them, the respondents were only able to deal with that claim on a piecemeal basis that was dependent, in large measure, on the managing controllers bringing individual claims against debtors in a time and manner of their own choosing, over which the respondents had no control. 107 The applicants have failed to establish the bases on which they allege the first respondent acted in breach of the statutory duties they have pleaded. The same conclusion follows in relation to the general law duties they allege the first respondent to have breached. As I have discussed, I do not accept that, on payment of the September payout amount on 10 October 2008, the first respondent was then under any duty to the first applicant to terminate his receivership, as the applicants have pleaded. Any duty that the first respondent might have owed in that regard was the one identified by Needham J in Expo, as I have discussed. However, that duty was not engaged in the circumstances of this case. 108 For completeness I should add that, in the course of submissions, the applicants sought to advance additional arguments that went beyond their pleaded case. Throughout this matter I have made it clear to the applicants that they would be bound by their pleaded case. It was for this reason that, during the course of the hearing, the applicants were granted leave to amend their statement of claim to bring it into line with the case they sought to make. I have decided this aspect of the applicants' case accordingly. Nevertheless I wish to record my view that, had the statement of claim pleaded a foundation for these additional arguments, I would have rejected them in any event. The additional arguments centred on the contention that the first respondent breached his duties to the first applicant (as pleaded) by failing to retire after the second applicant offered alternative arrangements to the second respondent to secure any liability that it might have in respect of the managing controllers' claim. The simple fact is that the second respondent rejected those arrangements as offered, as it was entitled to do. There could be no viable argument that, by failing to retire in such circumstances, the first respondent breached any of the pleaded duties. The Trade Practices Act claim 109 Although the Competition and Consumer Act 2010 (Cth) is now in force and affects (although not in any materially substantive way for present purposes) a number of provisions of present relevance, for ease of reference in light of the applicants' pleadings, I will continue to refer to this aspect of the applicants' case as the Trade Practices Act claim and to the relevant provisions as provisions of the Trade Practices Act, by their pre-amendment section numbers. 110 The applicants allege that, by the respondents' solicitors' letter of 7 October 2008, the first respondent made a representation which had the following components: (a) "the indebtedness of the Applicants, Mountain Maid and R R & S M Powell to the second Respondent as at 30 September 2008 was $286,000.00"; (b) "the total receiver and manager's remuneration over [sic] the Applicants, Mountain Maid and R R & S M Powell as at 30 September 2008 was $222,588.30 with a further $62,332.33 outstanding"; (c) "payment by the Applicants of 309,423.26 ("the payout figure") to the first Respondent would be sufficient to discharge the indebtedness of the Applicants, Mountain Maid and R R & S M Powell to the second Respondent as at 30 September 2008"; (d) "the second Respondent would not release its securities over the Forest Marsh property and Mountain Maid until it received indemnities and releases as outlined in a draft deed". [Capitalisation and definition in original] 111 The applicants allege that, by making this representation, the first respondent engaged in conduct that was misleading or deceptive or likely to mislead or deceive: (a) "By failing to advise contemporaneously of Gawler's claim despite the fact that the first Respondent was aware of the same since on or about 16 July 2008"; (b) "By never intending to apply and by failing to apply money required to be paid and in fact paid by the Applicants to satisfy the entirety of the indebtedness of the Applicants, Mountain Maid and R R & S M Powell to the second Respondent"; (c) "By never intending to and by failing to retire as receiver upon the payment of the payout figure"; (d) "By retaining the sum of $112,579.00 in whole or in part for their own benefit rather than using it, in whole or in part, to discharge the indebtedness of the Applicants, Mountain Maid and R R & S M Powell to the second Respondent". [Capitalisation in original] 112 In advancing their claim the applicants relied on the extended operation of the Trade Practices Act to individuals provided by s 6(2)(h) and s 6(3)(a), in the latter case because sending the letter containing the alleged representation involved the use of postal, telegraphic or telephonic services. The applicants also called in aid s 51A of the Trade Practices Act, inferentially on the basis that the alleged representation was with respect to a future matter and that the first respondent did not have reasonable grounds for making the representation: see now s 4 of the Australian Consumer Law. Consideration 113 It may be accepted that the letter of 7 October 2008 contained each of the several components identified by the applicants. But the spreadsheet accompanying that letter also showed that there were a number of other payments (beyond the first respondent's remuneration) that were outstanding as at 30 September 2008. To that extent the representation pleaded by the applicants is selective and incomplete and does not accurately convey the full particulars of the indebtedness (as at 30 September 2008) referred to in the letter. 114 In substance, the applicants' case in this regard has two elements. First, the letter of 7 October 2008 did not refer to the managing controllers' claim and was, therefore, misleading or deceptive or likely to mislead or deceive as to the true amount required by the respondents to discharge the indebtedness of the second applicant and his companies to the second respondent. Secondly, the letter of 7 October 2008 was not a genuine step towards the possible retirement of the first respondent as receiver and manager and that the first respondent was, for his part, duplicitous, never intending to retire as receiver and manager and never intending to apply the sum of $309,423.26 as and when paid to discharge the indebtedness of the second applicant and his companies to the second respondent. No similar allegation is made against the second respondent, on whose behalf the letter of 7 October 2008 was also sent. 115 As to the first of these elements, it is true that the letter of 7 October 2008, although referring generally to the possible accrual of contingent liabilities, did not refer to the managing controllers' claim, even though the first respondent had been aware of that claim (or at least of one in substantially similar terms) since 16 July 2008. The evidence is silent on whether the second applicant was aware of that claim at the time the letter of 7 October 2008 was sent by the respondents' solicitors. 116 The second applicant's email to the respondents' solicitors sent at 10.56 am on 8 October 2008 shows that the second applicant had either read the letter of 7 October 2008 or had been informed of its contents by that time. In an affidavit sworn on 4 March 2010, the second applicant gave the following evidence as to his understanding at that time: I took this payout figure provided by the legal advisers of Hall Chadwick and explicitly understood that payment of $309,423.26 by me to Mr Anderson would be expressly applied to discharge the liability of myself and my companies to Bibby in its entirety and that the sum of $286,000.00 would be paid by Hall Chadwick directly to Bibby. It was further my explicit understanding that the balance sought of $23,423.26 would be full payment of the account of Hall Chadwick together with its disbursements. 117 The second applicant was not cross-examined. There was, therefore, no direct challenge to this evidence. Even so, I do not accept the unqualified or absolute terms in which it was given. 118 First, as I have already stated, it is plain from the circumstances in which the letter of 7 October 2008 was sent that the September payout amount was no more than indicative of the amount that would be required to be paid at settlement, whenever that came to be appointed. The letter did not represent that payment of the September payout amount would be sufficient to discharge the indebtedness of the second applicant and his companies to the second respondent whenever they chose to pay it. At the time the September payout amount was given it was already an historical figure. 119 Secondly, as I have already noted, the second applicant's email of 8 October 2008 indicates that he was well aware of the likelihood that costs and expenses in relation to the receivership were being incurred on a daily basis, particularly in relation to the intended sale by auction of the Forest Marsh land. It is tolerably clear from that email that the second applicant was trying to engineer circumstances so that those costs would not be borne by him or his companies. Moreover, the fact that interest was accruing could not have escaped his attention, let alone the fact that legal costs were being incurred while he and his solicitors were corresponding with the respondents' solicitors on the subject of the possible retirement of the first respondent and the possible discharge of the securities. In this respect a draft deed had been submitted under cover of the letter of 7 October 2008, with advice that the respondents' solicitors would engage in the process of amending the draft on receipt of further advice from the second applicant as to how he wished to proceed. 120 Thirdly, the letter of 7 October 2008 has to be viewed in the light of other correspondence sent to the second applicant on the same subject, to which I now refer. 121 In an affidavit sworn on 20 August 2010, the second applicant gave the following evidence under the heading "Private loan for October 10 2008 payment": On or about 29 September 2008 I perused an email from Mr Anderson dated 29 September 2008 indicating the payout figure as at 5 September 2008 with respect to both Respondents was $280,239.71. I note this correspondence is referred to in the Affidavit of J Saric filed 9 Marsh [sic] 2010 at paragraph 7. I relied on the figures referred to above and in that correspondence from Mr Anderson and obtained a private loan from Trones Investments Pty Ltd ("the loan"). [Capitalisation and definition in original] 122 The reference to the email dated 29 September 2008 is to one sent by the respondents' solicitors to the second applicant personally. In that email the respondents' solicitors referred to an enclosed spreadsheet particularising a payout amount as at 5 September 2008. With respect to that amount the respondents' solicitors said: You will note that the amount required to payout [sic] Bibby as at 5 September 2008 was $280,239.71. As you will appreciate this figure will need to be updated when the precise payout date is known. 123 In a letter dated 16 July 2008 the first respondent provided a payout amount as at 10 July 2008 to the second applicant, in response to an earlier request. In that letter the first respondent stated: Upon payment of the abovestated amount (as updated on the day of the proposed payout) my appointor has indicated that it will retire me from my appointment as Receiver and Manager of the Companies … [Capitalisation in original] 124 In light of this earlier correspondence, the letter of 7 October 2008 cannot reasonably be read as departing from the basis on which earlier payout amounts had been provided. 125 For these reasons, I do not accept that the second applicant understood the letter of 7 October 2008 as giving anything more than an indicative payout amount which would need to be updated when the precise settlement date was known. It follows from this conclusion that I do not accept that the second applicant understood the letter of 7 October 2008 as giving anything more than an indicative statement of how any discharge sum would be applied. Plainly enough, how any discharge sum would be applied in specific terms depended on circumstances at the time of settlement. It would not be reasonable to read the letter otherwise. 126 I am prepared to assume that the second applicant was ignorant of the managing controllers' claim as at 7 October 2010. In these circumstances, he may reasonably be taken to have been led to believe by the letter that no such specific claim had been made. The applicants' case is that, acting in reliance on the pleaded representation, finance sufficient to pay the September payout amount was obtained and, in ignorance of the claim, the payment on 10 October 2008 was made: see paragraph 29 of the amended statement of claim. However, the evidence shows that that could not possibly have been the case. 127 First, the second applicant's affidavit of 20 August 2010, to which I have already referred, makes clear that the finance obtained by the second applicant to make the payment on 10 October 2008 was obtained as a result of the payout amount provided as at 5 September 2008. The fact that the second applicant had already obtained funds before the letter of 7 October 2008 had been sent is made clear by an email sent on 1 October 2008 to the respondents' solicitors, in which the applicants' solicitors say: Further to our email to you dated 29 September 2008 and our telephone conversation of even date, we can now confirm that as of the 30th of September 2008 we now have funds in our trust account sufficient to discharge any alleged liability or debt to your client. 128 That advice from the applicants' solicitors is, in fact, acknowledged in the letter of 7 October 2008. 129 Secondly, on the morning of 8 October 2008, the respondents' solicitors sent their email advising the applicants' solicitors of the managing controllers' claim. Whilst that email may have conveyed unwelcome news and raised a contentious claim so far as the second applicant was concerned, he could have been left in no doubt about the fact that the amount required by the second respondent to discharge the indebtedness to it had increased by the amount of the contingent liability raised by the managing controllers' claim plus the additional costs incurred by the respondents since 30 September 2008. That position was the subject of correspondence passing between the applicants' solicitors and the respondents' solicitors over the ensuing days before the sum of $309,423.26 was deposited into the respondents' solicitors' trust account. Clearly that payment was not made in ignorance of the managing controllers' claim or of the second respondents' attitude towards that claim and its consequences for discharging the indebtedness of the second applicant and his companies to the second respondent. 130 Given that the applicants' claim of misleading or deceptive conduct in this regard is one based on omission referable to the sending of the letter of 7 October 2008, the most that can be said on the evidence is that: (a) the second applicant can be taken to have been ignorant of the managing controllers' claim when the letter of 7 October 2008 was sent by email at 3.25 pm on that day, but was disabused of any misconception when the email of 8 October 2008 was sent at 11.57 am on that day; and that (b) the respondents could have informed the second applicant of the managing controllers' claim at the time that the letter of 7 October 2008 was sent. But that omission was, in all the circumstances, trifling and ephemeral, given that the communications on 7 October and 8 October 2008 were so closely connected in time. It was also completely without consequence. Such an omission, if amounting to conduct that is, for the purposes of s 52 of the Trade Practices Act (or its present counterpart), misleading or deceptive or likely to mislead or deceive, is not such as would attract the granting of relief. 131 However, it would be artificial in the extreme to assess the first respondent's conduct by reference to the letter of 7 October 2008 alone, divorced from the other correspondence of which it forms a part. The letter of 7 October 2008 should be seen for what it truly was: one step towards the possible discharge of the indebtedness of the second applicant and his companies to the second respondent in respect of which a number of matters were still required to be agreed or resolved, including the actual payout amount that would be required on settlement. The simple fact is that the applicants did not act on the letter of 7 October 2008, other than in combination with the email of 8 October 2008 and other correspondence from the respondents' solicitors to the same effect. That chain of correspondence from the respondents' solicitors, considered as a whole, constitutes the relevant conduct. When so considered, that correspondence plainly informed the applicants of the managing controllers' claim and its consequences for settlement. 132 I should add that at no time in the course of that correspondence was it ever suggested that the applicants were misled or deceived on account of the letter of 7 October 2008 not advising of the existence of the managing controllers' claim. Indeed, no such suggestion was made by the applicants in the months following the payment of the $309,423.26, when the second applicant continued to negotiate with the second respondent on the question of the retirement of the first respondent as receiver and manager. 133 The second element of the applicants' claim concerns, as I have noted, alleged duplicitous conduct on the part of the first respondent. That case fails for want of proof. The first respondent was not even cross-examined on this aspect of the applicants' case. In the absence of evidence to the contrary, I have no doubt that, in so far as the first respondent was concerned, the letter of 7 October 2008 was a genuine step taken towards providing for his retirement as receiver and manager once the indebtedness of the second applicant and his companies to the second respondent had been discharged. However, events changed on 8 October 2008 when the applicants were told that it was necessary to deal with the managing controllers' claim. The applicants were clearly and consistently advised on and from 8 October 2008 of the respondents' position on that matter: that the amount required to discharge the indebtedness had increased by the amount of the managing controllers' claim (and thus, by clear implication, that the sum of $309,423.26 would not be sufficient to discharge the indebtedness) and that the first respondent would not be retired as receiver and manager until the full indebtedness to the second respondent had been discharged. The respondents acted genuinely and transparently in that regard. The second applicant took his own course with full knowledge of the respondents' position and, no doubt, with the benefit of legal advice on that matter. 134 Both elements of the applicants' Trade Practices Act claim fail. For completeness I should add that, on the factual findings I have made, s 51A of the Trade Practices Act (or its present counterpart) provides no material assistance to the applicants. The conduct of the hearing 135 On 23 August 2010 I indicated that I would make an order that the second applicant pay, on an indemnity basis, the costs thrown away by an adjournment that I granted on the first day of the hearing of the proceeding. 136 At a case management conference on 24 May 2010 I appointed a hearing date for the proceeding and made directions providing for (amongst other things) the service (in advance of the hearing) of a short written outline of opening. At that time, the second applicant was the only applicant named in the proceeding. The first respondent was the only respondent named in the proceeding. 137 During the case management conference the solicitor acting for the first respondent (Mr Anderson) pointed out what he perceived to be a disconformity between the second applicant's case, as then pleaded, and the affidavits which the second applicant proposed to read in support of that case. I made clear my position that the hearing would be one defined by the pleadings. A question also arose as to the need to join the second respondent as a party. I therefore made an order which would provide for that to be done. As a result, an amended application was filed joining the second respondent. 138 When the matter came on for hearing it was plain that the applicants' opening submissions (an outline of which had then been served) did not match the then statement of claim but went further, asserting breaches of duty not pleaded in the statement of claim. Moreover, the breaches then foreshadowed did not appear to be breaches of duty owed to the second applicant. 139 After hearing submissions, I reiterated that I proposed to deal only with the pleaded case. The second applicant then sought an adjournment to enable him to formulate, by way of a draft amended statement of claim, the case he sought to bring in light of the written outline of opening. I granted that adjournment but indicated the provisional view that the second respondent would be responsible for costs thrown away, on a basis that remained to be determined. 140 On the adjourned day the respondents raised a number of objections to what was then a further draft amended application and a further draft amended statement of claim. However, after hearing the parties, I granted leave to the second applicant to file the draft amended application and draft amended statement of claim, subject to certain other amendments being made. The consequence of filing the amended application (in the form of the draft) was that the first applicant was joined as a party to the proceeding. 141 The effect of granting the adjournment was that the first day of the hearing was effectively wasted. The responsibility for that lies entirely at the feet of the second applicant who had clearly been on notice for some months that there was, in the first respondent's view, a disconformity between the case that had been pleaded and the case that was foreshadowed by the affidavits that had then been filed. In these circumstances it is appropriate, in my view, that the second applicant be responsible for those costs on an indemnity basis, and I propose to so order. other matters 142 As I have noted, the applicants also seek by way of relief an inquiry under s 423 of the Corporations Act into the conduct of the first respondent in continuing his receivership after 10 October 2008 and in respect of his fees incurred since that date. The applicants accepted, however, that the subject matter of any such inquiry would be coextensive with the claims they have made concerning the alleged breaches of duty and alleged contravention of the Trade Practices Act, all of which have been fully litigated in this proceeding. In light of the findings I have made there is, in my view, no basis for conducting any such inquiry, nor any utility in doing so. DISPOSITION 143 The applicants have failed in their claims. The application should be dismissed. The second applicant is to pay, on an indemnity basis, the respondents' costs thrown away by the adjournment granted on 29 July 2010. Other than in relation to those costs, the applicants are to pay the respondents' costs. I certify that the preceding one hundred and forty-three (143) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates. Associate: Dated: 23 February 2011	20,639
federal_court_of_australia:fca/single/2015/2015fca0834	decision	commonwealth	federal_court_of_australia	text/html	2015-08-13 00:00:00	Perrett v Attorney-General of the Commonwealth of Australia [2015] FCA 834	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2015/2015fca0834	2024-09-13T22:44:39.405060+10:00	FEDERAL COURT OF AUSTRALIA Perrett v Attorney-General of the Commonwealth of Australia [2015] FCA 834 Citation: Perrett v Attorney-General of the Commonwealth of Australia [2015] FCA 834 Parties: GRAHAM DOUGLAS PERRETT, CLAIRE MARY MOORE, GREG DAVIES, KAREN BATES AND TING WEI v GEORGE HENRY BRANDIS, ATTORNEY-GENERAL OF THE COMMONWEALTH OF AUSTRALIA File number: QUD 613 of 2015 Judge: DOWSETT J Date of judgment: 13 August 2015 Catchwords: CONSTITUTIONAL LAW – subordinate legislation – validity – disallowance of regulations by Senate – whether a new regulation, Family Law (Fees) Amendment (2015 Measures No 1) Regulation 2015 (Cth), is "the same in substance" as a regulation previously disallowed within the meaning of s 48 of the Legislative Instruments Act 2003 (Cth) and hence of no effect. CONSTITUTIONAL LAW – standing to seek injunctive and declarative relief under s 39B of the Judiciary Act 1903 (Cth) – where applicants are parliamentarians or senators – whether applicants have "special interest". Legislation: Acts Interpretation Act 1901-1941 (Cth) ss 48, 49 Administrative Decisions (Judicial Review) Act 1977 (Cth) Family Law Act 1975 (Cth) s 125 Family Law (Fees) Amendment (2015 Measures No 1) Regulation 2015 (Cth) Family Law (Fees) Regulation 2012 (Cth) Federal Courts Legislation Amendment (Fees) Regulation 2015 (Cth) Legislative Instruments Act 2003 (Cth) ss 24, 38, 39, 41, 42, 45, 46, 47, 48 National Security Act 1939-1940 (Cth) Women's Employment Act 1942 (Cth) Cases cited: Australian Conservation Foundation Inc v Commonwealth (1978-1980) 146 CLR 493 Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 Boyce v Paddington Borough Council [1903] 1 Ch 109 Brown v West (1990) 169 CLR 195 City of Enfield v Development Assessment Commission (2000) 199 CLR 135 Combet v Commonwealth (2005) 224 CLR 494 Dignan v Australian Steamships Pty Ltd (1931) 45 CLR 188 Robinson v South East Queensland Indigenous Regional Council of the Aboriginal and Torres Strait Islander Commission (1996) 70 FCR 212 Victorian Chamber of Manufactures v Commonwealth (1943) 67 CLR 347 Date of hearing: 7 August 2015 Place: Brisbane Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 42 Counsel for the Applicants: Mr S Keim SC, Dr J Brasch QC and Ms K Hillard Solicitor for the Applicants: Maurice Blackburn Lawyers Counsel for the Respondent: Mr R Lancaster SC and Mr G Del Villar Solicitor for the Respondent: Australian Government Solicitor IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 613 of 2015 BETWEEN: GRAHAM DOUGLAS PERRETT First Applicant CLAIRE MARY MOORE Second Applicant GREG DAVIES Third Applicant KAREN BATES Fourth Applicant TING WEI Fifth Applicant AND: GEORGE HENRY BRANDIS, ATTORNEY-GENERAL OF THE COMMONWEALTH OF AUSTRALIA Respondent JUDGE: DOWSETT J DATE: 13 AUGUST 2015 PLACE: BRISBANE REASONS FOR JUDGMENT BACKGROUND 1 The original applicants in these proceedings were Graham Douglas Perrett and Claire Mary Moore. At the hearing of the matter I ordered that Greg Davies, Karen Bates and Ting Wei be joined as third, fourth and fifth applicants respectively. Mr Perrett is a member of the House of Representatives, representing the electorate of Moreton. He is the Shadow Parliamentary Secretary to the Shadow Attorney-General, and a member of many parliamentary standing committees, including the Standing Committee on Social Policy and Legal Affairs. Within the Opposition he has primary responsibility for family law, including marriage. Senator Moore is a Senator for Queensland. Senator Moore currently serves as the Shadow Minister for Women, Communities and Carers and is the Manager of Opposition Business in the Senate. Mr Davies, Ms Bates and Ms Wei have either commenced proceedings for divorce in the Family Court, or propose to do so. The respondent, (the "Attorney-General") challenges Mr Perrett and Senator Moore's standing in these proceedings. Mr Davies, Ms Bates and Ms Wei were joined in order to avoid the consequences in the event that the Attorney-General's submission is successful. 2 Section 125 of the Family Law Act 1975 (Cth) (the "Family Law Act") provides that the Governor-General may make regulations not inconsistent with the Act prescribing, amongst other things, fees payable in respect of proceedings under that Act. From time to time regulations have been made, providing for such fees. Immediately prior to 28 May 2015 the relevant measure was the Family Law (Fees) Regulation 2012 (Cth) (the "2012 Regulations"). On that date the Governor-General made a regulation described as the Federal Courts Legislation Amendment (Fees) Regulation 2015 (Cth) (the "First Regulation"). The First Regulation is a legislative instrument for the purposes of the Legislative Instruments Act 2003 (Cth) (the "Legislative Instruments Act"). In the First Regulation itself, it is described as a "select legislative instrument". The word "select" has no present relevance. Section 24 of the Legislative Instruments Act requires that a legislative instrument be registered. The First Regulation was registered on 19 May 2015. Pursuant to s 38 the Parliamentary Counsel must arrange for a copy of each registered legislative instrument to be delivered to each House of Parliament so that it may be laid before each House within six sitting days after registration. Section 39 provides as follows: 39 Additional material to be tabled with the legislative instrument: (1) If a rule-maker lodges an explanatory statement relating to a legislative instrument: (a) at the time of lodging the legislative instrument for registration; or (b) at a later time before a copy of the legislative instrument is delivered to each House of the Parliament to be laid before it; the Office of Parliamentary Counsel must also arrange for the delivery to that House, to be laid before it, with the copy of that legislative instrument, a copy of that explanatory statement. (2) If a rule-maker fails to lodge an explanatory statement relating to a legislative instrument with the Office of Parliamentary Counsel before the Office arranges for a copy of the legislative instrument to be delivered to a particular House of the Parliament, the rule-maker must, as soon as possible, deliver to that House, to be laid before it: (a) a copy of the explanatory statement; and (b) a written statement why the explanatory statement was not provided to the Office in time to be delivered to the House with the legislative instrument. Section 41 provides: 41 Incorporated material may be required to be made available: A House of the Parliament may, at any time while a legislative instrument is subject to disallowance, require any document incorporated by reference in the instrument to be made available for inspection by that House: (a) at a place acceptable to the House; and (b) at a time specified by the House. Section 42 provides: 42 Disallowance of legislative instruments (1) If: (a) notice of a motion to disallow a legislative instrument or a provision of a legislative instrument is given in a House of the Parliament within 15 sitting days of that House after a copy of the instrument was laid before that House; and (b) within 15 sitting days of that House after the giving of that notice, the House passes a resolution, in pursuance of the motion, disallowing the instrument or provision; the instrument or provision so disallowed then ceases to have effect. (2) If: (a) notice of a motion to disallow a legislative instrument or a provision of a legislative instrument is given in a House of the Parliament within 15 sitting days of that House after a copy of the instrument was laid before that House; and (b) at the end of 15 sitting days of that House after the giving of that notice of motion: (i) the notice has not been withdrawn and the motion has not been called on; or (ii) the motion has been called on, moved and (where relevant) seconded and has not been withdrawn or otherwise disposed of; the instrument or provision specified in the motion is then taken to have been disallowed and ceases at that time to have effect. (3) If: (a) notice of a motion to disallow a legislative instrument or a provision of a legislative instrument is given in a House of the Parliament within 15 sitting days of that House after a copy of the instrument was laid before that House; and (b) before the end of 15 sitting days of that House after the giving of that notice of motion, the House of Representatives is dissolved or expires, or the Parliament is prorogued; and (c) at the time of the dissolution, expiry or prorogation, as the case may be: (i) the notice has not been withdrawn and the motion has not been called on; or (ii) the motion has been called on, moved and (where relevant) seconded and has not been withdrawn or otherwise disposed of; the legislative instrument is taken, for the purposes of subsections (1) and (2), to have been laid before the first mentioned House on the first sitting day of that first mentioned House after the dissolution, expiry or prorogation, as the case may be. Sections 45, 46, 47 and 48 provide: 45 Effect of a legislative instrument ceasing to have effect: (1) If a legislative instrument (the affected instrument), or a provision of a legislative instrument (the affected provision), ceases, at a particular time, to have effect under subsection 38(3) or 42(1) or (2), the operation of that subsection in relation to the affected instrument or provision has the same effect as if the affected instrument or provision had been repealed with effect from that time. (2) If: (a) a legislative instrument (the repealing instrument) or a provision (the repealing provision) of a legislative instrument either: (i) ceases under subsection 38(3) or section 42 to have effect at a particular time (the cessation time); or (ii) would so cease to have effect then if it had not already been repealed by section 48A or 48C; and (b) the repealing instrument or repealing provision wholly or partly repealed another legislative instrument or law, or a provision of another legislative instrument or law, that was in force immediately before the repealing instrument or repealing provision commenced; the repealed instrument, law or provision revives from the cessation time as if the repealing instrument or repealing provision had not been made. (3) Subsection (2) does not have the effect of reviving a legislative instrument, law or provision if, before the date when it would have been revived, Part 6 would have repealed it had it not already been repealed by the repealing instrument or the repealing provision. 46 Legislative instruments not to be remade while required to be tabled (1) If a legislative instrument (the original legislative instrument) has been registered, no legislative instrument the same in substance as the original legislative instrument is to be made during the period defined by subsection (2) unless both Houses of the Parliament by resolution approve the making of an instrument the same in substance as the original legislative instrument. (2) The period referred to in subsection (1) is the period starting on the day on which the original legislative instrument was registered and ending at the end of 7 days after: (a) if the original legislative instrument has been laid, in accordance with subsection 38(1), before both Houses of the Parliament on the same day—that day; or (b) if the original legislative instrument was so laid before both Houses on different days—the later of those days; or (c) if the original legislative instrument has not been so laid before both Houses—the last day on which subsection 38(1) could have been complied with. (3) An instrument made in contravention of this section has no effect. 47 Legislative instruments not to be remade while subject to disallowance (1) If notice of a motion to disallow a legislative instrument, or a provision of a legislative instrument, has been given in a House of the Parliament within 15 sitting days after the instrument has been laid before that House, a legislative instrument, or a provision of a legislative instrument, that is the same in substance as the first-mentioned instrument or provision, must not be made unless: (a) the notice has been withdrawn; or (b) the instrument or provision is taken to have been disallowed under subsection 42(2); or (c) the motion has been withdrawn or otherwise disposed of; or (d) subsection 42(3) has applied in relation to the instrument. (2) If: (a) because of subsection 42(3), a legislative instrument is taken to have been laid before a House of the Parliament on a particular day; and (b) notice of a motion to disallow the instrument or a provision of the instrument has been given in that House within 15 sitting days after that day; a legislative instrument, or a provision of a legislative instrument, that is the same in substance as the first-mentioned instrument or provision must not be made unless: (c) the notice has been withdrawn; or (d) the first mentioned instrument or provision is taken to have been disallowed under subsection 42(2); or (e) the motion has been withdrawn or otherwise disposed of; or (f) subsection 42(3) has applied again in relation to the first mentioned instrument. (3) A legislative instrument or a provision of a legislative instrument made in contravention of this section has no effect. (4) This section does not limit the operation of section 46 or 48. 48 Disallowed legislative instruments not to be remade unless disallowance resolution rescinded or House approves (1) If, under section 42, a legislative instrument or a provision of a legislative instrument is disallowed, or is taken to have been disallowed, a legislative instrument, or a provision of a legislative instrument, that is the same in substance as the first-mentioned instrument or provision, must not be made within 6 months after the day on which the first-mentioned instrument or provision was disallowed or was taken to have been disallowed, unless: (a) if the first mentioned instrument or provision was disallowed by resolution—the resolution has been rescinded by the House of the Parliament by which it was passed; or (b) if the first mentioned instrument or provision was taken to have been disallowed—the House of the Parliament in which notice of the motion to disallow the instrument or provision was given by resolution approves the making of a legislative instrument or provision the same in substance as the first mentioned instrument or provision. (2) Any legislative instrument or provision made in contravention of this section has no effect. 3 On 25 June 2015 the Senate disallowed the First Regulation. On 9 July 2015 the Governor-General made select legislative instrument No 114, 2015 headed "Family Law (Fees) Amendment (2015 Measures No. 1) Regulation 2015" (the "Second Regulation"). It was registered on 12 July 2015. On 24 July 2015 Mr Perrett and Senator Moore made application to this Court for declaratory and injunctive relief. They seek to establish that the making of the Second Regulation was contrary to the provisions of s 48 of the Legislative Instruments Act upon the basis that it was, "the same in substance", as the First Regulation which had been disallowed. The Attorney-General accepts that he is the appropriate respondent in these proceedings. 4 At a directions hearing held on 29 July 2015 counsel for the Attorney-General indicated that he would submit that Mr Perrett and Senator Moore had no standing sufficient to justify their making of this application. In the course of that hearing it was suggested that other persons might be joined as applicants, being persons who had applied to the Family Court for divorce, and thereby incurred liability to pay the fees prescribed by the Second Regulation. Each of Mr Davies and Ms Bates presently proposes to seek a divorce. Prior to the hearing of this matter, but after the filing of the original application, Ms Wei caused an application for divorce to be delivered to the Family Court Registry. In the course of the hearing I was informed that her application had been accepted for filing. Ms Wei has therefore become liable to pay the fee fixed pursuant to the Second Regulation. Ms Brain's affidavit discloses that the fee has been charged to Ms Wei's credit card. 5 As I understand it, the Attorney-General does not challenge the standing of Mr Davies, Ms Bates or Ms Wei to bring these proceedings. His challenge to Mr Perrett and Senator Moore's standing remains. It may only be necessary to resolve that question in connection with any order as to costs, subject always to the considerations discussed by Hill J in Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194. The other issues which remain outstanding between the parties are: the admissibility of the matters dealt with in the affidavit of Virginia Louise Wilson filed on 4 August 2015; whether or not the Second Regulation is the same in substance as the First Regulation; and in the event that the applicants succeed, the appropriate relief. THE EVIDENCE 6 The evidence is quite limited. I have already set out much of Mr Perrett's evidence. He has consulted with family law practitioners. They have expressed concern about proposed increases in Family Court filing fees. He exhibits a number of documents to which I shall refer if necessary. Senator Moore has also sworn an affidavit deposing to her position in the Senate and her associated responsibilities. She explains the process by which the First Regulation was disallowed. It is not necessary that I refer to that matter in any detail as the fact of disallowance has been proven by reference to the Journals of the Senate. Senator Moore has also exhibited various documents to which I shall refer if necessary. Mr Matthew Littlejohn is a solicitor in the employ of the applicants' solicitors. He has sworn four affidavits, exhibiting numerous documents and providing information concerning the disallowance of the First Regulation. Mr Davies, Ms Bates and Ms Wei have all sworn affidavits. I have already referred to Ms Brain's affidavit. 7 Ms Wilson is a principal legal officer in the Courts, Tribunals and Justice Policy Branch of the Attorney-General's Department and was authorized to make her affidavit on behalf of the Attorney-General. In effect her affidavit addresses the amounts of revenue likely to be derived by the Government from the First and Second Regulations respectively. Ms Wilson sets out the method by which such calculations were done and the results. The additional revenue projected as a result of the First Regulation is $63,866,918 for the period from 1 July 2015 to 30 July 2019. Pursuant to the Second Regulation the additional revenue for the same period would be $66,061,867 showing an increase of $2,194,949. The applicants object to the receipt of Ms Wilson's evidence on the ground of relevance. That objection reflects the approach which the applicants submit I should take in determining the "same in substance" point. The Attorney-General also objects to much of the applicants' evidence, primarily on the basis that it is irrelevant to that same question, although his objection was not expressly related to any particular aspect of the evidence. These objections will be resolved by my eventual conclusion as to the proper approach to the "same in substance" point. THE PARTIES' SUBMISSIONS 8 Insofar as the case concerns s 48 of the Legislative Instruments Act the parties' submissions focus very much upon the decision of the High Court in Victorian Chamber of Manufactures v Commonwealth (1943) 67 CLR 347 (the "Women's Employment Case"). In that case the High Court considered a number of important issues, including the capacity of the Parliament to delegate legislative power and the extent of the defence power of the Commonwealth. Those matters are of no present relevance. However questions also arose concerning the operation of s 49 of the Acts Interpretation Act 1901-1941 (Cth) (the "Acts Interpretation Act 1941"). That section provided: (1) Where, in pursuance of the last preceding section, either House of the Parliament disallows any regulation, … no regulation, being the same in substance as the regulation so disallowed, … shall be made within six months after the date of the disallowance, unless … the resolution has been rescinded by the House of the Parliament by which it was passed. (2) Any regulation made in contravention of this section shall be void and of no effect. 9 Section 48 (the "last preceding section" referred to in s 49(1)) dealt with the disallowance of a regulation by either House of Parliament. Insofar as concerns s 49 of the Acts Interpretation Act 1941 the High Court, in the Women's Employment Case, appears to have been primarily concerned with two aspects of that provision, namely: where numerous regulations are part of the one "statutory rule", whether a global approach should be taken to the assessment of "identity" or "sameness", or whether each regulation should be considered individually; and the meaning of the term "the same in substance". 10 The applicants submit that I should adopt the reasoning of Latham CJ in that case. They also submit that I should consider whether the Second Regulation is the same in substance as the First Regulation. They then point to individual similarities and differences, concluding that they vary, "only very slightly and in respect of detail only". In effect, each of the two Regulations substitutes a new schedule of fees for that which appeared in the 2012 Regulations. In each, the schedule identifies various services which may be provided, or documents which may be filed or generated in Family Court proceedings. Each identifies a fee for each event or document. The events or documents identified in the First and Second Regulations appear to be the same. The major difference between the two Regulations is that most of the fees prescribed by the Second Regulation are $5 higher than those prescribed by the First Regulation. The applicants submit that the question of whether the Second Regulation is the same in substance as the First Regulation involves an assessment of the extent to which the various fees have been increased. They submit that: … an increase from $845 to $1,195 and then $1,200 for divorce applications and an increase from $55 (subpoena) to $120 then $125, along with no changes to other forms of application costs, does not constitute the kind of substantial difference which would exclude the application of s 48 of the Legislative Instruments Act. Rather, it is the kind of minor change in details which was held invalid in the [Women's Employment Case]. 11 The Attorney-General submits that the Women's Employment Case: … does not lay down a single approach for determining whether a legislative instrument is the 'same in substance' as a previously disallowed instrument. All that one can glean from the decision is that there must be a comparison of the disallowed legislative instrument and the impugned legislative instrument to determine whether, as a matter of substance and not form, the two instruments are so alike that they can be called the same. 12 The Attorney-General submits that in dealing with legislative instruments which set fees, "differences in the level of fees will ordinarily go to substance, not form". He submits that where a regulation fixes a fee, the relevant question pursuant to s 48 cannot be determined by an intuitive assessment of whether the amount of any proposed increase may be characterized as a change of a "substantial nature". Rather the Attorney-General submits that the concept of "substance" is used in contradistinction to the concept of "form". I should add that the parties submit that I should take a global approach to any comparison of the First and Second Regulations, as opposed to an "item by item" approach. THE WOMEN'S EMPLOYMENT CASE 13 Given the way in which the parties have conducted the matter, its resolution depends upon a proper understanding of the decision of the High Court in the Women's Employment Case. In argument the parties focussed upon the judgment of Latham CJ. However there is no reason to believe that the other members of the Court adopted his Honour's reasoning. The facts of the case appear in the introductory paragraphs of the Chief Justice's reasons at 355-356. During 1942, the Governor-General had made regulations, purportedly pursuant to the National Security Act 1939-1940 (Cth), presumably legislation relating to the defence of the Commonwealth. The regulations were disallowed pursuant to s 48(4) of the Acts Interpretation Act 1941. The Government's response was to introduce the Women's Employment Act 1942 (Cth) (the "Women's Employment Act"). Scheduled to that Act were regulations (the "Women's Employment Regulations") which corresponded with the regulations which had previously been made and disallowed. In those proceedings the plaintiffs sought to establish that the Women's Employment Act was beyond the power of the Commonwealth and therefore void. 14 The Act provided for the making of regulations. On 22 December 1942 regulations were made. On 16 March 1943 those regulations were disallowed by the Senate. On 25 March and 8 April 1943, new regulations were made. The plaintiffs asserted that such regulations were the same in substance as the regulations which had been disallowed, and were therefore invalid. For present purposes it is the High Court's consideration of the validity of the regulations made on 23 March and 8 April 1943 which is relevant. The consideration of that question commences at 358 in the judgment of Latham CJ. I should say that the present case has been conducted upon the basis that there is no material difference between s 49 of the Acts Interpretation Act 1941 and s 48 of the Legislative Instruments Act. 15 At 359-363, Latham CJ set out his understanding of the relevant sections as follows: A statute is made by both Houses of Parliament. Regulations under a statute are made by the Governor-General. The Acts Interpretation Act has at all times since 1904 contained provisions providing for the disallowance by either House of the Parliament of regulations made under a statute. It was found, however, that these provisions were ineffective to prevent the immediate or early re-introduction of a new regulation which produced the same legal effect as the disallowed regulation. A regulation could be disallowed by a House and could be immediately promulgated again even in the same terms. Thus a regulation, though disallowed, could, as Starke J. pointed in Dignan v. Australian Steamships Pty Ltd [(1931) 45 CLR 188 at p. 202] be kept in perpetual operation, notwithstanding even repeated disallowance. … These cases provided examples of regulations being disallowed and then re-enacted in terms which had, as Stark J. said, "substantially the same effect". These cases were decided in 1931. … It should be observed that ss. 48 and 49 deal with regulations contained in statutory rules. A statutory rule frequently consists of a number of regulations, and either House may disallow a single regulation or a number of regulations or all the regulations in a statutory rule. … Both plaintiffs and defendants in the present case contended that the sections should be so interpreted, and that, for the purpose of applying s. 48(4), regulation could be compared with regulation, and not necessarily statutory rule with statutory rule. I agree that regulation may be compared with regulation, but in my opinion this proposition should not be adopted as an exhaustive statement of the manner in which s. 49 may be applied. A particular new regulation may, it is true, be compared with a particular disallowed regulation for the purpose of determining whether those particular regulations are the same in substance. But I see nothing to prevent the comparison of a new set of regulations, as a whole, with a disallowed set of regulations, for the same purpose. In such a case it might appear that no single one of the new regulations was the same in substance as any particular disallowed regulation, and yet the effect of the new re-drafted and re-arranged regulations, taken as a whole, might be the same in substance as that of the regulations which had been disallowed. In such a case, it should, in my opinion, be held that the new regulations were void if they were passed within six months of the disallowance. Further, a new set of regulations may be so drafted as to deal in the same way with cases covered by disallowed regulations but so as also to deal with other cases to which the disallowed regulations did not apply. Such new regulations would have the same operation as the previous regulations, but would have an additional operation as well. Such a re-enactment of old regulations with additions should, in my opinion, be held to be ineffectual to escape the operation of s. 49. To hold otherwise would be to reduce the section to a complete futility. If it should happen that the objection of a House to the old regulations was that they were not sufficiently extensive in their operation, s. 49 provides a method which will enable the Government to procure the re-enactment of the old regulations, but with an addition which would give effect to the objection which had brought about their disallowance. The House which had disallowed the regulations could in that case rescind the resolution of disallowance, and there would then be no obstacle in the way of making the new regulations (s. 49(1)(a)). Similar considerations apply to any case where the ground of disallowance is an objection that the regulations are too extensive in their operation. When a regulation has been disallowed more than one course is open if it should be desired by Parliament, by the House of the Parliament which has disallowed the regulation, or by the Government, to enact provisions applying to the matters to which the disallowed regulation related. In the first place Parliament may itself legislate upon the matter. Parliament may, if it thinks proper, incorporate in a statute all the provisions of the disallowed regulations, and no question can arise as to their validity under s. 49, because that section applies only to the re-enactment of regulations being the same in substance as disallowed regulations, and not to statutes. This course was adopted when, after the disallowance of certain regulations, the Women's Employment Act was passed. In the second place (as already stated) the House which has disallowed a regulation may, if it thinks proper, rescind the resolution of disallowance. In such a case s. 49 has no application and regulations may then properly be enacted forthwith even though they are the same in substance as the disallowed regulations. In the third place, if the Government desires to re-enact a regulation which is the same in substance as the regulation disallowed and cannot persuade the disallowing House to rescind its resolution, it may, after waiting six months from the date of the disallowance, move the Governor-General to make such a regulation, and s. 49 will not be applicable to the new regulation. In the fourth place, regulations relating to the same subject matter may be made immediately after the disallowance and notwithstanding the disallowance, provided that they are not the same in substance as the regulation disallowed. But, finally, it is not open to the Governor-General, acting upon the advice of the Government of the day, to re-enact within six months of disallowance any regulation which is the same in substance as the regulation disallowed. This provision must be applied by the court without any knowledge of the reasons which prompted a House of the Parliament in disallowing a regulation. No statement of reasons is required in the resolution of disallowance. The Regulations in question in the present case may have been disallowed for many reasons. … In the absence of a statement of reasons in a resolution of disallowance, reasons for disallowance could be ascertained, with more or less accuracy, only by an examination of such speeches as might have been made in support of the resolution for disallowance. But such a resolution might be carried without any speeches, and in most cases some members would have voted for it without speaking. The court must apply the section independently of any knowledge or any speculation as to the reasons which prompted disallowance. It is left to the court to determine whether a new regulation is the same in substance as a disallowed regulation by applying such tests as the court may think proper. The court can have no basis for saying that a regulation was disallowed only because it was objectionable in some particular characteristic, so that a new regulation which has omitted that characteristic would for that reason necessarily be not the same in substance as the disallowed regulation. The court must do its best to determine in each case whether such differences as exist between the disallowed regulation and the new regulation are differences in substance. The statutory provision preventing the re-enactment of a disallowed regulation within six months of disallowance is plainly intended to give effective parliamentary control over such subordinate legislation as Parliament has authorized the Governor-General, upon the advice of the Government of the day, to enact. That authority is given by a statute passed by both Houses. The principle introduced in ss. 48 and 49 of the Acts Interpretation Act taken together is that if either House objects to the substance of a regulation made in pursuance of that authority the regulation shall be of no force or effect, so that no Government can exercise a legislative power against an objection of either House. The court should not, in my opinion, hesitate to give the fullest operation and effect to such legislation. The question whether a new regulation is the same—not identically in all particulars, but "in substance"—as a disallowed regulation will often be a question of degree, upon which opinions may reasonably differ. But, if the intention of the disallowing House has been misunderstood by the court, that House can easily put the matter right by rescinding the resolution of disallowance and so making possible the immediate re-enactment of the substituted regulation. No decision of the court that one regulation is the same in substance as another regulation can prevent the disallowing House from giving effect to a contrary opinion if it wishes to do so. 16 The Chief Justice noted that the words "same in substance" and similar expressions had a long history, dating back to 1 June 1610 when the House of Commons agreed upon a rule that, " … no Bill of the same substance be brought in the same session". His Honour noted that similar rules applied in both the House of Lords and the House of Commons, and in the Senate and the House of Representatives. That is still the case. In Erskine May's, Treatise on The Law, Privileges, Proceedings and Usage of Parliament (24th ed, Sir Malcolm Jack KCB PhD (ed)) the practice in the House of Commons is discussed at p 543 to p 545. It is for the Speaker to apply the rule, although such application is subject to any contrary vote by the House. Erkine May provides a list of occasions on which the rule has been applied in the Commons. One example has some similarity to the present case. Erskine May states: In Session 1976-77, the Reduction of Redundancy Rebates Bill provided for a reduction expressed in percentage terms in the rebate payable under previous Acts; but the question 'That the bill be now read a second time' was negatived on division. A second bill was drafted, but the Speaker ruled privately that it could not be presented since it contained provisions which would achieve the same object as that of the original bill. The Redundancy Rebates Bill, which gave power to vary the rebates within wide limits by order, was then introduced, and proceeded without objection. 17 In the House of Representatives the so-called "same motion rule" may be found in standing order 114B. In the House of Representatives Practice (6th ed) at p 298 it is said that the application of the rule is "totally at the Chair's discretion". Presumably, the term "Chair" includes the Speaker, Deputy Speaker and chairs of committees. The author suggests that the rule should not restrict or prevent, "the House from debating important matters, particularly during a long session, which may be of two to three years' duration". It seems that the rule has rarely been applied. See also pp 357 and 358. A similar rule appears as standing order 86 in the Senate. See Odgers' Australian Senate Practice (12th ed, Harry Evans (ed)) at pp 182, 334 and 342. Again, it seems that the rule is seldom applied. In particular, at p 182, the author states: This rule, known as the same question rule, is seldom applied, because it seldom occurs that a motion is exactly the same as a motion moved previously. A motion moved in a different context, for example, as part of a different "package" of proposals, is not the same motion even if identical in terms to one already moved … . Even if the terms of a motion are the same as one previously determined, because of a lapse of time it almost invariably has a different effect because of changed circumstances and therefore is not the same motion. There may also be different grounds for moving the same motion again. Of course, standing orders, and the ways in which each House habitually applies them can have no relevance for present purposes. 18 Latham CJ then observed that s 49 of the Acts Interpretation Act 1941 could have two possible meanings. Either: the provision was intended only to prevent the re-enactment of regulations which were identical in substance with a disallowed regulation, varying only in form from that regulation; or as such interpretation would, in practice, deprive the legislation of all effect, and in order to give any real effect to the legislation, it should be interpreted as preventing the re-enactment within six months of any regulation which is "substantially the same" as any disallowed regulation, and that regulations should be held to be substantially the same not only if they differ only in form, but also if their material provisions, as in fact operative, produce the same substantial result as a disallowed regulation, even if there be differences in details. At 364 his Honour said: Upon the first view suggested, the distinction upon which s. 49 is based is a distinction between substance and form. Upon the second view the relevant distinction is the distinction between substance and detail—between essential characteristics and immaterial features. The Chief Justice considered that both views were open, but concluded that the first approach would not resolve the situation which, following the decision in Dignan v Australian Steamships Pty Ltd (1931) 45 CLR 188, had led to the adoption of the provision. At 364 his Honour said: In my opinion, in order to give any practical effect to the section, it should be construed in the second of the senses above stated: that is to say, the section prevents the re-enactment by action of the Governor-General, within six months of disallowance, of any regulation which is substantially the same as the disallowed regulation in the sense that it produces substantially, that is, in large measure, though not in all details, the same effect as the disallowed regulation. The adoption of this view prevents the result that a variation in the new regulation which is real, but quite immaterial in relation to the substantial object of the legislation, would exclude the application of s. 49. 19 Rich J said at 377: The words "in substance" indicate that in making the necessary comparison form should be disregarded. 20 In other words, his Honour adopted the first of the approaches suggested by the Chief Justice. Starke J did not deal with the question. McTiernan J dealt with it at 388-390. At 389 his Honour said: Where either House disallows one regulation the intention of s. 49 is to prohibit the Executive, subject to the conditions imposed by the section, from making any regulation or regulations the same in substance as the disallowed regulation; or if either House disallows a series of regulations from making any regulation or regulations the same in substance as the disallowed regulations. The expression "the same in substance" does not fix precisely the limits of the prohibition imposed on the Executive. In my opinion a new regulation would be the "same in substance" as a disallowed regulation if, irrespective of form or expression, it were so much like the disallowed regulation in its general legal operation that it could be fairly said to be the same law as the disallowed regulation. Superficially this statement might appear to be somewhat equivocal. However, in my view, it is closer to the position adopted by Rich J than to that adopted by Latham CJ. First, McTiernan J focussed upon the distinction between form and substance. Secondly, his Honour's approach required that in order that a later measure be the same in substance as a previously disallowed measure, the later measure must, in its general legal operation, be such that it could fairly be said to be the "same law" as the disallowed measure. 21 Concerning the present question Williams J said at 405-406: The section refers to a regulation which is the same in substance as a regulation which has been disallowed. It therefore requires that each regulation forming part of a set of regulations which has been disallowed shall be contrasted with the regulation which replaces it. The meaning of a regulation must be ascertained in the context of the whole set of regulations of which it forms a part just as a section must be construed in the context of the whole Act. It requires the court to go behind the mere form of regulations and ascertain their real purpose and effect. If this is in substance the same the subsequent regulation is void. It is impossible to define the meaning of the section with any precision. As the Privy Council said in another connection, each case must be determined as it arises, "for no general test applicable to all cases can safely be laid down" … . In his Honour's subsequent consideration of the various regulations at 406, he was clearly distinguishing between form and substance. Hence I conclude that three members of the Court, Rich, McTiernan and Williams JJ, all understood s 49 as distinguishing between form, on the one hand, and substance, on the other. Latham CJ seems to have taken a somewhat different approach, considering that notwithstanding differences in the "detail", the two measures might be the same in substance. Such an approach requires that there be criteria for determining whether a difference is, or is not, as to detail. 22 I am not convinced that his Honour's approach provides any real support for the applicants' case. At 364 his Honour distinguished between "substance and detail—between essential characteristics and immaterial features". It may be that the distinction goes beyond that between form and substance, but if so, not by much, at least for present purposes. I find it difficult, in considering the First and Second Regulations, both of which impose fees, to accept that any increase in a fee, or in the level of any proposed increase, can be described as "detail" or an "immaterial feature" of the measure in question. The amount of the fee or the proposed increase is at the heart of each measure. DICTIONARY DEFINITIONS 23 The Oxford English Dictionary (2nd ed) defines the term, "in substance", as meaning "in reality". According to the same source the expression, "in reality", means "really, actually, in fact". The word "substantial" is relevantly defined as, "relating to or proceeding from the essence of a thing; essential", "that is, constitutes, or involves an essential part, point or feature; essential, material", "that is such in the main; real or true for the most part" or "the things belonging to or constituting the substance; the essential parts or elements; the essentials". The Macquarie Dictionary (5th ed) defines "substance" relevantly as, "the actual matter of a thing, as opposed to the appearance or shadow; reality", and the expression "in substance" to mean "substantially" or "actually; really". According to that dictionary the word "real" means "true (rather than merely ostensible, nominal, or apparent)". The word "substantial" means "being such with respect to essentials", "relating to the substance, matter or material of a thing" or "of or relating to the essence of a thing; essential, material or important". 24 The Chambers Dictionary (11th ed) defines the word "substance" relevantly as, "something in which qualities or attributes exist, the existence to which qualities belong; that which makes anything what it is; the principal part; gist, subject matter, body, matter, material; a kind of matter … ". The word "substantial" is defined as "of or having substance; being of substance; essential; actually existing; real; corporal; material; solid; stable". The Collins Australian Dictionary (7th ed) defines "substance" relevantly as "the essence, meaning, etc, of a written or spoken thought", "solid or meaningful quality", and the term "in substance" as "with regard to the salient points". The word "substantial" means "real; actual; true", "of or relating to the basic or fundamental substance or aspects of a thing". 25 The applicants' submissions seem tacitly to treat the term "the same in substance" as meaning "substantially similar". Such an approach involves abandonment of the actual wording of the relevant section. If the phrase "substantially the same" means something different from "the same in substance", the actual wording of the section must prevail. 26 The Oxford English Dictionary (2nd ed) defines the word "same" as "not numerically different from an object indicated or implied; identical" or "identical with what is indicated in the following context". The word "similar" is relevantly defined as "having a marked resemblance or likeness; of a like nature or kind", "a thing or person similar to or resembling another; a counterpart". The Macquarie Dictionary (5th ed) defines the word "same" as "identical with what is about to be or has just been mentioned", "being one or identical, though having different names, aspects, etc.", "agreeing in kind, amount, etc.; corresponding, unchanged in character, condition, etc." or "the same person or thing". The word "similar" is defined as, "having likeness or resemblance, especially in a general way". The Collins Australian Dictionary (7th Australian ed) defines "same" as "being the very one", "being the one previously referred to", "identical in kind, quantity, etc", unchanged in character or nature" or "in an identical manner". The word "similar" is described as "showing resemblance in qualities, characteristics or appearance; alike but not identical". The Chambers Dictionary (11th ed) defines "same" as "identical", "not different; unchanged; unvaried; an identical thing". The same reference work defines the word "similar" as "like; resembling". 27 These definitions seem to suggest that the word "same" is used to identify the very thing which is the subject of a relevant comparison, whilst the word "similar" may denote something different which nonetheless resembles the thing against which comparison is to be made. In the case of the word "same", the definitions disclose a strong sense of identity or sameness. In the case of the word "similar", they seem to contemplate a degree of divergence. This distinction is, I think, consistent with common usage. The applicants do not, in their submissions, expressly suggest that the test should be as to substantial similarity (rather than sameness in substance). However their approach reflects a search for similarity rather than for identity or sameness. It is difficult to avoid the conclusion that the word "same" in s 48 should be construed as requiring that the two measures be identical in effect, and in their means of achieving that effect. 28 Another way of looking at the problem is to focus upon the inter-relationship between the words "same" and "substance" in s 48. The expression, "the same in substance", strongly suggests that in matters of substance, complete identity is required. Thus one must identify the substance of the measure disallowed and look to see if it is reflected in the later measure. In the phrase, "substantially the same", the adverb of degree "substantially" qualifies the adjective "same" (as in "the same thing"). The effect of an adverb of degree is inevitably to qualify the meaning of the qualified adjective by, in effect, introducing the concept of "degree". By recasting the phrase, "the same in substance", as the phrase, "substantially the same", the applicants (and perhaps Latham CJ) removed the requirement that the substance of the disallowed measure be replicated in the later measure. They substituted for that requirement, a requirement that the later measure replicate the disallowed measure to a substantial degree. 29 In my view s 48 should be construed as requiring that, in order that a legislative instrument be invalid, it be, in substance or legal effect, identical to the previously disallowed measure. Differences in form will be of no consequence. In the Women's Employment Case, Rich, McTiernan and Williams JJ seem to have adopted that position. Although Latham CJ took a slightly different approach, his Honour's reasoning does not go as far as the applicants submit. Further, the dictionary definitions suggest that the word "same" should not be used in a way which tends towards the meaning of the word "similar". The word "same" requires virtual identity (or sameness) between the objects of the comparison. Another consideration militates in favour of this approach. The task conferred upon the Court by s 48 concerns the intersection of the legislative, executive and judicial functions. Whilst it may be true, as Latham CJ said, that the Court should not hesitate to give the fullest operation and effect to legislation of this kind, the courts generally seek to avoid involvement in matters of political judgment. Disputes about whether a $5 increase in a fee is an essential characteristic or an immaterial feature, or as to whether the result of such increase is substantial or otherwise, may lead to such involvement. ADMISSIBILITY OF MS WILSON'S AFFIDAVIT 30 On the approach which I have taken this question is of no real significance. Nonetheless, given the way in which the applicants have conducted the case, it seems to me that the affidavit is relevant to the matters in question. The applicants submit that the "same in substance" question can be determined simply by comparing the quantum of the increase under the Second Regulation with that imposed by the First Regulation. They submit that I should infer that increases of $5 in various items do not effect a difference in substance. The argument seems to be that $5 is not a substantial amount of money. Whilst it may be a small amount, it is not insubstantial. The applicants' approach looks at the increase only from the point of view of the person paying the fee. There can be little doubt that the proposed increases under both the First and Second Regulations were, and are, motivated by the need to generate more revenue. Ms Wilson's affidavit demonstrates that the increase in revenue to be derived pursuant to the Second Regulation is substantially greater than that to be derived pursuant to the First Regulation. In that sense Ms Wilson effectively responds to the submission that the increase of $5 should be treated as being insubstantial. In the absence of Ms Wilson's affidavit, the Court would be forced to speculate as to the extent to which each measure would increase revenue. Her affidavit does no more than give a quantitative assessment of an effect which could otherwise only be described in qualitative terms. On that basis I shall admit the affidavit. Of course, as I have said, I have not relied upon it in reaching my conclusion on the substantive issue. STANDING 31 The general rule as to standing appears in the judgment of Gibbs J (as his Honour then was) in Australian Conservation Foundation Inc v Commonwealth (1978-1980) 146 CLR 493 at 526-527. His Honour there adopted the following passage from the judgment of Buckley J in Boyce v Paddington Borough Council [1903] 1 Ch 109 at 114: A plaintiff can sue without joining the Attorney-General in two cases: first, where the interference with the public right is such as that some private right of his is at the same time interfered with … ; and, secondly, where no private right is interfered with, but the plaintiff, in respect of his public right, suffers special damage peculiar to himself from the interference with the public right. 32 At 530-531 Gibbs J said: However, an interest, for present purposes, does not mean a mere intellectual or emotional concern. A person is not interested within the meaning of the rule, unless he is likely to gain some advantage, other than the satisfaction of righting a wrong, upholding a principle or winning a contest, if his action succeeds or to suffer some disadvantage, other than a sense of grievance or a debt for costs, if his action fails. A belief, however strongly felt, that the law generally, or a particular law, should be observed, or that conduct of a particular kind should be prevented, does not suffice to give its possessor locus standi. If that were not so, the rule requiring special interest would be meaningless. Any plaintiff who felt strongly enough to bring an action could maintain it. 33 Stephen J similarly approved that extract from the judgment of Buckley J in Boyce. At 539 his Honour observed: An individual does not suffer such damage as gives rise to standing to sue merely because he voices a particular concern and regards the actions of another as injurious to the object of that concern. … Even so, the appellant clearly enough fails to establish standing to sue on the basis of damage suffered by itself. For it to succeed upon this particular ground the law must be that any person with genuinely held convictions upon a topic of public concern thereby acquires standing to enforce a public right to breach of which it takes exception. That is not the current state of the law. To hold otherwise would be radically to alter the existing law as it now stands. 34 Mason J (as his Honour then was) agreed with the reasons of Gibbs J and, at 547, said: … apart from cases of constitutional validity which I shall mention later, a person, whether a private citizen or a corporation, who has no special interest in the subject matter of the action over and above that enjoyed by the public generally, has no locus standi to seek a declaration or injunction to prevent the violation of a public right or to enforce the performance of a public duty. Depending on the nature of the relief which he seeks, a plaintiff will in general have a locus standi when he can show actual or apprehended injury or damage to his property or proprietary rights, to his business or economic interests … and perhaps to his social or political interests. 35 The applicants seek support for their submission as to Mr Perrett and Senator Moore's standing by reference to the decision of Gaudron J in City of Enfield v Development Assessment Commission (2000) 199 CLR 135 at [57]. However I do not understand her Honour to be there discussing questions of standing, but rather the proposition that relief in equity should be limited by considerations of the kind applicable to the grant of prerogative writs. 36 The applicants also refer to Brown v West (1990) 169 CLR 195. In that case a member of the House of Representatives brought proceedings against the Minister for Administrative Services and the Commonwealth, challenging the Minister's decision to increase the postage entitlement for Members of Parliament beyond the amount determined by the Remuneration Tribunal. The Court dealt briefly with the question of standing at 212 where it said: Although the plaintiff has an interest in knowing whether or not he is entitled to a supplementary allowance, there may be other persons who are not parties to these proceedings whose rights or liabilities would be affected by the making of the declarations sought by the plaintiff … . It seems that Mr Brown's interest was not as a Member of Parliament per se, but as a Member of Parliament who was, or might have been entitled to a particular allowance. 37 The applicants also refer to the decision in Combet v Commonwealth (2005) 224 CLR 494. That case concerned a challenge to the validity of proposed expenditure by the Government on a national advertising campaign, promoting proposed reforms in the workplace relations area. The secretary of the Australian Council of Trade Unions and Ms Roxon, a Member of Parliament, commenced proceedings, contending that such advertising expenditure was not authorized by legislation. The majority (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ) concluded that such advertising was authorized. In those circumstances it was not necessary that they consider the question of standing (per Gleeson CJ at [31] and per Gummow, Hayne, Callinan and Heydon JJ at [164]). McHugh and Kirby JJ separately considered the question. Ms Roxon was the Shadow Attorney-General. She claimed that this position gave her the necessary standing. At [96]-[98] McHugh J said: 96 The defendants contended that neither plaintiff has standing to obtain a declaration concerning the validity of the payments or an injunction to restrain the third defendant from issuing drawing rights to authorise the payment of public money for the advertising campaign. The first plaintiff is the Secretary of the ACTU. In British Medical Association v The Commonwealth, Dixon J doubted that the Federal Council of the British Medical Association in Australia, one of whose objects was to advance the general interests of the medical profession in Australia, had standing to challenge federal legislation that imposed a form of civil conscription within the meaning of s 51(xxiiiA) of the Constitution. … It is not necessary, however, to determine whether the first plaintiff has standing. In my opinion, the second plaintiff as the shadow Attorney-General of the Commonwealth has sufficient interest in the proceedings to give her standing to bring these proceedings. 97 The second plaintiff is a member of the House of Representatives. Her status as a member is expressly recognised by the Constitution … . She voted for or against or could have voted for or against Act No 1. She has a special interest in ensuring that public moneys are not expended inconsistently with the terms of Act No 1 passed by the Parliament of which she is a member. Furthermore, she is seeking an injunction to restrain an officer of the Commonwealth from acting in contravention of the law and s 83 of the Constitution. Her action is brought under s 75(v) of the Constitution. The remedy of injunction available under that paragraph of s 75 is one of three remedies that the paragraph makes available against officers of the Commonwealth. Another remedy under that paragraph is "prohibition", a remedy that even under the general law is available, subject to exercise of the Court's discretion, to a stranger to the issue. If a stranger can obtain a writ of prohibition under s 75(v), it is difficult to see why, subject to the Court's discretion, a stranger cannot obtain an injunction under that paragraph. In many cases to which s 75(v) applies, the distinction between a writ of prohibition and a writ of injunction will be elusive. 98 Accordingly, the second plaintiff has standing to bring these proceedings. (Footnotes omitted.) 38 The basis upon which his Honour concluded that Ms Roxon had standing is not entirely clear. It may be that the conclusion was based on: her position as Shadow Attorney-General; her position as a Member of Parliament; and/or the analogy with standing for the purpose of obtaining a prerogative writ. Kirby J considered the matter at [308]-[310]. His Honour considered that a member of Parliament had a, "particular interest in ensuring obedience by the Executive Government to the requirements prescribed by the Constitution and by federal law". See [308]. His Honour also considered that Ms Roxon had something more than a, "vexatious or purely hypothetical interest in the resolution of the issue". 39 There are, no doubt, advantages in the approaches taken by McHugh and Kirby JJ. There are also arguments against them. Firstly, the two Houses of Parliament, in conjunction with the Governor-General, make the law. Individual parliamentarians do not. Secondly, enforcement of the law is a matter for the Executive, not the Parliament or parliamentarians. Further, parliamentary supervision of the Executive depends upon constitutional and legislative arrangements. One can imagine many difficulties emerging if individual Members of Parliament were generally permitted to seek to enforce the law. With all respect to McHugh and Kirby JJ, they have not identified any principled basis for conferring such a right upon legislators, whether such legislators have relevant special responsibilities or not. As I have observed, in Australian Conservation Foundation, at 547 Mason J said that "perhaps" a social or political interest might be sufficient to give standing. However neither McHugh J nor Kirby J suggested that Ms Roxon's political interest gave her standing. Rather, it was her position as a member of the House of Representatives and Shadow Attorney-General which did so. It seems unlikely that either political interest or membership of the House of Representatives or Senate would be sufficient to satisfy the requirements for standing identified by the majority of the Court in the cases to which I have referred. 40 I note also that in Robinson v South East Queensland Indigenous Regional Council of the Aboriginal and Torres Strait Islander Commission (1996) 70 FCR 212, Drummond J considered whether the applicant was "a person aggrieved" for the purposes of the Administrative Decisions (Judicial Review) Act 1977 (Cth). The applicant was a commissioner of the Aboriginal and Torres Strait Islander Commission, having been elected to that position under the relevant legislation. He had responsibility for the approval and administration of funding allocated to the Commission for certain purposes. He also had responsibility for ensuring compliance with any terms or conditions laid down with respect to such grants. At 226 his Honour said: An elected representative, be he a member of Parliament, a local councillor or an ATSIC Commissioner, is elected to represent in the Parliament, the council or the Commission the interests of those members of the public who make up his constituency. None of those members of the public, in the absence of being able to show a special interest in a matter touching on the activities of the elected body, has standing to raise that matter in the Court. I do not think that a person can derive standing from being the elected representative of an aggregation of members of the public, none of whom individually has standing to sue. The present state of the law, in my opinion, is that subject to a situation in which an elected representative can show a special interest of his own that has been affected by a decision or an activity of the elected body (or its delegate), the representative's membership of such a body is by itself insufficient to confer standing on him to challenge the actions of the body (or its delegate). There is much to be said for this line of reasoning. 41 It is not necessary that I determine finally the question of standing as it concerns Mr Perrett and Senator Moore. However, if it were necessary to do so, I would conclude that they lacked the necessary standing. orders 42 In the circumstances the application will be dismissed. I shall receive submissions as to appropriate orders and as to costs. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. Associate: Dated: 13 August 2015	13,659
federal_court_of_australia:fca/single/1998/1998fca1438	decision	commonwealth	federal_court_of_australia	text/html	1998-10-30 00:00:00	FAI General Insurance Co Ltd & Anor v Workcover Corp of South Australia [1998] FCA 1438	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1998/1998fca1438	2024-09-13T22:44:39.533684+10:00	IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY SG 42 of 1998 BETWEEN: fai general insurance company ltd (acn 000 327 855) first Applicant fai workers compensation (SA) pty ltd (aCn 069 013 127) second applicant AND: workcover corporation of south australia Respondent JUDGE: MANSFIELD J DATE: 30 OCTOBER 1998 PLACE: ADELAIDE REASONS FOR DECISION HIS HONOUR: In this matter I have had but a limited opportunity to consider the detailed and helpful submissions of the parties, both in writing and orally. I have also considered the material presented in evidence, in particular the affidavits of Mr Britten-Jones of 21 and 22 October 1998 and of Mr Shaw of 21, 22 and 28 October 1998. In the course of my consideration of the issue now before the Court I have also had regard to the nature of the applicants' claim as expressed in their statement of claim, and to the defence of the respondent. I have not separately looked at each of the documents about which there is an issue. I have had regard to the affidavit evidence concerning each to determine what, if any, orders ought to be made with respect to them. In the course of giving discovery in this matter, significant issues have arisen as to whether certain documents which have been discovered by the respondent should be made available for the inspection of the applicants and, if so, upon what terms. Those issues have led to the refinement of the categories of documents in issue to four groups. The present group of documents, in respect of which I am asked to make a ruling, is a series of documents said to be confidential and in respect to which the respondent has been only prepared to provide access to the applicants limited to the solicitors and counsel acting for the applicants and, upon certain terms, to experts independent of the applicants. The legal representatives of the applicants have considered those documents. The applicants now claim, in respect of a limited number of documents, that the claim for confidentiality is not warranted, or that, notwithstanding the claim for confidentiality reflected in the extent to which access has presently been permitted, further access should be permitted so that officers generally of the applicants may inspect those documents or, alternatively, that two named officers of the applicants may inspect those documents. In the interests of expedition, the applicants have not pursued that claim for general access. They have now limited their claims for access to the documents in issue to two named officers of the applicants: the company secretary of the first applicant, Mr Robert Baulderstone, and Mr Colin Fagan, an officer of the first respondent directly involved in the administration of its workers compensation claims section. For the purposes of ruling upon the application, I do not think it is necessary to consider in detail the legal authorities to which the parties have referred, and in particular I do not think it is necessary to consider in detail the refinements or perceived refinements of the law which various cases may identify. I have considered those cases. The documents in issue are discoverable, and have been discovered. The issue is the extent to which, if at all, those discovered documents should be made available for inspection. I accept, on the basis of Mr Shaw's affidavits, that in various respects they are confidential. In view of the orders which I propose to make, it is not presently necessary to discuss the nature and extent of that confidentiality severally in respect of each of the documents in issue. Mr Shaw has not been cross-examined. It may be that the applicants have chosen not to cross-examine him in part because of the exigencies of time within which this application had to be resolved. For present purposes, I accept his evidence that, in various respects, the documents sought to be inspected more widely than presently permitted are confidential. Section 112 of the Workers Rehabilitation and Compensation Act 1986 (SA) also proceeds on the premise that much of the information assembled by the respondent in the course of its operations will be confidential. I should not, in those circumstances, permit inspection beyond that which is necessary to achieve justice between the parties: Home Office v Harman [1983] AC 280 at 308; Riddick v Thames Board Mills [1977] 1 QB 881 at 896. Although I have had regard to the contractual arrangements between the applicants and the respondent by virtue of which the respondent tendered to be accepted by the applicant as a provider, in my view that plea, which is also raised by way of defence, is not decisive of the present issue. That is simply because the relevant test is to determine what, in all the circumstances, is necessary to achieve justice between the parties, bearing in mind all proper claims for confidentiality. I have accepted that the documents are confidential on the basis of the material to which I have been referred. The terms of the tendering contractual arrangements reflect that at the time of tendering the parties accepted that the material provided should be confidential. In the balancing of the considerations of the need to preserve confidentiality on the one hand, and the need to achieve justice between the parties on the other, I have regarded those contractual terms as relevantly weighing in the scales against further access being permitted to the documents. The applicants' agreement acknowledging confidentiality of the documents may touch upon the demands of the interests of justice. Counsel for the applicants has indicated that the applicants are prepared to provide an undertaking themselves, and to procure an undertaking personally from each of Mr Baulderstone and Mr Fagan, which will bind them personally and not simply as officers of the applicants, that will not simply recognise the obligation to keep confidential the material the subject of the documents sought to be inspected by them, but which will also include an undertaking on the part of each of them that in respect of any further tendering process to the respondent in which the applicants or either of them participate, or in which any other employer or other entity with which in any way Mr Baulderstone or Mr Fagan may at the time be associated, might participate, neither Mr Baulderstone or Mr Fagan will in any way be involved in or participate in or provide any information with respect to the information presently sought to be made available to them, or be involved in the tendering process itself. That understanding will insulate the respondent from the possible adverse commercial consequences of the disclosure of the documents in issue to those persons, as it will prevent Mr Baulderstone and Mr Fagan from participating in any way in any future tendering process. I suspect the undertaking should be limited in time. The documents in issue have been properly identified in a schedule to which the parties have referred, and are identifiable by reference to discovery numbers. The issues as to their respective confidentiality are addressed (other than discovered document numbered 10) in sequence by reference to discovery numbers in par 9 of the affidavit of Mr Shaw of 28 October 1998. I have considered each of the matters to which he deposes, not simply to address the question of confidentiality, because I have accepted his evidence on that matter, but also to consider whether, in the light of the nature of the confidentiality to which he deposes, I should nevertheless make some order for further inspection of the documents to be available to either Mr Baulderstone or Mr Fagan or both. In making the rulings which I make, I do so on the basis that each of the applicants and Mr Baulderstone and Mr Fagan will provide in writing undertakings of the general nature to which I have referred. Those undertakings are relevant to the balancing process which the parties agree I should apply, as they will very largely protect the confidentiality of the documents from the commercial detriment which the respondent otherwise fears. Before access is permitted to either of those persons, the parties should consult with a view to determining the form of the undertaking and, in the event of dispute, the matter can be brought back before the Court for ruling as to the appropriate terms of the undertaking. The undertaking, in a form finally to be determined, will have to be signed by each of the applicants and by Mr Baulderstone and Mr Fagan. I propose to defer a ruling on those documents which, in the list of documents are numbered 46 to 48 and 81. Mr Shaw describes those documents in his affidavit as internal E-mail records or activity log entries. Although they are discoverable and have been discovered, I do not have a sufficient understanding of those documents to form the view that they are sufficiently significant to the applicants' case to warrant the applicants having greater access for the purpose of inspection of those documents than presently is the case. I suspect that many of them will not be necessary to be inspected. It is appropriate not to lose sight of the fundamental nature of the applicants' case, as it is expressed in the details of the claim. In essence, it invokes claims under ss 45(2)(a)(ii) and (2)(b)(ii), 46 and 51AA of the Trade Practices Act 1974 (Cth) concerning the process by which the applicants ceased to be agents of the respondent, and the process by which the applicants' tender to be renewed as agent of the respondent was not accepted. The solicitors for the applicants have access to those documents in any event. They may go through them for the purposes of identifying whether there is in fact any one or more of them which, in particular, requires to be considered by either Mr Baulderstone or Mr Fagan for the purposes of instructions. If there is then no agreement that the documents so identified should be treated in the way in which I propose to treat the balance of the documents, then the matter can be brought back before the Court. However, those documents in the first place do not strike me as inherently likely to be significant in showing the primary processes of the decision-making of the respondent about which the applicants complain. Subject to that matter and subject to the undertakings to which I have referred, I propose to order that each of the documents in the list of documents numbered 10, 13, 11 (two documents), 12 (two documents), 50 (three documents), 69, 70, 73, 74, 79-1, 79-8, 79-9, and 79-11, be made available for the inspection of Mr Baulderstone and Mr Fagan. In the case of documents numbered 11, 12 and 50 the reference to the number of documents is to those the parties have identified as being the subject to the present claim for confidentiality which these reasons address. I have not referred to the documents numbered 79-2 simply because I am told that it is the same document as document 69. That order is subject to the following particular conditions. In making available those documents for inspection by those two persons, the respondent is entitled to exclude, by masking, any content of any of those documents which records any information provided by an individual tenderer which is specific information of or concerning that individual tenderer or which records any information collated or assembled by the respondent which reflects or represents specific information provided by or concerning that individual tenderer, or any other entity providing services to the respondent. That formulation is intended to permit the masking of any information recorded in any of those documents which reflects the respondent's specific assessment of an individual tender or its assessment of the comparative rating of individual tenderers. By way of illustration, for example, where there is a table listing an assessment of each of the tenderers, the order contemplates that the table with its heading will appear but the names of the tenders and what is said about each of them within the table may be masked, except for the information or comments regarding the applicant or either of the applicants. To ensure that it is clear, I indicate that the material which may be excluded by masking includes the levy rates and bid rates to which reference is made in those documents. I do not think it is necessary separately to go through each of the documents dealt with in Mr Shaw's affidavit of 28 October 1996 to single out that information. As is apparent from the documents which have been handed up to me by way of illustration to highlight the nature of the submissions, his affidavit is not necessarily entirely comprehensive in identifying such information. Illustrations appear both from those documents, and from the affidavit noting that certain documents record information specific to another bidder or to another entity, which clearly fall within the exclusion I have expressed. In fairness to the applicant, I note that the applicant has accepted that information, which might be called "third party information" presents different issues for consideration, and have not sought, by the resolution of the present issue, access to third party information. The question of how access to documents containing such information should be given, if at all, is the subject of a separate process now being undertaken. I have reached that view because it seems to me, having regard to the nature of the case, that it fairly reflects what counsel for the respondent described as the tension between the right to privacy and confidentiality of documents such as those for which inspection is now sought on the one hand, and achieving the ends of justice on the other. In particular, I am mindful of the fact that the limited inspection which is now permitted is confined to certain named persons who will have given an undertaking reflecting the terms to which I have referred. Because I do not pretend to have examined myself each of the documents in issue or to apprehend fully the issues which the applicants or the respondent may wish to ventilate during the course of the hearing, it is possible that further issues may emerge in the course of inspection of those documents by Mr Baulderstone or Mr Fagan and the taking of instructions in relation to them. I therefore propose to give liberty to apply generally to either party, but in particular liberty to the applicants to apply to extend the range of persons to whom access to a document or documents is permitted by the decision which I have announced, and to apply for variation of the terms of the undertaking which I have indicated should be provided. I will give the parties liberty to speak to the minutes and to the form of undertaking. I certify that this and the preceding five (5) pages are a true copy of the Reasons for Decision herein of the Honourable Justice Mansfield. Associate: Dated: 30 October 1998 Counsel for the Applicants: Mr R J Whitington QC with Mr N G Rochow Solicitors for the Applicants: Fisher Jeffries Counsel for the Respondent: Mr T A Gray QC with Dr R J Baxter Solicitors for the Respondent: Johnson Winter & Slattery Date of Hearing: 30 October 1998 Date of Decision: 30 October 1998	3,079
federal_court_of_australia:fca/single/2023/2023fca0402	decision	commonwealth	federal_court_of_australia	text/html	2023-05-02 00:00:00	Tredders Investments Pty Ltd as trustee for Warren Tredrea Trust v Channel 9 South Australia [2023] FCA 402	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2023/2023fca0402	2024-09-13T22:44:39.574212+10:00	Federal Court of Australia Tredders Investments Pty Ltd as trustee for Warren Tredrea Trust v Channel 9 South Australia [2023] FCA 402 File number: SAD 147 of 2022 Judgment of: KENNETT J Date of judgment: 2 May 2023 Catchwords: PRACTICE AND PROCEDURE – Application for suppression and non-publication orders pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) – sensitive personal information of third-parties – whether order necessary to prevent prejudice to the proper administration of justice – application refused Legislation: Federal Court of Australia Act 1976 (Cth) ss 37AE, 37AF, 37AG, 37AI Cases cited: Australian Competition and Consumer Commission v Cascade Coal Pty Ltd [2015] FCA 607 Clime Capital Limited v UGL Pty Limited (No 2) [2020] FCA 257 Harman v Secretary of State for the Home Department [1983] 1 AC 280 Hearne v Street [2008] 235 CLR 125 Hogan v Australian Crime Commission (2010) 240 CLR 651 Huikeshoven v Secretary, Department of Education, Skills and Employment [2021] FCA 1359 Kaplan v State of Victoria [2022] FCA 590 Porter v Australian Broadcasting Corporation [2021] FCA 863 Roberts-Smith v Fairfax Media Publications Pty Ltd (No 26) [2022] FCA 46 Division: General Division Registry: South Australia National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 18 Date of last submission: 30 March 2023 Date of hearing: Determined on the papers Solicitor for the Applicant: Polson Legal Solicitor for the Respondent: Finlaysons Lawyers ORDERS SAD 147 of 2022 BETWEEN: TREDDERS INVESTMENTS PTY LTD (ACN 089 102 958) AS TRUSTEE FOR WARREN TREDREA TRUST First Applicant WARREN TREDREA Second Applicant AND: CHANNEL 9 SOUTH AUSTRALIA (ACN 007 577 880) Respondent order made by: KENNETT J DATE OF ORDER: 2 May 2023 THE COURT ORDERS THAT: 1. The application for an order under s 37AF of the Federal Court of Australia Act 1976 (Cth) is refused. 2. The affidavit of Jessie Murphy-Allen dated 30 March 2023 is to be placed on the Court's file; however, there will be a notation on the file that annexure JMA7 is "not to be released except by leave granted by a judge". Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT KENNETT J: 1 In this case the applicants seek various relief against the respondent arising from what they assert is discrimination against the second applicant arising from his refusal to be vaccinated against COVID-19. The matter is set down for a final hearing commencing on 31 July 2023. Among the many other steps that have been taken in the proceeding to date, the respondent has given discovery in accordance with orders made by the Court. 2 On 2 March 2023, at the request of the respondent, I made interim orders under s 37AI of the Federal Court of Australia Act 1976 (Cth) (the Act) prohibiting the publication or disclosure of 18 documents which had been discovered by the respondent and identified in the list of documents accepted for filing on 9 February 2023. On 10 March 2023, the respondent notified my chambers that it was only pressing its application for ongoing orders in relation to four of the documents, two of which related to personal health information of individual employees and two of which related to information of third-party organisations in relation to the steps those organisations had taken to address COVID-19 within their workplaces. At that time, it was also anticipated that the respondent would be making further discovery. On 15 March 2023, by consent, I made orders setting aside the earlier order and substituting a new order under s 37AI in relation to the four documents for which confidentiality was now sought. I required material in support of the application for a continuing order to be filed by 30 March 2023. 3 On 30 March 2023 the respondent provided to my chambers an affidavit, annexing the proposed ongoing orders, and written submissions. An order is now sought preventing the publication or other disclosure of five of the documents discovered by the respondent. They do not include the documents relating to third-party organisations, as the organisations in question have notified the respondent that they do not seek ongoing non-publication orders to protect their commercial interests. The documents in relation to which orders are now sought include two of the documents which were subject to the orders made on 15 March, together with a further three documents which have since been identified. The concern that is raised in relation to all of these documents is that they include private health information in relation to individuals who (apart from being employed by entities affiliated with the respondent) have no connection with the proceedings. 4 The applicants did not oppose the order sought and the respondent did not seek to add to its written submissions. I have determined the issue on the papers. 5 Copies of the five documents in question were annexed to the affidavit referred to above. They are copies of internal emails of the respondent with their attachments. The emails were sent in late 2021 and early 2022 and concern the arrangements that were to be made in the respondent's workplace in relation to a small number of employees or contractors who were unable to wear a mask or did not wish to be vaccinated (or disclose their vaccination status). The attachments include medical certificates and other documents from one of those people's doctors. 6 The only grounds on which a suppression or non-publication order may be made are those set out in s 37AG(1) of the Act. The only ground said to be relevant here is that contained in para (a): "the order is necessary to prevent prejudice to the proper administration of justice". 7 The term "necessary" is included in each paragraph of s 37AG(1). It sets a high bar, reflecting the importance of the principle of open justice (which is expressly referred to in s 37AE). It has been observed in relation to s 37AG(1) and its statutory predecessors that "'necessary' is a strong word", to be distinguished from merely convenient reasonable or sensible (Hogan v Australian Crime Commission (2010) 240 CLR 651 at [30]-[31]), and that "embarrassment, inconvenience, annoyance or unreasonable or groundless fears will not suffice" (Australian Competition and Consumer Commission v Cascade Coal Pty Ltd [2015] FCA 607 at [30] (Foster J)). 8 Despite the stringency of the test, this Court has been prepared to make confidentiality orders in relation to sensitive information that could have a commercial value or could be used by competitors of a party to undermine its interests (see eg Clime Capital Limited v UGL Pty Limited (No 2) [2020] FCA 257 (Anastassiou J)). The view has been taken that it would be contrary to the interests of the administration of justice for the Court's process to result in the value of such information being destroyed or diminished, as this could lead to a loss of confidence in the Court or open the way to abuse. 9 The information with which the present application is concerned is in a different category. It is very unlikely to have any commercial value, and the prospect of it being used against any of the individuals concerned is slight. Its disclosure could well be said to be likely to lead only to "embarrassment, inconvenience [or] annoyance" to those persons. Nevertheless, it is information of a kind which people in Australia properly expect to be treated with sensitivity and to be kept confidential, unless there is a good reason for its disclosure. 10 In Huikeshoven v Secretary, Department of Education, Skills and Employment [2021] FCA 1359 (Huikeshoven), Jackson J considered an application to suppress the names of the applicant in the proceedings and her child. The subject matter of the case was a decision by a delegate of the respondent to deny benefits to the applicant because the child did not meet vaccination requirements. His Honour carefully reviewed the authorities and determined that the proposed orders could not be justified under s 37AG(1)(a) or under para (c) (which is made out where the order is "necessary to protect the safety of any person"). His Honour was not satisfied that there was anything inherent in the nature of the proceeding which indicated that persons would be deterred from bringing such proceedings if their privacy were not protected (at [61]). The fact that the applicant herself had commenced proceedings without any assurance that suppression orders would be made tended to the contrary. The argument therefore boiled down to a desire on the part of the applicant to avoid embarrassment to herself and her child which, his Honour held, was understandable and reasonable but insufficient to meet the terms of s 37AG(1)(a). 11 One of the cases referred to in Huikeshoven was Porter v Australian Broadcasting Corporation [2021] FCA 863 (Porter) where, at [84], Jagot J referred to "sensitive information about a person's health" among examples of information which, if not protected from disclosure, might diminish public confidence in and access to justice. This was given as an example of the ways in which the administration of justice might be prejudiced, and as an aspect of what her Honour described as the recognition, in ss 37AE – 37AL of the Act, that it is sometimes necessary that information filed or given in a proceeding not be disclosed or published in order for justice to be done. This was part of a general discussion about the Federal Court Rules 2011 (Cth) and their relationship to the Part of the Act under which suppression and non-publication orders are made, rather than reasoning leading to an order under s 37AF (ultimately, her Honour made an order permitting material to be removed from the court file rather than a suppression or non-publication order). It was essentially for this reason that Jackson J did not regard Porter as supporting the applicant's position in Huikeshoven. 12 Huikeshoven was relied on in Kaplan v State of Victoria [2022] FCA 590 (Kaplan) where Mortimer J, as her Honour then was, declined to make orders suppressing the identities of 34 current and former school students who were alleged to have engaged in conduct including assaults, taunts, Nazi salutes, racist assaults, battery and bullying of the applicants. The students were not parties, and only one was proposed at the time of the suppression application to be called as a witness. In reaching the conclusion that there was insufficient justification to make the orders sought, her Honour emphasised two matters of particular relevance here. First, at [50] (and referring to Roberts-Smith v Fairfax Media Publications Pty Ltd (No 26) [2022] FCA 46), that the Court is entitled to expect reporting will be responsible, fair and reasonable. Secondly, at [20]-[24], that cogent evidence is required to establish a justification for orders departing from the principle of open justice. Her Honour found there the evidence created no probative basis for the Court to apprehend that the media would start reporting the full names of the 34 students. The embarrassment or distress caused to them could be ameliorated to some extent by using only their first names in the trial and the ultimate reasons for judgment. 13 Like Kaplan, the present case raises somewhat different considerations to Huikeshoven because the information sought to be protected is not sensitive information relating to any party to the proceeding. It concerns individuals who have no connection with the proceeding, either as parties or (so far as I am presently aware) as witnesses. The prospect that people may be deterred from pursuing their rights in the courts as a result of concern about private information of other people being disclosed is, realistically, very small. The interests of the administration of justice would therefore not be prejudiced, in that way, by disclosure of the information in question here. 14 The other possibility that needs to be considered is that the administration of justice could be brought into disrepute or suffer a loss of public confidence if the privacy of people who are in effect innocent bystanders were to be compromised. In my view, such an outcome, if repeated over time, would be detrimental to the reputation of the Court and the administration of justice. While the filing of sensitive information about a third-party for a collateral purpose could well involve an abuse of process (and may be prevented for that reason), this is far from always the way in which the Court comes to hold such information, as the present situation shows. It is difficult to justify, as an aspect of open justice, the disclosure of sensitive personal information concerning a person who has no connection with the subject matter of a proceeding. 15 However, it does not follow that prevention of such disclosure in the present case is "necessary" to prevent "prejudice to the proper administration of justice". That expression appears to refer to the actual administration of justice by the courts, not to the regard in which the courts are held by members of the public. Potential reputational damage to the Court would need to be demonstrably substantial before it could be said to be prejudicial to the "proper administration of justice". There is no evidence from which it can be inferred that discontent arising from the occasional revelation of private information would make the proper administration of justice more difficult. Section 37AG does not call for a balancing of competing interests or a broad assessment of where the public interest lies. It permits a suppression or non-publication order to be made only when the Court is satisfied that such an order is "necessary" for identified purposes. As noted earlier, that expression sets a high bar. 16 A further reason why the proposed order may not be "necessary to prevent prejudice to the proper administration of justice" is that there is as yet no certainty that the present proceeding will lead to the information in question here being disclosed let alone published. The documents in question may not be put into evidence; and if they are not, they will (at least in the normal course) not become available by way of any grant of access to the Court's file. The applicants and their legal representatives are entitled to inspect the documents but, as a result of the implied undertaking are not entitled to use them for any purpose ulterior to the proceeding: Harman v Secretary of State for the Home Department [1983] 1 AC 280; Hearne v Street [2008] 235 CLR 125 at [107][108]. Should the documents be tendered in the proceeding by either party, a sensible approach on the part of their legal representatives could allow redacted versions to go into evidence, thereby protecting the identities of the persons referred to. 17 For these reasons, I will not make the order sought under s 37AF. 18 The affidavit referred to above will be placed on the Court's file so that it becomes part of the record of the Court. However, I will also make an order designed to prevent the accidental disclosure of the annexure to that affidavit containing copies of the documents in relation to which the orders were sought. If copies of the same documents are relied on in open court, any requests for access to those copies will be dealt with in the usual way. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Kennett. Associate: Dated: 2 May 2023	3,345
federal_court_of_australia:fca/single/2008/2008fca0204	decision	commonwealth	federal_court_of_australia	text/html	2008-02-25 00:00:00	SZKON v Minister for Immigration and Citizenship (No 2) [2008] FCA 204	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2008/2008fca0204	2024-09-13T22:44:41.485716+10:00	FEDERAL COURT OF AUSTRALIA SZKON v Minister for Immigration and Citizenship (No 2) [2008] FCA 204 SZKON v MINISTER FOR IMMIGRATION AND CITIZENSHIP AND REFUGEE REVIEW TRIBUNAL NSD 2198 OF 2007 GRAHAM J 25 FEBRUARY 2008 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2198 OF 2007 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: SZKON Appellant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent REFUGEE REVIEW TRIBUNAL Second Respondent JUDGE: GRAHAM J DATE OF ORDER: 25 FEBRUARY 2008 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The appellant pay the respondent Minister's costs Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2198 OF 2007 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: SZKON Appellant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent REFUGEE REVIEW TRIBUNAL Second Respondent JUDGE: GRAHAM J DATE: 25 FEBRUARY 2008 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The appellant, who is identified for the purposes of these proceedings as 'SZKON', was born in Henan in the People's Republic of China on 19 September 1964. 2 On 21 November 2005, he was issued with a passport by the People's Republic of China. 3 On 29 August 2006 he left the People's Republic of China and arrived in Australia on the following day, namely, 30 August 2006. 4 On 11 September 2006, he lodged an application for a Protection (Class XA) visa. That application was refused by a delegate of the Minister on 16 November 2006. 5 On 28 December 2006 the appellant lodged an application for review with the Refugee Review Tribunal ('the Tribunal'). 6 By letter dated 24 January 2007, the appellant was invited to attend a hearing of the Tribunal to give oral evidence and present arguments in support of his claims. The Tribunal's letter indicated that the Tribunal had considered the material before it in relation to his application for a Protection (Class XA) visa but was unable to make a decision in his favour on that information alone. He was advised that he could also ask the Tribunal to obtain oral evidence from another person or persons. 7 A somewhat confusing response to the hearing invitation was apparently sent on behalf of the appellant to the Tribunal on 6 February 2007. The form indicated that the appellant did not wish to attend a hearing, but indicated that he would need an interpreter from the Mandarin language into the English and vice versa. 8 In fact, the appellant attended a hearing before the Tribunal on 12 March 2007. On 28 March 2007 the Tribunal decided to affirm the decision of the Minister's delegate not to grant the appellant a Protection (Class XA) visa. 9 On 1 May 2007, the appellant filed an application in the Federal Magistrates Court of Australia, seeking the issue of constitutional writ relief in respect of the decision of the Tribunal. 10 An amended application was apparently filed on or about 18 July 2007. That application was heard on 30 August 2007 and on 23 October 2007 the learned Federal Magistrate handed down his reasons for judgment and ordered that the application be dismissed and that the appellant pay the respondent Minister's costs fixed in the amount of $4,000.00. 11 On 8 November 2007 the appellant filed a Notice of Appeal in this Court, appealing from the whole of the judgment of the Federal Magistrates Court of Australia given on 23 October 2007. 12 It is important to remember that proceedings before the Tribunal are not adversarial but inquisitorial. The Tribunal is not in the position of a contradictor of a 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. 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. The Tribunal, conducting an inquisitorial hearing, is not obliged to prompt and stimulate an elaboration which an appellant chooses not to embark on (see per Gummow and Heydon JJ in Re Ruddock (in his capacity as Minister for Immigration and Multicultural Affairs) and Another; ex parte Applicant S154/2002 (2003) 201 ALR 437 at [57]-[58]). The Act does not require the Tribunal actively to assist an applicant in putting his or her case, nor does it require the tribunal to carry out an inquiry in order to identify what that case might be (Minister for Immigration and Multicultural and Indigenous Affairs v SCAR (2003) 128 FCR 553 at [36]). 13 Under s 65(1) of the Migration Act 1958 (Cth) ('the Act') the Minister, after considering a valid application for a visa is to grant it or to refuse it depending on whether or not the Minister is satisfied or not satisfied of certain matters. One of the matters upon which the Minister must be satisfied is that 'the other criteria for it prescribed by this Act or the regulations have been satisfied'. 14 The relevant criteria in the case of a Protection (Class XA) visa is set out in s 36(2) of the Act which calls into consideration 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 (collectively referred to as 'the Refugees Convention'). The appellant claimed to be a refugee within the meaning of the Refugees Convention because 'owing to well-founded fear of being persecuted for reasons of … religion, …membership of a particular social group or political opinion' he was 'outside the country of his nationality and' was 'unable, or owing to such fear, unwilling to avail himself of the protection of that country'. 15 The appellant claimed to be a refugee because of his practice of Falun Gong and the persecution of adherents of Falun Gong by the authorities in the People's Republic of China. He claimed that prior to his departure from China he had personally experienced persecution and claimed that if he returned to China he would be persecuted again. 16 The Tribunal had before it the Department's file relating to the appellant, the material referred to in the Minister's delegate's decision and other material available to it from a range of sources. It had regard to the written statement accompanying the appellant's application for the Protection (Class XA) visa and to the oral testimony given by the appellant at the Tribunal hearing on 12 March 2007. It also had regard to supplementary material provided by the appellant to the Tribunal on 22 March 2007; that is to say, some six days before the Tribunal Member reached his decision, which was ultimately handed down on 24 April 2007. 17 The supplementary material consisted of one and a half pages of closely typed material, which was in part a commentary on the manner in which the appellant had presented his evidence before the Tribunal Member and his desire to make sure that his case was comprehensively and carefully recorded for the Tribunal's assistance. It was accompanied by a letter directed to the Tribunal, which had apparently been brought into existence on 18 March 2007 and apparently interpreted on 21 March 2007 before being lodged with the Tribunal on 22 March 2007. 18 The Tribunal said in its 'statement of decision and reasons' under the heading 'FINDINGS AND REASONS': 'The central claim of the applicant is that he was a practitioner of Falun Gong in China and as a result, he was subject to persecution involving detention and torture and that his family suffered discrimination. In support of his case, the applicant further alleges that he has joined a Chapter and been practising Falun Gong since he arrived in Australia. In this respect, the applicant also impliedly makes a sur place claim for protection.' 19 The Tribunal relied in part upon the provisions of s 91R(3) of the Act to support the conclusions which it ultimately reached. Section 91R(3) provided: '91R(3) For the purposes of the application of this Act and the regulations to a particular person: (a) in determining whether the person has a well-founded fear of being persecuted for one or more of the reasons mentioned in Article 1A(2) of the Refugees Convention as amended by the Refugees Protocol; disregard any conduct engaged in by the person in Australia unless: (b) the person satisfies the Minister that the person engaged in the conduct otherwise than for the purpose of strengthening the person's claim to be a refugee within the meaning of the Refugees Convention as amended by the Refugees Protocol.' 20 In respect of the appellant's claims of membership in the Falun Gong, the Tribunal Member would appear to have been concerned about an apparent lack of knowledge on the part of the appellant of rudimentary elements of the practice of Falun Gong. The Tribunal Member said: 'In spite of the applicant's claims that he was a member of the Falun Gong and that he joined the organisation in late 1999 or early 2000, the applicant could not provide any credible information to the Tribunal to corroborate his claims. The Tribunal regards it as important that when the applicant was asked about basic issues relating to Falun Gong he was not able to provide any answers that inspire confidence in his claims that he has been a practitioner of the organisation since 2000.' 21 The Tribunal Member said: 'The absence of any credible evidence of past association with the Falun Gong coupled with his lack of knowledge about basic elements of the organisation in spite of his claims of current association with the organisation leads the Tribunal to conclude that the applicant has joined the Falun Gong in Australia for the purpose of strengthening his claims before the Tribunal and the Department for a Protection Visa. The Tribunal does not regard the applicant's sur place claims as genuine' 22 In relation to the claims of persecution made by the appellant, the Tribunal Member said: 'All these factors combined lead the Tribunal to the conclusion that the applicant's claims that he was a member of the Falun Gong and that he was subject to torture and detention in China as a result of his association have been fabricated to strengthen his claim for a Protection Visa in Australia. His claims are rejected accordingly.' 23 The Tribunal was not satisfied that the appellant was a person for whom Australia had protection obligations under the Refugees Convention. Therefore, the appellant did not satisfy the criterion set out in s 36(2) for a protection visa. 24 The grounds of appeal relied upon by the appellant were as follows: '1. Refugee Review Tribunal had bias against me and did not make fair decision for my application. 2. I clarify my points at the hearing of the Federal Magistrates Court, but the Judge did not give me a chance to provide more document. The Judge refused my application on Oct. 23. It is not fair. 3. I believe that my application was not considered reasonably by the Judge at the Federal Magistrates Court.' 25 The record of the tribunal member's decision included the following paragraph: 'The Tribunal asked the applicant if he had any other information to provide to assist his claims. The Tribunal asked if for instance he has any documentation that indicates that he was detained in China. He said he has no documentation. The Tribunal also asked him how the authorities could have given him a passport to help him leave the country if indeed he was of adverse interest to them. He said once he was released from detention there was no barrier to his obtaining the passport.' 26 In this context, the appellant submitted the additional information to which reference has been made on 22 March 2007 which information reached the Tribunal some six days before the Tribunal Member decided the Application for Review as he did. Nothing was advanced in the additional information to indicate that there was more information again which the appellant wished to place before the Tribunal for its consideration. 27 On the hearing of the application before the learned Federal Magistrate, an opportunity was provided to the appellant to give evidence about the claimed denial of an opportunity to present additional material to the Tribunal. On the hearing of the appeal before me, the appellant said that the Tribunal had refused his application without obtaining additional documents from him. He thought that he had further time available to him to submit further documents. He did not specifically ask the Tribunal to give him more time. 28 When the matter was before the learned Federal Magistrate the appellant gave the following evidence on 30 August 2007: 'Before the hearing was concluded I asked the member whether I can show them [sic] the books and evidence, however, the member said to me they can only consider the evidence that is related to either my mum or me. To my opinion, I think those books are the evidence related with my mum and me. [The books referred to were the subject of cross-examination by counsel for the Minister where it was elicited that they provided general information about the practice of Falun Gong.] Besides the member also told me I could remit him or her and [sic] further evidence. For example, like the detention certificate. After the hearing I also talked to my family members and they said to me they could use the quanshi to fix up this matter. While I was thinking about how to bring those evidence to Australia, for example, the detention certificate as well as the written testimonial from my mum – while I was trying to think about how to bring those documents to Australia, my application was refused by RRT. I therefore think they did not give me enough time to provide the further evidence. Before I got all the documents in place they turned down my application.' 29 When cross-examined by counsel for the Minister the appellant gave answers which were inconsistent with his evidence-in-chief. The relevant evidence included: Counsel for the Minister: 'I just have a couple more questions. Do you accept that at the conclusion of the hearing the Tribunal asked you if you had any further information to assist your claims?' Appellant: 'Yes.' Counsel: 'And do you accept that the Tribunal also asked you at the end of the hearing whether you had any documentation that indicated you had been detained in China?' Appellant: 'Yes.' Counsel: 'And you said at the hearing that you had no such documentation.' Appellant: 'Yes.' Counsel: 'And what you have just told his Honour about the detention certificate was something that came to your knowledge after the Tribunal hearing. Is that the case?' Appellant: 'Yes. I did not consider the importance of the detention certificate in the hearing, but I began to consider its importance after the hearing.' ... Counsel: '... But you didn't ask the Tribunal to give you an extension of time in which to provide further material, did you?' Appellant: 'Yes. I did not ask for the extension of time because I thought I could send those documents here very shortly but my application was turned down much shorter that [sic] I bring those documents here.' 30 In the light of the evidence to which I have just referred I am not satisfied that the Tribunal denied the appellant procedural fairness. The Tribunal Member clearly took into account the supplementary information that was provided by the appellant on 22 March 2007. When that material was provided, no further request was made for an opportunity to provide further evidence again. It seems to me that there was no wrongful refusal by the Tribunal Member of any evidence that was personal to the appellant or any member of his family by the Tribunal. If the Tribunal Member was invited to but failed to accept evidence of a book or books containing material about the practice of Falun Gong generally then the Tribunal Member did not relevantly fall into error. 31 On the hearing of the appeal the appellant made an application for the Court to receive additional fresh evidence going to the merits of his application before the Tribunal. That application was refused. 32 On 7 January 2008 the appellant provided a two-and-a-half page typed submission to the Court in support of his notice of appeal. That submission included: 'My failure in the Federal Magistrates Court is unexpected. I feel frustrated and upset. I am worried that if I return to China, I would again suffer from detention and persecution and once again would be deprived of my freedom. Now I would like to provide some photos and witnesses about my participating in Falun Gong in Sydney. All these things can prove that I am a Falun Gong practitioners and a participant of a series of Falun Gong activities.' 33 It seems clear to me that the Tribunal did not commit any jurisdictional error in considering the appellant's case. It is not open to this Court, nor was it open to the Federal Magistrates Court, to provide the appellant with a merits review, which in essence is what he now seeks. In support of his grounds of appeal the appellant submitted orally that the Tribunal Member did not listen to his point of view. He made a similar allegation in respect of the learned Federal Magistrate. It seems to me, having regard to the detailed reasons for the decision of the Tribunal Member and the judgment of the learned Federal Magistrate, that neither of these submissions bears analysis. 34 Plainly in both the Tribunal and in the Court, due consideration was given to the matter upon which the appellant was relying and the arguments that were advanced by him as to why he should be found to be a refugee and as to why there may or may not have been an error in the consideration of the matter in the Tribunal. In my opinion the appeal should be dismissed. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. Associate: Dated: 29 February 2008 The Appellant appeared in person. Counsel for the First Respondent: G R Kennett Solicitor for the First Respondent: Sparke Helmore The Second Respondent filed a submitting appearance. Date of Hearing: 25 February 2008 Date of Judgment: 25 February 2008	4,043
federal_court_of_australia:fca/single/2019/2019fca1872	decision	commonwealth	federal_court_of_australia	text/html	2019-11-13 00:00:00	Wellcom Group Limited, in the matter of Wellcom Group Limited (No 2) [2019] FCA 1872	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2019/2019fca1872	2024-09-13T22:44:42.004093+10:00	FEDERAL COURT OF AUSTRALIA Wellcom Group Limited, in the matter of Wellcom Group Limited (No 2) [2019] FCA 1872 File number: VID 878 of 2019 Judge: O'BRYAN J Date of judgment: 13 November 2019 Date of publication of reasons: 22 November 2019 Catchwords: CORPORATIONS – members' scheme of arrangement –order sought under s 411(4)(b) of the Corporations Act 2001 (Cth) approving scheme of arrangement – where scheme of arrangement receives strong support at meeting of members – approval given Legislation: Corporations Act 2001 (Cth) ss 411(1), 411(17), 412 Cases cited: Re Alabama, New Orleans, Texas and Pacific Junction Railway Company [1891] 1 Ch 213 Re Central Pacific Minerals NL [2002] FCA 239 Re Medical Australia Ltd (No 2) [2017] FCA 1429 Re Permanent Trustee Co Ltd (2002) 43 ACSR 601 Re Seven Network Ltd (No 3) (2010) 267 ALR 583; 77 ACSR 701 Re Signature Capital Investments Ltd (No 2) [2016] FCA 385 Re Solution 6 Holdings Ltd (2004) 50 ACSR 113 Re Tatts Group Ltd (No 2) [2017] VSC 770 Re Toll Holdings Ltd (No 2) [2015] VSC 236 Re Wellcom Group Limited [2019] FCA 1655 Date of hearing: 13 November 2019 Registry: Victoria Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 35 Counsel for the Plaintiff: Mr M Oakes SC Solicitor for the Plaintiff: Minter Ellison Counsel for Innocean Worldwide Inc: Ms K A O'Gorman Solicitor for Innocean Worldwide Inc: Ashurst Australia ORDERS VID 878 of 2019 IN THE MATTER OF WELLCOM GROUP LIMITED (ACN 114 312 542) BETWEEN: WELLCOM GROUP LIMITED (ACN 114 312 542) Plaintiff INNOCEAN WORLDWIDE INC Interested Person JUDGE: O'BRYAN J DATE OF ORDER: 13 November 2019 THE COURT ORDERS THAT: 1. Pursuant to sub-section 411(4)(b) of the Corporations Act 2001 (Cth) (Act), the Scheme of Arrangement between the plaintiff and its members (other than the Excluded Shareholder, SIDCOM Pty Ltd (ACN 635 070 049)) agreed to by the said members at the meeting held on 8 November 2019 (the terms of which were set out in Annexure B to the Orders of the Court made on 4 October 2019) (Scheme) be and is hereby approved. 2. Pursuant to sub-section 411(12) of the Act, the plaintiff be exempted from compliance with sub-section 411(11) of the Act in relation to the Scheme. 3. Pursuant to rule 39.34 of the Federal Court Rules 2011 (Cth), these Orders be entered forthwith. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT O'BRYAN J: Introduction 1 On 4 October 2019, I made orders convening a meeting of the holders of ordinary shares of the plaintiff, Wellcom Group Limited (ACN 114 312 542) (Wellcom), pursuant to s 411(1) of the Corporations Act 2001 (Cth) (Act) in relation to a proposed scheme of arrangement (Scheme): Re Wellcom Group Limited [2019] FCA 1655. 2 On 8 November 2019, at the meeting of members convened pursuant to those orders, the Scheme was approved by 99.46% of votes cast on the resolution and by 93.84% of members present and voting either in person or by proxy. Accordingly, the requirements specified in s 411(4)(a) of the Act have been met. 3 At the second court hearing held on 13 November 2019, Wellcom sought an order under s 411(4)(b) of the Act approving the Scheme. No shareholder or other person appeared at the hearing to object to the Scheme. 4 At the conclusion of the hearing, I made the orders sought by Wellcom. These are my reasons for doing so. Overview of the Scheme 5 The Scheme is described in my decision convening the Scheme meeting referred to above. The Scheme provides for the transfer of approximately 85% of Wellcom's shares to Innocean Worldwide Inc (Innocean) in consideration for a cash payment by Innocean of $6.70 per share. The remaining 15% of Wellcom's shares, which are owned by SIDCOM Pty Ltd (SIDCOM), a company controlled by Mr Wayne Sidwell, the founder and current Chairman of Wellcom, will not participate in or vote on the Scheme and will not be acquired by Innocean pursuant to the Scheme. Those shares are referred to as the excluded shares. The excluded shares are the subject of separate arrangements with Innocean which are connected to a proposed employment arrangement between Innocean and Mr Sidwell. Those arrangements are described at [9]-[14] and [38]-[48] of my decision convening the Scheme meeting. 6 If the Scheme is approved by the Court, on the Implementation Date (which is anticipated to be 27 November 2019): (a) holders of Wellcom shares, other than the excluded shares, who were listed on the share register on the record date (proposed to be 7.00pm on 21 November 2019) will be paid the Scheme consideration of $6.70 per share; and (b) all Wellcom shares, other than the excluded shares, will be transferred to Innocean and Wellcom will become an 85% owned subsidiary of Innocean and will be delisted from the ASX. Relevant principles 7 Section 411(4) of the Act provides that an arrangement is binding on members and Wellcom only if: (a) at a meeting of members, it is passed by a majority of members present and voting (in person or by proxy) and by 75% of votes cast; and (b) it is approved by order of the Court. 8 Section 411(6) of the Act provides that the Court may grant approval subject to such alterations or conditions as it thinks just. 9 In Re Alabama, New Orleans, Texas and Pacific Junction Railway Company [1891] 1 Ch 213 at 247, Fry LJ described the role of the Court in applications of this type as follows: … the Court is bound to ascertain that all the conditions required by the statute have been complied with; it is bound to be satisfied that the proposition was made in good faith; and, further, it must be satisfied that the proposal was at least so far fair and reasonable, as that an intelligent and honest man, who is a member of that class, and acting alone in respect of his interest as such a member, might approve of it. What other circumstances the Court may take into consideration I will not attempt to forecast. 10 In deciding whether to grant approval of a scheme of arrangement, the Court will ordinarily have regard to the following matters: (a) that the orders of the Court convening a meeting of members were complied with; (b) that the meeting of members so convened has approved the Scheme with the requisite majority; (c) that all other statutory requirements have been satisfied; (d) that the Scheme is fair and reasonable so that an intelligent and honest person who was a member of the relevant class, properly informed and acting alone, might approve it; (e) that there has been full and fair disclosure to members and creditors of all information material to the decision whether to vote for or against the applicable scheme; and (f) that the plaintiff has brought to the attention of the Court all matters that could be considered relevant to the exercise of the Court's discretion: see, for example, Re Solution 6 Holdings Ltd (2004) 50 ACSR 113 at [18]-[24]; Re Permanent Trustee Co Ltd (2002) 43 ACSR 601 at [8]-[10]; Re Central Pacific Minerals NL [2002] FCA 239 at [12]-[14]; Re Seven Network Ltd (No 3) (2010) 267 ALR 583 at [35]-[39]; 77 ACSR 701; Re Signature Capital Investments Ltd (No 2) [2016] FCA 385; Re Medical Australia Ltd (No 2) [2017] FCA 1429. Compliance with Orders convening the meeting 11 An office copy of the orders I made on 4 October 2019 (Convening Orders) was lodged with ASIC on 7 October 2019 as required by r 3.5(b) of the Federal Court (Corporations) Rules 2000. 12 The explanatory statement (which is included in the Explanatory Booklet) was registered by ASIC on 7 October 2019 prior to being sent to Scheme shareholders in accordance with s 412(6) of the Act. 13 The Convening Orders required that the Scheme meeting be convened by sending the following documents to each Scheme shareholder: a document substantially in the form set out at Annexure 'BOV6' to the affidavit of Bernard Frederic Oude-Vrielink sworn 4 October 2019 (the Explanatory Booklet) and a proxy form for the Scheme meeting. The Explanatory Booklet and the proxy form were required to be sent by the following methods: (a) in the case of Scheme shareholders who have elected to receive shareholder communications electronically by way of email (Email Shareholders) and whose registered address is in or outside Australia, by email; (b) in the case of Scheme shareholders who are not Email Shareholders and whose registered address is in Australia, by pre-paid post addressed to the relevant addresses recorded in Wellcom's register; and (c) in the case of Scheme shareholders who are not Email Shareholders and whose registered address is outside Australia, by airmail addressed to the relevant addresses recorded in Wellcom's register. 14 Based on the evidence adduced at the hearing, I am satisfied that those requirements were complied with. 15 On 30 October 2019, a notice advertising the hearing listed for 13 November 2019 was published in The Australian newspaper in accordance with Order 10 of the Convening Orders. Passing of the approval resolutions 16 The Scheme meeting was held at the offices of Minter Ellison, Level 23, 525 Collins Street, Melbourne, Victoria 3000 on 8 November 2019 commencing at approximately 10.00am (as required by Order 2 of the Convening Orders). 17 In accordance with Order 6 of the Convening Orders, the Scheme meeting was chaired by Mr Charles Anzarut. 18 In accordance with Order 4 of the Convening Orders, voting on the resolution in favour of the Scheme was conducted by way of poll. 19 Mr Daniel Reid, of Link Market Services Limited (acting as both scrutineer and returning officer), did not report any issues or concerns to Mr Anzarut in relation to the conduct of the Scheme meeting or the conduct of the poll. The resolution in favour of the Scheme was passed by 99.46% of votes cast on the resolution and by 93.84% of members present and voting either in person or by proxy. Accordingly, the statutory majorities set out in ss 411(4)(a)(ii)(A) and (B) of the Act have been satisfied. 20 A second poll calculation was made by Link Market Services Limited, at the request of Wellcom, showing the shares voted by attendees at the Scheme meeting excluding the 12,361,887 shares participating in the Scheme in which Mr Sidwell has an interest. That second poll calculation shows that the resolution in favour of the Scheme was passed by 98.97% of votes cast on the resolution and by 93.78% of members present and voting either in person or by proxy when the shares associated with Mr Sidwell are excluded. 21 The evidence showed that approximately 78% of shares eligible to vote at the Scheme meeting participated in the vote. Full and fair disclosure to members 22 As noted above, the explanatory statement contained in the Explanatory Booklet was registered by ASIC prior to dispatch as required by s 412(6) of the Act. The content of the explanatory statement provided to members was considered at the first court hearing. I am satisfied that the explanatory statement contained in the Explanatory Booklet satisfies the requirements in ss 411(3) and 412 of the Act. 23 Wellcom adduced evidence of the conduct of the Scheme meeting including the address given by the chairman and the questions and answers that followed. I am satisfied that, through the Explanatory Booklet and further consideration given to the Scheme at the Scheme meeting, there has been full and fair disclosure to members of all information material to the decision whether to vote for or against the Scheme. Is the Scheme fair and reasonable? 24 When making orders convening the Scheme meeting, I concluded that the Scheme was fit for consideration by the members of Wellcom. In reaching that conclusion, I noted that the question whether to accept particular consideration for shares is quintessentially a commercial matter for members to assess. Nevertheless, the Court's role is also to scrutinise the terms of a scheme to satisfy itself that there is no element of unfairness. In respect of the present Scheme, I considered it relevant that: (a) all directors recommended that shareholders vote in favour of the Scheme; (b) all directors intended to vote their Wellcom shares (save for Mr Sidwell's indirect interest in the excluded shares) in favour of the Scheme; and (c) the independent expert, PricewaterhouseCoopers, opined that in the absence of a superior proposal, the Scheme is fair and reasonable and is in the best interests of Wellcom's shareholders. 25 There is no evidence of opposition to approval by the Court, or as to oppression in the conduct of the meeting of members. 26 In my view, the Scheme is fair and reasonable in the sense that an intelligent and honest person who was a shareholder of Wellcom, properly informed and acting alone, might approve the Scheme. Conditions Precedent 27 Clause 3.1 of the Scheme stipulates that the Scheme is conditional upon and will not become effective unless the following conditions precedent are satisfied: (a) all of the conditions in clause 3.1 of the Scheme Implementation Deed (other than the condition relating to Court approval of the Scheme) are satisfied or waived in accordance with the terms of the Deed by 8.00am on the second court hearing date; (b) neither the Scheme Implementation Deed nor the Deed Poll is terminated in accordance with its terms before 8.00am on the second court hearing date; and (c) the Court has approved the Scheme pursuant to s 411(4)(b) of the Act, including with any alterations made or required by the Court under s 411(6) of the Act as are agreed to in writing by Wellcom and Innocean. 28 Clause 3.6 of the Scheme Implementation Deed sets out a regime for certificates to be provided by Wellcom and Innocean to the Court regarding the satisfaction or waiver of conditions precedent. 29 In the present matter, Wellcom and Innocean each provided to the Court a signed certificate confirming that, in respect of matters within their knowledge, each of the conditions precedent: (a) in clause 3.1 of the Scheme Implementation Deed (other than the condition relating to Court approval of the Scheme) has been satisfied or waived in accordance with the terms of the Agreement; and (b) in clauses 3.1(a) and (b) of the Scheme has been satisfied. 30 The Schedule to each of the conditions precedent certificates provided to the Court contained primary evidence (where available) regarding the satisfaction of those conditions precedent. In my view, no issues arose with respect to the interests of members from those certificates and the supporting evidence. Section 411(17) 31 Section 411(17) of the Act provides that the Court must not approve a compromise or arrangement unless: (a) it is satisfied that the compromise or arrangement has not been proposed for the purpose of enabling any person to avoid the operation of any of the provisions of Chapter 6; or (b) there is produced to the Court a statement in writing by ASIC to the effect that ASIC has no objection to the compromise or arrangement, but the Court need not approve a compromise or arrangement merely because a statement by ASIC that it has no objection to the compromise or arrangement has been produced to the Court as mentioned in s 411(17)(b). 32 Wellcom provided the Court with a letter from ASIC issued pursuant to s 411(17)(b) of the Act stating that ASIC has no objection to the Scheme. In those circumstances, there is no need for the Court to consider s 411(17)(a), particularly where no issue has been raised concerning Ch 6 of the Act by any person: Re Tatts Group Ltd (No 2) [2017] VSC 770. Have all necessary matters been brought to the attention of the Court? 33 At the first court hearing, Wellcom notified the Court of several matters warranting the attention of the Court. These matters were considered by the Court: Re Wellcom Group Limited [2019] FCA 1655 at [38]-[60]. In my view, none of those issues justifies the Court refusing to approve the Scheme. Orders sought 34 For the reasons given, I made the order sought by Wellcom approving the Scheme pursuant to s 411(4)(b) of the Act. 35 Wellcom also sought an order under s 411(12) of the Act exempting it from compliance with s 411(11), which requires a copy of the Court's order under s 411(4)(b) to be annexed to the company's Constitution. An order under s 411(12) is appropriate in circumstances where the Scheme does not amend Wellcom's Constitution and where, upon implementation, Wellcom will become an 85% owned subsidiary of Innocean and the remaining 15% of shares are all held indirectly by Mr Sidwell: Re Toll Holdings Ltd (No 2) [2015] VSC 236 at [18]-[19]. I therefore made that order. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice O'Bryan . Associate: Dated: 22 November 2019	4,089
federal_court_of_australia:fca/single/2013/2013fca0937	decision	commonwealth	federal_court_of_australia	text/html	2013-09-05 00:00:00	Shea v TruEnergy Services Pty Ltd (No 5) [2013] FCA 937	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2013/2013fca0937	2024-09-13T22:44:42.244868+10:00	FEDERAL COURT OF AUSTRALIA Shea v TruEnergy Services Pty Ltd (No 5) [2013] FCA 937 Citation: Shea v TruEnergy Services Pty Ltd (No 5) [2013] FCA 937 Parties: KATE SHEA v ENERGYAUSTRALIA SERVICES PTY LTD File number: VID 289 of 2012 Judge: DODDS-STREETON J Date of judgment: 5 September 2013 Catchwords: PRACTICE AND PROCEDURE –– production sought during trial of draft expert reports and expert's correspondence with solicitors – whether client legal privilege subsisted and if so waived – relevant provisions of Evidence Act 1995 (Cth) and applicable legal principles – call for production too late – moreover, evidence indicated that documents had client legal privilege which was not waived Legislation: Evidence Act 1995 (Cth) ss 4, 118, 119, 122 and 133 Fair Work Act 2009 ss 340(1) and 342(1) Cases cited: Attorney-General (NT) v Maurice (1980) 161 CLR 475 Australian Securities and Investments Commission v Southcorp Ltd (2003) 16 ACSR 438; [2003] FCA 804 Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 7) [2008] FCA 323 Clifford v Vegas Enterprises Pty Ltd (No 3) [2010] FCA 287 Dingwall v Commonwealth of Australia (1992) 39 FCR 521 Linter Group Ltd v PriceWaterhouse [1999] VSC 245 Mann v Carnell (1999) 201 CLR 1 Matthews v SPI Electricity Pty Ltd [2013] VSC 33 New Cap Reinsurance Corporation Ltd (in liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258 Traderight v Bank of Queensland Ltd (No 14) [2013] NSWSC 211 Date of hearing: 2 September 2013 Date of last submissions: 4 September 2013 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 71 Counsel for the Applicant: Mr C Gunst QC with Mr R Millar Solicitor for the Applicant: KR Legal Counsel for the Respondent: Mr J Bourke SC with Mr P O'Grady Solicitor for the Respondent: Minter Ellison IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 289 of 2012 BETWEEN: KATE SHEA Applicant AND: ENERGYAUSTRALIA SERVICES PTY LTD Respondent JUDGE: DODDS-STREETON J DATE: 5 SEPTEMBER 2013 PLACE: MELBOURNE REASONS FOR JUDGMENT (REVISED FROM TRANSCRIPT) introduction 1 The applicant, Kate Shea, was dismissed by her employer, the respondent, EnergyAustralia Services Pty Ltd, on 6 February 2012 on the ground that her position had become redundant. In this proceeding, the applicant alleges that, to the contrary, she was dismissed because she exercised a workplace right by having made five successive complaints (or for reasons including such reason or reasons), that her dismissal was adverse action within the meaning of s 342(1) item 1(a) of the Fair Work Act 2009 (Cth) ("the Fair Work Act") and that the respondent contravened s 340(1) of the Fair Work Act. 2 The respondent denied the applicant's allegations, but alternatively challenged her claim to compensation on the ground of failure to mitigate her loss. In support of that submission, the respondent relied upon two expert reports of Guy Farrow, an executive search consultant and managing partner of Heidrick & Struggles, an executive search and leadership consultancy service provider. 3 On 2 September 2013, which was the sixth day of trial, during the cross-examination of Mr Farrow, the applicant sought the production and admission into evidence of: (a) a number of draft expert reports prepared by Mr Farrow; and (b) correspondence concerning the draft reports passing between Mr Farrow and Minter Ellison, the respondent's solicitors. 4 The respondent resisted the call for production. It primarily contended that the application was made too late and should not now be entertained. Alternatively, it submitted that the application should be rejected because the relevant documents and/or communications were the subject of legal client privilege which had not been waived. background The expert reports 5 Mr Farrow prepared two expert witness reports for the respondent dated 3 April 2013 ("the April report") and 14 August 2013 ("the August report") respectively. 6 In each report, Mr Farrow stated that he had read, understood and complied with the Federal Court Practice Note CM7 for Expert Witnesses in Proceedings in the Federal Court of Australia. 7 In each report, Mr Farrow stated that he was engaged by Minter Ellison lawyers to prepare an expert witness report pertaining to a legal proceeding between Ms Shea and EnergyAustralia Service [sic] Pty Ltd. 8 The April report stated that it addressed issues set out in the terms of reference contained in the letter of engagement. The April report then discussed a number of topics under headings apparently derived from the letter of engagement. The letter of engagement was not, however, attached or identified by reference to a date. 9 The August report stated that it addressed issues set out in cl 2.1 of a request for supplementary information dated 17 July 2013. 10 The August report annexed seven documents, including a letter of instructions and related documents dated 18 March 2013 and a second letter of engagement to Heidrick and Struggles dated 17 July 2013. Cross-examination of Mr Farrow 11 On 2 September 2013, in cross-examination, senior counsel for the applicant asked Mr Farrow how many drafts he had made of the April report. Mr Farrow replied that he believed that he prepared one draft prior to the final draft, which he sent to Minter Ellison and received comments back. Senior counsel for the applicant asked if Mr Farrow had made changes to the April report in consequence. That question was met with the respondent's objection that such matters were covered by legal professional privilege. 12 In relation to the August report, senior counsel asked Mr Farrow how many drafts he had prepared, whether there was correspondence with Minter Ellison in relation to the drafts and whether changes were made in consequence. Those questions were met with the respondent's objections based on legal professional privilege. Under cover of the objections, Mr Farrow stated that there were three drafts, one of which merely entailed a change of date. 13 Mr Farrow further stated that there were suggested changes, which he recalled were "more around editing than substantial or significant changes of content". the parties' submissions 14 The applicant submitted that legal professional privilege did not attach to any such drafts of the expert reports and related correspondence because it was well established that such privilege was implicitly waived upon the entry of the witness in the witness box. Subsequently, the applicant submitted that client legal privilege under the Evidence Act 1995 (Cth) ("the Evidence Act") was waived pursuant to s 122, as relevant inconsistency was established. 15 The respondent contended that, to the contrary, legal professional privilege attached to the documents by their nature and had not been waived by reliance on a final report. The argument was deferred so that the trial could proceed and the parties filed brief written submissions on 4 September 2013. the relevant Authorities Common law legal professional privilege 16 A number of Federal Court authorities consider the question of waiver of legal professional privilege in expert witness statements, drafts thereof, instructions from and communications with solicitors and copies of documents used by the expert. 17 In Australian Securities and Investments Commission v Southcorp Ltd (2003) 16 ACSR 438; [2003] FCA 804 ("ASIC v Southcorp"), Lindgren J set out the applicable common law principles as follows (at [21]): (1) Ordinarily the confidential briefing or instructing by a prospective litigant's lawyers of an expert to provide a report of his or her opinion to be used in the anticipated litigation attracts client legal privilege: cf Wheeler v Le Marchant (1881) 17 Ch D 675; Trade Practices Commission v Sterling (1979) 36 FLR 244 at 246; Interchase Corp Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 1) [1999] 1 Qd R 141 (Interchase) at 151 per Pincus JA, at 160 per Thomas J. (2) Copies of documents, whether the originals are privileged or not, where the copies were made for the purpose of forming part of confidential communications between the client's lawyers and the expert witness, ordinarily attract the privilege: Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501; 141 ALR 545; 91 A Crim R 451 (Propend); Interchase, per Pincus JA; Spassked Pty Ltd v Cmr of Taxation (No 4) (2002) 50 ATR 70 at [17]. (3) Documents generated unilaterally by the expert witness, such as working notes, field notes, and the witness's own drafts of his or her report, do not attract privilege because they are not in the nature of, and would not expose, communications: cf Interchase at 161–2 per Thomas J. (4) Ordinarily disclosure of the expert's report for the purpose of reliance on it in the litigation will result in an implied waiver of the privilege in respect of the brief or instructions or documents referred to in (1) and (2) above, at least if the appropriate inference to be drawn is that they were used in a way that could be said to influence the content of the report, because, in these circumstances, it would be unfair for the client to rely on the report without disclosure of the brief, instructions or documents; cf Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 481; 69 ALR 31 at 34 per Gibbs CJ, CLR 487–8; ALR 38–9 per Mason and Brennan JJ, CLR 492–3; ALR 42–3 per Deane J, CLR 497–8; ALR 46–7 per Dawson J; Goldberg v Ng (1995) 185 CLR 83 at 98; 132 ALR 57 at 66 per Deane, Dawson and Gaudron JJ, CLR 109; ALR 75 per Toohey J; Instant Colour Pty Ltd v Canon Australia Pty Ltd [1995] FCA 870; BC9506842; Australian Competition and Consumer Commission v Lux Pty Ltd [2003] FCA 89; BC200300344 (ACCC v Lux) at [46]. (5) Similarly, privilege cannot be maintained in respect of documents used by an expert to form an opinion or write a report, regardless of how the expert came by the documents; Interchase at 148–50 per Pincus JA, at 161 per Thomas J. (6) It may be difficult to establish at an early stage whether documents which were before an expert witness influenced the content of his or her report, in the absence of any reference to them in the report: cf Dingwall v Commonwealth of Australia (1992) 39 FCR 521; Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd (No 2) (1998) 83 FCR 397 at 400; 156 ALR 364 at 366; ACCC v Lux at [46]. 18 His Honour recognised (as stated at paragraph [21], sub-paragraph (4) of his reasons) that implied waiver of legal professional privilege in the confidential briefs and instructions to the expert and copy documents made for the purpose of the expert's confidential communications with the client's lawyers could occur (at least) where it could be inferred that the documents were used in a way that could be said to influence the content of the report, because in such circumstances it would be unfair to permit the client to rely on the report without disclosing the brief, instructions or other documents. 19 Lindgren J acknowledged that if the final report did not mention such documents, it might be difficult, at an early stage, to determine whether they had influenced the content of the report. 20 His Honour found that privilege did not subsist in the various draft reports at issue in the case before him because, although they resulted from conferences with counsel, they were the expert's own thinking and did not constitute or reveal a communication between the expert, solicitor and counsel (at [26]). In contrast, Lindgren J found that annotations on the draft were the subject of the privilege, as they recorded the expert's understanding of the communications between himself and a solicitor and counsel, and included or exposed expressions of legal opinion (at [27]). 21 Lindgren J's statement of the common law principles of legal professional privilege have been endorsed in a number of authorities, including, recently in Matthews v SPI Electricity Pty Ltd [2013] VSC 33 at [44] and Clifford v Vegas Enterprises Pty Ltd (No 3) [2010] FCA 287 at [8]. In Traderight (NSW) Pty Ltd v Bank of Queensland Ltd (No 14) [2013] NSWSC 211 Ball J observed (at [14]-[16]) that Lindgren J's statement of common law principles has been frequently approved and provides context for subsequent decisions. Nevertheless, for the reasons discussed below, the principles set out in ASIC v Southcorp must be modified in cases governed by the Evidence Act and in the light of the analysis in Mann v Carnell (1999) 201 CLR 1 ("Mann v Carnell") Client legal privilege under the Evidence Act 22 The present case is not governed by common law principles of legal professional privilege but rather is governed by the Evidence Act (see s 4(1) of that Act). 23 The Evidence Act in Pt 3.10 Div 1 ss 117-126 deals with client legal privilege. It relevantly provides: … 118 Legal advice Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of: (a) a confidential communication made between the client and a lawyer; or (b) a confidential communication made between 2 or more lawyers acting for the client; or (c) the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person; for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client. 119 Litigation Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of: (a) a confidential communication between the client and another person, or between a lawyer acting for the client and another person, that was made; or (b) the contents of a confidential document (whether delivered or not) that was prepared; for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party. … 122 Loss of client legal privilege: consent and related matters (1) This Division does not prevent the adducing of evidence given with the consent of the client or party concerned. (2) Subject to subsection (5), this Division does not prevent the adducing of evidence if the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence because it would result in a disclosure of a kind referred to in section 118, 119 or 120. (3) Without limiting subsection (2), a client or party is taken to have so acted if: (a) the client or party knowingly and voluntarily disclosed the substance of the evidence to another person; or (b) the substance of the evidence has been disclosed with the express or implied consent of the client or party. (4) The reference in paragraph (3)(a) to a knowing and voluntary disclosure does not include a reference to a disclosure by a person who was, at the time of the disclosure, an employee or agent of the client or party or of a lawyer of the client or party unless the employee or agent was authorised by the client, party or lawyer to make the disclosure. (5) A client or party is not taken to have acted in a manner inconsistent with the client or party objecting to the adducing of the evidence merely because: (a) the substance of the evidence has been disclosed: (i) in the course of making a confidential communication or preparing a confidential document; or (ii) as a result of duress or deception; or (iii) under compulsion of law; or (iv) if the client or party is a body established by, or a person holding an office under, an Australian law—to the Minister, or the Minister of the Commonwealth, the State or Territory, administering the law, or part of the law, under which the body is established or the office is held; or (b) of a disclosure by a client to another person if the disclosure concerns a matter in relation to which the same lawyer is providing, or is to provide, professional legal services to both the client and the other person; or (c) of a disclosure to a person with whom the client or party had, at the time of the disclosure, a common interest relating to the proceeding or an anticipated or pending proceeding in an Australian court or a foreign court. (6) This Division does not prevent the adducing of evidence of a document that a witness has used to try to revive the witness's memory about a fact or opinion or has used as mentioned in section 32 (Attempts to revive memory in court) or 33 (Evidence given by police officers). 24 Section 133 provides: If a question arises under this Part in relation to a document, the court may order that the document be produced to it and may inspect the document for the purpose of determining the question. 25 In New Cap Reinsurance Corporation Ltd (in liq) v Renaissance Reinsurance Ltd [2007] NSWSC 258 ("New Cap"), White J in the Supreme Court of New South Wales (sitting in the Corporations List) considered the relevant provisions of the Evidence Act in a defendant's application to inspect documents for which the plaintiffs claimed privilege in their list of discovered documents. The documents comprised draft expert reports, requests for instructions from solicitors, records of instructions from solicitors in relation to the preparation of the report and notes and working papers in relation to the report. 26 The plaintiffs contended that the documents in question were not uncommunicated drafts of the report (to which client legal professional privilege did not attach) but rather, privileged communications which had passed between the expert and the plaintiffs' solicitors, for the purpose of providing the plaintiff with professional legal services in connection with the proceeding. Some items were communications between the expert (or members of his firm) and the solicitors, attaching drafts and inviting review. 27 The defendant in New Cap contended that the draft reports were not privileged, or alternatively that privilege had been waived by the plaintiffs' disclosure of the final report for the express purpose of using it as evidence for them in the litigation. 28 White J observed that the application of common law legal professional privilege was limited, as it did not attach to an expert's own documents not communicated to the client (or the client's lawyer) and which do not reveal communications between the expert and client or the client's lawyer (at [18]). The limitation sprang from common law legal professional privilege's concern with communications, rather than documents per se. 29 White J recognised that client legal privilege under the Evidence Act was not subject to the same limitation. Rather, s 119 of the Evidence Act extended to both confidential communications between a client's lawyer and the contents of confidential documents (whether delivered or not) that were prepared for the dominant stated purpose (that is, of the client being provided with professional legal services relating to a proceeding, whether before the Court or anticipated, to which the client is, may, was or might have been a party) (at [20]). 30 White J held that the draft expert reports in the case before him were the subject of client legal privilege, as it could be inferred that they were confidential and produced for the dominant purpose of being communicated to the client's lawyer for the purposes of the litigation (at [22]). 31 His Honour considered that any draft reports prepared and kept by the expert, and any working notes prepared by the expert or his staff, would be privileged under s 119 if they were prepared for the dominant purpose of submitting a draft report for advice or comment by the plaintiff's lawyers (at [29]-[30]). If, however, they were brought into existence for the dominant purpose of the expert forming his own opinions to be expressed in the final report, it was arguable that they were not privileged or made for the dominant purpose of providing the plaintiffs with professional legal services relating to the proceedings (at [30]). 32 White J discussed (at [31]) the meaning of "professional legal services" and appeared to accept the view in Odgers, Uniform Evidence Law, 7th ed, (2006) Sydney, Lawbook Co at paragraph 1.3.10720 that: Since providing a client with professional legal services includes representing the client in legal proceedings, it is likely that a document prepared for use in such legal proceedings by the client's lawyer will be privileged. 33 White J noted that cases such as ASIC v Southcorp were decided on the principles of common law, which were limited to communications rather than documents per se, whereas s 119(b) of the Evidence Act extended privileged to confidential documents, whether communicated or not (at [33]-[34]). 34 His Honour said that the relevant question under s 119(b) was identifying the dominant purpose for which the documents were brought into existence. 35 While White J acknowledged that the issue may not be easy to determine, he considered it probable that where an expert retained by lawyers prepares a draft report, one purpose will be to set out the evidence which the expert intends to give and another purpose will be to enable the draft to be considered and commented on by the lawyers (at [35]). Only if the latter purpose were the dominant purpose would the draft would be privileged (at [35]). 36 In the case before him, White J concluded that the draft reports were privileged because they were copies of the draft report brought into existence for the [dominant] purpose of comment (at [37]). The earlier instructions were privileged as they were brought into existence for the dominant purpose of the client being provided with professional legal services in connection with the proceeding [at [37]]. Whether the same documents retained by the expert were produced for the same dominant purpose would be a different question, which might depend on the expert's oath. 37 White J rejected the defendant's contention (which was based on Lindgren J's observations in ASIC v Southcorp) that the plaintiff had impliedly waived privilege in all the communications between solicitors and the expert, earlier letters of instruction and drafts (at [43]). His Honour noted that ASIC v Southcorp concerned common law legal professional privilege (at [41]). 38 White J discussed loss of privilege under s 122 of the Evidence Act 1995 (NSW) (which was not as yet amended to include sub-sections (2) and (3) in their current form). Section 122(1) provided: This Division does not prevent the adducing of evidence given with the consent of the client or party concerned. 39 White J stated that consent in that context included imputed consent, as where at common law a party may be taken to have waived privilege, even if there was no subjective intention to do so (at [44]). 40 His Honour referred to the High Court's discussion in Mann v Carnell of inconsistency between, on the one hand, the conduct of the client and, on the other hand, the maintenance of confidentiality, which affected an express or implied waiver (at [44]). 41 Applying the reasoning in Mann v Carnell (which, as it did not recognise an overriding principle of fairness operating at large, to some extent qualified Lindgren J's statements in ASIC v Southcorp), White J concluded that privilege in materials provided to an expert would not be lost merely because an expert is called or his or her report is served (at [54]). Waiver would require, at least, reference to the contents of a document and reliance on it (at [53]). 42 His Honour referred (at [46]) to Dingwall v Commonwealth of Australia (1992) 39 FCR 521 where Foster J (at 524) stated that Attorney-General (NT) v Maurice (1980) 161 CLR 475 ("Maurice") did not go so far as to support waiver of privilege in materials merely because they were sent to a potential witness so that they could provide an expert report. Rather, Maurice required, for waiver, "an indication that documents were used in the preparation of the evidentiary document in a way that could be said to influence the content of that document". 43 White J did not recognise any universal entitlement in the opposite party to test whether the relevant privileged documents influenced the content of the expert's report (at [48]). 44 In New Cap, the expert specified material on which he relied, which did not include draft reports or earlier letters of instruction. White J inspected the documents in dispute in an attempt to discern whether they may have relevantly influenced the content of the report. His Honour acknowledged that the usefulness of such an exercise was limited (at [51]). The expert could, for example, have genuinely changed his or her opinion, so that the mere fact of a difference between the final report and the draft would not establish that the latter influenced the former in the relevant sense (at [52], see Linter Group Ltd v PriceWaterhouse [1999] VSC 245 at [16] per Harper J). 45 Further, White J recognised that there are many different senses in which the legal advisers might be said to influence the content of the report (eg, advice in relation to admissible form) which would not be inconsistent with maintaining the privilege because it would be unfair to rely on the final report without disclosing the earlier materials (at [53]). 46 In Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 7) [2008] FCA 323, Heerey J of the Federal Court, in reliance on New Cap, Natuna Pty Ltd v Cook [2006] NSWSC 1367 and ML Ubase Holdings Co Ltd v Trigem Computer Inc [2007] NSWSC 859, concluded (at [3]): There is a clear line of authority which establishes that draft documents and other communications of a like nature with an expert witness proposed to be called in litigation are privileged under s 119(b) whatever may have been the position at common law … 47 More recently, in Traderight v Bank of Queensland Ltd (No 14) [2013] NSWSC 211, ("Traderight") Ball J refused an application by the respondent bank for access to documents relating to the preparation of an expert's report prepared on instructions from the solicitors for the plaintiffs, over which the plaintiffs claimed privilege. Broadly, the documents sought by the respondent bank included draft reports prepared by the expert containing comments, requests or advice by the legal advisers; draft reports created for the dominant purpose of providing them to the legal advisers for consideration or comment; and documents recording the communications between the expert and the legal advisers in relation to the draft reports or their preparation, for the dominant purpose of the legal advisers considering or providing comment or advice (at [3]). 48 It was not disputed that the above documents were, on their face, subject to client legal professional privilege under s 119 of the Evidence Act 1995 (NSW) (which was relevantly in the same terms as the Evidence Act 1995 (Cth)). 49 The bank relied on the exceptions to legal professional privilege under s 122(2) of the Evidence Act 1995 (NSW). 50 Ball J noted (at [10]) that the amendment to s 122(2) (in force from 1 January 2009) was made pursuant to the recommendation of a joint report of the Australian Law Reform Commission, New South Wales Law Reform Commission and Victorian Law Reform Commission (Uniform Evidence Law, ALRC Report 102, NSWLR Report 112 and VLRC Final Report (February 2006) ("Joint Report"). The Joint Report followed the High Court's decision Mann v Carnell (1999) 201 CLR 1, where Gleeson CJ and Gaudron, Gummow and Callinan JJ (at [29]) stated that the waiver of legal professional privilege depended on the inconsistency which the courts (where necessary informed by considerations of fairness) perceive, between the conduct of the client and maintenance of the confidentiality – not some overriding principle of fairness operating at large. The Joint Report recommended that s 122 be amended to align it more closely with the common law as set out in Mann v Carnell. Ball J stated at [12]: It is clear from these paragraphs that s 122(2) in its current form is intended largely to adopt the test for waiver at common law as explained by the High Court in Mann v Carnell and that s 122(3) is intended to give some examples of the application of that test. 51 His Honour recognised that ASIC v Southcorp provided context for cases such as New Cap. He further stated at [21]: It is clear, however, that the approach taken by White J to s 122(1) is now applicable to s 122(2). White J proceeded on the basis that s 122(1) incorporated principles of common law waiver. As I have explained, those principles are now encapsulated in s 122(2). The narrow approach taken by Brereton J to s 122 no longer applies to the section as amended. Although Mr Cotman SC, who appeared for the OMB Parties, took me to a number of other cases, there was no real dispute between the parties that the principles as stated by White J were the principles to be applied in this case. 52 Ball J concluded that in the case before him, privilege in the communications between the expert and the legal advisers was not lost as there was nothing to indicate that the expert's conclusions were not her own or were based on material which the report did not disclose (at [23]). Consideration 53 In this case, the questions whether relevant documents are the subject of client legal privilege and whether, if so, the privilege has been waived, are to be determined under the Evidence Act. The cognate principles of common law legal professional privilege are, to the extent of any inconsistency with the Evidence Act, inapplicable. 54 The concept of implied waiver discussed by the High Court in Mann v Carnell, although enunciated in relation to common law legal professional privilege, is applicable to the loss of client legal privilege under s 122(2) of the Evidence Act. 55 In the light of the above, statements of principles in decisions of this court which were made in relation to common law legal professional privilege, rather than client legal privilege under the Evidence Act, or which depart from, or do not take account of the reasoning in Mann v Carnell, must be qualified accordingly. 56 The provisions of the Evidence Act do not support the absolute and diametrically conflicting propositions initially advocated by each party. Drafts of expert reports, and commentary and communications passing between an expert and the client's lawyers, are not ipso facto the subject of client legal privilege. Nor, in my opinion, is such privilege in draft expert reports and communications passing between an expert and the client's lawyers automatically waived by reliance on the final report, whether by its service, the expert witness' entry into the witness box or otherwise. 57 Rather, draft expert reports and communications passing between an expert and the client's lawyers will attract client legal privilege if, inter alia, they satisfy the conditions of s 119 of the Evidence Act, in that they are confidential and were prepared or made "for the dominant purpose of the client being provided with professional legal services in relation to an Australian overseas proceeding (including the proceeding before the court) or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party" ("the specified purpose"). In my opinion, as White J accepted in New Cap, "professional legal services" encompasses representing the client in legal proceedings. 58 The means of establishing that documents and communication were prepared or made for the specified purpose may vary according to the context. 59 Client legal privilege subsisting under s 119 may be waived under s 122(2) if the client or party acted inconsistently with objecting to adducing evidence because it would result in a disclosure of the relevant documents or communications. An example of such inconsistency relevant to the present case is contained in s 122(3) (that is, where the substance of the evidence has been disclosed with the express or implied consent of the client or party), which invokes the doctrine of imputed consent applicable to common law legal professional privilege. 60 Recent persuasive authority, such as New Cap, makes clear that relevant inconsistency may subsist where the draft reports or communications may have influenced the content of the final report in a substantial sense, as in such a case, there would be inconsistency informed by notions of fairness between, on the one hand, withholding the documents or communications while, on the other hand, relying on the final report. If, however, the relevant documents or communications have not influenced the content of the final report, or may have influenced it but in relation only to form or peripheral matters, the inconsistency would be unlikely to be established. 61 The party asserting wavier of privilege has no automatic entitlement to test whether the privileged documents influenced the contents of the expert's report in the relevant sense. Rather, it will be a balancing exercise in the circumstances of each particular case. 62 In the present case, as the applicant submitted, the existence of the draft expert reports and the related correspondence between the expert witness and the respondent's solicitors was revealed only in the course of the cross-examination of Mr Farrow on the sixth day of trial. 63 As the respondent submitted, however: [3] No call for production had been made previously. Discovery was by categories. The categories notified by the Applicant did not cover the documents now pressed. The documents now pressed were created long after categories were notified. [4] The parties agreed to exchange copies of instructions provided to their respective expert witnesses seeking the reports that were to be tendered at trial. Despite having the opportunity, the Applicant did not call for production of the documents identified in 2(a) [any draft reports prepared by Mr Farrow] and (b) [all communications between Mr Farrow and Minter Ellison in relation to the two reports tendered in evidence and drafts of those reports]. 64 On any view, the possible existence of draft reports or communications between the expert and the respondent's lawyers was clearly apparent prior to trial. The applicant advanced no sufficient explanation for the failure to use the opportunity to call for production of (and challenge any client legal privilege asserted for) any extant document of the kind now in dispute at an earlier and more appropriate stage of the proceeding. 65 The making of the application on the sixth day (in relation to which brief written submissions were filed at the conclusion of the eighth day) of a trial initially fixed for ten days and subsequently extended to 13 days (to which significant time constraints applied) rendered reference to affidavits and the court's inspection of the relevant documents (if otherwise appropriate) impracticable. Moreover, as White J observed in New Cap, such inspection may frequently prove inclusive or of little assistance in determining whether the drafts or correspondence have influenced the final report in the sense necessary to establish waiver. 66 The application also constituted a significant distraction, the further pursuit of which would have been, in my view, prejudicial to the efficient conduct and timely completion of the trial. 67 In such circumstances, I considered that the application for the production of the documents was made at too late a stage and should not be further entertained. 68 Such relevant evidence as was given fortified the view that the above conclusion worked no appreciable injustice. The evidence supported the inference that client legal privilege subsisted in the relevant documents and correspondence and had not been waived. 69 On the basis of the testimony of Mr Farrow, which was given subject to the respondent's objections and the matters referred to in paragraphs 3 and 4 of the respondent's written submissions (see paragraph 63 above) it is probable that the draft reports and the correspondence passing between the expert and the respondent's lawyers are confidential and were prepared or made for the specified purpose. 70 Further, Mr Farrow, although he gave no evidence about the nature of any changes made to the April report, expressly testified that the changes to the August report were in the nature of editing rather than matters of substance. Conclusion 71 It was inappropriate to order production of the draft expert reports of Mr Farrow and correspondence between Mr Farrow and Minter Ellison concerning said drafts. I certify that the preceding seventy-one (71) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dodds-Streeton. Associate: Dated: 19 September 2013	7,986
federal_court_of_australia:fca/single/2016/2016fca0728	decision	commonwealth	federal_court_of_australia	text/html	2016-06-23 00:00:00	Australian Competition and Consumer Commission v SensaSlim Australia Pty Ltd (in liq) (No 8) [2016] FCA 728	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2016/2016fca0728	2024-09-13T22:44:44.381757+10:00	FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v SensaSlim Australia Pty Ltd (in liq) (No 8) [2016] FCA 728 File number: NSD 1163 of 2011 Judge: YATES J Date of judgment: 23 June 2016 Catchwords: COSTS – whether costs should follow the event – whether costs should be apportioned Cases cited: Australian Competition and Consumer Commission v Boyle [2015] FCA 1039 Australian Competition and Consumer Commission v SensaSlim Australia Pty Ltd (in liq) (No 7) [2016] FCA 484 Date of hearing: Determined on the papers Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 18 Solicitor for the Applicant: Corrs Chambers Westgarth Counsel for the Fifth Respondent: The Fifth Respondent was self-represented ORDERS NSD 1163 of 2011 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: SENSASLIM AUSTRALIA PTY LTD (IN LIQUIDATION) ACN 140 333 133 (and others named in the Schedule) First Respondent JUDGE: YATES J DATE OF ORDER: 23 JUNE 2016 THE COURT ORDERS THAT: 1. The fifth respondent pay the applicant's costs of and incidental to this proceeding as against him. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT YATES J: 1 On 11 May 2016, I made certain orders against the remaining respondents following a penalty hearing: Australian Competition and Consumer Commission v SensaSlim Australia Pty Ltd (in liq) (No 7) [2016] FCA 484 (the penalty reasons). In those reasons I noted (at [178]) that the applicant had sought an order that the remaining personal respondents—Mr Foster, Mr O'Brien and Mr Boyle—pay its costs of the proceeding. I noted that, at the penalty hearing, Mr Boyle had sought to be heard on the question of costs following the publication of the penalty reasons. I allowed Mr Boyle that opportunity, although I expressed the provisional view in the penalty reasons that I could see no reason why Mr Foster, Mr O'Brien and Mr Boyle should not pay the applicant's costs of the case as brought against each of them, respectively. 2 Mr Boyle and the applicant have now provided written submissions on the question of costs as between them, in accordance with Orders 13 and 14 of the orders made on 11 May 2016. Mr Boyle's submissions 3 In his submissions, Mr Boyle refers, firstly, to his attempts to come to a settlement with the applicant. Mr Boyle says that the terms he offered included his consent to certain injunctions, a disqualification order for a period of one year, and a contribution ($5,000) towards the applicant's costs. He says that his offer also included his preparedness to submit to a pecuniary penalty in an amount to be "negotiated" between himself and the applicant. 4 Mr Boyle criticises the applicant's "offer of settlement" which, he says, required him to agree to facts which were not accurate. He complains that the applicant was not willing to "negotiate" on the amount of the pecuniary penalty to be paid—it wanted Mr Boyle to agree "to allow the Court to impose a pecuniary penalty at some later date". He also complains that the applicant required him to agree to a compensation order for an amount to be determined by the Court at a later date, even though, subsequently, the applicant abandoned its claim against the respondents for compensation orders. 5 Mr Boyle says that he does not believe that the applicant acted "appropriately as a model litigant" in the manner in which it "handled the settlement negotiation". By this, I understand Mr Boyle to mean that his offer of settlement should have been accepted by the applicant. 6 Secondly, Mr Boyle argues that various contraventions alleged against him at the liability hearing failed. He submits that a proportionate discount should be applied to the costs sought against him. Indeed, Mr Boyle submits that the applicant should pay his costs of defending the claims on which the applicant did not succeed. 7 Thirdly, Mr Boyle says that he conducted himself "at the highest level at all times throughout the entire process". He says that he has shown the Court "the appropriate respect and met with all requirements in a timely manner". He says that he "did not cause any delays in the process". 8 In this connection, Mr Boyle also points to the fact that, because the liability hearing was heard in Brisbane (for reasons associated with the inability of the second respondent, Mr Foster, to leave Queensland at that time), he engaged counsel from Brisbane. He says that, because subsequent hearings were held in Sydney, it was necessary for him to bear the additional cost of his inter-state counsel attending in Sydney on those occasions. 9 Finally, Mr Boyle points to what he says are mitigating circumstances which should be taken into account on the question of costs. Mr Boyle refers to the amount of the pecuniary penalty that has been ordered against him, and his limited financial circumstances, which I discussed in the penalty reasons. He requests that provision be made for a "payment plan" in respect of the costs he might be ordered to pay. He also requests that any order for costs against him be "postponed" until after the applicant has exhausted its attempts to recover costs against the two other remaining personal respondents. consideration and disposition 10 Notwithstanding Mr Boyle's submissions, I am not persuaded that, on the question of costs, he stands in any significantly different position to Mr Foster and Mr O'Brien. On 11 May 2016, each was ordered to pay the applicant's costs of the case as brought against him. 11 It is true that a number of alleged contraventions pleaded against Mr Boyle did not ultimately succeed. In some cases, this was due to the particular way in which the applicant had chosen to plead its case, rather than to the lack of a proper factual foundation. Also, the applicant submits, correctly in my view, that the essence of the contraventions that were made out against Mr Boyle in respect of the Welcome letter and the KMB letter, concerned the false representation, in which Mr Boyle actively participated, that he controlled and directed the SensaSlim business and was actively involved in that business. The fact that Mr Boyle's liability was not established for each other aspect of conduct alleged against him in which that false representation was made, does not mean that the applicant acted inappropriately in pursuing Mr Boyle for those additional, alleged contraventions. 12 Overall, I am not persuaded that this is a case where costs should be apportioned according to the particular contraventions that were, and were not, established, against Mr Boyle. All contraventions alleged against Mr Boyle concerned two central findings of fact which Mr Boyle resisted and which were made against him, namely that he was personally involved in misrepresenting to prospective franchisees and Area Managers that he directed and controlled the SensaSlim business and was actively involved in that business, and that he deliberately failed to inform Area Managers, in a timely manner, that he intended to resign as a director of SensaSlim. 13 Mr Boyle's submission that the applicant did not act appropriately in the "settlement negotiation" to which he refers, should be rejected. It is not necessary for me to either know or understand the ins and outs of how the parties handled any "settlement negotiation". It is enough for me to observe that the imposition of penalties and other remedies in a case such as the present is, ultimately, a question for the Court, not for the parties to "negotiate". I can only assume that Mr Boyle's idea of an appropriate penalty would have been an amount falling within the range of $4,241 to $7,626, which he urged on the Court during the penalty hearing. A penalty in that range, even if "agreed", would never have been accepted as appropriate, particularly in light of the pecuniary penalty of $75,000 which I did impose. Similarly, a disqualification order for the period of one year, even if "agreed", would not have been accepted as appropriate in light of the disqualification order for three years which I did make. 14 Whilst I have no doubt that Mr Boyle has incurred not insignificant legal costs, including the cost of having interstate counsel appear for him in Sydney at the penalty hearing, this fact has no real weight in determining Mr Boyle's liability for the applicant's costs. Similarly, the fact that Mr Boyle has been ordered to pay a substantial pecuniary penalty is not a factor which has real weight. 15 Mr Boyle's submission that the applicant should first exhaust its attempts to recover costs from Mr Foster and Mr O'Brien before pursuing costs against him is, with respect, misconceived. The applicant is only seeking an order against Mr Boyle for that part of its costs which relates to the preparation and bringing of the proceeding against Mr Boyle. The applicant does not seek an order that Mr Boyle pay or contribute to its costs of bringing the proceeding against the other respondents. 16 Whilst I am satisfied that Mr Boyle has limited financial means, I am not persuaded that a "payment plan" in respect of costs should be ordered. For one thing, no attempt has been made by Mr Boyle to articulate the structure of any such "plan" or to demonstrate, in practical terms, its appropriateness or feasibility. 17 Finally, it is not correct that Mr Boyle has conducted himself "at the highest level at all times throughout the entire process". It is to be remembered that Mr Boyle gave false evidence in his examination conducted under s 155 of the Trade Practices Act 1974 (Cth): Australian Competition and Consumer Commission v Boyle [2015] FCA 1039. In any event, such considerations are not relevant to the determination of costs, unless they are raised to counter the argument that the party concerned has acted inappropriately. The applicant makes no suggestion that Mr Boyle acted inappropriately in his conduct in this proceeding. 18 In all the circumstances, the appropriate order is that Mr Boyle should pay the applicant's costs of and incidental to the proceeding as against him. I certify that the preceding eighteen (18) numbered paragraph are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates. Associate: Dated: 23 June 2016 SCHEDULE OF PARTIES NSD 1163 of 2011 Respondents Second Respondent PETER CLARENCE FOSTER Third Respondent PETER LESLIE O'BRIEN Fourth Respondent ADAM TROY ADAMS Fifth Respondent MICHAEL ANTHONY BOYLE	2,314
federal_court_of_australia:fca/single/2021/2021fca0485	decision	commonwealth	federal_court_of_australia	text/html	2021-05-10 00:00:00	Heath v LawTap Pty Ltd [2021] FCA 485	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2021/2021fca0485	2024-09-13T22:44:45.525054+10:00	Federal Court of Australia Heath v LawTap Pty Ltd [2021] FCA 485 File number: VID 124 of 2021 Judgment of: MORTIMER J Date of judgment: 10 May 2021 Catchwords: PRACTICE AND PROCEDURE – application for preliminary discovery pursuant to r 7.22 of the Federal Court Rules 2011 (Cth) – allegedly defamatory comments made online – respondent filed submitting notice pursuant to r 12.01(1) of the Rules – application granted Legislation: Federal Court Rules 2011 (Cth) rr 7.22, 7.23, 7.27, 7.28, 12.01(1) Cases cited: Hooper and Others v Kirella Pty Ltd [1999] FCA 1584; 96 FCR 1 Kabbabe v Google LLC [2020] FCA 126 McCrae v Reynolds [2015] FCA 529 Division: General Division Registry: Victoria National Practice Area: Other Federal Jurisdiction Number of paragraphs: 15 Date of last submission/s: 4 May 2021 Date of hearing: 6 May 2021 Counsel for the Prospective Applicant: Mr Jeffrey G Levine Solicitor for the Prospective Applicant: Mr Mark Stanarevic of Matrix Legal ORDERS VID 124 of 2021 BETWEEN: CRAIG HEATH Prospective Applicant AND: LAWTAP PTY LTD Respondent order made by: MORTIMER J DATE OF ORDER: 10 May 2021 THE COURT ORDERS THAT: 1. On or before 4pm on 9 June 2021, or such further or other time as the Court may order, LawTap Pty Ltd give preliminary discovery, by affidavit, of all documents which are or have been in its control relating to the identification of the description (as defined in the Dictionary to the Federal Court Rules 2011 (Cth)), by name, address or any other form of contact details, of the presently unknown person or persons who posted comments or statements in the thread located at the URL set out at [5] of the affidavit of Mr Mark Stanarevic sworn 7 May 2021 and which is reproduced as Annexure MS-2 to that affidavit. 2. Preliminary discovery pursuant to order 1 is limited to documents relating to the identification of the description of the presently unknown person or persons who posted comments or statements between 1 February 2020 and the date of these orders. 3. Preliminary discovery and inspection pursuant to order 1 is to be given in accordance with rr 7.22(2)(c), 7.27 and 7.28 of the Rules. 4. Liberty to apply on 48 hours' notice to amend, vary or substitute the orders made. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MORTIMER J: 1 The prospective applicant, Mr Craig Heath, by originating application pursuant to r 7.22 of the Federal Court Rules 2011 (Cth), seeks orders for preliminary discovery to require LawTap Pty Ltd to provide "all documents or things in its possession or control relating to the description of an unknown person" who posted allegedly defamatory comments under various pseudonyms in relation to Mr Heath and his property development business. 2 LawTap filed a submitting notice pursuant to r 12.01(1) of the Rules on 16 April 2021. 3 For the reasons that follow, the application for preliminary discovery is granted. 4 Rule 7.22(1) of the Rules provides: 7.22 Order for discovery to ascertain description of respondent (1) A prospective applicant may apply to the Court for an order under subrule (2) if the prospective applicant satisfies the Court that: (a) there may be a right for the prospective applicant to obtain relief against a prospective respondent; and (b) the prospective applicant is unable to ascertain the description of the prospective respondent; and (c) another person (the other person): (i) knows or is likely to know the prospective respondent's description; or (ii) has, or is likely to have, or has had, or is likely to have had, control of a document that would help ascertain the prospective respondent's description. 5 Orders are only sought pursuant to r 7.22, not r 7.23: see [1] of Mr Heath's written submissions. Mr Heath relied on the affidavit of his solicitor, Mr Mark Stanarevic sworn 16 March 2021. Since LawTap filed a submitting appearance there were no objections to the affidavit, nor any contest about the facts to which Mr Stanarevic deposes. There were some minor errors in the affidavit which resulted in the Court directing that a second affidavit be filed to correct those errors. A second affidavit was filed on 7 May 2021 with the errors corrected, and that is the version of Mr Stanarevic's affidavit that the Court takes as read in support of the application. 6 As to the correct approach to the making of an order under r 7.22, counsel for Mr Heath referred the Court to Kabbabe v Google LLC [2020] FCA 126; McCrae v Reynolds [2015] FCA 529 and Hooper and Others v Kirella Pty Ltd [1999] FCA 1584; 96 FCR 1. I have adopted an approach which is consistent with those authorities. 7 Mr Stanarevic deposes that Mr Heath is a property developer who relies on the internet to attract customers across Australia. He deposes that Mr Heath wishes to commence a defamation proceeding in this Court against the makers of comments, which he alleges are defamatory of him, on a website described as "lawanswers.com.au". 8 Mr Stanarevic deposes that: (a) LawTap is registered and located in Australia. (b) LawTap registered and owns the domain name "lawanswers.com.au". (c) The statements are visible to the public in the Australian Capital Territory, and in all of Australia including Victoria. (d) The allegedly defamatory imputations arising from the statements include that Mr Heath: (i) intentionally rips off people; (ii) is a criminal; (iii) steals from people and is a serial fraudster; and (iv) is an unscrupulous property developer who exploits and deceives his customers. (e) Mr Heath is concerned the comments are having an impact on his professional reputation and business, and he has sought psychological help due to the impact of the online bullying and harassment. 9 As I have noted, LawTap filed a submitting appearance, and its only active participation in the proceeding has been in relation to securing agreement to the payment by Mr Heath of its costs of complying with any orders made by the Court. The parties have agreed on the substance of orders on those costs, which have been made separately. I accept the submissions of counsel for Mr Heath that LawTap's approach to the proceeding allows the Court more readily to accept Mr Stanarevic's evidence, and to infer that it is more likely than not LawTap has documents which will meet the terms of the order for discovery which the Court has been asked to make. 10 The URL for the thread in which the statements are made is set out in Mr Stanarevic's 7 May 2021 affidavit, and the contents of the thread are reproduced as an annexure to that affidavit. It is not appropriate for those details to be reproduced again in these reasons for judgment. 11 As the authorities indicate, the Court need not be satisfied to the level of a prima facie case. I am satisfied that there may be a right for Mr Heath to obtain relief in relation to those statements, through a defamation proceeding; that is the standard set by r 7.22(1)(a). The comments in the thread refer extensively to locations in the State of Victoria in ways which lead me to be satisfied that Mr Heath may be able to establish that the statements are visible in Australia, and are being read by people in Australia. There is no basis to find he may not be able to establish they are available in the ACT, for the purposes of the jurisdiction of this Court. 12 Mr Stanarevic deposes that Mr Heath is concerned the comments are having an impact on his professional reputation and business, and that although there has been a "campaign" against him since 2019, he is only seeking the identities of those who published statements about him over the last 12 months. Accordingly, the orders made are limited to discovery of documents relating to statements made on or after 1 February 2020, the last statement being made in February 2021. 13 I am satisfied neither Mr Heath, nor his solicitors have been able to ascertain the description of the makers of the statements, despite efforts which I am prepared to characterise, with some reservations, as reasonable. The evidence is that another firm of solicitors wrote to LawTap some time ago (in mid-2019) demanding that the posts be removed, and no further similar posts be permitted. The evidence suggests further posts continued to be made throughout the rest of 2020 and into 2021, the latest being in February 2021. 14 Mr Stanarevic also deposes that after this letter, Mr Heath himself contacted LawTap and sought removal of the comments, and the "identifying details" of the makers of the statements but could not obtain a "positive resolution", which is why these orders have been sought. That evidence is unchallenged. Particularly in the context of an ongoing course of conduct from 2019 through to February 2021, I accept that Mr Heath has made attempts to have the statements removed, and to have the person or persons making them stopped, and has himself tried to discover who has been making them, but now feels driven to take more formal action. I accept it is a significant step to enter a costs jurisdiction in a superior court to pursue a remedy and on the present unchallenged material he should not be criticised, nor denied the relief he seeks, for taking some time before taking that step. 15 For the purposes of r 7.22(1)(c), I am satisfied that LawTap is likely to have access to documents that may contain the descriptions sought. I accept the submissions of counsel for Mr Heath that the Court can more readily draw that inference from the absence of a challenge by LawTap to the preliminary discovery application, and from the parties' agreement as to the fixing of sums to be paid by Mr Heath to LawTap for the costs of providing discovery, if it was ordered. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Mortimer. Associate: Dated: 10 May 2021	2,322
federal_court_of_australia:fca/single/2015/2015fca1339	decision	commonwealth	federal_court_of_australia	text/html	2015-11-26 00:00:00	Thomas v Commissioner of Taxation [2015] FCA 1339	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2015/2015fca1339	2024-09-13T22:44:45.640610+10:00	FEDERAL COURT OF AUSTRALIA Thomas v Commissioner of Taxation [2015] FCA 1339 Citation: Thomas v Commissioner of Taxation [2015] FCA 1339 Parties: MARTIN ANDREW THOMAS v THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA MARTIN ANDREW PTY LTD (ACN 063 993 055) v THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA File number(s): QUD 274 of 2012 QUD 276 of 2012 Judge(s): GREENWOOD J Date of judgment: 26 November 2015 Catchwords: TAXATION – consideration of an application for leave to re-open the proceedings – consideration of the final form of the orders to be made consequent upon reasons for judgment published on 31 August 2015 Legislation: Taxation Administration Act 1953 (Cth), ss 14ZZ, 14ZZO, 14ZZP, 14ZZQ Administrative Appeals Tribunal Act 1975 (Cth), ss 42A, 42B Cases cited: Thomas v Commissioner of Taxation [2015] FCA 968 – cited Autodesk Inc and Anor v Dyason and Ors (No 2) (1993) 176 CLR 300 – cited and quoted Davis v Insolvency and Trustee Service Australia and Ors (No 2) (2011) 190 FCR 437 - cited Wenkart v Pantzer (No 3) [2013] FCAFC 162 - cited Federal Commissioner of Taxation v Vegners (1989) 90 ALR 547 – cited Federal Commissioner of Taxation v Whiting (1943) 68 CLR 199 - cited Date of hearing: 19 November 2015 Place: Brisbane Division: General division Category: Catchwords Number of paragraphs: 49 Counsel for the Applicants: Mr F L Harrison QC and M Robertson QC Solicitor for the Applicants: Stephen Comino & Arthur Comino Counsel for the Respondent: Mr P Looney QC and Ms L Allen Solicitor for the Respondent: Australian Government Solicitor IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 274 of 2012 BETWEEN: MARTIN ANDREW THOMAS Applicant AND: THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA Respondent JUDGE: GREENWOOD J DATE OF ORDER: 26 NOVEMBER 2015 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The applicant's application for leave to re-open the proceeding is refused. 2. The applicant pay the costs of and incidental to the application for leave to re-open. 3. The applicant's appeal is allowed in part but only as indicated in Orders 5 and 6 below. 4. The applicant's appeal is otherwise dismissed. 5. The objection decisions in respect of the income years ending 30 June 2006, 2007, 2008 and 2009 are varied to the extent that the premiums incurred by Thomas Nominees Pty Ltd as trustee for the Thomas Investment Trust as part of its options trading business are allowable as deductions in working out the net income of the Trust estate under s 95 of the Income Tax Assessment Act 1936 (the "1936 Act"). 6. The objection decision in respect of the income year ending 30 June 2009 is varied to the extent that the applicant's assessable income under s 97 of the 1936 Act includes a 99.6% share of the net income of the trust estate under s 95 of the 1936 Act (as re-calculated in accordance with Order 5). 7. In accordance with r 36.03 of the Federal Court Rules 2011, an appellant must file any notice of appeal on or before 29 January 2016. 8. Each party bear their own costs of and incidental to the proceeding. 9. Pursuant to the provisions of the Federal Court of Australia Act 1976 (Cth) and rr 1.32 and 1.36 of the Federal Court Rules 2011, these orders are made from Chambers. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 276 of 2012 BETWEEN: MARTIN ANDREW PTY LTD (ACN 063 993 055) Applicant AND: THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA Respondent JUDGE: GREENWOOD J DATE OF ORDER: 26 NOVEMBER 2015 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The applicant's application for leave to re-open the proceeding is refused. 2. The applicant pay the costs of and incidental to the application for leave to re-open. 3. The applicant's appeal is allowed in part but only as indicated in Order 5 below. 4. The applicant's appeal is otherwise dismissed. 5. The objection decision in respect of the income year ending 30 June 2008 is varied to the extent that the premium incurred by Thomas Nominees Pty Ltd as trustee for the Thomas Investment Trust as part of its options trading business are allowable as deductions in working out the net income of the trust estate under s 95 of the Income Tax Assessment Act 1936. 6. In accordance with r 36.03 of the Federal Court Rules 2011, an appellant must file any notice of appeal on or before 29 January 2016. 7. Each party bear their own costs of and incidental to the proceeding. 8. Pursuant to the provisions of the Federal Court of Australia Act 1976 (Cth) and rr 1.32 and 1.36 of the Federal Court Rules 2011, these orders are made from Chambers. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 274 of 2012 BETWEEN: MARTIN ANDREW THOMAS Applicant AND: THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA Respondent IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 276 of 2012 BETWEEN: MARTIN ANDREW PTY LTD (ACN 063 993 055) Applicant AND: THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA Respondent JUDGE: GREENWOOD J DATE: 26 NOVEMBER 2015 PLACE: BRISBANE REASONS FOR JUDGMENT Background 1 These proceedings concern an application made by Martin Thomas for leave to re-open proceeding QUD 274/2012 and an application by Martin Andrew Pty Ltd ("MAPL") for leave to re-open proceeding QUD 276/2012 and adduce further evidence in each proceeding in relation to the tax years ending 30 June 2006, 2007 and 2008 so far as Martin Thomas is concerned and the tax year ending 30 June 2008 so far as MAPL is concerned. 2 In proceeding QUD 274/2012, Martin Thomas brought appeal proceedings challenging objection decisions of the Commissioner of Taxation (the "Commissioner") disallowing objections to assessments of income tax (and penalties – QUD 284/2012) for the financial years ending 30 June 2006, 2007, 2008 and 2009. The Court heard and determined the appeal proceedings by publication of reasons for judgment on 31 August 2015: Thomas v Commissioner of Taxation [2015] FCA 968 ("Thomas v CoT"). 3 These reasons are to be read together with the published reasons in Thomas v CoT. 4 In proceeding QUD 274/2012, Martin Thomas framed and litigated a large number of grounds of appeal in support of his attempt to demonstrate that the assessments of the Commissioner in each financial year were excessive or otherwise incorrect. He failed to make good his contentions as to the objection decisions concerning his objections to the income tax assessments in each tax year and failed to discharge the onus cast upon him by s 14ZZO of the Taxation Administration Act 1953 (Cth) (the "TAA") for the reasons set out in the judgment. That conclusion, following from the reasoning, is set out at [521] of the judgment. 5 Martin Thomas and MAPL were, in the relevant tax years, beneficiaries of the Thomas Investment Trust of which Thomas Nominees Pty Ltd was the trustee. 6 In proceeding QUD 276/2012, MAPL brought appeal proceedings challenging an objection decision of the Commissioner disallowing objections to the assessment of income tax for the financial year ending 30 June 2008 (and penalties – QUD 285/2012). The Court heard and determined the appeal proceeding by publication of reasons for judgment in Thomas v CoT. 7 MAPL failed to make good its contentions as to the objection decision concerning its objection to the income tax assessment for that financial year and thus failed to discharge the onus cast upon it by s 14ZZO of the TAA. 8 Apart from these appeals (and other appeals addressed in the principal proceeding), the judgment in Thomas v CoT was also concerned with an appeal by the trustee from an objection decision of the Commissioner disallowing objections to an assessment in the financial year ending 30 June 2009: QUD 325/2013. 9 On publication of the judgment on 31 August 2015 addressing all of the various appeals (among other appeals not presently mentioned), the parties were directed to submit proposed final orders for the consideration of the Court in disposition of each appeal. There are also related matters before the Administrative Appeals Tribunal (the "Tribunal") which were also to be the subject of proposed final orders. Draft orders were submitted by the parties and final orders were made in all appeals other than QUD 274/2012 and QUD 276/2012: that is, final orders were made on 9 October 2015 in QUD 275/2012, QUD 283/2012, QUD 284/2012, QUD 285/2012 and QUD 325/2013. It is not necessary, for the purposes of these proceedings, to identify the content of those appeals and the ultimate orders made. 10 As to QUD 274/2012 and QUD 276/2012, directions were made concerning the proposed application by Martin Thomas and MAPL for leave to re-open each proceeding and adduce further evidence. The material sought to be adduced into evidence should leave be given to re-open each proceeding is an affidavit of Martin Thomas sworn 22 October 2015 and an extensive affidavit of Elizabeth Robyn Abbott, the accountant acting for Martin Thomas, MAPL and the trustee, in the relevant tax years, sworn 22 October 2015. All such evidence, should leave be given, would be admitted in QUD 274/2012 and treated as evidence in QUD 276/2012. In the various appeal proceedings, QUD 274/2012 has been the vehicle for the reception of evidence treated as evidence in all other matters. 11 The applicants say that they wish to adduce evidence for the 2006 to 2008 tax years of the same nature of that adduced for the 2009 year of income and specifically the applicants seek to adduce evidence of the interim distributions of gross income made to them by the trustee of the trust. They say that if the evidence is admitted, it supports findings that the applicants were presently entitled to the trust income in the 2006 to 2008 tax years in similar proportions to their entitlements for the 2009 year. 12 In the submissions of the applicants, a number of propositions are advanced as to findings and conclusions in the published judgment in Thomas v CoT. With the exception of the matters specifically mentioned in these reasons, it is, however, unnecessary and in any event undesirable to say anything further in these reasons about the judgment in the principal proceeding which necessarily speaks for itself. 13 As to the applications to re-open each appeal proceeding, I refuse leave for the following reasons (although I expand upon these matters further throughout these reasons). 14 First, it seems to me plain that Martin Thomas and MAPL, put simply, want to have another go at the litigation and re-agitate and re-litigate afresh the appeal proceedings. In doing so, they seek to put on evidence that could have been assembled, adduced and addressed at the trial of the appeal proceedings. 15 Second, the applicants actually wish to now also propound an entirely different contention to that previously contended throughout the proceedings and which formed the basis of their case. 16 Third, the application for leave to re-open does not fall within the principles informing the exercise of the discretion to either grant or withhold leave to re-open each proceeding and adduce further evidence. 17 Fourth, the contended basis for granting leave to re-open each proceeding is unmeritorious. 18 It is now necessary to say something further about these issues. The principles 19 Plainly enough, the Federal Court of Australia, as a superior court of record and a court of law and equity, has power to re-open each proceeding before final orders are entered: s 5(2), Federal Court of Australia Act 1976 (Cth); rr 1.32 and 39.04 of the Federal Court Rules 2011. As to varying or setting aside a judgment or order after entry, see r 39.05 of the Federal Court Rules. 20 In Autodesk Inc and Anor v Dyason and Ors (No 2) (1993) 176 CLR 300, Mason CJ made these observations (citations omitted) at pp 301 and 302: The exercise of the jurisdiction to reopen a judgment and to grant a rehearing is not confined to circumstances in which the applicant can show that, by accident and without fault on the applicant's part, he or she has not been heard. It is true that the jurisdiction is to be exercised with great caution having regard to the importance of the public interest in the finality of litigation. [This observation of Mason CJ was adopted as correct by French CJ, Gummow and Hayne JJ in Aktas v Westpac Banking Corporation [No 2] (2010) 241 CLR 570 at 573 [6]]. It is equally true, as this Court said in Wentworth v Woollahra Municipal Council that "[g]enerally speaking, it will not be exercised unless the applicant can show that by accident without fault on his part he has not been heard". But these statements do not exclude the exercise of jurisdiction to reopen a judgment which has apparently miscarried for other reasons, at least when the orders pronounced have not been perfected by the taking out of formal orders. [Having cited examples as to the above proposition, the Chief Justice went on.] These examples indicate that the public interest in the finality of litigation will not preclude the exceptional step of reviewing or rehearing an issue when a court has good reason to consider that, in its earlier judgment, it has proceeded on a misapprehension as to the facts or the law. [emphasis added] 21 At p 303, the Chief Justice also said this: However, it must be emphasized that the jurisdiction is not to be exercised for the purpose of re-agitating arguments already considered by the Court; nor is it to be exercised simply because the party seeking a rehearing has failed to present the argument in all its aspects or as well as it might have been put. What must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing. The purpose of the jurisdiction is not to provide a backdoor method by which unsuccessful litigants can seek to re-argue their case. [emphasis added] 22 See also the observations of Keane CJ, Besanko and Perram JJ in Davis v Insolvency and Trustee Service Australia and Ors (No 2) (2011) 190 FCR 437 at [4] and [6]. Finally, in terms of the authorities in this Court, see also the observations of Dowsett, McKerracher and Foster JJ in Wenkart v Pantzer (No 3) [2013] FCAFC 162 at [17] to [22]. 23 As already mentioned, Martin Thomas seeks leave to re-open QUD 274/2012 and adduce evidence said to be relevant to the issues going to the Commissioner's objection decision to disallow objections to assessments of income tax for the years ending 30 June 2006, 2007 and 2008 and MAPL seeks leave to re-open QUD 276/2012 and adduce evidence said to be relevant to the issues going to the Commissioner's objection decision to disallow objections to an assessment of income tax for the year ending 30 June 2008. 24 The point of re-opening each proceeding is to enable the applicants to lead further evidence in each appeal. That evidence is said to demonstrate that interim distributions of gross income were made by the trustee of the trust to the beneficiaries in the tax years 2006, 2007 and 2008. The applicants seek to show that they were, by reason of these distributions, presently entitled to trust income in particular proportions: see para 3 of the applicants' submissions. However, the case they now seek to make is entirely inconsistent with the case they ran at trial and inconsistent with the Further Amended Appeal Statement filed on 23 August 2013 and the corrected submissions filed on 25 September 2014. I accept the submissions of the Commissioner that propounding the position the applicants would now seek to contend for in each appeal proceeding is inconsistent with the findings in the reasons for judgment at [488], [529] and [530]. 25 The evidence the applicants now want to adduce through the vehicle of re-opening each appeal is evidence which was available to them at the time of the trial. There is nothing new about the evidence. The evidence of Ms Abbott was known to and available to the applicants throughout the entire period of the preparation of the appeals and the conduct of the appeals. 26 In evaluating the evidence and formulating the reasons for judgment, the Court had regard to the evidence put on by the parties. There is no basis at all for the suggestion that the Court has proceeded on what Chief Justice Mason described as a misapprehension as to the facts or the law. To the extent that the applicants might seek to assert error of law, that is a matter for the appeal process. However, there is no proper basis upon which it can be said that the Court proceeded on a misapprehension as to the facts or the law. 27 More fundamentally, the applicants contend that the findings made by the Court give rise to a lacuna in the sense that the findings are said to leave a gap as to the proportionate share of the applicants of the trust income for the financial years ending 2006, 2007 and 2008. I am not satisfied that there is any such lacuna at all. For those tax years, the applicants ran a case framed in a particular way based upon the evidence they called going to those financial years. Having evaluated all of the written material and the oral evidence of the witnesses forensically put on by the applicants in support of their contentions, the Court found that Martin Thomas was simply unable to make good his case and demonstrate that the Commissioner's assessments were excessive or otherwise incorrect. 28 The application to re-open each appeal and adduce the evidence the applicants seek to adduce falls squarely within the observations of the Chief Justice referred to at [20] of these reasons. 29 The applicants also say, not so much as a lacuna going to the evidence but a lacuna going to the discharge of the Commissioner's statutory obligations, that in the absence of re-opening each appeal and enabling the applicants to adduce the evidence in question, the Commissioner "will not be able to perform his duty to reassess the applicants' true tax liability in accordance with the law until each beneficiary's share in the trust income is identified" according to the re-formulation the applicants now seek to adopt; applicants' submissions. 30 I do not accept that that is so. There is no reason to believe that the Commissioner will not proceed to discharge the statutory duty imposed by s 14ZZQ of the TAA or that the Commissioner is incapable of comprehending the scope of that duty or discharging that duty unless leave is given to re-open the proceedings and the further evidence adduced. Section 14ZZQ of the TAA provides that when the order of the Federal Court in relation to the decision becomes final, the Commissioner must, within 60 days, take such action, including amending any assessment or determination concerned, as is necessary to give effect to the decision. As to the concession reflected at [48] to [50] of the principal judgment, see [37] and [38] below. 31 The question at the heart of this application has really arisen in the following way. 32 In proceeding QUD 325/2013, the trustee brought appeal proceedings challenging an objection decision of the Commissioner disallowing objections to an assessment of income tax for the financial year ending 30 June 2009. As to that tax year, the Commissioner contended, having made the options concession described at [48] to [50] of the reasons for judgment (see [37] below) that the expenses of the trust exceeded its income with the result that it had made a net loss for the 2009 tax year and that no beneficiary was presently entitled to a share of the trust income in that tax year notwithstanding that the net income of the trust for the purposes of s 95 of the Income Tax Assessment Act 1936 (the "1936 Act") for the 2009 tax year was $173,743, as agreed. The Commissioner also contended that there was no distributable income of the trust (on the Commissioner's construction of the trust deed). The problem as to the 2009 income year was, in the Commissioner's view, not that there was net distributable income of the trust and no beneficiary entitled to it, but rather there was no distributable income. 33 The applicants had contended that even though the trust is a discretionary trust, the trustee operated on the footing that a relevant beneficiary had a beneficial interest in the gross income as it was derived with the result that income could be applied by the trustee for the benefit of a beneficiary during the course of the income year with the trustee foregoing a lien over the gross income as security for its right of indemnity for costs and expenses. These competing contentions raised questions about present entitlement to a share of the income of the trust estate for the purposes of s 97(1)(a)(i); the relevance of the observations of Gummow J in Federal Commissioner of Taxation v Vegners (1989) 90 ALR 547 at 553 and the observations of Lathan CJ and Williams J in Federal Commissioner of Taxation v Whiting (1943) 68 CLR 199 at 215; s 101 of the 1936 Act and its relationship with the notion of present entitlement in the context of the exercise of a discretionary power by a trustee; and notions of distributable income. 34 In other words, the applicants knew at least from the final formulation of their amended appeal statement and the formulation of their submissions on the appeals that questions of the basis upon which a beneficiary might be said to be presently entitled to trust income in the tax year 2009 and also the basis upon which a beneficiary might be said to be presently entitled to trust income and the proportionate shares in the income years 2006, 2007 and 2008 was at the core of the questions in issue. Thus, the applicants knew throughout, relevantly, both analytically and forensically that these questions were live issues in each of the tax years in question. They chose to put on evidence, adduced by the trustee through the guiding minds of Martin Thomas and Ms Abbott in relation to the 2009 year, and chose not to adduce any evidence in the 2006, 2007 and 2008 tax years of the kind they put on for the 2009 year. Now, they want to re-configure the appeals by obtaining leave to re-open them and put on evidence that they wished they had put on at the time. 35 There would never be any end to litigation if parties could take such a course: see the observations of Mason CJ at [20] of these reasons. 36 Section 14ZZP of the TAA provides that where a Court hears an appeal against an objection decision under s 14ZZ, the Court may make such order in relation to the decision as it thinks fit, including an order confirming or varying the decision. Orders ought now be made for the final disposition of the appeals having regard to the judgment. For all the reasons mentioned, I am not satisfied that it would be unjust to refuse the applications. In the principal judgment, the Court determined that Martin Thomas had been unable to demonstrate that the amended assessments issued to him were excessive or otherwise incorrect for the purposes of s 14ZZO of the TAA. 37 However, the Court made these observations at [48] to [50] of the judgment: 48 In mid-2012, however, after the making of the April 2012 objection decisions, the Commissioner issued further Notices of Amended Assessment to the beneficiaries concerning their primary tax liabilities in respect of the relevant tax years. On 2 November 2012, consequent upon a review of the Applicants' Appeal Statement filed on 20 September 2012, the Commissioner advised the applicants that he now accepted one of the grounds relied upon in each of the relevant objections to the effect that all premiums paid by the trustee as part of its ETO options trading business were deductible under s 8-1 of the 1997 Act. 49 This change of position is described as the "options concession". 50 It seems that this concession led to an agreement between the parties that the net income of the trust estate pursuant to s 95 of the 1936 Act in each of the relevant tax years was that set out in the table at [27] of these reasons. 38 Having regard to that concession, it is appropriate in terms of s 14ZZP to make the orders in each of QUD 274/2012 and QUD 276/2012 at Orders 5 and 6 and Order 5 respectively of the orders made today. The appeals are otherwise to be dismissed. 39 A question has arisen as to the orders to be made in each of the three Tribunal proceedings: 2012/2445; 2012/2450; and 2012/2453. I will say something about those matters in these reasons simply as a matter of convenience as the judgment in Thomas v CoT is decisive of the issues in the Tribunal matters and these reasons (taken together with the reasons in Thomas v CoT) are to be treated by the Tribunal as the reasons for the final decision of the Tribunal in disposition of each of the three matters. 40 Put simply: in matter 2012/2445, Martin Thomas appeals to the Tribunal for review of the Commissioner's decision to refuse to remit penalties imposed in respect of the tax years ending 30 June 2006, 2007, 2008 and 2009; in matter 2012/2450, the trustee appeals to the Tribunal for review of the Commissioner's decision to refuse to remit penalties imposed in respect of the tax years ending 30 June 2006, 2007 and 2008; and in matter 2012/2453, MAPL appeals to the Tribunal for review of the Commissioner's decision to refuse to remit penalties imposed in respect of the tax year ending 30 June 2008. 41 By the time of the commencement of the Tribunal proceedings (and the related Federal Court proceedings heard first in time though subject to the protocol that all evidence tended in QUD 274/2012 was to be treated as evidence in all Tribunal proceedings and thus the Federal Court and Tribunal matters were heard together subject to separation in convening sittings of the Court and sittings of the Tribunal), the Commissioner's position concerning applications 2012/2450 (by the trustee) and 2012/2453 (by MAPL) was that those applications were no longer opposed. The application by Martin Thomas (2012/2445) continued to be opposed by the Commissioner. 42 In the Federal Court proceedings, the Court determined that the appeal from the Commissioner's objection decision on penalty by Martin Thomas for the tax years ending 30 June 2006, 2007, 2008 and 2009 be upheld and the penalty assessment be set aside. The Court also decided that no further penalties be imposed: Thomas v CoT at [586]. The Commissioner had already adopted by the commencement of the hearing the position that the appeals by MAPL for the tax year ending 30 June 2008 (QUD 285/2012) and the trustee for the tax years ending 30 June 2006, 2007 and 2008 (QUD 283/2012) from objection decisions concerning penalty assessments were no longer opposed. 43 Because the imposition of a penalty on Martin Thomas for the tax years ending 30 June 2006, 2007, 2008 and 2009 was set aside, the question of undertaking an examination by way of appeal before the Tribunal of the Commissioner's decision to refuse to remit the penalty imposed by the Commissioner on Martin Thomas, fell away. The other two appeals from the Commissioner's refusal to remit penalties were not opposed in any event. The result is that the parties agree that the three Tribunal matters are to be dismissed. However, the parties do not agree about the terms of the dismissal of each Tribunal matter nor the statutory foundation upon which each matter might be dismissed. The applicants press the notion that the Tribunal's decision to dismiss each matter ought to also note that each proceeding has been brought to an end "favourably to the applicant". The applicant says that this will apparently have the effect of invoking the Tribunal's practice of re-funding the application fee to each applicant. 44 As to the statutory foundation for dismissing each application, the applicants say that as the Federal Court has set aside the penalty assessment, there is no penalty to be remitted for the purposes of matter 2012/2445 and thus no engagement of the exercise of the discretion to remit the penalty for the purposes of s 298/20 of Sch 1 to the TAA. They say that it follows that s 42A(4) of the Administrative Appeals Tribunal Act 1975 (Cth) (the "AAT Act") is engaged. That section provides that if the Tribunal is satisfied that the decision the subject of the application is "not reviewable by the Tribunal", the Tribunal may dismiss the application without proceeding to review the decision. 45 Each Tribunal application is concerned with the Commissioner's refusal to remit a penalty. Each decision was properly reviewable before the Tribunal at the time of the filing of the application. Although I have some doubt about the scope of s 42A(4) of the AAT Act, I am satisfied that if the primary decision to impose a penalty (which penalty would be the subject of a remittal review proceeding) has been set aside by the Federal Court and there is no longer a penalty that is to be the subject of a Tribunal decision to remit or not remit, the remittal discretion is no longer reviewable and thus the power under s 42A(4) is properly engaged. 46 The Commissioner contends that the proper statutory foundation for dismissing each matter is s 42B of the AAT Act. That section provides, relevantly, that the Tribunal may dismiss an application for review of a decision, at any stage of the proceeding, if the Tribunal is satisfied that the application: is frivolous, vexatious, misconceived or lacking in substance; or, has no reasonable prospect of success; or, is otherwise an abuse of the process of the Tribunal. 47 It seems to me that s 42B is a provision designed to protect the integrity of proceedings in the sense of conferring a power upon the Tribunal to dismiss applications which have no inherent integrity about them, to use a general word, in the sense that the proceedings can be seen to be frivolous or vexatious or otherwise misconceived, lack substance, have no reasonable prospects of success or fall within the description of an abuse of process. I am not satisfied that that statutory framework is properly engaged in the circumstances of matter 2012/2445 or the other two Tribunal proceedings. 48 I am satisfied that each proceeding ought to be dismissed in reliance upon s 42A(4) of the AAT Act. 49 I am not satisfied that the exercise of the statutory dismissal power under s 42A(4) of the AAT Act ought to carry with it the form of endorsement sought by the applicants. I am satisfied that it is appropriate to reflect in these reasons that since the primary penalty decision of the Commissioner has been set aside by the Federal Court of Australia with no further penalties to be imposed, the challenge to the Commissioner's refusal to remit the penalty (as it was imposed) the subject of each Tribunal application falls away with an outcome favourable to the applicant in the form of a dismissal of each application in the circumstances that emerged. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. Associate: Dated: 26 November 2015	7,235
federal_court_of_australia:fca/full/2009/2009fcafc0098	decision	commonwealth	federal_court_of_australia	text/html	2009-08-21 00:00:00	Minister for Immigration and Citizenship v Kamal [2009] FCAFC 98	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2009/2009fcafc0098	2024-09-13T22:44:45.656676+10:00	FEDERAL COURT OF AUSTRALIA Minister for Immigration and Citizenship v Kamal [2009] FCAFC 98 MIGRATION – application for Student (Temporary) (Class TU) visa under the Migration Act 1958 (Cth) – criteria for subclass 572 visa – requirement to demonstrate English language proficiency in accordance with Schedule 5A of the Migration Regulations 1994 (Cth) – meaning of "[a test] taken less than two years before the date of application" – whether provision requires that test be taken prior to date of application or whether it can be taken after date of application Migration Act 1958 (Cth) Migration Regulations 1994 (Cth) rr 1.41(1), 1.44(1), Sch 2, sub-cll 572.223(1), 572.223(2)(a)(i), Sch 5A, Items 5A404(a), 5A404(b) Kamal v Minister for Immigration and Citizenship [2009] FMCA 238; affirmed Rana v Minister for Immigration and Citizenship [2009] FMCA 553; referred to MINISTER FOR IMMIGRATION AND CITIZENSHIP v MOHAMMAD ANOWER KAMAL and MIGRATION REVIEW TRIBUNAL NSD 299 of 2009 FINN, EMMETT & EDMONDS JJ 21 AUGUST 2009 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 299 of 2009 GENERAL DIVISION ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: MINISTER FOR IMMIGRATION AND CITIZENSHIP Appellant AND: MOHAMMAD ANOWER KAMAL First Respondent MIGRATION REVIEW TRIBUNAL Second Respondent JUDGES: FINN, EMMETT & EDMONDS JJ DATE OF ORDER: 21 AUGUST 2009 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The Appellant pay the First Respondent's costs of the appeal. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 299 of 2009 GENERAL DIVISION ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: MINISTER FOR IMMIGRATION AND CITIZENSHIP Appellant AND: MOHAMMAD ANOWER KAMAL First Respondent MIGRATION REVIEW TRIBUNAL Second Respondent JUDGES: FINN, EMMETT & EDMONDS JJ DATE: 21 AUGUST 2009 PLACE: SYDNEY REASONS FOR JUDGMENT THE COURT: INTRODUCTION 1 This appeal concerns the construction of the phrase "[a test] taken less than two years before the date of the application" in Item 5A404(a) in Schedule 5A to the Migration Regulations 1994 (Cth) (the Regulations). The question is whether the language of that Item refers only to a test taken before the date of the application or whether it also includes a test taken after the date of the application. 2 On 23 August 2007, the first respondent, Mohammad Anowar Kamal (Mr Kamal), applied for a Student (Temporary) (Class TU) visa under the Migration Act 1958 (Cth). It is common ground that the only subclass of Class TU visa in respect of which Mr Kamal would have been eligible was subclass 572 – Vocational Education and Training Sector visa (572 Visa). On 4 October 2007, a delegate of the appellant, the Minister for Immigration and Citizenship (the Minister), refused to grant a 572 Visa to Mr Kamal. Mr Kamal then applied to the second respondent, the Migration Review Tribunal (the Tribunal), for review of the delegate's decision. On 31 July 2008, the Tribunal affirmed the decision not to grant Mr Kamal a 572 Visa. 3 Mr Kamal then commenced a proceeding in the Federal Magistrates Court seeking Constitutional writ relief in respect of the Tribunal's decision. On 20 March 2009, the Federal Magistrates Court quashed the Tribunal's decision and ordered the Tribunal to determine its review of the delegate's decision according to law. By notice of appeal filed on 9 April 2009, the Minister appeals from the orders of the Federal Magistrates Court. The Chief Justice has directed that the appeal be heard by a Full Court consisting of three judges. RELEVANT STATUTORY PROVISIONS 4 Division 1.8 of the Regulations, which consists of regs 1.40 to 1.44, contains special provisions for student visas. Regulation 1.41(1) provides that the Minister must specify, in relation to each subclass of student visa, an assessment level to which an applicant for a student visa will be subject. Under Regulation 1.44(1), an applicant for a student visa must give evidence about the applicant's English language proficiency in accordance with the requirements set out in Schedule 5A for the relevant subclass of visa and the assessment level to which the applicant is subject. 5 The criteria for a 572 Visa are set out in Part 572 of Schedule 2 to the Regulations. Relevantly, an applicant must, as at the date of the decision, satisfy the criteria specified in clause 572.223. Subclause 572.223(1) relevantly provides that the decision maker must be satisfied that the applicant meets the requirements of subclause 572.223(2). One of those requirements, contained in paragraph 572.223(2)(a)(i), is that the applicant gives to the Minister evidence in relation to the applicant's English language proficiency for the purposes of each course of study that the applicant proposes to undertake. The evidence is to be given in accordance with the requirements mentioned in Schedule 5A. 6 The relevant part of Schedule 5A is Item 5A404. Item 5A404 contemplates several possibilities. One possibility is that contained in Item 5A404(a), which provides, relevantly, that an applicant must give evidence: · that the applicant will not undertake an ELICOS before commencing his or her principal course, and · that the applicant achieved, in an IELTS test that was taken less than two years before the date of the application, an Overall Band Score of at least 5.5. Another possibility is contained in Item 5A404(b), which provides, relevantly, that an applicant must give evidence that: · the applicant will undertake an ELICOS of a specified duration before commencing his or her principal course, and · the applicant achieved, in an IELTS test that was taken less than two years before the date of the application, an Overall Band Score of 5.0. An ELICOS is an English language intensive course for overseas students that is a registered course. An IELTS test is the International English Language Testing System test. 7 Thus, the scheme of Item 5A404 entails that by the time of the decision, an applicant may or may not have achieved an appropriate level of proficiency in English, as evidenced by the result of an IELTS test. If the applicant has not achieved the relevant level of proficiency, he or she will undertake an ELICOS. However, if the applicant has achieved the relevant level of proficiency, he or she will not need to undertake further tuition, such as an ELICOS. There are other possibilities depending upon the level of proficiency that has been achieved by the applicant. THE ISSUE 8 Mr Kamal gave evidence to the Tribunal that he does not intend to take an ELICOS before commencement of his principal course. He also gave evidence to the Tribunal that, on 8 December 2007, he achieved, in an IELTS test, an Overall Band Score of 5.5. The question is whether that test was a test that was taken less than two years before the date of Mr Kamal's application for a 572 Visa. As already indicated, the date on which Mr Kamal applied for a 572 Visa was 23 August 2007. 9 The Tribunal concluded that, in that circumstance, the IELTS test taken on 8 December 2007 was not a test that was taken less than two years before the date of Mr Kamal's application and the requirement of Item 5A404(a) was not satisfied. The Tribunal considered that Item 5A404 required a test to have been taken in the period commencing two years before the date of the application and ending on the date of the application. 10 The primary judge in the Federal Magistrates Court took a different view as to the meaning of Item 5A404(a) and concluded, as a consequence, that the Tribunal's decision was infected by jurisdictional error. The Minister accepts that, if the Tribunal misconstrued Item 5A404 in the way found by the Federal Magistrates Court, the decision of the Tribunal was infected by jurisdictional error and Constitutional writ relief should be ordered. The Federal Magistrates Court ordered that: · A writ of Certiorari issue directed to the Tribunal quashing the decision of the Tribunal. · A writ of Mandamus issue directed to the Tribunal requiring the Tribunal to determine Mr Kamal's application for review according to law. · The Minister pay Mr Kamal's costs. 11 The only question before the Full Court is whether the construction of Item 5A404(a) adopted by the primary judge in the Federal Magistrates Court is correct. No point has been taken concerning the form of the order and, in particular, as to whether a writ of Certiorari has the effect of quashing a decision. DISPOSITION OF THE APPEAL 12 The appeal has been conducted on the basis that one of two constructions of the relevant language of Item 5A404 is correct. The Minister contends that the relevant phrase means: · an IELTS test that was taken within the period of two years before the date of the application. The primary judge in the Federal Magistrates Court accepted Mr Kamal's contention that the relevant language means: · an IELTS test that was taken no earlier than two years before the date of the application. 13 The Minister contends that the relevant language of Item 5A404(a)(ii) is a composite phrase the natural meaning of which is to set a time period with both a start date, being the date two years before the date of the application, and an end date, being the date of the application. The Minister says that the natural meaning of the word "before" is "prior in time to" and that the relevant phrase cannot embrace less than two years before the date of the application as well after the date of the application. 14 The Minister points to what he characterises as good reasons of administrative efficiency for requiring an applicant to have achieved the relevant test result prior to making an application for a visa. He contends that satisfying the language proficiency criteria is, in the context of a student visa application, part of a two step process. The first part is the identification of the level of proficiency that an applicant has. The second part is the provision of evidence that tuition will be put in place to remedy a relevant lack of English language proficiency by undertaking an ELICOS (see Rana v Minister for Immigration and Citizenship [2009] FMCA 553 at [36]). The Minister says that ensuring that an applicant has undertaken an IELTS test before submitting a visa application aids the efficiency of the decision making process by enabling the second step, whether to undertake an ELICOS, to be taken once the IELTS result is known. 15 To the extent that there is any ambiguity in the relevant language, the Minister points to the Explanatory Statement published in connection with Migration Amendment Regulations 2001 (No. 5) 2001 No 162 (Cth), pursuant to which the language in question was inserted in Schedule 5A. The Explanatory Statement stated, inter alia, that the changes effected by the amending regulation codify, in Schedule 5A, evidentiary requirements that must be met by an applicant seeking to satisfy primary criteria for the relevant student visa subclasses, including criteria dealing with English proficiency. The Explanatory Statement said that the IELTS test is designed to assess the language ability of candidates who need to study or work where English is used as the language of communication. It stated that the IELTS test is readily available at centres around the world, including Australia, that arrange test administration according to local demand. Most significantly, the Explanatory Statement then said: Under the new student regime, potential students sit the test to gauge their English proficiency before applying for a student visa. [emphasis added] The Minister contends that, to the extent that there is ambiguity in the meaning of Item 5A404(a)(ii), the Explanatory Memorandum may be called in aid to resolve that ambiguity in favour of the construction contended for by the Minister. 16 The Minister says that, if an applicant has not undertaken an IELTS test before lodging a visa application, the decision making process could be unduly delayed or frustrated. Item 5A404 provides no requirement that an applicant is required to undertake the test by any particular date. Accordingly, the Minister says, there would be a possibility that an applicant could delay taking the test and thus delay the making of a decision on the visa application. On the other hand, the Minister says, if an applicant has sat for the IELTS test before lodging the application, it is only a matter of obtaining the result and giving evidence of the result to the decision maker. However, there is nothing to suggest that such a rationale was in fact in the mind of the drafter of the relevant provisions in Schedule 5A. 17 There is no indication in Item 5A404 that the possibility that an applicant might request a deferment of the decision while the applicant takes the relevant test should be the basis for the arbitrary exclusion of a test that happens to be the most recent and therefore the most current indication of the applicant's proficiency. The Minister accepts that the evidence of a result does not have to be given before the application is made, so long as it has been given prior to the decision. An applicant could equally request some deferment of a decision while the evidence of a test result is obtained. 18 Clearly, the question that is raised by this proceeding could have been avoided by the use of different language one way or another. The Regulations contain various formulations of time periods that might have been employed in the drafting of Item 5A404 to avoid any possible ambiguity as to the meaning of the words in question. For example, the Regulations contain the following formulations in various provisions: The applicant has been employed in a skilled occupation for a period of… at least six months in the period of 12 months immediately before the day on which the application was made. The applicant has, in the six months immediately before the day on which the application was made, completed a degree, diploma or trade qualification… for award by an Australian educational institution. The applicant has been employed in a skilled occupation… for a period of, or for periods totalling, at least 24 months in the period of 36 months immediately before the day on which the application was made. However, the complexity of the Regulations and the various occasions upon which they have been amended suggests that comparison of the language of Item 5A404 with the language of other provisions in the Regulations is likely to be of little assistance. 19 The language of Item 5A404(a)(ii) is directed to the recency or currency of a test result. The intent is to ensure that the test is sufficiently recent and current for the decision maker to be satisfied that it is a reliable indication of the proficiency of the applicant. As a matter of logic and syntax, the words in question are clearly capable of being interpreted as meaning that the test must have been taken no earlier than two years before the date of the application. The question of construction does not so much turn on the word "before" as on the phrase "less than two years before", which means a test taken less than two years before. While the question of construction is not without doubt, the construction contended for by Mr Kamal is to be preferred. 20 That is the conclusion reached by the primary judge in the Federal Magistrates Court. It follows that his Honour made no error in concluding as he did. In the circumstances, the appeal should be dismissed with costs. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Finn, Emmett & Edmonds. Associate: Dated: 21 August 2009 Counsel for the Appellant: Mr R Beech-Jones SC with Mr T Reilly Solicitor for the Appellant: Sparke Helmore Counsel for the First Respondent: Mr L Karp with Mr P Reynolds Solicitor for the First Respondent: Patience Parish Immigration Lawyers Date of Hearing: 7 August 2009 Date of Judgment: 21 August 2009	3,719
federal_court_of_australia:fca/single/2010/2010fca0694	decision	commonwealth	federal_court_of_australia	text/html	2010-07-02 00:00:00	Flashback Holdings Pty Ltd v Showtime DVD Holdings Pty Ltd (No 6) [2010] FCA 694	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2010/2010fca0694	2024-09-13T22:44:45.703773+10:00	FEDERAL COURT OF AUSTRALIA Flashback Holdings Pty Ltd v Showtime DVD Holdings Pty Ltd (No 6) [2010] FCA 694 Citation: Flashback Holdings Pty Ltd v Showtime DVD Holdings Pty Ltd (No 6) [2010] FCA 694 Parties: FLASHBACK HOLDINGS PTY LTD, GAIAM, INC and GAIAM AMERICAS, INC v SHOWTIME DVD HOLDINGS PTY LTD, INTERFREIGHT LOGISTICS PTY LTD, WILLIAM NIGEL HEYDON LESLIE, GT HOLDINGS, INC and JAFFA ROAD LIV LIMITED PARTNERSHIP File number(s): NSD 680 of 2008 Judges: PERRAM J Date of judgment: 2 July 2010 Catchwords: COPYRIGHT – Infringement – Relief – Election for damages – Calculation of damages using method of "lost profits" – Inclusion in assessment of damages of sales lost by exclusive licensee on other products whose copyright had not been infringed – Claimable head of damage so long as sufficient causation and foreseeability – Insufficient evidence to calculate damages Legislation: Copyright Act 1968 (Cth) ss 36, 37, 115, 119 Copyright Amendment (Digital Agenda) Act 2000 (Cth) Sch 1 [39] Federal Court of Australia Act 1976 (Cth) s 51A Federal Court Rules O35 r 1; O 35A r 3; O 38 r 1 Cases cited: Aristocrat Technologies Australia Pty Ltd v DAP Services (Kempsey) Pty Ltd (2007) 157 FCR 564 cited Australasian Performing Right Association Ltd v Jain (1990) 26 FCR 53 cited Golden Editions Pty Ltd v Polygram Pty Ltd (1996) 61 FCR 479 cited Gordon M Jenkins & Associates Pty Ltd v Coleman (1989)23 FCR 38 cited Hall v Busst (1960) 104 CLR 206 cited Harris v Caladine (1991) 172 CLR 84 cited Flashback Holdings Pty Ltd v Showtime DVD Holdings Pty Ltd (No 3) [2009] FCA 308 cited Flashback Holdings Pty Ltd v Showtime DVD Holdings Pty Ltd (No 4) [2009] FCA 461 cited Flashback Holdings Pty Ltd v Showtime DVD Holdings Pty Ltd (No 5) [2009] FCA 859 cited Krueger Transport Equipment Pty Ltd v Glen Cameron Storage and Distribution Pty Ltd (No 2) (2008) 79 IPR 81 cited Light v William West & Sons Ltd [1926] 2 KB 238 applied Luna Park Sydney Pty Ltd v Bose [2006] FCA 94 cited Milwell Pty Ltd v Olympic Amusements Pty Ltd (1999) 85 FCR 436 cited Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 77 ALJR 768 cited TS & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (No 3) (2007) 158 FCR 444 cited Victorian Economic Development Corporation v Clovervale Pty Ltd [1992] 1 VR 596 cited Date of hearing: 15-16 June 2010 Date of last submissions: 16 June 2010 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 47 Counsel for the First Applicant: Mr M R J Ellicott Solicitor for the First Applicant: Banki Haddock Fiora Counsel for the Third Respondent: Mr A Chelvathurai with Mr A Shuli Solicitor for the Third Respondent: iLaw Barristers & Solicitors IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 680 of 2008 BETWEEN: FLASHBACK HOLDINGS PTY LTD First Applicant GAIAM, INC Second Applicant GAIAM AMERICAS, INC Third Applicant AND: SHOWTIME DVD HOLDINGS PTY LTD First Respondent INTERFREIGHT LOGISTICS PTY LTD Second Respondent WILLIAM NIGEL HEYDON LESLIE Third Respondent GT HOLDINGS, INC Fourth Respondent JAFFA ROAD LIV LIMITED PARTNERSHIP Fifth Respondent JUDGE: PERRAM J DATE OF ORDER: 2 JULY 2010 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The parties bring in short minutes of order reflecting the reasons for judgment within 14 days. Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 680 of 2008 BETWEEN: FLASHBACK HOLDINGS PTY LTD First Applicant GAIAM, INC Second Applicant GAIAM AMERICAS, INC Third Applicant AND: SHOWTIME DVD HOLDINGS PTY LTD First Respondent INTERFREIGHT LOGISTICS PTY LTD Second Respondent WILLIAM NIGEL HEYDON LESLIE Third Respondent GT HOLDINGS, INC Fourth Respondent JAFFA ROAD LIV LIMITED PARTNERSHIP Fifth Respondent JUDGE: PERRAM J DATE: 2 JULY 2010 PLACE: SYDNEY REASONS FOR JUDGMENT I - Introduction 1 The first applicant, Flashback Holdings Pty Ltd ("Flashback"), is part of a group of companies which licences, sells and distributes DVDs and CDs and which has been doing so since 1999. On 14 May 2008 Flashback commenced an urgent proceeding in this Court seeking to restrain the first respondent, Showtime DVD Holdings Pty Ltd ("Showtime"), from distributing or selling a range of children's DVDs on the basis that Flashback had the exclusive licence to distribute those DVDs in Australia. On the same day Rares J granted an ex parte injunction having that effect. That injunction has remained in place since that time. On 30 May 2008 Branson J granted Flashback leave to join the third respondent, Mr Leslie, to the proceeding. Mr Leslie is the sole director and secretary of Showtime. As the proceeding was ultimately formulated Flashback's allegations were: (a) that it held an exclusive licence from the owner of the copyright in the DVDs to distribute them in Australia; (b) Showtime had infringed the copyright by selling 27,840 of the DVDs to a well-known German grocer, ALDI; and (c) Mr Leslie had authorised this conduct of Showtime. Consequently, so it was said, both Showtime and Mr Leslie were liable to Flashback as exclusive licensee for infringing that copyright. 2 Following procedural defaults on Showtime and Mr Leslie's parts I made a self-executing order relating to discovery, non-compliance with which was to result in the striking out of their respective defences and the entry of judgment against both of them: Flashback Holdings Pty Ltd v Showtime DVD Holdings Pty Ltd (No 3) [2009] FCA 308. That order was not complied with: Flashback Holdings Pty Ltd v Showtime DVD Holdings Pty Ltd (No 4) [2009] FCA 461. Consequently I directed the Registrar to draw up a minute recording that their defences had been struck out and judgment entered against them. The question of damages or an account of profits remained to be determined. 3 A subsequent application to revoke the original self-executing order was refused: Flashback Holdings Pty Ltd v Showtime DVD Holdings Pty Ltd (No 5) [2009] FCA 859. The question which now falls for determination is the assessment of Flashback's damages. Further, at the commencement of the present hearing it indicated that it would not be seeking an account of profits. The issue which arises is, therefore, the extent of Mr Leslie's liability in damages to Flashback. As events transpired, it did not seek damages from Showtime. II - The Nature of the Earlier Judgments 4 The hearings in Flashback (No 4) [2009] FCA 461 and (No 5) [2009] FCA 859, which concerned the operation and the effect of the self-executing order, were substantial. No issue was raised then (or now) as to the power of the Court to enter such a judgment. However, during the course of the present hearing, Mr Ellicott, who appeared for Flashback, submitted that the nature of the order made was such that Mr Leslie was no longer entitled to be heard and that the inquiry which now remained was one in which the Court only needed to be satisfied that there was evidence making good the damages claimed. 5 Properly to deal with that submission requires a consideration of the nature of the original order. It was in these terms: That in the event of a default [of the discovery order by either the first or third respondent] and without any further order, the first and third respondents' defences be struck out and judgment be entered for the applicant against the first and third respondents. 6 Subsequently, following the determination in Flashback (No 4) [2009] FCA 461 that that order had been activated I made the following direction: The Court directs the Registrar to record upon the Court file that the first and third respondents' defences were struck out on 18 March 2009 and that judgment was entered against each of them in favour of the first applicant. 7 In the accompanying reasons I said (at [19]): That leaves the question of the assessment of damages or account of profits still at large, together with the question of costs, both of the argument which has resulted in these reasons and, more generally, of the proceedings. I will list the matter for directions with a view to charting its procedural future on Tuesday 19 May 2009. In the meantime I vacate the trial. Any applications which are to be made should be served well in advance of that date. 8 I would construe this as a judgment for the applicant, damages to be assessed. It is true that the judgment is only expressed to be a judgment and not a judgment damages to be assessed, but I do not think that that difference matters. The question of whether a judgment is a judgment damages to be assessed has usually been approached as a matter of substance rather than form. Thus, in Hall v Busst (1960) 104 CLR 206 Dixon CJ noted (at 214) that the trial judge had answered various questions and then ordered that the action proceed to trial on the issue of damages. Despite not being expressed to be a judgment the Court nevertheless treated it as such. The critical question was whether the "judgment" was final. Dixon CJ said (at 218): I think that the order was intended as a judgment for the plaintiff for damages to be assessed and therefore that it is final in the sense that word bears in s 35(1)(a)(2) of the Judiciary Act 1903-1955 (Cth). 9 And indeed the debate about judgments of this kind has not so much centred on the power of the Court to make them but rather on whether they be interlocutory or final. To that question the answer has generally been given that they are both, that is, final as to the issue of liability, interlocutory as to the question of damages: Light v William West & Sons Ltd [1926] 2 KB 238 at 241-242 per Lord Hanworth MR; Victorian Economic Development Corporation v Clovervale Pty Ltd [1992] 1 VR 596 at 598 per Tadgell J. 10 Specific provision is made in the rules of some courts for the calculation of damages by a registrar or master. Indeed in Light v William West & Sons Ltd [1926] 2 KB 238 just such a rule – O XXXVI r 57 – was under consideration. There is no necessity, however, for a judgment damages to be assessed to be consigned to such a ministerial officer. As the reasoning in Hall v Busst 104 CLR 206 shows the damages component may simply be left to trial, if necessary, by a judge. This Court has the power to assign the calculation of damages to a registrar in certain circumstances. Order 38 r 1 provides: Ascertainment of damages where a matter of calculation (1) Where: (a) a respondent admits liability on an applicant's claim, but denies liability to the extent of the damages claimed; or (b) the Court finds that a party is liable to pay damages; the Court, if it considers that the amount of damages to be recovered is substantially a matter of calculation, may direct that the amount which the party liable shall be ordered to pay be ascertained by the Registrar at the proper place. (2) The attendance of witnesses and the production of documents before the Registrar may be compelled by subpoena. (3) The Registrar may adjourn the inquiry from time to time. 11 The Full Court of this Court in Gordon M Jenkins & Associates Pty Ltd v Coleman (1989)23 FCR 38 at 50-51 per Sheppard, Beaumont and Hill JJ held that the words "substantially a matter of calculation" constrained significantly what could be referred to a registrar and in particular limited it to methods of mathematical calculation not calling for the exercise of judgment. 12 The Court thought that the rule had been drafted "having in mind the requirement that judicial power be exercised by judges appointed under Chapter III of the Constitution" (at 50). This may reflect an understanding of the powers of registrars which may well have been superseded by the High Court's decision in Harris v Caladine (1991) 172 CLR 84 although no present occasion arises to consider that. 13 The point to be made is that the power to give judgment damages to be assessed is not limited by the terms of O 38 r 1 which, in truth, deal only with the situation where the assessment is to be carried out by a registrar. In other cases, the power in O 35 r 1 to give "such judgment … as the nature of the case requires" will be sufficiently ample to permit such a judgment. The decision of Drummond J in Simmons v Levene Pty Ltd [1996] FCA 1217 at [34]-[35] proceeds on the basis that the power was (then) to be located both in O 35 r 1 and O 38 r 1 which, with respect, is correct. 14 However, the judgment in this case was not given under either of those provisions. Instead, it was granted pursuant to O 35A r 3(2)(c), (d) and (e) which provide relevantly: (2) If a respondent is in default, the Court may: … (c) if the proceeding was commenced by an application supported by a statement or claim or the Court has ordered that the proceeding continue on pleadings – give judgment against the respondent for the relief that: (i) the applicant appears entitled to on the statement of claim; and (ii) the Court is satisfied it has power to grant; or (d) give judgment or make any other order against the respondent; or (e) make an order specified in paragraph (b), (c) or (d) to take effect if the respondent does not take a step ordered by the Court in the proceeding in the time limited in the order. 15 For the reasons I have given this Court has the power to give a judgment for damages to be assessed and hence a power to do so under these Rules. No issue was raised before me about this but it is to be noted that under O 35A – unlike O 35 itself – it is only necessary that the applicant appear entitled to the relief claimed in the pleading. That difference has led to the view that proof of the claim by an applicant is not necessary under the rule: Luna Park Sydney Pty Ltd v Bose [2006] FCA 94 at [20] per Jacobson J. 16 In those circumstances, the nature of the present hearing becomes clear. It is a trial of the damages issue. The judgment which has been entered concludes all liability issues against Mr Leslie but leaves him free to conduct defences which go to the issue of quantum. I reject, therefore, Flashback's argument that Mr Leslie is shut out of the hearing altogether. III – Procedural Consequences 17 During the hearing Mr Leslie sought to put in issue, both by means of evidence and through argument, two propositions. These were that: (a) Flashback did not, in truth, hold an exclusive licence; and (b) Mr Leslie was entitled to rely upon the defence conferred by s 115(3) of the Copyright Act 1968 (Cth). 18 I do not doubt that Mr Leslie could have contended, prior to entry of judgment against him, that Flashback's licence was not exclusive and that it could not, therefore, seek to rely upon the rights conferred upon an exclusive licensee by Part V Division III of the Act. However, the contention that Flashback was not an exclusive licensee merged in the judgment and is no longer extant to be litigated. The controversy as to whether Flashback was, or was not, such a licensee has now been resolved albeit through O 35A. No other position is consistent with the fact that damages are now to be assessed. 19 A similar conclusion obtains in the case of s 115(3). It provides: Where, in an action for infringement of copyright, it is established that an infringement was committed but it is also established that, at the time of the infringement, the defendant was not aware, and had no reasonable grounds for suspecting, that the act constituting the infringement was an infringement of the copyright, the plaintiff is not entitled under this section to any damages against the defendant in respect of the infringement, but is entitled to an account of profits in respect of the infringement whether any other relief is granted under this section or not. 20 This provision confers a defence which goes to the respondent's liability for infringement: Golden Editions Pty Ltd v Polygram Pty Ltd (1996) 61 FCR 479 at 481-482 per Kiefel J (with whom Burchett and Tamberlin JJ agreed); Milwell Pty Ltd v Olympic Amusements Pty Ltd (1999) 85 FCR 436 at 449 [52] per Lee, von Doussa and Heerey JJ; Krueger Transport Equipment Pty Ltd v Glen Cameron Storage and Distribution Pty Ltd (No 2) (2008) 79 IPR 81 at 85 [11] per Gordon J. As such, it too has ceased to be an issue by reason of the judgment. 21 Mr Leslie sought to rely upon two affidavits going to these issues – his affidavit of 2 November 2009 and paragraphs 1-25 (paragraph 26 was not contested and was admitted) of his affidavit of 16 May 2008. At the hearing I rejected all of that evidence and indicated that I would provide my reasons for doing so at the time of delivery of judgment. My reasons for doing so are because they do not relate to a fact in issue. IV - Relevant Principles 22 Although it is no longer in dispute because of the judgment which has been entered it is useful to recall the basis of Mr Leslie's liability. Section 119 of the Act confers upon an exclusive licensee the same rights it would have if the licensee had taken an assignment of the copyright from the copyright owner. One of those rights is the right conferred by s 115(2) to damages for infringement of copyright. Section 37(1) extends the concept of infringement to include, inter alia, the sale of an artistic work without the licence of the copyright owner. Here Showtime, by selling the 27,840 copies of the children's DVDs to ALDI, infringed the copyright as a result of which Flashback had a right to sue for damages for that infringement. Section 36(1), however, also extends the concept of infringement to include a person who authorises any act comprised in the copyright. Section 36(1A) elaborates on the concept of authorisation: In determining, for the purposes of subsection (1), whether or not a person has authorised the doing in Australia of any act comprised in the copyright in a work, without the licence of the owner of the copyright, the matters that must be taken into account include the following: (a) the extent (if any) of the person's power to prevent the doing of the act concerned; (b) the nature of any relationship existing between the person and the person who did the act concerned; (c) whether the person took any reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice. 23 The concept of authorisation has been the subject of frequent judicial interpretation. However, much of that dialogue predates the insertion of s 36(1A) by the Copyright Amendment (Digital Agenda) Act 2000 (Cth) Schedule 1 [39]. In Australasian Performing Right Association Ltd v Jain (1990) 26 FCR 53 at 61 Sheppard, Foster and Hill JJ thought that the concept of authorisation came close to "countenance". However, that approach may not be compatible with the injunction in s 36(1A) that the three matters set out in subsections (a)-(c) must be taken into account. Quite apart from the judgment – which, of course, resolves this issue – there could be little doubt that Mr Leslie, as the sole director and secretary of Showtime, satisfied these requirements. Unlike more complex corporate veil situations Mr Leslie and Showtime were, in essence, alter egos. 24 It is then useful to say something of the principles governing the assessment of damages for infringement of copyright. Of course, Flashback was bound to elect between pursuing damages and an account of profits – s 115(2). At the outset of the damages trial its counsel did so and elected to pursue damages. I take as a useful summary of the relevant principles for an assessment of damages under s 115(2) the reasons of Finkelstein J in TS & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (No 3) (2007) 158 FCR 444 at 495-496 [203]-[208]. For present purposes his Honour's analysis contains seven points of relevance. 1. One way of describing the measure of damages for copyright infringement is as the depreciation caused by the infringement to the value of the copyright as a chose in action. But this is not to be thought an exclusive measure. 2. Another, perhaps preferable way, is to assess the position a plaintiff would have been in if there had been no infringement. 3. Damage is not the gist of the action so that a plaintiff is entitled, at least, to nominal damages on proof of infringement. 4. Compensation is not limited to pecuniary loss and may extend to matters such as goodwill. 5. The two usual, but not invariable, ways of assessing damages are the licence fee method and the lost profits method. The licence fee method will be appropriate where the plaintiff in all likelihood would have granted a licence to the infringing party, and, in that case, the measure of damages is the royalties foregone under that notional licence. Under the lost profits approach, which would ordinarily be appropriate where the plaintiff and the defendant are in competition with each other, the plaintiff seeks to prove the extent of its lost sales with a view to recovering its lost profits. 6. The assessment of lost profits requires, or may require, a degree of speculation and, at times, the calculations involved may be rough and ready. 7. Other lost profits, not directly arising from lost sales, may also be recoverable so long as they are causally connected to the infringement and not too remote. One common example given is that of the loss of profits arising from foregone sales of chattels (such as CD containers) in which the copyright article would have been sold. 25 To these seven I would add an eighth: 8. There is a difference between cases where a plaintiff cannot adduce precise evidence of what has been lost and cases where a plaintiff, although able to do so, has not done so: Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 77 ALJR 768 at 774 [37]-[38] per Hayne J (with whom Gleeson CJ, McHugh and Kirby JJ agreed); applied to s 115(2) by the Full Court in Aristocrat Technologies Australia Pty Ltd v DAP Services (Kempsey) Pty Ltd (2007) 157 FCR 564 at 569-570 [35]-[39] per Black CJ and Jacobson J, 581-582 [101]-[103] per Rares J. V – Evidence of Lost Sales 26 Flashback's claims for damages fell into two categories: 1. Lost profits arising from the sale by Showtime to ALDI of 27,840 copies of the children's DVDs on 28 February 2008. The argument, in short, was that if Showtime had not sold the DVDs to ALDI, Flashback would have done so. The foregone profit was said to be $1.68 per DVD on a sale price of $3 which amounted to $46,771.20. 2. Lost future sales of the children's DVDs sold to ALDI in the period between December 2008 and May 2010 in the order of 90,000 discs. Here the argument was that ALDI had ceased to do business with Flashback after the dispute between Flashback and Showtime became known to it. Again, a rate of profit of $1.68 was claimed for a total of $151,200. 27 I accept the claim in (1) but I reject the claim in (2). My reasons for this are as follows. 28 Mr Hume, one of Flashback's directors, gave evidence on its behalf and was cross-examined. In his affidavit he deposed to an estimate on his part of 30,000 DVDs at a profit margin of $1.68. The pleaded case was that Showtime had sold 27,840 copies of the DVDs to ALDI. There was a separate pleaded case relating to the sale of another 30,000 DVDs to a different entity but that case was not pursued at the damages hearing. The entered judgment stands for the proposition that Mr Leslie authorised the sale by Showtime of 27,840 DVDs to ALDI and is therefore liable to Flashback in damages. I proceed on the basis of 27,840 DVDs. 29 The unexpressed premise in Flashback's argument is that ALDI would have purchased the DVDs from Flashback if it had not purchased them from Showtime. In favour of concluding that that premise is sound is the fact that Flashback is the exclusive licensee so that, in the ordinary course of events, ALDI would not have been able to purchase them elsewhere. Against it, however, is the absence of any evidence to indicate that ALDI would have agreed to pay Flashback's asking price of $3 per DVD. There is no ready way to resolve that debate save by observing that the facts at least bespeak a desire on ALDI's part to purchase the DVDs. In the circumstances I propose to proceed on the basis of a finding that a sale of 27,840 DVDs by Flashback to ALDI would have occurred. 30 Mr Hume gave evidence that the profit margin was $1.68 on a sale price of $3. He provided no supporting documentation for that figure but under cross-examination he explained the basis upon which it was calculated and indicated that the primary documentation was available if the cross-examiner wished to have access to it. The hearing extended over two days and that answer was given on the first day. No attempt was made on Mr Leslie's behalf to call for the documents referred to by Mr Hume. In the circumstances I accept the validity of his calculation of $1.68 as the relevant profit margin. 31 The application of that figure to 27,840 DVDs results in a damages sum of $46,771.20. I propose to reduce this to $40,000 to reflect the possibility that ALDI may well have sought a lower price than $3 per DVD. 32 I turn then to the second claim. Mr Hume sought a sum based on sales of 90,000 of the children's DVDs for the 17month period from December 2008 to May 2010. The steps in this argument were: (a) after ALDI became aware of the situation between Showtime and Flashback it ceased to do business with Flashback; and (b) but for that occurrence Flashback would have sold a further 90,000 of the children's DVDs to ALDI. 33 The figure 90,000 was said to be derived from assessing Flashback's past sales to ALDI in the years following 2004. 34 I would accept the first step (a) which, in substance, requires an assessment of the motives of ALDI. Mr Leslie objected that the evidence showed that ALDI was still dealing with Flashback and that the alleged cessation of trading had not, in fact, occurred. Reliance was placed on a facsimile sent by ALDI to Flashback dated 16 January 2009 which called for tenders from interested suppliers. Mr Hume gave evidence, from which he was not shaken, that this facsimile was a standard pro-forma tender request which Flashback, along with others, received. The difficulty was, so he said, that none of Flashback's tenders were accepted. I accept this evidence not only because Mr Hume was not moved from it but because the facsimile in question is addressed to "Dear David Ogilvy" which has the appearance of being a computer generated correspondence. 35 Accepting then that ALDI has, in fact, ceased dealing with Flashback the question then arises, why? 36 During the hearing three theories contended for the field: (a) ALDI had chosen not to deal with Flashback out of a concern not to become embroiled in a dispute about copyright ownership and was avoiding dealing either with Flashback or Showtime; (b) ALDI had decided to move out of the product range being offered by Flashback and the cessation of dealing was, therefore, unconnected to anything done by Showtime; (c) ALDI had continued to be willing to accept tenders from Flashback but the quality of Flashback's tenders were so poor or uncompetitive that none of them had been successful. 37 Both Mr Leslie and Mr Hume gave evidence about the intentions of ALDI. Most of Mr Leslie's evidence on this score was excluded by reason of objections which were raised but many of Mr Hume's statements about this topic were received into evidence when no objection was taken. Despite that, I propose to treat all such evidence as having no weight. Ascertainment of the motives of ALDI is to proceed by reference to inferences drawn from objectively available facts, not the subjective opinions of the protagonists. For completeness, no party sought to adduce evidence from ALDI but neither was under any obligation so to do. 38 I reject the proposition that ALDI had decided to move out of the relevant product range. The evidence for this proposition was said to consist, I think, of ALDI and Big W catalogues. However, none of them was tendered in evidence and I remain ignorant of their contents. Mr Hume was asked some questions about them – indeed he produced some of them from his briefcase during his cross-examination – but none of his answers advanced the proposition now under consideration. A later attempt on Mr Leslie's behalf to prove something about an ALDI advertisement extracted from the internet petered out before any document was tendered. In the circumstances, there is simply not a sufficient basis in the evidence to embrace this view. It was also put that Flashback's sales to ALDI could be seen as declining. However, whilst, the evidence suggested that in one year the sales were lower than in the previous year this is simply not a sufficient basis to conclude the existence of a trend. Still less could it provide a basis for deducing that the decline was caused by any particular set of circumstances. 39 I also reject the argument that Flashback's tenders were of insufficient quality. There were, I think, two aspects to this point. First, there was an undated product submission form with the list of children's DVDs attached to it and handwritten words "DVD Children" on the front. I do not accept that this is an example of Flashback's tender documentation. A number of such tenders were in evidence and they were detailed including, as might be expected, prices, quantities, samples and so on. I can fathom no reason why Flashback's tenders might generally be of acceptable quality but be of substandard quality in the case of ALDI. 40 The second point was allied to the first. None of the tenders provided by Mr Hume were tenders to ALDI. The point being made was that there had been no such tenders by Flashback and this is why no orders were being received from ALDI. Mr Hume agreed that he had not been able to locate any such tenders within Flashback's records and that they must have gone missing. Unlike tax invoices, however, I can see no pressing reason why such documents would necessarily need to be kept. I accept the anomaly of some, but not all, of Flashback's tender documents being available but I do not feel that I can conclude from that that I should reject Mr Hume's evidence that tenders to ALDI had been done. I am fortified in that conclusion by the absence of any compelling reason why Flashback would stop tendering to a large client like ALDI. 41 That leaves only the fact that ALDI ceased using Flashback after the dispute became known to ALDI. I can well understand why its attitude may well have been to cease to deal with either Flashback or Showtime so as not to involve itself needlessly in a potentially dyspeptic dispute about an inexpensive range of children's DVDs. I note, for completeness, that Mr Leslie gave evidence that ALDI had not used the services of Showtime since the events in question. In those circumstances, I conclude that ALDI ceased to deal with Flashback because it did not wish to be involved with disputing parties with questionable title to the product they were tendering to sell. 42 Mr Hume estimated that there would have been a further 90,000 of the children's DVDs sold to ALDI. The evidence relied upon Mr Hume to make good that proposition was the invoices for all sales made by Flashback to ALDI in the years 2004-2008. 43 Those invoices do not bear out Mr Hume's arithmetic. They reveal the following volumes of sales for each years 2004-2007: 2004 14,140 2005 4,752 2006 11,750 2007 14,750 Total 45,392 44 Taking an annual average this amounts to 11,348 sales per annum whereas Mr Hume's evidence proceeds on the basis of sale of 90,000 over 17 months. More significantly, the invoices show that the items sold were not the children's DVDs but, perhaps unsurprisingly, a miscellany of titles including CDs and DVDs and ranging from karaoke to romantic comedy. In that circumstance, I cannot conclude that Flashback lost sales of 90,000 of the children's DVDs in the periods between December 2008 and May 2010. 45 However, as I have previously indicated, loss may be recovered even in respect of items which are not the copyright works themselves. In this case, it is a reasonable inference that ALDI's decision not to treat with Flashback has cost it profits not only on the children's DVDs but on all of its other product lines too. The invoices in evidence suggest total sales of 45,392 DVDs and CDs at a total cost (excluding GST) of $180,534.52. Adjusted for the 17 month window between December 2008 and May 2010 this would suggest sales in the vicinity of $63,939.31. However, whilst Mr Hume gave evidence about the profit margin on the children's DVDs he did not give evidence on the margin on other products. In those circumstances, it has not proved this element of its loss. To be plain, the reason for this is because: (a) I am affirmatively satisfied that Flashback would not have sold 90,000 of the children's DVDs to ALDI in the period December 2008 to May 2010; and (b) whilst I am satisfied that revenue of $63,939.31 on a range of titles has probably been foregone I cannot perceive the profit margin and, therefore, cannot calculate the profits which have been lost. 46 Put another way, this is a case not of difficulty of calculation but of failure to prove loss. VI - Relief 47 In the circumstances it is appropriate to give judgment in favour of Flashback against Mr Leslie in the sum of $40,000 together with interest pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth). Given the circumstances of the litigation, it is appropriate to grant the injunctive relief sought. I see no utility, however, in granting any additional declaratory relief. I will hear further argument on the question of costs on a date to be arranged with my Associate. The parties are to bring in short minutes of order giving effect to these reasons within 14 days. I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. Associate: Dated: 2 July 2010	8,215
federal_court_of_australia:fca/single/2020/2020fca1176	decision	commonwealth	federal_court_of_australia	text/html	2020-08-14 00:00:00	BDS20 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 1176	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2020/2020fca1176	2024-09-13T22:44:45.731160+10:00	Federal Court of Australia BDS20 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 1176 File number: NSD 300 of 2020 Judgment of: STEWART J Date of judgment: 14 August 2020 Catchwords: MIGRATION – application for judicial review of a decision by the Minister not to revoke the mandatory cancellation of the applicant's visa under section 501CA of the Migration Act 1958 (Cth) – where representations for revocation made out of time – where Minister accepted that representations were made in time but later said that they were not – whether subsequent invitation for further representations recommenced time running – whether despite previously having taken the contrary position, the Minister lacked power to revoke the visa cancellation where representations were made out of time – application dismissed Legislation: Migration Act 1958 (Cth) ss 36, 198, 501, 501CA Migration Regulations 1994 (Cth) reg 2.52 Cases cited: Ali v Minister for Home Affairs [2020] FCAFC 109 Beni v Minister for Immigration and Border Protection [2018] FCAFC 228; 267 FCR 15 Fernando v Minister for Immigration and Multicultural Affairs [2000] FCA 324; 97 FCR 407 Gedeon v Commissioner of New South Wales Crime Commission [2008] HCA 43; 236 CLR 120 Hossain v Minister for Immigration and Border Protection [2018] HCA 34; 264 CLR 123 Minister for Immigration and Border Protection v SZMTA [2019] HCA 3; 264 CLR 421 Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 Rail Corporation New South Wales v Brown [2012] NSWCA 296; 82 NSWLR 318 Tasker v Fullwood [1978] 1 NSWLR 20 Division: General Division Registry: New South Wales National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 59 Date of hearing: 23 July 2020 Counsel for the Applicant: R Chia Solicitor for the Applicant: Oumaru Kamara & Associates Counsel for the Respondent: C Lenehan SC with G Johnson Solicitor for the Respondent: Sparke Helmore Lawyers ORDERS NSD 300 of 2020 BETWEEN: BDS20 Applicant AND: MINISTER FOR IMMIGRATION, CITIZENSHIP, MIGRANT SERVICES AND MULTICULTURAL AFFAIRS Respondent order made by: STEWART J DATE OF ORDER: 14 August 2020 THE COURT ORDERS THAT: 1. The originating application for judicial review of a migration decision filed on 17 March 2020 is dismissed. 2. The respondent is to pay the applicant's costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT STEWART J: Introduction 1 The applicant is from Sierra Leone. When he was 15 years of age, he, his mother and his siblings escaped the Sierra Leone civil war after witnessing his father being beaten to death and their home being burnt down. His father was a prominent journalist and human rights activist. The applicant and his family then spent four or five years in refugee camps in the Republic of Guinea before coming to Australia. The applicant did so on a Global Special Humanitarian (Class XB) (subclass 202) visa. That was in 2009. 2 Three years later, when the applicant was 23 years of age, he committed offences one evening in Bankstown which may result in him being returned to Sierra Leone where he says that he knows no one and he fears he will be killed like his father. The applicant was convicted in the District Court of New South Wales in 2015 of two counts of sexual intercourse without consent. He was sentenced to an aggregate term of seven years and three months imprisonment, with a non-parole period of three years and 11 months. On any view, the offences were serious and he does not submit to the contrary. 3 On 22 June 2017, the applicant's visa was cancelled by a delegate of the Minister under s 501(3A) of the Migration Act 1958 (Cth) on the basis that he has a "substantial criminal record" as referred to in s 501(7)(c) and therefore failed the "character test" as referred to in s 501(6)(a) and he was serving a sentence of imprisonment on a full-time basis as referred to in s 501(3A)(b) of the Act. 4 The Minister for Immigration and Border Protection, as the relevant Minister was then styled, invited the applicant under s 501CA(3) of the Act to make representations to him in support of the revocation by him of the original decision to cancel the applicant's visa. On 24 February 2020, the Minister of Home Affairs, as the Minister was then styled, decided that he was not satisfied that "there is another reason why the original decision should be revoked" within the meaning of s 501CA(4)(b)(ii) and that accordingly "the power in s 501CA(4) of the Act to revoke the original decision is not enlivened". The cancellation of the applicant's visa was therefore not revoked as had been sought by him. 5 The applicant seeks an order against the Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs, as the Minister is now styled, quashing the decision not to revoke the cancellation of the applicant's visa and a writ of mandamus directed to the Minister requiring him to determine the applicant's revocation application according to law. 6 Although the originating application sets out three broadly expressed grounds of application, in written submissions on behalf of the applicant the complaint is stated in substance to be the following: in making the finding of jurisdictional fact that he was not satisfied that there was "another reason" why the decision to cancel the applicant's visa should be revoked, the Minister failed to take into account a relevant consideration, namely the Minister failed to give proper, genuine and realistic consideration to the applicant's claims in relation to Australia's non-refoulement obligations. A threshold question 7 In what is sometimes referred to as a point in limine, the Minister submits that his power under s 501CA(4) of the Act was not enlivened in this case because the applicant failed to make representations in accordance with the invitation, i.e. within the 28 day time limit imposed under s 501CA(3)(b) of the Act read with reg 2.52(2)(b) of the Migration Regulations 1994 (Cth). The point is taken by the Minister notwithstanding that in his non-revocation decision he concluded the opposite, namely that "[the applicant] has made representations in accordance with the invitation, as required under s 501CA(4)(a) of the Act". 8 Notice of the threshold point was first given by the Minister by email from the Minister's solicitors on 29 June 2020, some three weeks before the hearing. The Minister did not oppose the applicant filing a late affidavit to respond to the point, and on that basis the applicant did not oppose the point being taken. The applicant, however, submitted that the point should be rejected. 9 The Minister also puts the threshold point on an alternative basis, namely that even if the substantive ground of review concerning failure to have regard to Australia's non-refoulement obligations is otherwise good, which is to say the error alleged is made out, the error is not material and is therefore not jurisdictional error because the Minister would in any event have no power to revoke the cancellation decision. That is because the representations had been made outside of the applicable time limit with the result that the power was not enlivened. The statutory framework 10 Section 501CA of the Act relevantly provides as follows: (1) This section applies if the Minister makes a decision (the original decision) under subsection 501(3A) (person serving sentence of imprisonment) to cancel a visa that has been granted to a person. (2) For the purposes of this section, relevant information is information (other than non‑disclosable information) that the Minister considers: (a) would be the reason, or a part of the reason, for making the original decision; and (b) is specifically about the person or another person and is not just about a class of persons of which the person or other person is a member. (3) As soon as practicable after making the original decision, the Minister must: (a) give the person, in the way that the Minister considers appropriate in the circumstances: (i) a written notice that sets out the original decision; and (ii) particulars of the relevant information; and (b) invite the person to make representations to the Minister, within the period and in the manner ascertained in accordance with the regulations, about revocation of the original decision. (4) The Minister may revoke the original decision if: (a) the person makes representations in accordance with the invitation; and (b) the Minister is satisfied: (i) that the person passes the character test (as defined by section 501); or (ii) that there is another reason why the original decision should be revoked. 11 Regulation 2.52 of the Regulations relevantly provides as follows: (1) This regulation applies to representations made to the Minister under paragraphs 501C(3)(b) and 501CA(3)(b) of the Act. (2) The representations must be made: (a) for a representation under paragraph 501C(3)(b) of the Act—within 7 days after the person is given the notice under subparagraph 501C(3)(a)(i) of the Act; and (b) for a representation under paragraph 501CA(3)(b) of the Act—within 28 days after the person is given the notice and the particulars of relevant information under paragraph 501CA(3)(a) of the Act. 12 There is no express power in the Act or in the Regulations to waive or extend the 28 day time period provided for in reg 2.52(2)(b). The Governor-General has the power to make and therefore to amend the Regulations under s 504 of the Act. Relevant chronology 13 The notice to the applicant advising him of the cancellation of his visa under s 501(3A) of the Act and inviting him to make submissions in support of the revocation of the cancellation is dated 22 June 2017. It is directed to the applicant in the Bathurst Correctional Centre for hand delivery. 14 In a statutory declaration, the applicant's mother stated that on 22 June 2017 the applicant rang her from gaol and told her that he had received a document cancelling his visa and that the document was in his possession. It was thus accepted that time began to run on that day with the result that the 28 day period expired at midnight on 20 July 2017. 15 The applicant's mother travelled to Bathurst and collected the documents from the applicant on 24 June 2017. She arranged, and kept, an appointment with the Legal Aid Sydney office on 27 June 2017. At the appointment, she was interviewed by a legal aid officer whereafter various documents including letters and references from family members and members of the community were assembled. The applicant's mother stated that she kept in constant touch with the legal aid officer. 16 On 18 July 2017, the applicant's mother visited the Legal Aid office to ascertain the status of the application and was told that the legal aid officer would email the application to the Department of Immigration and Border Protection rather than it being mailed to the Department. Unfortunately, and for reasons that are not explored in the evidence, that was not done within the time period. 17 On 4 September 2017, which is to say some six weeks later, the legal aid officer emailed documents to the Department in support of the revocation of the cancellation of the applicant's visa. That was the first response on behalf of the applicant to the invitation to provide submissions in support of revocation. 18 By letter dated 5 September 2017, the Department acknowledged receipt of the emails from Legal Aid on 4 September 2017 but advised the applicant that the representations on his behalf were not made within the prescribed time period with the result that the Minister could not consider revoking the decision to cancel his visa. 19 There followed further correspondence and representations between the applicant and the Department but the latter maintained its position that the submissions had been made out of time and that consideration could therefore not be given to the revocation of the cancellation. The correspondence culminated in a letter from the Department to the applicant dated 14 November 2017 which stated that the Department had "determined" that the applicant's representations were not made within the prescribed time period and that the Minister could therefore not consider revoking the decision to cancel the applicant's visa. 20 As a result, on 23 November 2017 the applicant filed an application in the Administrative Appeals Tribunal (AAT) in which he sought merits review of the decision of 14 November 2017. The matter proceeded in the AAT for a period of time in which the AAT made directions for the filing of submissions by the parties on the question of whether the AAT had jurisdiction to deal with the application. 21 Prior to the Minister's submissions being due to be filed under the directions of the AAT, a representative of the Minister called the applicant's solicitor by telephone to resolve the matter before the AAT by consent. At the hearing in this Court, the parties agreed a factual statement of what took place in that telephone conversation as follows: A solicitor with carriage of the AAT proceedings on behalf of the Minister had a phone call with the applicant's solicitor during which he discussed with the applicant's solicitor withdrawing the applicant's AAT proceeding because the Minister's department had accepted that the representations had been made within time. 22 By letter dated 23 March 2018 and emailed to the applicant on that day, the Department (then styled the Department of Home Affairs) informed the applicant that "[t]he Department considers that you have made representations in accordance with the invitation [of 22 June 2017]", and that the applicant would be notified when a decision had been made about whether or not to revoke the decision to cancel his visa. 23 The applicant accepted what had been said on behalf of the Department and advised the AAT that he wished to withdraw the proceeding in the AAT. By letter dated 9 April 2018, the AAT acknowledged receipt of the withdrawal application and advised that the matter had consequently been dismissed. 24 On 1 February 2019, the applicant's solicitor emailed the Department in which reference was made to the "agreement … to withdraw the application" to the AAT and an update on the progress of the matter was requested. On the same day, the Department replied saying that because of "the care and attention required in assessing cases under section 501 … cases are currently taking a significant amount of time to finalize" and that it was not possible to provide any indicative timeframe with regard to when the matter would be finalised. 25 On 11 April 2019, the Department emailed a letter to the applicant's solicitor. The letter: enclosed a "Personal Circumstances Form" and requested that it be completed and returned; advised that further information which might be taken into account in making the decision whether to revoke the cancellation had been received, namely a National Criminal History Check released on 5 March 2019 which was enclosed with the letter, and invited the applicant to comment on that further information; enclosed the new Direction 79 – Visa refusal and cancellation under s501 and revocation of a mandatory cancellation of a visa under s501CA – which revoked and replaced the previous Direction 65 on 28 February 2019 and requested the applicant to address each paragraph in Part C of Direction 79 that is relevant to his circumstances; specified that any response to the above should be received by the Department no later than 28 days from the date that the applicant is taken to have received the letter. 26 The period of 28 days referred to in the letter of 11 April 2019 expired at midnight on 9 May 2019. On 8 May 2019, the applicant's solicitor emailed a letter, the personal circumstances form duly completed, submissions, character references and other material to the Department in response to the letter of 11 April 2019. It was common ground that that was within the specified 28 day period. 27 As indicated, on 24 February 2020 the Minister decided not to revoke the cancellation of the applicant's visa. The Minister's statement of reasons includes the following: [The applicant] failed to make representations within the prescribed period and sought merits review at the Administrative Appeals Tribunal (AAT); a decision was subsequently made by the department to accept the revocation request and supporting documents were received from [the applicant] on 4 September 2017. These representations were deemed to have been made within the period and in the manner ascertained in accordance with the regulations. Thus, I conclude that [the applicant] has made representations in accordance with the invitation, as required under s501CA(4)(a) of the Act. 28 On 17 March 2020 the originating application in this proceeding was filed, and, as indicated, on 29 June 2020 the Minister first gave notice that he intended to argue that there was no power to revoke the cancellation of the applicant's visa because the applicant had not made representations within the requisite 28 days. 29 This new attitude by the Minister is completely at odds with the position taken on his behalf in settling the AAT proceeding in early 2018 (see [21] above), the position taken by the Department in its letters of 23 March 2018 ([22] above) and 11 April 2019 ([25] above) and the Minister's stated conclusion in his reasons of 24 February 2020 ([27] above). The submissions 30 The Minister submits that his power to revoke the cancellation of a visa under s 501CA(4) arises only if two criteria are met: first, the applicant "makes representations in accordance with the invitation" (para (4)(a)), and, second, the Minister is satisfied that the person passes the character test or that there is another reason why the original decision should be revoked (para (4)(b)). It is the first criterion that is presently relevant. 31 The Minister submits that the first criterion is premised upon a person having made "representations" and that those have "period" and "manner" requirements determined by the regulations, as referred to in s 501CA(3)(b). A failure to comply with the temporal requirement, i.e. to make the representations within the "period" prescribed, would mean that the representations were not made "in accordance with" the invitation with the result that the essential pre-condition for the valid exercise of the power in s 501CA(4)(a) was not met. 32 The Minister refers to Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [93] for the proposition that the test for determining the validity of something done contrary to a statutory requirement is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. Further, in determining the question of purpose, regard must be had to the language of the relevant provision and the scope and object of the whole statute. 33 The Minister submits that time limitation provisions ordinarily are interpreted as imposing a mandatory, rather than a directory, obligation and refers to Pearce D, Statutory Interpretation in Australia (9th ed, LexisNexis Butterworths, 2019) at [11.26] and Fernando v Minister for Immigration and Multicultural Affairs [2000] FCA 324; 97 FCR 407 at [31]. 34 The Minister submits that the principal reason for that approach is because where a provision states, for example, that an application is to be commenced within the specified time, and provides no power to extend the time stated, a construction that would permit such an application to be validly commenced in any event effectively renders such a provision otiose: Rail Corporation New South Wales v Brown [2012] NSWCA 296; 82 NSWLR 318 at [42]. 35 The Minister submits that his letter of 22 June 2017 was written notice with particulars as required by s 501CA(3)(a) and an invitation referred to in s 501CA(3)(b) and, as is common ground, it was received by the applicant on 22 June 2017. Thus, the applicant was "given the notice and the particulars" on that day as referred to in reg 2.52(2)(b) and the 28 day time period commenced. Representations were not received until 4 September 2017, well outside the period with the result that the Minister's power was not enlivened. 36 The Minister submits that the fact that he later sought further information from the applicant by the letter dated 11 April 2019 does not impact on that conclusion. That "invitation" was not a notice setting out the original decision with particulars of the relevant information as referred to in s 501CA(3)(a) and could therefore not be regarded as commencing time running under reg 2.52(2)(b). 37 In those circumstances, the Minister submits that the only decision available to him in respect of the applicant's request for revocation was the decision that he in fact made, namely determining not to revoke the original decision. He submitted that any error made in the purported discharge of his function, as alleged by the applicant in his substantive ground of review, could not be a material error in that the error could not "realistically have resulted in a different decision": Minister for Immigration and Border Protection v SZMTA [2019] HCA 3; 264 CLR 421 at [45] and [48]. 38 The applicant submits that the letter of 11 April 2019 in which further representations or submissions were sought from him constituted a second invitation which, as it stated, gave him a further 28 days within which to respond. He submits that this was an invitation "to make representations to the Minister, within the period and in the manner ascertained in accordance with the regulations, about revocation of the original decision" within the meaning of s 501CA(3)(b) of the Act. He submits that since he responded within the required timeframe, this was an independent basis upon which the condition in s 501CA(4)(a) was met. 39 The applicant also submits that on the principal ground of review no question of jurisdictional error arises, and therefore the Minister's submission with regard to materiality is misplaced. The applicant submits that the question of the Minister's satisfaction as to there being another reason to revoke the cancellation as referred to in s 501CA(4)(b)(ii) is a jurisdictional fact, albeit a subjective jurisdictional fact, so the ground of review does not require the establishment of jurisdictional error. The applicant refers to Ali v Minister for Home Affairs [2020] FCAFC 109 at [39]-[44] in that regard. Consideration 40 The criterion for the exercise of the Minister's power to revoke a visa cancellation expressed in s 501CA(4)(a) of the Act, i.e. that the person makes representations in accordance with the invitation, is an objective jurisdictional fact: Ali at [40] per Collier, Reeves and Derrington JJ. That is to say, "the satisfaction of [the criterion] enlivens the exercise of the statutory power or discretion in question" and "if the criterion be not satisfied then the decision purportedly made an exercise of the power or discretion will have been made without the necessary statutory authority required of the decision maker": Gedeon v Commissioner of New South Wales Crime Commission [2008] HCA 43; 236 CLR 120 at [43] per Gummow, Kirby, Hayne, Heydon, Crennan and Kiefel JJ. 41 With reference to reg 2.52(2)(b), it is to be observed that the period of 28 days within which the representations must be made is calculated with reference to when "the person is given the notice and the particulars of relevant information under paragraph 501CA(3)(a) of the Act". That is to say, it is the giving of "a written notice that sets out the original decision" and "particulars of the relevant information" to the person under paragraph (a) that starts time running, and not the giving of the invitation under paragraph (b). 42 It is possible that the invitation is given separately from and later than the written notice of the decision and the particulars of the relevant information. It is therefore possible that the invitation is given more than 28 days after the written notice of the decision and the particulars of the relevant information. That would make it impossible for the person to respond to the invitation by making representations within the period of 28 days. That would defeat the legislative purpose, which is to give the person the opportunity to make representations in support of the revocation of the cancellation decision, and cannot be regarded to have been intended. 43 Therefore, and since the representations are necessarily made in response to the invitation – that must flow from the requirement that the representations are made "in accordance with the invitation" in s 501CA(4)(a) – time can only start to run once both (a) the notice of the decision and particulars of the relevant information and (b) the invitation to make representations have been given. 44 In this case, that was done by the letter of 22 June 2017 that was received by the applicant that day. It was not contended that that letter did not meet the requirements of s 501CA(3) and I am satisfied that it did. There is therefore no question that time started to run on 22 June 2017, that the 28 day period ended on 20 July 2017 and that representations were not received by the Department until 4 September 2017. 45 I do not see any basis on which it can be concluded that the letter of 11 April 2019 constituted a fresh invitation such as to recommence the running of time and re-enliven the Minister's power. It did not constitute a notice setting out the original decision and it did not give particulars of the relevant information. Indeed, it records in its opening paragraph that notice of the original decision, particulars of the relevant information and an invitation to make representations about the revocation of the original decision were given by the notice dated 22 June 2017. 46 It is perhaps significant that the criterion in s 501CA(4)(a) refers to representations in accordance with "the invitation", not "an invitation". The invitation referred to is the invitation given under s 501CA(3)(b). That invitation was given by the letter dated 22 June 2017. Whilst the letter of 11 April 29 constituted an invitation, it was not "the invitation". I therefore cannot accede to the applicant's invitation to treat the letter of 11 April 2019 as a fresh invitation within the meaning of s 501CA(4)(a) such as to re-enliven the power. 47 The next question is what the consequence is of the failure by the applicant to make representations in time. As identified in Project Blue Sky, the test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. In determining the question of purpose, regard must be had to "the language of the relevant provision and the scope and object of the whole statute" (at [93] per McHugh, Gummow, Kirby and Hayne JJ quoting Tasker v Fullwood [1978] 1 NSWLR 20 at 24). 48 There are indications in the Act that the time period stipulated for the making of representations under s 501CA(3)(b) is inflexible and requires certainty. For example, under ss 198(2A) and 198(2B) an officer must remove as soon as reasonably practicable an unlawful non-citizen if certain circumstances exist including, relevantly, in a case where the non-citizen has been invited, in accordance with s 501CA, to make representations to the Minister about revocation of a decision to cancel a visa, and the non-citizen has not made representations "in accordance with the invitation and the period for making representations has ended". It would introduce uncertainty contrary to the statutory scheme if even after the relevant period has expired and representations have not been made, the person could later make representations such as to enliven the power to revoke the cancellation. 49 Those considerations of certainty are similar to those observed in relation to the consequence of the failure to observe the time periods for applying to review Pt 5 and Pt 7 reviewable decisions in Beni v Minister for Immigration and Border Protection [2018] FCAFC 228; 267 FCR 15 at [82] per McKerracher, Reeves and Thawley JJ. It was said to be highly improbable that Parliament intended to allow important removal powers to be defeated by removing fixed periods within which persons can seek merits review. 50 I accept the Minister's submission that in the case of a time limit provision the scope for interpreting it other than as a strict requirement that if not met results in invalidity is generally unavoidable. That is because the obvious purpose of such a statutory rule is to exclude any subsequent exercise of power where the relevant act is done outside the relevant time period – subject to any express or implied discretionary power to extend the time period or excuse the lateness of the relevant act. It was not contended by the applicant that such a power exists in this case, and I can find no basis to conclude that it does. 51 There is plainly a strong case to be made for the introduction of a discretion to extend time in appropriate cases, but that is a matter for Parliament by way of amendment to the Act or the Executive Government by way of amendment of the Regulations. It is not relevant to the task facing the Court. 52 In those circumstances, the inevitable conclusion is that when the 28 day period expired on 20 July 2017 and the applicant had not yet made representations for the revocation of the cancellation of his visa, the power to revoke the cancellation given by s 501CA was spent and it could not be revived by the lateness of submissions being overlooked or by the Minister giving another invitation. 53 That conclusion also deals with the question whether the substantive ground of review in order to succeed must involve jurisdictional error and in that way invoke the materiality requirement discussed in cases such as Hossain v Minister for Immigration and Border Protection [2018] HCA 34; 264 CLR 123 at [30]-[31] and SZMTA at [45] and [48]. Since the Minister lacked jurisdiction to make any decision to revoke the cancellation of the applicant's visa, he could not lawfully have reached any conclusion other than the one that he did, namely that his power to revoke the cancellation was not enlivened. The fact that he made it for the wrong reason, that is to say on the basis of the jurisdictional fiction that s 501CA(4)(a) was satisfied and that the jurisdictional fact in s 501CA(4)(b) was not satisfied does not make any difference – he simply lacked the power to do anything other than to, in effect, reject the application which is what he did. The substantive ground of review 54 In view of my conclusion on the threshold question, it is not necessary to deal with the substantive ground in any detail. 55 The applicant claimed in his representations to the Minister that if he was returned to Sierra Leone he feared he would be harmed and that doing so would be in breach of Australia's non-refoulement obligations. However, the Minister did not make findings on the issue of non-refoulement. Instead, the Minister reasoned that a protection visa application is a key mechanism provided by the Act for considering claims by a non-citizen that they would suffer harm if returned to their home country and that any such claim by the applicant could be fully considered through the making of a protection visa application. 56 In my view, as in Ali (at [99]), whilst the Minister considered the level of harm faced by the applicant should he be returned to Sierra Leone, at no stage was there any consideration of which, if any, non-refoulement obligations was owed in respect of the applicant by reason of s 36(2) of the Act or any wider obligation, and nor was there any consideration of the consequences of returning the applicant to Sierra Leone in breach of Australia's treaty obligations. I do not find Ali to be relevantly distinguishable, as submitted by the Minister. 57 Thus, but for my conclusion on the threshold question, I would have quashed the Minister's decision and returned it to him for reconsideration. Conclusion and costs 58 In the circumstances, however unpalatable it might seem in the light of the Minister's last minute volte-face and the hardship wrought on the applicant, there is no alternative than to dismiss the application. 59 Due to the conduct of the Minister, through his Department, settling the AAT proceeding on the basis that the applicant's representations would be accepted, the acceptance of those representations as having been made within time and the raising of the threshold question only on the eve of the final hearing, in my view justice in this case requires that the Minister pay the applicant's costs of the application notwithstanding the substantive result – if the Minister had taken and maintained the correct legal position in relation to his powers from the outset the application, at least in its present form, would never have been brought. The Minister did not put any submissions to the contrary. I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Stewart. Associate: Dated: 14 August 2020	7,261
federal_court_of_australia:fca/single/2023/2023fca1343	decision	commonwealth	federal_court_of_australia	text/html	2023-11-03 00:00:00	Save the Children Australia v Minister for Home Affairs [2023] FCA 1343	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2023/2023fca1343	2024-09-13T22:44:48.609804+10:00	Federal Court of Australia Save the Children Australia v Minister for Home Affairs [2023] FCA 1343 File number: VID 403 of 2023 Judgment of: MOSHINSKY J Date of judgment: 3 November 2023 Catchwords: ADMINISTRATIVE LAW – habeas corpus – where Australian women and their children were being detained by a non-state actor in camps in North-East Syria – where the applicant (a registered charity with the purpose of supporting children in need) applied for the issue of a writ of habeas corpus against the Minister for Home Affairs and the Commonwealth – where the respondents did not have custody of the relevant women and children – whether the respondents had control over the detention of the relevant women and children – whether the writ should issue to test whether the respondents had control over the detention of the relevant women and children – held: application for writ of habeas corpus refused ADMINISTRATIVE LAW – judicial review – where Australian women and their children were being detained by a non-state actor in camps in North-East Syria – where the applicant (a registered charity with the purpose of supporting children in need) applied for judicial review of a decision by the Minister for Home Affairs or another officer of the Commonwealth not to repatriate the relevant women and children – where there was no evidence of such a decision having been made – where the applicant applied, in the alternative, for relief in relation to a failure by the respondents to decide whether or not to repatriate the relevant women and children – whether the respondents were under a requirement to decide whether to repatriate the women and children – held: application for judicial review refused Legislation: Evidence Act 1995 (Cth), ss 75, 190 Federal Court of Australia Act 1976 (Cth), s 23 Judiciary Act 1901 (Cth), s 39B Irish Free State Constitution Act 1922 (UK) Restoration of Order in Ireland Regulations 1920 (UK), reg 14B Cases cited: Australian Competition and Consumer Commission v PT Garuda Indonesia (No 9) [2013] FCA 323; 212 FCR 406 Barnardo v Ford [1892] AC 326 C3 v Secretary of State for Foreign, Commonwealth & Development Affairs [2023] EWCA Civ 444; [2023] 3 WLR 529 Ex parte Mwenya [1960] 1 QB 241 Hicks v Ruddock [2007] FCA 299; 156 FCR 574 In re Sankoh (2000) 119 ILR 386 Jones v Dunkel [1959] HCA 8; 101 CLR 298 McHugh v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCAFC 223; 283 FCR 602 Plaintiff M68/2015 v Minister for Immigration and Broder Protection [2016] HCA 1; 257 CLR 42 R (Abbasi) v Secretary of State for Foreign & Commonwealth Affairs [2002] EWCA Civ 159 R v Secretary of State for Home Affairs; ex parte O'Brien [1923] 2 KB 361 Rahmatullah v Secretary of State for Defence [2011] EWCA Civ 1540; [2012] 1 WLR 1462 Rahmatullah v Secretary of State for Defence [2012] UKSC 48; [2013] 1 AC 614 Secretary of State for Home Affairs v O'Brien [1923] AC 603 Division: General Division Registry: Victoria National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 123 Date of hearing: 26 and 28 September 2023 Counsel for the Applicant: Mr P Morrissey SC with Mr E Nekvapil SC, Ms R Taylor, Mr N Petrie and Ms K Brown Solicitor for the Applicant: Birchgrove Legal Counsel for the First and Second Respondents: Mr C Lenehan SC with Mr C Tran, Ms K McInnes and Ms M Jackson Solicitor for the First and Second Respondents: Australian Government Solicitor ORDERS VID 403 of 2023 BETWEEN: SAVE THE CHILDREN AUSTRALIA Applicant AND: MINISTER FOR HOME AFFAIRS First Respondent COMMONWEALTH OF AUSTRALIA Second Respondent order made by: MOSHINSKY J DATE OF ORDER: 3 NOVEMBER 2023 THE COURT ORDERS THAT: 1. The application be dismissed. 2. Within 14 days, the parties submit any agreed minute of orders on costs. 3. If the parties cannot agree, then within 21 days, each party file and serve a written submission (of no more than three pages) on costs, and the issue of costs will be determined on the papers. 4. The Court's reasons for judgment be published, in the first instance, on a confidential basis to the parties, to enable them to consider whether to seek confidentiality orders with respect to any part of the judgment. Within two business days, the parties provide the Court with any submission on proposed confidentiality orders. 5. Subject to further order, the Court's reasons for judgment otherwise be and remain confidential for a period of seven days. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MOSHINSKY J: Introduction 1 By this proceeding, the applicant, Save The Children Australia (STCA), a registered charity with the stated purpose of supporting children in need, seeks orders and declarations against the Minister for Home Affairs and the Commonwealth of Australia (the respondents), relating to certain Australian women and their children (34 people in total) who are being detained in North-East Syria in camps including the Al-Roj camp (the relevant women and children). It appears that the women are Australian citizens and that their children are either Australian citizens or eligible to become Australian citizens. The relevant women and children are being detained by the Autonomous Administration of North East Syria (AANES) and/or its military wing, the Syrian Democratic Forces (SDF). AANES and SDF are supported by a coalition of countries known as the Global Coalition against Daesh/ISIS (the Coalition), which includes the United States of America, the United Kingdom and Australia. ISIS refers to the Islamic State in Iraq and Syria. It is also known as Islamic State and as ISIL (Islamic State in Iraq and the Levant). 2 In practical terms, what STCA is seeking to achieve is to have the Australian Government repatriate (bring to Australia) the women and children who are the subject of this proceeding. The Australian Government did this in October 2022 for four Australian citizen women and their 13 children (a total of 17 people) in a similar plight. However, for reasons that are unexplained in the evidence, the Australian Government does not seem to be taking steps to repatriate the remaining Australian women and their children. 3 By its originating application, STCA seeks the following relief (in summary): (a) an order that a writ of habeas corpus issue against the respondents in respect of the relevant women and their children, alternatively in respect of certain women and their children (31 people in total) who have authorised STCA to act on their behalf (the STCA Women and Children); (b) on the return of the writ, an order that the relevant women and children (alternatively, the STCA Women and Children) be released; (c) alternatively to (a) and (b), a declaration that, in making a decision not to repatriate the relevant women and children, the Minister for Home Affairs or another officer of the Commonwealth took into account a prohibited consideration, acted for an ulterior purpose, or acted unreasonably; (d) alternatively to (c), a declaration that, in failing to make a decision to repatriate the relevant women and children, the Minister for Home Affairs or the Commonwealth acted for an ulterior purpose or acted unreasonably; (e) alternatively to (d), mandamus, alternatively an injunction, compelling the Minister for Home Affairs or the Commonwealth by an appropriate officer to properly consider certain letters from STCA (dated 19 May 2023 and 23 May 2023) and to decide whether or not to repatriate the relevant women and children. 4 The application proceeded on the basis that the Court was not dealing, at this stage, with the application for the relief set out in (b) above. The parties conducted the hearing on the basis that the relief sought in (b) above would be dealt with at a later stage, on the return of the writ (if the Court decided to issue the writ). The overwhelming focus of the oral submissions was on the application for a writ of habeas corpus. Very little time was spent in oral submissions on the application for the relief set out in (c), (d) and (e) above, with both sides largely relying on their written submissions. 5 There is no issue between the parties as to the Court's jurisdiction in the present matter. I consider that the Court has jurisdiction in the present matter under s 39B(1) of the Judiciary Act 1901 (Cth), which refers to "any matter in respect of which a writ of mandamus or prohibition or an injunction is sought against an officer or officers of the Commonwealth". There is no issue between the parties as to the Court's power to issue a writ of habeas corpus. Given that the Court has jurisdiction in the matter, it has power to issue a writ of habeas corpus: see s 23 of the Federal Court of Australia Act 1976 (Cth) ("[t]he Court has power, in relation to matters in which it has jurisdiction, … to issue … writs of such kinds, as the Court thinks appropriate") and McHugh v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCAFC 223; 283 FCR 602 (McHugh) at [20]-[23] per Allsop CJ, [75] per Besanko J and [190]-[214] per Mortimer J (as her Honour then was). 6 The respondents accept that STCA has standing to bring the proceeding in respect of the STCA Women and Children. However, the respondents contend that STCA does not have standing to bring the proceeding with respect to the other relevant women and children (who have not authorised STCA to seek relief on their behalf). 7 There is no issue between the parties that the relevant women and children are being detained by AANES and/or SDF. 8 Further, there is no issue between the parties that the detention is prima facie unlawful: STCA contends that the detention is prima facie unlawful and the respondents do not put forward any argument as to the legality of the relevant women and children's detention and do not seek to rely on the act of state doctrine. In circumstances where the relevant women and children are being detained, and there is no evidence that they have been charged with any crime, I accept that the detention is prima facie unlawful. 9 As discussed later in these reasons, the cases establish that actual physical custody of the relevant person is not essential (for a defendant or respondent to be amenable to a writ of habeas corpus); it is sufficient if the defendant or respondent has control over the person's detention: R v Secretary of State for Home Affairs; ex parte O'Brien [1923] 2 KB 361 (O'Brien) at 398; Rahmatullah v Secretary of State for Defence [2012] UKSC 48; [2013] 1 AC 614 (Rahmatullah) at [43], [90]-[91], [109]. Further, it is established that it is sufficient if the control is de facto (as distinct from de jure) control: O'Brien at 398; Rahmatullah at [48]. There is no issue between the parties about these propositions. 10 STCA's key contentions in support of its application for a writ of habeas corpus can be summarised as follows. STCA contends that, where it appears that the respondent has control over the detention of the relevant person or, at least, the Court entertains a doubt as to whether the respondent has control, the Court can use the "pressure of the writ" to test the truth of the respondent's assertion of a lack of control. In support of that contention, STCA relies on a series of three decisions of the United Kingdom courts: Barnardo v Ford [1892] AC 326 (Barnardo); O'Brien; and Rahmatullah. STCA contends that, in the present case, it appears that the respondents have control over the detention of the relevant women and children or, at least, there is doubt as to whether the respondents have control. Accordingly, STCA contends, the writ should issue to test the respondents' assertion that they do not have control. 11 The respondents contend, in summary, that the evidence establishes that they do not have control over the detention of the relevant women and children and, therefore, the writ of habeas corpus should not issue. The respondents contend that the three cases relied on by STCA are distinguishable. Further, the respondents rely on C3 v Secretary of State for Foreign, Commonwealth & Development Affairs [2023] EWCA Civ 444; [2023] 3 WLR 529 (C3), which they contend is factually more similar to the present case. 12 For the reasons that follow, I have decided, in summary: (a) I am satisfied (on the balance of probabilities) that the respondents do not have control over the detention of the relevant women and children. Accordingly, in my view, a writ of habeas corpus should not issue. (b) In relation to the application for judicial review of a decision not to repatriate (or seek the repatriation of) the relevant women and children, I am not satisfied that any such decision has been made. Insofar as STCA seeks relief in relation to a failure to make a decision (whether or not to repatriate, or seek the repatriation of, the women and children), this part of the application is premised on there being a requirement to make such a decision. However, I am not satisfied that there is any such requirement. Accordingly, the application for judicial review is rejected. 13 It follows that the application is to be dismissed. The hearing and the evidence 14 The hearing took place over two hearing days: the evidence was dealt with on the first hearing day; and the second hearing day was devoted to closing oral submissions. 15 STCA relied on affidavits of the following deponents: (a) Mathew Tinkler, the Chief Executive Officer of STCA; (b) Joshua McDonald, a media advisor with STCA; (c) Gary Dabboussy; (d) Dr Anan Haidar, a Research Fellow at the Institute for International Peace and Security Law, Cologne University; (e) Professor Michael Newton, a Director of the International Legal Studies Program, Professor of the Practice of Law, and Professor of the Practice of Political Science at the Vanderbilt Law School in Nashville, Tennessee; (f) Peter Galbraith, a former US Ambassador; and (g) Professor Gregory Barton, a Research Professor in Global Islamic Politics at the Alfred Deakin Institute, Deakin University; a Scholar in Residence at Asia Society Australia; and a Senior Fellow at Hedayah, Abu Dhabi. 16 There are two affidavits of Mr Tinkler in evidence. The first affidavit (dated 5 June 2023) annexes a statement prepared by Mr Tinkler dated 18 May 2023 (the Tinkler Statement) that was provided to the Minister for Home Affairs before the commencement of the proceeding. 17 Each of Dr Haidar, Professor Newton, Ambassador Galbraith and Professor Barton gave expert evidence in the form of expert reports annexed to their affidavits. 18 None of the witnesses called by STCA were required to attend for cross-examination. 19 The respondents relied on affidavits of the following deponents: (a) Rear Admiral James Lybrand, who holds the rank of Rear Admiral in the Royal Australian Navy (RAN); he was the Director General Operations and Plans (J3) at Headquarters Joint Operations Command (in the Australian Defence Force (ADF)) from 6 December 2021 to 14 July 2023; (b) Kathleen Logan, who is currently the First Assistant Secretary of the Pacific Strategy Division (PSD) in the Department of Foreign Affairs and Trade (DFAT), a position she has held since 24 July 2023; she was the First Assistant Secretary of the Consular and Crisis Management Division (CCD) (within DFAT) from around July 2021 to July 2023; (c) Ciara Spencer, the First Assistant Secretary of the CCD, a position she has held since 31 July 2023; (d) Josefina Booth, a Principal Legal Officer/Director of the Character, Citizenship and Removal Litigation Section of the Migration and Citizenship Litigation Branch in the Legal Group of the Department of Home Affairs; and (e) Scot Wu, an officer in the Border Systems Support Section of the Australian Border Force (ABF); the ABF operates within the Department of Home Affairs. 20 Rear Admiral Lybrand and Ms Logan were cross-examined. Each of them gave evidence in a clear and straightforward manner and in a way that was designed to assist the Court. I accept their evidence. 21 The other witnesses called by the respondents were not required for cross-examination. 22 The respondents did not call Marc Innes-Brown. In 2022, he was the Australian Government's Special Envoy to liaise with AANES to facilitate the return to Australia of Australians who were located in the Al-Roj camp. He led the Australian Government's communications with AANES in relation to the repatriation of Australian women and children that took place in October 2022. STCA contends that an adverse inference should be drawn from the failure to call him, relying on Jones v Dunkel [1959] HCA 8; 101 CLR 298. 23 The respondents filed a lengthy list of objections to STCA's evidence (marked as "MFI-1"). An earlier version of this document (dated 22 September 2023) included a section at the beginning headed "Global observations of the applicant", which set out STCA's submissions on a number of global issues raised by the respondents' objections. The objections were dealt with on the first day of the hearing. I note the following in relation to two global issues raised by the respondents' objections: (a) The first issue was whether the application (insofar as it concerned a writ of habeas corpus) was interlocutory or final. Many of the respondents' objections were that the evidence was hearsay and therefore inadmissible. In response, STCA relied on (among other things) s 75 of the Evidence Act 1995 (Cth), which provides that, in an interlocutory proceeding, the hearsay rule does not apply to evidence if the party who adduces it also adduces evidence of its source. The respondents contended in response that the application was final not interlocutory. Having regard to an observation in McHugh that the remedy of habeas corpus is "interlocutory in character" (see McHugh at [21] per Allsop CJ, a paragraph with which Besanko J (at [75]) and Mortimer J (at [199]) agreed), I said that I would proceed on the basis that the application was interlocutory and would admit the evidence, but I would give the parties the opportunity to make further submissions about the issue in closing submissions. I said that, if I formed the view that the application is final, then I would not have regard to the hearsay evidence (unless it were admissible on some other basis). The parties made submissions on the issue in final submissions. I accept that (as submitted by the respondents) there does not appear to have been a live issue in McHugh as to whether the application was interlocutory or final. Nevertheless, it remains the case that all three Judges in that case described habeas corpus as a remedy that is interlocutory in character. Ultimately, I do not consider it necessary to resolve the issue. This is because, if the application is final, I would consider it appropriate to exercise the discretion in s 190(3) of the Evidence Act to order that the provisions of the Act relating to hearsay evidence do not apply in relation to this category of evidence on the basis that the application of those provisions would cause or involve unnecessary expense and delay. Given the plight of the relevant women and children, the application is urgent. Further, obtaining evidence from the relevant women and children in their current circumstances would be difficult. I would therefore exercise the power in s 190(3) in relation to this category of evidence. (b) The second issue was concerned with evidence about international law. The respondents objected to this evidence (contained in some of the expert reports) on the basis that international law (as with domestic law) is not a matter for proof by evidence, citing Australian Competition and Consumer Commission v PT Garuda Indonesia (No 9) [2013] FCA 323; 212 FCR 406 at [32]-[48] per Perram J. I said that whether the evidence of international law was admissible raised a complex issue. I said that, given that complexity, I would admit the evidence and give the parties the opportunity to make submissions on the issue in closing submissions. I said that, if I was persuaded that the evidence was not a matter for proof by evidence, I would not have regard to it. In the event, neither party made submissions on the issue in closing submissions. I do not consider it necessary to resolve the issue because nothing turns on the evidence about international law for the resolution of the application. Factual findings General matters 24 In this section, I set out some general facts and matters that do not appear to be controversial between the parties. This section is based on evidence that was not the subject of objection and not challenged. 25 In paragraphs 37-39 of the Tinkler Statement, Mr Tinkler states that, based on his review, he believes that each of the relevant women is an Australian citizen and their children are either Australian citizens or eligible to become Australian citizens. He provides reasons for holding those beliefs. I will proceed on the basis that each of the women is an Australian citizen, and each of the children is, or is eligible to become, an Australian citizen. Mr Tinkler states at paragraph 25 of that statement, and I accept, that the relevant women and children are currently being detained in the Al-Roj camp because of their associations (voluntary or involuntary) with Islamic State. There is no evidence that any of the women or children have been charged with any crime. 26 Australia is a member of the Coalition, which was formed in 2014 to combat ISIS. The Coalition now comprises more than 80 countries including the United States of America and the United Kingdom. The Coalition now performs a role that includes supporting stability in North-East Syria. 27 AANES is the de facto governing authority over a region in North-East Syria that includes the Al-Roj camp. It is a non-state actor. SDF is the military wing of AANES and also a non-state actor. 28 AANES and SDF are reliant on support from the Coalition, including to improve security and ensure that the SDF has control of detention facilities. 29 AANES and/or SDF have control over detention facilities and camps in North-East Syria, including the Al-Roj camp. SDF guards the perimeter of the Al-Roj camp. Within the camp, most security is provided by the all-female YPJ (People's Protection Force), a component of SDF. Ambassador Galbraith describes Al-Roj as a "prison camp". As with any prison, the responsible authorities (in this case, SDF, YPJ and AANES) restrict the movement and activities of detainees. Conditions in the Al-Roj camp are described in the Tinkler Statement and the report of Ambassador Galbraith. 30 Australia funds a number of humanitarian organisations that provide assistance in the camps. 31 AANES and SDF leaders have stated publicly that they would like countries to repatriate citizens held in the camps. The camps are a major burden for them. 32 The United States has repeatedly called on countries to repatriate their citizens. When asked to do so, the US Government has assisted countries in repatriating their citizens. 33 Many countries have successfully repatriated some or all of their citizens from camps in North-East Syria. This includes the United States, Germany, Belgium, Sweden, Finland, the Netherlands, Denmark, Albania, Kosovo, Bosnia-Hercegovina, Russia and Indonesia. The October 2022 repatriation 34 In October 2022, the Australian Government successfully effected the release from detention in Al-Roj and the repatriation of four Australian citizen women and their 13 children (the October 2022 repatriation). 35 The October 2022 repatriation was co-ordinated by a Joint Agency Taskforce (JATF) of the Australian Government. The JATF was led by the Department of Home Affairs and included (but was not limited to) National Intelligence Community Agencies, DFAT, the Attorney-General's Department and the Australian Federal Police. Within the JATF, DFAT was responsible for the offshore consular aspects of the operation. The repatriation in 2022 required extensive preparation over several months, including detailed safety and security risk assessments based on continuous, real-time information monitoring, and the identification and implementation of appropriate risk mitigation measures; the operation was a sensitive and complex undertaking that required significant resources. 36 Australian officials led by Mr Innes-Brown liaised with AANES representatives via email and then met them in person in connection with the repatriation. 37 On 27 September 2022, Mr Innes-Brown sent an email to the Head of the Office of External Relations of AANES. Mr Innes-Brown's email included: I am also writing to introduce myself and to advise you that I have been appointed as the Australian Government's Special Envoy to liaise with you and your Administration to facilitate the return to Australia of Australians that are currently located in Al Roj Camp. The Australian Government wishes to repatriate 4 women and 13 children from Al Roj Cap to Australia in coming weeks, subject to appropriate checks. I would be grateful for your assistance in supporting and facilitating this proposal. The email included a list with the names of the four women and their 13 children who Australia was seeking to repatriate. 38 On 28 September 2022, an internal DFAT email reported on a meeting between a DFAT officer or representative and the External Affairs Office of AANES on the same day. The summary of the meeting included: • [name redacted] said he had received the email from Australia's Special Envoy, Marc Innes-Brown. The AANES were fully prepared and willing to cooperate with the Australian Government to undertake the repatriation operation. AANES considered this a humanitarian operation, given the problems Northeast Syria was suffering from. There were currently citizens from around 50 countries in the camps, most of these were women and children. The were exposed to security risks and terrorism and it was not a favourable living environment. As a result, the AANES wanted to cooperate with any country to repatriate individuals as soon as possible. • We said we would appreciate AANES assistance to ensure our operation went smoothly. • [name redacted] said AANES were willing to facilitate all procedures. AANES would provide all security and protection on the ground. The AANES procedures were simple – some specific paperwork had to be completed and signed between the repatriating country and AANES. Also, every State had the option to make a statement thanking AANES – this would be a matter for the State. 39 The evidence includes an AANES document headed "Procedures Required for the Repatriation of Foreign Nationals". The procedures were as follows: The Autonomous Administration of North and East Syria (AANES) sets forth the following procedures for countries to repatriate their citizens from North and East Syria (NES). 1- The country is expected to submit an official request to repatriate its citizens by sending an email from the official email address of its Foreign Ministry to the official email address of the Department of Foreign Relations (DFR) in the AANES, which is [email address redacted]. The two sides will arrange either an in-person or a virtual meeting to discuss the procedures. 2- The country should provide the DFR with a list of names, photos, or any other relevant information about their nationals. 3- The DFR will share the list with the Camps Administration and Rehabilitation Centres to identify them, check their conditions, and facilitate and arrange the repatriation process. 4- The DFR will communicate with the country to set a convenient date, agreed upon by both sides, for repatriation. An official delegation representing the Ministry of Foreign Affairs is expected to visit NES to take back their citizens. 5- The DFR will provide logistical support to facilitate the process, and will send the protocol officers to accompany the delegation from the border to the headquarters of the DFR in Qamishli, where the delegation will receive their citizens. 6- The two sides will sign a repatriation document that is prepared by the DFR, and each party will get a signed copy. 7- The head of the visiting delegation is expected to make a short media statement to thank the AANES for its cooperation and for facilitating the process of repatriation and providing care for their citizens during their presence in the AANES regions. They should kindly refer to and acknowledge the sacrifice of the Syrian Democratic Forces and their role in fighting against terrorism. Any further remarks can be added to the statement, if the delegation so desire. 8- The repatriation is usually conducted [place details redacted]. However, the AANES is open to consider other options. 9- We enclose a copy of the repatriation document. 40 A copy of the repatriation document (referred to in paragraph 9 of the procedures document) is included in the evidence. It is a pro forma document with certain details to be completed, including the name of the person to be repatriated. The document has a place for it to be signed by a representative of AANES and a representative of the repatriating country. 41 On 29 September 2022, the Department of Foreign Relations of AANES sent an email to Mr Innes-Brown, acknowledging receipt of his email and stating that they would start working on the list in his email. 42 On 29 September 2022, Mr Innes-Brown sent an email in reply, expressing his thanks for "this very welcome and prompt response". 43 On 2 October 2022, Mr Innes-Brown sent an email to the Department of Foreign Relations of AANES. The email referred to the repatriation procedures document and stated that the formal request to repatriate the 17 people had been conveyed in his earlier email of 27 September 2022. The email set out the names again. The email also stated that the Australian Government "kindly wishes to propose that the requested repatriation of the above people take place approximately in the last week of October 2022". The email stated that Mr Innes-Brown would travel to North-East Syria to meet with the Department of Foreign Relations to facilitate the "operation" and that he would be accompanied by a small number of Australian security personnel. The email stated that he was willing to sign a mutually agreed repatriation document, and that he was willing to make a short media statement as proposed in the repatriation procedures document. 44 On 3 October 2022, the Department of Foreign Relations of AANES sent an email to Mr Innes-Brown informing him that 27 October 2022 would be a suitable date for handing over the Australian nationals. 45 On 7 October 2022, Mr Innes-Brown sent an email to the Department of Foreign Relations of AANES. The email referred to the draft repatriation agreement and stated that the Australian Government proposed a minor change to one of the paragraphs. This change was agreed to in a subsequent email. 46 During October 2022, further emails were exchanged between Mr Innes-Brown and the Department of Foreign Relations of AANES regarding the details of the arrangements for the repatriation of the 17 people. 47 DFAT co-ordinated engagement with foreign governments and local authorities for the purpose of seeking clearance to travel through foreign territory with the women and children and co-operation on travel logistics. This was necessary because the women and children were to travel back to Australia through other territory rather than directly. 48 Commonwealth agencies took steps to obtain and document the informed consent of the four Australian women and their children. To provide informed consent, they needed to understand the nature of the proposed travel and the risks associated with that travel. 49 To effect the repatriation, DFAT officials were required to be deployed to, and undertake activities in, places with a dangerous security situation and which are designated by the Australian Government as Do Not Travel locations for this reason. 50 DFAT (specifically, CCD) had to arrange appropriate transportation for the women and children and accompanying Australian officials to Australia. This included ground transportation and a charter flight with medical professionals. 51 The evidence includes a DFAT file note of a meeting on 24 October 2022. This is a record of a meeting between a DFAT officer or representative and AANES. The file note records that the purpose of the meeting was "to co-ordinate arrangements for the repatriation of Cohort 1 on 27 October", that is, the four women and their 13 children. The file note contains several further references to that group as "Cohort 1". The file note includes: … The Administration was eager to assist with a successful repatriation, but indicated they too had established a set of processes which they used with all countries conducting repatriation. … In closing the meeting [name redacted] stated that they saw the repatriation as a humanitarian activity and indicated that they look forward to future cooperation with Australia on foreign relation[s], humanitarian issues and the economy. 52 On 27 October 2022, Mr Innes-Brown met with AANES, signed the repatriation document as representative of the Australian Government and issued a short media statement on behalf of the Australian Government. On the same day, the four women and their children were released by AANES to the Australian Government. The women and children were then repatriated to Australia. 53 On 28 October 2022, Mr Innes-Brown sent an email to others at DFAT reporting on his meeting with AANES on the day of the repatriation (27 October 2022). He stated that the formalities "went smoothly" and that the meeting "was conducted in a positive tenor". Attached to the email was a copy of the signed repatriation document. Mr Innes-Brown stated that he would write a full record when he returned the following week. 54 The evidence includes a file note prepared by Mr Innes-Brown of his meeting with AANES on 27 October 2022. The file note includes: [name redacted] said AANES was appreciative of the efforts of the Australian Government to repatriate some women and children. At all times AANES had sought to play a facilitation role. They believed that women and children were victims of this war. For years AANES had been asking for a solution to ISIS families as the facilities of AANES were unable to deal with this challenge alone. Therefore they appreciated the Australian Government's repatriation decision. He hoped this would lead to cooperation – not just on the repatriation – with AANES to support the establishment of security in the region. … I (Marc Innes-Brown) said the Australian Government was very appreciative of the cooperation of the Syrian Kurd authorities on repatriation arrangements. The cooperation had been very smooth. I also thanked them for the care they had provided to these Australian citizens over recent years. I also acknowledged the sacrifices made by the Syrian Kurds in the fight against Daesh (very similar to my public statement made at the conclusion of the meeting). [name redacted] said he wished to reassure me that AANES was ready to cooperate with Australia to achieve humanitarian outcomes. … Noting the plan to repatriate further groups of women and children and the long distance from Australia, I asked whether it would be necessary to travel to North and East Syria as part of this process. [name redacted] said yes – they preferred to have a senior Government official attend to take responsibility. Additional notes: At no point did I make any commitment to undertake wider cooperation and/or provide funding for AANES. … 55 On the basis of the facts and matters, and evidence, set out above, I find that: (a) it was necessary for the Australian Government to make an official request to repatriate the four Australian women and their children before they would be released; (b) AANES agreed to the request for repatriation of the women and children, subject to compliance with its procedural requirements; (c) AANES imposed certain procedural requirements in connection with repatriation of the women and children, including that a repatriation document be signed by a representative of the Australian Government and that the head of the visiting delegation make a short media statement as set out in paragraph 7 of the repatriation procedures document (see [39] above); (d) the Australian Government was willing to accept the procedural requirements in order to repatriate the women and children; and (e) AANES co-operated fully with the Australian Government to repatriate the women and children. 56 To the extent that the email dated 28 September 2022 (see [38] above) may suggest that a media statement was not a requirement and was merely optional, the evidence as a whole suggests that it was a requirement. 57 Although the file note of the meeting on 24 October 2022 (see [51] above) describes the group of four women and their children as "Cohort 1" and Mr Innes-Brown's file note of his meeting on 27 October 2022 (see [54] above) refers to "the plan to repatriate further groups of women and children", I am not satisfied that any agreement or arrangement was reached at that time between the Australian Government and AANES regarding the repatriation of the remaining Australian women and their children in the Al-Roj camp. A process of discovery has taken place in this proceeding and the respondents have not produced any document resembling (or evidencing) an agreement or arrangement between the Australian Government and AANES regarding the repatriation of the remaining Australian women and their children. The description "Cohort 1" is consistent with there being an expectation or proposal that further repatriations would be requested. It does not establish that there was an agreement or arrangement to repatriate the remaining Australian women and children. Read in context, the word "plan" indicates that, at that time, the Australian Government was planning to request more repatriations. However, this falls short of an agreement or arrangement between the Australian Government and AANES for that to occur. The repatriation procedures document (see [39] above) and the whole process undertaken in connection with the October 2022 repatriation makes clear that it would be necessary for the Australian Government to make a request for repatriation in relation to some or all of the remaining women and children and that any such request would then be considered by AANES; it would also be necessary for the Australian Government to agree to the procedural requirements stipulated by AANES in relation to any such future repatriation. For these reasons, and notwithstanding that Mr Innes-Brown and the other Australian Government officials referred to by STCA in its closing submissions were not called, I am not satisfied that there was an agreement or arrangement to repatriate the remaining Australian women and their children. Further repatriations 58 Based on the evidence before the Court, the Australian Government does not seem to be taking steps to repatriate the remaining Australian women and their children in the Al-Roj camp. The evidence does not explain why the Australian Government is not doing so (in circumstances where it seems that, in October 2022, it was planning to do so). 59 I infer from the facts and matters set out above and the affidavit evidence of Ms Logan (at paragraph 69) and Ms Spencer (at paragraph 13) that, if the Australian Government were to request the repatriation of some or all of the Australian women and their children held in the Al-Roj camp, it is likely that AANES would agree to their repatriation, and co-operate fully to achieve their repatriation, subject to compliance with its procedural requirements. The evidence establishes that AANES wants countries such as Australia to repatriate their citizens and that keeping them in camps is a burden on AANES. The evidence relating to the October 2022 repatriation shows that AANES co-operated fully with the Australian Government to achieve the repatriation of the four women and their children. Consideration Habeas corpus 60 As set out in the Introduction, STCA contends that, where it appears that the respondent to an application for a writ of habeas corpus has control over the detention of the relevant person or, at least, the Court entertains a doubt as to whether the respondent has control, the Court can use the "pressure of the writ" to test the truth of the respondent's assertion of a lack of control. STCA relies on Barnardo, O'Brien and Rahmatullah in support of that contention. STCA contends that, in the present case, it appears that the respondents have control over the detention of the relevant woman and children or, at least, there is doubt as to whether the respondents have control. 61 I will put to one side, at this stage, the issue of standing. There is no issue that STCA has standing in relation to the STCA Women and Children. The issue whether a writ of habeas corpus should issue therefore needs to be considered in any event in relation to those women and children. 62 I will start by considering the three cases relied on by STCA. I approach these cases on the basis that, while not binding on me, they are persuasive authority as to the principles applicable to the writ of habeas corpus. 63 The first of the three cases, Barnardo, a judgment of the House of Lords, concerned an application by a parent for a writ of habeas corpus in respect of a child. The application was directed to Dr Barnardo, who was the head of an institution for destitute children in which the child has been placed. Dr Barnardo filed an affidavit stating that, before the commencement of the proceeding, he had handed over the child to another person (a Mr William Norton), an American, and that he (Dr Barnardo) believed that the boy had been taken by Mr Norton to Canada. Dr Barnardo further deposed that he had not, since he handed over the child, heard from the child or Mr Norton, that he did not know where the child or Mr Norton was, and that he had no means of communicating with either of them. 64 The House of Lords affirmed the decision of the Court of Appeal that a writ of habeas corpus should issue. All members of the House of Lords agreed in the result. Separate judgments were delivered by each of the Law Lords, namely Lord Halsbury LC, Lord Watson, Lord Herschell, Lord Macnaghten, Lord Morris and Lord Hannen. Lord Morris agreed with the reasons given in the Queen's Bench Division and in the Court of Appeal. Lord Hannen agreed with the reasons of Lord Herschell. 65 Lord Halsbury referred (at 332) to the fact that, late in the argument, it became apparent that the parties (or, at least, one of them) did not consider that all the facts had already been ascertained, and desired a return to the writ so that, upon the return, further questions of evidence might be raised. Lord Halsbury stated (at 333) that where a Court is satisfied that illegal detention has ceased before the application for the writ was made, the writ ought not issue "as it is not the appropriate procedure for punishing such conduct". However, treating the facts of the present case as still open to inquiry, he held that the appeal should be dismissed (i.e. the writ should issue) on the ground that "the respondents have a right to the return". 66 Lord Watson's judgment was similar to that of Lord Halsbury. Lord Watson stated (at 333) that the remedy of habeas corpus "was not meant to afford the means of inflicting penalties upon those persons by whom they were at some time or other illegally detained". Lord Watson stated (at 335) that, where it is shown to the satisfaction of the Court that the person charged with unlawfully detaining a child or adult had de facto ceased to have any custody or control, the writ should not issue. However, he agreed (at 336) with the opinion of the other Law Lords that the present case "may be more conveniently disposed of after a return has been made to the writ". 67 Lord Herschell stated (at 338) that he could not feel satisfied that it is not a good return to the writ that the person to whom it relates was not at the time it was issued in the custody, power or control of the person on whom it is served. His Lordship stated (at 339-340): Where any tribunal believes that a person is or may be under detention in unlawful custody, and issues a writ of habeas corpus accordingly, no Court of Appeal ought lightly to interfere with the issue of the writ. The order for its issue ought only to be set aside if there be, beyond question, no ground for it. If, for example, in the present case it had been an admitted fact that before notice of the application for the writ the appellant had ceased to have the custody of or any control over the boy alleged to be detained, that might have been ground for reversing the order of the Queen's Bench Division. But where the Court entertains a doubt whether this be the fact, it is unquestionably entitled to use the pressure of the writ to test the truth of the allegation, and to require a return to be made to it. Now, it is impossible to read the judgment of the Lord Chief Justice without seeing that he did entertain such a doubt, and that he was not prepared upon the affidavits to accept as conclusive the statements of the appellant. At your Lordships' bar the counsel for the respondent contended that they had a right to cross-examine the appellant, and that the proper occasion on which to try the question was when he had returned to the writ that he was not detaining the child, and that it was not, at the time the writ was issued, in his custody, power, or control. I think this view is the correct one; the truth of the return may, no doubt, be put in issue, and I feel myself unable to advise your Lordships that the Queen's Bench Division were not in point of law justified in issuing the writ. (Emphases added.) 68 Lord Macnaghten stated (at 340) that he could not say that this is a case in which there ought not be an opportunity of further inquiry into the circumstances under which Dr Barnardo parted with the child, and "ascertaining beyond all doubt whether the child is or is not still under Dr Barnardo's control or within his reach". 69 The second case relied on by STCA is O'Brien, a judgment of the English Court of Appeal. An appeal to the House of Lords was dismissed on jurisdictional grounds (see below). 70 The background facts were as follows. Regulation 14B of the Restoration of Order in Ireland Regulations 1920 (UK) gave the Secretary of State for Home Affairs (the Home Secretary) power to order the internment in a place in the British Islands of any person suspected of acting, or having acted, or being about to act, in a manner prejudicial to the restoration or maintenance of order in Ireland. On 5 December 1922, the Irish Free State Constitution Act 1922 (UK) was passed. By the Act, the Irish Free State was given a distinct and independent executive. On 7 March 1923, the Home Secretary made an order under reg 14B that Mr O'Brien, who was then residing in England, should be interned in such place in the Irish Free State as the Irish Free State Government should determine. Mr O'Brien was arrested in London under that order and conveyed to Dublin, where he was interned in Mountjoy Prison. There was an agreement between the Home Secretary and the Irish Free State Government that, if a certain advisory committee reported that Mr O'Brien ought not to have been interned, the Irish Free State Government would release him. Mr O'Brien applied to a Divisional Court for a rule nisi for a writ of habeas corpus directed to the Home Secretary. 71 In his affidavit, the Home Secretary stated that Mr O'Brien was in the custody and control of the Governor of the Mountjoy Prison and that the Governor of the prison was an official of the Irish Free State Government and was not subject to the orders or directions of the Home Secretary or the British Government. 72 The Divisional Court refused the rule nisi. Mr O'Brien applied to the Court of Appeal, which granted a rule nisi. At the subsequent hearing before the Court of Appeal, the Home Secretary contended (among other things) that the application was directed against the wrong person. It was contended that any writ of habeas corpus should be directed to the person who has control of the applicant's body, who in this case was the Governor of Mountjoy Prison. It was contended that the fact that the Home Secretary ordered the arrest did not make him a proper person to whom to direct the writ. 73 The Court of Appeal held that the rule nisi be made absolute (in effect, that a writ of habeas corpus issue against the Home Secretary). There are two aspects to the Court's reasoning. First, the Court held that reg 14B was inconsistent with the Irish Free State Constitution Act 1922, and was impliedly repealed by it, and that the order of internment was consequently invalid. Secondly, the Court held that the application was properly made against the Home Secretary. It is the Court's reasoning on the second aspect that is relevant for present purposes. 74 Separate judgments were delivered by Bankes LJ, Scrutton LJ and Atkin LJ. 75 Bankes LJ considered (at 381) the Home Secretary's contention that, as Mr O'Brien had been deported to and was interned in the Irish Free State, the Home Secretary no longer had any power or control over him (except insofar as the Irish Free State Government had agreed that, in the event the advisory committee decided that Mr O'Brien ought not to have been deported and interned, they would release him). Bankes LJ referred to statements made by the Home Secretary in the House of Commons to the effect that he had not lost control over persons who, by his orders, had been interned in the Irish Free State. Bankes LJ stated (at 381): In his affidavit he [i.e. the Home Secretary] states that the Governor of the Mountjoy Prison is an official of the Free State Government, and is not subject either to his orders or to those of the British Government. This is no doubt an accurate statement in reference to the Governor of the prison, but it leaves the question in doubt how far, if at all, by arrangement with the Free State Government the body of the applicant is under the control of the Home Secretary. This question cannot, I think, be satisfactorily disposed of unless the rule is made absolute which will give the Home Secretary the opportunity, if he desires to take advantage of it, of making the position clearer than at present it appears to be. This was the course taken in Barnardo v. Ford, and is, in my opinion, the appropriate course to take in the present case. The order, therefore, is made absolute. (Footnote omitted.) 76 Scrutton LJ considered (at 391-392) the question whether a writ of habeas corpus was the appropriate remedy for the illegality of the order and detention. Scrutton LJ stated (at 391): Now it has been laid down by the House of Lords in Barnardo v. Ford that if the Court is satisfied that the body whose production is asked is not in the custody, power or control of the person to whom it is sought to address the writ, a writ of habeas corpus is not the proper remedy, though there was an original illegal taking and detention. The object of the writ is not to punish previous illegality, but to release from present illegal detention. I do not wish to tie myself to the exact degree of power over the body which justifies the issue of the writ, for various high authorities have used different words. Lord Herschell's language is "custody, power or control"; Lord Macnaghten's "under control or within reach"; Lord Halsbury's "wrongful detention by himself or his agent." (Footnotes omitted.) 77 After referring to the Home Secretary's statement in the House of Commons that he had not lost control over internees in the Irish Free State, and the Home Secretary's affidavit evidence that Mr O'Brien was in the custody or control of an Irish official who was not subject to the orders or directions of the Home Secretary, Scrutton LJ stated (at 392): On this conflicting evidence, all proceeding from the Home Secretary himself, it appears to me quite doubtful whether or not, if an order is made for the production of the body, the Home Secretary can or cannot produce that body. Under these circumstances I think the proper course to follow is that affirmed by the House of Lords in Barnardo v. Ford. (Footnote omitted.) 78 Atkin LJ considered (at 398-399) the question whether the writ should go to the Home Secretary. In relation to this issue, Atkin LJ stated in part (at 398-399): I think that the question is whether there is evidence that the Home Secretary has the custody or control of the applicant. Actual physical custody is obviously not essential. "Custody" or "control" are the phrases used passim in the opinions of the Lords in Barnardo v. Ford, and in my opinion are a correct measure of liability to the writ. … In testing the validity of the order the question is as to the legal right to control; in testing the liability of the respondent to the writ the question is as to de facto control. In all cases of alleged unjustifiable detention such as arise on applications for the writ of habeas corpus the custody or control is ex hypothesi unlawful; the question is whether it exists in fact. In the present case there may be some doubt. The Home Secretary by the Attorney-General alleged that he has no control; on the other hand the applicant by his affidavit submits reasons for supposing that the Home Secretary is in a position by agreement to cause him to be returned to England, while the answer of the Home Secretary does not in terms deny that he is in such a position; and refrains from stating that he has no control. The affidavit states that the applicant is in the control of the governor of the prison, and is not subject to the Home Secretary's orders, but this is by no means inconsistent with an agreement with the Free State Government to return on request. I think moreover that the applicant strengthens his case by the reference to the debate in Parliament on Monday, March 19, 1923, a report of which was put in. But without further explanation it seems to me that much support for the contention that the Home Secretary retains de facto control is afforded by the words of the order itself, a copy of which is served on the applicant. The order is that the applicant shall "be interned in the Irish Free State . . . . and shall remain there until further orders." It was conceded that the ordinary interpretation of those words would be until further orders by the Home Secretary, though it was said that in fact he had no power to give such orders. I cannot without further explanation accept this. … I cannot explain these provisions on the footing that there is no de facto control. In this case it is plain that the applicant was at one time in the custody and control of the Home Secretary by an order which we have held to be illegal. There is, to say the least, grave doubt whether he is not still in the custody or control of the Home Secretary. The case of Barnardo v. Ford appears to me to afford ample ground for the conclusion that this Court should order the writ to go addressed to the Home Secretary in order that he may deal fully with the matter, and if he has in fact parted with control show fully how that has come about. The rule must be made absolute. (Footnotes omitted.) 79 As noted above, an appeal to the House of Lords was dismissed on jurisdictional grounds: Secretary of State for Home Affairs v O'Brien [1923] AC 603. Lord Atkinson dissented on that issue. It appears from a passage at 624 that he approved of the Court of Appeal's analysis. 80 The third case relied on by STCA is Rahmatullah, a judgment of the Supreme Court of the United Kingdom. The background facts were as follows. Mr Rahmatullah, a national of Pakistan, was captured by British Forces in Iraq in 2004 and handed over to United States forces, who transferred him to Afghanistan, where he was detained at a United States airbase. At that time, a memorandum of understanding between the Governments of the United States, the United Kingdom and Australia (the 2003 MoU) was in place. The 2003 MoU provided that it was to be implemented in accordance with the Geneva Convention relative to the Treatment of Prisoners of War (GC3) and the Geneva Convention relative to the Protection of Civilian Persons in Time of War (GC4), as well as customary international law. Clause 4 of the 2003 MoU provided: Any prisoners of war, civilian internees, and civilian detainees transferred by a detaining power [the UK] will be returned by the accepting power [the US] to the detaining power without delay upon request by the detaining power. 81 In 2008, a revised memorandum of understanding was concluded between the Governments of the United States and the United Kingdom (the 2008 MoU). (This was not signed until 2009.) 82 An application was made on behalf of Mr Rahmatullah for a writ of habeas corpus directed to the Secretary of State for Defence and the Secretary of State for Foreign and Commonwealth Affairs. The Divisional Court of the Queen's Bench Division refused the application. On appeal, the Court of Appeal allowed the appeal and held that the writ of habeas corpus should issue: Rahmatullah v Secretary of State for Defence [2011] EWCA Civ 1540; [2012] 1 WLR 1462. The United Kingdom Government then requested the United States authorities to return Mr Rahmatullah. In response, the United States authorities stated that Mr Rahmatullah's detention was proper and consistent with the international law of armed conflict. A further hearing took place before the Court of Appeal. In a second judgment, the Court of Appeal held that the United Kingdom authorities had made a sufficient return to the writ. 83 The Secretaries of State appealed against the first judgment and Mr Rahmatullah appealed against the second judgment. The United Kingdom Supreme Court dismissed both appeals. In relation to the first judgment of the Court of Appeal, all members of the Supreme Court were of the view that the appeal should be dismissed. In relation to the second judgment of the Court of Appeal, a majority were of the view that the appeal should be dismissed (with Baroness Hale of Richmond and Lord Carnwath JJSC dissenting). 84 Reasons for judgment were delivered by Lord Kerr of Tonaghmore JSC (with whom Lord Dyson MR and Lord Wilson JSC agreed), Lord Phillips of Worth Matravers and Lord Reed JSC. A joint judgment was delivered by Lord Carnwath and Baroness Hale JJSC. For present purposes, it is sufficient to focus on the parts of the judgments dealing with the appeal from the first judgment of the Court of Appeal. 85 Lord Kerr JSC (at [17]) noted evidence (on behalf of the Secretaries of State) that the 2008 MoU was designed to replace and supersede the 2003 MoU. Lord Kerr JSC stated that he was not disposed to accept that claim (for reasons he gave). He also stated that, even if the 2008 MoU did indeed supersede the 2003 MoU, there was no reason to conclude that it had done so for prisoners already transferred under the earlier arrangements. He therefore considered that the UK Government remained entitled to have recourse to the 2003 MoU to demand Mr Rahmatullah's release to them. Lord Kerr JSC stated (at [17]): This provides a sufficient basis for the finding that there was at least uncertainty as to whether the UK could exert control over Mr Rahmatullah. That uncertainty was enough to justify the issue of the writ. 86 Lord Kerr JSC set out some general principles regarding habeas corpus at [41]-[44]. This section included (at [43]): The effectiveness of the remedy would be substantially reduced if it was not available to require someone who had the means of securing the release of a person unlawfully detained to do so, simply because he did not have physical custody of the detainee—"actual physical custody is obviously not essential" per Atkin LJ in Ex p O'Brien [1923] 2 KB 361, 398 and Vaughan Williams LJ in R v Earl of Crewe, Ex p Sekgome [1910] 2 KB 576, 592, stating that the writ "may be addressed to any person who has such control over the imprisonment that he could order the release of the prisoner". 87 The next section of the judgment, at [45]-[64], concerned "control". Lord Kerr JSC stated (at [45]): At the heart of the cases on control in habeas corpus proceedings lies the notion that the person to whom the writ is directed has either actual control of the custody of the applicant or at least the reasonable prospect of being able to exert control over his custody or to secure his production to the court. Thus in Barnardo v Ford [1892] AC 326 where the respondent to the writ had consistently claimed to have handed the child, who was the subject of the application, over to someone whom he was no longer able to contact, the courts nevertheless ordered that the writ should issue because they entertained a doubt as to whether he had indeed relinquished custody of the child. There was therefore a reasonable prospect that the respondent, despite his claims, either had or could obtain custody of the child. (Emphasis added.) 88 Lord Kerr JSC discussed O'Brien, stating (at [48]) that "there was at least a reasonable prospect that the Home Secretary could procure Mr O'Brien's return to England". Lord Kerr JSC stated (at [48]): This highlights the factual nature of the inquiry that must be made as to whether a sufficient degree of control exists. It is not simply a question of the legal enforceability of any right to assert control over the individual detained. The question is, as Atkin LJ put it, whether control "exists in fact". 89 At [52], Lord Kerr JSC stated that a critical, if not the central, issue in O'Brien was "that there was reason to conclude that the Home Secretary had control over Mr O'Brien's release". Lord Kerr JSC stated (at [52]): Habeas corpus was issued in his case not simply because it was held that he had been deported and interned on foot of an order which, it was found, had not been lawfully made. The issue of the writ depended crucially on the finding that it was likely that the Home Secretary could procure Mr O'Brien's release. 90 At [55]-[57], Lord Kerr JSC discussed Ex parte Mwenya [1960] 1 QB 241, noting that there was a clear distinction between the facts of that case and those of O'Brien. Lord Kerr JSC stated (at [57]): "Whereas in O'Brien there were "strong grounds" for believing that the Home Secretary had not lost control over Mr O'Brien's detention, in Mwenya no such grounds existed." 91 In the course of rejecting an argument that the writ in the present case had the effect of requiring the Secretaries of State to engage at a diplomatic level with the custodian state, the US, Lord Kerr JSC stated (at [60]): … In the first place, the Court of Appeal's decision [i.e. in the present case] does not amount to an "instruction" to the Government to demand Mr Rahmatullah's return. Its judgment merely reflects the court's conclusion that there were sufficient grounds for believing that the UK Government had the means of obtaining control over the custody of Mr Rahmatullah. On that basis the court required the Secretaries of State to make a return to the writ. The essential underpinning of the court's conclusion was that there was sufficient reason to believe that the Government could obtain control of Mr Rahmatullah. It might well prove that the only means of establishing whether in fact it could obtain control was for the Government to ask for his return but that remained a matter for the ministers concerned. The Court of Appeal's judgment did not require the Secretaries of State to act in any particular way in order to demonstrate whether they could or could not exert control. What it required of them was that they show, by whatever efficacious means they could, whether or not control existed in fact. 92 At [61]-[62], Lord Kerr JSC discussed In re Sankoh (2000) 119 ILR 386. Lord Kerr JSC concluded his discussion of "control" as follows: 63 For the reasons that I have given at para 60 above, I do not consider that the effect of the Court of Appeal's decision in the present case is to require the British Government to engage in a process of persuasion. It does not involve an attempt to "dictate to the executive government steps that it should take in the course of executing Government foreign policy". Rather it requires the Government to test whether it has the control that it appeared to have over the custody of Mr Rahmatullah and to demonstrate in the return that it makes to the writ that, if it be the case, it does not have the control which would allow it to produce the body of [Mr Rahmatullah] to the court. 64 An applicant for the writ of habeas corpus must therefore demonstrate that the respondent is in actual physical control of the body of the person who is the subject of the writ or that there are reasonable grounds on which it may be concluded that the respondent will be able to assert that control. In this case there was ample reason to believe that the UK Government's request that Mr Rahmatullah be returned to UK authorities would be granted. Not only had the 2003 MoU committed the US armed forces to do that, the Government of the US must have been aware of the UK Government's view that Mr Rahmatullah was entitled to the protection of GC4 and that, on that account, it was bound to seek his return if (as it was bound to do) it considered that his continued detention was in violation of that Convention. (Emphasis added.) 93 I turn now to the other judgments. Lord Phillips of Worth Matravers stated (at [90]-[91]): 90 Habeas corpus will lie not merely against a defendant who is himself detaining the prisoner, but against a defendant who holds the prisoner in his custody or control through another. 91 Typically habeas corpus lies against a defendant who is detaining the prisoner within the jurisdiction of the court. Where a defendant, who is within the jurisdiction, has unlawfully detained the prisoner within the jurisdiction and unlawfully taken him out of the jurisdiction, where he still holds him in his custody or control, habeas corpus will also lie. 94 Lord Phillips stated (at [92]) that the English courts had issued the writ of habeas corpus in two cases "where the defendant had unlawfully removed the prisoner from the jurisdiction and where it was uncertain whether the defendant retained sufficient control over the prisoner to procure his release", referring to Barnardo and O'Brien. In these cases, the "object of the issue of the writ was to put that question to the test". Lord Phillips stated that the principal issue was whether what he called "the O'Brien approach" should be adopted on the facts of the present case. 95 Lord Phillips referred to an "unexplored issue", namely, that no one had suggested that the UK forces acted unlawfully in detaining Mr Rahmatullah in Iraq or in then transferring him to the custody of the United States forces. Putting to one side the unexplored issue, Lord Phillips agreed (at [98]) with the judgment of Lord Kerr JSC. 96 Lord Reed JSC stated (at [108]) that he agreed with the conclusion that the appeal by the Secretaries of State should be dismissed, but he reached that conclusion for reasons that he would express "more narrowly" than Lord Kerr JSC. Lord Reed JSC stated (at [109]-[110]): 109 As Lord Phillips of Worth Matravers has explained, the writ of habeas corpus requires a respondent who is detaining a person ("the prisoner") to produce him before the court and to justify his detention. If the respondent cannot justify his detention of the prisoner, he will be ordered to release him. His failure to comply with such an order will fall within the scope of the court's jurisdiction to deal with contempt. It follows that the appropriate respondent to the writ is in principle the person who has custody or control (or, as it has sometimes been put, actual custody or constructive custody) of the prisoner: that is to say, either the actual gaoler, or some other person who has "such control over the imprisonment that he could order the release of the prisoner": R v Earl of Crewe, Ex p Sekgome [1910] 2 KB 576, 592, per Vaughan Williams LJ. As Scrutton LJ said in R v Secretary of State for Home Affairs, Ex p O'Brien [1923] 2 KB 361, 391, if the court is satisfied that the body whose production is asked is not in the custody, power or control of the person to whom it is sought to address the writ, a writ of habeas corpus is not the proper remedy. 110 Cases can arise in which it is uncertain whether the respondent has sufficient control of the prisoner's detention to be required to justify his detention and to be ordered to release him. In such a case, the court can issue the writ so that it can determine the question of control on the return, with a fuller knowledge of the facts. Barnardo v Ford [1892] AC 326 and Ex p O'Brien are examples. 97 At [112], Lord Reed JSC stated that the Court of Appeal, on the basis of its analysis of the evidence, concluded "that there was sufficient uncertainty to justify the issue of the writ". Lord Reed JSC stated that this appeared to have been a "reasonable conclusion". He then set out the relevant facts that supported that conclusion. 98 Lord Reed JSC stated, at [115], that he considered it important that Mr Rahmatullah was initially detained by British forces, with the consequence that the question was whether the Secretaries of State's control over him had been relinquished. Otherwise, there may be insufficient connection with the jurisdiction. Lord Reed JSC also stated that, like Lord Phillips, he would wish to reserve his opinion on the unexplored issue. 99 Lord Carnwath and Baroness Hale JJSC stated (at [118]) that, on the issue of control, "the effect of the two MoUs concluded in 2003 and 2008 is crucial". They considered it doubtful whether provisions of an international treaty (GC4) could on their own be relied on as giving control for the purposes of the domestic law of habeas corpus. They considered (at [119]) clause 4 of the 2003 MoU to be "crucial" because, on the evidence, "it was designed specifically to ensure that the United Kingdom did retain control over the continuing legality of the detention". They noted (at [120]) the possible issue as to whether the 2008 MoU, which did not contain an equivalent clause, was intended to alter the position in relation to those already detained. They said that the evidence was equivocal on this point and the document did not in terms have that effect. Lord Carnwath and Baroness Hale JJSC stated (at [121]) that they were not unduly concerned by the unexplored issue identified by Lord Phillips and Lord Reed JSC, explaining their reasons for holding that view. Lord Carnwath and Baroness Hale JJSC stated (at [123]): As to the authorities, we accept of course that there are factual differences from O'Brien, in particular because in that case, unlike the present, the original detention was itself unlawful. However, habeas corpus is equally applicable where detention, originally lawful, later becomes unlawful. It is true also that in this case the illegality of the detention arose through the actions of the US, rather than the UK, and at a time when the UK no longer had actual custody. However, it is difficult to see why this should make a difference in principle. Since illegality of detention is presumed in favour of the applicant, it should not be a defence for the UK to say that it arose from someone else's actions, if the UK has the practical ability to bring it to an end. 100 I note that O'Brien and Rahmatullah were referred to by Gageler J in Plaintiff M68/2015 v Minister for Immigration and Broder Protection [2016] HCA 1; 257 CLR 42 at [165]. His Honour stated: Amenability to the writ is determined solely as a question of whether the person to whom the writ is addressed has de facto control over the liberty of the person who has been detained, in relation to which actual physical custody is sufficient but not essential. In support of that proposition, Gageler J cited O'Brien at 391 and 398 and Rahmatullah at [43] and [109]. 101 The principles discussed in O'Brien and Rahmatullah were considered by the England and Wales Court of Appeal in C3. STCA submits that aspects of the reasoning of the Court of Appeal express the principles more narrowly than the judgments in Rahmatullah. For present purposes, it is sufficient to focus on the three cases relied on by STCA. 102 I do not consider it necessary to discuss the judgment in Hicks v Ruddock [2007] FCA 299; 156 FCR 574 (Hicks), as this concerned a strike-out application rather than a judgment on whether the writ of habeas corpus should issue. 103 The following propositions emerge from the cases discussed above: (a) For a defendant or respondent to be amenable to a writ of habeas corpus, actual physical custody of the relevant person is not essential; it is sufficient if the defendant or respondent has control over the detention of the relevant person: O'Brien at 398 per Atkin LJ; Rahmatullah at [43] per Lord Kerr JSC, at [90]-[91] per Lord Phillips of Worth Matravers, at [109] per Lord Reed JSC. (b) The question whether a defendant or respondent has control over the detention of the relevant person is concerned with whether control exists in fact (as distinct from in law): O'Brien at 398 per Atkin LJ; Rahmatullah at [48] per Lord Kerr JSC. (c) Control may be established, for example, where there is an agreement or arrangement (whether or not legally enforceable) between the person who is detaining the relevant person and the defendant/respondent whereby the relevant person will be handed over upon demand: O'Brien at 398-399 per Atkin LJ. (d) If the Court is satisfied that the relevant person is not in the custody or control of a defendant or respondent, a writ of habeas corpus ought not issue: Barnardo at 335 per Lord Watson; O'Brien at 391 per Scrutton LJ; Rahmatullah at [109] per Lord Reed JSC. (e) Where a defendant or respondent contends that he or she does not have custody or control over the relevant person, and the Court is left in doubt about the matter, it is open to the Court to use the "pressure of the writ" to test whether the defendant's or respondent's contention is correct: Barnardo at 339 per Lord Herschell; O'Brien at 381 per Bankes LJ, at 392 per Scrutton LJ, at 399 per Atkin LJ; Rahmatullah at [45], [60], [63]-[64] per Lord Kerr JSC, [92] per Lord Phillips of Worth Matravers, [110] per Lord Reed JSC. 104 Applying these propositions in the present case, I am satisfied (on the balance of probabilities) that the relevant women and children are not in the custody or control of the respondents. 105 Plainly, they are not in the custody of the respondents; they are in the custody of the AANES and/or the SDF. 106 As for control, there is no agreement or arrangement between the Australian Government and AANES relating to the release or repatriation of the relevant women and children. Thus, the Australian Government does not have the power to effect their release or repatriation. All that the Australian Government has is the ability to request repatriation of the relevant woman and children. While it is likely that any such request will be agreed to by AANES (subject to compliance with procedural requirements), it cannot be assumed that AANES will agree. That is a decision for AANES to make upon receipt of a request. The ability to request the release or repatriation of the relevant women or children, in the absence of an agreement or arrangement that any such request will be agreed to, does not amount to control over the detention of the relevant women and children. For these reasons, in my view, the respondents do not have control over the detention of the relevant women and children. To the extent that the expert evidence expresses a contrary opinion, I do not accept that opinion, for the reasons I have given. 107 The facts of the present case are quite unlike those of Barnardo, O'Brien and Rahmatullah. In Barnardo, Dr Barnardo had previously had custody of the child and it was unclear on the evidence whether he had ceased to have control. In O'Brien, Mr O'Brien had previously been in the custody or control of the Home Secretary and there was evidence that suggested that the Home Secretary retained de facto control. In particular, the order stated that Mr O'Brien was to "be interned in the Irish Free State … and shall remain there until further orders". In Rahmatullah, clause 4 of the 2003 MoU provided that any prisoners of war, civilian internees and civilian detainees transferred by a detaining power (the UK) would be returned by the accepting power (the US) to the detaining power "without delay upon request by the detaining power". This appeared to give the United Kingdom the ability to effect the release of Mr Rahmatullah. 108 I accept that, in some circumstances, where the Court is left in doubt as to whether a respondent has custody or control over the relevant person, it is open to the Court to use the "pressure of the writ" to test whether the respondent's contention (of lack of custody or control) is correct. However, I do not consider this approach to be appropriate in the circumstances of the present case. The question of control has already been the subject of extensive evidence led by both sides. I consider that this evidence makes clear that there is no agreement or arrangement between the Australian Government and AANES regarding release or repatriation of the relevant women and children and that the Australian Government does not otherwise have control over the detention of the relevant women and children. In these circumstances, a further hearing on the return of the writ is not necessary to ascertain the true position or to test whether the respondents' contentions are correct. Therefore, I do not consider the approach adopted in Barnardo, O'Brien and Rahmatullah to be appropriate in the circumstances of this case. 109 Given the above, it is unnecessary to consider the issue of standing (in relation to the relevant women and children who are not STCA Woman and Children). 110 For these reasons, I conclude that a writ of habeas corpus should not issue. Judicial review 111 In the alternative to the application for the issue of a writ of habeas corpus, STCA seeks judicial review. STCA's judicial review case is put on two alternative bases: the first basis is that the Minister for Home Affairs or another officer of the Commonwealth has made a decision not to repatriate (or not to seek the repatriation of) the relevant women and children; the second basis is that the respondents have not made a decision whether or not to repatriate (or seek the repatriation of) the relevant women and children. Each will be considered in turn. 112 Again, I will put the issue of standing to one side initially, given that the issues need to be determined in any event as regards the STCA Women and Children. First alternative basis: a non-repatriation decision has been made 113 In its amended concise statement, STCA sets out the following factual contentions in support of the proposition that a non-repatriation decision has been made. STCA contends that: (a) On 19 May 2023, following much correspondence between STCA and the respondents about the repatriation of the remaining Australian women and children, STCA wrote to the Minister for Home Affairs to ask that the Commonwealth executive make a decision about them equivalent to the decision to repatriate the four women and their 13 children that had been made in 2022 (referred to by STCA as a "further repatriation decision"). The request attached: (1) the Tinkler Statement; (2) an expert report prepared by Professor Newton; (3) an expert report, and supplementary expert report, prepared by Dr Haidar; and (4) an expert report prepared by former Ambassador Galbraith. Noting the long period of time the executive had had to consider making a further repatriation decision, STCA requested that a decision be made by 26 May 2023. STCA stated that if the Minister for Home Affairs failed by 26 May 2023 to make, or to decide to not make, a further repatriation decision, STCA would infer, having regard to the time the executive had had to make a further repatriation decision, that the executive had decided to not make a further repatriation decision. STCA sent the Minister for Home Affairs a supplementary letter on 23 May 2023. (b) On 26 May 2023, an officer of the Commonwealth wrote to STCA, informing it that he was unable to respond to the request. The only reasons provided in the 26 May 2023 letter for not having made a further repatriation decision were "[r]epatriations are a complex undertaking and at all times the focus is on the safety and security of all Australians as well as the safety of those who would be involved in any operation". (c) In all the circumstances, it may be inferred that the Minister for Home Affairs or another officer of the Commonwealth has decided not to make a further repatriation decision for the remaining Australian women and children. 114 While it is true that, as noted above, the Australian Government does not seem to be taking steps to repatriate the remaining Australian women and their children in the Al-Roj camp, there is no evidence that establishes that a decision has been made not to repatriate (or not to seek the repatriation of) the women and children. There is no documentary evidence of such a decision. I am not prepared to infer from the letters sent by STCA to the Minister for Home Affairs dated 19 May 2023 and 23 May 2023, and the time that has elapsed since then without a positive decision having been made to seek to repatriate the women and children, that a decision has been made not to do so. Further, I note that, in paragraph 9 of her affidavit, Ms Spencer gives evidence: I haven't been directed on the timing of any possible or future repatriation of the remaining Australian women and children. Nor have I been informed that a decision not to repatriate the remaining Australian women and children has been made. 115 I accept the evidence of Ms Spencer, which was not challenged. 116 Having regard to the above facts and matters, I am not satisfied that a decision has been made not to repatriate (or not to seek the repatriation of) the relevant women and children. It follows that the application for judicial review on this basis must be rejected. 117 It is therefore unnecessary to consider the grounds of review relied on by STCA. It is also unnecessary to consider the issue of standing. Second alternative basis: a decision has not been made 118 The alternative basis for STCA's judicial review case is that a decision whether or not to repatriate (or seek the repatriation of) the relevant women and children has not been made. In light of the above, I accept that no decision has been made. 119 STCA contends that the respondents have failed to make a decision whether or not to repatriate (or seek the repatriation of) the relevant women and children, in circumstances where they are required to make such a decision: see the amended concise statement, paragraph 25; STCA's outline of submissions, paragraph 105. It is on this basis that STCA seeks mandamus or an injunction compelling the Minister for Home Affairs or an appropriate officer of the Commonwealth to consider STCA's letters dated 19 May 2023 and 23 May 2023 and to decide whether or not to repatriate the relevant women and children (see [3(e)] above). 120 The difficulty with that contention is that it is not established that the respondents were or are required to make a decision whether or not to repatriate (or seek the repatriation of) the relevant women and children. Insofar as STCA relies on authorities regarding citizenship at paragraphs 15-18 of its amended concise statement, these establish that, in principle, Australian citizens have a right to return to Australia. However, that is a very different proposition from the Australian Government being under a legal obligation to undertake repatriation of Australian citizens who are overseas. In STCA's outline of submissions at paragraph 105, footnote 191, it cites Hicks at [61] and C3 at [59] in support of the proposition that it is incumbent on the respondents to make such a decision. However, Hicks at [61] merely sets out Mr Hicks's submissions (to the effect that the executive has a duty to protect citizens) rather than reasoning of the Court. In C3 at [59], Underhill LJ stated that he believed that the only proper vehicle for the appellants' case was a claim for judicial review, in which the Court would consider the lawfulness of the Foreign Secretary's refusal of assistance in accordance with the principles in R (Abbasi) v Secretary of State for Foreign & Commonwealth Affairs [2002] EWCA Civ 159 (Abbasi). That case was discussed at [43] of the judgment of Underhill LJ in C3. It appears from that summary that Abbasi merely establishes that the Foreign Secretary may be required to give due consideration to a request for consular assistance. It does not establish that, in the present circumstances, it is incumbent on the respondents to decide whether or not to repatriate (or seek the repatriation of) the relevant women and children. 121 Insofar as STCA seeks a declaration that, in failing to make a decision to repatriate the relevant women and children, the Minister for Home Affairs or the Commonwealth acted for an ulterior purpose or acted unreasonably (see [3(d)] above), STCA did not develop this in its written or oral submissions. It appears that the application for this relief is also premised on there being a requirement to make a decision whether or not to repatriate (or seek the repatriation of) the relevant women and children. For the reasons given above, it is not established that there is any such requirement. In any event, there is no material to suggest that the respondents have acted for an ulterior purpose or acted unreasonably. 122 For these reasons, the application for judicial review on the second basis is not made out. It is therefore unnecessary to consider the issue of standing. Conclusion 123 It follows that the application is to be dismissed. In relation to costs, I will give the parties a period of time to provide any agreed minute of orders on costs. I will make an order that, if they cannot agree, each party file and serve a short outline of submissions on costs, with the issue of costs to be determined on the papers. I certify that the preceding one hundred and twenty-three (123) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Moshinsky. Associate: Dated: 3 November 2023	18,945
federal_court_of_australia:fca/full/2022/2022fcafc0078	decision	commonwealth	federal_court_of_australia	text/html	2022-05-13 00:00:00	Shepherd v Watt [2022] FCAFC 78	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2022/2022fcafc0078	2024-09-13T22:44:50.897541+10:00	FEDERAL COURT OF AUSTRALIA Shepherd v Watt [2022] FCAFC 78 Appeal from: Watt v Shepherd [2021] FCA 561 File number(s): NSD 530 of 2021 Judgment of: GREENWOOD, BURLEY AND HALLEY JJ Date of judgment: 13 May 2022 Catchwords: PRACTICE AND PROCEDURE – application for leave to appeal and appeal from orders made dismissing an application for leave to file an amended cross-claim and to extend the time to file evidence – whether sufficient doubt to warrant reconsideration of the discretion to make the orders – whether primary judge's exercise of his discretion fell within the scope of House v The King (1936) 55 CLR 499 – whether the primary judge failed to give weight or sufficient weight to relevant considerations, being the timely, efficient and cost-effective resolution of proceedings and potential prejudice to the parties – whether the exercise of discretion was unreasonable or plainly unjust – whether the primary judge erred in his application of r 5.23 of the Federal Court Rules 2011 (Cth) in the absence of any application by the respondents – whether procedural fairness was afforded to the applicants – leave to appeal granted – appeal allowed Legislation: Competition and Consumer Act 2010 (Cth), Schedule 2, Australian Consumer Law ss 18, 21, 22 Corporations Act 2001 (Cth) ss 180, 181, 183 Federal Court Act of Australia 1976 (Cth) ss 24, 37M, 37N, 37P Competition and Consumer (Industry Codes – Franchising) Regulation 2014 (Cth) Federal Court Rules 2011 (Cth) rr 1.40, 5.23 Civil Procedure Act 2005 (NSW) s 58 Uniform Civil Procedure Rules 2005 (NSW) Cases cited: Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27 Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137; [1987] FCA 504 Australian Coal and Shale Employees' Federation and Another v The Commonwealth and Others (1953) 94 CLR 621; [1953] HCA 25 Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (ACN 003 274 655) (2016) 340 ALR 25; [2016] FCAFC 181 Bomanite Pty Limited v Slatex Corp Aust Pty Limited (1991) 32 FCR 379; [1991] FCA 536 Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; [1996] HCA 25 Décor Corporation Pty Ltd and Another v Dart Industries Inc (1991) 33 FCR 397; [1991] FCA 84 Ex parte Bucknell (1936) 56 CLR 221; [1936] HCA 67 Expense Reduction Analysts Group Pty Ltd and Others v Armstrong Strategic Management and Marketing Pty Limited and Others (2013) 250 CLR 303; [2013] HCA 46 House v The King (1936) 55 CLR 499; [1936] HCA 40 James v Australia and New Zealand Banking Group Limited [2022] FCAFC 18 Lenijamar Pty Ltd and Others v AGC (Advances) Limited (1990) 27 FCR 388; [1990] FCA 745 Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar (2008) 237 CLR 66; [2008] HCA 4 Mallet v Mallet (1984) 156 CLR 605; [1984] HCA 21 Park Trent Properties Group Pty Ltd v Australian Securities Investments Commission (2016) 116 ACSR 473; [2016] NSWCA 298 Professional Administration Service Centres Pty Ltd (ACN 109 055 049) v Commissioner of Taxation (2012) 295 ALR 52; [2012] FCAFC 180 Risk v Northern Territory (2007) 240 ALR 75; [2007] FCAFC 46 Rodgers v Rodgers (1964) 114 CLR 608; [1964] HCA 25 Samsung Electronics Company Ltd v Apple Inc and Another (2011) 217 FCR 238; [2011] FCAFC 156 Tamaya Resources Ltd (in liq) v Deloitte Touche Tohmatsu (2016) 332 ALR 199; [2016] FCAFC 2 Watt v Shepherd [2021] FCA 561 Watt v Shepherd (No 2) [2021] FCA 826 Watt v Shepherd (No 3) [2021] FCA 1670 WGKS v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCAFC 10 Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 205 Date of hearing: 17 February 2022 Counsel for the Applicants: Mr C O'Neill Solicitor for the Applicants: Colin Biggers & Paisley Counsel for the Respondents: Mr EC Muston with Mr RA Parsons Solicitor for the Respondents: Bray Jackson & Co Solicitors ORDERS NSD 530 of 2021 BETWEEN: PHILLIP CHARLES SHEPHERD First Applicant MARK ROBERT STEIDLE Second Applicant RX HOLDINGS PTY LTD ACN 612 534 746 (and another named in the Schedule) Third Applicant AND: ESPIE IAN WATT First Respondent MAZZAWATTIE PTY LTD ACN 096 943 476 AS TRUSTEE OF SMSUT Second Respondent WATTABEAR PTY LTD ACN 148 915 262 (and others named in the Schedule) Third Respondent AND BETWEEN: PHILLIP CHARLES SHEPHERD (and others named in the Schedule) First Cross-Claimant AND: ESPIE IAN WATT (and others named in the Schedule) First Cross Respondent order made by: GREENWOOD, BURLEY AND HALLEY JJ DATE OF ORDER: 13 May 2022 THE COURT ORDERS THAT: 1. The applicants have leave to appeal from the judgment given on 20 May 2021 and the orders 1 to 4 made by his Honour on 20 May 2021. 2. The draft notice of appeal (other than grounds 2, 3, 5 and 6) filed on 7 June 2021 stand as the appellants' notice of appeal. 3. The appeal be allowed. 4. The following orders and declarations made by the primary judge be set aside: (a) orders 1 to 4 made on 20 May 2021; (b) the declarations and orders made on 23 July 2021; and (c) the declaration and orders made on 13 December 2021. 5. The matter be referred to the National Operations Registrar for reallocation to a judge in the Commercial and Corporations National Practice Area. 6. The respondents pay the appellants' costs of and incidental to the application for leave to appeal and the appeal. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT THE COURT: INTRODUCTION 1 These reasons concern an application for leave to appeal and an appeal from orders of a judge of this Court made on 20 May 2021, giving effect to ex tempore reasons given on that date and subsequently published on 27 May 2021: Watt v Shepherd [2021] FCA 561. 2 The proceedings before the primary judge concerned a franchising dispute between the applicants and cross respondents in the primary proceedings (Watt parties), as franchisees, and the respondents and cross-claimants in the primary proceedings (Shepherd parties), as franchisors. 3 The orders made by the primary judge on 20 May 2021 relevantly included orders: dismissing an application made by the Shepherd parties filed on 14 May 2021; seeking leave to file an amended cross-claim and to extend the time for them to file their evidence; requiring the Shepherd parties to pay the Watt parties' costs of the application; striking out the defence filed by the Shepherd parties; and dismissing the cross-claim (Orders). 4 The Shepherd parties broadly contend that in making the Orders the primary judge erred in three material respects: (a) in the exercise of his Honour's discretion; (b) in the application of rule 5.23 of the Federal Court Rules 2011 (Cth) (FCR) in the absence of any application from the Watt parties; and (c) by failing to afford the Shepherd parties procedural fairness in connection with the striking out of their defence and dismissing the cross-claim. 5 The Shepherd parties submit that substantial injustice would result if leave to appeal were not granted and the Orders were not set aside. 6 For the reasons that follow we are satisfied that leave to appeal should be granted, but only in respect of the grounds addressed at the exercise of his Honour's discretion, and the appeal should be allowed. BACKGROUND FACTS 7 The following background facts as found by the primary judge are relevant to a resolution of the application for leave to appeal and the appeal. They are not in dispute. 8 On 13 June 2019, the Watt parties commenced the proceedings before the primary judge by filing an originating application and statement of claim. 9 On 5 September 2019, the Shepherd parties filed their defence. 10 On 26 September 2019, the Shepherd parties filed a notice of cross-claim and cross-claim. 11 On 21 February 2020, following an unsuccessful mediation, the primary judge made orders for the service of outlines of evidence, together with any documents on which they intended to rely by: (a) 17 April 2020 for the Watt parties; (b) 29 May 2020 for the Shepherd parties; and (c) 19 June 2020 for any reply evidence. 12 The parties were not able to comply with the orders made on 21 February 2020, principally because of the impact of the COVID-19 pandemic. 13 On 25 June 2020, the primary judge made orders, by consent, extending the times for the service of outlines of evidence, together with any documents on which they intended to rely, to: (a) 10 July 2020 for the Watt parties; (b) 21 August 2020 for the Shepherd parties; and (c) 18 September 2020 for any reply evidence. 14 Again, the parties were not able to comply with that timetable. 15 On 24 September 2020, the primary judge made orders, by consent, extending the times for the service of outlines of evidence, together with any documents on which they intended to rely, to: (a) 2 October 2020 for the Watt parties; (b) 11 December 2020 for the Shepherd parties; (c) 29 January 2021 for any reply evidence; and listed the proceedings for case management on 5 February 2021. 16 On 12 October 2020, the Watt parties served outlines of evidence from eight witnesses, in aggregate 60 pages, together with approximately 1400 pages of documents. 17 On 3 February 2021, the Watt parties notified the primary judge's associate that the parties had agreed consent orders that provided for the Shepherd parties to have until 2 April 2021 to serve their evidence and for the parties to have until 4 June 2021 to serve their reply evidence. In response to this communication, the primary judge requested an explanation of the reason for the length of the extension for the Shepherd parties to serve their evidence. 18 On 4 February 2021, Logie-Smith Lanyon, the firm of solicitors who had been acting for the Shepherd parties since February 2020, responded in writing to the primary judge's request stating that the delays in preparing the witness outlines were due to a "number of reasons" including that: 1. Two key witnesses have been ill; 2. There were issues with insurance cover that needed to be resolved (and now have been resolved); and 3. We have engaged new counsel Callan O'Neill to act in the matter. 19 On 4 February 2021, on the basis of the explanation provided by Logie-Smith Lanyon, the primary judge made orders by consent extending the time for the Shepherd parties to serve their witness outlines and documents on which they intended to rely to 2 April 2021 (4 February 2021 orders) and that the matter be listed for case management on 18 June 2021. 20 On 27 April 2021, the Watt parties informed the primary judge's associate that there had been a "slippage" in relation to the compliance by the Shepherd parties with the 4 February 2021 orders. In response to this communication, the primary judge directed that the matter be listed for a case management hearing on 7 May 2021. 21 On 7 May 2021, in the course of the case management hearing, the Shepherd parties foreshadowed for the first time that they wished to amend their cross-claim and sought orders that the amended cross-claim be filed by 18 June 2021. They also sought an order that the time for them to serve witness outlines and documents on which they intended to rely be further extended to 18 June 2021. In response to these requests, the primary judge made orders that "having regard to their previous defaults", the Shepherd parties must file and serve any interlocutory application for leave to amend their cross-claim and to extend the time for service of their witness outlines and documents, together with submissions and evidence by 14 May 2021, the Watt parties respond by 18 May 2021 and the Shepherd parties serve any submissions in reply by 19 May 2021. 22 On 14 May 2021, the Shepherd parties emailed the Watt parties an affidavit of Michael Nurse (the solicitor from Logie-Smith Lanyon with carriage of the matter for the Shepherd parties) sworn on that day, together with written submissions and an interlocutory application (Interlocutory Application) seeking various orders, including orders that: (a) the time for the Shepherd parties to serve the witness outlines and "a bundle of documents to which those witnesses refer in their outlines" be extended to 28 May 2021 (Extension Order); and (b) the Shepherd parties have leave to file and serve an amended cross-claim by 17 May 2021 (Amendment Order). 23 Mr Nurse's 14 May 2021 affidavit and the written submissions were principally, but not exclusively, directed at the Extension Order. 24 On 19 May 2021, Mr Nurse swore a second affidavit directed only at the Amendment Order. Copies of the proposed amended cross-claim and proposed amended notice of cross-claim were exhibited to the affidavit. 25 On 20 May 2021, the primary judge heard the Interlocutory Application, made the Orders and delivered an ex tempore judgment which was subsequently published on 27 May 2021. 26 In the period following 20 May 2021, the primary judge made the following further orders: (a) on 8 June 2021, vacating the case management hearing on 18 June 2021; (b) on 25 June 2021, granting leave to the parties to file and serve further submissions and evidence in relation to quantum, adjourning the hearing on quantum to 8 July 2021 and requiring the applicants to pay the respondents' costs thrown away by reason of the adjournment; (c) on 9 July 2021, setting aside the orders pronounced orally on 8 July 2021 following delivery of the Court's ex tempore reasons; (d) on 23 July 2021, declaring void the whole of the various contracts between the fourth respondent (Summit Pharmacy Group Pty Ltd) and various of the Watt parties; requiring that the third respondent (RX Holdings Pty Ltd) assign ownership of the website "bushchemist.com.au" to the first applicant (Espie Ian Watt) and place it in the position of registered owner of the business name "Bush Chemist"; ordering judgment against each of the Shepherd parties for damages to be assessed; granting leave to the parties to file and serve further submissions and evidence in relation to damages and appropriate relief; and reserving costs, and delivered reasons for making those orders and declarations (Watt v Shepherd (No 2) [2021] FCA 826); (e) on 7 September 2021, extending the time for the respondents to file and serve further submissions and evidence in relation to damages and appropriate relief, listing the matter for final hearing on 8 October 2021 and reserving costs; (f) on 8 October 2021, ordering that the parties file and serve draft relief orders with accompanying explanations of calculations, and any responses to the draft orders, listing the matter for hearing on 11 November 2021 and ordering that the applicants pay the respondents' costs of 8 October 2021; (g) on 2 November 2021, noting that the respondents and Mr Whelan had made undertakings to the Court in relation to the confidentiality of the applicants' MYOB files and information contained therein; (h) on 12 November 2021, extending the time for the respondents to file and serve any response to documents filed by the applicants pursuant to the orders made on 8 October 2021; requiring the applicants to file and serve submissions identifying damages sought and any response to those documents; ordering the respondents file and serve written submissions in reply; and listing the matter for hearing on 13 December 2021, and reserving costs; and (i) on 13 December 2021, the matter proceeded to a final hearing on damages and final relief and a declaration was made that any assignment to the third or fourth respondent of debts due to the second applicant was void ab initio. Orders were made for the respondents to make various payments to the applicants. Ex tempore reasons were delivered (Watt v Shepherd (No 3) [2021] FCA 1670). EVIDENCE RELIED UPON BEFORE THE PRIMARY JUDGE 27 In his 14 May 2021 affidavit, Mr Nurse provided the following explanations for the failure of the Shepherd parties to comply with the 4 February 2021 orders and the steps that the Shepherd parties had taken to advance the preparation of their evidence. 28 First, in addition to being voluminous, the outlines and accompanying documents served by the Watt parties on 12 October 2021 described a "complex factual matrix, the precise relevance and admissibility of which to the pleaded case is challenging to unpick/comprehend". As a result, significant consideration had been given by the Shepherd parties as to whether their outlines should be prepared in response to the outlines of the Watt parties or in response to the pleaded case and the cross-claim and ultimately the latter course was chosen. 29 Second, since 12 October 2021 a "number of related tasks" had been undertaken that "related to" the conduct of the proceedings by the Shepherd parties which "would not be appropriate to raise in a public forum, including matters which would be the subject of claims for legal professional privilege". 30 Third, as disclosed in the February 2021 email, two key witnesses had been ill, there were issues with the insurance cover which had since been resolved and new counsel had been engaged. 31 Fourth, Mr O'Neill of counsel had been briefed in February 2021, including for the purpose of assisting with interviewing witnesses, preparing draft witness statements and advising in the matter generally. 32 Fifth, in March 2021, Mr Nurse had assumed day to day responsibility for the conduct of the matter when it became apparent that the previous solicitor with daily responsibility for the matter had become heavily occupied in an unrelated Supreme Court proceeding. 33 Sixth, on 20 April 2021, three witness interviews were conducted by Mr O'Neill for the purpose of preparing outlines of evidence. 34 Seventh, the witness outlines continued to be progressed in the period leading up to the case management hearing on 7 May 2021 and as at the date of swearing the affidavit, 14 May 2021, the outlines were "in fact at a very advanced stage, and we are confident that we will be in a position to serve the outlines within the timeframes sought in the attached application [28 May 2021]". 35 Eighth, on 12 May 2021 an interview was conducted with a further witness who was believed to be located in South Africa and a draft outline had been prepared. 36 Ninth, it only became apparent to Logie-Smith Lanyon in the course of the witness interviews conducted by Mr O'Neill on 20 April 2021 that the Shepherd parties had additional claims available to them that had not been considered by their previous legal representatives and had therefore not been included in the cross-claim filed on 15 October 2019. 37 Tenth, a draft amended cross-claim had been prepared, the Shepherd parties having provided expanded instructions regarding potential further claims that would require further consideration and advice. However, Mr Nurse believed, based on his present instructions, that the amended cross-claim could be finalised by the close of business on 17 May 2021. 38 Mr Nurse otherwise stated in his 14 May 2021 affidavit that the Shepherd parties refuted the claims made by the Watt parties, apologised for their delays in preparing their evidence and confirmed that they wished to be heard in relation to the merits of their defence and their cross-claim or amended cross-claim against the Watt parties. 39 In his affidavit sworn on 19 May 2021, Mr Nurse briefly outlined the nature of the new claims sought to be advanced in the amended cross-claim, confirmed that Logie-Smith Lanyon had only become aware of them in the course of the 20 April 2021 witness interviews and summarised the loss and damage that the Shepherd parties claimed they had suffered as a result of the new claims. THE JUDGMENT OF THE PRIMARY JUDGE 40 The primary judge found that it was not in the interests of justice to grant the Shepherd parties an extension of time to serve their outlines of evidence, nor to grant them leave to file the amended cross-claim. His Honour considered that it was clear that the Shepherd parties were not prosecuting the proceeding in an appropriately diligent manner and there must come a point where a party's default, unexplained as he considered it was in this case by any proper or adequate evidence, will attract the consequences contemplated by ss 37P(5) and (6) of the Federal Court of Australia Act 1976 (Cth) (FCA Act): J [60]. 41 The primary judge's conclusions were based on the following reasons. 42 First, the appointment of new counsel was not, of itself, necessarily sufficient to support an amendment, citing the decision of the Full Court in WGKS v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCAFC 10 at [20] (Rares, Moshinksy and Stewart JJ): J [52]. 43 Second, the evidence of Mr Nurse failed to give any substantive information about any activities that the Shepherd parties undertook between the receipt of the outlines of evidence from the Watt parties on 12 October 2020 and the interviews conducted by Mr O'Neill on 20 April 2021: J [52]. 44 Third, the suggestion by Mr Nurse that there may have been relevance or admissibility issues with the material in the witness outlines of the Watt parties provided no basis for the delay in the Shepherd parties providing their outlines: J [54]. 45 Fourth, the evidence of Mr Nurse in asserting that some "related tasks" affected the conduct of the proceedings by the Shepherd parties "which would not be appropriate to raise in a public forum" was opaque: J [54]. 46 Fifth, the identity of the witnesses who had suffered illnesses, as asserted in the 4 February email, was not disclosed. Nor was the period of the alleged illnesses, the nature of the alleged insurance issues, when the issues were resolved nor their impact on the Shepherd parties' conduct in the proceedings. Further, no explanation was provided as to why Mr O'Neill had not interviewed any witnesses prior to 20 April 2021: J [55]. 47 Sixth, there was no substantive evidence as to what, if any, difficulties might have precluded the Shepherd parties from substantially progressing their outlines of evidence prior to February 2021: J [55]. 48 Seventh, the Shepherd parties did nothing in April 2021 to bring the matter back to Court notwithstanding their default in complying with the 4 February 2021 orders: J [56]. 49 Eighth, no explanation had been provided by the Shepherd parties as to why they had still not finalised or served the outlines of evidence, given that it was now a month after the interviews were conducted with Mr O'Neill, other than a reference to the fact that new claims had been raised in the course of those interviews. Mr O'Neill conceded that these matters were known to the Shepherd parties from at least the inception of the proceeding, however no explanation was provided as to why it took more than a year after the engagement of new solicitors for these matters come matters to come to light: J [56]. 50 The primary judge concluded that the default by the Shepherd parties was egregious and unexplained and their conduct indicated an unwillingness to comply with the orders of the Court in a timely or appropriate way in order to achieve the overarching purpose contrary to their duty under s 37N of the FCA Act: J [58]. 51 The primary judge stated: 59 I am comfortably satisfied that the respondents have had every proper opportunity in which to put their evidence on in a timely way and to advance their case. I reject the respondents' argument that no further delay will be caused if they are allowed the extension of time and amendment that they seek. If I were to grant the amendment to the cross-claim, new parties would be brought into the proceeding who are not already joined. No doubt each of them will have their own defence and possible cross-claim to make, which will further protract and delay the proceeding from being heard. The extension of time that I granted at the beginning of this year again delayed the time at which this proceeding would be ready to be heard. The ability of parties to recall accurately what occurred in the past is obviously continuing to be impacted by the delays and, if the respondents are allowed to amend the cross-claim, they will expand the scope of the proceeding, albeit that I accept that some of it will be narrowed in relation in the Australia Capital Territory franchises. 60 There must come a point when a party's default, unexplained as it is in this case by any proper or adequate evidence, will attract the consequences that s 37P(5) and (6) contemplate. In my opinion, it is not in the interests of justice to grant, first, an extension of time in which the respondents can serve their outlines of evidence or, secondly, leave to amend the cross-claim. It is clear that the respondents are not prosecuting the proceeding in an appropriately diligent way. 61 For these reasons, I will order that the defence and cross-claim be struck out, and that the cross-claim be dismissed. I will also order that the interlocutory application filed on 14 May 2021 be dismissed. The parties should have an opportunity to address on whether or not, based on the case pleaded in the statement of claim and the absence of a defence, the applicants are entitled to any of the relief which they seek or to judgment and, if so, in what amount. I will order that the respondents pay the applicants and cross-respondents' costs of the interlocutory application. I will reserve the costs of the proceeding. 52 The Shepherd parties seek leave to appeal from the Orders. The Orders were made by the primary judge at the conclusion of the hearing of the Interlocutory Application on 20 May 2021 in the following terms: 1. The interlocutory application filed by the respondents on 14 May 2021 be dismissed. 2. The respondents pay the applicants' costs of defending the interlocutory application filed on 14 May 2021. 3. The defence filed by the respondents on 5 September 2019 be struck out. 4. The notice of cross-claim filed by the respondents on 15 October 2019 be dismissed. RELEVANT PRINCIPLES Leave to appeal 53 The decision of the primary judge was interlocutory in nature and therefore the Shepherd parties require leave to appeal: s 24(1A) of the FCA Act. 54 It is well established that two criteria that need to be addressed in an application for leave to appeal from an interlocutory judgment. First, whether the judgment was attended with sufficient doubt to warrant it being reconsidered by the Full Court and second, whether substantial injustice would result if leave were refused: Décor Corporation Pty Ltd and Another v Dart Industries Inc (1991) 33 FCR 397; [1991] FCA 84 at 398 (Décor) (Sheppard, Burchett and Heerey JJ). 55 The test created by the criteria is appropriate for the general run of cases but each case must be considered on its merits and the test should not be applied as if it were some hard and fast rule: Samsung Electronics Company Ltd v Apple Inc and Another (2011) 217 FCR 238; [2011] FCAFC 156 (Samsung) at [29] (Dowsett, Foster and Yates JJ), citing Décor at 398-400. 56 It is important to consider the practical operation or effect of the interlocutory order from which leave to appeal is sought. Leave should readily be given if the practical effect of the interlocutory order is to determine the proceeding or an important issue in the proceeding: Samsung at [33], citing Ex parte Bucknell (1936) 56 CLR 221; [1936] HCA 67 (Bucknell) at 225-6 (Latham CJ, Rich, Dixon, Evatt and McTiernnan JJ). The principles on appeal 57 It is not sufficient for the purposes of an appeal from a discretionary judgment for this Court to conclude that it would have exercised the relevant discretion differently had it been in the position of the primary judge: House v The King (1936) 55 CLR 499; [1936] HCA 40 at 504-5 (Dixon, Evatt and McTiernan JJ). 58 Their Honours Dixon, Evatt and McTiernan JJ explained in House v The King at 505: If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. Unlike courts of criminal appeal, this court has not been given a special or particular power to review sentences imposed upon convicted persons. Its authority to do so belongs to it only in virtue of its general appellate power. But even with respect to the particular jurisdiction conferred on courts of criminal appeal, limitations upon the manner in which it will be exercised have been formulated. [Emphasis added.] 59 Subsequent decisions of the High Court have emphasised that there is a strong presumption in favour of the correctness of the decision appealed from in a discretionary judgment and the decision should be affirmed unless the appeal court is satisfied that it is clearly wrong: Samsung at [39], citing Australian Coal and Shale Employees' Federation and Another v The Commonwealth and Others (1953) 94 CLR 621; [1953] HCA 25 (Australian Coal and Shale) at 627 (Kitto J) and Mallet v Mallet (1984) 156 CLR 605; [1984] HCA 21 (Mallet) at 634 (Wilson J). 60 The following statement by Kitto J in Australian Coal and Shale at 627 was described in Mallet at 634 by Wilson J as a succinct statement of the principle in House v The King: … the true principle limiting the manner in which appellate jurisdiction is exercised in respect of decisions involving discretionary judgment is that there is a strong presumption in favour of the correctness of the decision appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong. A degree of satisfaction sufficient to overcome the strength of the presumption may exist where there has been an error which consists in acting upon a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts. Again, the nature of the error may not be discoverable, but even so it is sufficient that the result is so unreasonable or plainly unjust that the appellate court may infer that there has been a failure properly to exercise the discretion which the law reposes in the court of first instance: House v The King. [Footnote omitted and emphasis added.] 61 The restatement of the House v The King principle by Kitto J in Australian Coal and Shade expands the scope of the principle in that it uses the phrase "failing to give weight or sufficient weight to relevant considerations", rather than the language employed by the plurality in House v The King of "he does not take into account some material consideration". 62 In Rodgers v Rodgers (1964) 114 CLR 608; [1964] HCA 25, McTiernan, Taylor and Owen JJ described the restatement of the House v The King principle by Kitto J in Australian Coal and Shale as a "convenient summary" of the principles applicable in appeals from orders involving discretionary judgments, and quoted the passage in full (at 619). The restatement by Kitto J was also quoted in full and applied in Risk v Northern Territory (2007) 240 ALR 75; [2007] FCAFC 46 at [113] (French J, as his Honour then was, Finn and Sundberg JJ), Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137; [1987] FCA 504 at 147 (Davies, Lockhart and Neaves JJ), and Bomanite Pty Limited v Slatex Corp Aust Pty Limited (1991) 32 FCR 379; [1991] FCA 536 at 387 (Gummow J). 63 In Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; [1996] HCA 25, McHugh J found (at 556) that the primary judge in that matter "did not fail to consider or fail to give sufficient weight to any matter he was required to consider" and that "his conclusion was not so 'unreasonable or plainly unjust'" that an appellate court could infer that the primary judge had failed to properly exercise the discretion, citing Australian Coal and Shale at 627. 64 In Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar (2008) 237 CLR 66; [2008] HCA 4, Gummow ACJ, Kirby, Hayne and Heydon JJ said in response to the question of whether the primary judge had conducted the correct "balancing exercise" in the exercise of the Court's discretion: 137 "Balancing exercise"? The orthodox approach to appellate intervention in relation to discretionary decisions requires the expression "balancing exercise" to be employed only with care. 138 The question is what the particular statute or rule of law conferring the discretion contemplates as relevant or irrelevant factors. If it mandates that particular weight be given to one factor, that mandate must be obeyed. But, in the absence of any such mandate, the question of what weight the relevant factors should be given or what balance should be struck among them is for the person on whom the discretion is conferred, provided no error of law is made, no error of fact is made, all material considerations are taken into account and no irrelevant considerations are taken into account, subject to the possibility of appellate intervention if there is a plain injustice suggesting the existence of one of the four errors just described even though its nature may not be discoverable, or if there is present what has come to be known as "Wednesbury unreasonableness". [Footnotes omitted.] 65 In Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (ACN 003 274 655) (2016) 340 ALR 25; [2016] FCAFC 181 (Jagot, Yates and Bromwich JJ), after noting that in Park Trent Properties Group Pty Ltd v Australian Securities Investments Commission (2016) 116 ACSR 473; [2016] NSWCA 298 Leeming JA (at [53]), with whom McColl and Gleeson JJA agreed, had observed that primary judge had provided elaborate reasons for the exercise of the relevant discretion, their Honours stated at [49]: This is not to say that elaborate reasons are immune from appellate review. In the absence of specific error, the outcome reached either will or will not be one which was reasonably open. If not reasonably open, elaborate reasons will not protect the result from appellate intervention. 66 The Court then addressed the specific error and inferential error dimensions to the House v The King principle. Their Honours explained inferential error at [52]: Alternatively, error may be inferred from a result that cannot have been arrived at without some kind of operative error. The influence of the reasons given for the result arrived at on this process will vary. Reasons are not to be ignored, but nor do they necessarily confine in a rigid or inflexible way the scope of the appellate inquiry. It may be legitimate to have regard to what was said and not said in order to identify how the asserted erroneous result was reached. But for error to be inferred from the result, the result must be one which was not open on the evidence or facts found or agreed. 67 In James v Australia and New Zealand Banking Group Limited [2022] FCAFC 18, the Full Court (Rares and Banks-Smith JJ, Murphy J in dissent) allowed in part an appeal from a decision of the primary judge refusing an application by the appellant on the first day of the trial of a creditor's petition to expand further his amended grounds of opposition to the petition, call additional witnesses and adjourn the hearing for a period of about four to six weeks to provide the petitioning creditor with sufficient time to respond to the new evidence, and to permit a seven-day trial listed for hearing in the Supreme Court of New South Wales brought by a company owned by his mother to be determined. 68 After citing House v The King with approval, and noting that the primary judge had dealt with all the issues, Rares and Banks-Smith JJ found (at [39]) that the primary judge's determinative reasoning appeared to have focused only on the adjournment application and her Honour did not consider: the debtor's alternate position that, if she were to act on the basis of granting the amendments and allowing the bank four to six weeks in which to put on evidence to meet them, it would have been possible to hear and determine the newly amended grounds before 11 August 2022 when the petition, as extended, would lapse. 69 Their Honours concluded at [41]: Although her Honour was the docket judge and may have had limited availability to hear the petition if any adjournment were granted, it was still necessary to consider the argument that, as the bank's evidence showed, it could meet the amended grounds and further evidence within four to six weeks, leaving about a year in which to hear and determine the petition proceeding. The primary judge's failure to consider a substantive, distinct ground for allowing the amendment and consequent adjournment amounted to a failure to take into account a relevant consideration so that her Honour's exercise of discretion miscarried: House 55 CLR at 505. Accordingly, the Full Court had to consider the exercise of the discretion afresh. [Emphasis added.] 70 In the course of considering the exercise of the discretion afresh as to whether the amendments and necessary consequent adjournment should be allowed, Rares and Banks-Smith JJ had regard to the merits of the existing amended grounds of opposition, the debtor's explanation for the failure to raise the new grounds earlier and the necessity to have regard to the justice of each case, stating: 45 There was a bona fide arguable ground already raised in the initial amended grounds of opposition to go behind the consent judgment. The new grounds sought to expand the reasons for going behind the consent judgment. As can be seen in the debtor's conduct after the refusal of the amendment and adjournment applications, he, no doubt guided by his senior counsel, did not consider that, without the further amendments, those grounds could succeed. Importantly, the debtor's explanation given for the failure to raise the new grounds earlier was that then counsel and the solicitor for the debtor had not thought of them previously. 46 As Keane CJ, Gilmour and Logan JJ said in Cement Australia Pty Ltd v Australian Competition and Consumer Commission (2010) 187 FCR 261 at 275–276 [51]: "Aon [239 CLR 175] is not a one size fits all case". The Court has to have regard to the justice of the case, as well as all of the circumstances relevant to case management in s 37M of the Federal Court Act. 47 Although the situation was finely balanced, the bona fide arguable nature of the proposed amendments and the relatively short adjournment that the bank required to meet the new case, in circumstances where there was still ample time for the petition to be heard and determined before it would lapse over one year later, persuaded us, in re-examining the discretion, to allow the amendments. [Emphasis added.] Practice and procedure discretionary principles 71 The Court has extensive powers to make directions about practice and procedure in a civil proceeding. Section 37P of the FCA Act provides: 37P Power of the Court to give directions about practice and procedure in a civil proceeding (1) This section applies in relation to a civil proceeding before the Court. (2) The Court or a Judge may give directions about the practice and procedure to be followed in relation to the proceeding, or any part of the proceeding. (3) Without limiting the generality of subsection (2), a direction may: (a) require things to be done; or (b) set time limits for the doing of anything, or the completion of any part of the proceeding; or (c) limit the number of witnesses who may be called to give evidence, or the number of documents that may be tendered in evidence; or (d) provide for submissions to be made in writing; or (e) limit the length of submissions (whether written or oral); or (f) waive or vary any provision of the Rules of Court in their application to the proceeding; or (g) revoke or vary an earlier direction. (4) In considering whether to give directions under subsection (2), the Court may also consider whether to make an order under subsection 53A(1). (5) If a party fails to comply with a direction given by the Court or a Judge under subsection (2), the Court or Judge may make such order or direction as the Court or Judge thinks appropriate. (6) In particular, the Court or Judge may do any of the following: (a) dismiss the proceeding in whole or in part; (b) strike out, amend or limit any part of a party's claim or defence; (c) disallow or reject any evidence; (d) award costs against a party; (e) order that costs awarded against a party are to be assessed on an indemnity basis or otherwise. (7) Subsections (5) and (6) do not affect any power that the Court or a Judge has apart from those subsections to deal with a party's failure to comply with a direction. 72 In Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27, Gummow, Hayne, Crennan, Kiefel and Bell JJ stated: 111 An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. … 112 A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate. 113 In the past it has been left largely to the parties to prepare for trial and to seek the court's assistance as required. Those times are long gone. The allocation of power, between litigants and the courts arises from tradition and from principle and policy … It is recognised by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings. [Footnotes omitted.] 73 In Expense Reduction Analysts Group Pty Ltd and Others v Armstrong Strategic Management and Marketing Pty Limited and Others (2013) 250 CLR 303; [2013] HCA 46 (Expense Reduction) at [56]-[59], French CJ, Kiefel, Bell, Gageler and Keane JJ stated that provisions such as Pt VB have the evident intention and expectation that the Court will use the broad powers conferred in such provisions to facilitate the "overarching purpose" of the equivalent Civil Procedure Act 2005 (NSW). Their Honours stated: 56 … Parties continue to have the right to bring, pursue and defend proceedings in the Court, but the conduct of the proceedings is firmly in the hands of the Court. It is the duty of the parties and their lawyers to assist the Court in furthering the overriding purpose. 57 That purpose may require a more robust and proactive approach on the part of the courts … the powers of the court are not at large and are not to be exercised according to a judge's individualistic idea of what is fair in a given circumstance. Rather, the dictates of justice referred to in s 58 require that in determining what directions or orders to make in the conduct of the proceedings, regard is to be had in the first place to how the overriding purpose of the CPA can be furthered, together with other relevant matters, including those referred to in s 58(2). The focus is upon facilitating a just, quick and cheap resolution of the real issues in the proceedings, although not at all costs. The terms of the CPA assume that its purpose, to a large extent, will coincide with the dictates of justice. 74 The nature of the explanation that a party might need to provide to the Court when seeking the exercise of a discretion was discussed in the following terms in the decision of the Full Court in Tamaya Resources Ltd (in liq) v Deloitte Touche Tohmatsu (2016) 332 ALR 199; [2016] FCAFC 2, where Gilmour, Perram and Beach JJ stated: [154] Just what explanation is called for will necessarily depend upon the particular case. The explanation will be given by, or on behalf of, the moving party. Affidavit evidence may or may not be necessary. In Cement Australia, for example, as the explanation was that the error was one of judgment by senior counsel for the ACCC, a statement by him from the bar table, to which no objection was taken, was accepted by the Court as sufficient. [155] It must be borne in mind that the explanation required is that of the moving party, not merely their solicitor or counsel. The client may very well know of matters relevant to the explanation for delay which are not known by the lawyers. [156] Evidence as to the explanation for delay will often be given by an applicant's solicitor from their own knowledge but that may, in some cases, not be sufficient. 75 The discretion conferred by rule 5.23 of the FCR is unconfined save that a party must be in default: Professional Administration Service Centres Pty Ltd (ACN 109 055 049) v Commissioner of Taxation (2012) 295 ALR 52; [2012] FCAFC 180 (PASC) at [35] (Edmonds and McKerracher JJ). 76 In PASC, their Honours referred (at [37]) to the following statement by Wilcox and Gummow JJ in Lenijamar Pty Ltd and Others v AGC (Advances) Limited (1990) 27 FCR 388; [1990] FCA 745 (Lenijamar) at 395-6: It is to be noted that the power given by this rule [Order 10.7, now rule 5.23 of the Federal Court Rules] is conditioned on one circumstance only: the failure of a party to comply with an order of the Court directing that party to take a step in the proceeding. There is no requirement of intentional default or contumelious conduct, although the attitude of the applicant to the default and the Court's judgment as to whether or not the applicant genuinely wishes the matter to go to trial within a reasonable period will usually be important factors in weighing the proper exercise of the discretion conferred by the rule. There is no requirement of "inordinate and inexcusable delay" on the part of the applicant or the applicant's lawyers, although any such delay is likely to be a significant matter. There is no requirement of prejudice to the respondent, although the existence of prejudice is also likely to be significant. And it must be remembered that, in almost every case, delay adversely affects the quality of the trial and is an additional burden on the parties. 77 As observed by Edmonds and McKerracher JJ in PASC (at [38]), however, Wilcox and Gummow JJ then immediately went on to state (at 396): The observations which we have just made about the scope of O 10, r 7 are not intended to convey the impression that any failure to comply with a procedural direction will appropriately result in the dismissal of the proceeding. On the contrary, the rules must be administered sensibly and with an appreciation both of the fact that some delays are unavoidable, and unpredictable, by even the most conscientious parties and their lawyers, and of the likely serious consequences to an applicant of staying or dismissing a claim; compare the approach taken to non-compliance with time limitations in respect of appeals in Van Reesema v Giameos (1979) 27 ALR 525. We would not wish our observations to cause respondents to apply for dismissal of proceedings simply because there has been a non-compliance with a direction by the applicant, even though it does not cause or indicate a continuing problem in preparing the matter for an early trial. APPEAL GROUNDS 78 Given the decisive impact of the orders made by the primary judge on the determination of the proceeding, it is convenient to address the issue of whether leave to appeal should be granted concurrently with the question of whether any of the appeal grounds have been established. 79 The draft notice of appeal contains the following proposed grounds of appeal (Proposed Grounds): Dismissal of the Interlocutory Application 1. In relation to Orders 1 and 2 made by the Primary Judge, the exercise of the Primary Judge's discretion miscarried in the sense discussed in House v R (1936) 55 CLR 499 and in particular by the description of any default as "egregious and unexplained": Primary Judgment at [58]. 2. In relation to Order 1 made by the Primary Judge, the Primary Judge erred in law in relation to the application of rule 5.23 of the Federal Court Rules in the absence of any application from the respondents to the appeal and in the face of the appellant's application for an extension of time to file evidence. 3. In relation to Order 2 made by the Primary Judge, the Primary Judge erred in law in relation to the application of rule 5.23 of the Federal Court Rules in the absence of any application from the respondents to the appeal. Strike out of the defence and cross-claim without notice 4. In relation to Orders 3 and 4 made by the Primary Judge, the exercise of the Primary Judge's discretion miscarried in the sense discussed in House v R (1936) 55 CLR 499. 5. In relation to Orders 3 and 4 made by the Primary Judge, the Primary Judge erred in law in relation to the application of rule 5.23 of the Federal Court Rules in the absence of any application from the respondents to the appeal. 6. In relation to Orders 3 and 4 made by the Primary Judge, the Primary Judge failed to accord the appellants procedural fairness in respect of the striking out of their defence and cross-claim, which was not the subject of any application from the respondents nor an application previously foreshadowed by the Court. 80 It is convenient to address the Proposed Grounds with respect to the dismissal of the interlocutory application separately from the Proposed Grounds with respect to the striking out of the defence and dismissal of the cross-claim. DISMISSAL OF THE INTERLOCUTORY APPLICATION Submissions 81 The Shepherd parties contend that the primary judge's discretion miscarried in the sense necessary to fall within House v The King in five respects: (a) a failure to consider appropriately the effect of each decision upon the just resolution of the proceeding; (b) an incorrect characterisation of the explanations provided by the Shepherd parties (including in the context of the earlier grant of time); (c) an incorrect characterisation of the effect of delay on the determination of the proceeding by drawing analogies to criminal law in which no six year limitation period applies; (d) the utilisation of rule 5.23 of the FCR in the absence of any application by the Watt parties; and (e) a failure to accord procedural fairness to the Shepherd parties with respect to the proposed entry of default judgment. 82 Proposed Grounds 2 and 3 in the draft notice of appeal address the refusal of the Extension Application and the Amendment Order by the primary judge, rather than the orders made by the primary judge striking out the defence and cross claim pursuant to rule 5.23 of the FCR, which are addressed in proposed grounds 4, 5 and 6. They are accordingly misconceived insofar as they allege a failure to afford procedural fairness to the Shepherd parties in the decision to dismiss the Interlocutory Application. Leave to advance those Proposed Grounds on appeal is refused. In relation to ground 1, the Shepherd parties advance two principal contentions in support of their challenge to the exercise of the discretion by the primary judge to dismiss the Interlocutory Application and not make the Extension Order and the Amendment Order. 83 First, the Shepherd parties contend that the grave and one-sided consequence to them of not being given an extension to serve their evidence far outweighed the case management principles that purportedly supported the exercise of the discretion. They submit that the effect of not extending time was that they would be shut out from advancing any evidence in support of their defence or cross claim at any hearing. They point to their consent to a guillotine order to serve their evidence, the absence of a hearing date or any application for default judgment by the Watt parties, the explanations provided by Mr Nurse for the delays in the service of their evidence and the steps that have been taken to progress the preparation of the outlines of evidence. 84 The Shepherd parties submit that what was being sought in the Interlocutory Application was an extension of the timetable for the service of their evidence by two months to 28 May 2021 (the 4 February 2021 orders stipulated 2 April 2021) and a month of that time had already elapsed so that "in reality all that was being sought was a four-week extension". We interpolate that by the time of the hearing of the Interlocutory Application on 20 May 2021, the extension sought was in effect only eight days. 85 The Shepherd parties also submit that the inference drawn by the primary judge at J [57] that the respondents were "not really actively progressing their defence and cross-claim or seeking to advance the serious issues that their existing pleadings agitated" and the characterisation of the default by the Shepherd parties at J [58] as "egregious and unexplained" did not accord with the explanations provided by Mr Nurse for the delays in the preparation of their evidence. 86 Second, the Shepherd parties submit that the discretion with respect to leave to amend the cross-claim should have been considered separately to the extension of time to serve evidence, but in any event the primary judge, by his finding that the delay in bringing the amendment application as "unexplained", had incorrectly characterised the delay and his Honour's reliance on that finding was an error in the exercise of his discretion. They point to the explanations offered by Mr Nurse with respect to the difficulty in obtaining instructions, client illness and the problems encountered by Logie-Smith Lanyon by reason of the COVID-19 pandemic and insurance matters, and the absence of a hearing date. 87 They also submit that the primary attack on the explanations offered for the delay in seeking to amend the cross-claim was misdirected in circumstances in which the amendments "largely sought to regularise the guarantee claims so as to advance claims for the primary debts" and the amendments to some degree even narrowed the issues by removing the claims with respect to pharmacies in the Australian Capital Territory. 88 The Watt parties submit in answer to the first respect in which it was alleged that the primary judge's discretion miscarried, that the effect of the dismissal of the Interlocutory Application upon the resolution of the proceeding was plain and obviously considered by the primary judge at J [36] and [38]. They submit that the real complaint advanced by the Shepherd parties is that the primary judge failed to give sufficient weight to the prejudice that the Shepherd parties claimed they would suffer if the Interlocutory Application was dismissed. 89 In answer to the second respect in which it is alleged that the primary judge's discretion miscarried (set out in [81(c)] above), the Watt parties refer to the summary by the primary judge at J [17]-[35] of the evidence of Mr Nurse and submit that it is not clear how that evidence has been mischaracterised. The Watt parties submit that the Shepherd parties appear to be suggesting that any further explanation than that provided by Mr Nurse in his affidavits was unnecessary and therefore its absence was an irrelevant or extraneous matter improperly relied upon by the primary judge in exercising his discretion. They submit that the relevance of evidence of steps taken in an attempt to comply with previous directions and circumstances preventing compliance or bring forward amendments earlier is plain, and having regard to "the sparsity" of the explanations provided by Mr Nurse it was properly open to the primary judge to reach the conclusions and draw the inferences at J [52]-[60]. 90 In answer to the third respect in which it was alleged that the primary judge's discretion miscarried, the Watt parties submit that the alleged erroneous reliance on criminal law considerations simply cannot be reconciled with his Honour's analysis at J [49]-[50]. 91 The Watt parties also submit that to the extent that the Shepherd parties might seek to rely on the earlier delays in the Watt parties serving their evidence, the absence of a hearing date and the general impact of the COVID-19 pandemic, each was raised in the course of the hearing of the Interlocutory Application and expressly considered by the primary judge in the exercise of his discretion, as is evident from J [5], [18], [36] and [47]. 92 Further, and in any event, the Watt parties submit that the Shepherd parties have not established that substantial injustice would result if leave to appeal were not granted. At best, they submit, the material adduced by the Shepherd parties "points to little more than a theoretical possibility of injustice if leave were not granted and that is insufficient to warrant a grant of appeal". Consideration Introduction 93 The orders of the primary judge made on 20 May 2021 as explained by the ex tempore reasons given that day (and published in corrected form on 27 May 2021) were interlocutory, concerned matters of practice and procedure and involved the exercise of a discretion conferred on the Court under ss 37P(5) and (6) of the FCA Act and rule 5.23 (and, in part, recourse to rule 1.40) of the FCR. 94 The exercise of the discretion conferred under s 37P had the effect of dismissing the Interlocutory Application by which the Shepherd parties sought the Extension Order, extending until 28 May 2021 the date for service on the Watt parties of outlines of evidence of witnesses (together with a bundle of relevant documents) to be relied upon by the Shepherd parties in both defending the claims of the Watt parties in the principal proceeding and prosecuting their cross-claim against the Watt parties arising out of the franchising and related transactions at the heart of the principal proceeding. 95 The outlines of evidence (and related documents) consisted of the evidence of Mr Shepherd, Mr Steidle and Mr Peterson (taken on and from 20 April 2021) and the evidence of Mr Beattie (taken on and from 12 May 2021). 96 The dismissal of the Interlocutory Application also had the effect of dismissing the application of the Shepherd parties for leave to amend by 4.00 pm, 17 May 2021, their cross-claim so as to: join as cross-respondents to the cross-claim, four parties who were already among the Watt party applicants (of which there were nine in all, the four proposed additional cross-respondents within that group being Mrs Peacock, Mr McCallum and companies called Asbet Pty Ltd and Wattabear Pty Ltd); join a new corporate franchisee, Riverina Pharmaceuticals Pty Ltd (said to be in breach of an obligation to pay particular amounts due under a franchise agreement); join two individuals, Mr Sergi and Mr Murray as guarantors of particular franchise agreements; add additional claims; and abandon the claims at [88] to [117] of the cross-claim concerning claims against a group described as the "ACT franchisees". We will return to elements of the principal proceeding later in these reasons. 97 The exercise of the discretion to dismiss the Interlocutory Application and thus dismiss the applications of the Shepherd parties for an extension until 28 May 2021 to serve their outlines of evidence and for leave to amend the cross-claim as described, also had the immediate effect of engaging a further exercise of discretion by the primary judge on the footing that since the Shepherd parties had failed to serve their outlines of evidence as required by earlier programming orders (with no proper explanation in the primary judge's view for the failure), and as the extension to 28 May 2021 to do so had been refused, the defence to the claims of the Watt parties was to be struck out and so too the cross-claim of the Shepherd parties against the Watt parties (in the unamended form as leave to amend had been refused). 98 Apart from dismissing the extension and leave to amend applications and striking out the defence and the cross-claim of the Shepherd parties, the primary judge also refused an application made that day for a stay of each of those orders. 99 At [26] of these reasons, we describe the events that occurred after the making of the Orders, including entry of judgment against each of the Shepherd parties on 23 July 2021 for damages to be assessed (Order 3), among other orders including declaratory orders (Order 1) and programming orders (Orders 4 and 5) for the subsequent damages hearing. 100 In striking out the defence and dismissing the notice of cross-claim of the Shepherd parties (having dismissed their interlocutory application (Order 1)), the primary judge exercised a power conferred by s 37P(5) to make such order as his Honour thought "appropriate". The primary judge exercised the particular power conferred under s 37(6)(a) and (b). 101 The primary judge at [43] also quoted the whole of rule 5.23 of the FCR, which addresses the topic of orders made on the default of a party. That rule contemplates that if a respondent is in default, an applicant may apply for one of the orders at rule 5.23(2)(a)-(e) including judgment for damages to be assessed (rule 5.23(2)(d)) or an order giving judgment for the relief claimed in the statement of claim (rule 5.23(2)(c)). 102 When making the Orders on 20 May 2021, the primary judge made no orders under rule 5.23 although his Honour did make orders giving the parties an opportunity to each put on submissions (and later be heard) as to whether or not, in the absence of the struck-out defence of the Shepherd parties, the Watt parties were entitled to any of the relief claimed in the statement of claim, or judgment for an amount. 103 Plainly, the primary judge was anticipating making an order under rule 5.23(2)(c) or (d) of the FCR. There is no suggestion that the Watt parties sought or urged the primary judge to act under rule 5.23(2) to make any order under the rule (whether rule 5.23(2)(c) or (d) or otherwise). The proposal to act under rule 5.23(2) came from the primary judge in the course of the hearing. The primary judge at [42] of his Honour's reasons regarded himself as entitled to act under any rule in the FCR on his "own initiative" by reason of rule 1.40 of the FCR. Some orders were made on 23 July 2021 with further programming orders on 7 September 2021, 8 October 2021, 2 November 2021 and 12 November 2021 and a hearing as to damages and final relief held on 13 December 2021: see [26] of these reasons. 104 Thus, the effect of the Orders as the expression of the exercise of the discretion was to bring about finality in a real and practical sense in the proceedings: adverse and final for the Shepherd parties; remedial for the Watt parties. 105 That being so, we note the observations of the Court (Latham CJ, Rich, Dixon, Evatt and McTiernan JJ) in Bucknell at 225 that if the interlocutory order "has the practical effect of finally determining the rights of the parties, though it is interlocutory in form, a prima facie case exists for granting leave to appeal". See also Décor at 400 (Sheppard, Burchett and Heerey JJ); Samsung at [30] (Dowsett, Foster and Yates JJ). 106 Their Honours in Bucknell were writing at a time (1936) well prior to the intervention by the Commonwealth Parliament and the Parliaments of the States and Territories in enacting purpose specific case management provisions relating to civil proceedings before courts directed to a statutory "overarching purpose". Those provisions confer a statutory discretionary power to make orders (giving expression to the recited purpose of the provisions) which, when exercised, might have the effect of finally determining the rights of parties and in respect of which a prima facie case otherwise exists for granting leave to appeal. 107 The question of whether the appeal court can be satisfied that such a decision is attended by sufficient doubt to warrant reconsideration and whether substantial injustice would result from the decision (and orders) if leave were refused supposing the decision to be wrong, is conditioned by the manner of the exercise of the power in the context of the subject matter, scope and purpose of the statutory provisions conferring the power on the court in the management of civil proceedings, and the factors those provisions conferring the discretion contemplate as relevant or irrelevant factors. 108 The source of the power exercised by the primary judge was a discretion to make "such order or direction" as the primary judge thought "appropriate", the Shepherd parties having failed to serve their outlines of evidence by 2 April 2021 in accordance with the direction of the Court made on 4 February 2021 (Order 1): s 37P(5). In particular, s 37P(6) confers a power (as a particular aspect of the s 37P(5) conferral) to disallow or reject any evidence; to strike out a party's defence; and to dismiss a proceeding in whole or part: see [71] of these reasons setting out the text of s 37P. A part of the proceeding before the primary judge was the proceeding by the Shepherd parties by cross-claim. 109 Section 37P of the FCA Act applies in relation to a civil proceeding before the Court which "must" be conducted by the parties to the proceeding in a way consistent with the "overarching purpose" (s 37N(1)) of the "civil practice and procedure provisions" (as defined at s 37M(4)). A party's lawyer in conducting a civil proceeding must "take account of the duty" imposed on the party by s 37N(1) and "assist" the party to comply with the duty: s 37N(2). 110 The overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes according to law; and to facilitate the just resolution of disputes as quickly, inexpensively and efficiently as possible: s 37M(1)(a) and (b). Importantly, both of the factors at (a) and (b) of s 37M(1) are governed by the notion of the extent to which they facilitate the just resolution of disputes. Not surprisingly, a core element of the s 37M(1) overarching purpose is to facilitate the "just resolution" of disputes (according to the two factors) as each exercise of power conferred by the civil practice and procedure provisions (including s 37P) is an exercise of the judicial power of the Commonwealth, the aim of which is to quell controversies between citizens (corporate or otherwise) according to law and do justice between the parties. 111 The overarching purpose includes the five "objectives" at s 37M(2), the first of which is "the just determination of all proceedings before the Court". The second and third objectives are concerned with the efficient use of judicial and administrative resources and the efficient disposal of the Court's caseload. The fourth objective is the timely disposal of proceedings, and the fifth objective is the resolution of disputes at a cost proportionate to the importance and complexity of the matters in controversy. 112 Section 37M(3) provides that the civil practice and procedure provisions must be construed and applied, and any power conferred or duty imposed by them must be exercised or carried out, in the way that best promotes the overarching purpose. 113 As to the overarching purpose, s 37M(1), (2) and (3) are in these terms: 37M The overarching purpose of civil practice and procedure provisions (1) The overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes: (a) according to law; and (b) as quickly, in inexpensively and efficiently as possible. (2) Without limiting the generality of subsection (1), the overarching purposes includes the following objectives: (a) the just determination of all proceedings before the Court; (b) the efficient use of the judicial and administrative resources available for the purposes of the Court; (c) the efficient disposal of the Court's overall caseload; (d) the disposal of all proceedings in a timely manner; (e) the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute. (3) The civil practice and procedure provisions must be interpreted and applied, and any power conferred or duty imposed by them (including the power to make Rules of Court) must be exercised or carried out, in the way that best promotes the overarching purpose. The pleaded case 114 The Watt parties commenced the proceeding on 13 June 2019. There are nine applicants. The principal applicant among them, Mr Watt, is a pharmacist who had established, by 21 April 2016, nine retail pharmacy stores in New South Wales and stores in the Australian Capital Territory (Watt Group). Another applicant, Mazzawattie Pty Ltd (Mazzawattie), as trustee of a unit trust (SMSUT) conducted the head office operations of the Watt Group. 115 The applicants' contentions as pleaded are as follows. 116 On or about 21 April 2016, Mr Shepherd and Mr Steidle proposed to Mr Watt the purchase by interests related to them of the head office operations of the Watt Group; that a particular franchising structure be established with an entity established as franchisor (ultimately, Summit Pharmacy Group Pty Ltd (SPG)) and each pharmacy becoming a franchisee; that certain monies be paid by the Shepherd interests (first Shepherd finance representation); and other representations at [31(i)-(ix)] of the statement of claim (SOC). 117 On 22 April 2016, Mr Shepherd made six further representations involving significant representations as to finance described as the second, third and fourth Shepherd finance representations: SOC [31(i)-(vi)]. Some were representations as to future matters. Further representations are pleaded at [33]-[34] of the SOC. The representations are said to be misleading. 118 Mr Steidle made representations on 4 July 2016 that RX Holdings Pty Ltd (RXH) would do certain things; that the value of the franchisor entity, SPG, would be between $900m and $1.2bn within five years; and seven other representations as to significant financial matters involving steps taken or being taken or to be taken by RXH (Steidle representations): SOC [42.1]-[42.9]. Mr Shepherd, Mr Steidle and Mr Beattie controlled RXH and by 22 November 2016, it held all the issued shares in SPG. Some of the Steidle representations were as to future matters. 119 Each one was misleading: SOC [45]. 120 Four of them were false: SOC [46]. 121 Further representations were made by Mr Shepherd: SOC [47]-[48]. 122 On 1 March 2017, Mr Shepherd made four further representations to Mr Watt concerning matters of profits to be derived, fee reductions and the financial capacity of RXH as to certain matters: SOC [51(i)-(iv)]. 123 In making the pleaded Shepherd representations, Mr Shepherd intended certain things: SOC [52(i)-(v)]. Each representation made by Mr Shepherd was misleading. In making the Steidle representations, Mr Steidle intended certain things: SOC [53(i)-(v)]. Each representation was misleading. 124 On 21 November 2016, Mr Shepherd made six further representations to Mr Watt: SOC [60]. 125 In reliance on all of the pleaded representations, Mr Watt entered into a sequence of significant transactions to establish SPG as the franchisor and put in place all of the transactional elements of the proposal put to him by Mr Shepherd and Mr Steidle: SOC [67.1]-[67.18]. 126 The respondents failed "to deliver" on the representations: SOC [75]. 127 Mr Watt requested the respondents to "co-operate in dismantling the franchising structure and re-instate the status quo": SOC [76]. The respondents declined to do so: SOC [77]. 128 The Watt parties assert breaches of the Competition and Consumer (Industry Codes – Franchising) Regulation 2014 (Cth) established under the provisions of the Competition and Consumer Act 2010 (Cth) (CCA): unconscionable conduct; and misleading conduct in contravention of ss 18, 21 and 22 of the Australian Consumer Law, located in Schedule 2 of the CCA. 129 They claim damages and other relief. 130 Thus, it can be seen that the SOC pleads a wide range of detailed factual matters across 117 paragraphs engaging a period from 21 April 2016 to March 2017 and then a period from 27 June 2017 to January 2018. No doubt, there is much evidence that places the pleaded representations in the context of oral negotiations, letters, emails and a raft of draft and final documents. The factual and forensic analysis of these claims would normally require an examination of the entire pleaded franchising structure, the documents and the pleaded transactions and the many pleaded representations including: (a) the first, second, third and fourth Shepherd finance representations; (b) the first and second Shepherd growth representations; (c) the Shepherd head office value representation; (d) the para 34 Shepherd representation; (e) the Steidle value representation; (f) the Steidle $65 million representation; (g) the Steidle 550 growth representation; (h) the Steidle sign-on team representation; (i) the Steidle $200 million; (j) the Steidle USD$250 million representation; (k) the Steidle $325 million convertible notes representation; (l) the Steidle $45 million to $65 million representation; (m) the Shepherd benefit representation; (n) the Shepherd cash flow representation; (o) the Shepherd profit representation; (p) the Shepherd first fees representation; (q) the Shepherd second fees representation; (r) the Shepherd capacity representation; and (s) the six Shepherd catalyst representations. 131 The Shepherd parties contest the pleaded claims and deny the causes of action asserted against them and the related claimed relief. 132 Apart from these matters pleaded by the Watt parties, the Shepherd parties (SPG and RXH) filed a cross-claim against three of the Watt party applicants (Mr Watt, Mrs Watt and Mazzawattie). 133 They plead the express terms of an Asset Transfer Agreement (ATA): [9(a)-(j)]; the steps taken by Mr Watt on 10 July 2016 to perform the relevant terms of that agreement: [11(a)-(c)]; the terms of a Share Subscription Agreement (SSA) of 10 July 2016; the steps taken by RXH on 1 June 2016 and steps taken by SPG between 1 June 2017 and May 2018. They plead breaches of the ATA. 134 They plead entry on 21 March 2017 by Mazzawattie, RXH and SPG into a Trade Receivables Agreement (TRA); the terms of it; steps taken under it from 20 March 2017 and 28 June 2017; and Mazzawattie's failure to account to SPG as required under the TRA concerning the collection of trade debts. As to these matters, the Shepherd parties claim $4.5m or equitable compensation. 135 They also plead an Asset Agreement of 18 June 2018 between SPG and Mazzawattie; the relevant express terms; SPG's performance of it; Mazzawattie's breaches of obligations to pay amounts and to take steps under it. They claim, in respect of these matters, $315,143.31 and specific performance of particular obligations. 136 They plead the Franchise Agreements of 17 December 2016 between SPG and the nine NSW pharmacies; the relevant express terms ([43(a)-(g)]) including the obligation to pay for services provided by SPG, and the obligations of the "Guarantor" of the obligations of the franchisee in each case; the provision of services by SPG to each pharmacy and the fee invoices issued to each pharmacy franchisee and the resultant amount owing: [45]-[80]; a total amount of $1,110,006.64. 137 They plead that Mr Watt, as guarantor of six the NSW pharmacy franchisees, failed to pay the amounts due and SPG seeks judgment for the relevant amount. A similar claim is made against Mrs Watt as guarantor of three NSW pharmacy franchisees. Judgment is sought against her. By the statement of cross-claim as originally filed, similar claims are made by SPG in respect of the seven ACT pharmacies: [84]-[117]. The proposed amendments to the cross claim 138 By that part of the Interlocutory Application concerned with leave to amend the statement of cross-claim in the form of the proposed amended statement of cross-claim prepared and settled for the Shepherd parties by Mr O'Neill of counsel (a document before the primary judge on 20 May 2021 as Annexure MAN-1 to the affidavit of Mr Nurse filed on 19 May 2021 at 5.09 pm), the Shepherd parties sought to join four of the existing Watt party applicants as cross-respondents as necessary parties to the claims against four of the nine NSW franchisees already fully pleaded: Mrs Peacock concerning the "Russell Street Pharmacy"; Mr McCallum, concerning the "Tumbarumba Pharmacy"; Asbet concerning the "Judges Pharmacy"; and Wattabear concerning the "Cootamundra Pharmacy". 139 They also sought to plead breaches by Mr Murray, Mr Sergi and Mrs Peacock of obligations as guarantors of particular franchisees. 140 They also sought to add a breach of contract claim at [80A] and [80B] although those paragraphs are simply conclusionary as to the existing pleading at [44]-[80]. 141 They sought to add a claim against Mr Watt of contended breaches of duty arising under ss 180, 181 and 183 of the Corporations Act 2001 (Cth) as a director of SPG and RXH, and breaches of fiduciary obligations arising otherwise. 142 They plead conduct from at least December 2016 concerning Mr Watt's role in relation to four NSW franchisees and his role as a guarantor of six of them giving rise to losses suffered by SPG and RXH: six heads of damage are pleaded. They plead conduct of Mr Watt of interfering in the contractual relations between SPG/RXH, on the one hand and particular franchisees, on the other. The pleaded loss is $214,999.68. They also plead loss suffered by SPG by reason of Mr Watt's conduct as earlier described, in relation to financial assistance of $500,000 provided by SPG on 15 May 2018. The consequential claim is $712,691.50. They claim other losses suffered by SPG due to Mr Watt's pleaded conduct amounting to $177,573. 143 They also plead other losses suffered by SPG due to Mr Watt's pleaded conduct (particularly the contractual interference claim) which deprived SPG of the exercise of options to extend the initial term of each of the Franchise Agreements for two new terms of five years each. That claim is framed as a loss of expected profits over the new Terms 2 and 3 of the agreements. That loss is said to be: Term 2, $4,320,000; Term 3, $5,355,000. 144 Apart from all of these claims, the Shepherd parties claim losses suffered from May 2018 as a result of suppliers ceasing to pay rebates to SPG or RXH and paying them instead to persons (unknown) but at the direction of Mr Watt in breach of the duties earlier described owed by him to SPG and RXH. The lost rebates are not quantified in the amended statement of cross-claim. 145 Finally, the proposed amended statement of cross-claim abandons all of the paragraphs pleading the claims (in similar form to the claims concerning the NSW franchisees) in relation to the seven ACT pharmacy franchisees. 146 The claims the Shepherd parties sought to agitate by the unamended statement of claim are significant and so too are the claims they sought to make by leave by the proposed amendments (some of which are entirely new and others of which join parties necessary to the cross-claims as earlier framed). The Shepherd parties submit that they believe the claims to be "good" (both original and those sought to be raised by leave) and they emphasise that the statement of cross-claim had been put in its final proposed form by counsel and was before the primary judge late on 19 May 2021. They also emphasise that as at 20 May 2021, no trial date had been allocated. Leave to appeal 147 It is convenient to address Proposed Grounds 1 and 4 together. 148 There is little discussion by the primary judge as to the nature and content of the cross-claim of the Shepherd parties and the amendments the Shepherd parties sought to raise by leave: see the brief references at J [32], [34], [35] and the last four sentences of [56]. 149 That may well be due to the circumstance that the primary judge had been case managing the litigation and was entirely familiar with it and felt no need to explain the burden of the potential orders in the particular context of the rights and remedies agitated or to be agitated in the proceeding. However, the proposed amended statement of cross-claim had only been filed after 5.00 pm on the day before the hearing. 150 We take the view that in exercising a discretion under the civil practice and procedure provisions (s 37M(4)), which has the effect of bringing about the effective finality of the proceedings in the circumstances of a failure of a party to comply with a direction or order of the Court, the primary judge ought not only take into account the circumstances of the failure, explanations given and whether the party and its advisers have complied with the obligations arising under s 37N(1) and s 37N(2) respectively, but also clearly take into account the subject matter, scope and content of the claims and any cross-claims effectively brought to finality by the exercise of the discretion, and whether the exercise of the discretion in the manner contemplated brings about the "just resolution of the dispute". 151 The character of the proceeding, its complexity, scope and scale and proposals to amend the framing of issues to be quelled by an exercise of judicial power in the proceeding would usually compel some reflection for weighing in the balance the bundle of rights and interests in issue in the proceeding overall affected by the proposed orders. That process of weighing would involve considering the detail of the rights and issues in question and the consequences of effectively extinguishing the defences and cross-claims of, in this case, the Shepherd parties and the rights and interests they sought to agitate in the controversy. That is to say, the prejudice likely to be suffered if the orders were made. 152 The amended pleading settled by counsel had not been before the primary judge previously and the ex tempore reasons themselves do not reflect a discussion of (or any detailed consideration of) the complexity of the proceedings which would in every practical sense be brought to an end by the orders made that day, as explained by the ex tempore reasons pronounced that day. 153 We have already noted the chronology of events from the commencement of the proceedings by the Watt parties on 13 June 2019 to the orders made on 20 May 2021 (and beyond): see [8] to [26] of these reasons. 154 The following additional aspects of the chronology ought to be noted here. 155 The proceeding was commenced by an originating application and the SOC pleading the matters already noted. In order to formulate the SOC addressing all of the elements of the transactions and each one of the many pleaded representations mentioned earlier, considerable time and effort must have been dedicated by the Watt parties, solicitors and counsel to gathering the relevant instructions, considering the documents and drafting and finalising the pleaded case. Even with the advantage of that preparation, the Watt parties who had been directed on 21 February 2020 to serve outlines of evidence together with any documents upon which they intended to rely by 17 April 2020 (55 days later) were not able to do so until 12 October 2020, seven months and 21 days later (essentially eight months later). Orders were made on 25 June 2020 adjusting the date for service by the Watt parties of their material until 10 July 2020 and then further orders were made on 24 September 2020 again adjusting the date to 2 October 2020. Those various orders were made with the consent and support of the Shepherd parties. Ultimately, on 12 October 2020, the Watt parties served outlines of evidence of eight witnesses and 1,400 pages of documents. 156 As the primary judge notes at [19] of his reasons, the solicitor for the Shepherd parties made no criticism of the almost eight months' delay brought about by disruptions to the Watt parties caused by the COVID-19 pandemic and related restrictions and difficulties. 157 The order of 24 September 2020 also provided for the service by the Shepherd parties of their outlines of evidence and documents by 11 December 2020, a period of 60 days (almost nine weeks, but not eight months), from the date of service on 12 October 2020 by the Watt parties of their material. The Shepherd parties could not meet that 60 day requirement and the parties agreed a consent order on 3 February 2021 extending the time until 2 April 2021. The primary judge required an explanation for the extension until 2 April 2021. The solicitors for the Shepherd parties responded to the chambers of the primary judge advising that a number of factors (reasons) had made the extension of time necessary including that the two key witnesses had been ill and insurance issues (the extent of coverage) needed to be resolved (and had been resolved). 158 On 4 February 2021, the primary judge made orders extending the time for the Shepherd parties to serve outlines of evidence and documents until 2 April 2021. 159 The extension of time under the order of 4 February 2021 would provide the Shepherd parties with additional time, calculated from 11 December 2021, of three months and three weeks until 2 April 2021, and taking into account the period from the date of service of the material of the Watt parties on 12 October 2020, the total time available to the Shepherd parties was five months and three weeks. 160 By the time of the making of the order on 4 February 2021, both sets of parties, by consent, were content with the way in which the proceeding had evolved, no doubt with the parties and their solicitors taking into account the difficulties of dealing with complex factual matters in a period of social anxiety and threats to health, and the difficulties of conducting the litigation and gathering instructions in an orthodox way brought about by the pandemic and other factors. such as the illness of witnesses and insurance issues. The primary judge had expressed concern about the extension to 2 April 2021, but, in light of the submissions of the Shepherd parties and recognising the consent of the Watt parties to the proposed extension, the primary judge made the orders of 4 February 2021 extending the time available to the Shepherd parties to 2 April 2021. 161 The present issue began when the Watt parties advised the primary judge on 27 April 2021 of non-compliance by the Shepherd parties with the order of 4 February 2021, described by the Watt parties as "slippage" in compliance with the order. The primary judge listed the matter for case management on 7 May 2021 and directed the Shepherd parties to file an interlocutory application by 14 May 2021 seeking an extension of time for the outlines (to 28 May 2021) and leave to amend (by 17 May 2021). Programming orders were made for a hearing of the application on 20 May 2021. The Interlocutory Application was supported by the affidavits of Mr Nurse filed on 14 May 2021 and 19 May 2021. We have noted the content of those affidavits: see [27]-[39] of these reasons. 162 On 20 May 2021, the primary judge was confronted with a number of possible ways in which to exercise the discretion conferred by ss 37P(5) and (6), his Honour finding for the purposes of the exercise of the discretion that the Shepherd parties had failed "to conduct the proceeding in a way consistent with the overarching purpose" as required by s 37N(1) and that the solicitors had failed to properly "take account" of that duty and had failed to "assist" the party to comply with it: s 37N(2)(a) and (b). 163 A number of possibilities arose in relation to the exercise of the discretion including these possibilities: (a) extend the time by eight days to Friday, 28 May 2021 to enable the Shepherd parties to serve their outlines of evidence and documents, with a guillotine order (as suggested by the Shepherd parties) that their defence be struck out if they failed to comply with the extension order, or without a guillotine order, coupled in either case with an order listing the matter for Monday, 31 May 2021 for review so as to supervise the consequences of non-performance of the extension order should that occur (listed for case management no doubt at the cost of the Shepherd parties having sought the indulgence); (b) make the above order and grant leave to amend in terms of the proposed draft amended statement of cross-claim settled by counsel as put before the Court and the parties; (c) grant the extension to 28 May 2021 and refuse leave to amend; or (d) refuse the extension application; refuse leave to amend as proposed or at all; strike out the defence and the notice of cross-claim of the Shepherd parties; dismiss the interlocutory application; make procedural directions to determine the terms of the judgment and orders to be entered and made in the proceeding in reliance on rules 5.23 and 1.40 of the FCR. 164 The primary judge exercised the discretion to bring about effective finality in the proceeding and the rights and interests of the parties by exercising the discretion in the manner described in the last of these options. 165 The question for the Full Court, of course, is not one of whether, standing in the position of the primary judge, the Full Court would have exercised the discretion differently according to one of the other possibilities described above (or other possible orders), but whether the decision of the primary judge is attended with sufficient doubt to warrant its reconsideration on appeal and whether substantial injustice would result if leave were refused. Because the orders of the primary judge have the practical effect or practical operation of finally determining the whole of the proceeding and thus the rights and interests of the parties, a prima facie case exists for granting leave to appeal. As the Full Court observed in Samsung at [33] citing Bucknell at 225-7: "Leave should readily be granted if, as a practical matter, the interlocutory order has the effect of determining the whole of the proceeding or an important issue in the proceeding" (emphasis added). 166 The question of whether the orders bring about effective finality of the proceedings goes to both questions of "sufficient doubt" and "substantial injustice". 167 In exercising the discretion to bring about effective finality in the proceeding by making the orders of 20 May 2021, the primary judge had particular regard to the failure of the Shepherd parties to discharge the s 37N(1) duty to conduct the proceeding in a way consistent with the overarching purpose. In Expense Reduction, the Court (French CJ, Kiefel, Bell, Gageler and Keane JJ) considered provisions of the Civil Procedure Act 2005 (NSW) (CPA) and provisions of the Uniform Civil Procedure Rules (UCPR) which are in substantially the same terms as ss 37M, 37N and 37P of the FCA Act. At [51], the Court recognised that speed and efficiency, in the sense of minimum delay and expense, "are essential to a just resolution of proceedings" and that the achievement of a "just but timely and cost-effective resolution of a dispute" has effects upon the parties, the Court and other litigants, and that in making interlocutory decisions, the Court must have regard to the "wider objects of the administration of justice". 168 The CPA is a little different in its terms in some respects. Section 58(1)(b) provides that, although the Court has power under s 61(1) of the CPA to make such order or direction "as it thinks fit" and power under s 61(2) to make such orders "as it considers appropriate" in the conduct of the proceeding, any orders made under the discretionary powers conferred by the CPA must be in accordance with the "dictates of justice" and the matters to be taken into account in deciding where the dictates of justice lie, include "the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction made in the process of case management": Expense Reduction at [54], quoting s 58(2) of the CPA. 169 In Expense Reduction, the Court observed (at [56]) (in terms equally applicable to ss 37M, 37N and 37P of the FCA Act) that the "evident intention and expectation" of the CPA is that the Court use the broad powers to facilitate the "overriding purpose" (or in the case of ss 37M, 37N and 37P, the "overarching purpose"). At [57], the Court observed that the overarching purpose "may require a more robust and proactive approach" on the part of courts. 170 The Court was not there concerned with the entry of final judgment in favour of a party, and clearly did not have orders of that kind in mind, as the Court (at [57]) immediately added, after the observations concerning a need for courts to be more robust and adopt a proactive approach, the further observation that "unduly technical and costly disputes about non-essential issues are clearly to be avoided" (by an exercise of the powers so conferred) and observed that the "powers" are "not at large" but governed in the case of the CPA by the "dictates of justice". The Court observed (at [57]) that in exercising the discretionary powers (analogous to the FCA Act powers) "regard is to be had in the first place to how to how the overriding purpose of the CPA can be furthered [in exercising the powers], together with other relevant matters including those referred to in s 58(2) [the "dictates of justice" and the matters quoted at [74] of these reasons]" (emphasis added). In many respects, the matters comprehended by the "dictates of justice" and the conceptions quoted at [74] of these reasons are comprehended by s 37M(1) and (2) of the FCA Act. 171 In exercising the discretionary powers in ss 37P(5) and (6), it is necessary to undertake a balancing exercise in which consideration is to be given to how the overarching purpose of s 37M can be furthered, together with other relevant considerations such as enabling the "just determination of all proceedings before the Court" as one of the recited "objectives" of the overarching purpose (s 37M(2)(a)) of facilitating the "just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible" (s 37M(1)(a) and (b)), by, for example, avoiding unduly technical and costly disputes about non-essential issues. That balance involves an assessment of the consequences of making (or not) the proposed orders for each of the parties. 172 In this case, however, there was no or no sufficient assessment of the consequences of making (or not) making the proposed orders on either the Watt or the Shepherd parties. In short, this is the principal reason why we respectfully conclude that the exercise of the discretion, in this case, miscarried. 173 The balancing exercise that needed to be undertaken involved assessing the prejudice to the Shepherd parties in the context of the subject matter, content and complexity of the proceedings should the application for an extension to Friday, 28 May 2021 and the application to amend the statement of cross-claim be refused, on the one hand, and the prejudice to the Watt parties should either or both orders have been made, on the other hand. 174 In assessing where the balance lies, the primary judge was required to keep in mind that the focus of the overarching purpose, the recited objectives and powers conferred in order to "best promote the overarching purpose" (s 37M(3)), are directed to facilitating the just resolution of the issues in the proceeding, according to law quickly, inexpensively and efficiently, of which there are many, rather than a conferral of power for the purpose of, in effect, disciplining a party by imposing final relief in the proceedings because that party has failed to comply with a direction or order of the Court or has failed to discharge the duty imposed under s 37N(1). 175 We do not, by these observations, underestimate the gravity of the concerns held by the primary judge about the conduct of the Shepherd parties that so significantly informed his Honour's exercise of the powers in the way he did, as expressed in his reasons at [22] and [52]-[60]. 176 The consequences contemplated by ss 37P(5) and (6) are that if a party fails to comply with a direction given by the Court about the practice and procedure to be followed in any part of a proceeding (see also, s 37P(2)), the discretionary power to make such order as the Court or a judge "thinks appropriate" is engaged. The discretion thus engaged is not at large and must be exercised according to settled principle recognising that the focus of the powers conferred by s 37P (taken in conjunction with the statutory framework created by ss 37M, 37N and 37P) is to identify how the overarching purpose can be furthered in facilitating a just, but quick and cheap, resolution of the real issues in the proceeding having regard to the subject matter, content and complexity of the proceeding, which is not confined to exercising the powers to bring the proceeding and the rights and interests of the parties to effective finality as, in effect, a punitive consequence of a failure to comply with orders and a failure to discharge the duty cast upon a party by s 37N(1) of the FCA Act. 177 We respectfully consider that the difficulty in the present case is that notwithstanding the matters emphasised by the primary judge and the characterisation of the conduct adopted by the primary judge, the steps taken by the Shepherd parties assisted by Mr O'Neill of counsel ultimately resulted (albeit after a period of delay) in a position on 20 May 2021 where the outlines were then eight days away from completion and service, and the amendments were then in final form (emerging as they often do in commercial litigation out of the intensity of the preparation of the outlines by counsel and counsel's focus upon the then state of the pleadings in the proceeding and whether other matters needed to be properly raised, pleaded and agitated). 178 What follows is that, at that point, the primary judge, in our respectful opinion, was required to examine the consequences for the Shepherd parties in refusing them an opportunity to put on their evidence, assert their defences to the various (and many) claims of the Watt parties and to agitate the cross-claims they sought to assert in the context of the rights and interests in controversy in the proceeding. That evaluative process would also have engaged an assessment, in the context of the complexity of the proceeding, of the precise consequences for the Watt parties should the primary judge grant the extension and the amendments. The Shepherd parties and their solicitor had both offered their apology to the Court, trial dates had not been allocated and the Shepherd parties were willing to accept a guillotine order striking out their defence should the 28 May 2021 deadline not be then met. 179 In our respectful opinion, that evaluative balancing exercise, fully taking into account the subject matter of the proceeding and the truly "determinative" consequences for the Shepherd parties, is not properly reflected in his Honour's reasons in explaining the basis for the exercise of the discretion. 180 At [59], the primary judge found that if he were to grant the extension of time to 28 May 2021 and the proposed amendments, there would be further delay in the proceeding being heard, beyond the delay already occasioned by the extension on 4 February 2021 to 2 April 2021. That, in part, would be due to new parties being joined to the cross-claim beyond those already joined (which must be a reference to Riverina, Mr Sergi and Mr Murray) with each new party likely to have their own defence to plead and possibly cross-claims to be made. The primary judge considered that the additional delay would also impact upon the capacity of the parties to recall the relevant events, and the expansion in the cross-claim by the proposed amendments would compound that problem. 181 But the fact remains that at 20 May 2021, the extension sought was for a further eight days and the extension beyond the due date set on 4 February 2021 of 2 April 2021 amounted to an additional period, in all, of about eight weeks. The exercise of the discretion, in taking into account the matters of concern to the primary judge just mentioned, ought also to have taken into account other possible orders such as allocating a trial date later in the year, setting expedited programming orders working back from the trial dates, together with a number of dates allocated for case management hearings in order to supervise the progression of the matter. If trial dates could not be allocated, expedited programming orders might nevertheless have been considered coupled with the allocation of dates for supervisory case management hearings of the proceeding. 182 In other words, we respectfully consider that the concerns about additional delay ought also to have been addressed by mechanisms other than the dismissal of the interlocutory application bringing about practical finality in the proceeding by the orders as made in the exercise of the primary judge's discretion. 183 Accordingly, we are satisfied that the decision of the primary judge is attended by sufficient doubt to warrant its reconsideration on appeal and we are also satisfied that the effective finality in the rights and interests of the parties brought about by the orders gives rise to substantial injustice in the event that leave to appeal is refused. 184 Thus, leave to appeal is to be granted with respect to Proposed Grounds 1 and 4. 185 We now turn to address Proposed Grounds 2, 3, 5 and 6. They can be addressed briefly. 186 As to Proposed Grounds 2, 3 and 5 we accept that no application was made by the Watt parties for the making of orders pursuant to rule 5.23 of the FCR as submitted by the Shepherd parties. It is clear, however, that the primary judge also relied on ss 37P(5) and (6) to make Orders 3 and 4. On the assumption that the primary judge had not erred in making Order 1, contrary to the findings that we have made above, given the extent of the non-compliance by the Shepherd parties with the directions to serve their evidence, we are satisfied that s 37P(5) and (6) provided the primary judge with the power to make Orders 3 and 4 of his own motion independently of any application by the Watt parties. 187 Proposed Grounds 2, 3 and 5 have insufficient prospects of success to justify leave to appeal. Leave to appeal on these grounds is refused. 188 As to Proposed Ground 6, we do not accept that the primary judge failed to afford procedural fairness to the Shepherd parties prior to making Orders 3 and 4 striking out the defence and dismissing the cross-claim. 189 The Shepherd parties were at all relevant times represented by competent and experienced solicitors and counsel. 190 The Shepherd parties were expressly put on notice by the primary judge at the case management hearing on 7 May 2021 that his Honour required an explanation for their failure to comply with earlier orders for the provision of their evidence and that he would need to be persuaded by evidence to allow any further extension of time for the Shepherd parties to serve their evidence. The matter was adjourned at the conclusion of the case management hearing to permit the Shepherd parties to file an interlocutory application and affidavit evidence in support of the relief that they sought. No application was made for further time to prepare the application and supporting evidence. 191 At the hearing of the Interlocutory Application on 20 May 2021, the Shepherd parties moved on the application and read the supporting affidavits of Mr Nurse. The primary judge made clear to counsel for the Shepherd parties that he was considering the entry of default judgment against the Shepherd parties and invited counsel to address him on why he should not to do so. Counsel for the Shepherd parties made submissions in response to the primary judge's invitation. It was not suggested by the Shepherd parties that they had been given insufficient time to make submissions or adduce further evidence to address why the primary judge should not make orders dismissing the defence and cross-claim. 192 Proposed Ground 6 has insufficient prospects of success to justify leave to appeal. Leave to appeal on this ground is refused. Re-exercising the discretion 193 We have concluded that in re-exercising the discretion, Order 1 should be set aside and the proceeding should be remitted to a docket judge other than the primary judge for the purpose of making case management orders establishing a timetable for the service of the evidence of the Shepherd parties and the filing of an amended cross-claim. We have reached that conclusion for the following principal reasons. 194 First, the impact of granting the Extension Order on the timely, efficient and cost-effective resolution of the proceedings would have been insignificant. Neither the primary judge nor the Watt parties pointed to any material prejudice. Conversely the prejudice to the Shepherd parties of not being permitted to rely on any evidence was manifest and immediate and led to the striking out of the defence, dismissal of the cross-claim and summary judgment against them. 195 Second, the impact on the timely, efficient and cost-effective resolution of the proceedings of granting leave to rely on the amended cross-claim, in particular the addition of new parties as cross respondents, needs to weighed against the following matters: (a) the efficiency of addressing all related claims in a single proceeding; (b) the absence of a hearing date; (c) the explanation on oath that the solicitors for the Shepherd parties had not previously identified the new claims until the witness conferences with counsel in April 2021; (d) the absence of any suggestion that the existing cross-claim did not raise bona fide claims; and (e) the amendments sought to expand the existing grounds in the cross-claim, including adding necessary additional parties and otherwise narrow the scope of the cross-claim. 196 Third, the evidence of Mr Nurse demonstrated that the Shepherd parties were taking substantive and material steps to progress the filing of an amended cross-claim and to address their failure to comply with previous orders to serve their evidence. There had been significant delays in serving evidence, but experienced counsel had since been briefed, witness interviews had been conducted and draft outlines had been prepared that would be finalised within eight days, a substantive defence and cross-claim had been served and a draft amended cross-claim had been finalised and was before the Court. 197 Fourth, substantive explanations had been provided by Mr Nurse for the delays in serving the evidence and the preparation of the proposed amendments to the cross-claim. We accept that further amplification of those explanations may well have been of assistance to the Court, but a broad explanation of the largely self-evident challenges created by the COVID-19 pandemic, particularly given the Melbourne location of the instructing solicitors, difficulties with insurers, witness illnesses and the need to replace the solicitor with day to day conduct of the matter, could not be dismissed peremptorily. It is also important to take account of understandable concerns about the potential waiver of legal professional privilege if more comprehensive explanations were provided, particularly with respect to the position that an insurer may have taken with respect to the proceeding and advice given by counsel as to the need for the preparation of an amended cross-claim. 198 Fifth, it is not uncommon that on counsel being briefed in a matter, particularly following interviews with material witnesses, additional issues and further evidence are identified that might be required in order to ensure that all relevant matters are addressed in a single proceeding. The impact of any amendments to pleadings on the timely, efficient and cost-effective resolution of the proceeding needs to be weighed against the timely, efficient and cost-effective benefits of resolving all interrelated issues in a single proceeding rather than multiple proceedings. In this case, that consideration weighs in favour of permitting the filing of the amended cross-claim, given the overlap in the factual basis for the claims against the proposed three new cross respondents and the claims that were already advanced against the Watt parties as guarantors. 199 Sixth, in circumstances in which there had already been substantial delays in both parties filing their evidence, previous extensions had been agreed by consent, steps were being taken to finalise their evidence, explanations albeit of a general nature had been provided for the delays and the matter had not been fixed for hearing we consider that the availability of alternative case management approaches to address delay, such as a guillotine order for the service of evidence as proffered by the Shepherd parties, or requiring further explanations for the delays with appropriate costs consequences weigh heavily against a dismissal of the Interlocutory Application. 200 We are therefore satisfied that Order 1 should be set aside, together with Order 2, the consequential costs order. STRIKING OUT THE DEFENCE AND DISMISSING THE CROSS-CLAIM 201 The analysis and conclusions above, with respect to the alleged miscarriage of the discretion by the primary judge in making Order 1, apply equally to Orders 3 and 4 because the basis on which Orders 3 and 4 were made striking out the defence and dismissing the cross-claim falls away if Order 1 is set aside and the relief sought in the Interlocutory Application is granted by a re-exercise of the discretion. DISPOSITION 202 The Court will grant leave to the Shepherd parties to appeal the orders made by the primary judge on 20 May 2021 but only in respect of Proposed Grounds 1 and 4. The appeal will be allowed. 203 The subsequent orders and declarations made by the primary judge on 23 July 2021 together with the orders and declaration made by the primary judge at the conclusion of the hearing on 13 December 2021 will be set aside, as the basis for making those orders and declarations necessarily falls away given the setting aside of Orders 1 to 4 made on 20 May 2021. 204 The matter will be referred to the National Operations Registrar for reallocation to a judge in the Commercial and Corporations National Practice Area. 205 The Shepherd parties' costs of the application for leave to appeal and the appeal are to be paid by the Watt parties. I certify that the preceding two hundred and five (205) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Greenwood, Burley and Halley. Associate: Dated: 13 May 2022 SCHEDULE OF PARTIES NSD 530 of 2021 Applicants Fourth Applicant: SUMMIT PHARMACY GROUP PTY LTD ACN 152 166 660 Respondents Fourth Respondent: SYLVIA WATT Fifth Respondent: GLEN MCCALLUM Sixth Respondent: KERRIE PEACOCK Seventh Respondent: ASBET PTY LTD ACN 003 317 404 Eighth Respondent: BURROUGHS PTY LTD ACN 613 528 028 Ninth Respondent: HERMIDALE HOLDINGS PTY LTD ACN 151 952 939 Cross-claimants Second Cross-claimant: SUMMIT PHARMACY GROUP PTY LTD ACN 152 166 660 Third Cross-claimant: RX HOLDINGS PTY LTD ACN 612 534 746 Cross Respondents Second Cross Respondent SYLVIA WATT Third Cross Respondent MAZZAWATTIE PTY LTD ACN 096 943 476 AS TRUSTEE OF SMSUT	24,821
federal_court_of_australia:fca/single/2018/2018fca1099	decision	commonwealth	federal_court_of_australia	text/html	2018-07-25 00:00:00	ADF15 v Minister for Immigration and Border Protection [2018] FCA 1099	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2018/2018fca1099	2024-09-13T22:44:51.664134+10:00	FEDERAL COURT OF AUSTRALIA ADF15 v Minister for Immigration and Border Protection [2018] FCA 1099 Appeal from: ADF15 v Minister for Immigration and Border Protection [2016] FCCA 3230 File number: NSD 2227 of 2016 Judge: FLICK J Date of judgment: 25 July 2018 Catchwords: MIGRATION – protection visas – appeal from the decision of the Federal Circuit Court to dismiss application for review of a decision of the Refugee Review Tribunal to refuse application for a Protection (Class XA) visa – consideration of nature of appeal to Federal Court – appeal by way of rehearing – whether Appellant identified appellable error – whether Tribunal considered complimentary protection obligations PRACTICE AND PROCEDURE – legal representation – whether right to legal assistance – consideration of circumstances in which a referral should be made for pro bono legal assistance – whether referral to legal assistance should be made Legislation: Federal Court Rules 2011 (Cth) rr 4.12, 36.75 Cases cited: ADF15 v Minister for Immigration and Border Protection [2016] FCCA 3230 AMF15 v Minister for Immigration and Border Protection [2016] FCAFC 68, (2016) 241 FCR 30 Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833, (2001) 117 FCR 424 Hamod v New South Wales [2011] NSWCA 375 McGibbon v Linkenbagh (1996) 41 ALD 219 Minister for Immigration and Border Protection v SZVFW [2017] FCAFC 33, (2017) 248 FCR 1 MZAGE v Minister for Immigration and Border Protection [2016] FCA 630 New South Wales v Canellis (1994) 181 CLR 309 SZRUR v Minister for Immigration and Border Protection [2013] FCAFC 146, (2013) 216 FCR 445 SZTYY v Minister for Immigration and Border Protection [2015] FCA 985 SZVLE v Minister for Immigration and Border Protection [2017] FCA 90 Date of hearing: 24 May 2018 Registry: New South Wales Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 32 Counsel for the Appellant: The Appellant did not appear Solicitor for the First Respondent: Ms B Rayment of Sparke Helmore Counsel for the Second Respondent: The Second Respondent filed a submitting notice save as to costs ORDERS NSD 2227 of 2016 BETWEEN: ADF15 Appellant AND: MINISTER FOR IMMIGRATION AND BORDER PROTECTION First Respondent ADMINISTRATIVE APPEALS TRIBUNAL Second Respondent JUDGE: FLICK J DATE OF ORDER: 25 JULY 2018 THE COURT ORDERS THAT: 1. The Administrative Appeals Tribunal be joined as the Second Respondent. 2. The appeal is dismissed. 3. The Appellant is to pay the costs of the First Respondent, either as taxed or agreed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT 1 The Appellant in the present proceeding, identified by the pseudonym ADF15, is a citizen of Sri Lanka. He arrived in Australia by boat in August 2012. 2 In May 2013, the Appellant applied for a Protection (Class XA) visa. A delegate of the Respondent Minister for Immigration and Border Protection refused that application in December 2013. An application was then filed with the former Refugee Review Tribunal for review of the delegate's decision. In February 2015, the Tribunal affirmed the delegate's decision. 3 An application for judicial review of the Tribunal's decision was filed in March 2015. The Federal Circuit Court of Australia dismissed that application in December 2016: ADF15 v Minister for Immigration and Border Protection [2016] FCCA 3230. 4 A Notice of Appeal was then filed in this Court. The Grounds of appeal are there set forth as follows (without alteration): The Federal Circuit court failed to find, in respect of the Respondent, on 14 December 2016, that the AAT declined its jurisdiction to me on the basis of grounds stated in my Federal Circuit Court Application. I have stated my grounds of review and the particulars of the grounds in my Federal Circuit Court application lodged with your court. I still rely on the grounds and the particulars for the judicial review with the Federal Court of Australia. I have no lawyer to represent me in this court as I am unemployed and I have no money to pay for legal representation. 5 The Appellant did not appear before the Court at the hearing of the appeal. Indeed, he had departed from Australia on 16 April 2018. He had been informed by email of the listing of the hearing a few days prior to his departure. The Respondent Minister was represented by his solicitor. The Second Respondent filed a submitting notice save as to costs. 6 An application made on behalf of the Minister at the outset of the hearing to have the appeal summarily dismissed pursuant to r 36.75(1)(a)(i) of the Federal Court Rules 2011 (Cth) was rejected. It was considered that the preferable course was to consider the merits of the appeal so that ADF15 had some assurance that his arguments had been considered. 7 The appeal is to be dismissed with costs. The absence of appellable error 8 The Grounds of appeal as set forth in the Notice of Appeal filed in this Court rely (in part) upon the Grounds relied upon before the Federal Circuit Court. 9 The Grounds relied upon in the Federal Circuit Court were there expressed (again without alteration) as follows: 1. The Respondent erred in law, with the error being a jurisdictional error, by failing to consider in full the complementary protection obligations Australia owed to me. 2. The Respondent made an error in law, with the error being a jurisdictional error, by not complying with section 424AA. 3. I intend to provide Transcript of the Respondent's hearing to this Court. 10 As was correctly submitted on behalf of the Respondent Minister, the task that this Court is now called upon to discharge is the exercise of its appellate jurisdiction – and not an exercise of its original jurisdiction. 11 The nature of an appeal to this Court, as is now well-established, is in the nature of a "rehearing" and is a jurisdiction to be exercised for the correction of error: Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833 at [20] to [21], (2001) 117 FCR 424 at 434 to 435 ("Branir"). In commenting upon Branir and other decisions of this Court, Griffiths, Kerr and Farrell JJ in Minister for Immigration and Border Protection v SZVFW [2017] FCAFC 33, (2017) 248 FCR 1 at 13 to 14 ("SZVFW") have helpfully summarised the position as follows: [40] It is important to now say something about the nature of the appeal. The appeal is brought under s 24 of the Federal Court of Australia Act 1976 (Cth). It is an appeal in the nature of a rehearing. This has important implications for the nature and scope of the appeal. It is well established that a rehearing is not a new hearing during which the original application is determined without regard to what happened in the Court below and without regard to its findings … [41] It is equally well established that the role of the Court on an appeal by way of rehearing is the correction of error. As Allsop J (as his Honour then was) emphasised in Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 (Branir) at [21] in such a case there is a "need to show error on appeal". It is desirable to set out in full that paragraph from his Honour's judgment (noting that Drummond and Mansfield JJ agreed with it): However, this conclusion does not alter the need to show error on appeal. In Hamsher Beaumont J and Lee J identified the need for the demonstration of error in the trial judge's findings or conclusions and they expressed the view that the statements in Warren v Coombes (1979) 142 CLR 531 (dealing with an appeal by way of rehearing) that an appellate court must not shrink from giving effect to its own conclusion were premised on a conclusion that the decision of the trial judge was wrong and should be corrected. [42] The need to identify appealable error in an appeal by way of rehearing and the incorrectness of an approach which simply invites the Full Court to consider the matter afresh and come to its own view, which appeared at least at one point to be the position advanced by the Minister, is reflected in the following passage from the joint judgment of Siopis, Gilmour and Katzmann JJ in Mesa Minerals Ltd v Mighty River International Ltd (2016) 241 FCR 241 at [85] (which, notably, refers approvingly to Allsop J's observations in Branir): In effect, Mesa sought to re-run the case it lost below. Yet, the appeal is in the nature of a rehearing; it is not a hearing de novo. The Court's task is to correct error. The determination of the question of whether Mighty River was acting in good faith and the inspection was sought for a proper purpose was largely an evaluative one. The primary judge's decision is entitled to be given some weight. Where, as here, the nature of the issues is such that there cannot be said to be one truly correct answer, the availability of a different view or a preference for a different view, is unlikely to be sufficient: Branir v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 at [25] per Allsop J (as his Honour then was), Mansfield and Drummond JJ agreeing. As Allsop J went on to explain at [30]: The proper approach is not to ask the court to survey all the evidence, directed by the otherwise unassailable findings on credit, and to ask it to arrive at its own conclusions, without "essaying the necessary task of positively demonstrating that the trial judge was wrong" … It is not appropriate to treat the appeal as though it were a new trial on the evidence and constrained merely by the unassailable factual findings. Error must be demonstrated … The views and conclusions of the trial judge ultimately have to be shown to be wrong. They should not be laid to one side and a simple re-argument of the case take place. 12 The Appellant ADF15 has failed to expose any appellable error. 13 The primary Judge considered and rejected the first Ground relied upon below. 14 The primary Judge concluded that the Tribunal had considered the complementary protection criterion: [2016] FCCA 3230 at [21]. No appellable error is discernible in the reasons of the primary Judge for so concluding. As the primary Judge concluded, the Tribunal had in fact addressed and resolved the claim for complementary protection. The reasons for decision of the Tribunal thus recognise at the outset the need to consider a "complementary protection" claim. In summarising the relevant law, those reasons thus state in part as follows: RELEVANT LAW 3. The criteria for a protection visa are set out in s.36 of the Act and Schedule 2 to the Migration Regulations 1994 (the Regulations). An applicant for the visa must meet one of the alternative criteria in s.36(2)(a), (aa), (b), or (c). That is, the applicant is either a person in respect of whom Australia has protection obligations under the 'refugee' criterion, or on other 'complementary protection' grounds, or is a member of the same family unit as such a person and that person holds a protection visa. 15 Those reasons thereafter separately consider as follows the criterion to be satisfied: Complementary protection criterion 14. If a person is found not to meet the refugee criterion in s.36(2)(a), he or she may nevertheless meet the criteria for the grant of a protection visa if he or she is a non-citizen in Australia in respect of whom the Minister is satisfied Australia has protection obligations because the Minister has substantial grounds for believing that, as a necessary and foreseeable consequence of the applicant being removed from Australia to a receiving country, there is a real risk that he or she will suffer significant harm: s.36(2)(aa) ('the complementary protection criterion'). 15. 'Significant harm' for these purposes is exhaustively defined in s.36(2A): s.5(1). A person will suffer significant harm if he or she will be arbitrarily deprived of their life; or the death penalty will be carried out on the person; or the person will be subjected to torture; or to cruel or inhuman treatment or punishment; or to degrading treatment or punishment. 'Cruel or inhuman treatment or punishment', 'degrading treatment or punishment', and 'torture', are further defined in s.5(1) of the Act. 16. There are certain circumstances in which there is taken not to be a real risk that an applicant will suffer significant harm in a country. These arise where it would be reasonable for the applicant to relocate to an area of the country where there would not be a real risk that the applicant will suffer significant harm; where the applicant could obtain, from an authority of the country, protection such that there would not be a real risk that the applicant will suffer significant harm; or where the real risk is one faced by the population of the country generally and is not faced by the applicant personally: s.36(2B) of the Act. 16 Having set forth this analysis, the Tribunal thereafter addressed the evidence and claims made. The Tribunal then returned to the question of complementary protection as follows: CONCLUDING PARAGRAPHS 69. The applicant has not made any other claims to fear harm in Sri Lanka. On the evidence before it and for the reasons outlined above the Tribunal is not satisfied the applicant has a well-founded fear of persecution for a Convention reason in Sri Lanka. 70. For the reasons discussed above, the Tribunal is also not satisfied there are substantial grounds for believing that, as a necessary and foreseeable consequence of being removed to Sri Lanka, there is a real risk the applicant will suffer significant harm. 71. The Tribunal is not satisfied that the applicant is a person in respect of whom Australia has protection obligations under the Refugees Convention. Therefore the applicant does not satisfy the criterion set out in s.36(2)(a). 72. Having concluded that the applicant does not meet the refugee criterion in s.36(2)(a), the Tribunal has considered the alternative criterion in s.36(2)(aa). The Tribunal is not satisfied that the applicant is a person in respect of whom Australia has protection obligations under s.36(2)(aa). 73. There is no suggestion that the applicant satisfies s.36(2) on the basis of being a member of the same family unit as a person who satisfies s.36(2)(a) or (aa) and who holds a protection visa. Accordingly, the applicant does not satisfy the criterion in s.36(2). 17 Any contention that the Tribunal failed "to consider in full the complementary protection obligations Australia owed to" ADF15 is contrary to the express reasons provided by the Tribunal. The Tribunal considered the relevant legal requirements and applied those principles to the facts. 18 The primary Judge was correct in rejecting the first Ground: [2016] FCCA 3230 at [21] to [22]. 19 No submissions were advanced before the primary Judge in respect to Ground 2 and no transcript was provided, as envisaged by Ground 3. Ground 2 was nevertheless characterised by the primary Judge as "an unparticularised claim the Tribunal failed to comply with (in effect) s.424AA of the Act" and the primary Judge concluded that the claim "disclose[d] no jurisdictional error": [2016] FCCA 3230 at [23]. No appellable error is discernible in the reasons of the primary Judge for rejecting Ground 2. 20 The primary Judge also resolved an argument that was not to be found in the Grounds of application but rather (apparently) in submissions advanced during the course of the hearing. That argument placed reliance upon a "letter", which was identified as a translation of a newspaper article published on 12 January 2015. The translated newspaper article had been sent to the Tribunal after the hearing and was expressly referred to by the Tribunal at para [24] of its reasons for decision. An argument that the "letter" had not been "seriously" considered was, accordingly, rejected: [2016] FCCA 3230 at [18] to [20]. There is again no error apparent in the reasons of the primary Judge. 21 The Grounds of appeal, as expressed in the Notice of Appeal by reference to the arguments relied upon before the Federal Circuit Court, accordingly fail. The lack of legal representation 22 It is unclear whether the reference in the Notice of Appeal to ADF15 having "no lawyer" and having "no money to pay for legal representation" is a mere statement of fact or is separately relied upon as an appellable error. 23 In considering any such argument, it may readily be accepted at the outset that legal representation confers upon a party an unquestionable advantage. Legal representation generally assists in the identification of relevant factual and legal issues and facilitates a party's claim being presented for resolution in a focussed and disciplined manner. Legal representation generally assists the Court to focus upon the strengths of a party's case, which is generally presented for resolution in a way consistent with the lawyer's duties to both his client and the Court. 24 Notwithstanding the considerable benefit that legal representation brings to the presentation of a party's case, it must also be recognised that the Court itself has responsibilities to all parties – especially the unrepresented. The Court, it has thus been said, has "an obligation to ensure that [an unrepresented party] suffers no meaningful disadvantage in the conduct of his or her case because she or he does not have the skills or knowledge of a lawyer": MZAGE v Minister for Immigration and Border Protection [2016] FCA 630 at [32] per Mortimer J ("MZAGE'). The Court has an "overriding duty to ensure that a trial is fair": Hamod v New South Wales [2011] NSWCA 375 at [309] per Beazley JA (as her Honour then was), Giles and Whealy JJA agreeing ("Hamod"). In discharging that duty there may well be a tension between ensuring that an unrepresented party has a reasonable opportunity to present his case and the duty of the Court to ensure a fair trial for all the parties to a dispute: Hamod [2011] NSWCA 375 at [310] to [316] per Beazley JA, Giles and Whealy JJA agreeing. These observations of the New South Wales Court of Appeal were cited with approval in SZRUR v Minister for Immigration and Border Protection [2013] FCAFC 146 at [37], (2013) 216 FCR 445 at 452 to 454 per Robertson J (Allsop CJ and Mortimer J agreeing). See also AMF15 v Minister for Immigration and Border Protection [2016] FCAFC 68 at [39], (2016) 241 FCR 30 at 44 to 46 per Flick, Griffiths and Perry JJ 25 But there is no common law "entitlement" or absolute right to legal representation: New South Wales v Canellis (1994) 181 CLR 309 at 328 per Mason CJ, Dawson, Toohey and McHugh JJ. See also McGibbon v Linkenbagh (1996) 41 ALD 219 at 228 per Kiefel J (as her Honour then was). In rejecting an argument that a primary Judge had erred in failing to adjourn a hearing to enable legal representation to be obtained, Katzmann J in SZVLE v Minister for Immigration and Border Protection [2017] FCA 90 concluded: [40] Further, there is no statutory right to legal representation. Nor is there any absolute right to legal representation at common law. In civil proceedings procedural fairness does not require that a party be provided with legal representation, no matter how serious the consequences of the proceedings might be. (Citations omitted.) See also: SZTYY v Minister for Immigration and Border Protection [2015] FCA 985 at [14] per McKerracher J. 26 The reasons of the primary Judge disclose on their face no departure from the responsibilities owed by a Judge to an unrepresented party to ensure that the hearing is "fair": cf. Hamod [2011] NSWCA 375. Those reasons disclose a review by the primary Judge of the claims for protection being relied upon by ADF15 and a review of the Tribunal's reasons. Given the apparent care with which the primary Judge approached the case before him, there is no self-evident "meaningful disadvantage" suffered by ADF15: cf. MZAGE [2016] FCA 630. 27 There is, accordingly, no substance in any argument now sought to be relied upon which contends that the proceedings before the primary Judge miscarried because ADF15 was not there represented by a lawyer. 28 Consideration has been given to whether ADF15 should be referred for pro bono legal assistance pursuant to r 4.12 of the Federal Court Rules. But no such referral is considered appropriate for either of two reasons, namely because: ADF15 has left Australia and there would be no utility in making such a reference; and/or the Grounds of appeal are without merit. 29 Even though the Appellant has left the country, it should nevertheless be noted that the mere fact that a party is unrepresented is not a sufficient reason of itself to warrant a referral for legal assistance. The claims as advanced before the Federal Circuit Court and this Court on appeal are so lacking in merit that any referral would not be an appropriate invocation of the pro bono assistance that barristers provide to unrepresented parties in particular and (more broadly) the community and this Court. The existence of a pro bono referral system, and the fact that members of the bar are prepared to offer their services for free, is a resource which should be cherished and not abused. Referrals should be reserved, generally, for those cases which are perceived to have some merit and in circumstances where the Court would be assisted by the input of a legal practitioner. CONCLUSIONS 30 No appellable error is exposed. The "need to show error on appeal" (cf. Branir [2001] FCA 1833, (2001) 117 FCR 424; SZVFW [2017] FCAFC 33, (2017) 248 FCR 1) has not been met. Nor is the Appellant's lack of legal representation any reason to set aside the decision of the primary Judge. 31 The appeal should be dismissed. 32 There is no reason why costs should not follow the event. THE ORDERS OF THE COURT ARE: 1. The Administrative Appeals Tribunal be joined as the Second Respondent. 2. The appeal is dismissed. 3. The Appellant is to pay the costs of the First Respondent, either as taxed or agreed. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. Associate: Dated: 25 July 2018	5,134
federal_court_of_australia:fca/single/2005/2005fca1760	decision	commonwealth	federal_court_of_australia	text/html	2005-12-01 00:00:00	Baker v Rigg [2005] FCA 1760	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2005/2005fca1760	2024-09-13T22:44:51.704648+10:00	FEDERAL COURT OF AUSTRALIA Baker v Rigg [2005] FCA 1760 BANKRUPTCY – Application for annulment of sequestration order – Principles relevant to determination of whether the sequestration order should not have been made – Relevance of fact that debtor had a claim against the petitioning creditor exceeding in value the debt upon which the petition was based. Bankruptcy Act 1966 (Cth) ss 60, 153B DAWN MARIE BAKER v STEPHEN JAMES RIGG NSD 2385 of 2005 WILCOX J 1 DECEMBER 2005 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2385 of 2005 IN THE MATTER OF: DAWN MARIE BAKER BETWEEN: DAWN MARIE BAKER APPLICANT AND: STEPHEN JAMES RIGG RESPONDENT JUDGE: WILCOX J DATE OF ORDER: 1 DECEMBER 2005 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The bankruptcy of the applicant be annulled. 2. The sequestration order made on 5 September 2005 in the Federal Magistrates Court be set aside. 3. The respondent, Stephen James Rigg, pay the applicant's costs of the annulment application. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2385 of 2005 IN THE MATTER OF: DAWN MARIE BAKER BETWEEN: DAWN MARIE BAKER APPLICANT AND: STEPHEN JAMES RIGG RESPONDENT JUDGE: WILCOX J DATE: 1 DECEMBER 2005 PLACE: SYDNEY REASONS FOR JUDGMENT WILCOX J: 1 Application has been made to the Court for orders annulling the bankruptcy of the applicant, Dawn Marie Baker, and setting aside the sequestration order made on 5 September 2005. The circumstances behind the application are unusual. 2 Mrs Baker was the sole beneficiary of the estate of her husband, Kenneth William Baker, who died on 25 April 1996 leaving assets, whose gross value was sworn for probate at $959,680.83. The net value of the estate was said to be $731,794.17. Among the assets was a house ('the homestead') in which the deceased and Mrs Baker had resided for some 30 years. 3 At the time of his death, Mr Baker was a sleeping partner with the respondent, Stephen James Rigg, in a business known as Kempsey Kar Kare. Mr Rigg is a nephew of Mrs Baker. The deceased's half-share of partnership debts to the Commonwealth Bank ('the bank') ($77,905) and to a man named Trott ($50,000) was included as a liability of the estate. 4 Between the date of Mr Baker's death and 25 November 1996, Mrs Baker conferred on several occasions with Paul Sheridan, a solicitor who had acted on behalf of her husband and was retained to act on behalf of the estate. Mr Rigg attended most of those conferences. 5 Mr Sheridan prepared two deeds, which were executed on 25 November 1996. There were the same three parties to each deed, Mrs Baker, Mr Rigg and Trevor William Baker, Mrs Baker's son. The first deed contained promises by Mrs Baker to transfer to Mr Rigg and/or Mr Trevor Baker title to various parcels of real estate and items of plant and equipment and livestock. The property the subject of the promises comprised the entire estate. 6 One of the parcels of land to be transferred to Mr Rigg was land containing the homestead ('the homestead block'). At the date of the deed, Mrs Baker resided in the homestead with her daughter, Cathy Alexander, and Ms Alexander's daughter. 7 The second deed contained the following operative clauses: '1. THE Transferor and her said daughter and grand-daughter shall continue to reside in the said house property rent free and without being liable for costs such as rates, insurance and maintenance at any time. 2. THE consideration for the terms of this Agreement is that consideration as is more fully particularised in the Deed of even date between the parties. 3. THE Transferees shall allow the Transferor and her said daughter and said grand-daughter full free and unfettered access to the said house property at all reasonable times. 4. THE said Transferees will at their own expense continue to maintain the subject house property and ensure that it is at all times habitable to the said Transferor, her said daughter and her said grand-daughter. 5. THE said Transferees will in addition to maintaining the property pay all Council rates, Water rates, Land tax and insurance and other charges associated with the said building.' 8 In due course, title to the assets was transferred in accordance with the promises in the first deed. Mr Rigg became sole owner of the homestead block. Apparently, he then reorganised his dealings with the bank in such a way as to increase his indebtedness to the bank, which indebtedness was secured inter alia by a mortgage over the homestead block. 9 For some time, Mr Rigg performed his obligations towards the bank. Mrs Baker continued to reside in the homestead with her daughter and grand-daughter. However, in about 2000 or 2001, Mr Rigg defaulted in his payments to the bank. The bank brought proceedings in the Supreme Court of New South Wales ('the Supreme Court') seeking to obtain possession of the homestead block in order to exercise its power of sale as mortgagee. 10 At about this time, Mrs Baker initiated proceeding 20124/01 in the Supreme Court against Mr Sheridan and his two legal partners, seeking damages for negligence, and against Mr Rigg and Mr Trevor Baker, based on claims of undue influence and unconscionable conduct. 11 On 2 January 2001, Mrs Baker, through new solicitors, lodged a caveat against the title to the homestead block. She followed this with a separate proceeding (91226/03) seeking to uphold the caveat. However, it was apparently realised that the caveat was defective and, on 14 February 2003, Mrs Baker consented to an order for removal of the caveat. She also agreed that proceeding 91226/03 be dismissed with costs. The costs were subsequently assessed at $4452.17. The costs were not paid and Mr Rigg obtained a judgment in the Local Court of New South Wales in the sum of $5991.17. That sum included the assessor's fee and legal costs. 12 Matter 20124/01 was heard by James J of the Supreme Court over many days in 2004. On 24 February 2005, his Honour delivered a judgment in which he dismissed Mrs Baker's claim as against all defendants. Mrs Baker filed a notice of appeal, as against all defendants. The appeal is currently listed for hearing by the Court of Appeal of New South Wales on 31 January and 1 February next. 13 It was a corollary of the findings made by James J that the deed entitling Mrs Baker to continue to occupy the homestead was valid. It is conceded by Mr T G Parker SC, who appears today for Mr Rigg, that this means Mr Rigg has breached his obligations under the deed and is liable to pay damages for that breach to Mrs Baker. No formal claim has yet been made for damages. Nor has their amount been quantified. 14 In relation to that matter, it is relevant to note that, in order to stave off eviction from the homestead, Mrs Baker agreed in 2001 to pay to the bank the interest that would accrue in the future on the balance of Mr Rigg's debt to the bank. On 19 May 2005, the bank recovered judgment against Mrs Baker in relation to that obligation in the sum of $46,918.36, including legal costs. The bank subsequently assigned this judgment to Mr Rigg. 15 On 26 May 2005, Mrs Baker vacated the homestead at the bank's insistence. Since that time, Mrs Baker has been living elsewhere in the Kempsey district. The homestead was sold by the bank, in exercise of its power of sale. 16 On 1 July 2005, a bankruptcy notice was served on Mrs Baker. It demanded payment of $5,995.60 to Mr Rigg, this being the amount of the Local Court judgment plus a small amount of interest. The notice was in the usual form and required payment within 21 days. Mrs Baker did not comply with the requirements of the bankruptcy notice. In an affidavit read in this Court, Mrs Baker explained her inaction by saying: 'I had no assets and I didn't believe I could avoid the bankruptcy'. Mrs Baker was not required to attend for cross-examination. 17 On 9 August 2005, Mr Rigg filed a bankruptcy petition in the Federal Magistrates Court. The petition was founded on Mrs Baker's failure to comply with the requirements of the bankruptcy notice. It claimed a debt of $5995.60, that is, the judgment debt in respect of the costs order in the caveat proceeding. 18 The bankruptcy petition was made returnable on 5 September 2005. On that day, Mrs Baker did not appear. Registrar McIllhatton made a sequestration order. 19 In her affidavit in this application, Mrs Baker said her only debts were debts that 'arose out of my endeavours to save myself from having to move out of the Homestead'. Otherwise she was solvent, she said. 20 Notwithstanding her bankruptcy, Mrs Baker is anxious to press on with her appeal to the Court of Appeal. The Official Receiver elected, pursuant to s 60 of the Bankruptcy Act 1966 (Cth), not to discontinue the appeal. Instead, the Official Receiver has assigned the bankrupt's chose in action in the appeal to Ms Alexander. 21 Various motions came before Mason P in the Court of Appeal. In a judgment delivered on 23 November 2005, his Honour upheld Ms Alexander's entitlement to prosecute the appeal; but he intimated he would be minded to order her to provide security for the respondent's costs. This she is unable to do. Accordingly, Mrs Baker made this application for annulment. If it is successful, it is proposed Ms Alexander will assign the chose in action back to Mrs Baker. She presumably will be able to prosecute it without being required to provide security for costs. As the matter is to go back to Mason P tomorrow, I have been asked to hear and determine this application as a matter of urgency. 22 Section 153B of the Bankruptcy Act provides that 'if the Court is satisfied that a sequestration order ought not to have been made', the Court may make an order annulling the bankruptcy. 23 Three principles must be noted. First, the relevant facts are those in existence at the date of the sequestration order. However, in considering that situation, the Court is not confined to the evidence that was before the judge or registrar who made the sequestration order. Fresh evidence may be placed before the Court in the annulment application. Second, the Court should not hold that a sequestration order ought not to have been made unless the person who made the order was bound, on the facts now known to the Court, not to have made the order. Third, even if that was the situation, the Court retains a discretion whether or not to annul a sequestration order. 24 Having regard to these principles, it is necessary to focus on the situation that existed on 5 September 2005. 25 First, at that time, Mrs Baker was indebted to Mr Rigg in the sum of $5,595.60 being a judgment debt in relation to the caveat proceedings, as to which there was no appeal. This indebtedness was the sole basis of the bankruptcy petition. Second, Mrs Baker also owed Mr Rigg, $46,918.36, being the value of the judgment that had been recovered by the bank against Mrs Baker and assigned by the bank to Mr Rigg. However, the amount of this judgment would be included in the damages payment that Mrs Baker was entitled to recover against Mr Rigg arising out of his breach of covenant in the second deed. Third, Mrs Baker was entitled to recover other damages arising out of Mr Rigg's breach of the covenants contained in the second deed, being damages consequential upon her dispossession of the homestead. Fourth, costs orders had been made by James J against Mrs Baker, in favour of both the solicitors and Mr Rigg. However, the ultimate fate of those orders was directly linked to the fate of the appeal, not yet determined. Finally, Mrs Baker wished to pursue her appeal, it being an appeal that Mason P has described as 'arguable'. I respectfully agree with that description. Indeed, in relation to the solicitors, I think the appeal has substantial prospects of success. It was obviously of vital importance to Mrs Baker that she be able to continue to reside in the homestead with her daughter and grand-daughter as long as she wished. In 1996 Mrs Baker was only 61 years of age. It was foreseeable that she would wish to stay in the house for many years, yet Mr Sheridan took no steps to protect her against alienation or mortgage of the property by the transferee. Neither, it seems, did he take steps to drive home to Mrs Baker the risk of this occurring and ensure she had independent advice as to whether she wished to take that risk. 26 In Ahern v Deputy Commissioner of Taxation (1987) 76 ALR 137 at 148 the Full Court of this Court said: 'It is also well established that in general a court exercising jurisdiction in bankruptcy should not proceed to sequestrate the estate of a debtor where an appeal is pending against the judgment relied on as the foundation of the bankruptcy proceedings provided that the appeal is based on genuine and arguable grounds: Re Rhodes; Ex parte Heyworth (1884) 14 QBD 49; Bayne v Baillieu (1907) 5 CLR 64 and Re Verma; Ex parte Deputy Commissioner of Taxation (1985) 4 FCR 181. These cases rest on the broad principle that before a person can be made bankrupt the court must be satisfied that the debt on which the petitioning creditor relies is due by the debtor and that if any genuine dispute exists as to the liability of the debtor to the petitioning creditor it ought to be investigated before he is made bankrupt. Bankruptcy is not mere inter partes litigation. It involves change of status and has quasi-penal consequences.' 27 This case is not the same as Ahern. The order that founded the bankruptcy petition in this case (the costs order in the caveat proceeding) was not subject to any appeal. Nonetheless, that order was closely related to the subject matter of the appeal. Absent the conduct complained of in the proceeding under appeal, that order would not have been made. Further, and perhaps more importantly, it is clear that, at the date of the sequestration order (and assuming James J was correct in regarding the second deed as valid), Mr Rigg was liable to pay damages to Mrs Baker in an amount that would undoubtedly exceed the amounts which she owed to him at the date of sequestration. 28 As I have mentioned, her damages must include the amount for which she became liable to the bank, as the price of mitigating her loss and staying in her home, together with damages for loss of her home during the period 26 May to 5 September 2005 and ongoing. Although the latter sum has not been quantified, it must exceed the judgment debt of $5,995.60. 29 It seems to me that, on these facts, a sequestration order ought not to have been made. If the Registrar had known the full facts, she would have realised it was not clear that Mrs Baker was a net debtor to Mr Rigg. The proper order would have been to adjourn the hearing of the bankruptcy petition until determination of the appeal to the Court of Appeal. 30 Although in the time available I have not been able to find a case that is on all fours with the present case, I note the decision of Emmett J in Eumina Investments Pty Limited v Westpac Banking Corporation (1998) 84 FCR 454. That case arose under the Corporations Law and involved the question whether a statutory demand should be set aside. The legislative provisions are different, but it is relevant to note the following observation by his Honour, at 453: 'It is, in my opinion, appropriate for a Court to exercise the discretion conferred by section 459J(1)(b) where the Court is satisfied that there is an appeal based on reasonable and arguable grounds which, if successful, would result in the existence of an offsetting claim. The expression "reasonable and arguable grounds" is suggested by the decision of the Full Court in Ahern v Deputy Commissioner of Taxation.' The situation must be a fortiori where the offsetting claim does not depend on success in a forthcoming appeal. See Ling v Enrobook Pty Ltd (1997) 74 FCR 19 at 25-26. 31 There is no discretionary factor pointing against annulment. Accepting for present purposes James J's conclusion that Mr Rigg did not exert undue influence or engage in unconscionable conduct, it is nevertheless the case that the whole problem arose out of his failure to honour his obligations under the second deed. It was the bank who took the action to evict Mrs Baker. However, the bank's action was only possible because Mr Rigg had encumbered the homestead property with a mortgage obligation he was unable to satisfy. 32 I propose to order that the applicant's bankruptcy be annulled, the sequestration order made against her estate on 5 September 2005 be set aside and that the respondent pay the applicant's costs of this application. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox. Associate: Dated: 13 December 2005 Counsel for the Applicant: Mr S G Campbell SC and Mr C P Taylor Solicitor for the Applicant: Paul Stubbs Counsel for the Respondent: Mr T G R Parker SC Solicitor for the Respondent: Maurice Blackburn Cashman Date of Hearing: 1 December 2005 Date of Judgment: 1 December 2005	4,029
federal_court_of_australia:fca/single/2019/2019fca1230	decision	commonwealth	federal_court_of_australia	text/html	2019-08-07 00:00:00	CYM16 v Minister for Immigration and Border Protection [2019] FCA 1230	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2019/2019fca1230	2024-09-13T22:44:52.292043+10:00	FEDERAL COURT OF AUSTRALIA CYM16 v Minister for Immigration and Border Protection [2019] FCA 1230 Appeal from: CYM16 v Minister for Immigration & Anor [2019] FCCA 369 File number(s): NSD 331 of 2019 Judge(s): THAWLEY J Date of judgment: 7 August 2019 Legislation: Migration Act 1956 (Cth) ss 36(2)(a), 36(2)(aa), 473DD Cases cited: BVG15 v Minister for Immigration & Border Protection [2019] FCCA 290 DCP16 v Minister for Immigration and Border Protection [2019] FCAFC 91 ENE17 v Minister for Immigration and Border Protection [2019] FCA 942 SZSFS v Minister for Immigration and Border Protection [2015] FCA 534 Date of hearing: 7 August 2019 Registry: New South Wales Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: No Catchwords Number of paragraphs: 32 Counsel for the Appellant: The Appellant appeared in person with the assistance of an interpreter Counsel for the Respondents: Mr T Reilly Solicitor for the Respondents: The Australian Government Solicitor ORDERS NSD 331 of 2019 BETWEEN: CYM16 Appellant AND: MINISTER FOR IMMIGRATION AND BORDER PROTECTION First Respondent IMMIGRATION ASSESSMENT AUTHORITY Second Respondent JUDGE: THAWLEY J DATE OF ORDER: 7 AUGUST 2019 THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The appellant pay the respondent's costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT (Revised from transcript) THAWLEY J: 1 This an appeal from orders of the Federal Circuit Court of Australia made on 19 February 2019, dismissing an application for judicial review of a decision of the Immigration Assessment Authority made on 14 September 2016: CYM16 v Minister for Immigration & Anor [2019] FCCA 369. 2 The Authority had affirmed a decision of the delegate of the Minister for Immigration and Border Protection (now Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs) not to grant the appellant a Safe Haven Enterprise (Class XE Subclass 790) visa. Background 3 The appellant is a Tamil citizen of Sri Lanka who arrived in Australia as an unauthorised maritime arrival on 28 September 2012. He applied for a protection visa on 1 December 2015. 4 The appellant claimed that if he returned to Sri Lanka he would face serious harm from the Sri Lankan Army (SLA), the Criminal Investigation Department (CID) and other Sri Lankan authorities. He was afraid of harm because of his Tamil ethnicity, his imputed political opinion as a supporter of the Liberation Tigers of Tamil Eelam (LTTE) and former member of the LTTE and his imputed political opinion against the Sri Lankan government. 5 The appellant made the following claims in support of his application: (1) The appellant returned to Sri Lanka in around 1991 from Saudi Arabia. About four or five months after his return, he was stopped by the SLA. The SLA interrogated the appellant, questioned where he was going, and accused him of being an LTTE member. The appellant was taken to the SLA camp and was beaten, blindfolded and handcuffed. He was subsequently detained for 15 days and was tortured. The appellant was then detained, without charges or convictions, in various SLA camps for about one year before being returned home. (2) Between 1994 and around May 2012 the appellant owned a grocery shop that was near an SLA camp. The appellant was regularly approached by SLA and CID members who took items from his store and refused to pay. The appellant was too scared to request payment. The actions of the SLA and CID members started to impact his business and livelihood. (3) At around 4.30pm one afternoon in May 2012, two armed CID members came to the appellant's shop to purchase cigarettes and drinks. The appellant pointed out to the individuals that their account with his store was very high and that they had promised to pay their loans. (4) The next day, the two CID members returned to the appellant's shop. He told them he had run out of cigarettes because he was out of money because they had not been paying for the products. The appellant told the men that he would report them to their superior if they did not settle the amount owing to him. The CID members proceeded to abuse the appellant, verbally and physically, and threatened him with words to the effect: "Come to our camp this evening. We will cut you to pieces". (5) The appellant did not go to the camp and instead left Sri Lanka. He feared harm from the SLA and other Sri Lankan authorities if he returns to Sri Lanka, because he did not obey their orders. The Delegate's Decision 6 The delegate accepted the appellant's claim to having been arrested in 1991, but did not accept his claim to having been detained for the length of time he had claimed. 7 The delegate accepted that the appellant had contributed money and groceries to the LTTE but did not accept that he was at risk of being imputed with an LTTE profile. He was well known to his customers including those who worked at the local SLA camp. 8 The delegate did not believe the appellant's claims regarding the incident with the two CID officers in May 2012, given that the appellant had been running his business for 20 years and that his wife had run the business, without incident, for another 2 years after his departure. 9 The delegate expressly found the appellant had not been beaten by the CID and had not been asked to report to the army camp in May 2012. 10 The delegate was not satisfied that the appellant met the refugee criterion in s 36(2)(a) of the Migration Act 1958 (Cth). The delegate also concluded that the appellant did not meet the complementary protection criterion in s 36(2)(aa) of the Act. The Authority's Decision 11 The Authority affirmed the decision of the delegate not to grant the appellant a protection visa. 12 The Authority accepted that: (1) the appellant originated from an area previously controlled by the LTTE; (2) as the owner and operator of a grocery store in his particular area of Sri Lanka, the appellant would have encountered the LTTE and, during Sri Lanka's civil conflict, may have been forced to contribute money and groceries from his store; (3) the behaviour reported by the appellant, including CID officers taking goods from the appellant's grocery store and retaliating with threats if the appellant asked for payment, was behaviour which may have been part of the general harassment of Tamils by Sri Lankan authorities in the aftermath of civil conflict; and (4) the incident in May 2012 occurred and the incident caused the appellant to have a subjective fear that such incidents might continue to occur should he return to Sri Lanka. 13 The Authority did not accept that: (1) the conduct referred to at (2) above continued to occur in 2010 and 2012 as stated at the PV interview because the LTTE were a "spent force by May 2009"; or (2) the appellant had an LTTE profile arising from these low level contributions made under duress. 14 The Authority considered then current country information to the effect that, under the Sirisena government elected in 2015, monitoring and detention of Tamils had decreased, fewer people were detained and day to day life for Tamils had improved. Given the appellant had no LTTE profile, it did not accept that the CID would have any interest in him. 15 Although not expressly the subject of any claim by the appellant, the Authority then considered whether the appellant faced a real chance of serious harm by reason of having departed illegally, in breach of Sri Lankan departure law. It found that, on return, the appellant would be processed and charged and that in the course of this the appellant might be held in detention for a short time in poor conditions, but that a short detention did not amount to serious harm. This aspect of the Authority's decision will be discussed in further detail when considering the grounds of appeal. Grounds of Appeal 16 The appellant's grounds of appeal to this Court are as follows: 1. The Court below erred in finding that the Immigration Assessment Authority (IAA) had failed to properly consider the Applicant's claims under s 36(2)(a) and s 36(2)(aa) of the Migration Act 1958 ... 2. The Applicant seeks leave to rely on the principles developed in SZSFS v Minister for Immigration and Border Protection [2015] FCA 534. 3. The Court below erred in not finding that the IAA incorrectly applied s 473DD of the Act in the treatment of the Applicant's statement dated 26 August 2016 send [sic] by RACS [the Refugee Advice and Casework Service] on behalf of the applicant (CB Page 126-129). Particulars A. At [3] [4] of its reasons for decision, the IAA concluded that the legal argument and country information already available to the Delegate were not new information and would be considered. However, it was considered that the IAA Statement also contained new information but would not be considered as the requirements of s 473DD had not been satisfied. B. The IAA failed to adequately distinguish between what aspects of the IAA statement it could consider and those which failed to comply with s 473DD. 17 The appellant's Notice of Appeal set out the following further text, which appears to be by way of submission (emphasis in original): It is respectfully submitted that IAA wrongly interpreted the application of IEA, it should be noted that Section 45 of the IEA indicates clearly he would face imprisonment of either description for a term not less than six (6) months and not more than five (5) years and to a fine not less than fifty thousand rupees and not more than two hundred thousand rupees. The IAA though accepted that he would face a higher penalty but failed to provide reasons why he would not be imprisoned due to his second offence and the IEA provides that if he is imprisoned, he would be imprisoned for not less than six months. In such a situation, six months is a long imprisonment and the IAA failed to consider whether he would suffer significant harm in prison. Further, the IAA without any evidence concluded that he would be granted bail on personal surety or [sic] a family member. The IAA failed to provide explanation who is the family member who would be provide surety to bail him out from the prison. It is respectfully noted that the IAA erred in making assumptions as to grant of bail on return to Sri Lanka. There is nothing in the IAA Decision, or in dealing with relevant country information, which provides a basis or source for the statement that a family member is required to stand as guarantor, eligible to stand as guarantor. No country information to that effect is cited in the IAA Decision, and no relevant law providing who may stand as guarantor, and if a family member may stand as guarantor, what constitutes a "family member" for the purposes of the relevant Sri Lankan legislation, is cited. There is no legal or evidentiary basis who met the requirements for providing a guarantee. A conclusion reached for which there is no evident legal (in the sense of relevant Sri Lankan law cited) or evidentiary (in the sense of any relevant country information cited as to the legal practice in Sri Lanka) means that the IAA Decision, in this respect, lacks an evident and reasonable justification, and thus constitutes jurisdictional error: Li at [105] per Gageler J; Minister for Immigration & Border Protection v Pandey & Ors [2014] FCA 640; (2014) 143 ALD 640 at [61(d)] per Wigney J. It is respectfully submitted that above principles were observed in a recent Federal Circuit Court decision in BVG15 v Minister for Immigration & Anor [2019] FCCA 290 (15 February 2019) which is after my Court decision. Ground 1 18 The appellant did not identify any claim which was not considered by the Authority. Having reviewed the material before this Court, including in particular the Authority's decision, I was not able to identify a claim which the Authority did not consider. Accordingly, this ground must be rejected. Ground 2 19 In SZSFS v Minister for Immigration and Border Protection [2015] FCA 534, Logan J concluded that the Tribunal there concerned dealt with expert evidence relevant to the appellant's psychological condition in a manner which was irrational. The relevance of the decision to the present case was not explained and is not apparent. This ground also fails. Ground 3 20 The third ground asserted that the Federal Circuit Court erred in not finding that the Authority incorrectly applied s 473DD. The complaint, as indicated in the particulars, was that the Authority did not clearly distinguish between the information it would consider and that which it would not. This complaint is not made good. It is clear from A[4] that the Authority was not satisfied about the matters in s 473DD(b) in relation to the report dated 7 May 2016 titled "Preliminary Observations of the Special Rapporteur on Torture and Other Cruel, Inhuman or Degrading Treatment". It otherwise considered the appellant's submission. 21 It follows that ground 3 must also be rejected. The written submission 22 The written submission contained in the Notice of Appeal concerns the IAA's conclusions with respect to the events which might occur on the appellant's return as a consequence of him having left Sri Lanka illegally. This was not a matter raised before the Federal Circuit Court. The Minister objected to it being raised for the first time on appeal. If the point has no merit then leave to raise the argument would ordinarily be refused. It is, accordingly, convenient to consider first whether the ground has any merit. 23 At A[27], the Authority stated (footnotes omitted): Sri Lanka's Attorney-General's Department, which is responsible for the conduct of prosecutions informed DFAT in July 2015 that no returnee who was merely a passenger on a people smuggling venture had been given a custodial sentence for departing Sri Lanka illegally. However, fines of varying amounts depending on individual case circumstances had been issued as a deterrent towards joining boat ventures in the future. If a person pleads guilty, they will be fined and are then free to go. In most cases, when a returnee pleads not guilty, they are granted bail on personal surety immediately by the magistrate, or may be required to have a family member act as guarantor. 24 The Authority's conclusions at A[29] were that: (1) if the applicant pleaded guilty, he would be required to pay a fine and would subsequently be released; and (2) if he pleaded not guilty, he would be released on his own personal surety; (3) being a mere passenger on a people smuggling venture he would not be subject to a custodial sentence; (4) the requirement to pay a fine or provide personal surety would not amount to serious harm, nor that the payment of a fine, being held in detention for a short period and questioning cumulatively amounts to serious harm. 25 The appellant's submission in the Notice of Appeal proceeded on an incorrect basis. The Authority did not conclude that a family member of the appellant would stand or be required to stand as guarantor. Rather, it considered that the appellant would do one of two things: plead guilty or plead not guilty. If the former, he would pay a fine and be released. If the latter, he would be released on his own personal surety. The Authority did not engage in the further speculation that a family member might be required to act as guarantor or identify a family member that would act as guarantor. This was not surprising given that the issue of illegal departure, and the consequences to the appellant of that fact on return, were not expressly raised by the appellant. A fortiori, he did not raise as an issue that he might not have a family member to act as guarantor in the event that were required. 26 The appellant's position is equivalent to that of the appellant in DCP16 v Minister for Immigration and Border Protection [2019] FCAFC 91 of which the Full Court stated at [97] and [98] (emphasis in original): Further, as to a family member acting as a guarantor, contrary to the appellant's submission the Authority did not make any assumption that a family member would act as guarantor. The country information was that the appellant may be required to have a family member act as guarantor and that is all the Authority said. The question of whether a family member would act as guarantor was not critical to the Authority's decision (SZTAP v Minister for Immigration and Border Protection (2015) 238 FCR 404 at [79] per Robertson and Kerr JJ). On the question of the guarantee, the Authority was dealing with a triply contingent hypothetical. First, the appellant had to plead not guilty. If he pleaded guilty, he would be fined, with the fine able to be paid by instalments; no guarantee question would arise. Second, if he pleaded not guilty, he could be released on his own personal recognizance. In that eventuality, no guarantee would be required. Third, the guarantee question would only arise if he pleaded not guilty and his own personal recognizance was not sufficient. Now in that eventuality, and given that no immediate payment of money would be required from a guarantor, it might be expected that a family member may act as guarantor to secure the appellant's release. But all of this is in the realm of a hypothetical which the Authority did not need to speculate about or discuss in detail. See also: ENE17 v Minister for Immigration and Border Protection [2019] FCA 942 (Farrell J). 27 As the Authority in this case found that the appellant would be released on his own personal surety if he pleaded not guilty, BVG15 v Minister for Immigration & Border Protection [2019] FCCA 290 is not relevant. BVG15 turned on a finding that a family member (a paternal uncle) would be required to stand as guarantor. No analogous finding was made in the present case. Oral submissions 28 The appellant made oral submissions. He made two points. First, the appellant said that he could not go back to Sri Lanka because of the current situation. Second, the appellant indicated that his daughter was disabled. It was said that the consequence of this was that the appellant's community rejected him and his daughter and that his society neglected him. He described his family's situation as that of being "outcasts". 29 The role of this Court is confined to correcting legal error on the part of the Federal Circuit Court. In an appropriate case, error on the part of the Federal Circuit Court might be established by its failure to recognise or provide appropriate relief in respect of jurisdictional error on the part of the Authority. 30 As to the first aspect of the appellant's oral submission, the current situation in Sri Lanka was not shown to be in any way relevant to demonstrating error on the part of the Federal Circuit Court or jurisdictional error on the part of the Authority. 31 As to the second aspect of the appellant's oral submissions, none of the matters concerning the appellant's daughter's disabilities or the consequences of them to the acceptance of the appellant or his family in the community were put to the delegate, the Authority or the Federal Circuit Court. Nor did those matters form an express or implied basis of the appellant's claims. These matters raised in oral submissions were not supported by evidence. Having said that, I am prepared to accept what was said at face value. As just mentioned, the role of this Court is confined to the correction of legal error on the part of the Federal Circuit Court. Assuming the matters stated are correct, they cannot demonstrate error on the part of the Federal Circuit Court or jurisdictional error on the part of the Authority in circumstances where those matters were not raised or evident on the material. CONCLUSION 32 The appeal must be dismissed with costs. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Thawley. Associate: Dated: 7 August 2019	4,397
federal_court_of_australia:fca/single/2010/2010fca0679	decision	commonwealth	federal_court_of_australia	text/html	2010-07-01 00:00:00	SZMVK v Minister for Immigration and Citizenship [2010] FCA 679	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2010/2010fca0679	2024-09-13T22:44:52.339294+10:00	FEDERAL COURT OF AUSTRALIA SZMVK v Minister for Immigration and Citizenship [2010] FCA 679 Citation: SZMVK v Minister for Immigration and Citizenship [2010] FCA 679 Appeal from: SZMVK v Minister for Immigration & Anor [2010] FMCA 75 Parties: SZMVK v MINISTER FOR IMMIGRATION AND CITIZENSHIP and REFUGEE REVIEW TRIBUNAL File number: NSD 192 of 2010 Judge: COWDROY J Date of judgment: 1 July 2010 Catchwords: MIGRATION – Appeal from Federal Magistrates Court of Australia – Review of a decision of the Refugee Review Tribunal – Claim of persecution through extortion – Whether Federal Magistrate erred in finding that Tribunal had adequately considered s 91R of Migration Act 1958 (Cth) – Whether Federal Magistrate erred in finding that threats against appellant's life were not genuine – Whether Federal Magistrate erred in finding that the Tribunal had considered broader test of 'serious harm' – Whether Federal Magistrate erred in finding that Tribunal had adequately considered issues relating to appellant's Pahadi ethnicity – Whether Federal Magistrate gave 'proper, genuine and realistic consideration' to appellant's claim – Held – No error as alleged – Appeal dismissed. Legislation: Migration Act 1958 (Cth) s 91R Cases cited: BRGAA of 2007 v Minister for Immigration and Citizenship and Another (2007) 164 FCR 381 cited Chan Yee Kin v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379 cited Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 cited Craig v The State of South Australia (1995) 184 CLR 163 cited Minister for Aboriginal Affairs and Another v Peko Wallsend Limited and Others (1986) 162 CLR 24 cited Minister for Immigration and Ethnic Affairs v Wu Shan Liang and Others (1996) 185 CLR 259 cited Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 cited NAHI v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 10 cited NAIS and Others v Minister for Immigration and Multicultural and Indigenous Affairs and Another (2005) 228 CLR 270 distinguished NBFP v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCAFC 95 cited Politis v Federal Commissioner of Taxation (1998) 16 ALD 707 cited SZIIF v Minister for Immigration and Citizenship and Another (2008) 102 ALD 366 distinguished VBAO v Minister for Immigration and Multicultural and Indigenous Affairs and Another (2006) 233 CLR 1 cited VTAO and Others v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 81 ALD 332 distinguished Date of hearing: 12 May 2010 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 37 Appellant: Appeared in Person Counsel for the First Respondent: Mr T. Reilly Solicitor for the First Respondent: DLA Phillips Fox IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 192 of 2010 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: SZMVK Appellant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent REFUGEE REVIEW TRIBUNAL Second Respondent JUDGE: COWDROY J DATE OF ORDER: 1 July 2010 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The Appellant pay the costs of the First Respondent. Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 192 of 2010 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: SZMVK Appellant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent REFUGEE REVIEW TRIBUNAL Second Respondent JUDGE: COWDROY J DATE: 1 July 2010 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The appellant appeals from the decision of Federal Magistrate Raphael delivered on 10 February 2010 which dismissed an application for judicial review of a decision of the Refugee Review Tribunal ('the Tribunal') handed down on 3 August 2009. The Tribunal's decision affirmed the decision of a delegate of the Minister for Immigration and Citizenship ('the Minister') to refuse to grant a Protection (Class XA) visa to the appellant. BACKGROUND 2 The appellant is a citizen of Nepal who arrived in Australia on 6 November 2007. On 19 December 2007 the appellant lodged an application for a protection visa with the Department of Immigration and Citizenship. 3 A delegate of the first respondent refused the application for a protection visa on 27 February 2008. The appellant applied to the Tribunal for a review of that decision, and on 25 August 2008 the Tribunal affirmed the delegate's decision. The appellant sought judicial review of this decision and on 14 April 2009 the Federal Magistrates Court set aside the decision and remitted the matter to the Tribunal to be determined according to law. 4 Before the second Tribunal hearing the appellant claimed that he operated a construction company in Nepal and had been a supporter of the Communist Party of Nepal – Unified Marxist Leninist (CPN-UML) while he was a student. The appellant claimed that he belonged to a group called the Pahadi (also referred to as 'Hill People'); that Maoists started to treat CPN-UML together with other leftist parties as their enemies and demanded money and financial aid from them; and that contractors in Nepal were severely affected by such extortion demands. 5 The appellant claimed that he was targeted by Maoists insurgents, especially the Maoist Young Communist League ('the YCL'), at a number of electrical generating plant sites at which he was working; that insurgents sought financial donations at each of these locations; and that he had been kidnapped for four hours and later released after giving his Maoist captors money. The appellant claimed that Maoists continued to attempt to extort money thereafter; that his home came under attack from various groups such as the Janatantrik Terai Mukti Morcha ('the JTMM') and the Madhesi Mukti Morcha ('the MMM'); and that he was accused of being a police informant against the Madhesi who were at war with the Pahadis. The appellant claimed the JTMM had attacked him in February-March 2007. The appellant also claimed his company was no longer operating and that the JTMM had threatened his wife in Bara before she moved to Kathmandu. The appellant said that he was issued with a passport in March 2007 and applied for a visa to enable him to attend a building conference in Australia. THE TRIBUNAL'S DECISION 6 The Tribunal was not satisfied the appellant's fear of Convention-related persecution was well-founded. It found the appellant to be vague and inconsistent regarding his claims that he was extorted, beaten, that threats were made against him by the YCL and that the JTMM continued to pursue him following an incident in February-March 2007. The Tribunal also found the appellant's reasons for a six month delay in coming to Australia after obtaining his passport cast doubt on the credibility of the appellant's claims that he was in fear of serious harm from Maoists and the JTMM. Accordingly the Tribunal did not accept the appellant's claims relating to the attacks on the appellant or his family. Nor did the Tribunal accept that there had been threats of ongoing harm. 7 The Tribunal accepted the appellant was the victim of extortion. However, based on the evidence and guided by s 91R(2) of the Migration Act 1958 (Cth) ('the Act'), it did not accept the appellant was denied the capacity to earn a livelihood in Nepal where such hardship threatened his capacity to subsist. Accordingly it did not accept that the extortion was sufficiently serious to amount to persecution. The Tribunal also held that the alleged kidnapping and threats were not genuine threats against his life and did not amount to persecution within the meaning of the 1951 Convention Relating to the Status of Refugees as amended by the 1967 Protocol Relating to the Status of Refugees (together, the Refugees Convention, or 'the Convention'). 8 The Tribunal concluded that the appellant's experience of extortion was primarily a result of criminal activity designed to raise funds for the Maoists, rather than a persecutory activity within the meaning of the Convention. The Tribunal was not satisfied that the appellant's membership of a particular social group was the essential motivation behind the various attempts to extort money from him. Rather, the Tribunal found that the construction industry had been targeted with extortion demands because the money involved within the industry was substantial and because such companies were a comparatively easy target. 9 Although the Tribunal accepted that the appellant was the victim of extortion by the Maoists, the Tribunal did not accept the appellant's claims that he had developed a high political profile with the Maoists such that he was specifically targeted for extortion by them. The Tribunal accepted country information which indicated a continuing risk of violence by the YCL and Maoists in Nepal. However, it did not accept the appellant would be targeted by these groups for a Convention reason and was not satisfied there was a real chance he would be subjected to persecution in the reasonably foreseeable future. The Tribunal also found that if a real chance of harm to the appellant by the JTMM existed, they would have sought to harm him in the nine month period before his departure to Australia. 10 On the basis of the above, the Tribunal was not satisfied that the appellant was a person to whom Australia has protection obligations under the Convention, and affirmed the decision under review. FEDERAL MAGISTRATES COURT AND APPEAL TO THIS COURT 11 By Application filed in the Federal Magistrates Court of Australia on 3 September 2009 the appellant sought judicial review of the Tribunal's decision. Each of the grounds relied upon were rejected by Raphael FM. By Notice of Appeal dated 1 March 2010, the appellant appealed to this Court from the Federal Magistrate's decision. 12 In the appeal to this Court the appellant relies essentially upon the same grounds as those considered by Raphael FM, except that a further ground (Ground 4 in the Notice of Appeal) has been added. The final ground of appeal in the Notice of Appeal (Ground 5) is in all relevant senses identical to the final ground of appeal heard by the Federal Magistrate. 13 The appellant appeared before this Court on 12 May 2010 unrepresented but assisted by an interpreter. The appellant informed the Court of the occasions when extortion demands were made of him by Maoists, and of his difficulties in tendering for construction contracts because of interference by Maoists who demanded money from him. The appellant's testimony related to factual issues. The appellant made no submissions in respect of the issues raised in his Notice of Appeal. Accordingly, as the grounds of appeal are relevantly identical except for Ground 4, it is convenient to address the findings of Raphael FM and to then state the Court's findings in respect of each ground. GROUNDS OF APPEAL Ground 1: His Honour erred by not finding that the Second Respondent made jurisdictional error in relation to the scope and effect of s 91R(1)(b) and s 91R(2) of the Migration Act. 14 The appellant submitted, both before the Federal Magistrate and before this Court, that the Tribunal had erred by only considering whether, when extorting money from the appellant, the Maoists had denied him his capacity to subsist (see s 91R(2)(f) of the Act) rather than considering whether he had suffered serious harm within s 91R(1)(b) of the Act. The Federal Magistrate rejected such submission. His Honour found that the Tribunal's decision did not indicate an exclusive consideration of s 91R(2)(f) as claimed, but merely indicated that the Tribunal's assessment of the relevant conduct as serious harm was to be guided by s 91R(2). Finding 15 Unlike the situation in VTAO and Others v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 81 ALD 332 (see [56]-[66]), there was no reason to infer that the Tribunal had only given consideration to the requirements of s 91R(2)(f). An argument raised to similar effect in NBFP v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCAFC 95 had been rejected (see [63]-[64]) for the same reason as determined by his Honour in this application. 16 A fair reading of the Tribunal's finding shows that the Tribunal did consider whether the appellant had in fact suffered 'serious harm' and concluded that he had not done so. At [63] of the Tribunal's decision dated 3 August 2009, the Tribunal said: The Tribunal accepts that the applicant was the victim of extortion by the Maoists in Nepal. He was an employee and later the owner of construction companies, and his description of the methods of the Maoists in relation to building contracts indicate that there was a general expectation in the building industry that moneys would be demanded of contractors by the Maoists both at the time of tendering for business and at the time of the awarding of contracts. The applicant was inconsistent in his claims about the number and extent of the extortion demands he received from the Maoists. However, he stated that his company continued to operate in Nepal up to the time of his departure for Australia, despite the demands for money. On the basis of this evidence, and guided by s91R(2) of the Act, the Tribunal does not accept that the applicant was denied the capacity to earn a livelihood in Nepal, where such hardship or denial threatens the applicant's capacity to subsist. It does not accept that the extortion was sufficiently serious at [sic] to amount to persecution in a Convention sense. 17 The Tribunal's finding is not to be read 'minutely and finely with a eye keenly attuned to the perception of error': see Politis v Federal Commissioner of Taxation (1998) 16 ALD 707 at 708; see also Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287; see also Minister for Immigration and Ethnic Affairs v Wu Shan Liang and Others (1996) 185 CLR 259 at 272. The Court finds that there is no error in his Honour's finding. Ground 2: His Honour erred in not finding that the Second Respondent made jurisdictional error by determining that, notwithstanding threats had been made against the life of the applicant, the threats could be discounted because of the findings that the threat5s [sic] to his life would not have been carried out. 18 The Federal Magistrate concluded that the appellant had incorrectly described the findings of the Tribunal. Raphael FM found that the Tribunal had carefully considered the events relied upon by the appellant before it reached its conclusion that the threats made against the appellant were not genuine. Finding 19 By concluding that the threats that were made did not constitute serious harm, the Tribunal adopted the correct approach: see VBAO v Minister for Immigration and Multicultural and Indigenous Affairs and Another (2006) 233 CLR 1 per Gummow J at [18]. In such decision his Honour concluded that threats to life or liberty in the form of declarations of intent do not, without more, constitute the serious harm which persecution must involve; that the term 'threat' connotes 'risk' in the sense of a danger or hazard; and that the threat to life or liberty must manifest itself as an incidence of serious harm as distinct from the possibility of danger. 20 A reading of the Tribunal's reasons reveals that the Tribunal did not ignore the threats made against the appellant. However, it found that the threats and the kidnapping were not sufficiently serious to amount to persecution in a Convention sense. The Tribunal specifically referred to the fact that the kidnapping was only for a brief period of time (four hours) and that the appellant provided information to the effect that nothing had happened to him during the six months before he left Nepal for Australia. 21 The concept of threat or risk was considered in BRGAA of 2007 v Minister for Immigration and Citizenship and Another (2007) 164 FCR 381 in which Collier J at [24]-[26] referred to the requirement that to constitute a well-founded fear of persecution, any threat or relevant risk must be current or prospective rather than merely historical. Further, her Honour held that it was reasonable that a Tribunal have regard to events that had occurred in order to assist its decision as to whether the claimant would be likely, in the future, to suffer persecution. 22 This Court has reviewed the Federal Magistrate's findings. Those finding were made after his Honour had considered the issues referred to by Collier J. The Court finds no error as alleged. Ground 3: His Honour erred by failing to find that the Second Respondent made jurisdictional error in its finds [sic] about the nature and Convention relationship concerning the extent to which the Second Respondent found the applicant had been subjected to extortion by Maoists in Nepal. 23 Before the Federal Magistrate the appellant submitted that his claim of fear of persecution on the grounds of his membership of the Pahadi people was a separate claim which had not been properly considered by the Tribunal. However the Federal Magistrate noted that there was no indication that the appellant, as a member of the Pahadi, raised his fear of the Madhesi (of which the JTMM is an associated group) other than in the general context of that which he had claimed at the Tribunal hearing. His Honour found that the Tribunal referred to the fact that the appellant had made this claim as a separate claim, but also observed that he did not make any further submissions in relation to it. In the absence of those submissions his Honour found that the Tribunal appeared to have considered that it was sufficient to conclude that the appellant did not have a well founded fear of persecution from the JTMM or 'associated Madhesi groups in Nepal'. His Honour considered that there was no error in the Tribunal adopting this approach. Finding 24 The Court notes the finding of the Tribunal at [71]: However, the Tribunal does not accept on the evidence before it that the applicant has made out a claim of being subjected to extortion for reasons of his political opinion, real or imputed. 25 The Court also notes that the Tribunal found at [71]: The applicant has not claimed that he was targeted by the YCL for reasons of his race, religion or nationality and there is nothing in his evidence which would found a reasonable claim of such motivation. In making this finding, the Tribunal accepts that the applicant claimed to be the target of the JTMM for reason of his ethnicity, as well as his political opinion, but has rejected these claims, as detailed above. The Tribunal does not accept that the essential and significant motivation for the Maoists in subjecting the applicant to extortion was any of the five convention reasons. 26 Lastly the Court refers to the following finding of the Tribunal at [73]: The Tribunal has formed the view that if in fact there was a real chance of harm being done to the applicant by the JTMM, for whatever reason, they would have sought to harm him in the period of nearly nine months in Nepal before his departure for Australia when he was living and travelling according to his usual routine. The Tribunal is not satisfied that the applicant as a well-founded fear of persecution within the meaning of the Convention by the JTMM, or associated Madhesi groups in Nepal. 27 Taking into account the reasoning set out above, the Court agrees with the Federal Magistrate's conclusion and considers that the findings of his Honour disclose no error as alleged. Ground 4: His Honour erred as to the applicability of a failure by the Second Respondent to give proper, genuine and realistic consideration to the appellant's claims and/or evidence and to the availability of jurisdictional error as a result of such failure. 28 Without particularisation or submissions it is difficult to establish the precise scope of the fourth ground of appeal. Upon review of the reasons of the Federal Magistrate, the Court cannot discern any general error as alleged. However, as the final ground of appeal in effect particularises the penultimate ground, it is appropriate to assess the Federal Magistrate's 'proper, genuine and realistic consideration' of the appellant's claim under the fifth ground of appeal set out below. Ground 5: His Honour erred by failing to find that the Second Respondent made jurisdiction error [sic] by failing to give proper, genuine, realistic consideration to the applicant's claim to fear harm from JTMM and instead applied a capricious and inflexible rule that if there was any chance that the appellant would be harmed by JTMM, the JTMM would have done so before the appellant left Nepal. 29 The Tribunal found at [65]: Further, the Tribunal does not accept that the Maoists were seeking the applicant to do him serious harm either before or after his departure for Australia, following the brief kidnapping incident. The applicant has given evidence at both Tribunal hearings that he continued to work with his company up to the time of his departure. He continued to live at his usual addresses either in his village in Terai or in his rented house in Kathmandu, or travelled in relation to his work projects. He has repeatedly claimed that the Maoists had very good intelligence about what was going on in his industry, and the Tribunal does not accept that if the Maoists had wished to pursue the applicant they would not have been able to discover his whereabouts, since, according to the applicant, they were well informed about him and the projects on which he was engaged. In particular, the applicant has given evidence that nothing happened to him for at least a number of months before he left for Australia. The Tribunal does not accept the claim that the applicant was sought by the Maoists either prior to or after his departure for Australia following his brief kidnapping, nor that any threats made by the Maoists to kill the applicant were genuine threats against his life. 30 The Tribunal further found at [73]: The Tribunal has formed the view that if in fact there was a real chance of harm being done to the applicant by the JTMM, for whatever reason, they would have sought to harm him in the period of nearly nine months in Nepal before his departure for Australia when he was living and travelling according to his usual routine. The Tribunal is not satisfied that the applicant has a well-founded fear of persecution within the meaning of the Convention by the JTMM, or associated Madhesi groups in Nepal. 31 The Federal Magistrate found that there was nothing capricious or inflexible in the approach taken by the Tribunal. His Honour noted that the decision of the Tribunal made it clear that it had not accepted the appellant's claims that he had almost been attacked by the JTMM or that threats were made against him. Whilst the Tribunal took into account the fact that the appellant had not been attacked in the nine months prior to his departure, this finding did not, as the appellant suggested, provide the sole basis for the finding on future persecution. Finding 32 Such finding is not 'capricious'. The claims that there was no 'proper, genuine and realistic consideration' to the appellant's claims and that there was a failure to engage in 'an active intellectual process' are not grounds for review unless a jurisdictional error can be identified: see Craig v The State of South Australia (1995) 184 CLR 163 at 179; Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at [82]. 33 In NAIS and Others v Minister for Immigration and Multicultural and Indigenous Affairs and Another (2005) 228 CLR 470 at [37] the phrase 'proper, genuine and realistic consideration' was used in respect of the jurisdictional error disclosed. Such jurisdictional error related to excessive delays by the Tribunal which had compromised its ability to consider fairly the case before it and thereby to fulfil its obligations pursuant to s 425 of the Act. Such decision was referred to by Raphael FM in his decision. Further, his Honour referred to the decision in SZIIF v Minister for Immigration and Citizenship and Another (2008) 102 ALD 366 in which Weinberg J said at [98]: However, when one adds to the mix the fact that none of the inconsistencies identified were properly analysed, several seemed to have misstated the appellant's earlier position, and some involved summaries taken out of context, the entire process appears to have gone badly wrong. To use the language of Gummow J in NAIS, the Tribunal did not give "proper, genuine and realistic" consideration to the appellant's case. He was not afforded the hearing to which the law entitled him. 34 The facts in the present case bear no resemblance to those discussed in NAIS nor in SZIIF. There is no significant delay which impacted upon the ability of the Tribunal to properly consider the application before it. The Federal Magistrate noted at [23]: It is well established that past events are a useful guide to future events: Minister for Immigration v Guo (1997) 191 CLR 559. At [68] of its decision the Tribunal makes it clear that it did not accept the applicant's claims that he had almost been attacked by the JTMM or that threats were made against him. This is the real reason why the Tribunal rejected the possibility of any future harm. The fact that the applicant had not been attacked in the nine months prior to his departure went towards that finding, it did not, as the applicant suggests, provide the basis for the finding on future persecution. 35 The claim by the appellant that the Tribunal 'applied a capricious and inflexible rule that if there was any chance that the appellant would be harmed by JTMM, the JTMM would have done so before the appellant left Nepal' is no more than an attempt to challenge a factual finding of the Tribunal. This Court cannot review the factual findings of the Tribunal's decision: see Chan Yee Kin v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379 at 391-392; Minister for Aboriginal Affairs and Another v Peko-Wallsend Limited and Others (1986) 162 CLR 24 at 40-42; NAHI v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 10 at [10]. 36 The Court concludes that there is no error of law identified in the Federal Magistrate's decision. 37 For the above reasons, the appeal is dismissed. 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. Associate: Dated: 1 July 2010	5,849
federal_court_of_australia:fca/single/1995/1995fca0561	decision	commonwealth	federal_court_of_australia	text/html	1995-08-03 00:00:00	Robert J. Zupanovich Pty Ltd v B & N Beale Nominees Pty Ltd & Ors [1995] FCA 561	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1995/1995fca0561	2024-09-13T22:44:52.696157+10:00	CATCHWORDS COPYRIGHT - builder's plans - whether respondents' plans and buildings infringed applicant's copyright in its plans and the buildings constructed from those plans - remedies - applicant elected for account of profits - nature of the court's discretion to grant that remedy - basis upon which profits to be calculated - whether apportionment appropriate - how profits to be apportioned. Copyright Act 1968 (Cth) s.115 Acorn Computers Ltd v. MCS Microcomputer Systems Pty Ltd (1984) 57 ALR 389 Led Builders Pty Ltd v. Masterton Homes (NSW) Pty Ltd partially reported in (1994) 54 FCR 196; fully reported at (1995) 30 IPR 447 Colbeam Palmer Ltd v. Stock Affiliates Pty Ltd (1968) 122 CLR 25 Concrete Systems Pty Ltd v. Devon Symonds Holdings Ltd (1978) 20 SASR 79 Television Broadcasts Ltd v. Tu (1990) 19 IPR 307 Z.S.Projects Pty Ltd v. G & R Investments Pty Ltd (1987) 9 NSWLR 686 Gentry Homes Pty Ltd v. Diamond Homes Pty Ltd & Ors (1993) AIPC 91-008 Warman International Ltd v. Dwyer (1995) 128 ALR 201 Chan v. Zacharia (1984) 154 CLR 178 Potton Ltd v. Yorkclose Ltd (1990) 17 FSR 11 Dart Industries Inc v. Decor Corporation Pty Ltd (1994) 179 CLR 101 My Kinda Town v. Soll [1983] RPC 15 Cartier v. Carlisle (1862) 31 Bevan 292 [54 E.R. 1151] Sheldon v. Metro-Goldwyn Pictures Corporation 309 US 390 (1939) Dubiner v. Cheerio Toys & Games Ltd (1966) 55 DLR 420 ROBERT J. ZUPANOVICH PTY LTD v. B & N BEALE NOMINEES PTY LTD, BRIAN BEALE and NINA CAROL BEALE No. WAG 34 of 1994 CARR J. PERTH 3 AUGUST 1995 IN THE FEDERAL COURT ) OF AUSTRALIA ) WESTERN AUSTRALIA ) No. WAG 34 of 1994 DISTRICT REGISTRY ) GENERAL DIVISION ) B E T W E E N: ROBERT J. ZUPANOVICH PTY LTD ACN 009 259 401 Applicant and B & N BEALE NOMINEES PTY LTD ACN 061 725 237 First Respondent and BRIAN BEALE Second Respondent and NINA CAROL BEALE Third Respondent CORAM: CARR J. PLACE: PERTH DATE: 3 AUGUST 1995 MINUTE OF ORDERS THE COURT ORDERS THAT: 1. The parties bring in a minute of orders to reflect and give effect to these reasons for judgment. 2. The matter be listed on a date to be fixed for the giving of interlocutory directions in respect of the taking of an account of profits. NOTE: Settlement and entry of Orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT ) OF AUSTRALIA ) WESTERN AUSTRALIA ) No. WAG 34 of 1994 DISTRICT REGISTRY ) GENERAL DIVISION ) B E T W E E N: ROBERT J. ZUPANOVICH PTY LTD ACN 009 259 401 Applicant and B & N BEALE NOMINEES PTY LTD ACN 061 725 237 First Respondent and BRIAN BEALE Second Respondent and NINA CAROL BEALE Third Respondent CORAM: CARR J. PLACE: PERTH DATE: 3 AUGUST 1995 REASONS FOR JUDGMENT Introduction This is a claim for infringements of copyright. The applicant alleges that the respondents have infringed its copyright in certain plans and drawings (which I shall refer to interchangeably as either the applicant's drawings or "the Drawings") and in certain buildings constructed in accordance with the Drawings. The Drawings depict the construction of two detached dwellings (which I shall call "units") on the one lot of land. First, it is alleged that the respondents infringed the copyright in the Drawings by making copies of them or of a substantial part of them. It is further claimed that the respondents have infringed the applicant's copyright in the Drawings and the units which the applicant has constructed in accordance with them, by the erection of two units on land owned by the first respondent B & N Beale Nominees Pty Ltd ("Beale Nominees") each of which reproduces a substantial part of the Drawings and of the units built by the applicant. The Pleadings In its statement of claim the applicant says that on 26 February 1993 or thereabouts the copyright in the Drawings of and relating to two units at Lot 144 Bramston Street, Spearwood, a suburb of Perth in Western Australia ("Lot 144"), and the copyright in those buildings was orally assigned to it by two draftsmen. The uncontroverted evidence was that the draftsmen carried on business in partnership under the name "Designwise". The applicant pleads that the consideration for the oral assignment was the sum of $840 paid by it to the two partners in Designwise. Next it is alleged that on 11 March 1994 there was a written assignment of the above copyrights from the partners in Designwise to the applicant and that two units were built on Lot 144 in accordance with the Drawings. The applicant pleads that Beale Nominees was at all material times the proprietor of a piece of land which can be described as "Lot 770". Lot 770 is also in Spearwood, about 500 metres from Lot 144. Notwithstanding non-admissions and formal denials in the Defence, at the hearing it was common ground that the second respondent Mr Brian Beale and the third respondent Mrs Nina Carol Beale at all material times carried on business as builders and were directors of Beale Nominees. The applicant was put to its proof of its allegation that Mr and Mrs Beale were responsible for the day-to-day operations and management of Beale Nominees. The applicant then pleads the infringements which I have described above. The applicant seeks injunctive relief, an order for delivery up of infringing copies and an account of profits. In their defence, in addition to the matters to which I have referred above, the respondents deny each and every allegation made in the statement of claim except to admit that units have been erected on Lot 770. In particular, the respondents deny that there has been any breach of copyright. The respondents allege that the plans for the units which were built on Lot 770 were designed by a firm identified as "M & M Enterprizes" (spelling as in the defence), that they were designed in consultation with Mr Beale only, that a selection of sketches and plans were supplied to M & M Enterprizes and that M & M Enterprizes formerly worked for the applicant. In his closing address, Mr C.A. Grasso, counsel for the respondents, conceded that copyright existed in the Drawings but his clients disputed the applicant's claim that it owned that copyright. It was agreed between the parties that the issues to be tried would be whether the applicant owned the copyrights upon which it sued, whether there had been copyright infringements and if so whether the applicant was entitled to an account of profits. If those issues were decided favourably to the applicant, the parties suggested that the taking of the account be delegated to the District Registrar. However, the applicant asked that in those circumstances I should give directions as to the procedures to be followed in taking the account and how any profit should be calculated. The Evidence Mr Robert John Zupanovich is the managing director of the applicant. His evidence was that since its incorporation and at all material times the applicant engaged in the business of building. Eighty per cent of its building was for "clients" and the remainder comprised developments for resale. That situation changed on 1 July 1994 and since that date the applicant has been solely a developer, retaining another company within the Zupanovich group to carry out its building work. There is a third company, Gordon Developments Pty Ltd, in the Zupanovich group which also carries on business as a developer. Mr Zupanovich said that he was the managing director of all three companies and that the applicant made available to the other two companies its copyright in any plans. Mr Zupanovich said that the applicant held the copyright to more than 150 sets of plans. These were used to assist customers in their selections and also to construct buildings from those plans or modifications of them. Mr Zupanovich said that the applicant retained a firm comprising two draftsmen brothers, Messrs Laurence and Brenton de Pledge, "on a job by job basis" to design plans for it. He said that before Messrs de Pledge started drawing plans for the applicant (which at first he said was in 1990 and later thought was in 1991) agreement was reached between the applicant and Messrs de Pledge's firm that copyright in all plans and drawings designed by them for the applicant were to be owned by the applicant upon payment for the individual jobs. Mr Zupanovich was rigorously cross-examined on this piece of evidence. It was put to him that he had concocted his evidence concerning this oral contract in order to help the applicant's case. Mr Zupanovich denied this and I believe him. I believe him, not only because he was not shaken in cross-examination on this or any other point but because it is totally consistent with the evidence of Mr Brenton de Pledge. Mr de Pledge said that he was quite sure that when his firm started working for the applicant there was what he described as "a verbal agreement" that copyright in plans and drawings prepared by the firm for the applicant would belong to the applicant once payment was made for them. Mr de Pledge said, in cross-examination, that this was not unusual and that "... builders do tend to ask for it [copyright] every now and again". Mr de Pledge acknowledged that he had never been asked to sign a formal assignment of the copyright prior to March 1994. This was a reference to a deed of assignment dated 11 March 1994 between Messrs de Pledge and the applicant. That deed recites an oral agreement made between Messrs de Pledge and the applicant on 25 February 1993 to assign their right title and interest in the copyrights in the Drawings and the units on Lot 144 for the term of such respective copyrights, that the assignment was made for valuable consideration payable by the applicant to Messrs de Pledge which they had received and that the parties wished to record the oral assignment in writing. The operative part of the assignment provides that in consideration of the sum of $840 paid by the applicant to Messrs de Pledge they assign the copyrights referred to above for the term of such copyrights. There is also a warranty by Messrs de Pledge that they are the owners of the copyrights and have not granted any interest by way of licence or otherwise to any other person. I believed Mr de Pledge's evidence. I took into account the possibility that he might be interested in retaining the applicant's custom, but he did not seem to me to be the sort of person who would be prepared to perjure himself for that purpose. Furthermore, I formed the impression that Mr Zupanovich was an astute and careful businessman. For example, he knew exactly the details of the ownership structure of the various companies in the group which I have described above. This was a group which, on his evidence, was expected to construct over 100 houses in the ensuing twelve months. Mr Zupanovich impressed me as the sort of person who would take care, when instructing draftsmen to prepare plans and drawings, to stipulate that once those plans and drawings had been paid for, the copyright in them would pass to the applicant. I believe that is precisely what happened in this case. Mr Grasso pointed to the evidence that the applicant had never entered into any agreement concerning copyright in its previous dealings with a Mr Szyjan, an architect whom the applicant had retained on some five projects. When Mr Zupanovich was recalled and further cross-examined, this matter was put to him. Mr Zupanovich's response was that Mr Szyjan is an architect and his designs are exclusively "one-off" designs. He understood that if a drawing were to be used again then, where an architect was involved, there would have to be further negotiations. He had never had cause to use Mr Szyjan's designs more than once. It was suggested that Mr Mrsa, a draftsman formerly retained by the applicant, had said in his evidence that in his previous dealings with Mr Zupanovich, the matter of copyright had never been discussed. My examination of the transcript does not show any such evidence as having been given by Mr Mrsa. I accept Mr Zupanovich's explanation as to why he did not secure copyright in drawings prepared by Mr Szyjan for the various projects upon which he was engaged by the applicant. Mr de Pledge said that he was the author of the designs in the Drawings. He described how he and his brother worked together in developing the Drawings whereupon they were passed to an employee of the partnership, Mr Stephen Paterson who "documented" them. Mr de Pledge was not cross-examined on this aspect of his evidence. It was not disputed that the Drawings and the units built from them could, as a matter of law, be the subject of copyright. Nor was there any dispute that the units on Lot 144 were built in accordance with the Drawings. There was no issue taken with the proposition that on the facts of the present matter the owner of the copyright in the Drawings owned the copyright in the buildings which comprise those two units. On the basis of the above evidence I find that copyright in the Drawings was created when they were prepared. The authors were either Messrs de Pledge or Mr Paterson as an employee of Messrs de Pledge. In either event Messrs de Pledge became the owners of the copyright at the time when the Drawings were prepared. I find further that at the same time Messrs de Pledge were, in equity, bound by the oral agreement referred to above, to hold that copyright for the benefit of the applicant as from the time payment was made for their services; Acorn Computers Ltd v. MCS Microcomputer Systems Pty Ltd (1984) 57 ALR 389. The evidence was that an invoice was raised by them on 26 February 1993. The invoice was addressed to Mr Zupanovich but I infer that it was addressed to him as managing director of the applicant. Apart from anything else, I make this inference because the drawings themselves are endorsed "proposed units for Robert J. Zupanovich Pty Ltd". Each drawing (bar one) also carries the endorsement "this drawing is © Robert J. Zupanovich Pty Ltd". Mr de Pledge gave evidence that the applicant had paid the invoice within two months of the Drawings having been drawn. Mr Zupanovich said that the applicant paid the invoice by the end of March 1993 and I accept that evidence. The respondents conceded that if the applicant held the equitable title to the copyright in the Drawings at the time of infringement then a subsequently-acquired legal title would give it sufficient standing to maintain these proceedings. The applicant acquired that legal title by the deed of assignment dated 11 March 1994. Mr Zupanovich said that two units were built on Lot 144 in accordance with the Drawings. The units were built for sale to prospective purchasers. Construction started in March 1993 and soon after construction started he retained real estate agents to sell the units. The agents retained were Messrs Hunter and Lavery. A Mr Tom Grljusich worked for Messrs Hunter and Lavery at their Spearwood office. Mr Zupanovich said that he had known Mr Grljusich for some 15-20 years and that Mr Grljusich was his main real estate agent. Mr Zupanovich said that he had used Mr Grljusich prior to this on approximately six or seven occasions and for "every job I did in Spearwood he was the agent". Messrs Hunter and Lavery had been the agents negotiating the sale when the applicant purchased Lot 144. Mr Zupanovich said that at the time of retaining Mr Grljusich to sell the units on Lot 144 he gave him a copy of the Drawings to assist in the selling process. Mr Zupanovich said that Mr Beale was working for Messrs Hunter and Lavery at the Spearwood office in March 1993, that he had seen Mr Beale in those offices but he did not know when Mr Beale had started working there. The applicant's units took approximately twelve weeks to build and were sold quickly thereafter, within approximately four weeks. They were sold for $250,000 to the one purchaser and the applicant made a profit of slightly over $54,000 on the transaction. Mr Zupanovich then gave evidence, which I do not think it is necessary for me to describe, about how he discovered the similarity between the two units being constructed on Lot 770 and the units which the applicant had constructed on Lot 144. There was a subsequent exchange of correspondence between the parties and also between their respective solicitors and at one stage Mr Zupanovich and Mr Beale compared their respective plans and drawings on the boot of Mr Beale's car. Mr Beale, on that occasion, explained any similarity between the plans and drawings as being coincidental and rejected the suggestion that he had infringed the applicant's copyright. During a later telephone conversation Mr Zupanovich said that Mr Beale told him that he (Mr Beale) had stood in the units at Lot 144 at a time when they were open for inspection. Mr Beale, in his evidence, denied that he said this to Mr Zupanovich and further denied either opening the units at Lot 144 for inspection or having been into those units. Mr Zupanovich then gave evidence that he had compared the two sets of plans and drawings, had walked onto the site at Lot 770 and through the rooms of the two units during the course of construction in early January 1994 and had observed the completed units on Lot 770 from outside. He gave his opinion that the units on Lot 770 had been constructed exactly in accordance with the applicant's plans and drawings except that each of the units on Lot 770 had an extra bedroom and that in lieu of the carports shown on the drawings for those units, garages had been constructed. Various differences between the two sets of plans were put to Mr Zupanovich and he acknowledged most of these. It was also put to him that certain items such as doors were standard and that there were certain standard requirements of the local authority and those responsible for authorising the issue of strata plans. Again, generally speaking, Mr Zupanovich acknowledged this. The applicant called an architect, Mr Pavlo Szyjan to give expert evidence. His report was admitted into evidence. Mr Szyjan conducted a very detailed comparison of the Drawings (i.e. the plans and drawings used to construct the units on Lot 144) on the one hand and the plans and drawings used for the construction of the units on Lot 770. First Mr Szyjan looked at Plan Form which he described as a comparison of the relationship between each functional space (living rooms, bedrooms, kitchens and the like) and the circulation passage in the respective units. Mr Szyjan's conclusions were that in respect of Unit 1, of the fifteen functional spaces evaluated, thirteen maintained an identical relationship. By relationship, Mr Szyjan explained, he meant their location with respect to other rooms in the units. In respect of Unit 2, on each of the respective lots Mr Szyjan concluded that of the fourteen spaces evaluated, twelve maintained identical relationships. I followed Mr Szyjan's evidence carefully when he described these relationships meticulously in respect of each unit and I accept and agree with both his description and his conclusions in respect of the Plan Form. Next Mr Szyjan dealt with the construction drawings. His conclusion in relation to Unit 1 was that after evaluating 48 spatial dimensions (by which Mr Szyjan said he meant the distance between one wall and another in a room) 30 spatial dimensions were identical. In relation to Unit 2, out of 41 spatial dimensions evaluated, 26 were identical. Mr Szyjan said that in respect of both units there were many other spatial dimensions with a difference of between three and four per cent. Mr Szyjan said that in his experience he would expect the majority of such spatial dimensions to be dissimilar although between ten and fifteen per cent would be standard. Once again, Mr Szyjan, in the witness box, took the Court on a very effective guided tour of the construction drawings and an overlay which he had prepared. The overlay superimposed the drawings prepared for the respondents on the drawings prepared for the applicant. The information was also presented in tabular form in respect of the two sets of units. I was very much impressed by the marked similarity between the two sets of drawings which this exercise and the report disclosed. Mr Szyjan then gave evidence of his evaluation of the roofing of the two sets of units. His conclusion was that Unit 1 showed a 70% similarity and Unit 2 a 65% similarity. He explained the differences as being caused principally by the additional bedroom in each of Beale Nominees' units and certain other changes in Unit 2 on Lot 770. Finally, in his report Mr Szyjan referred to the site plan and gave his opinion that both units maintained almost identical placement on the land. Mr Szyjan's overall conclusion was that the drawings which had been prepared for the construction of the units on Lot 144 had been copied when the drawings were prepared for the units constructed on Lot 770. His report contained this conclusion: "I conclude that without question, the Beale units display no level of coincidence or chance for reproduction from the Zupanovich units in that an average of 80% or more similarities were confirmed with measurements, spatial relationship and overlay procedure". There was one further, very significant piece of evidence given by Mr Szyjan. It related to the kitchen depicted on the drawings for each of the four units. It was common ground that the applicant's units were constructed first and thus the applicant's plans and drawings (to which I have referred as "the Drawings") were the first to be prepared. On the applicant's plans and drawings in relation to each of the kitchens there appeared a notation in relation to the type of kitchen sink to be installed. This read "1372 SS DB inset sink". This, so I was told by Mr Szyjan, describes a stainless steel sink being 1372 mm in length inset with a double basin. Mr Szyjan said that this was a mistake because such a sink did not exist. Mr Szyjan explained that there are different-sized sinks. The bench provided in the kitchens depicted in the Drawings was 600 mm in width. A sink 1372 mm in length would be for a 450 mm wide bench. Mr Szyjan acknowledged that one could fit a 1372 mm long sink into a 600 mm wide bench but that it would involve "a lot of messy cutting". He further explained why it was a mistake to specify a 1372 mm sink for this space. On recall to the witness stand, Mr Zupanovich added to this matter. Mr Zupanovich said that there was such a thing as a 1372 mm long sink but that it was wood-backed in that it had a wooden bottom which sat proud (above) the bench by about 30 mm. An inset sink would sit proud of the bench by only 5 mm. The 1372 mm inset sink was designed for a 450 mm wide bench. I inferred from the evidence of Messrs Szyjan and Zupanovich that a mistake had been made by the draftsman of the Drawings. The significance of this is that the mistake was repeated identically on the drawings prepared for the respondents. I was not impressed by the efforts of Mr Beale or Mr Zec Mrsa, a partner in the firm which drafted the respondents' drawings, to explain how the same sink was specified in those drawings and I reject both their explanations. Mr Beale contradicted himself by saying (at page 117 of the transcript) that the 1372 mm sink could be bought as a standard model when he had earlier all but conceded that it would need to be specially made. Mr Beale was unable to name a manufacturer which carried this type of sink as a standard model. His evidence on this and other points was most unconvincing. Mr Mrsa said that the measurement "... would have been picked up from the nearest catalogue I would have had sitting on my desk at the time". No such catalogue was produced and no evidence was given of the availability of a 1372 mm sink as a standard model. This is perhaps a small matter but is particularly consistent with the draftsman of the respondents' drawings having copied the Drawings. Mr Beale gave evidence that he had been a building contractor for approximately 15 years during which he had been engaged predominantly in renovations and government work for local councils and the like. In the last three or four years he had constructed two sets of two units, being those constructed on Lot 770 and one other set previously. The other set had been constructed in about 1993. Mr Beale said that in about 1992 there was a building slump and he obtained a "real estate sales certificate" and started work part-time with Messrs Hunter and Lavery. In November 1993 he (by which I took him to mean Beale Nominees) purchased Lot 770 for $80,000. Mr Beale said that he had met Mr Zupanovich in the course of his work as a salesman with Messrs Hunter and Lavery. He said that he had spoken very briefly to Mr Zupanovich and had told him what he (Mr Beale) was going to build on Lot 770, namely two four-bedroom homes. Mr Beale said that he obtained plans which he described as "mud sketches" from his father who had been a builder for forty years. He took those mud sketches to M & M Enterprizez (that firm's spelling) to have them developed into working drawings. Mr Beale said that he spoke to Mr Zec Mrsa for this purpose. He went to see Mr Mrsa three or four times. Mr Mrsa did the drawings and he (Mr Beale) took them to the local council. Mr Beale acknowledged that he had seen the applicant's drawings at Messrs Hunter and Lavery. He said that Mr Tom Grljusich had shown him the applicant's drawings and had told him that they would be ideal for Lot 770. Mr Beale said that he had not been into the applicant's units; as he put it, he "did not go anywhere near them". Mr Beale explained that the carports on Lot 770 were positioned where they were because there were only two places where the carports could be put, otherwise the units could not be sold. He said that he always likes to keep the main bedroom away from the other bedrooms and that the same configuration could be seen in thousands of houses. Other differences to which Mr Beale referred between Beale Nominees' Unit 1 and the applicant's Unit 1 were as follows: . the Beale Nominees unit had a hip roof with a 22° pitch and no Dutch gables; . there were no side lights by the front door as the unit was constructed although these were shown on the drawings prepared by M & M Enterprizez; . in the interior, Tudor-style arches had been constructed instead of door frames as shown on the drawings prepared by M & M Enterprizez; . a completely different oven (a wall oven) was installed in the kitchen; . a lot of the window sizes were completely different; . the sliding door into the family room was ten bricks wide compared to the 7˝ bricks wide equivalent in the applicant's unit; . there was a bay window in the main bedroom; . the front of the house was "completely different"; . the carport was enclosed and had a height of twenty-eight courses compared to the applicant's twenty-five courses of brickwork in an unenclosed carport; . in the laundry there were bigger doors on the linen cupboard and a much larger trough in a different location; . in the kitchen there was a breakfast bar underneath an island cupboard; . in the hallway there was an angle at one point just below the second bedroom, in the corridor; . the walk-in wardrobe in the main bedroom was of a different size; . in bedrooms 3 and 4 there were corner windows; . there was an extra bedroom; . the right hand side was completely different; and . the laundry and toilets were in different positions. Mr Beale outlined the following as being differences between Unit 2 in his company's development and Unit 2 as constructed by the applicant: . 22° roof pitch; . enclosed carport; . no side lights near the front door; . 870 mm doors instead of 820 as shown on the drawings; . the bay window in the main bedroom; . window in different position in the en suite bathroom to the main bedroom; . different lay-out in the bathroom; . a double island in the kitchen with a breakfast bar; . the breakfast bar in the kitchen was curved; . different window sizes except for the standard size windows in bedrooms 2 and 3; . an open lounge room instead of walls; and . the front and the whole of the back area of Unit 2 was completely different. In cross-examination I found Mr Beale to be most unimpressive. His attitude was one of almost constant bluster. He was evasive and extremely aggressive. He spoke very loudly indeed and quite often would not give a straight answer to even the simplest of questions. At times Mr Beale appeared almost irrational in his behaviour in the witness box. At other times he endeavoured to offer explanations which were most unconvincing. I have already referred to his attempt to explain the specification of a 1372 mm sink as being extremely unconvincing. When Mr Beale was first asked in cross-examination whether he had tried to sell the applicant's units he was most evasive. He then said that he had never tried to sell those units but was unable to explain how his draft witness statement filed in Court stated "... in fact I was trying to sell his units ...". I decided that Mr Beale was not a witness of truth and that I would not accept any of his evidence unless it was corroborated either by documentation or other credible evidence. Mr F.R. Lavery was called to give evidence to the effect that according to his firm's records Mr Beale had never opened the applicant's units for inspection by prospective customers. This was intended to rebut Mr Zupanovich's evidence that Mr Beale had told Mr Zupanovich that he had done this. I accept that on Mr Lavery's evidence the probability is that Mr Beale did not open the applicant's units for inspection by prospective purchasers but from what I saw of Mr Beale in the witness box I formed the opinion that Mr Beale was quite capable of having told Mr Zupanovich that he had done so, if it served his purposes or if he thought it served his purposes. Mr Zec Mrsa was called by the respondents and gave evidence as to how the respondents' drawings were prepared. A close examination of Mr Mrsa's evidence reveals that he did not actually say that he personally prepared those drawings. On the face of his evidence the implication is that Mr Mrsa drew them and his name appears on the drawings as the person who drew them. Mr Mrsa denied having copied the applicant's drawings. The case was conducted on the basis that Mr Mrsa had personally drawn the respondents' drawings and I shall decide it on that basis. However there was one piece of evidence which puzzled me. It was Exhibit 7. Exhibit 7 was a fax from the second respondents addressed "To Darren Miller". On its face it seems that it was sent not from their fax number but from the fax of Messrs Hunter and Lavery at 15:26 on 29 July 1993. Mr Mrsa said that this fax stipulated where Mr Beale wanted the carports placed on Lot 770. He said "... that was obviously our starting point and we had to work from that". It was part of the respondents' case that the carports on Lot 770, in practical terms, had to be located where they were eventually built and that consequently it was inevitable that there would be so much similarity between the two sets of drawings. There were two things which puzzled me about Exhibit 7. First, that it was dated 29 July 1993. Mr Beale's evidence was that he (obviously referring to Beale Nominees - see the copy Certificate of Title, Exhibit C) purchased Lot 770 in November 1993. It may be that Mr Beale was making some design enquiries before the purchase but there was no other evidence to that effect. Secondly, as mentioned above, the fax is addressed to "Darren Miller". There was evidence that Mr Mrsa had a Mr Miller as a partner. Mr Miller did not give evidence and there was no evidence as to his role in this matter nor indeed whether he had any role in the matter. Before leaving Exhibit 7 I should note that it specifically refers to Lot 770, gives a freehand outline of its shape and rather than "stipulating" where the carports are to be located there are question marks at both points. Finally it carries the notation "3 or 4 bedroom 2 bath and family 2 WC's" (underlining on the original). I must say that Mr Mrsa gave his evidence in a calm and straight forward manner which was in stark contrast to that of Mr Beale. Just as Sheppard J. in Led Builders Pty Ltd v. Masterton Homes (NSW) Pty Ltd (partially reported on the question of relief in (1994) 54 FCR 196; fully reported in (1995) 30 IPR 447) described Mr Masterton in that case as being certainly not an evasive witness, so I would describe Mr Mrsa in this case. Again there was nothing in Mr Mrsa's demeanour to suggest that he was dishonest or lacking in integrity (to quote Sheppard J's words in that case describing Mr Masterton further). However, like Sheppard J. with Mr Masterton, I have had difficulty resolving the matter of Mr Mrsa's evidence. Nevertheless, I have concluded that the objective factors in this matter justify and require me not to accept Mr Mrsa's evidence and I find that in the preparation of the respondents' drawings there was substantial copying of the Drawings. I have come to this conclusion for the following reasons, in summary: . there were so many things that were identical on the two sets of drawings as explained in Mr Szyjan's report (Exhibit J) and his oral evidence; . there were many other things that were very similar in the two sets of drawings; . Mr Beale had access to the Drawings at his place of part-time employment and was in a position to provide them to Mr Mrsa or his partner for tracing; . Mr Mrsa could not be regarded as a disinterested witness; . Mr Mrsa's explanation about the reference to the 1372 mm inset sink was unconvincing; . similarly Mr Mrsa's explanation as to why side lights had been shown on his drawings when he had been instructed not to provide side lights was equally unconvincing; and . there was a degree of inconsistency between what Mr Beale said he had given Mr Mrsa by way of written instructions for preparing the drawings and what Mr Mrsa said he had been given. Mr Beale said that he had given Mr Mrsa "... at least a dozen different bloody sketches". Mr Mrsa said that he was given only two. It is possible, but I think unlikely, that Mr Mrsa had forgotten that Mr Beale had given him the applicant's drawings to copy. I say this because Mr Mrsa said that Mr Beale had telephoned him and said that Mr Zupanovich had taken out a suit for copyright and asked Mr Mrsa for his file back. Mr Mrsa gave the file back to Mr Beale at that stage. Finally, Mr Alan Beale (the second respondent's father) was called to give evidence. Mr Beale Senior said that at his son's request he had prepared two sketches [Exhibits 4A and 4B] depicting two units as being suitable for Lot 770. Mr Beale (Junior) said that he had given those sketches to Mr Mrsa. Mr Beale Senior also had a tendency to be evasive. I am prepared to accept that two sketches which Mr Beale Senior identified may have accompanied his son's instructions to M & M Enterprizez (that firm's spelling). I have examined those sketches and in my opinion they are substantially different to the drawings prepared by that firm. I do not consider that to be very surprising because it was M & M Enterprizez's task to develop drawings from those sketches. However, the striking identical elements and similarity between the applicant's drawings and those prepared for the respondents convinces me that the respondents' drawings were prepared by copying substantial parts of the applicant's drawings. Mr Beale Senior said that he was not surprised by the similarity between the applicant's set of drawings and the respondent's set of drawings. Whether there were infringements of copyright In Led Builders [(1995) 30 IPR at pp.450-453] Sheppard J. reviewed a number of the authorities relevant to the approach which a court should take when determining whether or not copyright subsists in architects' or builders' plans and, if so, whether or not there has been an infringement by reproduction or copying. The former matter is no longer in issue here, having been conceded, eventually, by the respondents. The authorities included Ancher, Mortlock, Murray & Woolley Pty Ltd v. Hooker Homes Pty Ltd [1971] 2 NSWLR 278, Beazley Homes Ltd v. Arrowsmith [1978] 1 NZLR 394; Lend Lease Homes Pty Ltd v. Warrigal Homes Pty Ltd [1970] 3 NSWR 265 and Beck v. Montana Constructions Pty Ltd [1964-5] NSWR 229. I do not propose to rehearse those case in these reasons but to incorporate by reference here the passages which Sheppard J. set out in his reasons in Led Builders. His Honour noted (at p.454) that: "... where there are two similar plans, it will often be difficult to determine whether or not, upon a simple comparison of the two, one is a reproduction or copy of the other or at least of a substantial part of it..." Mr Grasso submitted that the evidence showed that these units were of a standard type for the area. The standard procedure would be to divide the block in two and have a frontage on both streets. It would be very likely (and the evidence supports this submission) that the main bedroom would be at the front, that there would be an en-suite bathroom for the main bedroom and that the main bedroom would be separated from the other bedrooms. With the exception of the proposition that it was inevitable that each unit would have a frontage to a different street, there was not much dispute between the parties on those matters. Mr Grasso also pointed to the fact that door sizes were standard and that there was a minimum area required for such rooms as the storeroom. Even accepting all those submissions, as I do on the basis of the evidence adduced, I do not accept that the inevitable result is the degree of identicality and similarity which exists between the two sets of drawings. When one places one set of drawings over the other in respect of each unit and when one compares the relative positioning of the rooms in each of the sets of units and looks at the identical measurements and the frequent similar positioning of appliances and the like there is, in my view, only one conclusion. My conclusion is that in the preparation of the respondents' drawings, a substantial part of the applicant's drawings was copied. I have referred earlier to the fact that Mr Beale had access to those drawings. I have not overlooked the differences and in particular the differences between Unit 2 in each development. Nevertheless, just as the fourth bedroom was easily added to the sketch plan forming Exhibit 4B, so, in my view, was it easily done for the draftsman to work from the applicant's drawings and add an extra bedroom to each of the respondents' units. I was favourably impressed by Mr Syjan's evidence and his report. He approached the task of comparing the two sets of drawings in a most careful, scientific and professional manner which was of considerable assistance to me. I accept his evidence (including his report). I have also come to the conclusion to which he came and I agree with the reasoning for that conclusion. Mr Syjan was not shaken in cross-examination. In fact he was not very seriously cross-examined about his conclusions and the respondents did not call an independent expert witness to challenge Mr Syjan's evidence. There was another matter which on its own was of a minor nature. I refer to the sidelights to the front doors of the units. Mr Beale pointed out that his units, as constructed, did not have such side lights. Mr Beale's evidence was that he told Mr Mrsa not to include side lights in his units. Nevertheless the respondents' drawings show side lights on either side of the front door in both units. These are identical to the side lights shown in the applicant's drawings. Mr Mrsa's explanation was that he disregarded Mr Beale's instructions in relation to the side lights as "basically our way of subtly trying to influence him" to add side lights. I do not accept that as a satisfactory explanation for the inclusion of side lights in the respondents' drawings. It is more consistent with the copying of that feature from the applicant's drawings on to the respondents' drawings and I find that is what took place. It should be remembered that Mr Zupanovich drew Mr Beale's attention to the applicant's claim for breach of copyright at a very early stage of construction of Beale Nominees' units. The evidence was that the stage reached was when the footings were being poured. Photographs of the two sets of units as built show that the omission of the side lights contributes to a cosmetic difference in the elevation comparison between the applicant's units and the Beale Nominees units. It is quite possible that this change was made, not for reasons of security as Mr Beale claimed, but in order to camouflage the copying which I have held took place. Nevertheless, it is not necessary for me to make a finding on that point. I do note, however, that on the respondents' drawings there are certain obvious changes manually drawn on to them. Mr Beale made particular mention of the resultant differences between the units which he constructed and the units depicted in the applicant's drawings and the two units built on Lot 144. I have referred to this evidence earlier in these reasons for judgment. Finally, I refer to Exhibit H2. Exhibit H2 is a letter dated 26 November 1993 written by Mr Beale to Mr Zupanovich in reply to a letter dated 24 November 1993 (Exhibit H1) from the applicant. This was at a time when the Beale Nominees' units were still under construction. In its letter the applicant draws Mr Beale's attention to the similarity of the duplex development on Lot 770 to one of the applicant's developments, expresses concern that an infringement of copyright may have occurred and asks for a copy of Mr Beale's plans of the development on Lot 770. In Mr Beale's letter there is no denial of any infringement. Omitting formal parts, that letter reads simply: "I will meet you on site at any time to suit yourself to discuss the plans. I would also like you to bring your plans in question so that I can site (sic) them as well." It is doubtless a small matter, but my assessment of Mr Beale is that he would normally respond to a false accusation of wrongdoing with a very strong denial. In Copinger and Skone James on Copyright (11 ed) the learned authors say, at paragraph 408: "... there is no infringement unless it is established that the defendant has produced a work which both closely resembles the plaintiff's work and has been produced by a direct or indirect use of those features of the plaintiff's work in which copyright subsists". I have had regard to the evidence concerning the differences between the respondents' drawings and the Drawings and the differences between the respondents' drawings and the two units constructed on Lot 770. I have also examined the photographs of the two sets of units. In my view, the differences between, on the one hand, the two units constructed on Lot 770 and, on the other hand, the Drawings and the units built on Lot 144 are not sufficient to preclude the building of the former to amount to an infringement of the applicant's copyright in the Drawings and those units as built. The units built on Lot 770 reproduce substantial parts of the units built on Lot 144. There were even fewer differences between the Drawings and the drawings prepared for the respondents. Conclusion on Infringements For the above reasons I find that there was an infringement of the applicant's copyrights in the Drawings when Mr Beale, acting as a partner in the building partnership between himself and his wife, arranged for and thus authorised the respondents' drawings to be prepared by M & M Enterprizez by making copies of substantial parts of the Drawings. In my view, Mr and Mrs Beale are thereby legally responsible to the applicant for such infringement. Furthermore, I find that the same building partnership of Mr and Mrs Beale built the two units on Lot 770 for Beale Nominees by arrangement with and at the request of Beale Nominees. I find that the building of those two units reproduced a substantial part of the units built by the applicant and substantially reproduce the Drawings in a three-dimensional form: s.21(3)(a) of the Copyright Act 1968 (Cth). By virtue of such building, in my opinion, all three respondents have infringed the applicant's copyrights in the Drawings and the units constructed on Lot 144. Remedies Mr Grasso submitted that if the Court finds infringements of copyright in this matter, it has a discretion whether to award damages or to order an account of profits. He submitted that an account of profits was to prevent the unjust enrichment of the respondents, but that what the applicant was trying to do was to effect an unjust enrichment for itself. The applicant conceded that it had not lost any money by the infringements and that it was not in competition with the respondents. Mr Grasso submitted that "the causal nexus" between the infringements and the generation by the respondents of profits was missing. Both Mr de Pledge and Mr Szyjan had agreed that purchasers would be attracted by the front elevations of his client's units which, so it was submitted, were different to those of the applicant's units. Mr Grasso submitted that the evidence showed that there was not much difference between small villa developments of the types shown in, for example, the newspaper cutting which became Exhibit 5 and the units depicted in other exhibits. If an account of profits were ordered then, so he submitted, it would be necessary to work out how much of the breach of copyright helped to sell Beale Nominees' units. For that proposition Mr Grasso relied on the decision of Windeyer J. in Colbeam Palmer Ltd v. Stock Affiliates Pty Ltd (1968) 122 CLR 25 at p.42. In that case Windeyer J. distinguished between such profit as was attributable to the wrongful use of a trade mark and the profit made by the sale of goods bearing that trade mark on the basis that a "trade mark is in its nature something apart and distinct from the goods in relation to which it is to be used ...". Mr R. Griffiths, counsel for the applicant, sought to distinguish Colbeam Palmer. His submission was that the units (constructed by the applicants) themselves constituted one of the applicant's copyrights and thus the construction and sale by the respondents of Beale Nominees' units could not be regarded or treated as something capable of being separated from the infringement of copyright. Nor, so Mr Griffiths submitted, could there be any apportionment of the profit to distinguish between profit derived from infringement of copyright in the units on Lot 144 and other causes, except that the value of the fourth bedroom in each of the two units on Lot 770 would be taken into consideration in the account of profits. I refer to this point later in these reasons. Section 115 of the Copyright Act provides as follows: 115. (1) Subject to this Act, ("the Act") the owner of a copyright may bring an action for an infringement of the copyright. (2) Subject to this Act, the relief that a court may grant in an action for an infringement of copyright includes an injunction (subject to such terms, if any, as the court thinks fit) and either damages or an account of profits. (3) Where, in an action for infringement of copyright, it is established that an infringement was committed but it is also established that, at the time of the infringement, the defendant was not aware, and had no reasonable grounds for suspecting, that the act constituting the infringement was an infringement of the copyright, the plaintiff is not entitled under this section to any damages against the defendant in respect of the infringement, but is entitled to an account of profits in respect of the infringement whether any other relief is granted under this section or not. (4) Where, in an action under this section: (a) an infringement of copyright is established; and (b) the court is satisfied that it is proper to do so, having regard to: (i) the flagrancy of the infringement; (ii) any benefit shown to have accrued to the defendant by reason of the infringement; and (iii) all other relevant matters; the court may, in assessing damages for the infringement, award such additional damages as it considers appropriate in the circumstances." Mr Griffiths conceded that there was no doubt that a court had a discretion whether to award damages or to order an account of profits. He submitted that there was doubt only over the questions whether the applicant must elect which of the two alternative remedies it seeks and if, having made such an election, the applicant is bound to it, so that the court's discretion is only to decide whether or not to award the applicant what it has elected to pursue. Quite properly, Mr Griffiths drew my attention to the decision of Legoe J. in Concrete Systems Pty Ltd v. Devon Symonds Holdings Ltd (1978) 20 SASR 79 where at p.84 his Honour said: "In my opinion the statute now removes that option from the plaintiff and places a discretion upon the Court to grant which of the alternative relief under sub-s.(2) may appear appropriate to the Court at the trial of the action." Mr Griffiths then referred to Television Broadcasts Ltd v. Tu (1990) 19 IPR 307 where, at p.320, O'Loughlin J. left the matter open. His Honour noted that if the applicants were entitled to make an election as to the proper form of relief, they had not done so. Then his Honour observed that if the form of relief was that which the Court, in its discretion, deems most appropriate (citing Concrete Systems Pty Ltd) then he had no hesitation in concluding that an award for damages was the appropriate remedy because an account of profits would not pay sufficient attention to the losses that the applicants had suffered as a result of the infringement. Next Mr Griffiths referred me to Z.S.Projects Pty Ltd v. G & R Investments Pty Ltd (1987) 9 NSWLR 686, which was an application for a summary judgment. The only reference to this point in that case was at p.689 where Needham J. referred to the fact that there had at that stage been no election by the plaintiff as to which of the remedies it sought and therefore it was still claiming damages and an account of profits. His Honour made no comment as to the appropriateness of the plaintiff maintaining that stance at the same time as applying for summary judgment. Finally, Mr Griffiths referred me to the decision of Beazley J. in Gentry Homes Pty Ltd v. Diamond Homes Pty Ltd & Ors (1993) AIPC 91-008. In that case the applicant had originally sought an account of profits. The first respondents admitted liability and claimed it had made no profit. During the course of the hearing there was an adjournment, on the applicant's application, because certain financial documents were only produced at the last minute. At the same time, the applicant's counsel applied for leave to amend the statement of claim, to claim damages. Later that afternoon the applicant withdrew its application to amend. The hearing was adjourned to the next day and then adjourned again with directions given for the making of any application to amend. When granting leave to amend Beazley J. held that the provisions of s.115 required the applicant to make an election and her Honour directed that such election should be made prior to the (resumed) hearing. On resumption, counsel for the applicant advised that it had elected to continue to pursue the claim for an account of profits. On the facts found in that matter it transpired that the respondent had made a loss in the construction of the relevant building and accordingly her Honour held that no order (for account of profits) could be made. In Led Builders Sheppard J. [(1994) 54 FCR 196 at pp.196-199; (1995) 30 IPR 447 at pp.466-468] dealt with a situation in which the applicant had not at that stage elected for an account of profits or damages. His Honour reached the conclusion that the remedies of injunction and account of profits were discretionary but that a successful applicant was entitled to damages. His Honour applied the principles in Colbeam Palmer and observed: "I would not suggest that the presence of the word `may', especially in sub-sec 115(2), means that the Court in an ordinary case ought not to give the remedies there provided for if a case for them has been made out. But I do think it right to take the view that the remedies of injunction and an account of profits being equitable remedies and thus discretionary were intended to be applied in cases for infringement of copyright in the way that they have been applied over the years both under the general law and under statute law such as the intellectual property statutes to which I have referred." In Led Builders the applicant had neither been required to elect before trial or before any finding of infringement was made, whether it sought damages or an account of profits nor had it made any such election. In Gentry, infringement was not in issue at the hearing. Concrete Systems was a decision on an application for an interim injunction. The plaintiff, in its writ also sought an inquiry as to damages and additional damages under s.115(4) of the Act. Legoe J's observation, which I have set out above, was not strictly essential for the purposes of deciding the issue before his Honour. Accordingly in the apparent absence of any binding authority on the point I propose to venture some short comments on what I consider to be the legal position. They are as follows: 1. There may well be situations in which the interests of justice require an applicant to elect before trial whether it claims damages or an account of profits. Much will depend upon the particular circumstances including, for example, whether there is any issue over infringement. The circumstances of the infringement may well have a bearing not only on the court's discretion whether to order an account of profits but also on whether damages are an available remedy [see s.115(3)] and the amount of damages [see s.115(4)]. One can easily envisage circumstances where it would be unfair to put an applicant to such an election before the respondent's evidence had been tested and factual findings made. Similarly one can easily think of other situations where it might be appropriate to require such an election. 2. There are no such problems here. The applicant has elected for an account of profits and does not wish to change that election. 3. I respectfully agree with Sheppard J's observation in Led Builders concerning the discretion to order an account of profits and also with his Honour's conclusion [(1994) 54 FCR 196 at p.197; (1995) 30 IPR 447 at p.466] that so far as damages are concerned, there can not be any room for the exercise of a discretion. If damages are claimed and proved then, subject to s.115(3), an applicant is entitled to those damages. As the High Court noted in Warman International Ltd v. Dwyer (1995) 128 ALR 201 at p.210: "Although an account of profits, like other equitable remedies, is said to be discretionary, it is granted or withheld according to settled principles. It will be defeated by equitable defences such as estoppel, laches, acquiescence and delay." At the same page the High Court acknowledged that the liability to account for a personal benefit gained by reason of fiduciary position, opportunity or knowledge will not arise in circumstances where it would be unconscientious to assert it or where there was no possible conflict between personal interest and fiduciary duty (citing Chan v. Zacharia (1984) 154 CLR 178 at pp.204-5). I have come to the conclusion that the applicant should be granted an order for an account of profits. In my view no circumstances have been established to justify withholding that relief as a matter of discretion. None of the traditional equitable defences were pleaded or established. Furthermore, for reasons relating to apportionment of profits to which I return below, I do not consider that it would be unconscientious to order an account of profits. I was asked to give directions concerning the manner in which the profits are to be calculated upon the taking of the account. That was on the assumption that I would delegate that function. I do not propose so to delegate, but it may be helpful if I give my views on how the profits should be calculated when the account is taken. The applicant argued that it was entitled to an account of the whole of Beale Nominees' profit less only some allowance for the provision of a fourth bedroom in the infringing units. The respondents submitted that the profit to be accounted for was only that caused by the infringement. In Warman v. Dwyer the High Court said (at p.208) of the remedy of account: "The remedy is ancient and notoriously difficult in practice and it gives rise to a liability, even in a case of a fiduciary, which is personal. In the context of patent infringement, the purpose of ordering an account is not to punish the defendant, but to prevent the defendant's unjust enrichment." In that case the High Court was dealing with a case which it described as "... a clear case of a fiduciary breaching his obligations." The extent of the liability of a fiduciary in that situation is particularly severe. Strict and rigorous standards have been applied to ensure that fiduciaries do not expose themselves to a conflict of interest and duty. Even in that situation the High Court observed at pp.211-212: "In the case of a business it may well be inappropriate and inequitable to compel the errant fiduciary to account for the whole of the profit of his conduct of the business or his exploitation of the principal's goodwill over an indefinite period of time. In such a case, it may be appropriate to allow the fiduciary a proportion of the profits, depending upon the particular circumstances. That may well be the case when it appears that a significant proportion of an increase in profits has been generated by the skill, efforts, property and resources of the fiduciary, the capital which he has introduced and the risks he has taken, so long as they are not risks to which the principal's property has been exposed. Then it may be said that the relevant proportion of the increased profits is not the product or consequence of the plaintiff's property but the product of the fiduciary's skill, efforts, property and resources. This is not to say that the liability of a fiduciary to account should be governed by the doctrine of unjust enrichment, though that doctrine may well have a useful part to play; it is simply to say that the stringent rules requiring the fiduciary to account for profits can be carried to extremes and that in cases outside the realm of specific assets, the liability of the fiduciary should not be transformed into a vehicle for the unjust enrichment of the plaintiff. It is for the defendant to establish that it is inequitable to order an account of the entire profits. If the defendant does not establish that that would be so, then the defendant must bear the consequences of mingling the profits attributable to the defendant's breach of fiduciary duty and the profits attributable to those earned by the defendant's efforts and investment, in the same way that a trustee of a mixed fund bears the onus of distinguishing what is his own. Whether it is appropriate to allow an errant fiduciary a proportion of profits or to make an allowance in respect of skill, expertise and other expenses is a matter of judgment which will depend on the facts of the given case." Mr Griffiths referred me to Potton Ltd v. Yorkclose Ltd for two propositions. The first was that upon the taking of an account of profits, unrealised profits may be taken into account. I accept that proposition, although that was not the real issue before the Court in that case (see p.16). The second proposition was that I should follow Millett J's refusal in Potton to order an inquiry into the source of the profits with a view to determining what part, if any, was attributable to the design. His Honour regarded the submission in favour of apportionment as being "misconceived" because there was a distinction to be drawn between infringement by using the drawings and infringement by building the houses themselves in that case. I accept that there are two infringements which are to some extent distinct but with all due respect to Millett J, I differ from the conclusion to which his Honour came in that case. I do not think that the distinction compels the conclusion that there can be no apportionment in the present matter. In this case, Mr Griffiths has already acknowledged that some adjustment needs to be made in respect of the fourth bedroom in the respondents' units. The applicant's units contain only three bedrooms. Mr Griffiths relied upon the High Court of Australia's decision in Dart Industries Inc v. Decor Corporation Pty Ltd (1994) 179 CLR 101 as authority requiring a direction that the taking of the accounts in this matter should be accompanied by a direction that all of the profits made by the respondent should be paid over to the applicant. However, at p.111 in the reasons for judgment of Mason CJ, Deane, Dawson and Toohey JJ. in that case there appears the following passage: "... an account of profits retains its equitable characteristics in that a defendant is made to account for, and is then stripped of, profits which it has dishonestly made by the infringement and which it would be unconscionable for it to retain. An account of profits is confined to profits actually made, its purpose being not to punish the defendant but to prevent its unjust enrichment. The ordinary requirement of the principles of unjust enrichment that regard be had to matters of substance rather than technical form is applicable." In Dart Industries the High Court applied the principles in Colbeam Palmer and at p.121 quoted the following passages from pp.42-43 of Windeyer J's reasons for decision in that case: "The true rule, I consider, is that a person who wrongly uses another man's industrial property - patent, copyright, trade mark - is accountable for any profits which he makes which are attributable to his use of the property which was not his ... [emphasis added] 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." In the present matter what Beale Nominees sold comprised the land upon which the units were constructed and any improvements, including the units. The fact that the applicant's drawings and buildings were substantially copied does not, in my view, preclude an apportionment. This is not a case where the copyright infringers could not have constructed the buildings without the use of the Drawings or the units built by the applicant from the Drawings. For that reason, it is in my view distinguishable from, for example, Peter Pan Manufacturing Corporation v. Corsets Silhouette Ltd [1963] 3 All E.R. 402. As Slade J. said in My Kinda Town v. Soll (1982) 8 FSR 147 at p.149: "As I understand the relevant principles, the object of ordering an account in cases such as the present is to deprive the defendants of the profits which they have improperly made by wrongful acts committed in breach of the plaintiffs' rights and to transfer such profits to the plaintiffs." And at p.156 "The purpose of ordering an account of profits in favour of a successful plaintiff in a passing off case is not to inflict punishment on the defendant. It is to prevent an unjust enrichment of the defendant by compelling him to surrender those profits, or those parts of the profits, actually made by him which were improperly made and nothing beyond this." Similarly in Cartier v. Carlisle (1862) 31 Bevan 292 at p.298 [54 E.R. 1151 at p.1153] Sir John Romilly M.R. observed: "... equity will restrain the further use of the trade mark by the person imitating it, and will make him account for such advantage, if any, as he may have derived from its user." [emphasis added] The Supreme Court of the United States of America has held that a copyright infringer was not to be penalised in the taking of an account by giving to the copyright proprietor profits which were not attributable to the infringement: Sheldon v. Metro- Goldwyn Pictures Corporation 309 US 390 (1939) at pp.398-399 [84 L ed 825 at p.830]; see also the Canadian decision of Dubiner v. Cheerio Toys & Games Ltd (1966) 55 DLR 420 at p.435. As Mr Lionel Bently points out in "Accounting for Profits Gained by Infringement of Copyright: When does it End?" [1991] 1 EIPR 5, the remedy of account has two principal characteristics. First, it is restitutionary, taking away from the infringer anything which he has gained and returning it to the owner of the copyright. Secondly it is an equitable remedy. Accordingly, in my view the taking of the account should be directed to the ascertainment of the amount of profit (realised and unrealised), if any, derived by Beale Nominees in building its units and the extent to which the substantial reproduction of the Drawings and the applicant's units contributed to the generation of that profit. There may well be problems of causation to be resolved by the calling of appropriate evidence. Slade J. in My Kinda Town (which, as the above passages indicate, was a passing-off case) referred, at p.156, to these difficulties in the context of some decisions relating to infringement of patents and observed: "... they do illustrate that the Court will not order an account of profits in a wider form than it regards as equitable, that, if it considers it necessary in the interests of justice, it will direct an apportionment and that it will not necessarily be deterred from so doing by the practical difficulties to which such an apportionment may give rise." I believe it would be unconscionable for the applicant to receive judgment for a sum which did not appropriately represent that proportion of Beale Nominees' profit which is fairly attributable to the infringement of the applicant's copyright. In other words, to the extent that such infringement caused profit to be made then, in my opinion, it should be ordered to disgorge that profit. Problems of causation and proof are adjusted by placing the onus on the respondents (see the passage from Warman v. Dwyer set out above). If upon the taking of the account in this matter the respondents are unable to establish that the whole of the profit (if any) made by Beale Nominees was not attributable to the infringement of the copyright in the Drawings and the applicant's buildings then the result will be an order that they pay all of those profits to the applicant. To the extent that the respondents are able to establish that factors other than such infringement caused such profit then they will only have to account for a lesser amount. The relevant comparison would appear to be between the profits which Beale Nominees would have made if it had not used the Drawings and the profits which they did in fact make. That is my provisional view but the matter will have to be decided in the course of taking the account of the profits. If that view is correct then as Millett J. observed in Potton Ltd "in practice this will come to the cost of commissioning similar drawings from another source." For much the same reasons as Windeyer J. in Colbeam Palmer decided to conduct the hearing of the account of profits, so in this case I do not propose to delegate that task to the District Registrar but to relist the matter, if necessary, for that purpose at a later date. Conclusions I summarise my conclusions as follows: 1. The applicant has established its ownership of the copyright in the Drawings and the buildings on Lot 144. 2. All of the respondents have infringed those copyrights by: (a) causing a substantial part of the Drawings to be copied; (b) causing the units on Lot 770 to be built thereby reproducing in substantial part both the Drawings and the buildings on Lot 144. 3. The applicant is entitled to an account of any profits, whether realised or unrealised, made by the respondents and properly attributable to the abovementioned infringements. 4. Directions will be given in respect of interlocutory steps to be taken before the taking of the account of profits. There will be orders accordingly. The parties should bring into Court a minute of orders to reflect and give effect to these reasons for judgment. If agreement cannot be reached on the terms of such orders, then the matter may be relisted for the purpose of hearing submissions about the precise terms of the orders and settling them. Traditionally, an account was not ordered unless accompanied by an injunction but there are exceptions. Some of the authorities are discussed in Mr Bently's article referred to above. It may be that an injunction is no longer pressed. If necessary I will hear the parties further on that aspect. I will also hear the parties on the question of costs. Postscript I would add one postscript. Had the applicant claimed damages, my provisional view is that I would probably have awarded damages amounting to the likely fee which the applicant could have obtained for permitting the use of the drawings. In cross-examination, Mr Zupanovich said that, as an example, the applicant could charge $2,000. He said that the applicant would probably charge another company in the Zupanovich group about $1,000 for the use of the Drawings. On the evidence, again on a provisional basis, I doubt whether the likely fee charged to an unrelated entity would have been much more than about $1,000. In reaching that provisional assessment I have had regard to the drafting fees charged by Designwise and M & M Enterprizez respectively and the fact that there does not appear to be much in the Drawings that is so distinguishable from similar designs as to command a substantial premium for their use. However, bearing in mind such of the factors referred to in s.115(4)(b) of the Act as have been the subject of evidence to date (and that evidence was far from complete for such a purpose) yet again on a provisional basis, I would have been inclined to award a further $1,500 by way of additional damages. The fact is that the applicant has elected not to claim damages but an account of profits, if any. I mention this only because it may enable the parties to resolve the matter. My impression is that a round-table conference between Mr Zupanovich (senior), Mr Beale (senior) and their respective sons might well result in a speedy, and possibly even amicable, resolution. If not, the account of profits will be taken and it should go without saying that nothing in this postscript will have any bearing on the result of that account. The result will depend on such further evidence as the parties see fit to adduce. I certify that this and the preceding forty-five (45) pages are a true copy of the Reasons for Judgment of Justice Carr. Associate: Date: 3 August, 1995 Counsel for the Applicant: Mr R. Griffiths Solicitors for the Applicant: Rodney Griffiths & Co Counsel for the Respondent: Mr C.A. Grasso Solicitors for the Respondent: Millsteed Grasso Date of Hearing: 3,4,5 July 1965 Date of Judgment: 3 August 1995	15,682
federal_court_of_australia:fca/single/2014/2014fca1231	decision	commonwealth	federal_court_of_australia	text/html	2014-11-17 00:00:00	SZTHQ v Minister for Immigration and Border Protection [2014] FCA 1231	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2014/2014fca1231	2024-09-13T22:44:52.752890+10:00	FEDERAL COURT OF AUSTRALIA SZTHQ v Minister for Immigration and Border Protection [2014] FCA 1231 Citation: SZTHQ v Minister for Immigration and Border Protection [2014] FCA 1231 Appeal from: SZTHQ & Anor v Minister for Immigration & Anor [2014] FCCA 1529 Parties: SZTHQ and SZTHR v MINISTER FOR IMMIGRATION AND BORDER PROTECTION and REFUGEE REVIEW TRIBUNAL File number: NSD 811 of 2014 Judge: MURPHY J Date of judgment: 17 November 2014 Catchwords: MIGRATION – Judicial review – Decision of Tribunal to make decision refusing application when non-appearance by applicant Legislation: Migration Act 1958 (Cth) Cases cited: Bushell v Repatriation Commission (1992) 175 CLR 408 Kaur v Minister for Immigration and Border Protection [2014] FCA 915 Minister for Immigration and Border Protection v Singh (2014) FCAFC 1 Minister for Immigration and Citizenship v Li (2013) 249 CLR 232 SZTHQ & Anor v Minister for Immigration & Anor [2014] FCCA 1529 Date of hearing: 14 November 2014 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 48 Counsel for the First Appellant: The First Appellant appeared in person Counsel for the Second Appellant: The Second Appellant did not appear Counsel for the Respondents: Ms A Wong of DLA Piper IN THE FEDERAL COURT OF AUSTRALIA NSW DISTRICT REGISTRY GENERAL DIVISION NSD 811 of 2014 ON APPEAL FROM THE FEDERAL CIRCUIT COURT OF AUSTRALIA BETWEEN: SZTHQ First Appellant SZTHR Second Appellant AND: MINISTER FOR IMMIGRATION AND BORDER PROTECTION First Respondent REFUGEE REVIEW TRIBUNAL Second Respondent JUDGE: MURPHY J DATE OF ORDER: 17 NOVEMBER 2014 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The appeal is dismissed. 2. The Appellants pay the First Respondent's costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NSW DISTRICT REGISTRY GENERAL DIVISION NSD 811 of 2014 ON APPEAL FROM THE FEDERAL CIRCUIT COURT OF AUSTRALIA BETWEEN: SZTHQ First Appellant SZTHR Second Appellant AND: MINISTER FOR IMMIGRATION AND BORDER PROTECTION First Respondent REFUGEE REVIEW TRIBUNAL Second Respondent JUDGE: MURPHY J DATE: 17 NOVEMBER 2014 PLACE: MELBOURNE REASONS FOR JUDGMENT INTRODUCTION 1 The appellants, SZTHQ and SZTHR, are nationals of the People's Republic of China. They appeal from a decision of the Federal Circuit Court dismissing their applications for judicial review of a decision of the Refugee Review Tribunal ("the Tribunal"). The Tribunal affirmed the decision of the delegate of the first respondent, the Minister for Immigration and Border Protection, refusing to grant the appellants Protection (Class XA) visas ("the protection visas") (SZTHQ & Anor v Minister for Immigration & Anor [2014] FCCA 1529). 2 The appellants sought protection visas on 15 May 2012 in an application accompanied by a written statement which made claims that they were refugees pursuant to the Convention relating to the Status of Refugees ("Refugees Convention"). A delegate of the Minister ("the delegate") refused the application. 3 The appellants applied to the Tribunal to review the delegate's decision, but the Tribunal affirmed the delegate's decision on 20 August 2013 and refused to grant the visas. It was significant to the Tribunal's decision that the appellants were invited to attend a hearing before the Tribunal on 29 July 2013 and had failed to attend. It is noteworthy that the first appellant had earlier failed to attend an interview with the delegate on 13 August 2012 which was significant to the delegate's rejection of the applications. 4 On 24 September 2013 the appellants made an application to the Federal Circuit Court seeking judicial review of the Tribunal's decision. The task of the Court in dealing with that application was restricted to the question of whether the Tribunal's decision was affected by jurisdictional error. On 16 July 2014 the Federal Circuit Court dismissed the application. 5 The appellants now appeal to this Court against the decision of the Federal Circuit Court. The task before this Court is to determine whether the learned primary judge erred in dismissing the application for review. The scope of this Court's review jurisdiction is restricted by the same considerations as applied in the Court below. THE FACTS 6 The appellants are husband and wife. The first appellant provided a detailed written statement to the Department of Immigration and Citizenship ("the Department") from which the following history is derived. He stated that he had a factory in an identified province in China which was very profitable. On 20 December 2011 he was told by the manager of the town industry section that a Taiwanese company was to build a factory in his local area. On 23 December 2011 a town meeting was held and the appellants and other attendees were informed of the purported benefits of the new factory. 7 He then attended a private meeting with town officials where he was told that the Taiwanese company had chosen the site of his factory to build their factory, but that he would be compensated for the acquisition of his factory. He was offered compensation for the acquisition but he did not accept it because he believed the amount of compensation offered was unreasonable. 8 On 25 December 2011 he spoke to the town officials and rejected the compensation offer as unreasonable. He was informed that his response would be reported to the city leaders. He was called to a meeting with city officials on 27 December 2011 and was advised that the town was experiencing financial difficulties and that he should put the town's interests over his own interests and accept the offer. 9 He was offered a written agreement to sign at that time but he says that he asked for time to consider the offer. He did not accept the offer despite feeling pressure to do so. The appellants then decided to submit a letter of protest to the Letter and Petition Office in the provincial city. They instructed a local law firm to write the letter which was to ask the government to stop their assets from being seized by unlawful means. The law firm was to have the letter ready for collection in three days. 10 However, on 29 December 2011 the first appellant was alone in his factory when he was attacked by unknown assailants, his head was covered with a hood and his mouth was taped. Someone then spoke to him advising him that he must accept the compensation offered, that he must not appeal to a higher level of government, and that he must not visit his lawyer again. He was told that he was under watch, and that if he did not heed the warning he would be killed and his family would not be able to find his body. He was then beaten, kicked and punched, suffering five broken ribs as a result. The perpetrators then fled the scene. 11 He was informed by his brother-in-law, who had been informed by a mutual friend, that the local officials had been offered a 20% share of the investment from the Taiwanese factory if he reduced the compensation money to be paid for his factory's demolition. His brother-in-law also informed him that a contract killer had been hired and that he had already given him a warning. He stated that the collusion between the Taiwanese investors and the local government officials made it impossible to seek justice, and claimed that any kind of petition to the government would be futile as the government officers had already been bribed. 12 He decided that he had to go into hiding in order to avoid signing the agreement that would result in the demolition of his factory, and in order to avoid the contract killer. He then decided to flee to Australia, intending to return to China when the situation had changed and when he could pursue the return of his unlawfully seized assets. 13 The appellants left China by legal means, and left behind their son and daughter, born in 1995 and 2003 respectively. THE DECISION of the delegate 14 On 15 May 2012 the delegate wrote to the first appellant advising him that the Department had begun to process the visa applications. Amongst other things, the letter advised him that when the Department mailed letters to him he was taken to have received the letter within seven working days after its date. 15 On 23 July 2012 the delegate wrote to the first appellant, in a letter sent to a new address provided by him to the Department, inviting the first appellant to attend an interview on 13 August 2012 to discuss his visa application and his claims for protection. The letter advised that if he did not attend the scheduled interview the visa applications may be decided without any further delay, based on the information held at that time. 16 The first appellant did not attend the interview. It does not appear that he offered any explanation for his non-attendance. 17 On 14 August 2012 the delegate refused to grant the protection visas sought, noting that the first appellant did not attend the interview which had been scheduled, and deciding that he was not satisfied that the first appellant met the relevant criteria for the grant of the visas under s 36(2) of the Migration Act 1958 (Cth) ("the Act"). In wide ranging reasons the delegate noted that it was necessary to interview the first appellant in order to assess the credibility of his claims, and stated: There were a number of questions regarding the protection claims which would have been asked at the interview. As the applicant did not attend the interview it is not possible to be satisfied that the claims that have been made in the written application are true claims and that the applicant meets the requirements for a Protection visa. A decision maker is not obliged to accept uncritically any and all statements made by an applicant, as noted in Randhawa v MIEA (1994). 18 The delegate found that: (a) "country information" about China indicated that legal avenues were available to those who wanted to challenge government land seizures or the provision of inadequate compensation; (b) the material before the delegate, including the country information, did not enable a finding that the first appellant had a profile that would result in a real chance of persecution by Chinese authorities should he return to China; (c) the first appellant had legally departed China which indicated that he was not of adverse interest to Chinese authorities; and (d) based on the available information it could not be found that the claimed agents of persecution would have influence with the Chinese authorities to the extent that the claimed unlawful conduct towards the first appellant would be supported by the authorities. While the Chinese legal system "may not be ideal" the country information indicated that it would provide protection to the first appellant. 19 The delegate was not satisfied that the first appellant was a person to whom Australia has protection obligations under s 36 of the Act and clause 866.221 of Schedule 2 to the Migration Regulations 1994 ("the Regulations"), and refused him a protection visa. The delegate also refused to grant a protection visa to the second appellant, doing so on the basis that she was a member of the family unit included in the application. THE TRIBUNAL DECISION 20 As noted above, on 12 September 2012 the first appellant applied to the Tribunal seeking review of the delegate's decision. 21 On 1 July 2013 the Tribunal wrote to the appellants by letter addressed to the first appellant at a post office box address in Hurstville, NSW, which was the address provided in the application to the Tribunal. The letter advised that the Tribunal had considered all of the material before it relating to the applications for review but that it was unable to make a favourable decision on that information alone. 22 The Tribunal invited the appellants to give oral evidence and present arguments at a hearing scheduled on 29 July 2013. The letter advised that if they failed to attend the hearing the Tribunal may make a decision on their case without taking any further action. 23 The appellants did not appear at the scheduled hearing. On 12 August 2013 the Tribunal's letter dated 1 July 2013 was returned to it marked "uncollected". The envelope had the handwritten notations "Final Notice 24/7" and "RTS 30/7". 24 The Tribunal delivered its decision on 20 August 2013 and affirmed the delegate's decision not to grant the protection visas. The Tribunal decided at [10]-[13]: The applicant claims to fear harm from the a [sic] contract killer and corrupt local business men and authorities of China by reason of his petitioning the authorities in relation to his factory being acquired and his claim that he was under-compensated. He claims that he was attacked and beaten by unknown people because of his resistance to his factory being acquired and his attempt to petition. The mere fact that a person claims to fear persecution for a particular reason does not establish either the genuineness of the asserted fear or that it is 'well-founded' or that it is for the reason/s claimed. Further, the Tribunal is not required to accept uncritically any and all the allegations made by an application (Randhawa v MIEA (1994) 52 FCR 437 @ 451). The Tribunal has a number of issues upon which it requires a good deal more detail, for example, why the authorities would continue to pursue the applicant in order to obtain his signature if they were acting corruptly, and/or they would engage a contract killer to kill the applicant, and/or why he would leave his children in China if he felt his life was under threat, before it could be satisfied that the applicants are in genuine fear of persecution and that there is a real chance that either or both will be persecuted on their return to China. In the circumstances the Tribunal is unable to be satisfied that either or both of the applicants have a well-founded fear of persecution for a Convention reason on their return to China now or in the reasonably foreseeable future. Nor is the Tribunal satisfied that there are substantial grounds for believing that as a necessary and foreseeable consequence of either or both of the applicants being removed from Australia to a receiving country that there would be a real risk of either or both of the applicants suffering significant harm. For the reasons given above the Tribunal is not satisfied that any of the applicants is [sic] a person in respect of whom Australia has protection obligations. Therefore the applicants do not satisfy the criterion set out in s 36(2)(a) or (aa) for a protection visa. It follows that they are also unable to satisfy the criterion set out in s 36(2)(b) or (c). As they do not satisfy the criteria for a protection visa, they cannot be granted the visa. THE DECISION OF THE FEDERAL CIRCUIT COURT 25 In their application for judicial review the appellants set out their grounds of review in the following terms: 1. The manager supported by the local officer threatened me to sign their agreement. This will make demolishing my factory legally [sic]. To avoid their further persecution, I was forced to flee abroad for protection. 2. The Tribunal member failed considering all my claims and evidence, made jurisdictional error [sic]. 26 At least part of the application for review was based on the Tribunal having decided the matter without hearing evidence and argument from the appellants. The Tribunal did so because the appellants did not appear before the Tribunal in response to a written invitation that they appear before it at a specified time and date. 27 The Minister contended that the Tribunal was able to determine the application without taking any further action to allow or enable the appellants to appear before it. Section 426A of the Act provides: (1) If the applicant: (a) is invited under section 425 to appear before the Tribunal; and (b) does not appear before the Tribunal on the day on which, or at the time and place at which, the applicant is scheduled to appear; the Tribunal may make a decision on the review without taking any further action to allow or enable the applicant to appear before it. (2) This section does not prevent the Tribunal from rescheduling the applicant's appearance before it, or from delaying its decision on the review in order to enable the applicant's appearance before it as rescheduled. 28 Before the Federal Circuit Court the appellants claimed that due to the illness of the second appellant they had not collected their mail from their post office box and they were unaware of the hearing before the Tribunal. One of the appellants also claimed that it "may be due to my… moving house that… I failed to receive the letter". 29 The learned primary judge considered the evidence that showed the Tribunal's invitation to appear dated 1 July 2013 was in fact dispatched on that date. His Honour was satisfied that the letter was returned marked "uncollected" on 12 August 2013 and that the envelope contained handwritten notations "Final Notice 24/7" and "RTS 30/7". 30 The primary judge held that it was open to the Tribunal under s 426A of the Act to make a decision on the application without taking any further action to allow or enable the appellants to appear. His Honour also concluded that there was no substance to the ground that the Tribunal had not considered the appellants' claims, noting that the Tribunal had set out the claims made by the appellants and that the reasons it gave indicated that the Tribunal understood and dealt with those claims. His Honour dismissed the appeal. THE APPEAL TO THIS COURT 31 In the Notice of Appeal the appellants set out two grounds of appeal, namely that: (a) the Tribunal was biased; and (b) the Tribunal failed to take all claims into account according to section 91R of the Act. 32 The appellants did not file written submissions. 33 At the hearing the appellants were assisted by an interpreter, but were not legally represented. The first appellant submitted that he had not received the invitation to attend the interview with the delegate because he had changed address, and that he had also not received the invitation to attend the hearing before the Tribunal. He submitted that his wife had been very unwell psychologically and that he had been unable to leave his home for two weeks or more while he was looking after her, although he later seemed to accept that he had been required to leave his home in order to buy food. In essence he said that he had not collected the mail from his post office box for about one month because of his wife's illness. CONSIDERATION Ground one – was the Tribunal biased against the appellants? 34 This ground of review was not raised in the application to the Federal Circuit Court and cannot now be advanced without leave. If leave had been sought I would have refused to grant it as no evidence or submissions were advanced in support of the ground. It must fail. Ground two – did the Tribunal take all of the appellants' claims into account pursuant to s 91R of the Act? 35 Section 91R of the Act provides that Article 1A(2) of the Refugees Convention does not apply in relation to persecution of a person for one or more of the reasons mentioned in that Article unless that reason is the essential and significant reason, or those reasons are the essential and significant reasons for the persecution, and the persecution involves serious harm to the person and systematic and discriminatory conduct. 36 This ground was not developed in submissions, and s 91R does not appear to have any central relevance in the present case. There is no real issue that assaults and threats to kill of the type described by the appellants might be sufficient to satisfy a decision-maker that a person was threatened with such serious harm that it constitutes persecution under the Refugee Convention. Such occurrences might also satisfy a decision-maker under the complementary protection criterion in ss 36(2)(aa) and 36(2A) of the Act. 37 However, that is not really to the point. The Tribunal rejected the appellants' application because it was not satisfied: (a) as to the genuineness of the appellants' asserted fear of persecution; (b) that the fear of persecution was "well founded"; or (c) that the fear of persecution was for the reasons stated. The Tribunal was not, of course, obliged to uncritically accept the appellants' claims. 38 The Tribunal described a number of issues upon which it required more detailed information, which it did not receive because the appellants did not attend the hearing. In all the circumstances the Tribunal said that it was unable to be satisfied that: (a) either of the appellants had a well-founded fear of persecution for a Convention reason on their return to China; or (b) there are substantial grounds for believing that as a necessary and foreseeable consequence of either or both of the appellants being removed from Australia to a receiving country that there would be a real risk of him or her suffering significant harm. In effect, because of the appellants' non-appearance, the Tribunal was unable to explore the appellants' claims in more detail and could not be satisfied that they were persons to whom Australia owed protection obligations. 39 As the learned primary judge recognised, part of the appellants' complaint related to the Tribunal's decision to proceed to conduct its review in their absence when they did not attend the hearing. In my view while the Tribunal had a discretion under s 426A to proceed to hear the application notwithstanding that the appellants did not attend, in some circumstances a refusal to adjourn a hearing may constitute a denial of procedural fairness amounting to jurisdictional error. 40 The question of legal unreasonableness of the kind identified in Minister for Immigration and Citizenship v Li (2013) 249 CLR 232 ("Li") and Minister for Immigration and Border Protection v Singh (2014) FCAFC 1 ("Singh") was not specifically raised before the Federal Circuit Court, but it is inherent in the appellants' complaint. 41 In Kaur v Minister for Immigration and Border Protection [2014] FCA 915 ("Kaur") at [83] Mortimer J observed in respect to analogous provisions that the Act does not require the Tribunal to postpone or refrain from making a decision on a review because the applicant does not attend. I respectfully agree. While the terms of s 426A recognise the need for flexibility in the context of a particular review there is no free-standing obligation on the Tribunal in every case in which there has been a failure to respond to a hearing invitation or a failure to appear at a scheduled hearing to search its records to seek to find another way of communicating with the applicant, or to adjourn the hearing: Kaur at [133]. 42 The Tribunal's task in deciding whether to proceed to determine the applications or to adjourn them was to arrive at the correct or preferable decision in the case before it according to the material before it: Li at [10] per French CJ, referring to Bushell v Repatriation Commission (1992) 175 CLR 408 at 425 per Brennan J. Whether it is correct or preferable to proceed in the applicant's absence depends on the circumstances of the particular case. It should also be kept in mind that the regime for determining visa applications would soon come to a grinding halt if the review process could be stopped simply by an applicant refusing or failing to attend interviews and/or hearings. 43 In my view there is nothing in the facts of the present case which reveals legal unreasonableness. 44 It is not contentious that the first appellant failed to attend the interview with the delegate and that this interview was intended to enable a well-informed assessment of the appellants' claims. The appellants accepted in submissions before me that this was an important interview. Having had their applications refused because they failed to attend the interview, and therefore (on their assertion) facing forcible return to persecution in China, one would think that they would be concerned to ensure that they attended the Tribunal upon the hearing of their review application. 45 The post office notations on the letter advising the hearing date before the Tribunal show that it was held in the appellants' post office box for about a month. The evidence is that although they were given almost one months' written notice of the hearing, the appellants assert that due to the second appellants' health they did not collect their mail from their post office box for that whole period. As a result they missed the hearing. They put on no evidence to establish these facts, and did not adequately explain the how it was impossible for them to pick up their mail for one month. There was nothing to indicate that it was unreasonable in all the circumstances for the Tribunal to decide their applications without providing a further opportunity for them to establish its merits. 46 In all the circumstances it was not unreasonable for the Tribunal to take the course that it did in determining the appellants' applications in their absence. The Tribunal had an "evident and intelligible justification" for doing so (Li at [76] per Hayne, Kiefel and Bell JJ) and the circumstances of this case do not give rise to the kind of unreasonableness that was identified in Li, Singh or Kaur. CONCLUSION 47 I can discern no jurisdictional error in the Tribunal's decision or appealable error in the judgment of the Federal Circuit Court. 48 The appeal must be dismissed, and I order the appellants pay the first respondent's costs. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Murphy. Associate: Dated: 17 November 2014	5,477
federal_court_of_australia:fca/single/2010/2010fca1014	decision	commonwealth	federal_court_of_australia	text/html	2010-09-15 00:00:00	Deputy Commissioner of Taxation v Hua Wang Bank Berhad [2010] FCA 1014	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2010/2010fca1014	2024-09-13T22:44:54.485695+10:00	FEDERAL COURT OF AUSTRALIA Deputy Commissioner of Taxation v Hua Wang Bank Berhad [2010] FCA 1014 Citation: Deputy Commissioner of Taxation v Hua Wang Bank Berhad [2010] FCA 1014 Parties: DEPUTY COMMISSIONER OF TAXATION v HUA WANG BANK BERHAD, CHEMICAL TRUSTEE LIMITED, DERRIN BROTHERS PROPERTIES LIMITED, BYWATER INVESTMENTS LIMITED and SOUTHGATE INVESTMENT FUNDS LIMITED File number(s): VID 672 of 2010 Judge: KENNY J Date of judgment: 15 September 2010 Catchwords: PRACTICE AND PROCEDURE – Freezing order – Appropriate test – Good arguable case – Real risk of removal or dissipation of assets – In the interest of justice that freezing order be made Legislation: Income Tax Assessment Act 1936 (Cth) ss 177(1), 204(1) Taxation Administration Act 1953 (Cth), Schedule 1, ss 255-45, 298-15, 298-30(3) Federal Court Rules O 25A Cases cited: Jackson v Sterling Industries Ltd (1987) 162 CLR 612 Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 Ninemia Maritime Corporation v Trave Schiffahrtsgesellschaft mbH & Co KG (The Niedersachsen) [1983] 1 WLR 1412 Patterson, Glenwood Management Group Pty Ltd v Mayo [1991] 2 VR 49 Lifetime Investments Ltd v Commercial (Worldwide) Financial Services Pty Ltd [2005] FCA 226 Victoria University of Technology v Wilson [2003] VSC 299 National Australia Bank Ltd v Bond Brewing Holdings Ltd (1990) 169 CLR 271 Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 Glenwood Management Group Pty Ltd v Mayo [1991] 2 VR 49 Riley McKay Pty Ltd v McKay [1982] 1 NSWLR 264 Third Chandris Shipping Corporation v Unimarine SA [1979] 1 QB 645 Raukura Moana Fisheries Ltd v The Ship 'Irina Zharkikh' [2001] 2 NZLR 801 Hadid v Lenfest Communications Inc (1996) 67 FCR 446 Reches Pty Ltd v Tadiran Pty Ltd (1998) 85 FCR 514 Clyne v Deputy Commissioner of Taxation (1981) 150 CLR 1 FJ Bloemen Pty Ltd v Commissioner of Taxation (1981) 147 CLR 360 Commissioner of Taxation v Futuris Corporation Ltd (2008) 237 CLR 146 Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd (2008) 237 CLR 473 Batagol v Commissioner of Taxation (1963) 109 CLR 243 Savcor Pty Ltd v Cathodic Protection International APS (2005) 12 VR 639 Canadian Pacific Tobacco Company Limited v Stapleton (1952) 86 CLR 1 Simionato Holdings Pty Ltd v Commissioner of Taxation (1995) 60 FCR 375 Date of hearing: 7 September 2010 Date of last submissions: 7 September 2010 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 68 Counsel for the Applicant: Mr I D Martindale SC with Mr E F Wheelahan Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondents: Mr D G Russell QC with Ms R L Seiden and Mr J Hyde Page Solicitor for the Respondents: Henry Davis York IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 672 of 2010 BETWEEN: DEPUTY COMMISSIONER OF TAXATION Applicant AND: HUA WANG BANK BERHAD First Respondent CHEMICAL TRUSTEE LIMITED Second Respondent DERRIN BROTHERS PROPERTIES LIMITED Third Respondent BYWATER INVESTMENTS LIMITED Fourth Respondent SOUTHGATE INVESTMENT FUNDS LIMITED Fifth Respondent JUDGE: KENNY J DATE OF ORDER: 15 SEPTEMBER 2010 WHERE MADE: MELBOURNE THIS COURT NOTES that the applicant by his counsel undertakes to the Court to submit to such order, if any, that the Court may consider to be just for the payment of compensation to be assessed by the Court, or as it may direct to any person whether or not a party affected by the operation of the freezing orders referred to in paragraphs 1 to 5 of this order. THE COURT ORDERS THAT: 1. The date specified in paragraph 2 of the freezing order made on 12 August 2010 against Hua Wang Bank Berhad be extended until 4.15 pm on 11 October 2010. 2. Paragraph 14 (first appearing) of the freezing order made on 12 August 2010 against Hua Wang Bank Berhad cease to have effect. 3. The date specified in paragraph 5 (first appearing) of the freezing order made on 12 August 2010 against Chemical Trustee Limited be extended until 4.15 pm on 11 October 2010. 4. Paragraph 14 (first appearing) of the freezing order made on 12 August 2010 against Chemical Trustee Limited cease to have effect. 5. The date specified in paragraph 8 (first appearing) of the freezing order made on 12 August 2010 against Derrin Brothers Properties Limited be extended until 4.15 pm on 11 October 2010. 6. Paragraph 14 (first appearing) of the freezing order made on 12 August 2010 against Derrin Brothers Properties Limited cease to have effect. 7. The date specified in paragraph 11 (first appearing) of the freezing order made on 12 August 2010 against Bywater Investments Limited be extended until 4.15 pm on 11 October 2010. 8. Paragraph 14 (first appearing) of the freezing order made on 12 August 2010 against Bywater Investments Limited cease to have effect. 9. The date specified in paragraph 14 (first appearing) of the freezing order made on 12 August 2010 against Southgate Investment Funds Limited be extended until 4.15 pm on 11 October 2010. 10. Paragraph 14 (second appearing) of the freezing order made on 12 August 2010 against Southgate Investment Funds Limited cease to have effect. 11. The parties have leave to file a minute of order providing for the division of the proceedings, and the Respondents' notice of motion dated 1 September 2010 be otherwise dismissed. 12. The Applicant's notice of motion dated 12 August 2010 be adjourned to 4.15 pm on 11 October 2010. 13. The Applicant's costs be reserved. THE COURT NOTES THAT: 14. The Applicant will give notice of the freezing orders to each of the Third Parties listed below by serving a copy of the orders on them as soon as practicable: 14.1 Computershare Investor Services Pty Limited 14.2 Link Market Services Limited 14.3 Registries Limited 14.4 Advanced Share Registry Services Limited 14.5 Security Transfer Registrar Pty Ltd 14.6 Gould Ralph Pty Ltd. 15. Each Respondent will lodge its taxation objection under Part IVC of the Taxation Administration Act 1953 by 30 September 2010. Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 672 of 2010 BETWEEN: DEPUTY COMMISSIONER OF TAXATION Applicant AND: HUA WANG BANK BERHAD First Respondent CHEMICAL TRUSTEE LIMITED Second Respondent DERRIN BROTHERS PROPERTIES LIMITED Third Respondent BYWATER INVESTMENTS LIMITED Fourth Respondent SOUTHGATE INVESTMENT FUNDS LIMITED Fifth Respondent JUDGE: KENNY J DATE: 15 SEPTEMBER 2010 PLACE: MELBOURNE REASONS FOR JUDGMENT Application before the Court 1 On 12 August 2010, the Deputy Commissioner of Taxation ('the Commissioner') filed an application for declaratory relief and judgment against the respondents in respect of their liability for income tax and administrative penalties plus general interest. The Commissioner also sought orders restraining the respondents from removing any assets in Australia outside the country, or from disposing of, dealing with, or diminishing the value of those assets. By a notice of motion filed the same day, the Commissioner sought interlocutory relief freezing the respondents' domestic assets and restraining third parties from registering and dealing in respect of any shares owned by the respondents. 2 The motion was heard ex parte that day and, further, on 19 August 2010 before other judges of the Court. The motion first came before me as duty judge on 2 September 2010 and, on 7 September 2010, when the Commissioner and the respondents made submissions to the Court as to the continuation of the freezing order. On that day, I ordered that the freezing order be continued until today. 3 The Commissioner has relied on the affidavit of Aris Zafiriou sworn on 12 August 2010. There were also various affidavits as to service and like matters filed on the Commissioner's behalf. 4 The respondents have relied on the affidavits of Peter Borgas sworn on 18 and 31 August 2010, Daud Yunus sworn on 30 August 2010, Thomas Leslie Hollo sworn on 6 September 2010, and Vanda Gould sworn on 1 September 2010. There were also two further affidavits sworn by Mr Gould on 6 September, and two affidavits of Naresh Shah both sworn on 5 September 2010. There was also an earlier affidavit of Mr Hollo sworn on 1 September 2010 in support of an application for a change of venue (discussed at the conclusion of these reasons). The legal test for grant of a freezing order 5 It is well established that this Court has jurisdiction to grant what is sometimes called a Mareva injunction or a freezing order: see Jackson v Sterling Industries Ltd (1987) 162 CLR 612. The purpose of a freezing order is to prevent frustration of the process of the Court and not to create security for the applicant. As the respondents said in this case, to impose a freeze on assets is no light matter. 6 Discretionary power to make a freezing order is now conferred by O 25A, rule 2 of the Federal Court Rules. Order 25A, rule 2 specifically confers power to make a freezing order "for the purpose of preventing the frustration … of the Court's process by seeking to meet a danger that a judgment or prospective judgment … will be … unsatisfied". The conditions that must be met before an order can be made are set out in O 25A, rule 5. Order 25A, subrule 5(1) relevantly provides that rule 5 applies if "an applicant has a good arguable case on an accrued or prospective cause of action that is justiciable in … the Court". Subrule 5(4) relevantly provides that: (4) The Court may make a freezing order or an ancillary order or both against a judgment debtor or prospective judgment debtor if the Court is satisfied, having regard to all the circumstances, that there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because any of the following might occur: … (b) the assets of the judgment debtor, prospective judgment debtor or another person are: (i) removed from Australia or from a place inside or outside Australia; or (ii) disposed of, dealt with or diminished in value. 7 For present purposes, subrules 5(5) and 5(6) are also relevant. They state: (5) The Court may make a freezing order or an ancillary order or both against a person other than a judgment debtor or prospective judgment debtor (a third party) if the Court is satisfied, having regard to all the circumstances, that: (a) there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because: (i) the third party holds or is using, or has exercised or is exercising, a power of disposition over assets (including claims and expectancies) of the judgment debtor or prospective judgment debtor; or (ii) the third party is in possession of, or in a position of control or influence concerning, assets (including claims and expectancies) of the judgment debtor or prospective judgment debtor; … (6) Nothing in this rule affects the power of the Court to make a freezing order or ancillary order if the Court considers it is in the interests of justice to do so. 8 In substance, O 25A re-states the current judge-made law with respect to freezing orders. A brief reference to the cases is useful to show how, and in what circumstances, the courts have previously thought it appropriate to make such an order. The cases speak of the need for the applicant to establish, first, a prima facie cause of action against the respondent, and, secondly, a "danger" or "real risk" that a judgment debt will go unsatisfied because assets are removed from the jurisdiction or disposed of in some way: see Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 ('Patterson') at 321-2 per Gleeson CJ, with whom Meagher JA generally agreed; and Ninemia Maritime Corporation v Trave Schiffahrtsgesellschaft mbH & Co KG (The Niedersachsen) [1983] 1 WLR 1412 ('Ninemia Maritime') at 1422-3. In the latter case (at 1422), the Court of Appeal in England described the test as "whether, on the assumption that the plaintiffs have shown at least 'a good arguable case', the court concludes, on the whole of the evidence then before it, that the refusal of a Mareva injunction would involve a real risk that a judgement or award in favour of the plaintiffs would remain unsatisfied". 9 Depending on the circumstances, the interests of justice may support the grant of a freezing order to prevent the dissipation of assets pending the hearing of an action even though the risk of dissipation is less probable than not: Patterson at 325 per Gleeson CJ; Peter Biscoe, Freezing and Search Orders: Mareva and Anton Piller Orders (LexisNexis Butterworths, Australia, 2008) ('Biscoe') at p 209 [6.17], citing Patterson, Glenwood Management Group Pty Ltd v Mayo [1991] 2 VR 49 ('Glenwood') at 54, and Lifetime Investments Ltd v Commercial (Worldwide) Financial Services Pty Ltd [2005] FCA 226 at [14] per Kiefel J referring to Victoria University of Technology v Wilson [2003] VSC 299 at [36]. As Redlich J noted in the last-mentioned case (at [36]), "[w]hat must be established is a sufficient likelihood of risk which in the circumstances of a particular case justifies an asset preservation order". 10 A freezing order may be granted even though there is no evidence of the respondent's positive intention to frustrate a judgment: see National Australia Bank Ltd v Bond Brewing Holdings Ltd (1990) 169 CLR 271 at 277 per Mason CJ, Brennan and Deane JJ; Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 394 [26]; Glenwood at 53 per Young CJ; and Riley McKay Pty Ltd v McKay [1982] 1 NSWLR 264 ('Riley McKay') at 276. In Riley McKay at 276, the Court of Appeal of the New South Wales Supreme Court said, and I accept, that the jurisdictional basis for relief of this kind "is directed to dispositions … which are intended to frustrate, or have the necessary effect of frustrating, the plaintiff in his attempt to seek through the court a remedy for the obligation to which he claims the defendant is subject" (emphasis added). In this case, there is no direct evidence of positive intention on the respondents' part to frustrate a judgment. Nonetheless, the Commissioner argues that there is a danger of the removal of assets from the jurisdiction, which would have the effect of frustrating any judgment. 11 The existence of the danger, so the Commissioner argues in this case, is to be inferred from the evidence. Relying on the law as stated in Biscoe, the Commissioner apparently accepts that "[s]olid evidence is required": see Biscoe at p 210 [6.20], quoting a passage from the judgment of Mustill J in Ninemia Maritime at 406, saying: It is not enough for the plaintiff to assert a risk that the assets will be dissipated. He must demonstrate this by solid evidence. This evidence may take a number of different forms. It may consist of direct evidence that the defendant has previously acted in a way which shows that his probity is not to be relied on. Or the plaintiff may show what type of company the defendant is (where it is incorporated, what are its corporate structure and assets, and so on) so as to raise an inference that the company is not to be relied on. Or again, the plaintiff may be able to found his case on the fact that the inquiries about the characteristics of the defendant have led to a blank wall. Precisely what form the evidence take will depend on the particular circumstances of the case. But the evidence must always be there. Mere proof that the company is incorporated abroad, accompanied by the allegation that there are no reachable assets in the United Kingdom apart from those which it is sought to enjoin, will not be enough. (Emphasis added.) 12 The fact that assets within the jurisdiction are moveable, and that the respondent is incorporated outside the jurisdiction is not enough to warrant an inferential finding of danger of dissipation. Rather, there must be facts from which, to quote Lawton LJ in Third Chandris Shipping Corporation v Unimarine SA [1979] 1 QB 645 ('Chandris') at 671 "a prudent, sensible commercial" person can "properly infer a danger of default if assets are removed from the jurisdiction". In this connection, Lawton LJ also said (at 672): In my judgment an affidavit in support of a Mareva injunction should give enough particulars of the plaintiff's case to enable the court to assess its strength and should set out what inquiries have been made about the defendant's business and what information has been revealed, including that relating to its size, origins, business domicile, the location of its known assets and the circumstances in which the dispute has arisen. These facts should enable a commercial judge to infer whether there is likely to be any real risk of default. Default is most unlikely if the defendant is a long established, well known foreign corporation or is known to have substantial assets in countries where English judgments can easily be enforced either under the Foreign Judgments (Reciprocal Enforcement) Act 1933 or otherwise. But if nothing can be found about the defendant, that in itself may be enough to justify a Mareva injunction. See also Chandris at 669 per Lord Denning MR, Raukura Moana Fisheries Ltd v The Ship 'Irina Zharkikh' [2001] 2 NZLR 801 at 827 [122] per Young J, Hadid v Lenfest Communications Inc (1996) 67 FCR 446 at 449 per Lehane J, and Reches Pty Ltd v Tadiran Pty Ltd (1998) 85 FCR 514 ('Reches') at 518 per Lehane J. In Reches Lehane J declined to grant a Mareva injunction where the respondent, though a foreign corporation that would remove or deplete its sole asset in Australian in the ordinary course of business, was "a major and profitable corporation with very substantial assets"; there was nothing to suggest that the respondent was likely to default; and the respondent resided and principally carried on business in a jurisdiction where enforcement was possible under a reciprocal regime for the registration of judgments. 13 In summary, the Court must consider, on the whole of the evidence before it, whether to continue, discharge or vary the freezing order previously made. In deciding this matter, the Court must determine, first, whether the Commissioner has shown a good arguable case on an accrued or prospective cause of action that is justiciable in the Court. Secondly, the Court must consider whether, on the evidence before it, there is a danger that a judgment or prospective judgment will be unsatisfied because assets are removed from Australia, or disposed of, dealt with, or diminished in value. Finally, the Court must consider the overarching question, whether, in all the circumstances, the case is one in which it is in the interests of justice to maintain or continue the freezing order. Amongst other things, in this regard, the Court must consider the likely consequences to the applicant if the assets are removed and the hardship that such an order inflicts on the respondents. The rights of third parties who may be affected by the grant of the order must also be borne in mind. Consideration Good arguable case 14 The Commissioner issued notices of assessment for unpaid income tax and notices of assessment for administrative penalties to each of the respondents on 12 August 2010. On the same day, the notices were sent by ordinary prepaid post to each of them, together with advice on the outcome of audits undertaken by the Australian Taxation Office ('ATO'). Under s 255-5 of Schedule 1 to the Taxation Administration Act 1953 (Cth) ('TAA'), the Commissioner may sue in the Federal Court to recover any tax liability that is due and payable. Pursuant to s 204(1) of the Income Tax Assessment Act 1936 (Cth) ('ITAA') (and subject to the issue of service discussed below) the income tax liabilities were due and payable at the time the Commissioner instituted this proceeding in this Court. The administrative penalties were due when assessed and notices of the assessment served, although not payable until 10 September 2010: see Clyne v Deputy Commissioner of Taxation (1981) 150 CLR 1 at 16-7 and TAA, s 298-15 of Schedule 1. 15 Generally, a taxpayer cannot challenge the correctness of an assessment except under Part IVC of the TAA, i.e., by making a taxation objection as prescribed and pursuing an appeals process under Part IVC if the objection decision is unfavourable. In any proceeding other than a proceeding under Part IVC, the production of a notice of assessment, or a document under the hand of the Commissioner or a Deputy Commissioner purporting to be a copy of a notice of assessment, is conclusive evidence of the due making of the assessment and that the amount and all the particulars of the assessment are correct: s 177(1) of the ITAA and s 298-30(3) of Schedule 1 to the TAA; also FJ Bloemen Pty Ltd v Commissioner of Taxation (1981) 147 CLR 360 at 376 and Commissioner of Taxation v Futuris Corporation Ltd (2008) 237 CLR 146 at 157 and 166-7. The Commissioner has produced documents under his hand purporting to be copies of the notices of assessment. Thus, in a recovery proceeding such as the proceedings on foot or contemplated here, the correctness of the assessments in question is not an issue the Court can consider. Once an assessed liability is due and payable, the Commissioner may move for judgment in reliance on the conclusive evidence provision of s 177(1) even where the resolution of an objection under Part IVC is pending: see generally Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd (2008) 237 CLR 473. Further, the Commissioner has also certified under s 255-45 of Schedule 1 of the TAA that there are debts due and payable to the Commonwealth by each respondent. According to the certificates under s 244-45, the sums in question, as at 1 September 2010, were: Hua Wang Bank Berhad $4,390,132.65 Chemical Trustee Limited $3,064,785.14 Derrin Bros Properties Ltd $6,489,502.69 Bywater Investments Ltd $10,257,462.30 Southgate Investment Funds Ltd $6,547,270.45 16 The result is that the Commissioner plainly satisfies the "good arguable case" requirement for obtaining a freezing order, although, in the case of the administrative penalties, the cause of action was prospective at the time the proceeding was instituted. This good arguable case is justiciable in this Court: see Judiciary Act 1903 (Cth), s 39B(1A)(c). 17 The respondents accepted that, if the assessments were validly served, then, the Commissioner had established existing or prospective causes of action against them. The respondents argued, however, that the assessments had not been validly served and that the Commissioner could not, therefore, rely on s 177(1) of the ITAA and the other associated provisions. Section 174 of the ITAA provides that "[a]s soon as conveniently may be after any assessment is made, the Commissioner shall serve notice thereof in writing by post or otherwise upon the person liable to pay tax". Batagol v Commissioner of Taxation (1963) 109 CLR 243 held that an assessment was not made until the Commissioner, having made the calculation, served upon the taxpayer a notice of the assessment. The respondents argued that, under Part 4A of the Income Tax Regulations 1936 (Cth) ('the 1936 Regulations'), "[a] tax assessment cannot be validly served on a foreign taxpayer unless the taxpayer has nominated a preferred address" for service. The Commissioner maintained that the respondents had been properly served at their known addresses in accordance with sub-regulation 38(2) of the 1936 Regulations. Regulation 38 provides as follows: (1) This regulation applies if: (a) a person has not given the Commissioner a preferred address for service; or (b) the Commissioner is satisfied that none of a person's preferred addresses for service is effective. (2) If the Commissioner has a record of another address relating to the person … and it appears to the Commissioner that it is likely that the address is effective, the Commissioner may treat that address as the person's preferred address for service for all purposes under the Act or these Regulations. 18 Bearing in mind this provision, and sub-regulation 40(1)(b) and (c), in the absence of further argument or evidence, at this interlocutory stage at least, it seems to me that service has been validly effected: see also Acts Interpretation Act 1901 (Cth), s 28A(1)(b). In any event, even if service of the notices of assessment had not been validly effected, a prospective cause of action would exist in respect of each of them. 19 Under the circumstances of the present case, the real issue is whether the Commissioner has established a sufficient likelihood of risk that the assets will be put out of reach that, in all the circumstances, justifies the continuance of the freezing orders. Before dealing with this key question, however, I first note several other issues that were also raised by the respondents, but, in the circumstances of this case, do not warrant a great deal of discussion. Respondents' arguments as to the Commissioner's failures to disclose and like matters 20 The respondents argued that the Commissioner failed to disclose certain facts adverse to the application for freezing orders during the 12 August ex parte hearing before Jessup J; and, in so doing, the Commissioner failed to comply with standards of care and good faith incumbent on an applicant for a freezing order. The respondents' allegations in this respect were thinly supported and not made out. It is fair to say that the respondents took a 'shotgun' approach to these sorts of matters, with the result that not all of the numerous items raised by them warrant individual comment. Those pressed most strongly by the respondents are discussed briefly below. 21 The principles applicable to alleged non-disclosure in circumstances such as the present are set out in Savcor Pty Ltd v Cathodic Protection International APS (2005) 12 VR 639 ('Savcor') at 647 [24]-650 [36]. In summary: (1) an applicant for ex parte relief has a duty to disclose all facts material to the court's determination; (2) if there is a breach of this duty on the applicant's part, the court has a discretion whether or not to set aside the order; and (3) absent deliberate and intentional non-disclosure or misleading information, which usually leads to a discharge, the court must weigh all relevant factors, including that another application may be made. 22 The respondents drew attention to the fact that the second respondent had previously been involved in dealings with the ATO about its tax liability. The respondents alleged in substance that the Commissioner ought to have disclosed the correspondence in 2006 with the second respondent and the nature of that correspondence. The evidence showed that the Commissioner had issued a default assessment in respect of the 2002 income year in respect of a distribution from the Babcock and Brown Infrastructure (DBCT) Trust. The related correspondence confirmed that there was no taxable capital gain on disposal in respect of the parcel of securities. At the hearing, the Commissioner explained that matters had since come to the Commissioner's attention that caused the Commissioner to issue an amended assessment in respect of that year, on the basis that the second respondent was engaged in share trading. This was explained at paragraph [97] of the Reasons for Decision for the second respondent, which was included in the material before Jessup J. I accept that, as the Commissioner submitted, there was nothing relating to the 2002 default assessment and associated correspondence that required further disclosure to the Court on the ex parte application for a freezing order. 23 The respondents also alleged as material non-disclosures the Commissioner's failure to inform the Court that four of the respondents are controlled by Australian citizens, or people who live in or have ties to Australia. In particular, the respondents argued that the Commissioner failed to disclose "that Peter Borgas, the director of the second, third and fourth [r]espondents is a former Australian citizen with family in Australia and a record of substantial charitable activity within Australia; or that the principal of the fifth [r]espondent (Dr Joseph Ross) lives in Sydney and has three children". The Commissioner denied knowledge of the alleged facts regarding Mr Borgas, and there was no attempt by the respondents to establish that the matters were within the Commissioner's knowledge. At any rate, it is not self-evident how information regarding Mr Borgas' personal family connections and claimed charitable activity, or the number of Dr Ross' children relates to the likelihood of the currently frozen assets being removed from Australia or the ability of the respondents to satisfy a judgment in the event they are removed. I accept that, as the Commissioner submitted, there was nothing with regard to Mr Borgas or Dr Ross that required further disclosure to the Court on the ex parte application for a freezing order. 24 The respondents also argued that the Commissioner had breached s 3C(2) of the TAA because information regarding the tax affairs of each respondent was revealed to the other four respondents via the Commissioner's application and supporting material. Section 3C(2) relevantly provides: Subject to subsection (4), a person who is or has been an officer shall not directly or indirectly: (a) make a record of any information with respect to the affairs of a second person; or (b) divulge or communicate to a second person any information with respect to the affairs of a third person; being information disclosed or obtained under or for the purposes of this Act and acquired by the person by reason of the person's appointment or employment by the Commonwealth or in the course of such employment, or by reason of the delegation to the person of powers or functions by the Commissioner, or in the course of the exercise of such powers or the performance of such functions, as the case may be. Penalty: $10,000 or imprisonment for 2 years, or both. 25 By virtue of s 3C(2A), however, this provision "does not apply to the extent that the person makes a record of the information, or divulges or communicates the information: (a) for the purposes of this Act; or (b) in the performance of the person's duties as an officer". 26 The effect of s 16(2) and (2A) of the ITAA is much the same effect as ss 3C(2) and (2A) of the TAA. 27 As the Commissioner said, these provisions do not apply to disclosure to a Court since the Court is not relevantly a "person": see Canadian Pacific Tobacco Company Limited v Stapleton (1952) 86 CLR 1 ('Canadian Pacific') at 6; and Commissioner of Taxation v Nestle Australia Ltd (1986) 12 FCR 257 ('Nestle') at 262. The circumstances show, moreover, that the disclosures in question were made "in the performance of the person's duties as an officer" and fall clearly within the statutory exceptions in s 3C(2A) of the TAA and s 16(2A) of the ITAA. In this context, "duties" have been widely construed, so as to encompass, for example, the production of documents upon discovery: see Nestle at 262; also Canadian Pacific at 6 and Simionato Holdings Pty Ltd v Commissioner of Taxation (1995) 60 FCR 375 at 384. Mr Zafiriou's affidavit – the source of the disclosures complained of by the respondents – was filed in conformity with Order 4 of the Federal Court Rules and as evidence in support of the Commissioner's application for a freezing order. The order is sought in furtherance of the recovery of income tax, being a primary purpose of the income tax legislation, including the TAA. 28 In the face of the authorities, the respondents advanced no tenable argument in support of their allegation that an officer or officers acted other than for the purposes of the relevant taxation legislation or other than in the course of their duties. The respondents noted that the matter could have been brought as a series of separate proceedings, but it does not follow that joining the respondents in the one proceeding was outside the officers' duties. The respondents' argument, in effect, was that the disclosure was improper and the officers therefore were acting outside of their duties. That argument is obviously circular. It may be observed that the depth of the respondents' analysis was not commensurate with the seriousness of the violation alleged. 29 The respondents also complained of the Commissioner's failure to effect prompt service of the originating documents and transcript on the respondents. Nothing turns on this, since the respondents had all this documentation by the time they came to contest the continuation of the freezing order. In any event, I am not satisfied that the Commissioner was improperly dilatory. 30 The respondents argued that the Commissioner's submissions to Jessup J amounted to an allegation of fraud, and that the Commissioner wrongly failed to plead this. The Commissioner responded, and I accept, that the Commissioner did not allege fraud against the respondents. 31 As indicated already, the respondents made certain other arguments that I have not addressed to this point. To the extent that they are not addressed below, I have regarded them as so weak as not to require discussion in these reasons. I would note particularly that, having read the transcript of the hearing before Jessup J on 12 August 2010 and considered the parties' subsequent submissions and evidence, I would reject the respondents' contention that the Commissioner breached any element of the duty described in Savcor. Risk of frustration of judgment – general considerations 32 The respondents properly noted that the Court must consider the risk of dissipation of assets in the circumstances of each respondent individually. However, there are several general points discussed at the hearing which were equally applicable to all respondents. These are discussed below. 33 The respondents argued that the freezing orders should not be extended because the Commissioner had adduced no evidence of lack of bona fides on the respondents' part. As it developed, the argument was not so much that the Commissioner was required to establish the respondents' intent to frustrate a prospective judgment (a position not supported by the authorities: see above) but that the Commissioner's case in favour of the freezing orders relied on allegations of "tax mischief" that were not sustainable. 34 The phrase "tax mischief" appears in the Commissioner's written submissions, originally filed before Jessup J. In context, it is clear that the phrase refers to the non-payment of taxes and failure to file returns in circumstances in which the Commissioner has determined that taxes are owed and returns should have been filed. This was confirmed by the Commissioner's oral submissions before me and written submissions in response to the respondents' argument. Understood in this way, the Commissioner's allegation of "mischief" is supported by the evidence on which the Commissioner relies. 35 The Commissioner is also of the view that the second respondent has engaged in avoidance and evasion – this view being the basis for the issue of the amended assessment for the year ended 30 June 2002. This is not, of course, the appropriate proceeding in which to consider this view; and I do no more than note it here. The Commissioner's characterization of the second respondent's conduct is plainly not an essential part of what the Commissioner means by the expression "tax mischief" in this proceeding. 36 The Commissioner has not alleged a common purpose between the respondents. The only point the Commissioner presently makes is that respondents are "linked in various ways" and have each participated in the same "tax mischief", which involves what the Commissioner says is a failure to disclose profits derived from share trading activities conducted in Australia. Again, it is not open to the respondents to contest this understanding of their activities in this proceeding; any contest must be made in accordance with Part IVC of the TAA. The Commissioner has not suggested to date that the links between the respondents have any particular tax significance. Rather, the Commissioner submits that the links justified the bringing of the applications simultaneously since "[t]here was otherwise a risk that one respondent would inform another of what has occurred and action might be taken by the latter to frustrate the Court's process". The respondents did not deny the existence of the links to which the Commissioner referred, although, for the reasons explained below, each denied there was any significant risk of dissipation. 37 The respondents argued that their decisions not to file returns were made on the advice of Mr Gould, an experienced tax advisor and, therefore, not with any wilful defiance of their income tax law obligations. The idea of "tax mischief", in the sense used by the Commissioner, does not, however, necessarily involve any deliberate breach on the respondents' part of these obligations. The respondents put forth various reasons for their disagreement with the Commissioner, but the principal contention was the same for each of them. This was that Mr Gould had formed the view, in regard to each of the respondents for each of the years for which they were assessed, that the relevant respondent had no taxable income and therefore did not have to file the relevant return, and had "advised accordingly". 38 Plainly, the Commissioner and the respondents take significantly different views of the respondents' tax liabilities. The unpaid liabilities on the Commissioner's view are substantial and have accrued over time in a regular pattern of non-filing and non-payment. Given the Commissioner's reliance here on s 177(1) of the ITAA and s 298-30(3) to Schedule 1 of the TAA, the difference between the parties' views is not a matter for the Court to consider further in this proceeding. This difference about the respondents' income tax obligations and liabilities does, however, provide part of the context for the Court's consideration of the risk that assets will be removed. 39 The Commissioner's case was essentially the same as to all five respondents. As to all the respondents, the Commissioner relied on the following factors to establish that there was an appreciable risk that the respondents' assets would be removed from the jurisdiction or dissipated so as to render prospective judgments nugatory if the freezing orders were not continued: · The respondents are incorporated overseas. This was particularly stressed with respect to those respondents who were incorporated, or whose parent companies were incorporated, in known "tax havens". · As securities traded on the ASX, the relevant assets are highly liquid. · The respondents have in the Commissioner's view engaged in "tax mischief" in the sense discussed above. · Significant amounts of money have in the past been transferred out of Australia to the respondents following the sale of securities. · The respondents, according to the Commissioner, "appear to be connected with or advised by international tax advisors experienced in setting up structures designed to minimise tax and which involve the ready movement of monies between jurisdictions". · The recent issuance of the assessments provides the respondents with an incentive to move their assets outside Australia. · In oral submissions, the Commissioner stressed the lack of information about the respondents and the lack of evidence regarding other assets in Australia (or in a country in which there existed a legally-enforceable arrangement for the satisfaction of Australian judgments). Factors particular to individual respondents are discussed below. 40 The respondents' case was also largely put in terms not specific to particular respondents. At heart, the respondents' argument was that there was no evidence of bad faith on their part and they had always conscientiously sought to comply with the Australian tax laws. As noted, it was the respondents' evidence that in each of the relevant years Mr Gould had advised each of the respondents that they did not need to file tax returns because they did not have any relevant taxable income. The respondents argued that the authorities did not support the grant of freezing orders under such circumstances. 41 The respondents relied in particular on their offer of an undertaking, pursuant to which each respondent undertook (amongst other things) not to remove any assets in which it had a beneficial interest from Australia without the Commissioner's consent or, in the absence of consent, without the Court's approval. The complete terms of the proposed undertaking and some correspondence accompanied Mr Hollo's second affidavit. Evidence regarding individual respondents Hua Wang Bank Berhad 42 Commissioner's Evidence. The facts regarding Hua Wang Bank Berhad on which the Commissioner relies may be summarized as follows: Hua Wang Bank Berhad is incorporated in Samoa. Nothing is known regarding the shareholders, directors or ultimate parents of the company. It holds a "'B' Class Offshore Banking Licence" under Samoa's Off-Shore Banking Act 1987. The licence entitles Hua Wang Bank Berhad to accept deposits only from persons or entities listed in an undertaking accompanying the licence application (which was itself not before the Court). The Bank was previously involved in off-shore superannuation schemes, but the present nature of its business is largely unknown. The company has loaned funds to 48 companies in Australia connected to Gould Ralph Pty Ltd or Gould Ralph Services Pty Ltd. Between September 1999 and July 2009, it has been involved in approximately 42 international funds transfers, with $547,151 transferred into Australia from Hua Wang Bank and $8,665,752 transferred out of Australia to Hua Wang Bank Berhad. Hua Wang Bank Berhad engaged in a number of share transactions on the Australian Stock Exchange ('ASX') between 30 June 1995 and 30 June 2009. 43 Respondents' Evidence. In his affidavit filed on 2 September 2009, Mr Gould indicates that he was responsible for setting up Hua Wang Bank Berhad, at the request of a client of his, identified as Mr Ian Gowrie-Smith. He also indicates that the Bank is "administered by directors who are also employees of Asiaciti Trust". Mr Gould confirms that the Bank has been involved with the administration of offshore superannuation funds, but denies that it was set up for this purpose. Other than this, the respondents' evidence does not provide any further substantive information about the control of Hua Wang Bank Berhad or the nature of its business. Mr Gould avers that various unspecified clients of Hua Wang Bank Berhad have contacted him since the imposition of the freezing orders and "expressed doubts" about relying on the Bank. 44 The respondents also rely on the affidavit of Mr Daud Yunus. Mr Yunus identifies himself as the "principal" of an entity he refers to as Normandy Malaysia, which he states is in the investment management business. The respondents relied on Mr Yunus' affidavit as evidence that Hua Wang Bank Berhad had no "beneficial interest" in any of the presently frozen assets. Mr Yunus' affidavit is, however, somewhat obscure and vague as to the claimed connection between Normandy Malaysia and any shares held by Hua Wang Bank Berhad in Australia. I have, therefore, placed little weight on Mr Yunus' affidavit, but my approach at this stage should be understood as not precluding Hua Wang Bank Berhad, Normandy Malaysia or Mr Yunus from making further application, and placing further material before me in support of the claim that persons other than Hua Wang Bank Berhad have ownership of any relevant frozen assets. 45 Mr Gould also states that "[t]o the best of [his] knowledge and belief, Hua Wang Bank has no equitable interest in any asset situated in the Commonwealth of Australia" and that he has had conversations with Mr Yunus which "always occur on the premise that the Bank's loans to Australia are beneficially owned by Normandy Malaysia, as are the Bank's shares in Australia". Mr Gould's assertions about his knowledge and belief and the "premise" of his conversations with Mr Yunus do not, however, provide a sufficient foundation for me to conclude that the freezing order should not continue on the ground that the shares are not property of Hua Wang Bank Berhad. No officer of Hua Wang Bank Berhad has come forward to clarify its ownership or otherwise of the shares. At present, all that is clear is that the shares are in the Bank's name. 46 In his affidavit of 6 September 2010 Mr Gould also estimates that $500,000 per year was paid in withholding tax in respect of the Bank for the years ended 30 June 2004, 2005, 2006 and 2007. For the reasons advanced by the Commissioner at the hearing, I would not regard this as material to the question whether or not the freezing order should be continued. "Borgas entities" 47 Commissioner's Evidence. The second, third and fourth respondents are all controlled by Mr Borgas and family and may be conveniently discussed together. All were involved in what the Commissioner described as "substantial" share trading. The second respondent, Chemical Trustee Ltd, is registered in the United Kingdom. Its directors are Peter, Timothy and Winny Borgas. Its parent company, JA Investments Ltd, is incorporated in the Cayman Islands. Its shareholder is Guardheath Securities Ltd, located in the United Kingdom. Between 30 June 2001 and 30 June 2007, Chemical Trustee engaged in 739 share transactions on the ASX. Between April 2001 and June 2007 $66,397,957 came into Australia from Chemical Trustee and $61,057,319 went out. 48 The third respondent, Derrin Brothers Property Ltd is registered in the United Kingdom and has Peter and Winny Borgas as directors. Its shareholders are Guardheath Securities Ltd and Lordhall Securities Ltd, both located in the United Kingdom. Derrin Brothers engaged in 120 share transactions between 30 June 1995 and 30 June 2009. Between December 2001 and December 2008, $6,463,208 was transferred into Australia from Derrin Brothers, and $11,097,603 out of Australia. 49 The fourth respondent, Bywater Investments Limited is registered in the Bahamas. Its director is Peter Borgas. Between 30 June 2002 and 30 June 2007, Bywater engaged in 240 share transactions on the ASX. Between January 2002 and July 2006, $42,045,711 was transferred into Australia from Bywater, and $73,172,425 out of Australia. The Commissioner also relied on the fact that Bywater had engaged in what was termed short term trading. 50 Respondents' Evidence. The description of the three companies given in Mr Borgas' affidavit filed on 2 September 2010 is simply that "[a]ll three companies invest in shares and securities across a number of different jurisdictions", though Mr Borgas also states cryptically that "[f]undamentally [Chemical Trustee] operates as a type of charitable institution". As to Bywater, Mr Borgas asserts that "there was no particular rationale for selecting the Bahamas as the place of incorporation for this company". I am unable to accept this assertion without further explanation. 51 Mr Borgas' assertions regarding prejudice are general and do not distinguish between the three companies. Mr Borgas states simply that the freezing orders were "detrimental to the efficient operation of the investment portfolio" of each of the three companies, because it might become desirable to sell shares based on changes in the market. He stressed his view that "flexibility" was important in this regard. Mr Gould makes similar comments in relation to Chemical Trustee at paragraph 19 of his affidavit sworn on 6 September 2010. He also expresses fear (at paragraph 24) that he may be unable to convince Chemical Trustee and other companies to invest in Australia because, in his opinion, companies "can invest freely in listed securities in the United States and Great Britain, and if taxation issues arise they will generally be resolved without the assets being seized". Mr Gould makes the general comment with respect to each of the companies that "many" or "the majority" of the company's investments are in his view "illiquid", and he singles out particular shares as "hard to sell". Southgate 52 Commissioner's Evidence. The fifth respondent, Southgate Investment Funds Limited, is registered in the United Kingdom. Its director is Soleguard Limited, a company also incorporated in the United Kingdom. In common with the third respondent, its shareholders are Guardheath Securities Ltd and Lordhall Securities Ltd. Between 30 June 2000 and 30 June 2007, Southgate traded in shares of eight publicly listed companies on the ASX, although the affidavit of Mr Zafiriou does not specify the volume of trade. Between 2002 and 2010, $10,262,106 was transferred to Southgate into Australia and $7,981,064 was transferred out of Australia to Southgate in the United Kingdom. 53 Respondents' Evidence. Mr Naresh Shah states in one of his two affidavits of 5 September 2010 that he is a director of Soleguard Limited. Mr Shah does not advert to any particular hardship suffered by Southgate as a result of the freezing orders or clarify the nature of its business. Mr Gould makes comments regarding the illiquidity of Southgate's assets which are essentially identical to those made in regard to the three respondents controlled by Mr Borgas. 54 In his affidavit of 6 September 2010 Mr Gould also estimates that $519,311 in withholding tax had been paid on behalf of Southgate in the period 2000-2007. Again, for the reasons advanced by the Commissioner at the hearing, I would not regard this as material to the question whether or not the freezing order should be continued. In conclusion 55 On the evidence before me, I am satisfied that there is a danger that a prospective judgment will be unsatisfied because assets of the respondents are removed from Australia or disposed of, or dealt with, or diminished in value. This danger is sufficient to justify the continuation of the freezing order in all the circumstances. 56 My analysis does not focus on the positive intent of the respondents to frustrate a judgment of the Court. This is because, while other views might arguably be taken, the Commissioner did not seek to contend that the evidence gave rise to an inference of such intent on the respondents' part. The factors that support a finding of sufficient likelihood of danger are therefore as follows: (1) Each respondent is a foreign corporation. (a) Hua Wang Bank Berhad is incorporated in Samoa. (b) As to the Borgas entities: Chemical Trustee Ltd is registered in the UK, and its parent company is incorporated in the Cayman Islands. Derrin Brothers Property Ltd is registered in the UK and so too are its shareholders, Guardheath Securities Ltd and Lordhall Securities Ltd. Bywater Investments Limited is registered in the Bahamas. (c) Southgate Investment Funds Limited is registered in the UK and so too are its shareholders, Guardheath Securities Ltd and Lordhall Securities Ltd. Its director is also a non-resident. (2) All of the respondents' known assets in Australia are securities tradeable on the ASX. They are liquid assets. Although Mr Gould expressed the view that the shares held by the respondents were "illiquid" and "hard to sell", I did not find this evidence particularly persuasive. (3) Each of the respondents has in the past been involved in transfers of significant amounts of money out of Australia following the sale of securities. (a) $8,665,752 was transferred out of Australia to Hua Wang Bank Berhad between September 1999 and July 2009, and the Bank has engaged in numbers of share transactions. (b) As to the Borgas entities: $61,057,319 was transferred out of Australia to Chemical Trustee Ltd between April 2001 and June 2007, and the company engaged in numerous share transactions. $11,097,603 was transferred out of Australia to Derrin Brothers Property Ltd between December 2001 and December 2008, and the company engaged in a number of share transactions. $73,172,425 was transferred out of Australia to Bywater Investments Limited between January 2002 and July 2006, and the company engaged in a number of share transactions. (c) $7,981,064 was transferred out of Australia to Southgate Investment Funds Limited between 2002 and 2010, and the company has engaged in share transactions. (4) None of the respondents has adduced evidence to show that it has other assets in Australia or in a jurisdiction where enforcement of judgments is possible under a reciprocal regime for registration and enforcement of foreign judgments. (5) None of the respondents has adduced clear evidence about the nature of their business activities, or their management and control. In light of all the evidence before me, and considering the observations in Chandris and other authorities cited at paragraph [12] above, this factor is particularly significant. On the available evidence, the nature of the companies is such that a reasonable commercial person might infer that a future judgment against the respondents would be frustrated if the relevant assets were removed from Australia. (a) Hua Wang Bank Berhad is apparently administered by directors who are employees of Asiaciti Trust. Beyond this little is known about the management and control of the Bank, or its business operations. The Bank is incorporated in what is commonly described as a "tax haven". (b) As to the Borgas entities: Chemical Trustee Ltd's directors are Mr Borgas and members of his family but little, if anything, is known about its parent company or its shareholder; and little is known about the business operations of any of these companies. Whilst Derrin Brothers Property Ltd has Mr Borgas and his wife as directors, little, if anything, is known about its shareholders; and nothing much is known about its business operations or any of its associated companies, save that Mr Borgas asserts that Chemical Trustee operated as a kind of "charitable institution". What Mr Borgas means by this is unclear. Chemical Trustee's parent company is incorporated in what is commonly described as a "tax haven". Even less is known about Bywater, save that it has apparently engaged in what the Commissioner calls short-term trading. Bywater is also incorporated in what is commonly described as a "tax haven". (c) Apart from the fact that Southgate Investment Funds Limited has a corporate director registered in the UK and that Mr Naresh Shah states that he is the director of it, nothing further is known about its management or its business operations or the business operations of the companies associated with it. (6) Each of the respondents is apparently advised by, or otherwise connected with, tax advisers, both international and Australian, with experience in setting up tax structures designed to minimise tax and in moving large amounts of money between jurisdictions. (7) Each of the respondents has chosen not to file tax returns in Australia. The Commissioner has now assessed each respondent as liable to pay substantial amounts in tax and administrative penalties, and this might provide incentive to remove the assets from Australia. 57 There are factors that militate against the finding of danger, including the proffered undertaking by the respondents. Without greater knowledge about the assets, business operations and management structures of the respondents, however, the proposed undertaking can do little to assuage the apprehension that there is sufficient likelihood of removal or dissipation of relevant assets to justify the continuation of the order. 58 I am satisfied that it is in the interests of justice to continue the freezing orders. A good arguable case and a real risk of dissipation have been established. On the evidence as it stands, if the relevant assets are removed or dissipated, the Commissioner would be unable to satisfy any prospective judgment. Such a judgment, if obtained, would represent a significant amount of unpaid taxes and administrative penalties. The risk of frustration of judgment is sufficient to justify a freezing order in light of this substantial unpaid tax liability, which, on the Commissioner's view, has accumulated over several years in a regular pattern of non-payment and non-filing by the respondents. The evidence of hardship to the respondents as a result of a freezing order was generalised and vague; and there is nothing to show that the Commissioner's undertaking as to damages will not offer them adequate protection. I have already referred to the evidence of Mr Gould and Mr Yunus regarding the Hua Wang Bank Berhad. In the case of the Borgas entities, as already noted, Mr Borgas' assertions were also general and did not differentiate between the three companies to any extent. Also as noted, Mr Shah did not refer to any particular hardship suffered by Southgate Investments Funds Limited as a result of the freezing order. The evidence as to hardship to third parties was slight or non-existent. Further, provision can be made for the release of funds to meet reasonable legal and business expenses. 59 There is a further question as to whether the Court should continue the orders earlier made against third parties – namely Computershare Investor Services Pty Limited, Link Market Services Limited, Registries Limited, Advanced Share Registry Services Limited, Security Transfer Registrar Pty Ltd and Gould Ralph Pty Ltd. Senior Counsel for the Commissioner informed the Court that the Commissioner "would not oppose the third parties being removed from the operation of the freezing orders, as parties affected, on the understanding that the [Commissioner] would give notice of the freezing orders, in their amended form, to those [third parties]", each of whom act as share registries. Accordingly, I would continue the freezing orders subject to removing the third parties from their operation upon the basis that the Commissioner will give notice of the orders that I now make to each of the third parties. 60 The last matter that has given me significant concern is the potentially lengthy duration of any freezing orders that the Court might make. One possibility is that these freezing orders will be brought to a relatively speedy end upon the Commissioner's expeditious application for judgment. Another possibility is that the litigation may become attenuated as the taxpayers challenge their assessments under and in accordance with Part IVC of the TAA. It seems to me that the Court should take steps to ensure as far as possible that the freezing orders operate only so long as they can be reasonably required. Amongst other things, this means that the Commissioner must act with reasonably alacrity when called upon to do so. At the hearing, I took up this aspect of the matter with senior counsel for the Commissioner and senior counsel for the respondents. Senior counsel for the respondents agreed that the respondents should be able to lodge their taxation objections in accordance with Part IVC within about a fortnight of the hearing. Senior counsel for the Commissioner indicated that the Commissioner would need about seven days from receipt of the objections in order to estimate the time needed to make decisions on them. In these circumstances, I would not continue the freezing orders indefinitely. Rather, I would extend them for a period of about three weeks until 11 October 2010, upon the basis that the respondents will lodge their objections in accordance with Part IVC by 30 September 2010. On 11 October 2010, I will be asking the parties for some statement of the likely progress of the matter. Respondents' notice of motion 61 By a notice of motion filed in court on 2 September 2010, the respondents sought several orders. In addition to seeking the discontinuance of the freezing orders, the respondents sought orders: 1. That the second respondent, third respondent, fourth respondent and fifth respondent each be removed from the proceeding in respect of the first respondent. 2. That all interlocutory and substantive applications in respect of the second respondent, third respondent and fourth respondent be consolidated, and proceed on the basis that evidence in respect of each of the three sets of applications shall be evidence for the purposes of all three sets of applications. 3. That all interlocutory and substantive applications in respect of the first respondent proceed independently. 4. That all interlocutory and substantive applications in respect of the first respondent proceed independently. 5. That the proceedings be transferred to the New South Wales District Registry of this Court and conducted there. 6. That the applicant pay the respondents costs up to 1 September on an indemnity basis. Division of proceeding 62 At hearing on 7 September 2010, senior counsel for the Commissioner indicated that the Commissioner consented to the proceedings regarding the first and fifth respondents being conducted individually and separately from proceedings as to the second, third and fourth respondents. There was, however, no discussion as to the precise form of the orders to be made or the appropriateness of the orders proposed in the respondents' notice of motion. 63 Under the circumstances, I would have no difficulty making an order to separate the proceedings as to the first and fifth respondents at an appropriate time. I would invite the parties to provide the Court with a proposed minute of order as soon as may be convenient to them. Transfer 64 The respondents' motion was not pressed in respect of transfer to the New South Wales registry. The hearing in respect of the freezing orders was not an appropriate time to entertain a request for transfer, and I would refuse the respondents' motion in this regard, without prejudice to a future motion for transfer brought at an appropriate time. Indemnity costs 65 The respondents' notice of motion sought an order of indemnity costs against the Commissioner, but their written submissions indicated that the order was sought against the Commissioner's legal representatives. There is plainly no basis for such an order in either case, and I would not make one. Disposition 66 For the reasons stated above, upon the Commissioner giving the usual undertaking as to damages, I would continue the freezing orders that were originally made on 12 August 2010 and last extended on 7 September until 4:15 pm on 11 October 2010, upon the basis that the respondents will lodge their objections in accordance with Part IVC by 30 September 2010. I would, however, vary these freezing orders by removing the third parties (Computershare Investor Services Pty Limited, Link Market Services Limited, Registries Limited, Advanced Share Registry Services Limited, Security Transfer Registrar Pty Ltd and Gould Ralph Pty Ltd) from the operation of the freezing orders, on the understanding that the Commissioner will instead give notice of the freezing order to each of those third parties. 67 Subject to an order being made in due course for the division of the proceeding, I would dismiss the respondents' motion, notice of which is dated 1 September 2010. The applicant's motion, notice of which is dated 12 August 2010, will be adjourned until 4:15 pm on 11 October 2010. 68 I would direct the Commissioner to submit a draft formal minute of orders in accordance with these reasons before 6 pm this evening. I certify that the preceding sixty-eight (68) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. Associate: Dated: 15 September 2010	13,755
federal_court_of_australia:irc/1995/1995irca0578	decision	commonwealth	federal_court_of_australia	text/html	1995-09-25 00:00:00	Julie-Anne de Jong v J & M Waste Pty Limited, J & M Metals Pty Limited [1995] IRCA 578	https://www.judgments.fedcourt.gov.au/judgments/Judgments/irc/1995/1995irca0578	2024-09-13T22:44:55.728270+10:00	CATCHWORDS INDUSTRIAL LAW - UNLAWFUL TERMINATION - PROCEDURAL FAIRNESS - UNJUST - COMPENSATION. Industrial Relations Act 1988ss 170DC, 170DE, 170EA, 170EE Nicolson v Heaven and Earth Gallery Pty Limited(1994)126 ALR 233 Aitken -v- CMTSWUI(WI 328 of 1995, unreported, Lee J, 7 August 1995) JULIE-ANNE de JONG -v- J & M WASTE PTY LIMITED, J & M METALS PTY LIMITED No. NI 2315 of 1995 COURT: PATCH JR PLACE: SYDNEY DATE: 25 & 26 SEPTEMBER 1995 INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES REGISTRY No. NI 2315 of 1995 BETWEEN: Julie-Anne de JONG Applicant AND: J & M Metals Pty Limited Respondent REASONS FOR JUDGMENT (Delivered ex tempore - revised from judgment) 25 & 26 SEPTEMBER 1995 PATCH JR This is an application under section 170EA of the Industrial Relations Act ("The Act"). The applicant initially sought reinstatement and, in lieu of reinstatement, compensation. However, in submissions her counsel has conceded that reinstatement is impracticable. Counsel for the respondent agrees with that, as do I. The reasons why I find that reinstatement is impracticable is because it would be too personally difficult for the applicant to return to a workplace from which she was dismissed in the circumstances which occurred, and it would also result in discord and disharmony within the workplace because the respondent company is a relatively small family company. Was the termination of the applicant's employment a breach of section 170DC of the Act? The applicant's employment was summarily terminated. She was present at a meeting with two directors of the company, Mr William and Mr Anthony Kamper, on 23 May 1995 at which she was informed that her employment was to be terminated. That is common ground. She was given no warning as to the possibility that her employment would be terminated before that meeting, nor was she given any reasons in respect of which her employment might possibly be terminated prior to that meeting. Section 170DC of the Act is as follows: "An employer must not terminate an employee's employment for reasons related to the employee's conduct or performance unless: (a) the employee has been given the opportunity to defend himself or herself against the allegations made; or (b) the employer could not reasonably be expected to give the employee that opportunity. In order for an employee to in fact have "the opportunity defend himself or herself against ............ allegations", those allegations must be made before the termination of employment occurs, and in such a way and time frame so as to enable the employee to respond to those allegations. See Nicolson v Heaven and Earth Galleries (1994) 126 ALR 233. In my opinion the applicant was not given an opportunity to respond to any allegations and the allegations were not mentioned to her except in virtually the same sentences as used to terminate her employment. To put it another way, using a well-known Australian expression, she was not given "a fair go." For that reason alone the termination of her employment was unlawful. Was the termination of the applicant's employment harsh, unjust or unreasonable? In my opinion, for precisely the same reasons as the termination of the applicant's employment was a breach of section 170DC of the Act, the termination of her employment was "unjust" within the meaning of section 170DE(2) of the Act. It is unjust to terminate an employee's employment in a summary way without giving him or her the opportunity to have a say about what is to happen. Therefore the termination of her employment is deemed to be not for a valid reason, and unlawful on that basis as well. Remedy. For the reasons that I have stated above, in my opinion it would be impracticable to order the reinstatement of the applicant. I therefore move to the question of compensation. The applicant has genuinely attempted to find new employment. She has been to the Commonwealth Employment Service; she has tried to get interviews; she has telephoned around to former employers; she has gone to the yellow pages and looked up prospective employers in her former industry, retail sales. These efforts have been to no avail and she remains unemployed. On the other hand, the applicant has a good work history and has been able to be in regular employment in the past. Nonetheless, in my view, in view of the fact that on this occasion she has tried hard to get employment and has been unsuccessful, it is likely that she will remain unemployed for at least the new few months. I note here that she is due to have a baby in December, but I do not regard that fact as relevant to the quantum of compensation which I might order, if only for the reason that the expected date of birth of the baby is more than a month after the end of a period of six months following the termination of her employment. Another factor which I take into account on the question of the quantum of compensation to be awarded under section 170EE(2) of the Act is the fact that the applicant has suffered some hurt feelings and distress and loss of confidence as a result of the termination of her employment. See Aitken v CMTSWUI (WI 328 of 1995, Unreported, Lee J, 7 August 1995). I do not regard that head of damages as being capable of sustaining any large amount of compensation but I do take it into account. In my opinion, on the question of the quantum of compensation, it more or less balances out the possibility that, because of her previous work history, the applicant might get employment in the near future. So in, all the circumstances, because the applicant is unemployed, and unemployed as a direct result of the unlawful termination of her employment, and because she is likely to remain, in my opinion, unemployed until she has her baby, in my opinion this is an appropriate case to award six months' compensation. I take into account the amount of gross wages that the applicant was earning at the date of the termination of her employment and use that as a basis to calculate the quantum of compensation due to her. That calculation is as follows: It is an agreed fact that she was earning a gross amount of $660.20 per week. I divide that figure of $660.20 by 7 in order to reach the daily rate. I multiply the resulting daily rate by 365 in order to reach the figure for one year, and I divide that by 2 in order to reach the figure for six months, which is the maximum permissible figure under the Act. In my opinion, it is likely that the actual economic loss suffered by the applicant will be in excess of a sum equal to six months' remuneration. It seems to me, although the evidence is not clear, that the applicant was not employed under an award. But in any case, section 170EE(3)(a) limits the amount of compensation that can be awarded under section 170EE(2) to: "The amount of the remuneration that would have been received by the employee in respect of the period of six months that immediately followed the day in which the termination took effect." That figure is $17,212.35. I order the respondent (J & M Waste Pty Ltd) to pay the sum of $17,212.35 to the applicant for the unlawful termination of her employment within 21 days of today. Additional reasons for judgment, given 26 September 1995. I have asked the parties' representatives to return, and thank them both for coming back. When I reviewed my notes yesterday, after everybody had gone, I realised that there were two areas of the case that I had intended to traverse, which were in my mind as reasons for my judgment, which I failed to mention. In order to ensure that my reasons for judgment were as full as they should be, I felt it necessary to ask the representatives to return in order to complete what were in fact the reasons for my judgment. The two areas that I intended to, and omitted, to traverse yesterday were, firstly, the credit of Mr William Kamper as a witness versus the credit of the applicant as a witness; and secondly, the question of whether the applicant was a probationary employee at the time of the termination of her employment. In respect of the credit of Mr William Kamper as a witness, I was most unimpressed by him as a witness. He gave the impression that he was giving answers of convenience and changed his evidence on several occasions when under pressure in order to, in my opinion, give what he thought would be a more convincing answer. In fact, his demeanour in the witness box and the way he answered questions had the opposite effect. The applicant on the other hand was a convincing and creditable witness. Her version of the events was to some extent corroborated by her husband, who I also found to be a convincing and credible witness. In respect of the question of whether or not the applicant was a probationary employee at the time of the termination of her employment, Mr Kamper initially said that he told the applicant, in a conversation on Friday 7 April 1995, (the Friday before the commencement of the applicant's employment), that the applicant was to be on probation for a two month period. Towards the end of his evidence, he changed his evidence in that respect so that the first mention of any particular period of probation (as opposed to the fact of probation) to the applicant occured on Thursday 13 April. That inconsistency in his testimony reflected adversely on his credit as a witness - particularly in respect of the issue of whether the applicant was a probationary employee. I accept the applicant's version, namely that she was told on Friday 7 April that she was to be on probation for a four week period. It follows that she was not a probationary employee at the time of the termination of her employment. ________________________________ I certify that this and the preceding six (6) pages are a true copy of the Reasons for Judgment of Judicial Registrar Patch. Associate: Claire McAuley Date: 27 October 1995 Appearances Applicant: Mr J. Watts of counsel Respondent: Mr M. Hershderfer of counsel Date of Hearing: 25 September 1995 Date of Judgment: 25 & 26 September 1995	2,210
federal_court_of_australia:fca/single/2000/2000fca0178	decision	commonwealth	federal_court_of_australia	text/html	2000-02-25 00:00:00	Lu v Minister for Immigration & Multicultural Affairs [2000] FCA 178	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2000/2000fca0178	2024-09-13T22:44:55.761365+10:00	FEDERAL COURT OF AUSTRALIA Lu v Minister for Immigration & Multicultural Affairs [2000] FCA 178 IMMIGRATION -- Competency of Minister's cancellation of permanent visa where earlier order for deportation set aside by Administrative Appeals Tribunal -- where decision involved duplication of similar considerations -- analysis of disparities between powers relevant to deportation and visa cancellation -- whether setting aside of deportation order manifests an estoppel, preventing Minister from taking further action against appellant. Minister for Immigration and Multicultural Affairs v Gunner (1998) 85 FCA 400 approved, followed Jia Le Geng v Minister for Immigration and Multicultural Affairs (1998) 84 FCR 87 discussed Geng v Minister for Immigration and Multicultural Affairs [1999] FCA 951 referred to Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic (1990) 92 ALR 93 cited Migration Act 1958 (Cth) ss 29, 30, 116, 118, 200, 201, 501, 502 Migration Legislation Amendment (Strengthening of Provisions relating to Character and Conduct) Act 1998 (Cth) Administrative Appeals Tribunal Act 1975 (Cth) s 43(6) HO SONG LU v MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS V 334 OF 1999 SPENDER, O'CONNOR and KIEFEL JJ BRISBANE 25 FEBRUARY 2000 IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY V 334 OF 1999 BETWEEN: HO SONG LU Appellant AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS Respondent JUDGES: SPENDER, O'CONNOR and KIEFEL JJ DATE OF ORDER: 25 FEBRUARY 2000 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The appeal be dismissed. 2.. The appellant pay the respondent's costs of the appeal. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY V 334 OF 1999 BETWEEN: HO SONG LU Appellant AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS Respondent JUDGES: SPENDER, O'CONNOR and KIEFEL JJ DATE: 25 FEBRUARY 2000 PLACE: BRISBANE REASONS FOR JUDGMENT SPENDER AND O'CONNOR JJ: 1 We have had the benefit of reading in draft form the Reasons for Judgment of Kiefel J. We agree that the appeal should be dismissed with costs, for the reasons which her Honour gives. I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justices Spender and O'Connor . Associate: Dated: 25 February 2000 IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY V 334 OF 1999 BETWEEN: HO SONG LU Appellant AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS Respondent JUDGES: SPENDER, O'CONNOR and KIEFEL JJ DATE: 25 FEBRUARY 2000 PLACE: BRISBANE REASONS FOR JUDGMENT KIEFEL J: 2 On 19 October 1998, the Minister for Immigration and Multicultural Affairs cancelled the appellant's visa and declared him to be an excluded person. The sources of power relied upon by the Minister were, respectively, ss 501 and 502 Migration Act 1958. The effect of the declaration was that the appellant could not obtain merits review by the Administrative Appeals Tribunal of the decision to cancel his visa. The Minister had earlier ordered the appellant's deportation under s 200 of the Act, but on 12 June 1998 the Tribunal set that decision aside and substituted for it a decision that the appellant not be deported from the country. 3 The appellant came to Australia from Vietnam in September 1982 and became a permanent resident. The recommendation for deportation, which was accepted by the Minister's delegate, had regard to the commission by the appellant of offences of armed robbery; break and entry and stealing; threatening to use an offensive weapon to prevent lawful apprehension and being in possession of housebreaking implements. The first of the offences was committed in February 1990 and the following offences some months later, and whilst he was on bail. The recommendation contained references to the sentences, which rendered the appellant liable for deportation, and the judge's comments on sentencing, which included a recommendation for deportation. It also referred to other factors including the risk of recidivism and the prospects of rehabilitation; other persons who would be affected by the deportation; reports from the Correctional Centre; the practicality of deportation; the appellant's contribution to the Australian community; the strength of his family and social ties in Australia; and the hardship he would suffer if he were returned to Vietnam. The Tribunal however concluded that deportation was not warranted, having regard to its view that there was a low risk of reoffending and the hardship which would be caused to the appellant's family. The Minister appealed to this Court from the decision on 10 July 1998. That appeal has not been prosecuted. 4 On 16 October 1998, the Minister's view was sought by his Department on the approach to be taken with respect to the appellant's case: as to whether to pursue the appeal or whether the Minister wished personally to consider cancelling the appellant's visa and declaring him to be an excluded person. On 19 October 1998, the Minister indicated his preference for the latter course. The Minister was then provided with a document which set out issues for his consideration. As to the finding, as to whether the appellant was not of good character, which s 501 requires before a visa can be cancelled, reference was made to his past criminal conduct and also to the need to balance any other matters including any recent good conduct. This information was not, however, available as the appellant had not responded to an invitation to provide it. The Minister was also advised of matters which might be relevant to the exercise of his discretion. They concerned the appellant's family and hardship to them and the issue of the safety of the Australian community. 5 It may be observed that the matters put forward for the Minister's consideration respecting ss 501 and 502 were the same as some of those taken into account for the purposes of s 200. Those matters which were relevant to the exercise of the Minister's discretion under s 501(1) - the risk to the community and effect upon the appellant's family - also fall for consideration under the Guidelines with respect to deportation. The essential determination under s 501(2) is however different from the deportation process, because the former focuses upon the person's character by reference to, amongst other matters, his or her past criminal conduct. Another difference between the two sets of provisions is that they give rise to different legal consequences: deportation with attendant rights to merits review; cancellation of visa with rights to merits review if not excluded by the Minister. The sections are set out below. The Decision Appealed From 6 The appellant's core argument, identified by his Honour the primary Judge (Drummond J), rested upon the Minister's inability to make orders under ss 501 and 502 when an order for deportation had already been made and set aside by the Tribunal. A Full Court of this Court (Heerey, Lindgren and Emmett JJ) had already dealt with arguments relating to the Minister's right to invoke sections 501 and 502 in such circumstances and held that the Minister might do so notwithstanding that the process relating to deportation had been undertaken (Minister for Immigration and Multicultural Affairs v Gunner (1998) 84 FCR 400, 407-8). His Honour considered that he was bound by that decision. The appellant then sought, unsuccessfully, to distinguish Gunner's case from the present. The Statutory Provisions 7 Section 501 was substituted and section 502(1)(a)(ii) of the Act repealed from 1 June 1999 (see the Migration Legislation Amendment (Strengthening of Provisions relating to Character and Conduct) Act 1998 (Cth) (Number 114, 1998)), but decisions made under the former provision are not affected by the repeal. The provisions which are of present concern to this Court are those considered in Gunner's case. Sections 200 and 201 provided: "Deportation of certain non-citizens 200. The Minister may order the deportation of a non-citizen to whom this Division applies. Deportation of non-citizens in Australia for less than 10 years who are convicted of crimes 201. Where: (a) a person who is a non-citizen has, either before or after the commencement of this section, been convicted in Australia of an offence; (b) when the offence was committed the person was a non-citizen who: (i) had been in Australia as a permanent resident: (A) for a period of less than 10 years; or (B) for periods that, when added together, total less than 10 years; or (ii) was a citizen of New Zealand who had been in Australia as an exempt non-citizen or a special category visa holder: (A) for a period of less than 10 years as an exempt non-citizen or a special category visa holder; or (B) for periods that, when added together, total less than 10 years, as an exempt non-citizen or a special category visa holder or in any combination of those capacities; and (c) the offence is an offence for which the person was sentenced to death or to imprisonment for life or for a period of not less than one year; section 200 applies to the person." And ss 501 and 502 provided: "Special power to refuse or to cancel visa or entry permit 501. (1) The Minister may refuse to grant a visa to a person, or may cancel a visa that has been granted to a person, if: (a) subsection (2) applies to the person; or (b) the Minister is satisfied that, if the person were allowed to enter or to remain in Australia, the person would: (i) be likely to engage in criminal conduct in Australia; or (ii) vilify a segment of the Australian community; or (iii) incite discord in the Australian community or in a segment of that community; or (iv) represent a danger to the Australian community or to a segment of that community, whether by way of being liable to become involved in activities that are disruptive to, or violence threatening harm to, that community or segment, or in any other way. (2) This subsection applies to a person if the Minister: (a) having regard to: (i) the person's past criminal conduct; or (ii) the person's general conduct ; is satisfied that the person is not of good character; or (b) is satisfied that the person is not of good character because of the person's association with another person, or with a group or organisation, who or that the Minister has reasonable grounds to believe has been or is involved in criminal conduct. (3) The power under this section to refuse to grant a visa to a person, or to cancel a visa that has been granted to a person, is in addition to any other power under this Act, as in force from time to time, to refuse to grant a visa to a person, or to cancel a visa that has been granted to a person. Minister may decide in the national interest that certain persons are to be excluded persons 502. (1) If: (a) the Minister, acting personally, intends to make a decision: (i) under section 200 because of circumstances specified in section 201; or (ii) under section 501; or (iii) to refuse to grant a protection visa, or to cancel a protection visa, relying on one or more of the following Articles of the Refugees Convention, namely, Article 1F, 32 or 33 (2); in relation to a person; and (b) the Minister decides that, because of the seriousness of the circumstances giving rise to the making of that decision, it is in the national interest that the person be declared to be an excluded person; the Minister may, as part of the decision, include a certificate declaring the person to be an excluded person. (2) A decision under subsection (1) must be taken by the Minister personally. (3) If the Minister makes a decision under subsection (1), the Minister must cause notice of the making of the decision to be laid before each House of the Parliament within 15 sitting days of that House after the day on which the decision was made." 8 The arguments advanced on appeal were directed to s 501. Section 500(1) provides that review by the Administrative Appeals Tribunal may be sought of decisions including those made under s 501, but not where a s 502 certificate applies to that decision. 9 It is also necessary to refer to certain provisions relating to visas, having regard to the arguments advanced on behalf of the appellant. Section 29 provides for the granting to a non-citizen of a permission, to be known as a visa, to remain in Australia. Section 30 provides: "(1) A visa to remain in Australia (whether also a visa to travel to and enter Australia) may be a visa, to be known as a permanent visa, to remain indefinitely. (2) A visa to remain in Australia (whether also a visa to travel to and enter Australia) may be a visa, to be known as a temporary visa, to remain: (a) during a specified period; or (b) until a specified event happens; or (c) while the holder has a specified status." 10 The general power of cancellation is contained in s 116 which refers to the circumstances supporting the original grant of visa no longer existing; non-compliance with conditions of a visa and other grounds including one that the presence of the holder of the visa in Australia would be a risk to the health, safety or good order of the Australian community. Section 118 provides: "Cancellation powers do not limit or affect each other 118. The powers to cancel a visa under: (a) section 109 (incorrect information); or (b) section 116 (general power to cancel); or (c) section 128 (when holder outside Australia); or (d) section 134 (cancellation of business visas); or (e) section 140 (consequential cancellation of other visas); or (f) section 501 (special power to refuse or cancel); are not limited, or otherwise affected, by each other." Gunner's case 11 In Gunner's case, the primary judge (Sackville J) had identified a number of considerations which suggested that the Minister might exercise the powers given by ss 501 and 502 notwithstanding a Tribunal decision adverse to deportation. His Honour was, however, persuaded to a contrary conclusion because, in his Honour's view, ss 501 and 502 should not be construed as authorising the Minister to take the same action on the basis of the same facts and circumstances that caused the Tribunal to set aside a deportation order and, in effect, overturn that decision. 12 That decision was not followed by French J in Jia Le Geng v Minister for Immigration and Multicultural Affairs (1998) 84 FCR 87 (which was reversed on other grounds: Geng v Minister for Immigration and Multicultural Affairs [1999] FCA 951). His Honour considered that there was no express limitation upon the exercise of the Minister's powers under ss 501 and 502 where the Administrative Appeals Tribunal had made a decision to the contrary (there a decision favourable to the grant of a visa) and that there was nothing to warrant such an implication. The Full Court in Gunner's case was of a similar view (407). It went on (at 408): "….. it is not accurate in our respectful submission to speak of setting at nought the AAT's determination. This is not a case where a Minister attempted to act in defiance of a binding ruling by the AAT. Sections 501 and 502 are quite separate sources of power.* The criteria for the exercise of those respective powers are by no means co-extensive, although there is an overlap. The fortuitous circumstance that two separately-sourced powers might be exercised in respect of the same collocation of facts cannot affect the construction of the relevant statutory provisions, which must be given a meaning as at the time of their enactment. In any event, it is not entirely correct to say that the Minister's decision was 'based on' the same facts and circumstances as had been considered by the AAT. The Minister did not have before him any material which was not before the AAT. But because of the different provisions of ss 201 and 501 the test is not the same and the criteria are different. The Minister, in exercising the discretion conferred by s 501, was entitled to take into account matters which were not relevant to a decision under s 200 based on the criteria specified in s 201." * (I take their Honours to say that ss 501 and 502 are separate sources of power from s 200). Contentions on the appeal 13 The appellant sought to argue that Gunner's case was wrongly decided. No issue was taken with the departure from the argument in the proceedings below. The appellant submitted that either the Minister lacked power under s 501 to cancel the visa; some constraint was to be seen as intended with respect to its exercise, in circumstances where there had been a decision by the Tribunal that there be no deportation; or the Minister was prevented or unable to exercise the power. In my view, once regard is had to the separate nature of the powers and the different criteria to which the exercise of them is referrable, as Gunner's case explains, and to the discretion contained in s 501, the contentions of the appellant are largely answered. 14 There were a number of approaches to the first general contention, that relating to the Minister's supposed lack of power. The first had regard to the nature of the visa held by the appellant, which was a permanent and not a temporary one. Such a visa is, by s 30(1), one which permits him to stay in Australia "indefinitely". It was submitted that it could not have been intended to confer such a right to many people but nevertheless subject it to the Minister's personal consideration under s 501. The argument at one point appeared to equate that permission with an unimpeachable right, but it is clear that permanent visas remain liable to cancellation on a number of grounds and that s 501 is not limited in its terms to temporary visas. The appellant also sought to read down the power of cancellation given by s 501 as subject to the other powers of cancellation earlier specified in the Act, but there is no basis for this contention. Not only is s 116 described as the general power and s 501 the special, s 118 provides that the different powers of cancellation do not limit or affect one another and s 501(3) states that the power under that section is in addition to any other power to cancel a visa. 15 It was then submitted that the power of deportation given by s 200 should be viewed as a specific power that prevails over the general power given by s 501, though it was not made clear why those powers should be so described. The two provisions are in any event different in the respects referred to above and as was pointed out in Gunner's case. The appellant's own argument recognised that there were different legal consequences following the exercise of the two powers even if, as Sackville J observed, the practical effect for a visa holder may be substantially the same. 16 In my view, no basis has been shown for doubting the correctness of the Full Court's reasoning in Gunner's case. 17 Arguments based upon estoppels of different kinds, as the appellant now contends for, were not raised in Gunner's case. It was first submitted, in this connexion, that there was an implicit representation, on the part of the Minister, that he would accept merits review and accept himself bound by it, regardless of whether there were other courses open to him. As a question of fact, no such representation can be gleaned from the Minister's decision to deport the appellant, even if the Tribunal later substituted a different decision for it. That the decision is thereby deemed to be the Minister's (see s 43(6) Administrative Appeals Tribunal Act 1975 (Cth)) for some purposes does not render it a statement in fact made by the Minister with respect to his future conduct. In any event, even if some otherwise actionable representation could be attributed to the Minister, considerations of public policy would prevent any estoppel from arising, since the legislation is to be taken as intending a free and unhindered exercise of discretion: Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic (1990) 92 ALR 93, 111. 18 The balance of the appellant's submissions raised questions relevant to issue estoppel, although it was not explained how these principles were to apply in the context of administrative decision-making. This is not a case where a second application has been made to the Tribunal. In such cases, there is at least some question whether these principles might apply (see Res Judicata, Issue Estoppel and the Commonwealth Administrative Appeals Tribunal: A Square Peg into a Round Hole? T. McEvoy, (1996) 4(1) AJAL 37-55). In these proceedings no facts, upon which the Minister's decision depends, are, or could be, in issue. In truth, the appellant's arguments concern the conclusion reached by the Tribunal against deportation, and seek to use it to foreclose another decision under a different head of power by the Minister under s 501. There is, as earlier mentioned, no basis for reading one source of power as limiting the other, and the same applies with respect to decisions made in the exercise of the power. 19 In my view, the appeal should be dismissed with costs. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel. Associate: Dated: 25 February 2000 Counsel for the Appellant: Mr T Hurley Solicitor for the Appellant: Haines & Polites Counsel for the Respondent: Mr J Basten QC with Mr J Logan Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 24 November 1999 Date of Judgment: 25 February 2000	4,954
federal_court_of_australia:fca/single/2022/2022fca1153	decision	commonwealth	federal_court_of_australia	text/html	2022-10-18 00:00:00	Cooper v Judicial Registrar Lackenby [2022] FCA 1153	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2022/2022fca1153	2024-09-13T22:44:55.802857+10:00	Federal Court of Australia Cooper v Judicial Registrar Lackenby [2022] FCA 1153 File number(s): SAD 45 of 2022 Judgment of: O'SULLIVAN J Date of judgment: 18 October 2022 Catchwords: ADMINISTRATIVE LAW – application for judicial review of two decisions, each by a different Registrar made under r 2.26 of the Federal Court Rules 2011 (Cth) to reject documents for filing – the first decision concerned whether a Bankruptcy Form 2 application and accompanying affidavit were frivolous, vexatious and sought orders outside the jurisdiction of the Court – a subsequent interlocutory application to join the second Registrar to the proceedings allowed – the second decision concerned whether a Form CP14 indictment and Form CP15 indictment information notice were frivolous, vexatious and sought orders outside the jurisdiction of the Court – whether the Registrars made a substantive judgment about the underling merit of the claims when making their decisions – application dismissed Legislation: Acts Interpretation Act 1901 (Cth), s 34 AB(1)(b) Administrative Decisions (Judicial Review) Act 1977 (Cth), ss 5(1), 5(1)(c) & (f), 11(1) Federal Court of Australia Act 1976 (Cth), ss 35A(1)(h), 37AM Federal Court Rules 2011 (Cth), rr 2.26, 31.01(1), Schedule 1 Cases cited: Ferdinands v Registrar Cridland [2021] FCA 592 Ferdinands v Registrar Cridland [2022] FCAFC 80 Ferdinands v Registrar Parkyn [2020] FCA 1676 Kable v Director of Public Prosecutions (NSW) [1996] HCA 24; (1996) 189 CLR 51 Nyoni v Murphy [2018] FCAFC 75; (2018) 261 FCR 164 Division: General Division Registry: South Australia National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 48 Date of last submission/s: 14 June 2022 Date of hearing: Determined on the papers Counsel for the Applicant: No appearance Counsel for the Respondents: No appearance ORDERS SAD 45 of 2022 BETWEEN: RICHARD JOHN COOPER Applicant AND: KIM LACKENBY, JUDICIAL REGISTRAR, CANBERRA, AUSTRALIAN CAPITAL TERRITORY First Respondent AMELIA EDWARDS, JUDICIAL REGISTRAR, MELBOURNE, VICTORIA Second Respondent order made by: O'SULLIVAN J DATE OF ORDER: 18 October 2022 THE COURT ORDERS THAT: 1. The application is dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT O'SULLIVAN J: INTRODUCTION 1 On 4 March 2022, Richard John Cooper (applicant) lodged for filing with the ACT Registry of the Court, a Bankruptcy Form 2 Application and supporting affidavit (first Cooper affidavit). On 7 March 2022, Registrar Lackenby refused to accept the documents for filing pursuant to r 2.26 of the Federal Court Rules 2011 (Cth) (FCR). On 23 March 2022, the applicant filed an originating application in which the applicant applies for judicial review of Registrar Lackenby's decision. 2 On 31 March 2022, the applicant lodged for filing a Form CP14 indictment and Form CP15 indictment information notice. That same day, Registrar Edwards refused to accept the documents pursuant to FCR 2.26. The applicant also seeks judicial review of Registrar Edward's decision. 3 On 13 April 2022, the applicant filed an interlocutory application in which he sought to join to these proceedings Registrar Edwards; the Commonwealth; the Commonwealth Director of Public Prosecutions; an alleged petitioning creditor, Selection Steel Trading Pty Ltd (ACN 005 324 497); Mr Christopher Chapman (Mr Chapman), a person whom the applicant alleges stole goods from him after the applicant was declared bankrupt; Mr Gregory Dudley (Mr Dudley), who allegedly volunteered as the applicant's Trustee in Bankruptcy; and the Australian Financial Services Authority. 4 On 21 April 2022, the applicant emailed to the Court written submissions in support of the interlocutory application. 5 In addition, on 21 April 2022, at 1:26am, the applicant emailed a 52 page affidavit to my chambers (second Cooper affidavit). 6 During the course of the hearing, I explored with the applicant his grounds for seeking to join the various parties. After engaging in that process, I refused leave to the applicant to join all parties except Registrar Edwards. 7 On 10 June 2022, Registrar Lackenby lodged a Form 29 submitting notice. On 14 June 2022, Registrar Edwards lodged a Form 29 submitting notice. 8 All parties requested that the Court deal with these matters on the papers. 9 On 26 May 2022, the applicant filed further written submissions. 10 On 5 August 2022, the applicant emailed a further document to the Court referring to the "Kable principle": See Kable v Director of Public Prosecutions (NSW) [1996] HCA 24; (1996) 189 CLR 51. In broad terms, the principle in Kable is that a State Court may not act in a manner incompatible with Ch III of the Commonwealth Constitution or exercise jurisdiction that is incompatible with the integrity, independence and impartiality of a State Court when it is exercising federal jurisdiction invested under Ch III. Since this application concerns an administrative decision made by a Federal Court Registrar, Kable has no application. The originating application seeking judicial review 11 The originating application does not identify the Act under which the application is brought, although it is described on its face as an "Originating Application for Judicial Review - Form 66 - Rule 31.01(1)". FCR 31.01(1) is the rule relating to applications for orders under s 11(1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act). 12 Section 11(1) of the ADJR Act provides relevantly: 11 Manner of making applications (1) An application to the Federal Court or the Federal Circuit and Family Court of Australia (Division 2) for an order of review: (a) shall be made in such manner as is prescribed by: (i) in the case of an application to the Federal Court—Federal Court Rules; or (ii) in the case of an application to the Federal Circuit and Family Court of Australia (Division 2)—Federal Circuit and Family Court of Australia (Division 2) Rules; and (b) shall set out the grounds of the application; and (c) shall be lodged with a Registry of the court concerned and, in the case of an application in relation to a decision that has been made and the terms of which were recorded in writing and set out in a document that was furnished to the applicant, including such a decision that a person purported to make after the expiration of the period within which it was required to be made, shall be so lodged within the prescribed period or within such further time as the court concerned (whether before or after the expiration of the prescribed period) allows. 13 In the circumstances, I treat the originating application as an application for judicial review pursuant to s 11(1) of the ADJR Act. 14 To have standing to seek a review of a decision pursuant to s 11(1) of the ADJR Act, a person must be aggrieved by a decision to which the ADJR Act applies: s 5(1) ADJR Act. 15 The ADJR Act applies to a decision of an administrative character, proposed to be made, or required to be made (whether in the exercise of a discretion or not) under an Act of the Commonwealth. 16 In Nyoni v Murphy [2018] FCAFC 75; (2018) 261 FCR 164 [41], (Barker, Banks-Smith and Colvin JJ) the Court noted that a Registrar's decision in refusing to accept documents for filing was a decision of an administrative character and may be susceptible to judicial review under the ADJR Act. Principles 17 In Ferdinands v Registrar Cridland [2021] FCA 592 at [9], White J referred to what he said in Ferdinands v Registrar Parkyn [2020] FCA 1676 where he set out some provisions from the authorities concerning the power which a Registrar may exercise pursuant to FCR 2.26. In Cridland, his Honour said: 10 The nature of the power bestowed on a Registrar pursuant to O 46, r 7A of the original Federal Court Rules (the predecessor of r 2.26) was discussed by the Full Court in Bizuneh v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 42; (2003) 128 FCR 353. The Full Court said: [15] The rule in its current form removed a clog on the Registrar's discretion to act by permitting the Registrar to refuse to accept or issue a document without the Registrar being required to obtain authority from a Judge so to act. The first point to note in the construction of the rule is that O 46 is directed to administration of registries of the Court. The purpose of r 7A is to assist the Registrar to maintain efficient operation of a registry and, thereby, the Court. Even without a rule in the terms of r 7A it may be thought that it would be implied that a Registrar would have the power, or be under a duty, to protect Court procedures from abuse by refusing to accept a document for lodgement or filing which, on its face, would be an abuse of court process or frivolous or vexatious. 11 This reasoning was applied more recently in Nyoni v Murphy in which the Full Court said: [33] The purpose of a rule such as r 2.26 is to assist the Registrar to maintain efficient operation of a registry … It is in the interests of the administration of justice that there be procedural requirements to be met in order for an application to be brought before a judge of the Court and for other parties to be required to attend … … [38] [A] Registrar acting under r 2.26 does not have power to adjudicate under the substantive law whether an application that a party seeks to bring is an abuse of process (or is frivolous or vexatious). The Registrar has no judicial power to determine substantively whether a claim must be dismissed because it is an abuse of process (or is frivolous or vexatious). Rather, r 2.26 is the means by which an administrative requirement is expressed that all documents filed in the Registry must not in their form and content (irrespective of any substantive assessment of their merit) be an abuse of the process of the Court or frivolous or vexatious … (Citation omitted and emphasis added) The decision under review 18 The decision by Registrar Lackenby dated 7 March 2022 is annexure RJC-1 to the second Cooper affidavit. After identifying the documents that were sought to be filed, the Registrar set out FCR 2.26 and said: I am of the view that the Documents should be refused for filing under rule 2.26 of the Rules on the basis that you seek to encompass in the one application multiple respondents and various causes of action, many of which appear to attempt to be criminal prosecutions for which the Federal Court does not have jurisdiction. Accordingly, the Documents are returned to you and. I encourage you to seek legal advice. 19 The decision by Registrar Edwards dated 31 March 2022 is annexure RJC-4 to the second Cooper affidavit. After identifying the documents that were sought to be filed, the Registrar set out FCR 2.26 and said: I am of the view that the Documents should be refused for filing under r 2.26 of the Rules because they are, on their face, an abuse of process, frivolous or vexatious. The Federal Court of Australia does not have jurisdiction to determine offences of attempting to pervert the course of justice under the Crimes Act, or crimes against humanity under the Criminal Code. Such offences are federal offences that may only be prosecuted in state or territory courts exercising federal jurisdiction: see by way of guidance, ss 39B(1A)(c) and 68(2) of the Judiciary Act 1903 (Cth), and Div 1A of the Federal Court Act 1976 (Cth). The Federal Court of Australia also does not have jurisdiction in respect of the international instruments you refer to in your letter. If you disagree with this decision you may make an application for judicial review of this decision under the Administrative Decisions (Judicial Review) Act 1997 (Cth). I recommend that you seek independent legal advice in relation to this matter prior to filing any further documents with the Court. The Documents are returned to you. 20 The remaining paragraphs of Registrar Edward's decision refer to the possibility of the applicant discontinuing the application for judicial review and having the originating application stamped and issued so that the applicant may serve it. 21 A letter from the applicant to Registrar Edwards dated 4 April 2022 follows Registrar Edward's decision, both of which are in annexure RJC-4 to the second Cooper affidavit. The letter includes the applicant's intention to join Registrar Edwards to the application. The documents Registrar Lackenby refused to accept for filing 22 The Bankruptcy Form 2 Application and the accompanying first Cooper affidavit, which Registrar Lackenby refused to accept for filing on 7 March 2022, is itself an application for judicial review to set aside a Sequestration Order of the Federal Circuit Court and a claim for "pecuniary penalties" against Mr Chapman; Mr Dudley; the Commonwealth; Selection Steel Trading Pty Ltd; and the Commonwealth Director of Public Prosecutions. 23 Under the heading "Details of claim", the applicant sets out the sections of the Bankruptcy Act 1996 (Cth); the Criminal Code Act 1995 (Cth); the Federal Court of Australia Act 1976 (Cth); the Constitution; the Bankruptcy Rules 2016 (Cth); the Crimes Act 1914 (Cth); the International Covenant on Civil and Political Rights; and the Judiciary Act 1903 (Cth), that the applicant relies on in support of his application. 24 Under the heading "Claim for interim relief" the applicant seeks the following: 1. That the Trustee 'be directed to annul the bankruptcy' by reference to s 153A of the Bankruptcy Act 1996 (Cth); or 2. The Court annul the bankruptcy on the grounds set out in s 153B of the Bankruptcy Act 1996 (Cth); and 3. Order an account under s 30(2) of the Bankruptcy Act 1996 (Cth) between the Petitioning Creditor, The Commonwealth under s 64 of the Judiciary Act 1903 (Cth) and the other respondents. 4. If the matter and liability is disputed by any other respondent, order a jury trial to determine liability as if this as an indictment under s 30 of the Bankruptcy Act 1996 (Cth); and 5. If the liability is not disputed, 'order an interim payment from the Commonwealth so the business is not destroyed by legal actions and the other respondents be ordered to pay as their various actions have resulted in losses and damage to the applicant's business attracting pecuniary penalties as approved by the law'. 25 The first Cooper affidavit alleges the following: (a) Selection Steel Trading Pty Ltd engaged a solicitor to collect a debt owing by the applicant, which is denied by the applicant, and even though the applicant was not put on notice, a default judgment was made: [5]; (b) A Bankruptcy Notice was issued out of the Melbourne Registry of the Federal Circuit Court based on the "fraudulent judgment" which was allegedly served upon the applicant at an address unknown to the applicant: [5A]; (c) A Sequestration Order by default was made in the Federal Circuit Court in Melbourne based upon a fraudulent Affidavit of Service filed by a Process Server in Adelaide. The applicant received a summons from the Adelaide Magistrates Court from the Commonwealth Director of Public Prosecutions, alleging the applicant was obliged to file a Statement of Affairs and had failed to do so, on complaint of Mr Dudley and officers of the Commonwealth Director of Public Prosecutions: [6]; (d) The Affidavit of Service was served upon a person unknown to the applicant at 23 Paskeville Road, Paskeville SA: [7]; (e) Mr Chapman commenced an action in the Magistrates Court of South Australia in Adelaide to obtain an Order for Possession for a Chaser Bin that he ordered from the applicant and had paid a deposit for, to avoid payment: [8]; (f) Mr Dudley acting as Trustee, "did not use due diligence in his acceptance of the Trusteeship of the Estate" and did not enquire whether the bankruptcy order was legitimate: [9]; (g) The Commonwealth, under s 64 of the Judiciary Act 1903 (Cth), had "mutual dealings through the Federal Circuit Court" and as a "Corporate Offender owes pecuniary penalties and offended s 43 of the Crimes Act 1914 (Cth)" by "not having Selection Steel Trading Pty Ltd strictly prove personal service": [10]; (h) Selection Steel Trading Pty Ltd "committed an offence by alleging service upon the applicant was achieved": [11]; (i) The Commonwealth Director of Public Prosecutions "attempted to enforce a bankruptcy that is fraudulent": [12]; and (j) At all material times, "Cooper Engineering was and remains a firm within the meaning of the Partnership Act 1891 (SA) and unless sued as a firm, is not subject to the Bankruptcy Act 1996 (Cth). As Trust Property the firm does not vest in a Trustee and while a partnership subsists, each partner is trustee for the other partner": [13]. The documents Registrar Edwards refused to accept for filing 26 The Form CP14 indictment and Form CP15 indictment information notice (Forms), which Registrar Edwards refused for filing on 31 March 2022, are annexed to the second Cooper affidavit as part of annexure RJC8. 27 The Forms name the prosecutor as The Commonwealth, as a Commonwealth Public Official under authority of the Parliament of the Commonwealth granted by s 13 of the Crimes Act 1914 (Cth) and Criminal Code Act 1995 (Cth) acting through the applicant. It names the accused as Mr Chapman and purports to charge Mr Chapman with an offence under s 43 of the Crimes Act. It purports to allege crimes against humanity under s 268.12 of the Criminal Code Act 1995 (Cth). The Forms also refer to Article 9 of the International Covenant on Civil and Political Rights and Statute 1 Will & Mary C 6 (Coronation Oath) (1688). The application for judicial review of the Registrars' decisions 28 As I have noted, on 21 April 2022, I granted leave to the applicant to file an amended originating application to join Registrar Edwards. The applicant did not file an amended originating application. Nonetheless, in view of the submitting notices, I treat the originating application filed 23 March 2022 as applying to the decisions of both Registrar Lackenby and Registrar Edwards. The originating application contains three subheadings: "Details of claim", "Grounds of application" and "Orders sought". Details of claim 29 The applicant asserts three grievances said to result from the Registrars' decisions to refuse to accept the documents for filing. 30 In the first and second grievance, the applicant contends that FCR 2.26 contravenes s 79 of the Constitution because the judicial power of the Commonwealth may only be exercised by a Judge. The applicant contends a Judicial Registrar is not a Judge, does not have the power to arbitrarily decide any dispute, and that a Judge does not have the power to delegate that authority. 31 In the third grievance, the applicant contends that s 34AB(1)(b) of the Acts Interpretation Act 1901 (Cth) prohibits a Judge from delegating power to a Judicial Registrar and that a Judicial Registrar does not have the power to make a "Rule of the Court" to exercise the power of a Judge. Grounds of application 32 There are 3 grounds of application. I summarise them as follows: (1) Failing to apply the International Covenant on Civil and Political Rights is a criminal offence pursuant to s 268.12 of the Criminal Code Act 1995 (Cth) therefore, any Rules of the Court that are applied to overrule it must be disallowed; (2) There is a "wide spread systematic attack on the civilian population" by Registrars willing to "deny the course of justice" in relation to applications for judicial review of administrative decisions; and (3) The Free Access to Courts Act 1400 2 Hen 4 c 1 is in force in the ACT. Orders sought 33 The applicant seeks an order that the decisions of both Registrar Lackenby and Registrar Edwards be set aside and an order that his application be granted. 34 The originating application also seeks that the Court disallow Registrars from exercising their power under FCR 2.26 to refuse the filing of documents in the Courts "bankruptcy and equitable" jurisdiction. CONSIDERATION 35 The application for judicial review does not identify the ground or grounds in s 5(1) of the ADJR Act upon which the applicant relies. The reference to Registrars not having the power to make decisions relating to the filing of documents suggests ss 5(1)(c) and (f). Those provisions provide: 5 Applications for review of decisions (1) A person who is aggrieved by a decision to which this Act applies that is made after the commencement of this Act may apply to the Federal Court or the Federal Circuit and Family Court of Australia (Division 2) for an order of review in respect of the decision on any one or more of the following grounds: … (c) that the person who purported to make the decision did not have jurisdiction to make the decision; ... (f) that the decision involved an error of law, whether or not the error appears on the record of the decision; … 36 When refusing to accept a document for filing under FCR 2.26, the Registrars do not make any substantive judgment about the underlying merit of the claims in the proposed proceedings. 37 The Registrars said in their letters to the applicant, that they refused to accept the documents because on their face they were frivolous or vexatious. In so doing, the Registrars were not making a substantive judgment about the underlying merit of the claims in the proposed proceedings but were ensuring compliance with procedural requirements. 38 That is sufficient to dispose of the ground of review in s 5(c) of the ADJR Act. 39 As to the meaning of "frivolous" or "vexatious" or the expression "an abuse of the Court's process", there is no definition of either of the terms "frivolous" or "vexatious" in the FCR nor of the expression "an abuse of the Court's process. 40 In Ferdinands v Registrar Cridland at [27]-[31], White J considered the meaning of these terms. His Honour noted that the Dictionary contained in Schedule 1 to the FCR contained a definition of "vexatious proceeding" by reason of a cross-reference to s 37AM of the Federal Court of Australia Act 1976 (Cth). Section 37AM(1) provides: vexatious proceeding includes: (a) a proceeding that is an abuse of the process of a court or tribunal; and (b) a proceeding instituted in a court or tribunal to harass or annoy, to cause delay or detriment, or for another wrongful purpose; and (c) a proceeding instituted or pursued in a court or tribunal without reasonable ground; and (d) a proceeding conducted in a court or tribunal in a way so as to harass or annoy, cause delay or detriment, or achieve another wrongful purpose. 41 After referring to s 37AM, his Honour continued at [28]-[30]: 28 As is apparent, that definition is not an exhaustive definition. It indicates, however, that a proceeding will be vexatious if, amongst other things, it is instituted or pursued without reasonable cause. 29 In Prior v South West Aboriginal Land and Sea Council Aboriginal Corporation [2020] FCA 808, McKerracher J discussed the meaning of the terms "vexatious" and "frivolous" appearing in r 26.01(1) of the FCR. His Honour said: [35] The expressions 'scandalous', 'vexatious' and 'frivolous' can be used either separately, or in conjunction, or interchangeably, with the expression 'abuse of process of the court' … [36] A matter is 'frivolous and vexatious' where the 'cause of action is one which on the face of it is clearly one which no reasonable person could properly treat as bona fide, and contend that he had a grievance which he was entitled to bring before the court' … [37] In relation to the term 'frivolous': (a) a matter that is 'frivolous' may be described as one that is 'without substance or groundless or fanciful' …; (b) a proceeding will be 'frivolous' where, despite whatever attempts are made to discern a cause of action in the case, it is still not arguable …; and (c) 'frivolous' may also describe a situation where a party is trifling with the Court or wasting the Court's time … [38] In relation to the term 'vexatious': (a) a 'vexatious' proceeding is one without foundation, which cannot succeed, or is brought for an ulterior and collateral purpose. 'Vexatious' might also describe proceedings that are seriously and unfairly burdensome, prejudicial or damaging …; (b) proceedings may also be described as 'vexatious' where they impose on a respondent party an unnecessary injustice in the form of a burden other than, and additional to, the burden necessarily imposed on a party to litigation instituted on reasonable grounds for the purpose of obtaining relief within the scope of the available remedy …; (c) a proceeding is to be regarded as 'vexatious' where: (i) it is instituted with the intention of annoying or embarrassing the person against whom the proceeding is brought; or (ii) it is brought for collateral purposes, and not for the purpose of having the court adjudicate on the issues to which it gives rise; or (iii) irrespective of the motive of the litigant, the proceeding is so obviously untenable or manifestly groundless as to be utterly hopeless …; and (d) 'vexatiousness' is a quality of the proceeding rather than a litigant's intention, so that the question is not whether the proceedings have been instituted vexatiously but whether the legal proceedings are in fact vexatious … (Citations omitted) 30. As is apparent, a proceeding will be frivolous and vexatious if, amongst other things, it is based on a cause of action which no reasonable person could properly treat as bona fide or if it is without substance, groundless, or fanciful. There is no reason to suppose that the Registrar did not apply meanings of this kind in the present case when considering whether the applicant's proposed proceeding was frivolous or vexatious on the face of the documents. In reaching that conclusion, I take into account that the applicant has not sought to point to any particular error by the Registrar in her construction of these terms. 42 His Honour's consideration of these expressions was approved by the Full Court of this Court in Ferdinands v Registrar Cridland [2022] FCAFC 80 at [8] (Charlesworth, Burley and Cheeseman JJ). 43 Adopting the meanings of "frivolous", "vexatious" and the expression "abuse of process" set out above, the Bankruptcy Form 2, accompanying affidavit, Form CP14 and Form CP15, were frivolous, vexatious and an abuse of process of the Court. 44 That conclusion is sufficient to dispose of the ground of review in s 5(1)(f) of the ADJR Act. 45 In all the circumstances, there is no error in each of the Registrar's characterisation of the respective proposed proceedings as frivolous and vexatious on their face such that it would constitute an abuse of process of the Court if they were accepted for filing. 46 In view of my decision that there is no error in the Registrars' characterisations of the proposed proceedings as frivolous and vexatious on their faces, there is no need to address the applicant's third grievance set out in [32] above and his application for an order that the Court disallow Registrars from exercising their powers under FCR 2.26. 47 Nonetheless, s 34AB(1)(b) of the Acts Interpretation Act 1901 (Cth) does not prohibit a judge of the Court from delegating power to a Judicial Registrar. Section 35A(1)(h) of the Federal Court of Australia Act 1976 (Cth) specifically provides that if the Court directs, a Registrar has a power of the Court prescribed by the rules of the Court. These sections provided the answer as to why such an order should not be made. CONCLUSION 48 The application for judicial review filed on 23 March 2022 is dismissed. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Sullivan. Associate: Dated: 18 October 2022	6,510
federal_court_of_australia:fca/single/1983/1983FCA0345	decision	commonwealth	federal_court_of_australia	application/pdf	1983-11-22 00:00:00	Telecasters North Queensland Ltd v Australian Broadcasting Tribunal & Ors [1983] FCA 345	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1983/1983FCA0345.pdf	2024-09-13T22:44:56.906152+10:00	BRISBANE wT] A 5 mor CATCHWORDS ADMINISTRATIVE - application to review certain proceedings of the Australian Broadcasting Tribunal - Tribunal's power to approve or reject applications lodged outside the time prescribed by sub-s. 92F(7A) of the Broadcasting and Television Act and its jurisdiction to hold an inquiry - "in accordance with sub-s. (7A)", "made in accordance with 3.92F", Administrative Decisions (Judicial Review) Act, 3.5 Broadcasting and Television Act, s.92F and 92FAA TELECASTERS NORTH QUEENSLAND LIMITED v. AUSTRALIAN BROADCASTING TRIBUNAL AND ORS (Qld G97 of 1983) TELECASTERS NORTH QUEENSLAND LIMITED v. DAVID JONES (AS CHATRMAN OF THE AUSTRALIAN BROADCASTING TRIBUNAL) AND ORS (Qld G99 of 1983) FITZGERALD J. 22 NOVEMBER 1983 SE OM Rereeerermanererereressenseescyere-sresemesrr etrernan arse rear rirer pberrr arsenite reyes coma IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G97 & G99 of 1983 GENERAL DIVISION ) BETWEEN : TELECASTERS NORTH QUEENSLAND LIMITED Applicant AUSTRALIAN BROADCASTING TRIBUNAL First Respondent AND: CATHARINE WEIGALL Second Respondent AND: JAMES WILKINSON Third Respondent AND: NORTH QUEENSLAND PORTFOLIO PTY LIMITED Fourth Respondent BETWEEN : TELECASTERS NORTH QUEENSLAND LIMITED Applicant AND: DAVID JONES (AS CHAIRMAN OF THE AUSTRALIAN BROADCASTING TRIBUNAL) First Respondent AND: AUSTRALIAN BROADCASTING TRIBUNAL Second Respondent AND: NORTH QUEENSLAND PORTFOLTO PTY LIMITED Third Respondent aS SE ORDER JUDGE MAKING ORDER: FITZGERALD J. DATE OF ORDER: WHERE MADE: 22 NOVEMBER 1983 BRISBANE THE COURT ORDERS THAT: 1. Applications G97 and G99 of 1983 be dismissed. The Applicant pay North Queensland Portfolio Pty Ltd's taxed costs of and incidental to the hearing of 15 and 16 November 1983, and otherwise of and incidental to Application G99 of 1983. Otherwise, the costs of all parties of and incidental to Applications G45 and G97 of 1983 are reserved. The Applicant may file and serve written submissions and any affidavits or other material with respect to the orders for costs which it seeks on or before Friday 25 November 1983 and the other parties may respond in similar fashion on or before Tuesday 29 November 1983. If any party desires that Applications G45 or G97 of 1983 be restored for further argument as to costs, the District Registrar must be notified in writing on or before Wednesday, 30 November 1983. IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G97 & G99 of 1983 GENERAL DIVISION ) BETWEEN : TELECASTERS NORTH QUEENSLAND LIMITED Applicant AND: AUSTRALIAN BROADCASTING TRIBUNAL First Respondent AND: CATHARINE WEIGALL Second Respondent AND: JAMES WILKINSON Third Respondent AND: NORTH QUEENSLAND PORTFOLIO PTY LIMITED Fourth Respondent BETWEEN: TELECASTERS NORTH QUEENSLAND LIMITED Applicant AND: DAVID JONES (AS CHAIRMAN OF THE AUSTRALIAN BROADCASTING TRIBUNAL) First Respondent AUSTRALIAN BROADCASTING TRIBUNAL Second Respondent AND: NORTH QUEENSLAND PORTFOLIO PTY LIMITED Third Respondent AER ORR FITZGERALD J. 22 NOVEMBER 1983 REASONS FOR JUDGMENT The applicant, Telecasters North Queensland Limited ("Telecasters"), has applied to the Court for orders under the Administrative Decisions (Judicial Review) Act 1977 ("the Judicial Review Act") in respect of certain proceedings of the Australian Broadcasting Tribunal ("the Tribunal"). The Tribunal, its Chairman, other members of the Tribunal involved in the proceedings before the Tribunal, and North Queensland Portfolio Pty Ltd ("Portfolio"), which is a party to those proceedings, are all respondents to the present Applications. In all, Telecasters has made three Applications. The first, Application G45 of 1983, has been dismissed by consent but the costs have been reserved. The second, Application G97 of 1983, sought the review of a number of decisions made by the Tribunal in the course of the proceedings before it. Sensibly, these questions have now been resolved by the legal representatives of Telecasters and Portfolio, although again there is an outstanding issue as to costs. A further question, raised both by Application G97 and the third Application, G99 of 1983, remains for resolution. Telecasters contends that the Tribunal has no jurisdiction in the proceedings before 1t. That question depends upon the construction of the Broadcasting and Television Act 1942 ("the Broadcasting Act"). PRK my Telecasters is a public company and the licencee of commercial television station TNQ-7 Townsville and commercial television translator stations TNQ-1 Bowen and TNQ-5A Townsville. Its wholly owned subsidiary companies hold licences under the Broadcasting Act for commercial television station FNQ-Cairns and commercial broadcasting stations 4AY and 4GC Charters Towers. Another subsidiary, in which Telecasters holds a majority interest, is the licencee of commercial broadcasting station 4LM Mt Isa. Telecasters also has smaller interests, directly or through gubsidiaries, in companies holding other licences under the Broadcasting Act. Between 8 May 1982 and 19 September 1982, Portfolio acquired 30,667 shares in the issued capital of Telecasters. The Broadcasting Act had no application to those acquisitions. However, further acquisitions of shares in Telecasters by Portfolio since that time are affected by the Broadcasting Act and it is its operation in relation to those acquisitions which lies at the heart of the present controversy. The parties have argued their dispute by reference to Part IV Division 3 of the Broadcasting Act, and in particular ss. 92F and 92FAA, in effect ignoring all licences in which Telecasters is interested beyond a single commercial television licence, It is common ground that it is appropriate to approach this matter in that way, and that the outcome of Applications G97 and G99 would not be affected by other material provisions of the Broadcasting Act such as those contained in Part IV Division 2 relating to commercial broadcasting licences. 92FAA. It is necessary to set out some parts of ss. Section 92F provides: "(3) Where a transaction 1s proposed, the prescribed party to the transaction ... may (a) give the Tribunal notice in writing, stating - (b) lodge an application with the Tribunal, in accordance with the form approved by the Tribunal, for approval of the transaction in so far as it affects the prescribed party. (7A) Each person to whom this section applies in relation to a transaction (other than a prescribed party who has lodged an application in relation to the transaction in accordance with paragraph (3)(b)) shall, not later than the 28th day after the transaction takes place or such later day as the Tribunal, on application, allows by notice in writing served on the person before that 28th day, lodge with the Tribunal, in accordance with the form approved by the Tribunal, an application for approval of the transaction in so far as it affects the person. (7B) An application lodged in pursuance of paragraph (3)(b) or sub-section (7A) ... shall be taken not to be lodged in accordance with that paragraph or sub-section unless it is accompanied by a statutory declaration ... (7D) On receipt of a ... application given to or lodged with the Tribunal by a person in pursuance of sub-section (3) or (7A), the Chairman shall ~- (a) if the... application does not comply with the requirements of this section - reject the ... application and give the person such directions as are necessary to ensure that it complies with those requirements; or 92F and 4 or TT Rm Serer eee er eer rte ne me FH (b) din any other case - accept the application, and, for the purpose of this Act, the ... application shall be taken not to be ... lodged with the Tribunal until it has been so accepted. (7E) Where a transaction takes place ata particular time anda person 18 a prescribed party to the transaction, then, unless - (a) immediately before that time, there was in effect a notice given by the person in accordance with paragraph (3)(a) in relation to the transaction; or (b) before that time, an application was lodged by the person in accordance with paragraph (3)(b) in relation to the transaction, the person is guilty of a separate offence in respect of each day (including the day of a conviction under this sub-section or any subsequent day) after that time until - (c) the day on which he gives a notice in relation to the transaction in accordance with paragraph (3)(a) (modified so far as is necessary to take account of the fact that the transaction has taken place); or (ad) the day on which he lodges an application in relation to the transaction in accordance with sub-section (7A). (7F) A person who fails to comply with sub-section ... (7A) 13 guilty of a separate offence in respect of each day (including the day of a conviction under this sub-section or any subsequent day) during which the failure continues." Section 92FAA provides: "(1) Subject to sub-section (2), where an application in relation toa transaction is made in accordance with section 92F, the Tribunal shall, by notice in writing served on the applicant, approve the transaction in so far as it affects the applicant. (2) Where an application in relation toa transaction is so made and - then subject to this section, the Tribunal by notice in writing served on the applicant - {then follows a statement of the circumstances in which the Tribunal is to, or may, refuse an application. (6) The Tribunal shall not refuse to approve a transaction either in whole or in part unless it has, in accordance with this section, held an inquiry into such matters ag are determined by the Tribunal to be relevant to the transaction, (8) An inquiry required by sub-section (6) to be held in relation to a transaction may, if the Tribunal thinks fit, be joined with an inquiry into the renewal of the licence to which the transaction relates. (11) Where - (a) an application is lodged by a person under sub-section 92F(7A) in relation to a transaction; (b) a notice is served on the person under sub-section (2) refusing approval of the transaction in whole or in part; and (c) after the expiration of the period of 6 months after the date of service of the notice or such longer period as_ the Tribunal, on application, allows by notice in writing served on the person within that period of 6 months, the a Cs rere fa ce Va ta rare ee nee person holds shareholding interests, or interests, in the company to which the transaction relates exceeding in amount or proportion - (1) where approval of the whole of the transaction 1s refused - the shareholding interests, or the interests, that he had in that company immediately before the transaction took place; or (ii) where approval of part of the transaction is refused - the shareholding interests, or the interests, that he had in that company immediately before the transaction took place together with the shareholding interests, or the interests, in respect of which approval is granted, the person is guilty of a separate offence in respect of each day (including the day of a conviction under this sub-section or a subsequent day) during which he so holds those shareholding interest or interests. (13) The Tribunal shall not approve a transaction in relation to which section 92F applies except as provided by this section." On 11 November 1982, Portfolio acquired a further 446,193 shares in Telecasters. It therefore became the holder of shareholding interests in Telecasters amounting to a prescribed interest in its commercial television licence (para. 92F(1)(a)(i)) and Portfolio became a prescribed party (para. 92F(2)(b)). Further, certain individuals and companies associated with Portfolio each became a person to whom or to which 3.92F applied in relation to the transaction by which Portfolio acquired the further shares. Since then, Portfolio has acquired further shares in Telecasters and ais currently Telecasters' largest shareholder. By the end of April this year, Portfolio's holding was of the order of 1 1/2 million shares, constituting something in excess of 19% of Telecasters' issued capital. It 18 umneceéssary to detail further the various transactions by which Portfolio acquired its shareholding in Telecasters. Prior to its acquisition of the 446,193 shares in Telecasters on 11 November 1982, Portfolio gave the Tribunal a notice in writing in cespect of the proposed transaction pursuant to para 92F(3)(a) of the Broadcasting Act which was accepted by the Tribunal on 10 November 1982, the day preceding the acquisition. No notice pursuant to para 92F(3)(a) was given in respect of any of the other acquisitions. No application for approval pursuant to para 92F(3)(b) of the Broadcasting Act was lodged with the Tribunal prior to any of the acquisitions. However, applications for approval were lodged after each of the acquisitions by Portfolio and by each of the other persons to whom or to which 8.92F applied in relation to the transactions. No extensions of time were allowed for the lodging of those applications for approval. The applications lodged by Portfolio in respect of the acquisition of 446,193 shares on ll November 1982 and in respect of a number of subsequent acgiisitions, and all applications lodged by the other persons to whom or to which 3.92F applied in relation to the acquisitions, were lodged outside the time prescribed by sub-s. 92F(7A), 1.6. later than the 28th day after the respective transactions. The Chairman of the Tribunal accepted all the applications under sub-s. 92F(7D}. The Tribunal then appointed an inquiry in relation to the transactions, in conjunction with an inquiry into Telecasters' commercial television licence, under sub-ss. 92FAA (6) and (8). The inquiry opened on 16 June 1983. Telecasters was approved by the Tribunal as "a person having an interest in the proceedings" under s.22 of the Broadcasting Act and has been permitted to be represented and to participate in the inquiry. The inquiry is part heard but stands adjourned to permit the determination of the Applications to this Court under the Judicial Review Act. The dispute presently before the Court centres upon the single fact that the applications for approval were not made within the time prescribed by 3.92F of the Broadcasting Act. It is common ground that questions concerning the sufficiency and accuracy of the applications for approval in other respects will fall for consideration by the Tribunal in the course of the inquiry, if it is to proceed, and may affect either its power to approve the applications or the course which it is proper for it to follow in the exercise of that power. There has been some debate already before the Tribunal concerning the various asietath LU. applications, and, insofar as it has ruled, it has ruled against Telecasters. However, as I understand it, it is accepted on all sides that no ruling thus far given by the Tribunal and no conduct by' the Tribunal Chairman either precludes the Court from determining the present question or will preclude the Tribunal from further considering the sufficiency and accuracy of the applications at the close of the evidence, or any review by the Court of the Tribunal's decision. No question presently arises concerning the conclusiveness, or lack of conclusiveness, of any determination thus far by the Tribunal or ats Chairman with respect to such issues. Perhaps because of the nature of an Application to the Court under the Judicial Review Act and the stage in the proceedings before the Tribunal at which the Court has' been approached, Telecasters tended to concentrate, although not exclusively, upon the Tribunal's jurisdiction to hold an inquiry. It was submitted for Telecasters that the Tribunai's jurisdiction to hold an inquiry stems from s.92FAA of the Broadcasting Act and, more particularly, sub-s. (6) of that section which denies the Tribunal power to refuse an application unless the Tribunal has held an inquiry. However, neither sub-s, 92FAA(6) nor sub-s. 18(1), which empowers the Tribunal to hold an inquiry into any matter before taking action under the Broadcasting Act in relation to that matter, expressly confines the Tribunal to inquiries in relation to those transactions falling within the operation of 3s.92F in respect of which the requirements of that section have been satisfied, and it does not seem helpful to consider the Tribunal's jurisdiction to hold an inquiry li. separately from its power to approve or reject the application in relation to the transactions to which the applications refer; in the course of argument, the two questions, jurisdiction to inquire and power to approve, tended to run together. Telecasters addressed two arguments in support of its proposition that the Tribunal could not approve the late applications. The first of those arguments turned on the construction of 3.92F of the Broadcasting Act and the other on the interpretation of s.92FAA. Telecasters' argument based on s.92F may be quite briefly stated. A prescribed party must lodge with the Tribunal an application for approval of a transaction, in accordance with the form approved by the Tribunal, either before the transaction (para. 92F(3)(b)), or, if prior to the transaction a notice has been given pursuant to para 92F(3)(a), not later than the 28th day after the transaction (sub-s. 92F(7A)). A person to whom 8.92F applies in relation to the transaction other than a prescribed party must lodge such an application with the Tribunal not later than the 28th day after the transaction (sub-s. 92F(7A)). Failure by a prescribed party either to give notice under para 92F(3)(a) or to lodge an application under para 92F(3)(b) prior to the transaction constitutes an offence (sub-s. 92F(7E)). Failure by either a prescribed party or other person to whom s.92F applies in relation toa transaction to comply with sub-s. 92F(7A) is also an offence (sub-s. 92(7F). By eeyarrs 8 REET OE teers ee nm iz, para 92(7D) (a) the Chairman of the Tribunal is required to reject a notice or application given to or lodged with the Tribunal by a person in pursuance of sub-s. (3) or sub-s. (7A) of 8.92F if the notice or application "does not comply with the requirements" of that section. Telecasters' submission 1s that an application out of time does not comply with the requirement of s.92F and thus cannot be accepted by the Chairman of the Tribunal but must be rejected, from which it is argued that there is no application to be approved or refused, or giving occasion for an inquiry, pursuant to s.92FAA. In my opinion, there are a number of indications in s.92F itself which require rejection of Telecasters' argument. Section 92F does not merely create an entitlement to apply for approval of a transaction to which it applies but imposes an obligation to do so. Although the obligation to make application for approval has a temporal aspect, non-compliance .with which constitutes an offence, the principal purpose of $.92F is to ensure that the Tribunal is provided with information needed to perform its statutory tasks of supervision and control: for example, under s.92M; (see also ss. 92F(7C)),. The additional statutory requirements concerning the timing of the provision of the information, whilst important, are ancillary to the fundamental requirement that the information be provided. It would defeat the evident scope and object of the Broadcasting Act and the underlying public policy concerned with the provision of ET TD 13. the information to the Tribunal to hold that an application lodged out of time must be rejected, or that such an application and its purported acceptance by the Chairman of the Tribunal are nullities. Indeed, s.92F makes it clear that there is an on-going obligation to lodge an application despite the explration of the period permitted for such a step: see also 5.92U. A _ prescribed party who has not complied with sub-s. 92F(3) before a transaction has a further obligation to make an application imposed upon it by sub-s. 92F(7A). Further, the obligations under both sub-sections continue and give rise to repeated offences for each day until performance of the statutory obligation. By the combined operation of gub-ss. 92F(3) and (7A), each person to whom s.92F applies in relation to a4 transaction, including a4 prescribed party, 1s required to lodge an application and, if the obligation is not performed in the specified time, an offence or offences are committed until the obligation is performed. It is clear that effective lodgment of an application may occur out of time. Sub-section 92F(7D) provides, inter alia, that for the purposes of the Broadcasting Act, "the ... application shall be taken not to be ... lodged with the Tribunal until it has been so accepted", i.e. by the Chairman, thereby perhaps impliedly requiring the Chairman to accept an application in order to permit performance of the statutory obligation to lodge it. What is provided in sub-s. 92F(7D) may create difficulties if given full literal effect; e.g. if there was delay in an acceptance See 14, by the Chairman which had the consequence that an application, although provided by an applicant, was not accepted within the prescribed time, and the introductory words of sub-s. 92F(D) themselves seem to assume that for some purposes lodgment with the Tribunal precedes a decision by the Chairman whether to accept or reject. However, it is unnecessary to pursue those questions. There igs nothing whatever in s.92F, other than para. 92F(7D)(a), which lends any support to the view that an application for approval provided in performance of the statutory obligation to do so but outside the prescribed time cannot be accepted but must be rejected by the Chairman. As I have already indicated, such a construction of para. 92F(7D)(a) would, in my opinion, defeat the manifest object of the legislation. Further, I am satisfied that the language of the paragraph does not require such a conclusion. The subject matter of the paragraph is "the ... application", i.e., the documentation. There are a number of provisions of s.92F which specifically state "the requirements" with which the application, as distinct from the applicant, must "comply". In my opinion, it ig with these "requirements" that para. 92F(7D)(a) 18 concerned. This view is confirmed by the latter part of the paragraph which requires the Chairman in rejecting an application to "give... such directions as are necessary to ensure that it (i.e. the application) complies with those requirements". No direction could lead to compliance with atime limit which had already expired, and, it may he noted, that time can only be extended prior to the date for compliance: sub-s. 92F(7A). In all cases not falling within para. 72F(7D)(a), the Chairman must accept the application (para. 92F(7D)(b)). "1 ere s EE Te Lo. Accordingly, I reject Telecasters' argument founded on s.92F. Telecaster's second argument was based on sub-section 92FAA(1) which authorises the Tribunal to approve a transaction only where an application in relation to that transaction is "made in accordance with s.92F". By sub-s. 92FAA(13), the Tribunal is forbidden to approve a transaction in relation to which 3.92F applies except as provided by s.92FAA. Sub-section 92FAA(2), which contains the Tribunal's power to refuse an application (but only after an inquiry (sub-s. 92FAA(6)), relates only to applications "so made", that is to say "made in accordance with s.92F" as provided an sub-s. 92FAA(1). Telecasters' submitted that an application which was made out of time was not made in accordance with 5.92F. At first glance, the words of sub-s. 92FAA(1) seem to lend force to this submission. It does, however, seem suprising that, if the submission is correct, an application for approval could be neither approved nor refused but must be left to continue in a legislative limbo. An indication that this was not contemplated is perhaps to be found in s.92N, which relates the Tribunal's power to order divestitute in respect of such acquisitions az are now in question to contravention of 3.92FAA, not s.92F. Ld — 7m a es Lo, Ultimately, it becomes necessary to see what is meant by the phrase "made in accordance with s.92F" when used in sub-s. 92FAA(1). I accept that, as Telecasters asserts, prima facie that phrase seems to require compliance ain every respect with 3.92F, including its requirements with respect to time. However, I have concluded that that is not the sense in which the phrase is used in s.92FAA. An application for approval must be "in accordance with the form approved by the Tribunal": para. 92F(3)(b) and sub-s. 92F(7A). An application is taken "not to be lodged in accordance with that paragraph or sub-section unless it is accompanied by a statutory declaration": sub-s. 92(7B). Failure by a prescribed party either to give a notice "in accordance with" para. 92F(3)(a) or to lodge an application "in accordance with" para. 92F(3)(b) prior to a transaction constitutes a separate offence each day until a modified notice 18 give after the transaction or an application in relation to the transaction is lodged "in accordance with sub-s. (7A)": para. 92F(7E)(d). Paragraph 92F(7E)(d) cannot sensibly be read as meaning that, if a prescribed party waits long enough and does nothing, the offences will cease, i.e. after 28 days. Nor can it mean that, after 28 days, the offences can never be terminated. It must, therefore, be possible to lodge an application for approval "in accordance with sub-3. (7A)" within the meaning of para. 92F(7E)(d) after the time limited by sub-s. 92(7A). Similarly, under sub-s. 92F(7F), a failure "to comply with sub-s. (7A)" can be terminated, again obviously after the time limited by that sub-section for compliance. bia PETES RCC "ERC CRESPO Pare renee ee EE ere ere Section 92FAA is complementary to 5.92F. In my opinion, an application may be "made in accordance with s.92F" for the purposes of sub-s. 92FAA(1) although lodged out of time. As earlier noted, sub-s. 92F(7C) does not presently fall for consideration. Accordingly, I have concluded that Telecasters' contentions fail. This conclusion makes it unnecessary to consider other questions, for example, relating to Telecasters' locus standi or the availability of the relief claimed in these proceedings on the basis of its contentions. Application G45 of 1983 has already been dismissed. The order of the Court is that Applications G97 and G99 of 1983 be dismissed. Telecasters must pay Portfolio's taxed costs of and incidental to the hearing before me last Tuesday and Wednesday, 15 and 16 November 1983, and otherwise of and incidental to Application G99 of 1983. Otherwise, the costs of all parties of and incidental to Applications G45 and G97 of 1983 are reserved. Telecasters may file and serve written submissions and any affidavits or other material with respect to the orders for costs which it seeks on or before Friday 25 November 1983 and the other parties may respond in similar fashion on or before Tuesday 29 November 1983. If any party desires that Applications G45 or G97 of 1983 be restored for further argument as to costs, the District Registrar must be notified in writing on or before Wednesday, 30 November 1983. I certify that this andthe /6 preceding rages are a true copy of the reasons for judgment herein of His Honour Mr, Justice Fitzgerald	6,799
federal_court_of_australia:fca/single/2013/2013fca0148	decision	commonwealth	federal_court_of_australia	text/html	2013-02-28 00:00:00	SZNYF v Minister for Immigration and Citizenship [2013] FCA 148	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2013/2013fca0148	2024-09-13T22:44:58.316864+10:00	FEDERAL COURT OF AUSTRALIA SZNYF v Minister for Immigration and Citizenship [2013] FCA 148 Citation: SZNYF v Minister for Immigration and Citizenship [2013] FCA 148 Appeal from: SZNYF v Minister for Immigration and Citizenship [2012] FMCA 1034 Parties: SZNYF and SZNYG v MINISTER FOR IMMIGRATION AND CITIZENSHIP and REFUGEE REVIEW TRIBUNAL File number: NSD 1980 of 2012 Judge: NICHOLAS J Date of judgment: 28 February 2013 Legislation: Migration Act 1958 (Cth) s 424A, s 430 Cases cited: Minister for Immigration v SZLFX (2009) 238 CLR 507 Re The Minister for Immigration and Multicultural Affairs; Ex parte Durairajasingham (2000) 74 ALJR 405 SZBYR v Minister for Immigration & Citizenship (2007) 235 ALR 609 Date of hearing: 27 February 2013 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 20 Counsel for the Appellants: The appellants appeared in person with the assistance of an interpreter Counsel for the Respondents: Mr P Knowles Solicitor for the Respondents: Clayton Utz Lawyers IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1980 of 2012 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: SZNYF First Appellant SZNYG Second Appellant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent REFUGEE REVIEW TRIBUNAL Second Respondent JUDGE: NICHOLAS J DATE OF ORDER: 28 february 2013 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The appellants pay the first respondent's costs in the amount of $5800. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1980 of 2012 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: SZNYF First Appellant SZNYG Second Appellant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent REFUGEE REVIEW TRIBUNAL Second Respondent JUDGE: NICHOLAS J DATE: 28 february 2013 PLACE: SYDNEY REASONS FOR JUDGMENT BACKGROUND 1 This is an appeal from a decision of a Federal Magistrate dismissing the appellants' application to quash a decision of the second respondent (the Tribunal) dated 2 December 2011. By its decision, the Tribunal affirmed the decision of the officer of the Department of Immigration and Citizenship (the Delegate) not to grant the appellants protection visas. 2 Both of the appellants are citizens of China. The first appellant, the wife of the second appellant, arrived in Australia on 13 December 2008. The second appellant arrived in Australia on 22 November 2007. On 20 January 2009 the first appellant applied for a protection visa. In her application she named the second appellant as a member of her family unit. 3 The Delegate refused the appellants' application for protection visas on 29 April 2009. That decision was affirmed by the Tribunal on 25 August 2009. A Judge of this Court quashed that decision on 10 August 2010 and remitted the matter to the Tribunal for reconsideration. On 2 December 2011, the Tribunal (differently constituted) again affirmed the decision of the Delegate. Its reasons for doing so are detailed and lengthy. 4 The first appellant claimed to fear persecution in China on account of her Catholic faith. The primary judge's reasons include a detailed account of the first appellant's claims which I need not repeat. In summary, the first appellant claimed: After the birth of her first son in 1989, she was forced by authorities to have a birth control device fitted. The operation was unsuccessful and she became pregnant again in 1990. After the birth of her second son she was forced to have a ligation. Her family had to pay fines in order to have the second son's birth registered. In about June 1989 the first appellant became a Christian. She became involved with the "underground" Catholic Church. The Church held services in the houses of its members. These services were not sanctioned by the Chinese authorities. In October 2006 a meeting of the Church was disrupted by police and local officials. The police used batons against members of the Church some of whom were injured. The Priest was detained. The members present were informed that they would be punished if caught attending such a meeting again. Since that time the first appellant has been harassed as a result of her involvement with the Church. She was placed under surveillance at work after the police informed her employer of her involvement. In June 2008 she was confronted by her neighbourhood committee in relation to her involvement with the Church. One member of the committee knocked the first appellant off her feet and pushed her against a wall. She hit her head and this had resulted in some memory loss. The first appellant would be persecuted if she were to return to China because of her Catholic religion. 5 The Tribunal did not accept that the first appellant was a member of the underground Catholic Church in China. It also rejected the first appellant's claim that she was beaten by police during the raid which she claimed took place in October 2006. In rejecting the first appellant's evidence the Tribunal drew attention to various inconsistencies between accounts given by her to the Delegate and later accounts given by her to the Tribunal. In particular, the first appellant claimed that the meeting in October 2006 took place in her home, although her statement to the Delegate indicated this not to be the case. The explanation given by the first appellant for this inconsistency was rejected by the Tribunal as untruthful. DECISION OF THE PRIMARY JUDGE 6 The amended application in the Federal Magistrate's Court contained three grounds of review: 1. The Tribunal's decision could give rise to an apprehension of bias in the mind of a reasonable observer. Particulars The Tribunal stated (at RD 401, [300]) that it did not accept certain claims made by the Applicants in relation to injuries leading to memory loss. The Tribunal stated "The Tribunal does not accept that this incident took place because [sentence unfinished]". The unfinished sentence could lead a reasonable observer to conclude that the Tribunal had decided to reject the evidence without having formulated a reason for doing so. 2. The Tribunal failed to give effect to the orders and findings of the Federal Court in SZNYF v MIAC [2010] FCA 839. Particulars The Federal Court found that the previously constituted Tribunal had failed to consider whether the Applicant had been the subject of a valid summons in relation to her claimed activities. The reconstituted Tribunal similarly failed to determine or explain why it considered the summons in question not to be genuine. 3. The Tribunal made findings of fact without considering a reasonably likely alternative hypothesis. Particulars The Tribunal made a finding that the Chinese authorities would not perceive the Applicants to have lodged protection visa applications because such applications are made confidentially (RD 409 [340]). The Tribunal failed to consider that the Chinese authorities would be aware of the significance of the types of bridging visas issued to the Applicants over a considerable period of time and could have drawn a conclusion on that basis that the Applicants had lodged protection visa applications. 7 The primary judge rejected all three grounds. In light of the notice of grounds of appeal filed in this Court (which I summarise below) the only ground raised before the Federal Magistrate that is still of some relevance is ground 1. This ground, as presented to the primary judge, focused upon para [300] of the Tribunal's reasons for decision. It is necessary at this point to set out that paragraph. At para [300] the Tribunal stated: 300. In coming to this finding, and other relevant findings the Tribunal has considered evidence given at the first Tribunal's hearing that she suffered memory loss from a head injury. In this regard, at that hearing the applicant had stated that in June 2008 the neighbourhood committee asked her to report to them. The applicant did so, and they again confronted her with allegations of church involvement. The applicant denied this to the committee, and turned to go away, but a member of the committee knocked her off her feet, and against a wall. She suffered a head injury. She was treated with some Chinese medication. She claimed to continue to suffer intermittent pain on one side of the head, and some consequent memory loss. The Tribunal does not accept that this incident took place because [sic] 8 Paragraph [300] of the Tribunal's reasons ended with the words "because". It did not go on to explain why the Tribunal did not accept that the incident involving the neighbourhood committee member occurred. 9 The primary judge rejected the first appellant's claim that para [300] gave rise to a reasonable apprehension of bias. His Honour dealt with this issue at [36] of his reasons. He said that "[t]he omission of the conclusion to that paragraph is obvious and just as obviously a mistake." His Honour concluded that a fair minded observer would not apprehend the possibility of bias on the part of the Tribunal. 10 It is apparent that the appellants' submission in relation to para [300] to the primary judge ventured beyond the specific grounds raised in the amended application. Their submissions, at least as understood by the primary judge, also raised an argument based upon s 430 of the Migration Act 1958 (Cth) (the Act). The primary judge dealt with this argument at [33]-[34] of his reasons. His Honour said: [33] As to the last point, there is no general rule at common law that an administrative decision-maker must give reasons for a decision, although in certain circumstances such a requirement might be implied: Soliman v University of Technology, Sydney [2012] FCAFC 146 at [42]ff. Given that the Act provides for judicial review of Tribunal decisions, it may well be that the common law would require the Tribunal to give reasons for its decisions were it not for s.430 of the Act which makes such provision. It may therefore be that the applicants allege that the obligation to give reasons arose out of s.430(1) of the Act which provides: 430 Refugee Review Tribunal to record its decisions etc. (1) Where the Tribunal makes its decision on a review, the Tribunal must prepare a written statement that: (a) sets out the decision of the Tribunal on the review; and (b) sets out the reasons for the decision; and (c) sets out the findings on any material questions of fact; and (d) refers to the evidence or any other material on which the findings of fact were based. [34] However, a failure to comply with s.430 does not amount to jurisdictional error which, as noted earlier, is the only basis on which the Court may set the Tribunal's decision aside. Nor am I persuaded that the failure to complete the paragraph indicates that the Tribunal had no reason for the conclusion it expressed or that the omission reveals a failure to consider the issue in question. A consideration of the Tribunal's reasons as a whole reveals a thoughtful examination of the applicants' claims, inconsistent with arbitrary decision-making. Seen in context, I do not conclude that the Tribunal's failure to complete para.300 of the reasons represents a failure to consider the relevant issue. I accept the Minister's submission that its failure to express its reasoning was an oversight. GROUNDS OF APPEAL 11 The grounds of appeal filed in this Court are discursive but, in essence, they appear to raise the following two issues: Para [300] of the Tribunal's decision demonstrated a failure to comply with s 430 of the Act, and the Federal Magistrate should have found that in failing to comply with this section the Tribunal committed a jurisdictional error (Grounds 1-4). The Tribunal failed to comply with s 424A and s 430 of the Act in respect of its finding that the second appellant was not a Catholic (Grounds 5-8). 12 In her oral submissions the first appellant made submissions to me as to why the Tribunal should have been satisfied that both she and her husband had a well founded fear of persecution on account of their religion if they were to return to China. I explained to her that there must be some error in the primary judge's reasoning if the appeal was to succeed. CONSIDERATION Grounds 1-4 13 These grounds all relate to para [300] of the Tribunal's reasons for decision which is, as the primary judge said, an obvious mistake. Two questions arise in relation to para [300]. First, was the Tribunal required to explain why it did not accept that the first appellant had been knocked off her feet and pushed against the wall in June 2008 by a member of the neighbourhood committee? And second, if it was required to provide such an explanation, did its failure to do so constitute jurisdictional error? 14 McHugh J's judgment in Re The Minister for Immigration and Multicultural Affairs; Ex parte Durairajasingham (2000) 74 ALJR 405 provides the answer to both questions. In that case his Honour said (at [64]-[65]): [64] There is some authority in the Full Court of the Federal Court for the proposition that s 430(1) requires the reasons of the Tribunal to refer to evidence contrary to findings of the Tribunal [Paramananthan v Minister for Immigration and Multicultural Affairs (1998) 160 ALR 24 at 31; Logenthiran v Minister for Immigration and Multicultural Affairs [1998] 1691 FCA; Thevendram v Minister for Immigration and Multicultural Affairs [1999] FCA 182]. However the contrary view was taken by differently constituted Full Courts in Ahmed v Minister for Immigration and Multicultural Affairs [[1999] FCA 811], Addo v Minister for Immigration and Multicultural Affairs [[1999] FCA 940] and Sivaram v Minister for Immigration and Multicultural Affairs [[1999] FCA 1740]. In Addo, the Court said [[1999] FCA 940 at [24] and [31]]: Section 430(1) does not impose an obligation to do anything more than to refer to the evidence on which the findings of fact are based. Section 430 does not require a decision-maker to give reasons for rejecting evidence inconsistent with the findings made. Accordingly, there was no failure to comply with s 430(1) of the Act. … It is not necessary, in order to comply with s 430(1), for the Tribunal to give reasons for rejecting, or attaching no weight to, evidence or other material which would tend to undermine any finding which it made. [65] In my opinion, this passage correctly sets out the effect of s 430(1)(c) and (d). However, the obligation to set out "the reasons for the decision" (s 430(1)(b)) will often require the Tribunal to state whether it has rejected or failed to accept evidence going to a material issue in the proceedings. Whenever rejection of evidence is one of the reasons for the decision, the Tribunal must set that out as one of its reasons. But that said, it is not necessary for the Tribunal to give a line-by-line refutation of the evidence for the claimant either generally or in those respects where there is evidence that is contrary to findings of material fact made by the Tribunal. … 15 His Honour was satisfied that there was an express rejection of the prosecutor's wife's evidence in that case and that there had been no failure to comply with the requirements of s 430(1) of the Act. His Honour then said at [68] and [70]: [68] But there is a more fundamental reason why the argument based on s 430 fails to support a claim for prerogative relief. Even if, contrary to my view, there was a breach of s 430(1) by the Tribunal, it would not amount to a jurisdictional error. … … [70] The language of s 430(1) indicates that the requirement that the Tribunal give reasons for its decision is not a requirement which goes to jurisdiction. The opening words of s 430(1) presuppose that the Tribunal has made a decision: "[w]here the Tribunal makes its decision", and the sub-section then goes on to impose requirements to be fulfilled subsequent to that decision being made. … 16 In the present case there was an express rejection by the Tribunal of the first appellant's evidence concerning the incident referred to in para [300] of the Tribunal's reasons. Elsewhere in the Tribunal's reasons it is made clear that the Tribunal did not accept that the first appellant was a credible witness. There were various matters which led the Tribunal to that position. One of these, which I have already mentioned, was the inconsistency in the first appellant's evidence concerning the events of October 2006. 17 I agree with the primary judge that there was no failure by the Tribunal to comply with s 430(1) of the Act. Grounds 5-8 18 None of grounds 5-8 was relied upon below. I would not grant leave to the appellants to rely upon them in this Court. To the extent grounds 5-8 raise the matter of s 430 of the Act, they are answered by the decision of McHugh J in Re The Minister for Immigration and Multicultural Affairs; Ex parte Durairajasingham (2000) 74 ALJR 405. So far as s 424A of the Act is concerned, the appellants did not develop the submission that there was a failure on the part of the Tribunal to comply with s 424A of the Act in any meaningful way. There is nothing to indicate that there was any such failure. 19 Section 424A applies in respect of "information" which the Tribunal considers would be the reason, or part of the reason, for affirming the decision under review. The Tribunal's views in respect of the second appellant's credit did not constitute "information" in the sense that word is used in s 424A: see SZBYR v Minister for Immigration & Citizenship (2007) 235 ALR 609 at [15]-[21]; Minister for Immigration v SZLFX (2009) 238 CLR 507 at [20]-[26]. DISPOSITION 20 In the result, I am satisfied that the primary judge's decision was correct. The appeal will be dismissed with costs. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholas. Associate: Dated: 28 February 2013	4,119
federal_court_of_australia:fca/single/2024/2024fca0991	decision	commonwealth	federal_court_of_australia	text/html	2024-08-29 00:00:00	Russell v S3@Raw Pty Ltd (No 3) [2024] FCA 991	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2024/2024fca0991	2024-09-13T22:44:58.373166+10:00	Federal Court of Australia Russell v S3@Raw Pty Ltd (No 3) [2024] FCA 991 File number(s): QUD 398 of 2022 Judgment of: MEAGHER J Date of judgment: 29 August 2024 Catchwords: DEFAMATION – Application brought by the third respondent pursuant to s 10A(5) of the Defamation Act 2005 (Vic) to dismiss the defamation claim – Where unclear whether s 10A(5) of the Defamation Act 2005 (Vic) is picked up by s 79 of the Judiciary Act 1903 (Cth) – Whether s 10A(5) of the Defamation Act 2005 (Vic) is inconsistent with s 37P of the Federal Court of Australia Act 1976 (Cth) and r 30.01 of the Federal Court Rules 2011 (Cth) – Whether s 10A(5) limits the discretion of the Court pursuant to s 37P of the Federal Court of Australia Act 1976 (Cth) – Where special circumstances exist to justify postponement in any event – Application dismissed PRACTICE AND PROCEDURE – Alternative application brought by the third respondent for striking out of the further amended statement of claim pursuant to r 16.21 of the Federal Court Rules 2011 (Cth) – Where third respondent contends that the pleading fails to establish serious harm – Where the pleading discloses a reasonable cause of action – Where the third respondent further contends that the concerns notices are invalid and the pleading should be struck out as an abuse of process – Whether the concerns notices inform the publisher of the serious harm to the person's reputation alleged to have been caused by the publications – Where inferences may be drawn from other matters in the concerns notices – Application dismissed Legislation: Federal Court of Australia Act 1967 (Cth) ss 37M, 37N, 37P, 43 Competition and Consumer Act 2010 (Cth) ss 18, 37(2) Corporations Act 2001 (Cth) s 471B Judiciary Act 1903 (Cth) s 79 Federal Court Rules 2011 (Cth) rr 16.21, 16.45, 30.01 Defamation Act 2005 (Vic) ss 10A, 10A(5) Defamation Act 2013 (UK) Cases cited: Georges v Georges [2022] NSWDC 558 Hayson v The Age Company (No 3) (2020) 280 FCR 139 Hun v Aljazeera International (Malaysia) SDN BHD [2023] 1103 Massarani v Kriz (2022) 400 ALR 178 [2022] FCA 80 Newman v Whittington [2022] NSWSC 249 Peros v Blackburn [2024] FCA 177 Rader v Haines [2022] NSWCA 198 Randell v Mclachlain [2022] NSWDC 506 Rizeq v Western Australia (2017) 262 CLR 1; [2017] HCA 23 Russell v S3@Raw Pty Ltd (Proper Place) [2023] FCA 1014 Selkirk v Hocking [2023] FCA 432 Staged Plus Pty Ltd v Yummi Fruit Ice-Creamery Pty Ltd [2024] QDC 088 Teh v Woodworth [2022] NSWDC 411 Whittington v Newman [2024] NSWCA 27 Division: General Division Registry: Queensland National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 81 Date of hearing: 17 April 2024 Counsel for the Applicant: Mr S Webster & Mr A Litster Solicitor for the Applicant: Synkronos Legal Counsel for the Respondents: Mr H Clift & Ms L Goad Solicitor for the Respondents: Macpherson Kelley Pty Ltd ORDERS QUD 398 of 2022 BETWEEN: HAYLEY ELIZABETH RUSSELL Applicant AND: S3@RAW PTY LTD First Respondent PAUL ANTHONY NORRIS-ONGSO Second Respondent JOSHUA NORRIS-ONGSO Third Respondent order made by: MEAGHER J DATE OF ORDER: 29 AUGUST 2024 THE COURT ORDERS THAT: 1. The amended interlocutory application filed on 4 March 2024 be dismissed. 2. The third respondent pay the applicant's costs of and incidental to the amended interlocutory application filed on 4 March 2024. 3. By 4:00pm AEST on 12 September 2024, the parties are to provide the Court with any agreed draft orders providing for the steps to be taken to progress the proceeding to trial. 4. If the parties are unable to agree on the draft orders referred to in order 3, the proceeding be listed for a case management hearing on a date to be advised administratively. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MEAGHER J introduction 1 Before the Court is an amended interlocutory application by which the third respondent seeks that the proceedings against him, insofar as they relate to the alleged defamation, be dismissed pursuant to s 10A of the Defamation Act 2005 (Vic). In the alternative, the third respondent seeks that the relevant paragraphs of the further amended statement of claim (FASOC) be struck out pursuant to r 16.21 of the Federal Court Rules 2011 (Cth). 2 By an amended originating application filed on 28 March 2023, the applicant seeks damages against the respondents for contraventions of ss 18 and 37(2) of the Australian Consumer Law (ACL), being Schedule 2 of the Competition and Consumer Act 2010 (Cth), as well as for breach of contract with respect to the first respondent. The applicant also sought injunctive relief and damages in respect of allegedly defamatory publications by the first and third respondents. 3 The third respondent asserted that the application before the Court raises two questions; first, whether the element of serious harm has been established and second, whether the concerns notices are valid. However, throughout his written submissions and over the course of his oral submissions, it became clear that the relief sought by the third respondent at paragraph 2 of the amended interlocutory application was on one, or both, of two bases, either that the pleadings failed to particularise "what [the] serious harm actually is", or that due to the claimed deficiencies in the concerns notices, they should be struck out as an abuse of process. 4 The third respondent read the following material: The amended interlocutory application filed on 4 March 2024; The written submissions filed on 12 March 2024; The written reply submissions filed on 8 April 2024; The FASOC filed on 28 March 2023; The third respondent's defence filed on 23 June 2023; The affidavit of Ms Elizabeth Jane Goad filed on 12 March 2024; 5 The applicant read the amended written submissions filed on 2 April 2024, the affidavit of Mr Gregory John Litster filed on 6 March 2023, the orders of this Court made on 7 February 2024 and the interlocutory application filed on 16 February 2024. 6 For the reasons that follow, the interlocutory application is dismissed. background 7 The third respondent was the sole director and secretary of the first respondent, a company which operated as a boutique Pilates and Barre studio in Ripponlea, a suburb of Melbourne in Victoria (the business). The applicant worked as a manager at the business pursuant to an Option and Service Agreement. 8 In November 2022, the first third respondents are alleged to have published a post on the social media platform, Instagram, about the applicant (Main Post). The applicant alleges that the various statements made in that post carried defamatory imputations including that the applicant had acted deceitfully, dishonourably and in breach of her contract with the respondents, that she had conceived and executed a dishonourable plan to pretend that she was purchasing the respondents' business when she had no intention of doing so, and, as pleaded in paragraph 46 of the FASOC, that the applicant had "cheated the respondents out of a valuable business with substantial goodwill". The third respondent pleads that the Main Post was removed approximately 10 minutes after being posted. 9 On 11 November 2022, the applicant sent to the first and third respondents a concerns notice in relation to the Main Post (First Concerns Notice). The applicant did not receive a response to the First Concerns Notice. 10 In January 2023, the first and third respondents further published a number of Instagram posts about the applicant (January Posts). The statements in the posts are alleged to have further defamatory imputations as to the applicant's character, including that she is a thief, is untrustworthy and deceitful, acted dishonourably and that she unlawfully misused confidential information of the business. 11 On 20 February 2023, the applicant sent the first and third respondents a second concerns notice (Second Concerns Notice). On the same day, the third respondent replied by email as follows: I reject your letter in its entirety for its characterization of my comments. Everything I have said in my comments was an accurate description of the circumstances of Hayley's involvement with my business and the events that followed. 12 On 27 February 2023, the applicant filed an interlocutory application seeking injunctive relief for the January Posts to be removed, as well as restraining the first and third respondents from re-publishing the Main Post and January Posts and publishing any material to the same or substantially the same effect as the Main Post and January Posts. On 23 March 2023, the applicant filed an amended interlocutory application seeking orders including that the third respondent be taken to have been served with the interlocutory application filed on 27 February 2023. 13 On 23 March 2023, the interlocutory application was heard. The third respondent did not appear at the hearing. 14 On 28 March 2023, the applicant filed an amended originating application and a FASOC which included the claim regarding the January Posts. 15 On 5 April 2023, the decision regarding the interlocutory injunction application was delivered: Russell v S3@Raw Pty Ltd (Proper Place) [2023] FCA 1014. The respondent was taken to have been served with the interlocutory application on 10 March 2023. 16 By orders made on 6 June 2023, the third respondent was taken to have been served with the originating application on 20 March 2023. Subsequently, on 23 June 2023, the third respondent filed his defence to the FASOC. 17 On 9 August 2023, an interlocutory application was brought by the second respondent, in which a transfer of proceedings to the Victoria Registry was sought. On 22 August 2023, the Court dismissed the application and made programming orders progressing the matter. Those orders were later vacated on 18 December 2023. 18 The defence of the first respondent was struck out and judgment was entered against the first respondent by force of the orders made on 22 August 2023. 19 As submitted by the applicant, a mediation was held on 13 December 2023 but the matter did not resolve. 20 On 29 January 2024, the second and third respondents filed a Notice of Acting – Appointment of Lawyer. Subsequently, on 2 February 2024, the second and third respondent's solicitors sent a letter to the applicant's solicitor, which relevantly provided: Given the clear deficiencies in your client's Concerns Notices, our clients invite your client to withdraw the defamation claim made against our clients and to withdraw the First and Second Concerns notices. In the event that your client does not do so by 9am on 6 February 2024, our client will seek orders from the court to timetable an application to strike out the Defamation Claim contained at paragraphs 33-71 and 72c of your client's Amended Statement of Claim at the next Case Management Conference listed for 7 February 2024. (Emphasis in original.) 21 The letter of 2 February 2024 also referred to purported deficiencies in the amended statement of claim as follows: On a separate note, even were the correspondences sufficient to constitute a Concerns Note for the purposes of the Act, which is explicitly denied, the Amended Statement of Claim contains no particulars at all of serious harm, but rather simply states, at paragraph 49, that your client "has suffered serious harm". The next paragraph merely continues to plead alleged aggravation of serious harm, but does nothing to particularise that alleged harm. The defamation claim contained within your client's amended statement of claim is therefore liable to be struck out in its current form. If ultimately necessary, our client will make application to the Court for the serious harm claim to be properly particularised, failing which we will make application for that claim to be struck out. (Emphasis added.) 22 By orders made by consent on 7 February 2024, the applicant was to provide a response to this letter by 12 February 2024. Further, the second and third respondents were required to file any application to dismiss paragraphs 33 to 71 and 72C of the FASOC by 16 February 2024. On 12 February 2024, in compliance with the orders made, the applicant sent a response to the letter, which relevantly provided: The Concerns Notices are not defective and there is no basis to strike out the defamation claim: … The Third Defendant has pleaded to the ASOC without raising any complaint about the particularisation of any particular allegations in it. If the Third Defendant now considers that he is somehow unable to conduct his case in response to the defamation claim without further particulars of some specific allegation in the ASOC, then we invite you to identify, with some precision, why this is the case, and the nature of the particulars actually sought. However, at present, it seems to us that the appropriate time for further particulars to be provided – if any – is following the completion of discovery and lay evidence. 23 The third respondent filed an interlocutory application on 16 February 2024, seeking: 1. That the Concerns Notices dated 11 November 2022 and 20 February 2023 be struck out. 2. That paragraphs 33 to 71 and 72c of the Further Amended Statement of Claim dated 28 March 2023 be struck out. 3. That the Applicant pay the Third Defendant's costs of and associated with or relating to the Concerns Notices dated 10 November 2022 and 20 February 2023, the costs of the Defamation claim the subject of this proceeding, and this Application. 24 Subsequently, on 4 March 2024, the third respondent filed an amended interlocutory application, seeking the following relief: 1. That, pursuant to s 10A of the Defamation Act 2005 (Vic), the proceedings against the Third Defendant be dismissed insofar as they concern alleged defamation. 2. That, alternatively to paragraph 1, pursuant to rule 16.21 of the Federal Corut Rules 2011 (Cth), paragraphs 33 to 71 and 72c of the Further Amended Statement of Claim dated 28 March 2023 be struck out. 3. That the Applicant pay the Third Defendant's costs of and associated with this Application. 25 On that same day, orders were made staying the proceeding against the first respondent pursuant to s 471B of the Corporations Act 2001 (Cth), noting the first respondent is in liquidation. 26 On 12 March 2024, the third respondent filed his written submissions in chief and the affidavit of Ms Elizabeth Jane Goad. As will be discussed further below, the third respondent's written submissions in chief did not directly address an application brought under s 10A(5), however, part of the provision was set out including s 10A(5). determination of serious harm Legal Framework 27 Section 10A of the Act provides as follows: 10A Serious harm element of cause of action for defamation (1) It is an element (the serious harm element) of a cause of action for defamation that the publication of defamatory matter about a person has caused, or is likely to cause, serious harm to the reputation of the person. (2) For the purposes of subsection (1), harm to the reputation of an excluded corporation is not serious harm unless it has caused, or is likely to cause, the corporation serious financial loss. (3) The judicial officer (and not the jury) in a defamation proceeding is to determine whether the serious harm element is established. (4) Without limiting subsection (3), the judicial officer may (whether on the application of a party or on the judicial officer's own motion)— (a) determine whether the serious harm element is established at any time before the trial for the proceeding commences or during the trial; and (b) make any orders the judicial officer considers appropriate concerning the determination of the issue (including dismissing the proceeding if satisfied the element is not established). (5) If a party applies for the serious harm element to be determined before the trial for the proceeding commences, the judicial officer is to determine the issue as soon as practicable before the trial commences unless satisfied that there are special circumstances justifying the postponement of the determination to a later stage of the proceeding (including during the trial). (6) The matters a judicial officer may take into account in deciding whether there are special circumstances for the purposes of subsection (5) include (but are not limited to) the following— (a) the cost implications for the parties; (b) the resources available to the court at the time; (c) the extent to which establishing the serious harm element is linked to other issues for determination during the trial for the proceeding. (7) Without limiting subsection (5), the judicial officer may determine the serious harm element is not established on the pleadings without the need for further evidence if satisfied that the pleaded particulars are insufficient to establish the element. (8) Nothing in this section limits the powers that a judicial officer may have apart from this section to dismiss a defamation proceeding (whether before or after the trial commences). 28 While "serious harm" is not defined in the Act, in Rader v Haines [2022] NSWCA 198, Brereton JA (Macfarlan JA agreeing) set out the following principles as they related to the similar provision in the Defamation Act 2013 (UK) at [28]: (1) In order to succeed, a plaintiff must satisfy the threshold of showing that the publication has caused or is likely to cause serious harm to his or her reputation. (2) "Serious" harm involves harm that is more than merely substantial, though it need not be grave. (3) The requirement for serious harm to reputation is concerned with actual or likely reputational damage – that is, the impact of the imputation, in all the circumstances, on the plaintiff's reputation – arising from a combination of the inherent tendency of the words and their actual impact on those to whom they were communicated. It is not satisfied by the gravity of the imputation alone. Nor is it satisfied by injury to feelings, however great. Relevant factors include the meaning of the words, the extent of the publication, the nature of the recipients and their relationship with the plaintiff, and whether they believe the imputations. (4) A grave imputation may not result in serious harm, typically where the publication is to a small number of persons well acquainted with the plaintiff who are not disposed to believe it, and any impact of the imputation on the plaintiff's reputation is transitory or ephemeral. (Emphasis in original.) 29 The provision was introduced to "weed out trivial or frivolous defamation claims" and to facilitate the early resolution of such matters: Selkirk v Hocking [2023] FCA 432 at [3]. The provision, in effect, places the onus on the applicant to prove, at the outset, that the publication has caused or is likely to cause serious harm to the applicant's reputation: Newman v Whittington [2022] NSWSC 249 at [47], [69]. Submissions 30 In respect of the Main Post, the applicant pleaded at paragraphs 33, and 44 to 53 of the FASOC as follows: On or about and after 10 November 2022, S3@Raw and Joshua Norris-Ongso published on a worldwide social media platform, namely on the lnstagram account of S3@Raw, the following matter of and concerning the Applicant: (a) A post, in Annexure 1 (the Main Post); (b) Two excerpts from a WhatsApp message from the Applicant to Joshua Norris-Ongso sent on 3 November 2022, which are Annexure 2. … The natural and ordinary meaning of the Main Post, including by use of the words "unbeknownst to us, @hayley.russell has been working behind our back" conveyed the defamatory imputation that the Applicant had, in her dealings with the Respondents and the Landlord at the S3 Ripponlea Business, acted deceitfully, dishonourably and in breach her contract with the Respondents (First Defamatory Imputation). The natural and ordinary meaning of the Main Post also carried the defamatory imputation that the Applicant had conceived and executed, over a lengthy period of five months, a devious and dishonourable plan (Second Defamatory Imputation), the elements of which were: (a) to pretend falsely that she would purchase the S3 Ripponlea Business, having no intention of doing so; (b) to force the Respondents to close down the S3 Studio when they otherwise would never have done so; (c) to take over their profitable business without paying for goodwill. The ordinary and natural meaning of the Main Post also conveyed the defamatory imputation that the Applicant had cheated the Respondents out of a valuable business with substantial goodwill (the Third Defamatory Imputation). The ordinary and natural meaning of the Main Post, including by the contention that Joshua Norris-Ongso never imagined that the Applicant would execute a lease of the premises, which he knew to be false, also conveyed the defamatory imputation that the Applicant is a spiteful and vindictive person, willing to act to frustrate the legitimate business dealings of others. That Joshua Norris-Ongso knew that his contention that he never imagined that the Applicant would execute a lease of the premises was false is to be inferred from her offer to the Respondents, on 3 November 2022, to acquire the asset of the Ripponlea Business, pleaded in sub-paragraph 24(c). As a result of the publication of the Main Post, including the four defamatory imputations, the Applicant has suffered serious harm. The harm suffered by the Applicant as a result of the defamatory imputations was aggravated by: (a) The false and misleading statements referred to in paragraphs 34 to 43; (b) As to the Fourth Defamatory Imputation, by the gratuitously false statement that the Applicant has executed at lease of the premises for the S3 Ripponlea Business merely to spoil the sale by the Respondents of the S3 Ripponlea Business to a third party. The Main Post: (a) Was published on the Instagram social media platform, used by more than one billion users; (b) Was published internationally and in the Territories of Australia; (c) Appeared in the Instagram applications held by approximately 5,000 followers of the Instagram account of S3@Raw; (d) Was read on or soon after 10 November 2022 by many of those 5,000 followers; (e) Has been republished by many of those persons to other persons. Those to whom the Main Post was published included hundreds of persons: (a) Personally known to the Applicant; (b) Who had received tutelage and instruction from the Applicant during her time at the S3 Ripponlea Business; and (c) many of whom are potential customers of the Applicant in her new business, The Body Crew. Further, the Main Post continues and will continue to be circulated on the Instagram platform and in other media. (Emphasis in original.) 31 As to the January Posts, the applicant pleaded at paragraphs 54 to 71 of the FASOC as follows: On 25 January 2023, S3@Raw and Joshua Norris-Ongso published on a worldwide social media platform, namely his Instagram account of joshua.s3, further matter of and concerning the Applicant a post, being Annexure 3, called the Second Post. On 26 January 2023, S3@Raw and Joshua Norris-Ongso published on a worldwide social media platform, namely his Instagram account of joshua.s3, further matter of and concerning the Applicant a post, being Annexure 4, called the Third Post. On 25 January 2023, S3@Raw and Joshua Norris-Ongso published on a worldwide social media platform, namely his Instagram account of joshua.s3, further matter of and concerning the Applicant a post, being Annexure 5, called the Fourth Post. The Second Post, the Third Post and the Fourth Post are called, collectively, the January Posts. The January Posts remain published on the Instagram account of his Instagram account of joshua.s3. The natural and ordinary meaning of the Second Post conveyed: (a) the defamatory imputation that that the Applicant is a thief, guilty of the serious crime of stealing under the sections 72 and 74 of the Crimes Act 1958 (Vic); (b) the defamatory imputation, which follows necessarily from the words used, namely that, being a thief, the Applicant is dishonest; and (c) the defamatory imputation, which also necessarily follows from the words used, namely that, being guilty of stealing, the Applicant is liable to be charged with the indictable offence under section 74 of the Crimes Act, which carries a penalty of imprisonment for a maximum of 10 years, to which the Applicant is liable, (together, the Fifth Defamatory Imputation). The Third Post, by the introductory words, contained statements to the effect that the Applicant had been disseminating false statements about Joshua-Norris-Ongso and the S3 Business ('misinformation' and 'gossip' and these proceedings) and that it was consequently necessary for Joshua Norris-Ongso to correct that false information, by the words published in the Third Post and the Fourth Post. In the premises, the natural and ordinary meaning of the Third Post and the Fourth Post conveyed the defamatory imputation that: (a) the Applicant is an untruthful person; (b) who had been spreading false statements and gossip about her dealings with the Respondents; and (c) the words published in the Third Post and the Fourth Post were necessary to rebut the false statements with Ms Russell had been publishing, (collectively, the Sixth Defamatory Imputation). Further, the statement, in the Third Post, that '[the Applicant] continues to spread misinformation about me and my former business' was, as Joshua Norris-Ongso well knew, false, in that the Applicant had not and has not published on any social media site or otherwise in writing any statement at all about any of the respondents or her dealings with them. Further, because of the statement in the Third Post that it was necessary to remove the Applicant "from any involvement and access to our business records" in the context in which these words were written, and in any event by their ordinary and natural meaning, they gave rise to an imputation that the Applicant is an untrustworthy and deceitful person, who had acted unlawfully in relation to the business records of the S3 Business (Seventh Defamatory Imputation). The natural and ordinary meaning of the Third Post also conveyed a repetition of the Fourth Defamatory Imputation, that the Applicant is a spiteful and vindictive person, willing to act to frustrate the legitimate business dealings of others. Further, by juxtaposing, in the Third Post, the description of Ms Krezel and Mr McKay as "open and honest with Hayley" with the Applicant's conduct, in the context in which these words were written, and in any event by their ordinary and natural meaning, they gave rise to an imputation that the Applicant is not open or honest in her business dealings (Eighth Defamatory Imputation). Further, in the context of the statement in the Third Post that it was "time for me to speak" and that he "[needed] to set the record straight because Hayley Russell continues to spread misinformation about me and my former business", the reference towards the end of the Fourth Post that this proceeding is being defended, and in any event by their ordinary and natural meaning, they gave rise to an imputation that these proceedings are based on falsehoods by the Applicant (Ninth Defamatory Imputation). Further, in the context of the whole of the Third Post and the Fourth Post, by their ordinary and natural meaning, they gave rise to an imputation the Applicant has acted dishonourably in stealing the goodwill of the S3 Business and has, in doing so, wrongly taken possession of all of the "business records" which she has used "for the purpose of contacting [S3's] former clients" (Tenth Defamatory Imputation). Further, by the closing words of the Fourth Post, in which Joshua Norris-Ongso wrote that the Applicant had misused personal information and contact details; and that he 'will refer this to the Privacy Commissioner', both from their ordinary and natural meaning and in the context of the January Posts, gave rise to the imputation that the Applicant has unlawfully misused confidential information of the S3 Business, by contravening the National Privacy Principles (Eleventh Defamatory Imputation). In the premises of paragraphs 59 to 68, Joshua Norris-Ongso published the January Posts on his own behalf and for and on behalf of S3@Raw. As a result of the publication of the January Posts, including the Fifth to Eleventh Defamatory Imputations, the Applicant has suffered serious harm, aggravated by: (a) the gratuitously false portrayal of the Third Post and the Fourth Post that they were merely a response to false statements by the Applicant; (b) the falsity of the January Posts, including the false statements alleged in paragraph 62 above; (c) the continued publication of the January Posts; (d) the correspondence by Joshua Norris-Ongso, since publication of each of the January Posts, on the S3 Instagram page, in Comments under each of the January Posts, in which he responded positively to expressions of sympathy and support he had engendered as a result of the January Posts; (e) the refusal of the respondents to offer to make amends or to make amends at all, despite the Applicant's Concerns Notices in her solicitors' letters dated 11 November 2022 and 20 February 2023. In the premises, Joshua Norris-Ongso and S3 intend, unless restrained, to repeat their publications of matter to the effect of the defamatory imputations pleaded above. (Emphasis in original.) 32 By his written submissions in chief, the third respondent contended that the applicant has failed to establish serious harm as she has not adequately pleaded the element of harm caused to her reputation, rather she has raised "hurt feelings." The third respondent also argued that the pleading does not identify persons to whom the publications were made, particularly given the Main Post was live for only 10 minutes. The third respondent relied on Massarani v Kriz (2022) 400 ALR 178; [2022] FCA 80 wherein Katzmann J stated at [53]: An inference that a publication has been downloaded will not be drawn from the mere fact that the material has been posted on the internet. A person who claims to have been defamed by such material must plead and prove facts which establish that the material complained of has been downloaded and viewed by someone. See Sims v Jooste (No 2) [2016] WASCA 83 at [18] –[20] (Martin CJ, Buss JA and Mitchell J). 33 The third respondent's written submissions in chief did not address s 10A(5) of the Act, save for setting out parts of the provision including subsection (5). No reference was made to the determination of serious harm prior to the hearing as is disclosed in the correspondence set out at paragraphs 20 and 21 above. The written submissions in chief were in respect of the failure to establish serious harm in the pleadings. 34 By the applicant's written submissions, she noted that the amended interlocutory application fails to seek orders for the serious harm element to be determined before trial, nor had such an application been foreshadowed to the parties or the Court before timetabling orders were made. At the hearing, counsel for the applicant submitted that the first time it was appreciated that such an application was being pursued is upon the receipt of the third respondent's written submissions. Therefore, the applicant submitted, s 10A(5) of the Act is not engaged. 35 Further, the applicant contended that the third respondent had not made submissions as to whether s 10A(5) of the Act is picked up by s 79 of the Judiciary Act 1903 (Cth) so as to be applicable in defamation proceedings in this Court, which is a question of real doubt; Selkirk at [19] – [43]; Hun v Aljazeera International (Malaysia) SDN BHD [2023] FCA 1103 at [2], [32] – [33]; Peros v Blackburn [2024] FCA 177 at [2]. 36 The third respondent only dealt with s 10A(5) in his reply and oral submissions. In that regard, as to whether s 10A(5) is picked up by the Judiciary Act, the third respondent contended that the views expressed in the cases to which the applicant referred were obiter. He argued that s 79(1) of the Judiciary Act picks up the text of the Act and applies it as Commonwealth law, except as otherwise provided by the Constitution or another Commonwealth law, relying on Rizeq v Western Australia (2017) 262 CLR 1; [2017] HCA 23 at [63], [83]-[84]. He argued that there is no Commonwealth law which appears to be inconsistent with the relevant provision of the Act. He did however, in the context of Selkirk, acknowledge the relevance of ss 37M, 37N and 37P of the Federal Court of Australia Act 1967 (Cth) and r 30.01 of the Rules but maintained that no inconsistency existed between those provisions and s 10A(5) and (6) of the Act. 37 The applicant submitted that even if s 10A(5) was engaged and applicable in defamation proceedings in the Federal Court, there are "special circumstances" which would justify the postponement of the question of the serious harm element to be determined at trial. To that end, the applicant referred to the following circumstances: (1) As the third respondent did not indicate to the Court at any time that he would be seeking the early and final determination of the serious harm element, the applicant did not have the opportunity to seek appropriate timetabling orders to put on evidence for the purpose of establishing serious harm. (2) As the defamatory imputations in paragraphs 44, 45, 46, 59, 61, 63, 65 to 68 of the FASOC are denied and truth allegations are made, the Court would need to determine the truth of the allegations, which has been recognised as a special circumstance: Qu v Wilks [2023] VSCA 198 at [63]. In that regard, the applicant also submitted that the timetabling orders made in respect of this application, including the length allowance of written submissions and the hearing time, "were not made in contemplation of having to resolve substantive questions relating to the existence of the imputations and the positive allegations of truth." (3) This is an application which is brought late in the proceedings, after the hearing of other interlocutory applications and case management hearings. Having regard to the purpose of s 10A(5) and the stage in the proceedings, the issue of serious harm would be more efficiently and effectively dealt with at trial. 38 The third respondent rejected that any of those circumstances are sufficient to be "special circumstances" such as to justify the postponement of the determination of serious harm. Counsel for the third respondent submitted, with respect to the timing of the application, that a mediation took place in December 2023, and that deferring to bring interlocutory applications until after a mediation is a "sensible approach". Counsel for the third respondent also noted that his client was unrepresented until after the mediation. Consideration 39 As a threshold matter, it is appropriate to first consider whether s 10A(5) of the Act is picked up by s 79 of the Judiciary Act. 40 Section 79(1) of the Judiciary Act provides: The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable. 41 The purpose of this provision was explained by Bell, Gageler (as his Honour then was), Keane, Nettle and Gordon JJ in Rizeq at [63]: The incapacity of a State Parliament to enact a law which governs the exercise of federal jurisdiction by a court, whether it be a federal court or a State court, explains the necessity for s 79 of the Judiciary Act and is the key to understanding the nature and extent of its operation. Section 79 is a law, enacted under s 51(xxxix) of the Constitution, which serves to ensure that the exercise of federal jurisdiction is effective. The section fills a gap in the law governing the actual exercise of federal jurisdiction which exists by reason of the absence of State legislative power. The section fills that gap by picking up the text of a State law governing the exercise of State jurisdiction and applying that text as a Commonwealth law to govern the manner of exercise of federal jurisdiction. The section has no broader operation. 42 In Selkirk, an application was brought by the respondents seeking that the serious harm element be determined prior to trial. O'Callaghan J considered that it is "sufficiently unclear" as to whether ss 10A(5) and (6) of the Act give rise to any potential inconsistency, referring to ss 37M, 37N and 37P of the Federal Court Act: Selkirk at [35] and [43]. While his Honour ultimately considered that it was not necessary to resolve that matter (at [43]), his Honour stated the following at [37] – [42]: Sub-section 10A(5) requires a judge to determine whether the publication of defamatory matter about a person has caused, or is likely to cause, serious harm to the reputation of the person "as soon as practicable before a trial commences unless satisfied that there are special circumstances justifying the postponement of the determination to a later stage of the proceeding (including during the trial)". The matters that a judge may take into account in deciding whether there are "special circumstances" are defined in s 10A(6) to include, but are not limited to, the cost implications for the parties; the resources available to the court at the time; and the extent to which establishing the serious harm element is linked to other issues for determination during the trial for the proceeding. As to the last of those considerations, the "other issues for determination" may include whether the alleged defamatory imputations were conveyed in the first place, because under s 10A "serious harm" is an additional element of the cause of action. See Rader v Haines [2022] NSWCA 198 at [17] (Brereton JA, with whom Macfarlan JA and Basten AJA agreed). On one view, those non-exhaustive matters are not aptly described as "special" circumstances. They seem to me, on the contrary, to require the giving of attention to what are nowadays run-of-the-mill case management considerations, which are matters that a judge of this court may, and routinely does, take into account in giving directions about practice and procedure under s 37P of the Federal Court Act. Viewed that way, there would be no inconsistency between ss 10A(5) and (6) of the Defamation Act and s 37P of the Federal Court Act. On the contrary, to use Bromwich J's word, the former would be "complementary" to the latter, and not involve any inconsistency within the meaning of s 79 of the Judiciary Act. On another view, it may be thought that the requirement of "special circumstances" is to be given content by the literal meaning of those words because the draftsperson presumably chose the words to be meaningful. As Lord Hoffmann put it in Chartbrook Ltd v Persimmon Home Ltd [2009] 1 AC 1101 at 1112 –13 [17], "[t]he words used as labels are seldom arbitrary. They are usually chosen as a distillation of the meaning or purpose of a concept intended to be more precisely stated in the definition." If by the inclusion of the word "special", the legislature is taken to have intended that a separate pre-trial hearing on the question of serious harm must occur unless "exceptional" or the like circumstances are made out, such a provision might very well be said to fetter, and thus be inconsistent with, not only the broad and wide-ranging case management considerations provided for in s 37P of the Federal Court Act, but also the undoubted power under that section (and r 30.01 of the Federal Court Rules 2011 (Cth)) to order that a question arising in a proceeding be heard separately from any other questions. The courts have long warned of the potential perils of hearing separate trials of issues. In Tepko Pty Ltd v Water Board (2001) 206 CLR 1 at 55 [168]–[170], for example, Kirby and Callinan JJ said: … The attractions of trials of issues rather than of cases in their totality, are often more chimerical than real. Common experience demonstrates that savings in time and expense are often illusory, particularly when the parties have, as here, had the necessity of making full preparation and the factual matters relevant to one issue are relevant to others, and they all overlap. The second and related comment is this. A party whose whole case is knocked out on a trial of a preliminary or single issue, may suspect, however unjustifiably, that an abbreviated course was adopted and a decision reached in the court's, rather than the parties,' interests. Thirdly, there is an additional potential for further appeals to which the course of the trial on separate issues may give rise. Indeed, that could occur here were this appeal to be allowed and a retrial had in which the remaining issues of causation and damages were decided. Single-issue trials should, in our opinion, only be embarked upon when their utility, economy, and fairness to the parties are beyond question. Whether and to what extent those considerations may or should be taken into account by a judge of this court in determining whether she or he is satisfied of the existence of "special circumstances" under s 10A(5) of the Defamation Act seems to me to be a further possible source of difficulty. 43 In Hun, McEvoy J considered that there remains a "serious question" as to whether s 10A(4) - (6) of the Act is picked up by s 79 of the Judiciary Act: Hun at [32]. However, in the circumstances of that case, including that the respondents applied under r 30.01 of the Rules, it was unnecessary to resolve that question: Hun at [33]. 44 More recently, in Peros, Derrington J, in considering an application for the hearing of a separate question made pursuant to r 30.01 of the Rules, made the following observations in relation to the applicability of s 10A(5) at [2] – [6]: There is uncertainty in the authorities as to whether the ambulatory effect of s 79 of the Judiciary Act 1903 (Cth) includes s 10A(5) of the Defamation Act and, therefore, whether it is a process available to this Court. It is unnecessary in these proceedings to determine that issue as Ms Blackburn elected to proceed under r 30.01, which relevantly provides that a party may apply to the Court for an order that a question arising in the proceedings be heard separately from any other questions. However, it should be acknowledged that the outcome of this case may well have been entirely different had it been determined under s 10A(5) of the Defamation Act. That is not only because under r 30.01 of the Rules, Ms Blackburn, as the applicant for relief, bears the onus of establishing that it is appropriate for the question to be heard separately. It is also because the judicially created limitations imposed on r 30.01 have confined its operation to very stark and clearly defined issues. Conversely, the process under s 10A(5) is obviously intended to include much more widely disputed issues. Whilst the two procedures might be regarded as raising or involving similar issues, it is apparent that, by the insertion of ss 10A(5) and (6) into the Defamation Act, the State legislature has indicated a clear preference that the issue of serious harm to the claimant's reputation be determined ahead of the trial if an application is made for that to occur. When that occurs, s 10A(5) requires the judicial officer to determine the question of serious harm in advance of the trial, unless satisfied that there are "special circumstances" justifying the postponement of that question. In this way, it might be said that there is effectively a reversal of the onus that is found in r 30.01. Contrary to some passing suggestions in the authorities: see Hun v Aljazeera International (Malaysia) SDN BHD [2023] FCA 1103 [35] (Hun v Aljazeera International), citing Selkirk v Hocking [2023] FCA 432 [39] (Selkirk v Hocking): r 30.01 of the Rules and s 10A(5) of the Defamation Act should not be considered as providing for the same or similar process. Although the "special circumstances" enumerated in s 10A(6) can be described as procedural or case management considerations which also fall to be considered under r 30.01, that does not give rise to an equivalence between the two provisions. The operation of the two sections shows that they are the complete antithesis to each other — for an application to succeed under r 30.01, the applicant must show that it is appropriate to determine the separate question, whilst an application made under s 10A(5) will lead to the determination of the separate question unless there is a demonstrated reason why that should not occur in the circumstances of the case. In this latter respect, the legislature must be taken as appreciating that the determination of serious harm will often be a factually contested matter which may involve the testing of the evidence adduced by the respective parties. Therefore, its utility ought not be circumscribed by judicially imposed limits as has occurred in relation to r 30.01. If it is the case that ss 10A(5) and (6) of the Defamation Act are not picked up and included in this Court's jurisdiction, an amendment to the Rules is required to create an analogous procedure for defamation proceedings in this Court. As the following reasons reveal, the circumstances of this case provide a good example of where an application made under r 30.01 of the Rules fails, but an order under s 10A(5) of the Defamation Act might well have been made. 45 The third respondent contended that no inconsistency arises with respect to the relevant provisions of the Act and referred the Court to Hayson v The Age Company Pty Ltd (No 3) (2020) 280 FCR 139; [2020] FCA 1163. In that case, Bromwich J considered whether the costs provisions of the New South Wales Defamation Act are inconsistent with costs provisions in the Federal Court Act. His Honour found that s 43 of the Federal Court Act is an "enabling provision" which involves the exercise of discretion (at [39]). The third respondent submitted that s 37P of the Federal Court Act and r 30.01 of the Rules are analogous to the costs provision considered in Hayson in that they are enabling provisions with no relevant inconsistency. 46 Section 37P of the Federal Court Act empowers the Court to give directions about practice and procedure in civil proceedings. It provides: (1) This section applies in relation to a civil proceeding before the Court. (2) The Court or a Judge may give directions about the practice and procedure to be followed in relation to the proceeding, or any part of the proceeding. (3) Without limiting the generality of subsection (2), a direction may: (a) require things to be done; or (b) set time limits for the doing of anything, or the completion of any part of the proceeding; or (c) limit the number of witnesses who may be called to give evidence, or the number of documents that may be tendered in evidence; or (d) provide for submissions to be made in writing; or (e) limit the length of submissions (whether written or oral); or (f) waive or vary any provision of the Rules of Court in their application to the proceeding; or (g) revoke or vary an earlier direction. (4) In considering whether to give directions under subsection (2), the Court may also consider whether to make an order under subsection 53A(1). (5) If a party fails to comply with a direction given by the Court or a Judge under subsection (2), the Court or Judge may make such order or direction as the Court or Judge thinks appropriate. (6) In particular, the Court or Judge may do any of the following: (a) dismiss the proceeding in whole or in part; (b) strike out, amend or limit any part of a party's claim or defence; (c) disallow or reject any evidence; (d) award costs against a party; (e) order that costs awarded against a party are to be assessed on an indemnity basis or otherwise. (7) Subsections (5) and (6) do not affect any power that the Court or a Judge has apart from those subsections to deal with a party's failure to comply with a direction. 47 In my view, the better construction is that s 10A(5) is not picked up by s 79 of the Judiciary Act. Simply because s 37P is an enabling provision does not mean that it is not inconsistent with s 10A(5). As observed by O'Callaghan J in Selkirk (at [40]), the "special circumstances" referred to in s 10A(5), if given its literal meaning, "might very well be said to fetter, and thus be inconsistent with, not only the broad and wide-ranging considerations provided for in s 37P of the Federal Court Act, but also the undoubted power under that section". I consider that to be the case. While the considerations set out in s 10A(6) of the Act, as to what the Court may take into account when considering whether the circumstances constitute "special circumstances", might seem comparable to "run-of-the-mill case management considerations" (Selkirk at [39]), the text of the provision, including the use of the word "special", requires that the Court determine the issue unless such "special circumstances" arise: Peros at [4]. In Qu, the Victorian Court of Appeal (per Beach, Kennedy and Walker JJA) considered the expression "special circumstances" at [42] – [44]: The expression 'special circumstances' is frequently used in legislation, and must, in each case, be considered in the context in which it has been used. As Spigelman CJ said in R v Simpson, they are 'words of indeterminate reference and will always take their colour from their surroundings.' In a number of different statutory contexts, the words have been held to require circumstances that are not of general application, or not common or not ordinary. That said, in Beadle v Director General of Social Security, the Full Court of the Federal Court said that the phrase 'special circumstances,' although lacking precision, was 'sufficiently understood in our view not to require judicial gloss.' In Selkirk v Hocking, O'Callaghan J was required to consider the issue of 'special circumstances' in s 10A(5) of the Act. His Honour described the non-exhaustive matters referred to in s 10A(6) of the Act as being matters which were 'not aptly described as "special" circumstances'. His Honour said that, to the contrary, the matters referred to in s 10A(6) seemed to require the giving attention to of what are 'nowadays run-of-the-mill case management considerations'. His Honour, however, went on to observe that it might be thought that the requirement of 'special circumstances' was to be given content by the literal meaning of those words 'because the draftsperson presumably chose the words to be meaningful.' Ultimately, in the circumstances of the dispute then before him, it was not necessary for his Honour to form a concluded view about the proper construction of the expression 'special circumstances' in s 10A(5) of the Act. Having reviewed the authorities, we favour the approach of the Full Federal Court in Beadle that the phrase 'special circumstances' does not require any judicial gloss. That said, we think the phrase, as used in s 10A(5) of the Act, encompasses circumstances which are not routine or run-of-the-mill. Additionally, we would endorse what Spigelman CJ said in Simpson that there will be circumstances which, either alone or in combination with other factors, justify a conclusion that 'special circumstances' are made out on the facts of a particular case; and it will be 'comparatively rare for an issue to arise in terms of a proposition that a particular circumstance is incapable, as a matter of law, of ever constituting a "special circumstance"'. (Emphasis added and citations omitted.) 48 The fact that s 10A(6) includes a non-exhaustive list of considerations that the Court may take into account when deciding whether there are special circumstances does not change the position that special circumstances must arise for the Court to decide not to determine the serious harm element before trial. In this way, s 10A(5) limits the Court's discretion to considering "special" or exceptional circumstances. So, while it may be the case that s 37P is an "enabling provision", it is one which appears to be inconsistent with s 10A(5) of the Act. 49 Further, r 30.01 of the Rules confers on the Court a wide discretionary power to determine whether a question ought to be heard separately from any other questions. Such a discretion appears to be informed by considerations of the overarching purpose of civil practice and procedure, as set out in s 37M of the Federal Court Act. Conversely, as stated above, s 10A(5) of the Act provides that where an application is made for the early determination of the serious harm element, the Court is to determine the issues unless there are special circumstances which would justify its postponement. In that regard, the provision effectively reverses the onus by requiring the Court to determine the issue unless special circumstances arise: Peros at [4]. The provisions therefore cannot be said to be consistent with one another. 50 If I have erred in considering that s 10A(5) is not picked up by s 79 of the Judiciary Act, I consider that in any event there are special circumstances to justify the postponement of the serious harm element until trial. The defamation claim is a factually disputed matter. While the Court, pursuant to s 10A(7) of the Act, may determine this issue without the need for further evidence, I do not consider it in the interests of justice that the element of serious harm be determined prior to trial in this case. I accept that it was not apparent that the third respondent was applying for the element of serious harm to be determined prior to trial until the receipt of written submissions in chief and therefore, the applicant was limited in her ability to respond to the application. As correctly contended by the applicant, the defamatory imputations pleaded in the relevant paragraphs of the FASOC are denied, and some truth allegations are made by the third respondent. The prospect that the truth of the allegations would need to be examined at this stage of the proceedings is a sufficient special circumstance to justify postponement; Qu at [63]. As set out in paragraph 47 above, in Qu at [44], the Victorian Court of Appeal was of the view that the expression "special circumstances" in s 10A(5) of the Act "encompasses circumstances which are not routine or run-of-the-mill". The Victorian Court of Appeal also considered that "special circumstances" may arise in a number of ways in a particular case, "either alone or in combination with other factors" (at [44]). In this case, the matters to be considered with respect to the defamation claim will be relevant to, or unable to disentangled from, the other claims made in this proceeding. 51 Were the Court to approach this as an application made pursuant to r 30.01 of the Rules, which I note was not urged by the third respondent, the applicant argued that she would need to make further written submissions responsive to the considerations raised by r 30.01 of the Rules. I agree with the applicant in that regard, noting that no application pursuant to r 30.01 of the Rules has been made in the alternative. pleading of serious harm 52 The application to strike out the relevant parts of the FASOC was brought in the alternative, in the event that the Court did not dismiss the proceedings pursuant to s 10A of the Act. The third respondent's submissions in relation to the strike out application appeared to be premised on both what he claimed to be the invalidity of the concerns notices and deficiencies in the FASOC as referred to above. 53 The main focus of the third respondent's submissions in chief is that serious harm has not been established as there is no pleading regarding the serious harm to the applicant's reputation nor identification of the persons to whom the publications were made. 54 The applicant opposed that argument, contending that the third respondent had pleaded to the FASOC in June 2023 and had not sought further particulars pursuant to r 16.45 of the Rules, notwithstanding an invitation by the applicant to identify the nature of any particulars sought on 12 February 2024, as referred to in paragraph 22 above. 55 The applicant also noted that she had adduced evidence regarding the element of serious harm in support of her application for an interlocutory injunction in March 2023, which was considered sufficient to demonstrate that there was a "serious question to be tried" by the Court: Russell at [34]. The third respondent, despite being on notice of the application for an interlocutory injunction, failed to appear. 56 The applicant submitted that it is necessary only to plead serious harm as an element of the cause of action and that the third respondent's complaint is thus in relation to the particularisation. The applicant referred to Whittington v Newman [2024] NSWCA 27 wherein Leeming JA, Stern JA and Simpson AJA stated at [48]: Secondly, Mr Wittington maintained that there was now an obligation in all cases to which s 10A applied for serious harm to "be proved by evidence of the actual impact of the publication". That goes too far. It will be necessary, for a plaintiff suing on a cause of action to which s 10A applies, to establish that the publication has caused or is likely to cause serious harm to the plaintiff's reputation. That may be established by evidence, or by admission. Further, actual serious harm, or the likelihood of serious harm, to the plaintiff's reputation, may also be established by inference from other facts, including the nature of the publication and the imputations it contains. And these are matters to be established at trial. It does not follow that in order for a defendant to meet the plaintiff's case particulars of the "actual impact" of the publication are required. 57 As to the claim that the pleading has not identified any person to whom the publications were published, the applicant contended, and I accept, that this was pleaded in paragraphs 51(d) and 70(d) of the FASOC which provides: The Main Post: … (d) Was read on or soon after 10 November 2022 by many of those 5,000 followers; … As a result of the publication of the January Posts, including the Fifth to Eleventh Defamatory Imputations, the Applicant has suffered serious harm, aggravated by: … (d) the correspondence by Joshua Norris-Ongso, since publication of each of the January Posts, in which he responded positively to expressions of sympathy and support he had engendered as a result of the January Posts; 58 Rule 16.21 of the Rules provides as follows: (1) A party may apply to the Court for an order that all or part of a pleading be struck out on the ground that the pleading: (a) contains scandalous material; or (b) contains frivolous or vexatious material; or (c) is evasive or ambiguous; or (d) is likely to cause prejudice, embarrassment or delay in the proceeding; or (e) fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or (f) is otherwise an abuse of the process of the Court. (2) A party may apply for an order that the pleading be removed from the Court file if the pleading contains material of a kind mentioned in paragraph (1)(a), (b) or (c) or is otherwise an abuse of the process of the Court 59 I do not consider that any part of the FASOC ought to be struck out on the basis of the pleading of serious harm. In my view, the material facts as set out in the available material disclose a reasonable cause of action, and none of the other bases for striking out arise on the pleadings in their current form. A request for further particulars of the serious harm alleged to have been suffered would be more appropriately sought through a formal request for particulars or an application under r 16.45 of the Rules. the validity of the concerns notices Legal Framework 60 Section 12B(1)(a) of the Act provides that an aggrieved person cannot commence a defamation proceeding unless, inter alia, the person has given the proposed defendant a concerns notice. 61 Section 12A(1)(a)(iv) of the Act provides that a concerns notice must inform "the publisher of the harm that the person considers to be serious harm to the person's reputation caused, or likely to be caused, by the publication of the matter in question". If a concerns notice fails to particularise this matter, s 12A(3)-(5) of the Act provides a mechanism by which the publisher may seek and receive further particulars. 62 The purpose of the introduction of a mandatory concerns notice provision was to reduce the number of defamation actions which proceed to trial. In that regard, the purpose of a concerns notice is twofold. First, to provide the publisher with sufficient information to encourage the making of a reasonable offer of amends and secondly, to allow the aggrieved person to consider the threshold of serious harm which is required at an early stage: Georges v Georges [2022] NSWDC 558 at [56] – [59]. 63 Rule 16.21(1)(f) of the Rules provides that a party may apply for an order striking out a pleading on the basis that it is an abuse of process. The third respondent argued that the concerns notices provided by the applicant were not valid and it is an abuse of process to commence defamation proceedings without a valid concerns notice, relying on Newman at [30] – [46]. Submissions 64 The First Concerns Notice initially set out the various statements which were made in the Main Publication and the alleged defamatory imputations. The First Concerns Notice does not contain any headings but provides the following seemingly in respect of the serious harm that the applicant alleges she has suffered: On behalf of Ms Russell, we inform you that she considers that the imputations mentioned above, exacerbated by the falsehoods also mentioned above, have caused and will continue to cause serious harm to her reputation. Apart from the obviously damaging nature and effect of the imputations, you published the matter on an Instagram which you claimed, in the 2021 Business Profile given to Ms Russell on 14 March 2022, has 5,000 followers. These followers are customers or former customers of the business and many of them know Ms Russell personally. Indeed, our client believes that it is obvious that you chose that media for publication, because that would maximise the damage – it would come to the attention of many hundreds of people who know Ms Russell and yet more people who may wish to patronise her new business. Further, it is difficult to imagine a more serious defamation of a young person commencing her first business than to accuse her, to the audience of potential customers, of devious, dishonourable and dishonest conduct, as you have done in the Main Post. Our client believes that you yourself recognise that the harm caused by your publication was serious harm, because once you learnt that you had tagged our client in your post and began to receive feedback on it, you took the post down immediately. … Because of its sensational content and nature, it is certain not only that the Main Post was seen and read by a substantial number of people but also that it has been widely distributed. Hence, even if it has been taken down, it is inevitable that it will have been shared by many people - particularly people in the fitness and wellness communities in which Ms Russell had been working and is hoping to continue working. 65 The third respondent submitted that the First Concerns Notice fails to particularise why the harm to the applicant's reputation is serious, the nature of the harm suffered or is likely to be suffered, who had viewed the publications or the effect of the publications on them. 66 Unlike the First Concerns Notice, the Second Concerns Notice contained headings such as "The Second Post" and "The Third Post and the Fourth Post," detailing in each section the defamatory imputations which are alleged to arise from the publications. The Second Concerns Notices provides the following in respect of the serious harm element: …The publication of these posts was effected to over 23,000 followers and they attracted many readers and posts by way of reply, several of which demonstrate that you have succeeded in seriously harming Ms Russell's reputation. … The January Posts continue the themes of the Main Post: they refer to Ms Russell and they concern her decision not to exercise her option to acquire the S3 Business and subsequent events, principally that S3@Raw sold its business to a third party (after advising Ms Russell's successful negotiations with Messrs Mrocki for a lease of S3@Raw's former premises for a new business later established by Ms Russell. Any person who read one or more of the January Posts would, from the natural and ordinary meaning of the words used, understand that you were repeating and reinforcing the imputations that arose from the Main Post, namely: 1. that Ms Russell has, in her dealings with you and the landlord at Ripponlea acted deceitfully, dishonourably and in breach of contract. 2. that Ms Russell had conceived and executed, over a lengthy period of five months, a devious plan and dishonourable plan, the elements of which were: (a) to pretend falsely that she would purchase S3@Raw's business, having no intention to do so; (b) rather to force you to close the studio down when you would never have done so; and (c) to take over your profitable business without paying for goodwill; 3. that our client has cheated you out of a valuable business with a substantial with substantial [sic] goodwill; and 4. that our client is a selfish, spiteful; and vindictive person, willing to act to frustrate otherwise legitimate business dealings. Your repetition and reinforcement of the defamatory imputations that arose from the Main Post, by the January Posts, was all the more serious (and caused serious harm to Ms Russell) because: 1. Ms Russell had offered to settle her claim for damages from the Main Post, for an apology and retraction; 2. you published the January Posts after you knew Ms Russell had instituted proceedings against you and S3@Raw for damages for defamation (which you mentioned and said that S3@Raw was defending); and 3. Ms Russell has, since advising you of her decision not to exercise the option, not published a word about you, your husband, S3@Raw or its business - she has maintained a dignified silence in the face of your quite spirited and malicious social media campaign against her, preferring to leave it to the Court to deal with your assaults on her reputation. … They have been commented on by others, to all of whom you have replied. This correspondence proves that many people have read the January Posts (and the Main Post) and, to our client's great distress, many persons have believed the defamatory and untrue statements you have published about her. As we have mentioned above, you did not reply to the concerns notice in our letter to you dated 11 November 2022. You plainly took no notice of it. On the contrary, you have made matters worse by the repetition and reinforcement of the Main Posts in the January Posts; and by the fresh defamatory statements therein. You have made it clear that there is our client [sic] no point seeking to resolve your unlawful defamation of her, by agreement. 67 The third respondent contended that the Second Concerns Notice is afflicted with the same deficiencies as those which he submitted arose with respect to the First Concerns Notice, as well as failing to particularise serious harm as it relates to the reputation of the applicant. 68 As a result, the third respondent argued, both concerns notices are invalid. He referred to a number of cases which provide that the failure to provide particulars as to serious harm renders the concerns notice invalid; Teh v Woodworth [2022] NSWDC 411 at [30]; Randell v Mclachlain [2022] NSWDC 506 at [13] - [17]. In Randell, Gibson DCJ found that the plaintiff's concerns notice did not sufficiently particularise serious harm. At [25], her Honour observed: … the gravamen of what Mr Olson is saying is that a plaintiff may choose to describe "serious harm" by simply referring the seriousness of the imputations, the extent of publication, the fact that the plaintiff has a respected position and that the grapevine effect is likely, and that will suffice. There are a number of problems with such an argument: (a) First, all of the English decisions emphasise that causation between the harm and the publication must be established. This is because a defendant cannot be held to account for damage arising from another unrelated publication: Associated Newspapers Ltd v Dingle [1962] 2 All E R 737, [1964] AC 371 ("Dingle"). For example, the defendant cannot be sued for the serious harm flowing from the Sunday Telegraph article unless there is a pleading that the defendant published (or republished) it. (b) Second, the lack of specificity as to what the harm is where all that is provided is generalities such as the seriousness of the imputations would render the making an offer of amends that responds to the harm extremely difficult. This would defeat the whole s 10A purpose of early resolution through offers of amends, which is contrary to s 3(d) of the Act. (c) Third, for the plaintiff to commence proceedings, the ambit of the case needs to be determined. Is it "serious harm" or just "harm"? In the present case, on the particulars given, it is hard to tell what the harm would be. 69 The applicant submitted that the relevant provision does not require that the concerns notice contain particulars of the serious harm, rather it requires that the concerns notice informs the publisher of the harm that the person considers to be serious harm. Accordingly, the applicant contended that both concerns notices are valid, having regard also to Georges wherein Abadee DCJ stated at [76]: The approach I favour eschews any notion of a 'one-size-fits-all,' rigidly prescriptive or formulaic approach for determining the adequacy of a concerns notice, for the purpose of s 12B(1)(a). The approach means that, depending on the circumstances: • the Court may draw inferences that adequate information about s 12A(1)(a)(iv) has been given not only from bare assertions of serious harm, but by other matters in the concerns notice requiring articulation, in s 12A(1)(a)(i)–(iii) and (where relevant) (v). • it is inappropriate for the Court to fasten only upon that part of the concerns notice specifically earmarked, say, under the sub-heading 'serious harm;' however desirable it may be to have such sub-headings or other means of illuminating the discrete requirements in s 12A(1)(ii)–(v). • information can be conveyed expressly and/or by implication; • whilst it is necessary for an aggrieved person to set out the imputations particularised in the concerns notice, it is unnecessary, in the case where there is multiple publications complained of, for the purpose of s 12A(1), for the aggrieved person to link, connect or tie imputations to specific publications; and • it is unnecessary, for the purposes of s 12A(1), for the aggrieved person to specifically identify the serious harm for each and every matter complained of. 70 The applicant also noted that the third respondent did not utilise the statutory mechanism to receive further particulars and that therefore it can be inferred that he did not have any issues with the adequacy of the particulars when the concerns notices were received. As stated by Abadee DCJ in Georges at [73]: So too with s 12A: if a publisher passes up the opportunity to ask for more in the period in which the amends process is to occur if it takes the view that the information is insufficient of [sic] incomplete in order for it to understand how an aggrieved person asserts that serious harm has been or is likely to be sustained by a publication, then a Court may be entitled to infer that the publisher sufficiently understands the aggrieved person's 'concern' about serious harm having been, or likely to be, sustained by the matter(s) complained of. Consideration 71 It is convenient to consider each of the concerns notices in turn. 72 In my view, the First Concerns Notice is valid. There is quite a distinction between a concerns notice that makes bare assertions as to the serious harm to the person's reputation without any basis and a concerns notice such as the one which was provided in this case. In Teh, the concerns notice merely stated "[y]ou have caused and are likely to continue to cause further serious harm." This is not the case here. The harm which the applicant considers to be serious harm can reasonably be inferred by the references to the applicant's business and the fact that the publication was made to the potential customers of her business. 73 With respect to the Second Concerns Notice, I consider that the applicant has provided enough information to make it plain that her integrity has been impeached as a result of the publications. When fairly read, it is clear that this impeachment must go to the applicant's reputation, particularly in the business context. 74 The applicant also submitted that the Second Concerns Notice must be read together with the First Concerns Notice as it is provided to the same person and refers to a continuing course of conduct. It is evident from the text of the Second Concerns Notice, which makes various references to the First Concerns Notice and the Main Post, that that was the intention of the applicant. While the applicant did not take the Court to any cases specifically in support of this submission, I agree that in these circumstances, the concerns notices ought to be read together. This is because, in this case, the Second Concerns Notice explicitly and repeatedly refers to and imports the contents of the First Concerns Notice. 75 If I am wrong in coming to that conclusion, I consider that, in any case, the Second Concerns Notice sufficiently informs the publisher of the harm that the applicant considers to be serious harm to her reputation, in accordance with the principles espoused in Georges. I therefore consider it to be valid. 76 Further, I consider that the failure of the third respondent to seek any further particulars pursuant to s 12A(3) of the Act in relation to either of the concerns notices at the time of their receipt is an impediment to now contending them to be invalid on the bases set out above. This can be contrasted with Randell wherein the defendant had sought particulars before applying to have the pleading struck out. As observed by Porter KC DCJ in Staged Plus Pty Ltd v Yummi Fruit Ice-Creamery Pty Ltd [2024] QDC 088 at [72]: … to adopt a broad reading of the necessary particularisation of harm for a valid notice is likely to have the opposite effect to that intended. It will provide an incentive for a publisher who considers a notice inadequately particularised not to seek to resolve a dispute in the hope or expectation that the publisher will be able to rely on s 12B(1)(a) to defeat any future claim. 77 Accordingly, the relevant paragraphs ought not to be struck out on the basis of the concerns notices. conclusion 78 For the reasons above, the amended interlocutory application ought to be dismissed. I do not consider that s 10A(5) is caught by s 79 of the Judiciary Act. However, even if it were caught, I consider there are special circumstances in this case which justify the postponement of the serious harm element until trial. 79 With respect to the strike out application, I consider the relevant paragraphs of the FASOC ought not be struck out on the basis that they are an abuse of process. As well, I consider that the FASOC as currently pleaded discloses the requisite causes of action and ought not be struck out. 80 Costs ought to follow the event. 81 Given that the application is dismissed, the matter should now progress to trial. To that end, the parties are requested to confer and provide to the Court any agreed draft orders progressing the proceeding to trial. If no agreement as to the appropriate orders is reached, a case management hearing should be listed. I certify that the preceding eighty-one (81) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Meagher. Associate: Dated: 29 August 2024	17,121
federal_court_of_australia:fca/single/2017/2017fca0472	decision	commonwealth	federal_court_of_australia	text/html	2017-05-10 00:00:00	SZWCR v Minister for Immigration and Border Protection [2017] FCA 472	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2017/2017fca0472	2024-09-13T22:44:58.413243+10:00	FEDERAL COURT OF AUSTRALIA SZWCR v Minister for Immigration and Border Protection [2017] FCA 472 Appeal from: SZWCR v Minister for Immigration & Anor [2016] FCCA 2385 SZWCR v Minister for Immigration & Anor (No 2) [2016] FCCA 2803 File number: NSD 1638 of 2016 Judge: FLICK J Date of judgment: 10 May 2017 Catchwords: MIGRATION – alleged denial of procedural fairness by Refugee Review Tribunal – the need to avoid "practical injustice" – alleged failure to consider claims made – no denial of procedural fairness PRACTICE AND PROCEDURE – appointment of mother as litigation representative of Appellant son Legislation: Migration Act 1958 (Cth) s 424A(3)(a) Federal Court Rules 2011 (Cth) rr 1.34, 9.63 Cases cited: Applicants S1266 of 2003 v Minister for Immigration & Multicultural Affairs [2006] FCA 1771 Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations [2011] FCA 370, (2011) 121 ALD 525 McGovern v Ku-ring-gai Council [2008] NSWCA 209, (2008) 72 NSWLR 504 Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17, (2001) 205 CLR 507 NABE v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) [2004] FCAFC 263, (2004) 144 FCR 1 Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6, (2003) 214 CLR 1 Swift v SAS Trustee Corporation [2010] NSWCA 182, (2010) 6 ASTLR 339 SZBPM v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 215 SZMCD v Minister for Immigration and Citizenship [2009] FCAFC 46, (2009) 174 FCR 415 SZNQS v Minister for Immigration and Border Protection [2016] FCA 637 SZWCR v Minister for Immigration & Anor [2015] FCCA 569 SZWCR v Minister for Immigration & Anor [2016] FCCA 2385 SZWCR v Minister for Immigration & Anor (No 2) [2016] FCCA 2803 Torbey Investments Corporated Pty Ltd v Ferrara [2017] NSWCA 9 VHAP of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 82, (2004) 80 ALD 559 Date of hearing: 23 February 2017 Registry: New South Wales Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 42 Counsel for the Appellant: The Appellant appeared in person by his litigation representative, with the assistance of an interpreter Solicitor for the First Respondent: Mr J Pinder of Minter Ellison ORDERS NSD 1638 of 2016 BETWEEN: SZWCR Appellant AND: MINISTER FOR IMMIGRATION AND BORDER PROTECTION First Respondent ADMINISTRATIVE APPEALS TRIBUNAL Second Respondent JUDGE: FLICK J DATE OF ORDER: 10 MAY 2017 THE COURT ORDERS THAT: 1. The Appellant's mother be appointed pursuant to r 9.63 of the Federal Court Rules 2011 (Cth) as the litigation representative of the Appellant. 2. Pursuant to r 1.34 of the Federal Court Rules 2011 (Cth), compliance with such other rules relating to the appointment of the mother as the litigation representative be dispensed with. 3. The appeal is dismissed. 4. The Appellant's mother, as the litigation representative of the Appellant, is to pay the costs of the First Respondent. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT 1 The Appellant is an infant child who is now almost four years old. He was born in Australia to parents who are both citizens of China. He also has an older sister. 2 Protection visas have apparently been refused to the parents and sister. 3 The Appellant was refused a protection visa in May 2014. That decision was affirmed by the former Refugee Review Tribunal in January 2015. 4 Proceedings seeking review of the Tribunal's decision were then commenced in the Federal Circuit Court of Australia. That Court summarily dismissed the application for review: SZWCR v Minister for Immigration & Anor [2015] FCCA 569. But that decision was set aside and the matter was remitted to the Federal Circuit Court to be determined according to law. Before that Court, the Appellant's mother was appointed as the litigation guardian of the Appellant. The Court as reconstituted following the remittal proceeded in July 2016 to give reasons in support of its conclusion that the Tribunal had committed no jurisdictional error: SZWCR v Minister for Immigration & Anor (No 2) [2016] FCCA 2803. In a separate judgment, it was concluded that the application should be dismissed and that the mother as litigation guardian was to pay the costs of the Respondent Minister: SZWCR v Minister for Immigration & Anor [2016] FCCA 2385. 5 A Notice of Appeal was then filed in this Court. 6 The appeal was heard on 23 February 2017. The mother was again appointed as the litigation representative of her infant son, that order being made in this Court pursuant to Div 9.6 of the Federal Court Rules 2011 (Cth). 7 Before this Court the Respondent Minister was represented by a solicitor; the Appellant appeared by his mother, who was assisted by an interpreter. The Appellant's mother took the opportunity to make oral submissions in support of the appeal. The Grounds of Appeal 8 Albeit inelegantly expressed, it is respectfully considered that the Appellant seeks to advance four Grounds of Appeal. The first two grounds contend that the Tribunal erred in failing to give "proper and realistic consideration" to claims that: the Appellant would be subject to persecution in China if he could not obtain what was referred to as "hukou" or "Family Household Registration" because the child was born in contravention of China's family planning laws – such children being referred to as "black children"; and if she returned to China, the Appellant's mother would be forced to undergo "forcible sterilisation" before the child could obtain "hukou". It was also sought to be argued on appeal that there was a failure on the part of the Tribunal to give consideration to: how long the Appellant would have to remain as a "black child". There was a final claim that: there was a denial of procedural fairness on the part of the Tribunal. 9 The appeal is to be dismissed with costs. None of the Grounds of Appeal have been made out. The failure to give proper consideration to claims made 10 Difficulties that have been repeatedly expressed in respect to the expression "proper, genuine and realistic consideration" giving rise to the temptation for a court considering whether jurisdictional error has been exposed to impermissibly descend into merits review can presently be left to one side: Swift v SAS Trustee Corporation [2010] NSWCA 182 at [45], (2010) 6 ASTLR 339 at 351 to 352 per Basten JA (Allsop P agreeing); Torbey Investments Corporated Pty Ltd v Ferrara [2017] NSWCA 9 at [67] per Basten JA (McColl JA and Simpson JA agreeing). 11 On any view of the Tribunal's reasons it gave proper and adequate consideration to each of the claims now identified on behalf of the Appellant. 12 The manner in which the first challenge was sought to be advanced before this Court seemed to vacillate and be (with respect) inconsistent with findings made by the Tribunal. 13 The Tribunal found that: the parents would be able to obtain household registration for the child following the payment of a "social compensation fee"; and that it was not satisfied that there was any real chance that the Appellant would suffer serious harm by reason of being a member of a social group being "black children" or "children without a hukou". These findings, as set forth by the Tribunal in its reasons for decision, are expressed as follows: [29] The amount of the compensation fee, as discussed above, is determined on the basis of a number of factors. The Tribunal is satisfied that the Family planning laws from Fujian and the evidence in relation to its implementation indicate that when a child is born in breach of China's family planning laws that a compensation fee will become payable. The Tribunal is satisfied that the evidence also indicates that upon payment of the compensation fee to the relevant authorities that a child is then issued with a hukou and included on the household registration of his family. The Tribunal finds, therefore, that the applicant's parents will be able to obtain household registration for [the Applicant] following the payment of the social compensation fee. Accordingly, the Tribunal is not satisfied that there is a real chance that the applicant will suffer serious harm because he is unable to obtain a hukou. The Tribunal is not satisfied, therefore, having considered the applicant's circumstances individually and cumulatively, that he will suffer serious harm as a result of the breach of China's family planning laws. Therefore, the Tribunal is not satisfied that there is a real chance that the applicant will suffer serious harm for reasons of his particular social group of "black children" or "children without a hukou", as posited by the representative, or any other formulation of particular social group. 14 Given the finding of the Tribunal that a "hukou" could be obtained and that there was no claim that the family did not have the resources to obtain one, the first Ground of Appeal (however expressed) is without substance. It is rejected. 15 Moreover, any challenge founded upon an inability to pay the "social compensation fee" did not sit comfortably with the fact that the Tribunal's reasons record that the father "also confirmed that he and his wife are not claiming they will be unable to pay the fine". The findings of the Tribunal are consistent with the evidence given. 16 Other than not reaching a finding favourable to the Appellant or his mother, it is difficult to see how the consideration in fact given by the Tribunal to the claims surrounding the need to obtain registration were not addressed and resolved. Attempts on the part of the Appellant, via his mother, to now seek to reargue facts going to the ability of the family to "try our very best to borrow money from others" and the effect upon the family "financially", either seek to recant upon statements made to the Tribunal and the evidence given or seek to invite this Court to make findings not only different to those made by the Tribunal, but inconsistent with those findings. Such an approach forms no part of judicial review as opposed to merits review. 17 Nor is there any substance in the argument that there was a failure to give adequate and proper consideration to the claims advanced by the mother as to the prospect of her having to undergo "forcible sterilisation". 18 This was an issue addressed in detail in the written submissions advanced on behalf of the Appellant both prior to and subsequent to the hearing before the Tribunal. After having considered those submissions and the evidence given during the course of the hearing, the Tribunal in its statement of reasons recorded its conclusions as follows: [27] The Tribunal has considered the applicant's parent's claim that his mother would have to undergo a sterilisation procedure upon her return to China. Although the law in China prohibits the use of physical coercion to force abortions, the Tribunal accepts that pressure on local birth planning officials to meet family planning targets has resulted in the use of physical coercion and "the abortion of certain pregnancies". The Tribunal has had regard to the evidence provided by the representative, but considers that the evidence in relation to this issue is conflicting and variable across different parts of China. Although there is limited evidence of this occurring in Fujian province, and there has been some relaxation of family planning laws in China recently, the Tribunal accepts that there are examples of forced abortions and sterilisations occurring throughout China, and it is possible that the applicant's mother may be required to at least have an IUD fitted or to undergo forcible sterilisation, or at worst, an abortion. However, as discussed during the hearing, the Tribunal is not considering whether the applicant's mother faces a real chance of serious harm upon her return to China, but whether [the Applicant] will suffer serious harm for a Convention reason upon his return to China. When this was discussed with [the Applicant's mother] and her husband during the hearing, they were unable to explain how the sterilisation of [the mother] or their inability to have another child or children would affect [the Applicant]. Nor were any submissions made in relation to the effect that the forcible imposition of family planning policies would have on [the Applicant]. The Tribunal is not satisfied that the imposition of contraceptive devices, sterilisation or even abortion which may be imposed forcibly on the applicant's mother would result in a real chance that [the Applicant] would suffer serious harm for reasons of his race, religion, nationality, membership of a particular social group or his political opinion if he returned to China now or in the reasonably foreseeable future. 19 Such findings and reasons given by the Tribunal, it is concluded, adequately demonstrate that proper consideration was given to the claims made. There is no illogicality or irrationality in the manner in which the Tribunal resolved those claims. There is, in particular, no substance to an argument that there was any inconsistency between country information about China generally and the Fujian province in particular. 20 The second Ground of Appeal is also rejected. The length of time as a "black child" – a claim not raised before the Tribunal 21 The Notice of Appeal was also understood as contending that the Tribunal had failed to give consideration to how long the Appellant would have to remain as a "black child". 22 The Federal Circuit Court Judge rejected a like challenge upon the basis that "there was nothing said either in any of the applicant's written submissions, or in the evidence given orally on his behalf at the Tribunal hearing that suggested that there would be any significant period between the time of return to China, and the registration of the applicant, such as might give rise to serious harm or significant harm": [2016] FCCA 2803 at [15]. 23 The only finding made by the Tribunal of any apparent relevance is its finding at para [29] that "upon payment of the compensation fee to the relevant authorities … a child is then issued with a hukou and included on the household registration of his family". 24 There remains, however, no necessity on the part of the Tribunal to resolve a claim that was not made before it: NABE v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) [2004] FCAFC 263 at [61], (2004) 144 FCR 1 at 19 to 20 per Black CJ, French and Selway JJ. 25 In the absence of a claim to like effect having been advanced before the Tribunal, it was not open to run such an argument before the Federal Circuit Court Judge. 26 The argument was correctly rejected by that Court. 27 The third Ground of Appeal advanced in this Court is likewise rejected. A denial of procedural fairness 28 The denial of procedural fairness Ground of Appeal focussed upon two contentions, namely: an alleged failure in not disclosing "its source of information" and not affording an opportunity to be heard in respect to the information relied upon by the Tribunal in reaching its findings in respect to "forced sterilisation"; and an allegation that the Tribunal had "predetermined our case before actually reading all of our claims and arguments". Neither contention prevails. 29 As to the former contention, considerable reservation was expressed during the course of the hearing of the appeal as to whether the Tribunal had adequately disclosed the substance of the information upon which it was proceeding. But it has ultimately been concluded that the Appellant was alive to the issues being considered by the Tribunal and which formed a factual foundation for its decision and that the Appellant was extended an adequate opportunity to be heard in respect to these issues. 30 At least some of the information relied upon was canvassed with the parents by the Tribunal Member during the hearing held on 19 January 2015. The exchange between the Tribunal Member and the mother relied upon by the Respondent Minister was the following: Q. The independent evidence I have, the evidence indicates that upon the payment of a fine, [the Applicant] would be able to obtain a hukou. A: INTERPRETER: Yes. In order to get [the Applicant's] hukou registered, we need to pay a high amount of penalty payment, and I am facing the forced sterilisation. Then we can apply for the hukou to be registered. Q. Okay. You have to apply, but after that, after you've paid the fine and the forced sterilisation, how would that impact on [the Applicant]? There's also very little evidence of that happening in either Fujian or Guangdong, and it's actually illegal now. A: INTERPRETER: Possibly it hasn't been reported. But according to the Communist laws, it doesn't say that one has to be sterilised to get the hukou registered. However, when it gets to the local government, it is..(not transcribable).. Q. I don't actually think that's consistent with anything that I've looked at, people being forced to be sterilised before a hukou can be issued. A: INTERPRETER: Because among the local governments, it is already a hidden rule. Everyone accepts it. No need to publish it. It's something you must do, you don't have a choice. So not much publication on it. Had the matter been left there, it may have been concluded that the Appellant had been denied procedural fairness. That which was disclosed by the questioning was within a limited compass. 31 The reservation expressed during the course of the hearing of the appeal focussed upon the Tribunal finding that "the most common form of penalty under China's family planning laws for breaching China's family planning laws is the levying of a social compensation fee". A footnote to that finding referred to a number of Department of Foreign Affairs and Trade Reports and also said that it had been "frequently reported on" by the United States Department of State and the United Nations High Commissioner for Refugees. But none of those Reports had been disclosed to the Appellant. The above exchange during the course of the hearing could arguably fall short of disclosing the manner in which those Reports were used by the Tribunal. The footnote identified at least two factual propositions, namely: that upon payment of a "social compensation fee", a "hukou" would be received; and that the imposition of a "compensation fee" was "the most common penalty for couples breaching China's one child policy". That footnote also referred to a report which describes: the "process for children born overseas obtaining a hukou upon their return to China". There was no substantial question canvassed during the hearing before the Tribunal other than the varying rates at which a compensation fee was calculated. But reservation is expressed as to whether there was sufficiently canvassed during the hearing the issue as to a compensation fee being the "most common" penalty and the issue of the "process" to be followed. Accepting that the specific Report relied upon by the Tribunal need not be disclosed, the question remained whether there had been sufficient disclosure of the fact that the payment of the compensation fee was the "most common penalty." 32 However, it has ultimately been concluded that such concerns, on the facts of the present case, were adequately addressed by: the detailed content of the submissions made on behalf of the Appellant prior to the hearing before the Tribunal; and the detailed submissions made after that hearing, those submissions (without alteration) addressing the "[r]isk of persecution of forcibly sterilization in relation to applicant's mother" and "[p]roblems faced by Children without Hukou". It is also to be recorded that the concern advanced during the Tribunal hearing was more directed to the issue of the "forcible sterilisation" rather than the payment of any "compensation fee". 33 The submissions made, it has nevertheless been concluded, demonstrate the fact that the Appellant was alive to the issues which needed to be addressed and that the opportunity was extended to the Appellant to make such submissions. Having had that opportunity, it thereafter remained for the Tribunal to consider the submissions made and to make the relevant finding of fact. 34 The concern of the law, it is to be recalled, is "to avoid practical injustice": Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6 at [37], (2003) 214 CLR 1 at 14 per Gleeson CJ. Ultimately the question to be resolved is one of "fairness": VHAP of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 82, (2004) 80 ALD 559 at 566 to 567. Allsop J (as his Honour then was) there concluded: [27] Natural justice and the analysis of whether, in any case, it was afforded is not a process of syllogistic reasoning. One does not approach it thus: the person is entitled to adverse material, this material was relied on in reaching an adverse result, that makes it adverse material, it was not provided in terms, therefore there has been a failure to afford natural justice. [28] Natural justice is ultimately a question of fairness. The appellant here came to the tribunal armed with her material about her country of origin in order to persuade the tribunal to reach a state of satisfaction about her, China, and her future: that she had a well-founded fear of persecution for a Convention reason should she be required to return to China. In order to perform the task required of it by ss 36 and 65 of the Migration Act 1958, the tribunal was required to inform and educate itself about China generally, and about aspects of Chinese life and affairs pertinent to the appellant's claims. In so analysing that material the tribunal might form a view about the appellant or her version of events, which fairness dictated, must be raised. That was done here. The tribunal will often have a store of experience and knowledge about the country in question without the need for specific reference to material. Sometimes, as here, it will reach for specific material for assistance. In doing so it was only informing itself of matters against which to assess the claims of the appellant. If, as here, subjects of concern are raised, I do not see how fairness requires provision of the specific text of country information seen to be of relevance. [29] The material to which we were taken was not such as to be required to be provided to the appellant. The appellant had an opportunity to persuade the tribunal of her claims. The tribunal raised with her issues of concern, which in the end were important. Fairness was afforded. His Honour adhered to these views in SZBPM v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 215 at [19]. See also: Applicants S1266 of 2003 v Minister for Immigration & Multicultural Affairs [2006] FCA 1771 at [34] per Bennett J. 35 No "practical injustice" or "unfairness", it is considered, has been exposed in the present case by the information and sources of information that the Tribunal relied upon in its reasons for decision – even if it were to be assumed that the Reports upon which the Tribunal relied were not disclosed to the now-Appellant. 36 Such a conclusion, however, should not be construed as providing any encouragement to Tribunal Members not to more fully disclose the information it has to hand and the information upon which it questions a claimant. To fully disclose such information should only be encouraged where it is practicable to do so, especially in those circumstances where a claimant is given an opportunity after a hearing has concluded to file further submissions. Not only does it avoid the prospect of subsequent argument, it also encourages procedural fairness by administrative hearings being both fair and seen to be fair. Such encouragement to disclose more information rather than less must nevertheless always be considered in the statutory context where country information need not necessarily be disclosed pursuant to s 424A(3)(a) of the Migration Act 1958 (Cth): cf. SZMCD v Minister for Immigration and Citizenship [2009] FCAFC 46, (2009) 174 FCR 415. See also: SZNQS v Minister for Immigration and Border Protection [2016] FCA 637 at [8] to [9]. 37 The "one-sided" nature of the information disclosed in the present case provides but an example of circumstances in which more fulsome disclosure on the part of the Tribunal should be encouraged. The submissions provided to the Tribunal on behalf of the Appellant both before and after the hearing set forth and annex the reports he relied upon and an identification of those paragraphs of those reports said to assume greater relevance. In contrast, there appears to have been comparative silence on the part of the Tribunal in similarly disclosing information it had to hand. 38 It is nevertheless also to be recalled that the opportunity to be heard is an opportunity to advance to the Tribunal such materials as the Appellant considers relevant to the claims advanced. The opportunity to be heard is not an opportunity to have the benefit of such findings and reasons as may thereafter be provided by the Tribunal and to thereafter carefully scrutinise and analyse what further evidence may potentially have addressed such adverse findings as have been made by the Tribunal. Opportunistic scrutiny of Tribunal findings and reasons with a view to discerning a perceived denial of procedural fairness should be discouraged. 39 As to the latter contention that the Tribunal had "predetermined" the claims made, there is no basis upon which that contention can be adequately founded. An allegation of a reasonable apprehension of bias is one which must be "distinctly made and clearly proved": Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17 at [69], (2001) 205 CLR 507 at 531. Gleeson CJ and Gummow J there further observed that what is required is that a decision-maker approach the claims being made with a mind "open to persuasion": [2001] HCA 17 at [105], (2001) 205 CLR at 540. See also: McGovern v Ku-ring-gai Council [2008] NSWCA 209 at [23], (2008) 72 NSWLR 504 at 509 per Spigelman CJ; Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations [2011] FCA 370 at [82], (2011) 121 ALD 525 at 544. 40 Any allegation that the Tribunal Member "predetermined" the claims made or approached the resolution of those claims with a mind other than one "open to persuasion" is inconsistent with (inter alia) the extent to which issues were canvassed with the parents during the course of the hearing and the opportunity given to provide further submissions after the conclusion of the hearing. CONCLUSIONS 41 The Federal Circuit Court Judge was correct to dismiss the application for review. 42 The appeal is to be dismissed with costs. THE ORDERS OF THE COURT ARE: 1. The Appellant's mother be appointed pursuant to r 9.63 of the Federal Court Rules 2011 (Cth) as the litigation representative of the Appellant. 2. Pursuant to r 1.34 of the Federal Court Rules 2011 (Cth), compliance with such other rules relating to the appointment of the mother as the litigation representative be dispensed with. 3. The appeal is dismissed. 4. The Appellant's mother, as the litigation representative of the Appellant, is to pay the costs of the First Respondent. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. Associate: Dated: 10 May 2017	6,076
federal_court_of_australia:fca/full/2014/2014fcafc0087	decision	commonwealth	federal_court_of_australia	text/html	2014-07-21 00:00:00	Kosciuszko Thredbo Pty Limited v ThredboNet Marketing Pty Limited [2014] FCAFC 87	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2014/2014fcafc0087	2024-09-13T22:44:58.638503+10:00	FEDERAL COURT OF AUSTRALIA Kosciuszko Thredbo Pty Limited v ThredboNet Marketing Pty Limited [2014] FCAFC 87 Citation: Kosciuszko Thredbo Pty Limited v ThredboNet Marketing Pty Limited [2014] FCAFC 87 Appeal from: Kosciuszko Thredbo Pty Limited v ThredboNet Marketing Pty Limited [2013] FCA 563 Kosciuszko Thredbo Pty Limited v ThredboNet Marketing Pty Limited (No 2) [2013] FCA 609 Parties: KOSCIUSZKO THREDBO PTY LIMITED (ACN 000 139 015) and THREDBO RESORT CENTRE PTY LIMITED (ACN 003 896 026) v THREDBONET MARKETING PTY LIMITED (ACN 097 622 869) and GLENN SMITH File numbers: NSD 1311 of 2013 Judges: SIOPIS, RARES & KATZMANN JJ Date of judgment: 21 July 2014 Catchwords: CONSUMER LAW – whether the word "Thredbo" had a secondary meaning associated with appellants' village and resort business in Thredbo – whether respondents' use of the word "Thredbo" amounted to misleading or deceptive conduct under s 18 of Australian Consumer Law or passing off – whether respondents' websites, domain names or Facebook page were so similar to appellants' websites, domain names and Facebook page as to amount to misleading or deceptive conduct or passing off CONTRACTS – whether respondents breached contractual restraint on use of the word "Thredbo" – where "Thredbo" identified the name of a geographic place – whether head lessor of resort using a geographic name can prohibit use of that geographic name by sublessors – where head lessor and its predecessors had promoted the name "Thredbo" in its business and the marketing of its resort conducted there – whether restraint effective to prohibit sublessors using geographic name as part of their trade names or domain names – meaning of terms of commercial contract to be ascertained by what a reasonable business person in the position of the parties would have understood – necessary to provide commercially practicable operation of terms of commercial contract RESTRAINT OF TRADE – whether contractual restraint on use of word "Thredbo" in sublease constituted restraint of trade – whether Restraints of Trade Act 1976 (NSW) applied – restraint of trade to be determined by practical working of clause – where sublease required respondents to provide demised premises for holiday letting to public – whether restraint operated as restriction on way in which respondents could carry on business rather than restriction on use of demised premises – whether restraint accepted as part of a trading society – whether head lessor bore onus of proving that restraint was an accepted part of the machinery of a trading society – whether restraint of trade unreasonable – where all businesses of sublessees in resort subject to prohibition on use of "Thredbo" likely to operate in Thredbo HELD – restraint of trade unreasonable because it lacked reasonable connection to head lessor's legitimate interests – clause void at common law Legislation: Competition and Consumer Act 2010 (Cth) Schedule 2 Judiciary Act 1903 (Cth) s 79 Real Property Act 1900 (NSW) Restraints of Trade Act 1976 (NSW) s 4 Trade Marks Act 1995 (Cth) Trade Practices Act 1974 (Cth) s 52 Cases cited: Australian Capital Territory v Munday (2000) 99 FCR 72 Australian Securities and Investments Commission v Edensor Nominees Pty Limited (2001) 204 CLR 559 Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 397 Campomar Sociedad, Limitada v Nike International Limited (2000) 202 CLR 45 connect.com.au Pty Ltd v Goconnect Australia Pty Ltd (2000) 178 ALR 348; [2000] FCA 1148 Electricity Generation Corporation (t/as Verve Energy) v Woodside Energy Ltd (2014) 306 ALR 25 Esso Petroleum Co Ltd v Harper's Garage (Stourport) Ltd [1968] AC 269 Hornsby Building Information Centre Proprietary Limited v Sydney Building Information Centre Limited (1978) 140 CLR 216 My Kinda Town Limited v Soll [1983] RPC 407 Office Cleaning Services Ltd v Westminster Window and General Cleaners Ltd (1946) 63 RPC 39 Parkdale Custom Built Furniture Proprietary Limited v Puxu Proprietary Limited (1982) 149 CLR 191 Peter Bodum A/S v DKSH Australia Pty Ltd (2011) 92 IPR 222 Peters (WA) Limited v Petersville Limited (2001) 205 CLR 126 Quadramain Pty Limited v Sevastapol Investments Pty Limited (1976) 133 CLR 390 Specialist Diagnostic Services Pty Ltd v Healthscope Ltd (2012) 305 ALR 569 Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354; [2002] FCAFC 157 Telmak Teleproducts (Australia) Pty Ltd v Coles Myer Ltd (1988) 84 ALR 437 Thomas Montgomery v Thompson [1891] AC 217 Tulk v Moxhay [1848] 2 Ph 774; 41 ER 1143 Zhu v Treasurer of the State of New South Wales (2004) 218 CLR 530 Date of hearing: 26 and 27 November 2013 Date of last submissions: 12 May 2014 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 86 Counsel for the Appellants: Mr F Douglas QC with Mr M R Hall Solicitor for the Appellants: King & Wood Mallesons Counsel for the Respondents: Mr K Smark SC with Ms C Champion Solicitor for the Respondents: Hazan Hollander IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1311 of 2013 ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: KOSCIUSZKO THREDBO PTY LIMITED (ACN 000 139 015) First Appellant THREDBO RESORT CENTRE PTY LIMITED (ACN 003 896 026) Second Appellant AND: THREDBONET MARKETING PTY LIMITED (ACN 097 622 869) First Respondent GLENN SMITH Second Respondent JUDGES: SIOPIS, RARES & KATZMANN JJ DATE OF ORDER: 21 JULY 2014 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The appellants pay the respondents' costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1311 of 2013 ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: KOSCIUSZKO THREDBO PTY LIMITED (ACN 000 139 015) First Appellant THREDBO RESORT CENTRE PTY LIMITED (ACN 003 896 026) Second Appellant AND: THREDBONET MARKETING PTY LIMITED (ACN 097 622 869) First Respondent GLENN SMITH Second Respondent JUDGES: SIOPIS, RARES & KATZMANN JJ DATE: 21 JULY 2014 PLACE: SYDNEY REASONS FOR JUDGMENT THE COURT: 1 Thredbo is a town within the Kosciuszko National Park in the Snowy Mountains of New South Wales and a popular centre for snow sports and other recreational activities. In the proceeding below the appellants sought to restrain the respondents from using the word "Thredbo" in various domain names, company and business names, and on their website. The appellants also sought to recover damages for loss they claimed to have suffered, though did not successfully prove. They alleged that "Thredbo" had acquired a secondary meaning associated with the appellants' business and that the respondents were engaged in misleading or deceptive conduct by using the name to promote their business. They claimed, amongst other things, that in doing so the respondents had contravened the Australian Consumer Law (the ACL) in Schedule 2 to the Competition and Consumer Act 2010 (Cth). They also claimed that the respondents had sought to pass off their business as that of the appellants. Save in one respect, their claims failed. 2 The appellants are related companies. Kosciuszko Thredbo Pty Limited ("KT") is a company which holds a lease over land in the national park. The lease covers the area in which Thredbo Village is located and the Thredbo Resort operates. The resort was established in the 1950s by Messrs Tony Sponar, Charles Anton and Geoffrey Hughes, who first approached the Kosciuszko State Park Trust for a lease for a ski resort. The men formed a syndicate, which in 1957 was incorporated into a company known as Kosciuszko Thredbo Limited. KT took an assignment of the lease in 1987 and since then has owned and operated the resort and maintained the village. It also owns and operates a ski school, the Thredbo Alpine Hotel and an accommodation complex as well as various other enterprises carrying on business in the village, including the Thredbo Leisure Centre and the Thredbo Childcare Centre. It also provides certain public amenities such as the water supply, sewerage systems, public roads and infrastructure. The second appellant, Thredbo Resort Centre Pty Limited ("TRC") is a wholly owned subsidiary of KT. It provides a central booking service for accommodation available at Thredbo and is known as "Thredbo Resort Centre" or "Thredbo Central Reservations". The centre also provides information relating to the resort and village, the facilities available there and activities which can be enjoyed whilst staying there. 3 Glenn Smith, the second respondent, and his company, ThredboNet Marketing Pty Limited, the first respondent, run an online business in competition with KT and TRC, managing and leasing rental accommodation in Thredbo. The business has been conducted through a number of websites, the domain names of which incorporate the Thredbo name. 4 The appellants' case at trial was that KT had acquired considerable goodwill and reputation in Thredbo village. This claim was based on the fact that the appellants trade under the name "Thredbo Alpine Village"; manage and service the amenities at the village; operate the Thredbo ski lift, ski school and various other activities; manage the Thredbo Alpine Hotel and other accommodation in the village and provide, through TRC, a central accommodation booking service and tourist information centre. The appellants submitted that the lease arrangements put KT in a unique position of control over the resort, likening it to Disneyland. They contended that Thredbo is "more than a place"; it is a "complete branded entity". Since 1997 KT has also owned and operated the website for the resort, www.thredbo.com.au. The appellants submitted that "thredbo.com.au", itself, has become "a brand in its own right". 5 The appellants complained that Mr Smith, through ThredboNet, had developed a number of websites and a Facebook page to promote not only the accommodation services offered by ThredboNet Marketing, but also other activities, including those offered by KT. They also complained that the respondents' websites and Facebook page had a similar appearance and content to KT's website and Facebook page. They contended that this conduct amounted to misleading or deceptive conduct contrary to ss 18(1), 29(1)(g) and (h) of the ACL and also passing off. They argued that while Thredbo "has become known" as a geographic location, through the operation of their business and their marketing, "Thredbo" had acquired a secondary meaning or independent reputation for their skiing resort services, including hotel and accommodation services. Indeed, they submitted that the name "Thredbo" had become synonymous with their resort business and services and that by their use of the name the respondents had "invade[d]" the appellants' goodwill and misrepresented that their websites and the goods and services offered through them were affiliated with the appellants. 6 Mr Smith also holds two subleases from KT over two properties in the village. Clause 4.3 in each of the subleases purports to prevent him from using the word "Thredbo" in connection with any business he may carry out unless he has KT's written consent to do so. KT claimed that Mr Smith had breached the terms of that clause by registering without its consent company names, business names and, more particularly, "an extensive suite of domain names" incorporating the word "Thredbo". The primary judge held that the clause was invalid as a restraint of trade and could not be read down. The findings of the primary judge 7 The primary judge found (at [95]) that the appellants had not proved that the word "Thredbo" has acquired a secondary meaning. He defined that as meaning, controversially: that the use of the word 'Thredbo' in its business names, internet names and logos has become so distinctive such that [the appellants have] a right to use it to the exclusion of all others. 8 His Honour held that all the parties were entitled to use the word and that, with one exception related to the use of the catchphrase 'My Thredbo', which for present purposes is irrelevant (the respondents having abandoned their cross-appeal), the respondents' operation of websites with domain names such as www.thredboreservations.com.au or www.thredbo.com was not misleading or deceptive (and, by inference, not likely to mislead or deceive). 9 His Honour rejected the appellants' contention that the content and appearance of the respondents' websites was misleading or deceptive because the general "get-up" of the websites was substantially identical with or deceptively similar to KT's website and common law trade mark. He pointed to various differences in the general layout and colours of the parties' websites and noted that the only similarities between them related to the use of "unremarkable and different" snow scenes. He also noted the fact that after the proceeding was launched and before the hearing the respondents had included on their "primary" website (www.thredbo.com) a disclaimer in the following terms: About thredbo.com This website is operated by Thredbonet Marketing Pty Ltd. Our company manages more than 50 properties in Thredbo and has provided booking and accommodation services in Thredbo since 2001. Please note this is NOT the official website of the owner and operator of the Thredbo Alpine Village or the Thredbo Ski Resort, Kosciuszko Thredbo Pty Ltd, and is not approved, endorsed or sponsored by them. 10 His Honour held that because of the differences between the parties' websites, consumers were not likely to be misled into believing that the respondents' web pages belonged to the appellants. He characterised the evidence called by the appellants to support their claim as "evidence of confusion", falling short of what is required to establish a contravention of the relevant sections of the ACL. 11 For similar reasons his Honour also rejected the claim that the respondents' Facebook page entitled "Thredbo Reservations" was misleading or deceptive. He found that the fact that almost 50,000 people had "liked" KT's Facebook page, in contrast to only 200 who "liked" that of ThredboNet suggested that consumers would not form the view that ThredboNet's Facebook page was associated with KT's Facebook page (despite some similarities between the pages). 12 His Honour considered that there were no practical differences between the claim under the ACL for misleading or deceptive conduct and the claim of passing off. For this reason he said there was no utility in deciding the passing off claim. 13 The remaining findings concerned the subleases. 14 Mr Smith contended that the clauses (prohibiting Mr Smith from using the word "Thredbo" in connection with his business) were invalid as restraints of trade and that if the Court were to read down the clauses so as to apply only within the land specified in the subleases, then he did not conduct the ThredboNet business in Thredbo, but from an address in Cammeray. KT argued that the restraint of trade doctrine was irrelevant because it did not apply to restrictive covenants given by a lessor or purchaser of land. His Honour rejected this argument. First, he said that the submission was stated too broadly. He explained that, although the doctrine does not apply to covenants which protect the amenity of land, it does apply to covenants imposed in a trade or commercial context or for a trade or commercial purpose, referring in particular to the remarks made by Jacobs J in Quadramain Pty Limited v Sevastapol Investments Pty Limited (1976) 133 CLR 390 at 415. He found that the covenant was not imposed to protect the amenity of the land subleased to Mr Smith or any other land. Secondly, "on its face" the restriction imposed by the clause was not limited to the land in question. He observed that the clause purported to prevent Mr Smith from carrying on his business anywhere in the world while he continued to sublease premises in Thredbo. 15 Consequently, his Honour found that the clause operated as a restraint of trade. He said that there was no evidence that the clause was of a type that a trading society considered a necessary part of doing business. He also found that the absence of limitations as to time or place suggested a deviation from accepted standards and a greater than usual restriction of an individual's right to trade. 16 His Honour accepted that Mr Smith was prima facie in breach of the clause. But his Honour went on to hold that the clause was an unreasonable restraint of trade. He considered that it could not be read down (in accordance with s 4 of the Restraints of Trade Act 1976 (NSW)) so as to make it reasonable. In view of his earlier findings, his Honour concluded that the restriction on the use of the word "Thredbo" imposed by KT offended Mr Smith's freedom to "earn his living as best he can", depriving ThredboNet of its common law right, with other traders, to use the name "Thredbo". The appeal 17 The appellants pitched their case at a very high level both at first instance and on appeal. The notice of appeal, which contains in effect some 26 grounds, suffers from the vice identified by Branson J in Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354; [2002] FCAFC 157 ("Sydneywide") at [4]: A ground of appeal is a basis upon which the appellant will contend that the judgment, or a part of the judgment, should be set aside or varied by the court in the exercise of its appellate jurisdiction. Not every grievance entertained by a party, or its legal advisors, in respect of the factual findings or legal reasoning of the primary judge will constitute a ground of appeal. Findings as to subordinate or basic facts will rarely, if ever, found a ground of appeal. Even were the Full Court to be persuaded that different factual findings of this kind should have been made, this would not of itself lead to the judgment, or part of the judgment, being set aside or varied. This result would be achieved, if at all, only if the Full Court were persuaded that an ultimate fact in issue had been wrongly determined. The same applies with respect to steps in the primary judge's process of legal reasoning. Although alleged errors with respect to findings as to subordinate or basic facts, and as to steps in a process of legal reasoning leading to an ultimate conclusion of law, may be relied upon to support a ground of appeal, they do not themselves constitute a ground of appeal. 18 Rule 36.01(2)(c) of the Federal Court Rules 2011 (Cth) (formerly O 52 r 13(2)(b)) requires that a notice of appeal state "briefly but specifically, the grounds relied on in support of the appeal". In Sydneywide her Honour went on to say (at [5]) that: A useful practical guide is that a notice of appeal which cannot be used to provide a sensible framework for the appellant's submissions to the Full Court is almost certainly a notice of appeal which fails to comply with the requirements of O 52 r 13(2)(b). 19 The notice of appeal in this case answers this description. The appellants' submissions were discursive and paid scant regard to the grounds of appeal. It was difficult at times to relate them to the grounds. They misled the respondents into thinking that some grounds had been abandoned when they had not. Ultimately, the submissions were revamped and the grounds were reduced to eight. They allege that the primary judge erred in the following respects by: (1) holding that in order to establish a secondary meaning in the word "Thredbo" the appellants had to establish they had an exclusive right to use the word; (2) failing to consider KT's unique leasehold arrangements, which gave it control of the entire head lease area; (3) giving insufficient consideration to the evidence that "Thredbo" and the domain name www.thredbo.com.au, owned by KT, are distinctive of the appellants so as to establish a secondary meaning in both those terms; (4) holding that evidence of consumer deception was "mere confusion" and was not capable of leading to a finding of misleading or deceptive conduct and/or passing off; (5) holding that the parties' Facebook pages were insufficiently similar to justify a finding that the respondents had engaged in conduct that was misleading or deceptive or amounted to passing off; (6) holding that the doctrine of restraint of trade applied to cl 4.3 of the subleases; (7) holding that cl 4.3 was unreasonable; and (8) holding that cl 4.3 could not be read down pursuant to the Restraints of Trade Act. 20 Notwithstanding the reference to passing off in grounds (4) and (5) above, the appellants did not press their challenge to the primary judge's failure to separately consider the cause of action in passing off. 21 Three broad issues therefore arise on the appeal: (1) whether the primary judge was wrong to conclude that the appellants had not established a secondary meaning in the word "Thredbo"; (2) whether the appellants had proved that the respondents' conduct was misleading or deceptive or likely to mislead or deceive; and (3) whether cl 4.3 of each sublease is invalid. Issue (1) – secondary meaning – the appellants' arguments 22 The appellants submitted that the primary judge fell into error at the outset by characterising the first question he had to decide in the following terms: Does the word 'Thredbo' have a secondary meaning such as to identify 'Thredbo' only with [the appellants'] business? 23 The appellants pointed to several passages in the reasons for judgment which touch on the notion of exclusivity and his Honour's references to cases decided under the Trade Marks Act 1955 (Cth) and Trade Marks Act 1995 (Cth) as indicative of error. In short, the appellants contended that his Honour was applying the wrong test. They argued that this was not a case where they had claimed to be entitled to register the word "Thredbo" as a trademark, where the test would be one of exclusivity. The appellants argued that at no point did his Honour consider "the true question", which they described in their written submissions as follows: whether, on the whole of the evidence before him, the word ["Thredbo"] in any of the forms used by the appellants (including its use in the domain name www.thredbo.com.au) had become sufficiently distinctive to a not insignificant number of consumers to render the conduct of the respondent (sic) misleading and deceptive, or likely to mislead or deceive. (Footnotes omitted.) 24 In support of their proposition that this was the correct question, the appellants cited Peter Bodum A/S v DKSH Australia Pty Ltd (2011) 92 IPR 222 at 263–264 [206]–[210] and Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 397 at 418 [96]. They went so far as to assert that his Honour "entirely failed to engage with the case presented to him by the appellants". The appellants contended that the question that the primary judge should have addressed was whether the respondents' use of the word "Thredbo" was calculated to lead potential or actual consumers of their common services to the belief that the respondents' business was that of the appellants, in accordance with the test formulated by Lord Simonds in Office Cleaning Services Ltd v Westminster Window and General Cleaners Ltd (1946) 63 RPC 39 at 42 and applied by Gummow J in Telmak Teleproducts (Australia) Pty Ltd v Coles Myer Ltd (1988) 84 ALR 437 at 442–443 as a test both for a contravention of statutory predecessors and analogues of s 18 of the ACL and passing off. 25 The appellants argued that, although it was a geographic word, "Thredbo" was so distinctive of their business as to give the word a secondary meaning that consumers associated with the appellants' village and resort operation in all its aspects. They contended that use of the word "Thredbo" by the respondents was misleading or deceptive or amounted to passing off because consumers would associate the appellants' businesses with those operated by the respondents by reason of the latters' use in domain names and websites of the names complained of, such as "Thredbo Reservations" on their Facebook page, "ThredboNet" and "thredbo". 26 The appellants argued that "Thredbo" was not "in the strongest sense of the term, a genuine geographic name" because it had been coined in the 1950s as the name of the village and resort. The appellants' predecessors in title had created Thredbo as a village and resort in a previously undeveloped landscape. They contended that this unusual origin led to an exceptional level of association in the consuming public's mind between the place and the appellants so that, in effect, "Thredbo" was synonymous with the Thredbo Resort and would not exist but for the resort. The appellants argued this had come about because they were the services provider for the village, direct operators of some businesses there (such as the chairlifts and other ski lifts, ski school, Thredbo Alpine Hotel) and the sublessor of all other premises, including those from which all other businesses operated and all accommodation could be offered. They contended that their extensive advertising and promotional activities of the resort for both winter and summer recreation since 1987 had created and reinforced the public perception of their businesses as being synonymous with the name "Thredbo". Issue (1) – secondary meaning – consideration 27 In our opinion, his Honour erred in holding that the appellants had to prove that they had the exclusive right to use the word "Thredbo" in order to prove that it had acquired a secondary meaning before they could establish that the respondents' conduct of which they complained could be found to contravene, among other provisions, s 18 of the ACL or amount to passing off. His Honour applied the wrong test for his consideration of those questions and his reasons for rejecting the appellants' claims based on s 18 and passing off were premised on his finding that they had failed to prove that the word "Thredbo" had a secondary meaning so that they had, and could enforce, an exclusive right to use it. It is difficult to understand why his Honour thought it necessary to decide whether the appellants had made out a case of exclusivity. As his Honour recognised (at [70]), the appellants did not contend for it. Indeed, they submitted below that an applicant's secondary meaning or reputation need not be exclusive, either for passing off or for misleading and deceptive conduct. They did not quibble with the evidence that Thredbo is a geographic place and has been for over a century. They did not seek to restrain the use of the name Thredbo as descriptive of the locality. Their point was (and is) that a geographical name when used as a trade mark or brand name may be found to have been adapted to distinguish the appellants' goods or services while at the same time being part of the common heritage. 28 It is possible that his Honour was confounded because of the claim based on the subleases. As the respondents submitted below, the assertion that the appellants do not seek to control the use of the name "Thredbo" when used in a descriptive sense contradicts the control it sought to exercise through the restrictive covenants in the subleases which impose a blanket prohibition on the use of the word. 29 The appellants did not have to establish that they had a right to use the word "Thredbo" to the exclusion of all others in order to establish the contraventions of ss 18, 29(1)(g) and (h) they complained of. In Cadbury Schweppes 159 FCR at 418 [96] Black CJ, Emmett and Middleton JJ held that the principles relating to passing off did not necessarily require an applicant, such as a confectionery maker, to establish an exclusive reputation in relation to the use of a particular colour or other distinguishing characteristic, in that case, purple. Likewise, their Honours held that it was possible to contravene the analogues of ss 18, 29(1)(g) and (h) even though the applicant had not established that it had an exclusive reputation in relation to the characteristic in issue. They held that the question was whether the applicant could establish facts that demonstrated that a particular use by the respondent of the characteristic in issue (in that case, the colour purple) misled or deceived, was likely to mislead or deceive, consumers into believing that "there is some relevant connection between [the respondent] and [the applicant] or their respective products". The Full Court then held (157 FCR at 418–419 [99]): Whether or not there is a requirement for some exclusive reputation as an element in the common law tort of passing off, there is no such requirement in relation to Pt V of the Trade Practices Act. The question is not whether an applicant has shown a sufficient reputation in a particular get-up or name. The question is whether the use of the particular get-up or name by an alleged wrongdoer in relation to his product is likely to mislead or deceive persons familiar with the claimant's product to believe that the two products are associated, having regard to the state of the knowledge of consumers in Australia of the claimant's product. 30 Accordingly, the primary judge's treatment of the issue of secondary meaning was erroneous. But that is by no means the end of the matter. As Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ noted in Campomar Sociedad, Limitada v Nike International Limited (2000) 202 CLR 45 at 87 [105], the initial question that must be determined in a claim under a provision like s 18 is whether the misconceptions or deceptions alleged to arise or to be likely to arise are properly to be attributed to the ordinary or reasonable members of the classes of consumers or prospective purchasers of the relevant goods or services. Thus, the question here is whether ordinary or reasonable members of those classes would, or would be likely to, understand that any of the respondents' impugned uses of the word "Thredbo" conveyed to them that they were dealing with the appellants or one of them. 31 In the end, the word "Thredbo" is a geographical name of a location in New South Wales. The appellants' resort and businesses are located there and they hold (and their predecessors in title held) the head lease over the land on which the village and resort complex are located. But others also operate businesses, as sublessees, in the physical location known as Thredbo. The real issue was not whether the appellants had established a monopoly over the right to use the word "Thredbo" but whether they had established that the respondents' conduct in using that word was likely to lead ordinary or reasonable consumers seeking accommodation or services in Thredbo into believing that the respondents' business or the accommodation or other services that the respondents were offering was or were that or those of the appellants: Campomar 202 CLR at 87 [105]; Office Cleaning 63 RPC at 42. The more significant issue, then, is whether the primary judge erred in his conclusions on the question whether the respondents' conduct was misleading or deceptive (or likely to be so). Issue (2) – misleading conduct 32 On this question his Honour's reasoning was orthodox. It involved an application of the principles in Hornsby Building Information Centre Proprietary Limited v Sydney Building Information Centre Limited (1978) 140 CLR 216. With one exception, the issue of exclusivity did not intrude into the reasoning process. The exception is in [143], which Mr Smark SC, who appeared for the respondents, candidly described as the low point of his case. There, however, his Honour did not state that the fact that the appellants had failed to prove exclusivity meant that they could not succeed. What he said was that the failure to prove exclusivity meant that, save in relation to the Genkan link, the respondents' use of word "Thredbo" was "unexceptional". Importantly, he went on to say at [144]: Stephen J's reasoning in Hornsby Building Information Centre, set out at 228-229, also applies to the circumstances in this proceeding. KT has chosen to primarily market its ski resort as 'Thredbo', which is a 'word of locality'. Occasionally, it uses the word in conjunction with descriptive words, such as 'Thredbo Resort' or 'Thredbo Reservations Centre'. When another company, which also conducts business in Thredbo, decides to use a similar arrangement of the 'word of locality' plus descriptive or generic words, e.g. 'Thredbo Accommodation Reservations', then KT cannot be heard to complain that such conduct is misleading or deceptive. 33 His Honour also drew upon Emmett J's decision in connect.com.au Pty Ltd v Goconnect Australia Pty Ltd (2000) 178 ALR 348; [2000] FCA 1148. 34 The primary judge observed correctly at [139] that mere confusion in the mind of a consumer does not equate to misleading or deceptive conduct. Lord Simonds observed in Office Cleaning 63 RPC at 43 (in a passage cited with approval by Stephen J in Hornsby at 229) that as long as descriptive words are used by two traders as part of their trade names, some members of the public may well be confused no matter what differentiating words are used. Stephen J said that (140 CLR at 229): [t]he risk of confusion must be accepted, to do otherwise is to give to one who appropriates to himself descriptive words an unfair monopoly in those words and might even deter others from pursuing the occupation which the words describe. Issue (2) – misleading conduct – appellants' submissions 35 The appellants submitted that the primary judge had rejected their claims in respect of contravention of ss 18, 29(1)(g) and (h) and for passing off because of his error that they had to have the exclusive right to use "Thredbo" before they could succeed on them. The appellants also argued that there was evidence that consumers had been misled or deceived. In particular, they pointed to the evidence of Michael Brooks, whom his Honour preferred over Mr Smith on this issue. Mr Brooks had booked accommodation for his family for a week using the respondents' website in the belief that he was dealing with the appellants. Mr Brooks was only disabused when he complained to KT after arriving for his family ski holiday to find the accommodation he had paid for was already occupied because it had been double booked. His Honour found Mr Brooks to have been prudent and careful in making his booking to the extent that a typical consumer would have been in arriving at his belief that he was dealing with the appellants. The appellants also referred to other instances where they had received complaints and other communications from persons who, in fact, had dealt, or intended to communicate, with the respondents. The appellants submitted that, the primary judge came to the conclusion that the respondents had not contravened ss 18, 29(1)(g) and (h) only because he had erroneously held that the appellants had failed to establish that they had an exclusive right to use, or a monopoly over, the word "Thredbo". 36 The appellants argued that two disclaimers that the respondents had placed on the home page of the www.thredbo.com website were inadequate. The first disclaimer appeared by about late April 2012 in the following form: About Thredbo.com This website is operated by ThredboNet Marketing Pty Ltd. Our company manages more than 50 properties in Thredbo and has provided booking and accommodation services in Thredbo since 2001. 37 On 28 November 2012, the respondents gave an undertaking to the Court that they would substitute for the first disclaimer a second disclaimer as follows: This website is operated by Thredbonet Marketing Pty Ltd. Our company manages more than 50 properties in Thredbo and has provided booking and accommodation services in Thredbo since 2001. Please note this is NOT the official website of the owner and operator of the Thredbo Alpine Village or the Thredbo Ski Resort, Kosciuszko Thredbo Pty Ltd, and is not approved, endorsed or sponsored by them. 38 At the same time the respondents also undertook to add to the www.thredboreservations.com.au website the following disclaimer below a heading "About Thredboreservations.com.au: Please note this is NOT the official website of the owner and operator of the Thredbo Alpine Village or the Thredbo Ski Resort, Kosciuszko Thredbo Pty Ltd, and is not approved, endorsed or sponsored by them. 39 The appellants argued that each disclaimer was not apt to remove the allegedly misleading effects of the respondents' two websites because each was "buried in the middle of a mass of other text on the homepages of the websites". The appellants contended that the surrounding text and get up of each homepage appeared deceptively similar to the appellants' website www.thredbo.com.au. Issue (2) – misleading conduct – consideration 40 In essence, the appellants' case was that they were identified as "Thredbo" in the public mind and that substantively any use of that word in relation to activities or businesses that were, or could be, conducted at that place would be associated with them. 41 We reject that argument. The appellants are not entitled to a monopoly in the use of the word "Thredbo" in association with accommodation in Thredbo. Ordinarily, a trader is entitled to use a geographical name honestly and accurately unless that name has become distinctive of another's goods or services and the trader is using the name to pass off its goods or services as those of the other. The respondents did not do that here. 42 The respondents' websites did not have the appearance of those of the resort operator. They appeared as websites that offered a limited range of accommodation and provided information about some activities that were available at Thredbo, but not offered by the respondents, that could be enjoyed by visitors to Thredbo. A screen shot at 28 March 2012 of page 2 of a Google search for "Thredbo" showed the following: 43 As is apparent, not only do the appellants' and respondents' website links appear in the screen shot with different descriptions and domain names, but so do a lot of others that use the word "Thredbo" in one way or another. There was no evidence of the results for the first page of the search of "Thredbo". Ordinarily, most people searching for a term or information will look at the first page of search results and then select the most apparently appropriate link or links from that page before they would move to a second or subsequent page of search results. Indeed, they would be unlikely to see any need to go to a second or subsequent page of search results unless they had not found some satisfactory site or sites on the first page. 44 A similar set of search results, showing a variety of links to other entities than just the parties, appeared in the screen shot for the first page of the Google search for "Thredbo reservations" as at 28 March 2012. That usage is consistent with honest and legitimate trading and almost inevitable where, as here, a geographical name is used by a trader as part of its name. The search results negate the appellants' contention that the word "Thredbo" denotes such an established secondary meaning in relation to their businesses and services, including as accommodation providers, as to render the respondents' conduct in using that word misleading or deceptive or likely to mislead or deceive. 45 It was not as if the appellants were the only persons who offered accommodation at Thredbo to the public before the commencement of the conduct complained of. The conduct complained of is not in the category of case justifying an injunction against a trader passing off his goods or services as those of a rival, such as is illustrated in Thomas Montgomery v Thompson [1891] AC 217. There, Lord Macnaghten, with his customary pungency, discussed the terms of an injunction granted against a fraudulent trader who had set up a brewery business at the town of Stone. The plaintiff had for a century carried on its business there and had for many years been famous for producing ales known as "Stone Ales", a name the defendant applied to the products he produced "in the hope of reaping where he had not sown" (at 223). His Lordship said of the defendant (at 225): It would have been impossible for him to have called his ales "Stone Ales," and to have distinguished his ales from those of the plaintiff. Any attempt to distinguish the two, even if honestly meant, would have been perfectly idle. Thirsty folk want beer, not explanations. If the public get the thing they want, or something near it, and get it under the old name – the name with which they are familiar – they are likely to be supremely indifferent to the character and conduct of the brewer, and the equitable rights of rival traders. (Emphasis added.) 46 The same imperatives do not apply to consumers doing internet searches for accommodation or holidays and being presented with an array of providers or businesses associated with a well-known geographical location of a resort. The respondents sufficiently distinguished their websites from the business of the appellants by their use of disclaimers and their offers of supply that were limited to some accommodation. 47 The www.thredbo.com domain name might, if viewed in isolation, suggest a connection with the appellants' business that the respondents do not have. But on the Google search result screen shot for "Thredbo reservations" the material associated with that domain name appears to offer only accommodation principally at Woodridge, a discrete area in Thredbo Village, which a consumer who clicked on the link would immediately appreciate when taken to the webpage. That appreciation would be reinforced by either disclaimer (depending on which was shown). Such a consumer would appreciate that he or she could not purchase ski lift tickets or ski lessons from the operator of that website. 48 We are not satisfied that a consumer who went to any of the respondents' websites would reasonably have associated the operator of the website with the appellants. The respondents' domain name www.thredbo.com was very similar to that of KT, namely www.thredbo.com.au. A consumer might easily be led to the former website thinking it was that of the appellants when doing an internet search. But in today's society the ordinary or reasonable consumer seeking accommodation, or other goods or services, on the internet will frequently click on a result in a web search thinking it is a link to a particular site, only to find when his or her browser is directed to the selected site that it is not the site of the supplier or business that the consumer wanted. The ordinary, reasonable consumer who came upon the home page of www.thredbo.com would have seen, depending on when he or she accessed it, the first or second disclaimer in the middle of the page. Each disclaimer appeared under a recognisable, distinctive heading "About Thredbo.com". It did not have the appearance, as asserted by the appellants, of being "buried in the text". 49 A consumer who was concerned about the entity with which he or she was dealing could be expected to read the short text under that heading. As Gibbs CJ pointed out of s 52 of the Trade Practices Act 1974 (Cth) (which is in substantively the same terms as s 18 of the ACL) in Parkdale Custom Built Furniture Proprietary Limited v Puxu Proprietary Limited (1982) 149 CLR 191 at 199: 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 persons likely to be affected in the present case, the potential purchasers of a suite of furniture costing about $1,500, would, if acting reasonably, look for a label, brand or mark if they were concerned to buy a suite of particular manufacture. The conduct of a defendant must be viewed as a whole. It would be wrong to select some words or act, which, alone, would be likely to mislead if those words or acts, when viewed in their context, were not capable of misleading. It is obvious that where the conduct complained of consists of words it would not be right to select some words only and to ignore others which provided the context which gave meaning to the particular words. The same is true of acts. (Emphasis added.) 50 The first disclaimer made clear that the website was not associated with the appellants. The second disclaimer emphasised that the website was "NOT the official website of the owner and operator of the Thredbo Alpine Village or the Thredbo Ski Resort, [KT], and is not approved, endorsed or sponsored by them". An ordinary reasonable consumer who was concerned about the identity of the operator of that website would have appreciated that the first and second disclaimers meant what they said. The same reasoning applies to the www.thredboreservations.com.au home page after late November 2012. 51 Although the respondents' Facebook page did not have a disclaimer, it used a large heading, "Thredbo accommodation reservations", and had the appearance of a site offering limited accommodation within the larger available pool in Thredbo village. It displayed a reference to www.thredbo.com accommodation reservations. The screen shot of that page taken on 13 November 2012 showed 106 "likes" – a trivial number compared with that of the resort operator KT which had nearly 40,000 "likes" on its Facebook page in a screen shot of 24 July 2012. The difference in the "likes" for each Facebook page is the more telling, as that of KT was recorded at the peak of the ski season during the period of the conduct complained of, while the desultory 106 likes for the respondents' Facebook page were the end product of that conduct recorded nearly four months later, during the trial. 52 While there was some limited evidence of confusion, including of Mr Brooks whom his Honour regarded as prudent and careful, the material to which we were taken during the appeal did not suggest that this confusion was widespread or such as would have caused an ordinary reasonable consumer, as a member of a class, to be misled or deceived into associating the respondents' business with that of the appellants, or that such a result was likely. 53 In our opinion, the get-up and appearance of the respondents' websites were not such as would lead the ordinary reasonable consumer into a belief that they were associated with the appellants' businesses. The respondents were in the business, as were the appellants, of providing accommodation at Thredbo. The arranging, acquisition or purchase of such accommodation ordinarily required a potential consumer to agree to pay a not insignificant sum of money. Moreover, the ordinary reasonable consumer looking for holiday accommodation at a resort such as Thredbo would be careful about making a selection of the provider, the accommodation and the price. 54 Thus, we are not satisfied that the appellants established that the respondents' conduct amounted to a contravention of ss 18, 29(1)(g) or (h) or to the tort of passing off. Issue (3) – clause 4.3 of the subleases – the restraint of trade issues 55 Mr Smith was the sublessee of two properties in Thredbo Village. KT was his immediate lessor. Each sublease was a sublease registered under the Real Property Act 1900 (NSW) granted by KT to Mr Smith on 29 June 2007 for a period of 50 years less two days. Each sublease contained covenants by Mr Smith that the premises would be used only for holiday accommodation or used in the conduct of activities involved in the business of licensing members of the public to occupy those premises on payment of reasonable licence fees. The critical clause for the purposes of the restraint of trade argument is cl 4.3, which provided: "4.3 NO USE OF 'THREDBO' The Sublessee must not use or permit the use of the word 'Thredbo' in connection with any business carried on by the Sublessee, without the prior written consent of [KT]." (Emphasis added.) 56 In addition, cl 16.6 provided that KT had an absolute discretion whether or not to grant its consent or to impose conditions on the grant. Relevantly, cl 20 provided: "20. USE OF PREMISES (a) The Sublessee and the Sublessee's Invitees must only use the Premises for holiday accommodation. The only exception to the above is that the Sublessee or the Sublessee's Invitees may use the Premises for conducting activities involved in the business of licensing members of the public to occupy the Premises on payment of reasonable licence fees. The Sublessee and the Sublessee's Invitees must not conduct any other business activities in or on the Premises or the Lot." (Emphasis added.) 57 In addition, cl 20 went on to provide that the sublessee had to make the demised premises available for holiday letting to members of the public when not occupied by the sublessee (who was limited to occupancy for no more than 26 weeks per annum) (cl 20(d)). 58 The Restraints of Trade Act 1976 (NSW) provides a limited discretion in s 4 for the Court to relieve against what would otherwise be a restraint of trade that was invalid as against public policy in the following terms: "4 Extent to which restraint of trade valid (1) A restraint of trade is valid to the extent to which it is not against public policy, whether it is in severable terms or not. (2) Subsection (1) does not affect the invalidity of a restraint of trade by reason of any matter other than public policy. (3) Where, on application by a person subject to the restraint, it appears to the Supreme Court that a restraint of trade is, as regards its application to the applicant, against public policy to any extent by reason of, or partly by reason of, a manifest failure by a person who created or joined in creating the restraint to attempt to make the restraint a reasonable restraint, the Court, having regard to the circumstances in which the restraint was created, may, on such terms as the Court thinks fit, order that the restraint be, as regards its application to the applicant, altogether invalid or valid to such extent only (not exceeding the extent to which the restraint is not against public policy) as the Court thinks fit and any such order shall, notwithstanding sub-section (1), have effect on and from such date (not being a date earlier than the date on which the order was made) as is specified in the order." (Emphasis added.) 59 This Court can exercise the power that s 4(3) conferred on the Supreme Court of New South Wales as a surrogate federal law picked up by s 79 of the Judiciary Act 1903 (Cth): Australian Securities and Investments Commission v Edensor Nominees Pty Limited (2001) 204 CLR 559 at 591–595 [68]–[80] per Gleeson CJ, Gaudron and Gummow JJ, 600–601 [102] and 606–607 [121] per McHugh J, 638 [217] per Hayne and Callinan JJ. 60 The primary judge found that the respondents were carrying on business in Thredbo and that finding is not in dispute. Indeed, their business involved the letting or licensing of holiday accommodation at the demised premises to members of the public. As noted above, there are three relevant issues arising from cl 4.3, first, whether it is a restraint of trade, secondly, whether it is unreasonable, and thirdly, whether s 4(3) of the Restraints of Trade Act can, and, if so, should save so much of it as the Court thinks fit. We will consider these issues in turn. KT's submissions on the lease issues 61 KT argued that the primary judge had been wrong to require evidence that cl 4.3 was the type of clause that a trading society considers necessary as a part of doing business. It contended that restraints such as cl 4.3 were accepted norms and so notorious that they should be the subject of judicial notice. KT submitted that clauses prohibiting individual retailers from using the centre's name were a commonplace in shopping centre leases. KT contended that the word "Thredbo" was not in the same class as the name of a suburb but was more akin to a name like the brand name of a shopping centre developer. KT argued that the respondents bore the onus of proving facts that the clause was not of a type that was accepted as part of a trading society as part of their establishing that the clause was a restraint. It submitted that the primary judge erred by placing the burden on KT to establish that cl 4.3 was of that nature. KT also contended that the primary judge erred by not identifying any authority to suggest that it was unreasonable for a restraint of trade to protect a person's distinctive connection or goodwill in an expression exclusively connected to that person, here being the name "Thredbo" in relation to the appellants' resort. KT argued that it did not matter that the distinctive connection or goodwill was not referrable to the land in the lease in which the restraint was contained. KT asserted that no "relevant" restraint of trade existed in cl 4.3 merely prohibiting the adoption of a name for the purpose of conducting a business from subleased premises that were to be used for holiday accommodation. KT submitted that his Honour erred in failing to construe cl 4.3 as limited to restricting the use of the word "Thredbo" in the name of a business that the sublessee carried on in its capacity as sublessee from the demised premises. It contended that, because the primary judge found that Mr Smith was carrying on a business at Thredbo, that activity was a contravention of cl 4.3. 62 Finally, KT argued that the reasonableness of the protection conferred on its goodwill in the name of "Thredbo" by cl 4.3 should have been weighed by his Honour in applying the Restraints of Trade Act. During the course of the hearing, senior counsel for the appellants handed up the following as their proposed construction of cl 4.3 as it should apply to the respondent pursuant to s 4(3) of that Act: "The Sublessee must not use or permit the use of the word "Thredbo" as the name of or in order to identify [any business carried on by the Sublessee] from or in connection with the sublet premises without the prior written consent of the company such consent not to be unreasonably withheld". (underlined words added by the appellants; bracketed words moved from after "connection with") The parties' submissions on the interaction between cll 4.3 and 20 63 After the Full Court reserved judgment, it invited the parties to address the interaction between cll 4.3 and 20 because that matter had not been previously developed, after having been only briefly mentioned in oral argument. In particular, the Court invited the parties to address how the sublessee could carry on the business of licensing members of the public to occupy the demised premises for at least 26 weeks each year if cl 4.3 prohibited the sublessee from using the word "Thredbo" in connection with that business. 64 The appellants submitted that, if the sublease were read as a whole, the prohibition in cl 4.3 was limited to the use of the word "Thredbo" "in a trade mark or business name sense, not in a geographic sense". They pointed to many examples of KT's sublessees whose business names did not include "Thredbo" who advertised their offers of accommodation at Thredbo, including in their given addresses. The appellants said that cl 4.3 could not be read as prohibiting a sublessee informing prospective tenants of a property's location in the geographic locality of Thredbo. The appellants asserted that there was no practical necessity for a sublessee to use "Thredbo" in or as part of its business name, and that, if it desired to do so, it could seek KT's consent. They also referred to their fast track reply that pleaded that they did not seek to restrain the use of the word "Thredbo" as a geographic descriptor. 65 The respondents argued that it would be possible for a sublessee to engage KT, as sublessor, to act as the managing agent of the accommodation offered at the demised premises under cl 20(f) and, in those circumstances, KT could not complain that its conduct, as agent of the sublessee, was a breach of cl 4.3. The respondents suggested that the accommodation could be advertised in the window of real estate agency premises at Thredbo with their street address, but without the place name, "Thredbo". However, they contended that ordinary or practical advertising, in the media or on the internet, would breach cl 4.3 if the full address, including "Thredbo" were given. They argued that, because cl 20(d) did not require the sublessee to advertise the availability of accommodation in the demised premises, there was no inconsistency between cll 4.3 and 20 and that cl 20 did not affect the construction of cl 4.3. They also argued that there was no reason in cl 20, or the sublease as a whole, to read down the broad terms of cl 4.3. Restraint of trade 66 The meaning of the terms of a commercial contract is ascertained by what a reasonable business person in the position of the parties would have understood those terms to mean. This requires the Court to consider the language used by the parties, the surrounding circumstances known to them and the purpose or object secured by the contract: Electricity Generation Corporation (t/as Verve Energy) v Woodside Energy Ltd (2014) 306 ALR 25 at 33–34 [35] per French CJ, Hayne, Crennan and Kiefel JJ. Their Honours continued, saying (at 33–34 [35]): "Appreciation of the commercial purpose or objects is facilitated by an understanding 'of the genesis of the transaction, the background, the context [and] the market in which the parties are operating'. As Arden LJ observed in Re Golden Key Ltd (in rec), unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption 'that the parties … intended to produce a commercial result'. A commercial contract is to be construed so as to avoid it 'making commercial nonsense or working commercial inconvenience'." (footnotes omitted) 67 It is significant that cl 4.3 does not apply to restrict the use of the demised premises. Rather, on its face the clause restricts the sublessee in the manner it carries on any business from any place in the world by prohibiting the sublessee from using the word "Thredbo" in connection with that business. Thus, cl 4.3 is not a restrictive covenant of the kind in Tulk v Moxhay [1848] 2 Ph 774; 41 ER 1143 restricting the sublessee (Mr Smith) in the way in which he may use the land. It is not a covenant about the use of land, far less the demised premises, at all. Rather, it is a restriction on the way in which the sublessee can carry on any business at all merely because the sublessee is in the relationship of tenant and landlord. 68 Whether a restraint is one within the legal doctrine of restraint of trade is determined by having regard to its practical working rather than merely its legal form: Peters (WA) Limited v Petersville Limited (2001) 205 CLR 126 at 134 [14] per Gleeson CJ, Gummow, Kirby and Hayne JJ. Some restraints are understood to have no practical operation that bring them within the doctrine. The test for ascertaining whether the restraint falls within that class, and so is outside the operation of the doctrine, was settled in this Court by Heerey J, with whom Miles J and O'Connor J agreed in Australian Capital Territory v Munday (2000) 99 FCR 72 at 93 [105] as being whether it is accepted as part of a trading society in the sense explained by Lord Wilberforce in Esso Petroleum Co Ltd v Harper's Garage (Stourport) Ltd [1968] AC 269 at 335B-D: see Peters 205 CLR at 138 [23]. The Court of Appeal of the Supreme Court of Victoria assumed that the trading society test should be applied in Specialist Diagnostic Services Pty Ltd v Healthscope Ltd (2012) 305 ALR 569 at 581 [57] per Buchanan, Mandie and Osborn JJA. Lord Wilberforce examined a number of accepted instances where the doctrine did not apply and said ([1968] AC at 335B-D): "One may express the exemption of these transactions from the doctrine of restraint of trade in terms of saying that they merely take land out of commerce and do not fetter the liberty to trade of individuals; but I think one can only truly explain them by saying that they have become part of the accepted machinery of a type of transaction which is generally found acceptable and necessary, so that instead of being regarded as restrictive they are accepted as part of the structure of a trading society. If in any individual case one finds a deviation from accepted standards, some greater restriction of an individual's right to "trade," or some artificial use of an accepted legal technique, it is right that this should be examined in the light of public policy." (Emphasis added.) 69 KT did not challenge or seek leave to challenge the correctness of Munday 99 FCR 72. KT merely asserted that there was now a class of contract in which a restraint of the kind imposed by cl 4.3 was an accepted restriction on the way a contracting party could carry on a business. KT's submission that cl 4.3 should be construed as restricting the use of the word "Thredbo" in a business name of a business the sublessee carried on in the demised premises flies in the face of the ordinary and natural meaning of cl 4.3. That clause does not, in terms, limit its prohibition of the use of "Thredbo" to use merely as a part of a business name. Rather, it prohibits use of that name "in connection with any business carried on by the Sublessee". The words "in connection with" create a very wide ambit in which the prohibition will operate. 70 However, the parties cannot have intended that the clause would be read as prohibiting the sublessee giving "Thredbo" as part of its address. That is because, in cl 20, the sublease contemplated that Mr Smith, as part of a business conducted from the demised premises, could, indeed had to, offer the demised premises to the public as holiday accommodation. A necessary part of such an offer would be the provision of the address of the accommodation in Thredbo. The parties, reasonably, would have understood that the sublessor authorised that use when the sublease was made. That is, by reading the sublease as a whole, including cl 20, there was no need for Mr Smith to seek KT's consent to using or giving out the address of the demised premises as part of the business of offering them as holiday accommodation. 71 This construction does not reflect either side's reading of cl 4.3. Yet it flows necessarily from the terms of cl 20 when read as part of the sublease as a whole. Once the parties expressly provided for Mr Smith not only to be able, but to be required, to conduct a business of offering the demised premises as holiday accommodation, it is difficult to understand why cl 4.3 applied to that business at all, as opposed to all other businesses the conduct of which on those premises was prohibited by cl 20(a). After all, the nature of the business that cl 20(a) authorised Mr Smith to carry on was the offer to the public of accommodation in the demised premises at Thredbo. 72 We reject the respondents' argument that, because cl 20(d) did not require the sublessee to advertise the availability of the accommodation, there was no inconsistency between that provision and cl 4.3 and that cl 4.3 should not be read down by reason of the operation of cl 20. The sublease was a commercial agreement. It required the sublessee to conduct a substantive accommodation business using the demised premises for at least 26 weeks in each year of its 50 year term. It would create a commercially nonsensical result to read the sublease as prohibiting the use of the word "Thredbo" in any advertising of the demised premises as accommodation by the sublessee. And, it would work commercial inconvenience so to read cll 4.3 and 20: Verve Energy 306 ALR at 33–34 [35]. 73 Moreover, for the purposes of consideration of cl 4.3 as a restraint of trade, the Court looks to the practical working of the clause: Peters (WA) 205 CLR at 134 [14]. If the practical working of cll 4.3 and 20 were as the respondents argued, the sublessee could only advertise the availability of the accommodation it was leasing in ways that did not use the word "Thredbo". While the respondents suggested possible scenarios in which that could occur (such as in a real estate agent's window in Thredbo), the limiting of the sublessee's promotion of its demised premises to those scenarios demonstrated the commercial inconvenience of that construction. 74 The parties could not reasonably have contemplated that the sublessee, Mr Smith, could conduct such a business without using the word "Thredbo" in connection with it. The location at which the holiday accommodation was to be offered obviously had to be named as "Thredbo". Moreover, a reasonable person in the position of the parties would have expected that the sublessee was free to advertise the availability of the demised premises in the ordinary way holiday resort accommodation is advertised, including on the internet. That being so, there is no reason to read a limitation into cl 4.3 such as that suggested by KT, that confined its restraint to using the word "Thredbo" in the business name or in order to identify any business carried on by Mr Smith that conformed to the use authorised in cl 20. A reasonable business person in the position of the parties, in light of the sublease's commercial purpose, the context, and the market in which they were operating, would have understood cl 4.3 to restrain the sublessee's use of the word "Thredbo" in respect of activities other than those that reflected the, or a, central purpose of the sublease. 75 Accordingly, cl 4.3 did not affect Mr Smith or ThredboNet in the ways KT complained of as a breach. Although the respondents did not challenge the primary judge's view that Mr Smith was prima facie in breach of cl 4.3 if it were valid, his Honour did not have his attention directed to the effect of cl 20 on the proper construction of cl 4.3 in the context of the subleases as a whole. And, as we have observed above, in this appeal, neither side propounded the construction of cl 4.3 which we consider correct. Because of that construction we are of opinion that Mr Smith did not breach cl 4.3. The clause did not apply to the present dispute. In the circumstances, cl 4.3 must have been intended to prohibit the sublessee from using the word "Thredbo" in a way that created a connection between any other business than providing accommodation that the sublessee might establish or conduct and the business or goodwill of the appellants' resort known as "Thredbo". 76 The effect of this construction is partly complementary to KT's common law right to seek relief in respect of acts or conduct that a sublessee might engage in amounting to passing off, or misleading or deceptive conduct representing the sublessee's business as that of KT to the extent that it could assert such rights in respect of the word "Thredbo" and the activity or conduct complained of. However, if the sublessee carried on another business, then cl 4.3 prohibits him using "Thredbo" in connection with it, regardless of any relationship that business might have to the demised premises. 77 There was no evidence before the primary judge of how lessees operating businesses in locales such as shopping centres or holiday resorts are permitted to use the developer's or operator's name for the centre or resort as part of the lessee's trading name. A franchisee of, say, a hamburger business in such a location, may wish to distinguish itself by adopting the franchisor's name with the suffix "at X Centre". There was no material before his Honour or us to suggest that it is an accepted or necessary part of tenancy leases in shopping centres or resorts that there is a restraint on using the centre's or resort's name without the lessor's permission in or to the effect of cl 4.3. 78 We reject KT's argument that the primary judge erred by not, in effect, taking judicial notice of some unspecific practice to include restraints like cl 4.3 in commercial leasing arrangements. This is because, first, KT had great difficulty in explaining a rational operation of the limitation in the use of the word "Thredbo" created by cl 4.3. The parties could not have intended that the ordinary and natural (i.e. literal) construction of cl 4.3 would apply even in leases without a clause like cl 20 in the respondent's lease. That is evident because every business subjected to the restraint was in fact connected to, and likely to operate in, Thredbo. The clause must be read to accommodate that reality, including the ability of the business to use its own address in dealing with the public and suppliers and in advertising its location. It would be extraordinary to find, without cogent evidence of commercial usage, that it was a generally necessary and accepted incident of commercial leases in shopping centres and resort complexes that a lessee trader could not use the name of the centre or resort in any connection with its business without the lessor's consent which the lessor was at liberty to withhold in its absolute discretion. We are not prepared to infer that such a commercially absurd restriction is reflective of a reasonable and business-like construction of cl 4.3: Verve Energy 306 ALR at 33–34 [35]; Zhu v Treasurer of the State of New South Wales (2004) 218 CLR 530 at 559 [82] per Gleeson CJ, Gummow, Kirby, Callinan and Heydon JJ. Far less do we accept that construction in respect of the argument as to the doctrine of restraint of trade, that a clause having that effect is an accepted part of the Australian trading society. 79 Secondly, as Buchanan, Mandie and Osborn JJA observed in Specialist Diagnostic 305 ALR at 584-585 [75]-[76], it would be anomalous if the geographic extent of an obligation in a clause that extended a restraint beyond the land retained by the lessor could not be examined by the Courts in order to ascertain whether it was reasonable either as between the parties or in the public interest. Thirdly, their Honours adverted to the difficulties in inferring that a restraint, in certain contexts, was an accepted part of this trading society without evidence (see 305 ALR at 585 [77]–[78]). 80 There will be some contexts where a court can draw such an inference without evidence, as Heerey J explained in Munday 99 FCR at 93 [107]–[108] where he said: "A common, and important, way of deriving economic benefit from land is the grant of exclusive licences for the conduct of business thereon. Such licences are only of value because of the expectation that other persons will enter upon the land and be customers, but not competitors. So persons gaining admission to the Melbourne Cricket Ground who happen to be caterers would not expect to be able to set up a pie stall in competition with those who have been granted exclusive catering rights by the MCG. Nor would a television station expect to be able to send camera operators into the ground to transmit broadcasts in competition with the channel which has exclusive contractual rights. It is true that Revolve's contractual rights only extended to material left or abandoned at the Tip. His Honour reasoned that Revolve's rights were therefore not infringed when the appellant persuaded entrants to hand over items to him rather than deposit them – as exemplified by the incident involving the plastic bottles. However, I think looking at the matter from a business viewpoint the ordinary and reasonable expectation of Revolve must have been that people taking rubbish to the Tip (and paying a fee for the opportunity to do so) would leave the material there. This would be, objectively speaking, the commercial genesis and purpose of the contract between Revolve and the appellant." (Emphasis added.) 81 Here, the commercial genesis and object of the sublease was to allow the sublessee to conduct the business of offering the demised premises to the public as holiday accommodation at Thredbo as part of a business that included those premises. That context does not suggest, one way or another, how the parties must reasonably have intended that each could use the word "Thredbo" in connection with their respective, and not necessarily wholly complementary, commercial interests in exploiting their business opportunities. Hence, the plenary reach of cl 4.3, and the need to construe it to arrive at a commercially practicable operation for it, demonstrate that a restraint in its literal terms cannot be considered as a commonplace in Australia. The very need to construe the objectively-intended operation of cl 4.3 in the context of the sublease as a whole suffices to explain why the wording of the restraint in cl 4.3 cannot be inferred or treated as being an accepted part of a trading society. 82 It may well be that some other shopping centres and resort complexes have some form of restraint clauses in leases, but those clauses would have to be construed as part of those leases as a whole, in accordance with the ordinary principles of contractual construction. The way in which any such restraint may operate and its validity in its own factual context are not matters that can be assumed without evidence. 83 KT bore the onus of proving that cl 4.3 was an accepted part of the machinery of a trading society. It did not discharge that onus. Accordingly, the doctrine of restraint of trade operates on cl 4.3 and its validity falls to be determined under that doctrine. 84 The practical working of cl 4.3 imposed a restraint of trade on the sublessee. However, given the construction of cl 4.3 at which we have arrived, it does not prevent Mr Smith carrying on a business as he and ThredboNet have or in the ways complained of by KT. 85 Because of the conclusion we have reached on the construction of cl 4.3 when read with the sublease as a whole in the manner a reasonable business person would read it, as explained in Verve Energy 306 ALR at 33–34 [35] and the authorities to which French CJ, Hayne, Crennan and Kiefel JJ referred, the questions of whether cl 4.3 is an unreasonable restraint or can and should be read down under the Restraints of Trade Act do not arise. However, we are not persuaded that cl 4.3 imposes a reasonable restraint of trade. It lacks any connection to the demised premises or any other reasonable basis connected to the sublessor's legitimate interests, such as the protection of its goodwill and trading reputation. The plenary restraint in cl 4.3, outside the activities contemplated by cl 20, preventing a sublessee conducting any business giving even its address as Thredbo is unreasonable. In our opinion, cl 4.3 is void at common law, as his Honour correctly held. Conclusion 86 For these reasons, the appeal must be dismissed with costs. I certify that the preceding eighty-six (86) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Siopis, Rares & Katzmann Associate: Dated: 21 July 2014	16,828
federal_court_of_australia:fca/single/2023/2023fca0206	decision	commonwealth	federal_court_of_australia	text/html	2023-03-08 00:00:00	Trustees of the Property of Shane L Fuz (Bankrupt); in the matter of Shane L Fuz (Bankrupt) v NSW Trustee and Guardian (No 2) [2023] FCA 206	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2023/2023fca0206	2024-09-13T22:44:59.084451+10:00	Federal Court of Australia Trustees of the Property of Shane L Fuz (Bankrupt); in the matter of Shane L Fuz (Bankrupt) v NSW Trustee and Guardian (No 2) [2023] FCA 206 File number(s): NSD 725 of 2019 Judgment of: GOODMAN J Date of judgment: 8 March 2023 Date of publication of reasons: 10 March 2023 Catchwords: BANKRUPTCY – bankrupt's joint interest in property with late wife – probate granted and property sold – order made for distribution of proceeds of sale Legislation: Probate and Administration Act 1898 (NSW), ss 44, 61 Cases cited: Ex parte Newlands Brothers Pty Ltd; Re Kenniff (1955) 56 SR(NSW) 35 Trustees of the Property of Shane L Fuz (Bankrupt); in the matter of Shane L Fuz (Bankrupt) v NSW Trustee and Guardian [2019] FCA 1311 Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Number of paragraphs: 16 Date of hearing: 8 March 2023 Solicitor for the Applicant: Ms B McMahon of Matthews Folbigg Pty Ltd Solicitor for the Respondent: No appearance ORDERS NSD 725 of 2019 IN THE MATTER OF SHANE L FUZ (BANKRUPT) BETWEEN: TRUSTEES OF THE PROPERTY OF SHANE L FUZ (BANKRUPT) Applicant AND: NSW TRUSTEE AND GUARDIAN Respondent order made by: GOODMAN J DATE OF ORDER: 8 MARCH 2023 THE COURT ORDERS THAT: 1. Pursuant to rule 9.05 of the Federal Court Rules 2011 (Cth) ("the Rules"), Joshua Mark Fuz and Mathew Lea Fuz as Executors of the Deceased Estate of Joanne Kim Fuz be joined as the second respondent. 2. Pursuant to rule 9.05 of the Rules, the Trustees of the Property of Aaron Shane Fuz, a Bankrupt be joined as the third respondent. 3. Andrew Aravanis and Ronil Prakash Roy as Trustees for Sale of 90 Yalwal Road, West Nowra, distribute the Net Proceeds held by them in an interest bearing account pursuant to Order 5(f)(ii) of the Orders made on 29 August 2019, as follows: (a) $34,080.25 to the Trustees of the Bankrupt Estate of Aaron Shane Fuz; and (b) the balance to the executors of the Deceased Estate of Joanne Kim Fuz. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT GOODMAN J 1 On 8 March 2023, I made orders for the distribution of the net proceeds of the sale of a property at Nowra in New South Wales, which proceeds are held on trust by the applicant trustees. I also made orders for the joinder of several parties as respondents. Set out below are my reasons for doing so. I refer below to members of the Fuz family (Shane, his late wife Joanne and their four children – Joshua, Mathew, Jayanne and Mathew) by their first names for convenience and without intending any disrespect. BACKGROUND 2 As at February 2012, Shane and Joanne owned the property jointly. 3 In February 2012, Shane became bankrupt and the trustees were appointed as trustees of his bankrupt estate. 4 On 6 July 2015, Joanne passed away leaving a will. The beneficiaries under her will are her four children. Upon her passing, her estate was deemed to be vested in the respondent, the New South Wales Trustee and Guardian, pursuant to s 61 of the Probate and Administration Act 1898 (NSW). 5 In July 2016, Aaron became bankrupt. The trustees were also appointed as trustees of his bankrupt estate. 6 On 9 May 2019, the trustees commenced this proceeding by originating application, seeking orders appointing themselves as trustees for sale of the property and facilitating the corresponding sale and distribution of funds. 7 On 7 June 2019, the respondent notified the trustees' solicitor that as the respondent was not administering Joanne's estate, and as the object of s 61 of the Act is to "… put the title in the Public Trustee and to hold the position in statu quo until a personal representative is appointed…" (citing Ex parte Newlands Brothers Pty Ltd; Re Kenniff (1955) 56 SR(NSW) 35 at 40 per Street CJ, Maxwell and Herron JJ), it proposed to take no active role in the proceeding. The respondent has not filed a notice of appearance. 8 On 29 August 2019, Flick J made a series of declarations and orders in this proceeding. Relevantly for present purposes his Honour appointed the trustees as trustees for the sale of the property and made orders for the distribution of the proceeds of sale of the property: Trustees of the Property of Shane L Fuz (Bankrupt); in the matter of Shane L Fuz (Bankrupt) v NSW Trustee and Guardian [2019] FCA 1311 (Fuz (No 1)). Order 5(f) was in the following terms: 5. Following completion of the sale of the Property by the Trustees for Sale, the settlement funds shall be distributed by the Trustees for Sale in the following order: ... f. Finally, the remaining balance of the sale proceeds ("the Net Proceeds") be divided equally and distributed as follows: (i) one-half of the Net Proceeds be paid to the Applicant; and (ii) one-half of the Net Proceeds be paid into an interest bearing account to be held by the Trustees for Sale on trust for the Deceased Estate of Joanne Kim Fuz, pending further order of the Court. … 9 As Flick J noted at [2] of Fuz (No 1), as at the date of his orders, no application for probate in respect of Joanne's will had been made. 10 On 10 November 2020, the trustees sold the property. The proceeds of sale have been held in an interest bearing account in accordance with order 5(f)(ii). 11 On 15 June 2022, probate was granted in respect of Joanne's will. Joshua and Mathew were appointed as the executors of Joanne's deceased estate. Thus, the trustees are now in a position to seek the further order contemplated by order 5(f)(ii). 12 The trustees (in their various capacities) and the executors have liaised and reached an agreement regarding a distribution of the proceeds from the sale of the property. In essence, they have agreed that Aaron's bankrupt estate should receive $34,080.25 of the proceeds of sale, and the executors receive the balance, to be distributed to the other beneficiaries under the will. 13 On 27 October 2022, the solicitor for the trustees wrote to the respondent enclosing a copy of orders they proposed to seek from the Court, and requesting that the respondent confirm whether there was any objection to the proposed orders and to indicate whether the respondent wished to be heard. No response was received from the respondent. 14 On 3 February 2023, the trustees filed an interlocutory application seeking orders for the joinder of (1) the executors and (2) themselves, in their capacity as trustees of Aaron's bankrupt estate, together with the following order: An order that Andrew Aravanis and Ronil Prakash Roy as Trustees for Sale of 90 Yalwal Road, West Nowra, distribute the Net Proceeds held by them in an interest bearing account pursuant to Order 5(f)(ii) of the Orders made on 29 August 2019, as follows: (a) $34,080.25 to the Trustees of the Bankrupt Estate of Aaron Shane Fuz; and (b) the balance to the executors of the Deceased Estate of Joanne Kim Fuz. CONSIDERATION Joinder 15 Both the executors and the trustees (in their capacity as trustees of Aaron's bankrupt estate) consented to their joinder as respondents. I was satisfied that each should be joined. In particular: (1) as probate has now been granted in respect of Joanne's estate, vesting her real and personal property in the executors pursuant to s 44 of the Act, the executors are now (and since the grant of probate have been) proper parties to this proceeding; and (2) the trustees in their capacity as trustees of Aaron's bankrupt estate should be joined as they are persons directly affected by the orders proposed. Distribution 16 I was satisfied that it was appropriate to make the distribution order sought in the following circumstances: (1) a further order is contemplated by order 5(1)(f)(ii) and is necessary to allow for the distribution of the proceeds of sale of the property which are currently held on trust by the trustees for the benefit of Joanne's estate; (2) by s 44 of the Act, Joanne's estate has vested in the executors and the respondent has no role to play in the proceeding; (3) all interested parties consent to the proposed distribution; and (4) the respondent is aware of the proceeding and has elected not to participate in it. The respondent is also on notice of the present application. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Goodman. Associate: Dated: 10 March 2023	2,097
federal_court_of_australia:fca/single/2022/2022fca1078	decision	commonwealth	federal_court_of_australia	text/html	2022-08-25 00:00:00	Kelly (Liquidator), in the matter of Halifax Investment Services Pty Ltd (in liquidation) v Loo (No 2) [2022] FCA 1078	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2022/2022fca1078	2024-09-13T22:44:59.292126+10:00	FEDERAL COURT OF AUSTRALIA Kelly (Liquidator), in the matter of Halifax Investment Services Pty Ltd (in liquidation) v Loo (No 2) [2022] FCA 1078 File number: NSD 2191 of 2018 Judgment of: MARKOVIC J Date of judgment: 25 August 2022 Date of publication of reasons: 14 September 2022 Catchwords: CORPORATIONS – application under s 477(2B) of the Corporations Act 2001 (Cth) for approval of entry into a funding agreement – whether it is a proper exercise of the liquidators' powers – application allowed – application for judicial advice and/or directions to the effect that liquidators would be justified in prosecuting a proceeding – whether it is proper for the liquidators to incur the costs and expenses, comprising their remuneration and expenses other than legal fees, in prosecuting the proposed proceeding – application granted – application for confidentiality orders pursuant to s 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth) – whether orders necessary to prevent prejudice to the proper administration of justice – application granted Legislation: Corporations Act 2001 (Cth) s 477(2B) Federal Court of Australia Act 1976 (Cth) s 37AF, s 37AG(1)(a) Trustee Act 1925 (NSW) s 63 Cases cited: Goyal (liquidator) in the matter of OLI 1 Pty Ltd (in liq) [2020] FCA 450 Hughes, in the matters of Sales Express Pty Ltd (in Liq) [2016] FCA 423 Kelly (Liquidator), in the matter of Halifax Investment Services Pty Ltd (in liquidation) v Loo [2021] FCA 531 Kogan, in the matter of Rogulj Enterprises Pty Ltd (in liq) [2021] FCA 856 Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66 Motorola Solutions Inc v Hytera Communications Corporation Ltd (No 2) [2018] FCA 17 Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 50 Dates of hearing: 25 August 2022 Counsel for the Plaintiffs: Ms E Holmes Solicitor for the Plaintiffs: K&L Gates ORDERS NSD 2191 of 2018 BETWEEN: MORGAN JOHN KELLY IN HIS CAPACITY AS A JOINT AND SEVERAL LIQUIDATOR OF HALIFAX INVESTMENT SERVICES PTY LTD (IN LIQUIDATION) ACN 096 980 522 First Plaintiff PHILIP ALEXANDER QUINLAN PHILIP ALEXANDER QUINLAN IN HIS CAPACITY AS A JOINT AND SEVERAL LIQUIDATOR OF HALIFAX INVESTMENT SERVICES PTY LTD (IN LIQUIDATION) ACN 096 980 522 Second Plaintiff HALIFAX INVESTMENT SERVICES PTY LTD (IN LIQUIDATION) Third Plaintiff AND: CHOO BOON LOO First Defendant ELYSIUM BUSINESS SYSTEMS PTY LTD Second Defendant JASON PAUL HINGSTON (and others named in the Schedule) Third Defendant order made by: markovic j DATE OF ORDER: 14 september 2022 THE COURT ORDERS THAT: 1. Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), to prevent prejudice to the proper administration of justice: (a) the unredacted version of the reasons for judgment not be published and not be made available to any person other than the plaintiffs to the proceeding or their legal representatives otherwise than pursuant to an order of a judge of the Court; (b) within seven days the plaintiffs provide to the Associate to Justice Markovic a proposed redacted version of the reasons for judgment which the plaintiffs consider is appropriate for publication. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. ORDERS NSD 2191 of 2018 IN THE MATTER OF HALIFAX INVESTMENT SERVICES PTY LTD (IN LIQUIDATION) ACN 096 980 522 BETWEEN: MORGAN JOHN KELLY IN HIS CAPACITY AS A JOINT AND SEVERAL LIQUIDATOR OF HALIFAX INVESTMENT SERVICES PTY LTD (IN LIQUIDATION) ACN 096 980 522 First Plaintiff PHILIP ALEXANDER QUINLAN PHILIP ALEXANDER QUINLAN IN HIS CAPACITY AS A JOINT AND SEVERAL LIQUIDATOR OF HALIFAX INVESTMENT SERVICES PTY LTD (IN LIQUIDATION) ACN 096 980 522 Second Plaintiff HALIFAX INVESTMENT SERVICES PTY LTD (IN LIQUIDATION) Third Plaintiff AND: CHOO BOON LOO First Defendant ELYSIUM BUSINESS SYSTEMS PTY LTD Second Defendant JASON PAUL HINGSTON (and others named in the Schedule) Third Defendant order made by: MARKOVIC J DATE OF ORDER: 25 August 2022 THE COURT ORDERS THAT: 1. Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) (FCA Act) and on the ground that it is necessary to prevent prejudice to the proper administration of justice for the purposes of s 37AG(1)(a) of the FCA Act, until the conclusion of the proceeding contemplated by the plaintiffs which is the subject of the application for judicial advice or directions or further order of the Court, the following material is not to be disclosed or made available for inspection by any person other than the docket judge, a member of the docket judge's staff, any officer of the Court authorised by the docket judge or any judge or other officer of the High Court of New Zealand, the plaintiffs, their staff and their legal representatives: (a) the unredacted copy of the affidavit of Morgan John Kelly affirmed on 11 August 2022 (Kelly August affidavit); (b) Confidential Exhibit H (formerly Confidential Exhibit MJK-15) to the Kelly August affidavit; (c) the unredacted copy of the written submissions dated 11 August 2022 provided by the plaintiffs in support of the amended interlocutory process; and (d) the transcript of today's hearing. 2. On the basis that it is necessary to prevent prejudice to the proper administration of justice from 11.24 am AEST the Court be closed on the hearing of the plaintiffs' amended interlocutory process filed on 15 August 2022 (Amended Interlocutory Process) until further direction with only the following persons permitted to remain: (a) officers of the Court; (b) representatives of the transcript provider; (c) the plaintiffs; and (d) the plaintiffs legal representatives. 3. The requirement for service of the Amended Interlocutory Process, the Kelly August affidavit and the exhibits to the Kelly August affidavit on the defendants be dispensed with. 4. Pursuant to s 477(2B) of the Corporations Act 2001 (Cth), the plaintiffs be granted approval to enter into the funding agreement (Funding Agreement) in substantially the form appearing at pages 192 to 217 of Confidential Exhibit H to the Kelly August affidavit. 5. The plaintiffs are justified in bringing and prosecuting proceedings substantially in the form of those set out in the draft statement of claim at pages 2 to 113 of Confidential Exhibit H in circumstances in which the Funding Agreement is in place. 6. The plaintiffs are justified in paying the plaintiffs' remuneration, costs and expenses in respect of the proceedings referred to in Order 5 in accordance with the process provided for by the Orders of Gleeson J made on 2 July 2020. 7. The plaintiffs' costs of and incidental to this application be costs and expenses in the liquidation of the third plaintiff and be paid out of the funds and accounts listed in Order 1 of the Orders made by Gleeson J on 2 July 2020. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MARKOVIC J: 1 By amended interlocutory process filed on 15 August 2022 Morgan John Kelly and Philip Alexander Quinlan in their capacity as joint and several liquidators (Liquidators) of Halifax Investments Services Pty Ltd (in liquidation) (Halifax AU) and Halifax AU (plaintiffs) sought various order and directions including: (1) an order pursuant to s 477(2B) of the Corporations Act 2001 (Cth) for the plaintiffs to enter into a funding agreement in respect of a proposed recovery proceeding against the former auditors and solicitors of Halifax AU; and (2) judicial advice and/or directions to the effect that the plaintiffs would be justified in: (a) bringing and prosecuting a proceeding substantially in the form of a draft statement of claim exhibited to the affidavit of Mr Kelly affirmed on 11 August 2022 (Kelly Affidavit); and (b) being paid their remuneration for bringing and prosecuting the proceeding referred to in (a) above in accordance with the process provided for by the orders made by this Court on 2 July 2020. 2 In support of the application the plaintiffs relied on the Kelly Affidavit and two exhibits thereto, one of which was subject to a claim for confidentiality, and a separate bundle of correspondence. The plaintiffs sought an order pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) in relation to, among other things, the Kelly Affidavit and the confidential exhibit to it, which became Exhibit H. 3 The application was brought with a degree of urgency because of the imminence of the expiration of limitation periods in relation to some of the claims the subject of the proposed proceeding. For that reason it was listed at short notice for hearing before me. 4 On 25 August 2022 I made the orders sought by the plaintiffs in their amended interlocutory process. These are my reasons for making those orders. BACKGROUND 5 The Liquidators were first appointed as joint and several voluntary administrators and then liquidators of Halifax AU on 23 November 2018 and 20 March 2019 respectively. They were also appointed as voluntary administrators and then liquidators of Halifax New Zealand Limited (in liquidation) (Halifax NZ) on 27 November 2018 and 22 March 2019 respectively. Halifax AU held 70% of the shares in Halifax NZ. 6 Halifax AU and Halifax NZ were financial services providers dealing in financial products on behalf of their respective investor clients: see Kelly (Liquidator), in the matter of Halifax Investment Services Pty Ltd (in liquidation) v Loo [2021] FCA 531 (Halifax v Loo) at [3]. The business of Halifax AU and Halifax NZ is described in detail in Halifax v Loo at [32]-[72]. It is not necessary to repeat those details here save to note that the application made in that proceeding and the parallel proceeding commenced in the High Court of New Zealand (NZ High Court) arose from the uncontroversial fact that there was (and is) a deficiency in moneys which are held on trust by Halifax AU and Halifax NZ for the benefit of their investor clients and that, prior to the date of administration, in breach of statutory requirements, there was commingling of funds held as between Halifax AU's accounts, Halifax NZ's accounts, and as between the accounts of Halifax AU and Halifax NZ such that as at the date of administration there was a single deficient mixed fund. In those circumstances the Liquidators sought judicial advice and directions from this Court and the NZ High Court in relation to the way in which the funds held in trust should be distributed. 7 Following a joint hearing between this Court and the NZ High Court, orders and directions were made in the proceeding before each court in relation to the method of distribution of the funds: see Halifax v Loo and Halifax New Zealand Limited (in liq) v Loo & Ors [2021] NZHC 1113. Appeals by the first defendant from an aspect of the Orders made in this Court and the NZ High Court were dismissed: see Loo, in the matter of Halifax Investment Services Pty Ltd (in liquidation) v Quinlan (Liquidator) [2021] FCAFC 186 and Loo v Quinlan (in their capacity as liquidators) [2021] NZCA 561. I will refer to these proceedings collectively as the client money proceedings. 8 As is apparent from the matters set out above, and as explained by Mr Kelly, the assets held by the Liquidators since their appointment to Halifax AU and Halifax NZ are held on trust for the investor clients of those companies and are to be distributed by the Liquidators in accordance with the directions given by this Court and the NZ High Court, subject to payment from time to time of the costs of the liquidation, in accordance with a process approved by each Court, from those trust funds. 9 The Liquidators have recently recovered a sum of money following the confidential settlement of a claim against a third party. However, they understand that sum may, subject to judicial advice, also form part of the commingled funds held on trust for investor clients of Halifax AU and Halifax NZ. 10 It follows that the Liquidators do not have any funds available to them to commence any proceedings to seek to recover amounts from third parties, other than funds which are or may be trust assets. Work undertaken to date 11 Since their appointment the Liquidators have undertaken and completed significant work in relation to the question of treatment of investor funds and the distribution of those funds including for the purposes of the client money proceedings. A significant proportion of the Liquidators' work and time up to the conclusion of the appeal proceedings referred to at [7] above was concerned with the client money proceedings. However, at the same time the Liquidators also completed work in relation to potential recovery actions against third parties. Since the resolution of the client money proceedings the Liquidators have been in a position to undertake work to progress those potential claims. Identification of potential claims 12 As a result of the work they have undertaken and with the assistance of their legal advisors, the Liquidators have identified a number of potential claims that may be available to Halifax AU. They include claims against its former auditors and solicitors. 13 The Liquidators have obtained advice from counsel in relation to the potential claims against third parties and have prepared a draft statement of claim in relation to Halifax AU's potential claims against its former auditors and solicitors. I was informed that, subject to some minor amendments, that draft was substantially in a form ready for filing. The advice obtained by the Liquidators and the draft statement of claim were in evidence before me but are subject to the confidentiality order. Funding of potential claims 14 The Liquidators have also taken steps to secure funding in order to be able to prosecute the potential claims against Halifax AU's former auditors and solicitors. 15 On 30 June 2020 the Liquidators applied to the Australian Securities and Investments Commission's (ASIC) Assetless Administration Fund for funding, including for the purpose of making inquiries of the previous advisors to Halifax AU and for the purpose of undertaking public examinations. On 24 December 2021 ASIC requested further information from the Liquidators which they provided on 16 February 2022. However, as at 11 August 2022, the date on which Mr Kelly affirmed his affidavit, ASIC had not offered to provide funding to the Liquidators for the purposes of its further investigations or public examinations. 16 In mid-2019 the Liquidators entered into preliminary discussions with prospective funders. In July 2021 they identified four prospective private litigation funders to approach in relation to the possibility of funding their proposed claims. The Liquidators entered into confidentiality deeds with, and issued an "Invitation to prospective funders" to, each of them. 17 Three of the four prospective funders declined to provide an offer of litigation funding to the Liquidators. On 3 June 2022 the Liquidators received an indicative funding proposal from the remaining prospective funder (proposed funder) for the funding of potential claims against Halifax AU's former auditors and solicitors. The indicative proposal was subject to approval by the proposed funder's investment committee. 18 On 30 June 2020 the proposed funder's investment committee considered the Liquidators' funding application and recommended it to its board for funding on the terms set out in an agreed form of funding agreement which had been the subject of discussions between the Liquidators and the proposed funder (Funding Agreement). 19 On 11 July 2022 the Liquidators were notified that the proposed funder's board had approved funding in accordance with the Funding Agreement. 20 A copy of the Funding Agreement was in evidence before me. It is also the subject of the confidentiality order. Accordingly, I have not set out its terms. Notice to investor clients and creditors 21 In a "Report to Investors and Creditors" dated 31 August 2020 the Liquidators informed investor clients and creditors of Halifax AU and Halifax NZ of work undertaken by them in relation to a potential action against Halifax AU's former auditors. 22 Mr Kelly gave evidence that more generally at meetings and in reports the Liquidators have informed investor clients and creditors about possible recovery actions. 23 By notice dated 16 August 2022 (Notice), among other things, the Liquidators notified investor clients that they had: … identified a number of claims against former lawyers and auditors who provided professional services to Halifax AU. The claims arise out of services provided to Halifax AU before the Liquidators' appointment which the Liquidators consider caused loss to the Halifax Group. That loss is, in significant part, its liability to Investors, being the difference between the money that should have been held on trust by Halifax AU for Investors and the amount that was actually held on trust. The loss also includes costs associated with the liquidation. 24 The Notice also: (1) referred to the fact that the Liquidators had reached an agreement in principle with a funder to provide funding to pursue the proposed claims; (2) referred to the filing of the application for approval to enter into the Funding Agreement and for judicial advice or directions to pursue the proposed proceedings against the former auditors and solicitors and to pay the Liquidators' remuneration for doing so from the moneys held on trust for investor clients; and (3) provided details of the date, time and venue for the hearing of the plaintiffs' application referred to in (2) above. 25 The Liquidators have received responses to their earlier notifications and, more recently, to the Notice. Those responses fall into two broad categories: those which raised the risk of delay in the payment of dividends because of the pursuit of the proposed proceeding; and those which were concerned with whether there would be any net benefit to investors, in terms of recovery, as a result of the proposed proceeding. 26 The Liquidators responded to each of the queries. In summary they informed investor clients that: (1) they intend to continue to pay dividends notwithstanding commencement of the proposed proceeding, although they acknowledge that payment of a final dividend will likely be delayed until completion of the proceeding; and (2) if the proposed proceeding is successful the pool of funds available to investor clients will likely increase, subject to payment of the Liquidators' remuneration and costs and, if it is not successful, the downside to investors is those costs. 27 No investor client or creditor sought to appear at the hearing of the application. APPROVAL TO ENTER INTO THE FUNDING AGREEMENT 28 The Liquidators applied for approval pursuant to s 477(2B) of the Corporations Act to enter into the Funding Agreement. That application was necessary because the terms of the Funding Agreement will end, and some of the obligations of the parties to that agreement may be performed, more than three months after the date on which the Liquidators enter into it. 29 Section 477(2B) of the Corporations Act provides: Except with the approval of the Court, of the committee of inspection or of a resolution of the creditors, a liquidator of a company must not enter into an agreement on the company's behalf (for example, but without limitation, a lease or an agreement under which a security interest arises or is created) if: (a) without limiting paragraph (b), the term of the agreement may end; or (b) obligations of a party to the agreement may, according to the terms of the agreement, be discharged by performance; more than 3 months after the agreement is entered into, even if the term may end, or the obligations may be discharged, within those 3 months. 30 The principles in relation to the application of s 477(2B) of the Corporations Act are well established. 31 The object of s 477(2B) of the Corporations Act is to ensure that the expectation that the winding up process will proceed in as expeditious a fashion as the circumstances allow is not unnecessarily prejudiced. The section is also seen to afford some protection to the company's creditors against ill-advised or improper actions on the part of a liquidator. However, the Court does not simply "rubber stamp" any agreement that a liquidator proposes to enter into. The approval process requires an assessment by the Court that entry into the agreement is a proper exercise of power and not ill-advised or improper on his or her part, rather than involving the exercise of commercial judgment: see Kogan, in the matter of Rogulj Enterprises Pty Ltd (in liq) [2021] FCA 856 at [16]-[18]. 32 In Hughes, in the matters of Sales Express Pty Ltd (in Liq) [2016] FCA 423 at [20] Edelman J set out the principles that apply in considering an application under s 477(2B) of the Corporations Act as follows: The approach to be taken to s 477(2B) is well settled. The principles, based on the authorities cited at the conclusion of this paragraph, concerning the grant or refusal of approval by the Court can be summarised as follows: (1) the role of the Court is to grant or refuse approval. It is not to develop an alternative proposal; (2) the notion of necessity in the power of the liquidator to do "things as are necessary" has a broad meaning and empowers a liquidator to do anything expedient in relation to the beneficial completion of the winding-up of the affairs of the corporation and the distribution of its assets; (3) however, notwithstanding this breadth, the Court must be satisfied that there is a good and solid reason for concluding that the processes of winding up and distribution would be enhanced by the funding agreement, compared with the ordinary deployment of surplus funds. The enhancement must be demonstrated by some informed and independent assessment of the separate and selfish interests of the funding company; (4) although the Court must be satisfied that it is appropriate for the exercise of power under s 477(2B), the Court will not generally review a liquidator's commercial judgment or second guess its decision; (5) circumstances in which the Court will scrutinise a liquidator's decision closely include where there appears to be a lack of good faith, an error of law or principle, or a real or substantial ground for doubting the prudence of the liquidator's conduct; (6) the Court will rarely approve an agreement which has important terms that are unclear; (7) in considering whether the Court's power under s 477(2B) should be exercised, any relevant matter can be considered. Matters that are commonly relevant include: (a) the manner in which the funding or indemnity will be provided under the agreement; (b) the extent to which the liquidator has considered other funding options; (c) the interests of creditors other than the proposed or potential respondents and the extent to which the liquidator has consulted them; (d) the liquidator's prospects of success in the litigation although this factor will rarely be able to be assessed at anything other than a high level of abstraction; (e) possible oppression in bringing the proceedings; (f) the nature and complexity of the cause of action; (g) the risks involved in the claim (including the amount of costs likely to be incurred in the proposed litigation, the extent to which the funder is to contribute to those costs, and the extent to which the funder is to contribute to the costs of the defendant in the event that the action is not successful, or towards any order for security for costs); (h) any particular premium or benefit which is promised in consideration of the provision of the funding or indemnity including whether that benefit is proportionate to the risk undertaken by the funder; (i) whether the liquidator is subject to any control over the conduct of the litigation, other than the usual obligation to keep the funder fully informed of all matters relating to the action; and (j) whether the agreement provides for a clear mechanism for resolving any dispute between the funder and the liquidator about the compromise of the litigation which is funded, … (Citations omitted.) 33 Having regard to the factors identified in Hughes, I was satisfied that an order should be made under s 477(2B) of the Corporations Act approving entry by the Liquidators into the Funding Agreement. This was because: (1) there is good reason for concluding that the processes of winding up and distribution would be enhanced by the Funding Agreement. This is because the Funding Agreement will permit the Liquidators to pursue the proposed claim against Halifax AU's former auditors and solicitors in circumstances where the only costs to which investors will be exposed, assuming entry into of the Funding Agreement, are the Liquidators' own costs (i.e. remuneration and expenses) in connection with the litigation. Mr Kelly has identified those costs associated with pursuing the proposed proceeding which have already been incurred and provided an estimate of future costs. The Liquidators incurred past costs as they formed the view that the proposed proceeding should only be pursued if litigation funding could be obtained which, in turn, could only be obtained once the proposed proceeding was developed and its merits considered; (2) the Liquidators have attempted to obtain funding from ASIC and four funders. The Funding Agreement is the only viable option; (3) the terms of the Funding Agreement are clear. More specifically, Mr Kelly opined that the terms of the Funding Agreement are commensurate with those ordinarily encountered by liquidators; (4) preparation for the proposed proceeding is well developed. A pleading has been drafted and is close to finalisation; (5) while it is an aspect that only need be addressed at a high level of abstraction, based on the advices obtained by the Liquidators in relation to the prospects of success of the proposed proceeding, I was comfortably satisfied that it was a proper exercise of power for the Liquidators to enter in to the Funding Agreement; and (6) notice of the proposal to enter into the Funding Agreement was provided to investor clients. In that respect, as set out above, responses were provided to any queries posed by investor clients and no investor client or creditor sought to appear at the hearing or be heard on the application. JUDICIAL ADVICE AND/OR DIRECTIONS 34 The Liquidators also seek judicial advice and/or directions that they are justified in pursuing the proposed proceeding and that they are entitled to their remuneration in accordance with the process for its approval put in place by this Court. 35 Section 63 of the Trustee Act 1925 (NSW) provides that: (1) A trustee may apply to the Court for an opinion advice or direction on any question respecting the management or administration of the trust property, or respecting the interpretation of the trust instrument. (2) If the trustee acts in accordance with the opinion advice or direction, the trustee shall be deemed, so far as regards the trustee's own responsibility, to have discharged the trustee's duty as trustee in the subject matter of the application, provided that the trustee has not been guilty of any fraud or wilful concealment or misrepresentation in obtaining the opinion advice or direction. 36 In Halifax v Loo at [18]–[19] I relevantly summarised the principles in relation to obtaining judicial advice pursuant to s 63 of the Trustee Act by reference to the decision in Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66 as follows: 18 The principles in respect of judicial advice to trustees were considered in [Macedonian Orthodox Church]. There, the plurality (Gummow ACJ, Kirby, Hayne and Heydon JJ) observed at [56]-[60] that there is no limitation on the power of the Court to give judicial advice pursuant to s 63 of the Trustee Act but there is one jurisdictional bar to relief under the section. That is that an applicant "must point to the existence of a question respecting the management or administration of the trust property or a question respecting the interpretation of the trust instrument": see Macedonian Orthodox Church at [58]. 19 At [64] of Macedonian Orthodox Church, the plurality observed that s 63 of the Trustee Act operates as an exception to a court's ordinary function of deciding disputes between competing litigants and affords a facility for providing private advice to a trustee, noting that it is private advice because, as is evident from the operation of s 63(2) of the Trustee Act, its function is to give personal protection to the trustee. … 37 Further and, of particular relevance to this application, at [71] of Macedonian Orthodox Church, the plurality said: In short, provision is made for a trustee to obtain judicial advice about the prosecution or defence of litigation in recognition of both the fact that the office of trustee is ordinarily a gratuitous office and the fact that a trustee is entitled to an indemnity for all costs and expenses properly incurred in performance of the trustee's duties. Obtaining judicial advice resolves doubt about whether it is proper for a trustee to incur the costs and expenses of prosecuting or defending litigation. No less importantly, however, resolving those doubts means that the interests of the trust will be protected; the interests of the trust will not be subordinated to the trustee's fear of personal liability for costs. (Emphasis in original.) 38 The Liquidators seek judicial advice and/or directions in this case because, as explained at [6]-[8] above, the monies held by them are, by virtue of the relevant sections of the Corporations Act, held in trust for the benefit of the investor clients of Halifax AU and Halifax NZ. That means that, to the extent that the costs of the proposed proceeding against Halifax AU's former auditors and solicitors are not covered by the Funding Agreement, the Liquidators will seek to have those costs paid from the commingled trust monies. 39 The plaintiffs submitted that the matters relevant to take into account on an application for judicial advice are in the discretion of the Court but observed that in this case the considerations are similar to those addressed for the purposes of their application pursuant to s 477(2B) of the Corporations Act for approval to enter into the Funding Agreement. They submitted that the two applications go hand in hand because it will only be proper for the Liquidators to enter into the Funding Agreement if it is proper for them to pursue the proposed proceeding. I accept that is so. 40 On this aspect of the application, the question for the Court was whether it is proper for the Liquidators to incur the costs and expenses, comprising their remuneration and expenses other than legal fees, in prosecuting the proposed proceeding. I was satisfied that it was having regard to the matters set out at [33] above and the following further matters. 41 First, the nature of the claim as set out in the draft statement of claim. The claim is against the former auditors and solicitors of Halifax AU and, in broad terms, concerns advice given to Halifax AU prior to its entry into administration. The claim made against each respondent is for damages for breach of provisions of the Australian Consumer Law being Sch 2 to the Competition and Consumer Act 2010 (Cth), breach of contract and breach of duty. The drafting of the claim is well advanced and, as I have already observed, subject to some minor amendment, will be filed substantially in the form of the draft statement of claim in evidence before me. 42 Secondly, the Liquidators have obtained detailed advice from their legal team in relation to prospects of success of the claims. Those advices were prepared having regard to the detailed understanding that the Liquidators and their legal advisers have of the operations of Halifax AU and Halifax NZ as a result of the client money proceedings. They consider prospects of success against each party, including in relation to questions of causation, damages and recovery. Given the confidential nature of the advices, I do not intend to refer to them in any detail here save to note that I was satisfied that the Liquidators have received advice sufficient for the purposes of this application and which provide a proper basis to draw a conclusion as to their likely prospects of success. 43 Thirdly and relatedly, in pursuing the proposed proceeding the funds held on trust are exposed to a limited degree only; that is for the Liquidators' remuneration as estimated by them. Those funds are not exposed to legal costs or to adverse costs orders, all of which are subject to and covered by the Funding Agreement. Insofar as the Liquidators' remuneration is concerned, the Liquidators have provided an estimate of those costs, which is contained in Exhibit H and is confidential. Accordingly, I have not set that estimate out. However, I am satisfied that the estimated remuneration and related costs are reasonable and appropriate. ORDERS FOR CONFIDENTIALITY 44 As set out above, on the application of the plaintiffs I made an order pursuant to s 37AF of the Federal Court Act, on the grounds in s 37AG(1)(a) of that Act, that the unredacted versions of the Kelly Affidavit, the submissions filed by the plaintiffs, Exhibit H and the transcript of the proceeding be kept confidential until the conclusion of the proposed proceeding against the former auditors and solicitors of Halifax AU. Redacted versions of each of the Kelly Affidavit and the submissions were also filed. 45 Section 37AF of the Federal Court Act empowers the Court to make a suppression or non-publication order prohibiting or restricting the publication of, among other things, evidence in a proceeding or information about evidence that is filed with the Court. The grounds on which such an order can be made are set out in s 37AG of that Act and relevantly include to "prevent prejudice to the proper administration of justice": see s 37AG(1)(a). 46 In Motorola Solutions Inc v Hytera Communications Corporation Ltd (No 2) [2018] FCA 17 at [6] Perram J summarised the principles to be applied in making a non-publication or suppression order under s 37AF of the Federal Court Act as follows: This Court has recently set out the principles to be applied when it is considering whether or not to make a suppression or non-publication order: Chief Executive Officer of Australian Transaction Reports and Analysis Centre v TAB Limited (No 4) [2017] FCA 1532 ('CEO of AUSTRAC v TAB (No 4)' at [9]-[12]. The present application does not call for any greater elaboration of those principles but they may be distilled as follows: (1) the FCAA contains Part VAA which relates to suppression and non-publication orders; (2) the power of the Court to make such orders is contained in s 37AF and the grounds for making them are to be found in s 37AG which includes within it that 'the order is necessary to prevent prejudice to the proper administration of justice': s 37AG(1)(a); (3) such an order is not lightly to be made. It must be necessary to prevent prejudice to the proper administration of justice and not merely desirable: see Hogan v Australian Crime Commission [2010] HCA 21; (2010) 240 CLR 651 at 666 [39]; Australian Competition and Consumer Commission v Valve Corporation (No 5) [2016] FCA 741 at [8] per Edelman J; (4) the Court may make any other order necessary to give effect to the primary order: s 37AF(2) of the FCAA. (5) the order, once made, must remain in place no longer than is reasonably necessary to achieve its purpose: s 37AJ(2); and (6) the Court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice (s 37AE) but no balancing exercise need be carried out between the utility of the order and the interest which open justice assumes under the FCAA: Australian Competition and Consumer Commission v Air New Zealand (No 12) [2013] FCA 533 at [21]. 47 In Goyal (liquidator) in the matter of OLI 1 Pty Ltd (in liq) [2020] FCA 450, in considering an application for orders pursuant to s 37AF of the Federal Court Act over some of the material relied on for the purposes of an application under s 477(2B) of the Corporations Act at [30]-[34], I observed: 30 Mr Goyal is concerned that if the proposed defendants to any proceeding are made aware of the commercial terms of the Funding Deed it would provide them with an unfair forensic advantage in relation to how they conduct any proceeding and/or any negotiations for the resolution of any proceeding. 31 The Goyal Affidavit refers in detail to the Offer Letter and the Funding Deed and the way in which the funding would operate including its effect on recoveries in certain scenarios and exhibit "RG-1" thereto includes the Offer Letter and Funding Deed. The Submissions also refer to the terms of the Offer Letter and the Funding Deed, although in less expansive terms. 32 It has been generally accepted that it is "conventional" or "appropriate" to make orders of the nature sought by Mr Goyal in relation to material relied on in support of an application by a liquidator for approval of a funding deed for the prosecution of litigation for the benefit of creditors: see, for example, Hird (Liquidator), in the matter of Allmine Group Limited (in liq) [2018] FCA 781 at [47]; Vickers, in the matter of JM Kelly Builders Pty Ltd (in Liquidation) [2019] FCA 2141 at [20]; Pogroske, in the matter of Bower Projects Australia Pty Ltd (in liq) [2019] FCA 1688 at [22]-[23]. 33 The rationale for that approach was explained by Barrett J in McGrath & Anor Re HIH Insurance Ltd [2005] NSWSC 731 at [10]-[13] and, in particular, at [12] where his Honour relevantly said: The administration of justice is, in my view, very likely to be prejudiced in two ways by availability to the potential defendants of (and any public airing of) the information concerning the liquidators' proceedings that will inevitably be divulged by the adducing of evidence and the making of submissions on the hearing of the s.447(2B) [sic] applications. There is a likelihood of a real and negative impact upon the due and orderly conduct of the proposed proceedings themselves, in that the defendants in them will have access to information that, in the ordinary course, a plaintiff is entitled to keep confidential in the plaintiff's own interests. Any such access would produce an undue distorting effect in relation to the due conduct of those proceedings themselves. … 34 In DCT v ACN 154 520 199 at [40]-[41] Gleeson J made the following observations in considering an application for confidentiality orders pursuant to s 37AF of the FCA Act in connection with affidavits relied on by the plaintiff in that case: 40 In previous cases which are substantially similar to this case, including Re Ambient Advertising Pty Ltd (in liq) [2015] NSWSC 1079, Victoria v Goulburn Administration Services (In Liq) [2016] VSC 654 and Victoria v CTM Training Solutions Pty Ltd (In Liq) [2017] VSC 47, the proposed funding deeds were kept confidential as between the special purpose liquidators and the funder. There is no reason why this matter should be any different. 41 The clear public interest in the due and beneficial administration of the estates of insolvent companies for the benefit of creditors is a relevant consideration in favour of a s 37AF order in this case. I was satisfied that an order pursuant to s 37AF should be made to protect commercially confidential information provided in support of the application. 48 In this case the orders were sought in relation to the Funding Agreement and material which went to and described the nature of the proposed proceeding against Halifax AU's former auditors and solicitors and the prospects of success of that proceeding. That is material which would, if it was available to the proposed respondents to the proceeding, provide them with an unfair forensic advantage and which could well undermine the conduct of the proceeding and the administration of the insolvent estate. In those circumstances it is in the interests of the administration of justice that material of that nature be kept confidential until the conclusion of the proposed proceeding. 49 Accordingly I was satisfied that the order sought by the plaintiffs in relation to the material listed at [44] above was appropriate. CONCLUSION 50 For those reasons I made the orders sought by the plaintiffs in their amended interlocutory application. I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Markovic. Associate: Dated: 14 September 2022 SCHEDULE OF PARTIES NSD 2191 of 2018 Defendants Fourth Defendant: ATLAS ASSET MANAGEMENT PTY LTD Fifth Defendant: FIONA MCMULLIN Sixth Defendant: ANDREW PHILLIP WHITEHEAD AND MARLENE WHITEHEAD IN THEIR CAPACITY AS THE TRUSTEES OF THE BEELINE TRUST Seventh Defendant: ANDREW PHILLIP WHITEHEAD Eighth Defendant: JEFFREY JOHN WORBOYS Ninth Defendant: HONG KONG CAPITAL HOLDINGS PTY LIMITED	9,122
federal_court_of_australia:fca/single/2016/2016fca0896	decision	commonwealth	federal_court_of_australia	text/html	2016-08-05 00:00:00	Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd (No 2) [2016] FCA 896	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2016/2016fca0896	2024-09-13T22:45:00.376902+10:00	FEDERAL COURT OF AUSTRALIA Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd (No 2) [2016] FCA 896 File number: VID 261 of 2015 Judge: MOSHINSKY J Date of judgment: 5 August 2016 Legislation: Federal Court Rules, rr 28.02, 40.08 Trade Marks Act 1995 (Cth), s 129 Cases cited: Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd [2016] FCA 820 Date of hearing: Determined on the papers Date of last submissions: 2 August 2016 Registry: Victoria Division: General Division National Practice Area: Intellectual Property Sub-area: Trade Marks Category: No Catchwords Number of paragraphs: 8 Solicitor for the Applicants/ Cross-respondents: Mr J Omond, Omond & Co. Counsel for the Respondents/ Cross-claimant: Mr CD Golvan QC with Mr P Creighton-Selvay Solicitor for the Respondents/Cross-claimant: HWL Ebsworth ORDERS VID 261 of 2015 BETWEEN: STONE & WOOD GROUP PTY LTD (ACN 124 373 324) First Applicant STONE & WOOD BREWING PTY LTD (ACN 124 487 510) Second Applicant AND: INTELLECTUAL PROPERTY DEVELOPMENT CORPORATION PTY LTD (ACN 116 569 665) First Respondent ELIXIR SIGNATURE PTY LTD (ACN 135 297 988) Second Respondent AND BETWEEN: ELIXIR SIGNATURE PTY LTD (ACN 135 297 988) Cross-Claimant AND: STONE & WOOD GROUP PTY LTD (ACN 124 373 324) (and another named in the Schedule) First Cross-Respondent JUDGE: MOSHINSKY J DATE OF ORDER: 5 AUGUST 2016 THE COURT DECLARES THAT: 1. By letters from their solicitors dated 26 February 2015 and 15 April 2015, the first and second cross-respondents (Stone & Wood) made groundless threats against the cross-claimant (Elixir) to bring an action for infringement of Australian Trade Mark No. 1395188 within the meaning of section 129 of the Trade Marks Act 1995 (Cth). THE COURT ORDERS THAT: 2. Stone & Wood pay Elixir's costs of the cross-claim up until and including 21 July 2016 (the day on which judgment on the cross-claim was pronounced in favour of Elixir), to be taxed if not agreed. 3. Costs after 21 July 2016 in relation to the cross-claim be reserved. THE COURT ORDERS BY CONSENT THAT: 4. Pursuant to rule 28.02 of the Federal Court Rules, all remaining issues in relation to the cross-claim be referred to mediation by a Registrar of the Court. The mediation shall be conducted on a date convenient to the parties. In the event that the matter does not settle at the conclusion of the mediation, the Registrar conduct a case management conference immediately following the mediation to consider the most economic and efficient means of bringing all remaining issues in relation to the cross-claim to trial and of conducting the trial, at which conference the Registrar may give further directions. The mediator is to report the result of the mediation or case management conference to the Court. 5. Order 4 be stayed: (a) initially for a period of 21 days from 21 July 2016; and (b) if an appeal is lodged in respect of the cross-claim within that period, until determination of that appeal or further order. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MOSHINSKY J: 1 On 21 July 2016, I gave judgment in relation to liability (but not quantum) in this matter: Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd [2016] FCA 820 (the Reasons). These reasons should be read together with the Reasons. I adopt the abbreviations used in the Reasons. 2 As noted in the Reasons at [244], Elixir sought the opportunity to make submissions as to the form of orders to be made in relation to the cross-claim following the publication of reasons. I therefore ordered, in relation to the cross-claim, that the parties submit agreed minutes of proposed orders and that, if they could not agree, each party provide its minutes of proposed orders, together with a short outline of submissions. The parties were in agreement as to some, but not all, of the orders to be made. They have each filed minutes of proposed orders and a short outline of submissions. The parties were content for me to deal with the matter on the papers. 3 The parties were in agreement as to the form of declaration to be made to give effect to the Reasons, namely a declaration to the effect that, by letters from their solicitors dated 26 February 2015 and 15 April 2015, Stone & Wood made groundless threats against Elixir to bring an action for infringement of Australian Trade Mark No. 1395188 within the meaning of s 129 of the Trade Marks Act. A declaration to this effect reflects the Reasons. Further, s 129(2) provides that a purpose of the action is to obtain a declaration to this effect. I will therefore make such a declaration. 4 In relation to costs, Elixir seeks an order that Stone & Wood pay Elixir's costs of the cross-claim up until and including 21 July 2016 (the day on which judgment on the cross-claim was pronounced in favour of Elixir). Stone & Wood seeks to qualify the costs order (which was order 4 in the minutes of proposed orders) by making it subject to two further orders as follows: 5. If, following the determination of all remaining issues in relation to the Cross-Claim, Elixir is awarded a sum of less than $100,000 in damages, Stone & Wood may file an application pursuant to Rule 40.08 of the Federal Court Rules that any costs and disbursements payable to Elixir pursuant to Order 4 be reduced by an amount to be specified by the Court. 6. Order 4 be stayed: (a) initially until the determination of all remaining issues in relation to the Cross-Claim; and (b) if, following the determination of all remaining issues in relation to the Cross-Claim, Elixir is awarded a sum of less than $100,000 in damages, until determination of any application filed by Stone & Wood pursuant to Order 5. 5 In support of these proposed orders, Stone & Wood submits that if there is to be a taxation of costs on the cross-claim, it should be on all relevant issues; it would be inefficient, and an inappropriate use of the resources of the parties and the Court, to have multiple taxations of costs in the proceeding; the outcome of the quantum phase of the proceeding may impact significantly on the amount of costs that should be awarded to Elixir – for example, those costs might properly be reduced (either under the Court's general discretion as to costs or pursuant to r 40.08 of the Federal Court Rules) if the damages awarded are nominal or low; accordingly, it is undesirable to tax Elixir's costs of the cross-claim until quantum has been determined and the cross-respondents have had the opportunity to pursue any application as to the reduction of costs that they consider appropriate. 6 In my view, there should be a costs order in favour of Elixir in relation to the cross-claim up until and including 21 July 2016. Elixir was successful in its cross-claim. I do not think reason is shown to depart from the normal rule that costs follow the event. Elixir has established an entitlement to a declaration, which is one of the forms of relief specifically referred to in s 129(2) of the Trade Marks Act. It has, therefore, succeeded in the cross-claim. Elixir's claim for damages is a separate stage of the proceeding and the costs of this stage will need to be addressed separately in due course. This may include an application under r 40.08 in respect of those costs. Further, I do not think reason is shown to stay the costs order in relation to the cross-claim. No stay has been sought or ordered in relation to the costs of the principal claim. 7 For these reasons, I will make a costs order in favour of Elixir in relation to the cross-claim up until and including 21 July 2016 and I will not make this order subject to the two additional orders sought by Stone & Wood. The parties were in agreement that the costs after 21 July 2016 in relation to the cross-claim be reserved. I will also make this order. 8 The parties also sought, by consent, orders for mediation of the remaining issues in the cross-claim. I will make those consent orders. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moshinsky. Associate: Dated: 5 August 2016 SCHEDULE OF PARTIES VID 261 of 2015 Cross-Respondents Second Cross-Respondent STONE & WOOD BREWING PTY LTD (ACN 124 487 510)	2,048
federal_court_of_australia:fca/single/1999/1999fca1541	decision	commonwealth	federal_court_of_australia	text/html	1999-10-25 00:00:00	Daniel v State of Western Australia [1999] FCA 1541	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1999/1999fca1541	2024-09-13T22:45:00.678579+10:00	FEDERAL COURT OF AUSTRALIA Daniel v State of Western Australia [1999] FCA 1541 EVIDENCE – client legal privilege – communications by applicants for native title to their expert anthropologist – subpoena for production – whether communications sought to be adduced at trial – whether communications made for sole purpose of legal advice or litigation – whether communications made for such sole purpose were confidential – whether privilege waived or to be imputed - whether unfairness in maintenance of privilege. EVIDENCE – public interest immunity – communications by applicants for native title to their expert anthropologist – whether subject to such immunity. Native Title Act 1993 (Cth) Evidence Act 1995 (Cth) s 126 Esso Australia Resources Ltd v Federal Commissioner of Taxation (1998) 159 ALR 664 applied Towney v Minister for Land and Water Conservation for NSW (1997) 147 ALR 402 applied Grant v Downs (1976)135 CLR 674 applied Trade Practices Commission v Sterling (1979) 36 FLR 244 cited Interchase -v- Grosvenor Hall [1999] 1 QdR 141 distinguished Attorney-General (Northern Territory) -v- Maurice (1986) 161 CLR 475 applied Commonwealth Federal Police v Propend Finance [1997] 188 CLR 501 considered Hoad v Nationwide News (1998) 19 WAR 468 considered Aboriginal Sites Protection Authority v Maurice (1986) 65 ALR 247 followed Sankey v Whitlam [1978] 142 CLR 1 applied Baker v Campbell (1983) 133 CLR 52 cited R D NICHOLSON J 25 OCTOBER 1999 YIGAGUDARA/PYRAMID STATION WESTERN AUSTRALIA IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAG 6017 OF 1996 BETWEEN: DANIEL & ORS. Applicants AND: STATE OF WESTERN AUSTRALIA & ORS. Respondents JUDGE: R D NICHOLSON J DATE: 25 OCTOBER 1999 PLACE: YIGAGUDARA/PYRAMID STATION WESTERN AUSTRALIA REASONS FOR JUDGMENT 1 I propose to give my ruling and reasons for the ruling in relation to the claim of privilege arising in relation to the subpoena for production. Subpoena for Production 2 The relevant subpoena for production issued under the Federal Court Rules, Order 27 Rule 2, is directed to Michael Vere Robinson. It is in respect of the following matters which are particularised in the Schedule and which may be broken into three component parts. They are (1) all notes, books, video tapes, audio tapes and other documents which are, (2) in your possession, custody or control, and (3) which contain or record interviews, conversations or correspondence with, or your observations of, members of the first, second and third applicant native title claim groups. Context of the Matter 3 The context in which the subpoena arises is as follows: the principal proceedings in which the subpoena issues concerns claims by the Ngarluma and Yindjibarndi peoples under the Native Title Act 1993 (Cth) for determination on whether native title exists over an area generally located in the vicinity of the Karratha and Roebourne areas in Western Australia. 4 The subpoena was issued at the request of the first respondent. 5 It is not in dispute that Mr Robinson is an anthropologist. In response to Order 4 of 12 June 1998, the first applicants filed an anthropological report prepared by Mr Robinson. In its terms the subpoena is not directed to that report. 6 It is not in dispute that the first applicant proposes to tender Mr Robinson's report at a later date and to make him available for cross-examination on it. 7 In the course of his report Mr Robinson makes a number of statements of which the following are but examples, and I list them: "Yilbi Warrie told me …" "[Dolly Bunga] told me that …" "My questioning of people did not reveal …" "Kenny Jerrold describes it as 'the biggest monument for the whole of this land'…". "It is said to be the case that 'the biggest Law for Top End people …are on the Burrup'…" "[Bridget Warrie] acknowledges that …". A passage quoted from David Daniels. 8 By Order 17 of 8 December 1998 the first applicants are required to allow inspection of any document referred to in Mr Robinson's report. While the above quoted statements do not refer to any documents, it is submitted for the first respondent that it is a distinction without a difference if the first applicants are unable to avoid producing the field notes of Mr Robinson from which these statements are said to arise, simply because he did not expressly refer to those notes. Response to the Subpoena 9 On behalf of the first applicants, reliance is placed on Order 33, Rule 11(1) of the Federal Court Rules, and claims are made that the communications and documents representing communications, being those sought by the subpoena, are subject to both client legal privilege and public interest immunity. 10 On behalf of Mr Robinson, no claim for any privilege is made to resist the subpoena in whole or in part. However, he objects to being compelled to answer the subpoena in a way which he contends breaches the client legal privilege which the communication and the communications represented by documents are subject to. He also supports the view that they are subject to public interest immunity. He therefore supports the claim made on behalf of the first applicants. 11 The second and third applicants are not presently exercising the opportunity to participate in the hearing of the application. No submissions have consequently been received from them on this issue. It is relevant to say that, expressed broadly, the second and third applicants are persons who it is alleged at one time formed part of the one applicant group. That is of significance because it may be that in preparing his field notes Mr Robinson recorded communications with some of the persons who are now either second applicants or third applicants and who were formerly in the one applicant group now known as the first applicants. 12 In these circumstances I think that the appropriate course is to regard the claims made on behalf of the first applicants as applicable to the second and third applicants so as to enable the resolution of the issues of principle. In the event that a privilege is upheld, it would be subject in the case of a communication or document containing a communication of the second or third applicants or any of them, to the assertion by them of that claim and the opportunity by them to decide whether there are any factual issues to be argued relevant to the decision on that claim. 13 The first and fifth respondents dispute the claims for privilege. 14 Counsel for Mr Robinson also appears on behalf of the Anthropological Society of Western Australian Inc. Client Legal Privilege 15 The claim made by the first applicants is not that client legal privilege endures in the communications or documents containing communications which are sought by the subpoena so as to make them permanently immune from disclosure. Rather the claim made is that until Mr Robinson goes into the witness box and his expert report is adduced in evidence, such communications or documents remain privileged, but at that point in time they then may be required of him. 16 "Client legal privilege" is the subject of provisions in Division 1 of part 3.10 of the Evidence Act 1995 (Cth). In Esso Australia Resources Limited v Federal Commissioner of Taxation (1998) 159 ALR 664, the Full Court of this Court held by majority that ss 118 and 119 of that Division did not apply so as to preclude disclosure of such documents at the stage of discovery. Essentially the reasoning of the majority was that the use by Parliament of the words "evidence is not to be adduced" read alone and in the context of the development of the legislation showed that Parliament intended those sections to apply only at trial. The effect of those sections is to apply "the dominant purpose test" to the existence of client legal privilege rather than the "sole purpose test" recognised at the common law. 17 In Towney v Minister for Land and Water Conservation for New South Wales (1997) 147 ALR 402, Sackville J held that s 126 of the Evidence Act (which also forms part of Division 1) permitted the loss of client legal privilege in respect of claimed documents constituting a source for an anthropological report. That section provides: "If, because of the application of section 121, 122, 123, 124 or 125, this Division does not prevent the adducing of evidence of a communication or the contents of a document, those sections do not prevent the adducing of evidence of another communication or document if it is reasonably necessary to enable a proper understanding of the communication or document." Sackville J held also that s 126 could not be read as simply incorporating unchanged the common law test of implied waiver as laid down in Attorney-General (Northern Territory) -v- Maurice (1986) 161 CLR 475. 18 It will be observed that s 126 uses the words "the adducing of evidence". There appears no reason (nor is one contended for) to distinguish the meaning of those words as they appear in ss 118 and 199 as interpreted in Esso by the majority of the Full Court and as they appear in s 126. 19 Whether or not a return of a subpoena is the same as discovery, it is here the case that response to the subpoena is not intended to adduce material at trial, only to adduce material for consideration by the parties with a view to its adduction at trial. By parity of reason from the majority view in Esso by which I am bound, I do not consider the provisions in Division 1 can therefore be applied to the present claim of privilege. 20 Accordingly here it is to the common law that reference must be made to determine what is the test to be satisfied to establish client legal privilege. 21 The rule at common law is that established in Grant v Downs (1976) 135 CLR 674, as applied and interpreted in subsequent decisions. In Grant v Downs it was held that client legal privilege will only attach where communications or documents are brought into existence for the sole purpose of submission to legal advisers for advice or for use in legal proceedings (see at 688). The privilege "requires a combination of dedication to the stipulated purpose and reasonable anticipation that litigation will ensue before it is attracted" (see at 689) "The character of the documents the subject of the claim will illuminate the purpose for which they are brought into existence" (at 689). A court has power to examine the document for itself (also at 689). 22 It is clear that client legal privilege is founded on the need to protect "full and unreserved communication" between a citizen and his or her lawyer. See Baker v Campbell (1983) 133 CLR 52 at 118, per Deane J. The communications or documents in question must be confidential between the relevant parties for the privilege to be attracted. See for further emphasis on this point Cross on Evidence, 4th Australian Edition, page 705, par 25255; P. Gillies, Law of Evidence in Australia, 2nd Edition, p. 436. 23 It is not in dispute that the privilege is capable of applying to communications between the client or his agent and third parties if made so as to obtain information to be submitted to the client's legal professional advisers for the purpose of obtaining advice upon pending or contemplated litigation: see Trade Practices Commission v Sterling (1979) 36 FLR 244 at 245, par (f). Evidence 24 The first applicants' claim of privilege relies on an affidavit of Mr Robinson sworn on 13 September 1999. Mr Robinson was cross-examined on that affidavit. The Communications with the expert 25 The communications in issue are principally communications from some of the first applicants. As I have said, however, there are possibly some communications from the second applicants and the third applicants and I have already stated that in the event of these being identified, if a privilege is found to exist, those parties should be given the opportunity to decide whether to make a claim and support it with argument. 26 If there are communications to Mr Robinson by persons other than any of the applicants, that is persons other than any client, there is no basis for a client based privilege. 27 Because the communications principally in issue are those of the first applicants as client, it is not necessary to make any definitive findings on whether Mr Robinson was or was not an agent of that client, and I accept submissions to that effect. It is sufficient that he was the third party to whom the communications were made. If the claim succeeded on that basis it would be even more secure if the true position was that there was a communication from a client to its own agent. Were the communications made for the sole purpose of obtaining legal advice or for use in litigation? 28 It is to be noted that this is not a case where it is agreed that the material in issue was created for the sole purpose of legal advice or use in litigation: cf Towney (supra). 29 There are a number of categories of documents and I list them by sub-headings: (a) Notes (field notes). The field notes comprise six to eight notebooks being a mixture of:- (1) recordings of communications with solicitors and counsel for the purposes of legal advice; (2) communications from some of the first applicants for the purpose of heritage surveys; (3) communications from some of the first applicants to Mr Robinson concerning genealogical and other information relevant to the present claim; (4) observations by Mr Robinson. (I have already noted that in reference to communications from some of the first applicants I am presently notionally including the possibility that the second or third applicants may have been the authors of some of those communications). 30 The evidence also shows the following in relation to the nature of those communications: they are held by Mr Robinson on the basis he regards them as the property of the first applicants' so far as they relate to this case. 31 In the case of genealogies, they have been pressed onto a CD-ROM, a copy of which being supplied to the Aboriginal Legal Service as solicitors for the first applicants, and a further copy of which Mr Robinson holds. 32 Field books have not otherwise been sent by Mr Robinson to the Aboriginal Legal Service or to counsel for the first applicants or to any other lawyer. 33 The field books are in the form of notebooks containing continuous recordings of what the first applicants were saying to Mr Robinson. Sometimes what was recorded were verbatim quotes. Some quotations so recorded appear in Mr Robinson's report. 34 The use of materials from the notes in the expert's report to which I have previously referred was done without Mr Robinson seeking the consent of the person quoted. However it was done with the general consent of the first applicants as a group, in that the draft report was sent to the Aboriginal Legal Service as solicitors for the first applicants and considered at a meeting attended by Mr Robinson before finalisation. 35 I return to the four categories of content of the communications in the field notes which I have identified. Re (1) - Field notes involving communications between solicitor and client are privileged. Re (4) - Observations by Mr Robinson are not communications to which the privilege attaches. See the authorities cited below in relation to the first video. Re (2) - Field notes on heritage surveys. In his affidavit, Mr Robinson deposes that information recorded in the surveys was communicated by some of the first applicants to enable the solicitors for the first applicants to advise in relation to a proposed third party development. This evidence is uncontroverted, therefore field notes being communications to Mr Robinson by some of those clients made for that purpose would be privileged. 36 It may be necessary to consider to what extent publication of the heritage survey constituted a waiver of such privilege, a question of fact which can be approached later if necessary. 37 I add that I do not accept the submissions for the first respondent that there were no such communications to Mr Robinson or that such communications concerning heritage surveys were made as not confidential. The evidence in cross-examination relied upon on their behalf to support these submissions took me to evidence which refers to the heritage surveys themselves and in my view not to the communications to Mr Robinson in this respect. Re (3) - In relation to the remainder of the field notes, it was submitted for the first respondents, and I quote: "The documents in question include records of communications between members of the first applicant claim group and an anthropologist. Those documents, (as distinct from various reports compiled from them), were never intended to be supplied to a lawyer for advice or for the purpose of litigation. They were not intended to be surrendered by Mr Robinson till the end of these proceedings and then only to form part of the documentary record …such communications are outside both the "advice" and the "litigation" limbs of legal professional privilege: Interchase -v- Grosvenor Hall [1999] 1 QDR 141 at 153, 161, 162; Attorney-General -v- Maurice supra at 480, lines 15-19 per Gibbs CJ (relying on Grant -v- Downs supra), and at 487 per Mason and Brennan JJ; and Trade Practices Commission -v- Sterling supra at 245-6, especially Lockhart J's category (f)." 38 Several issues arise in relation to this primary submission. (A) The Federal Court practice direction concerning expert evidence requires that "an expert's written report must give details of … the … other material used in making the report". Furthermore it directs that "there should be attached to the report, or summarised in it …the facts, matters and assumptions upon which the report proceeds". In my view this direction did not require Mr Robinson as an expert anthropologist to attach field notes to the report where these have been summarised in it, or otherwise. The content of the direction does not make more likely that the communications would not be privileged. (B) No evidence was called from any of the applicants making the communications as to their intent in doing so. The intent for which the communications were made is therefore to be inferred from the only available evidence, being that of Mr Robinson. (C) From that evidence the only inference open, in my opinion, is that the communications in the remainder of the field notes involving communications from any of the first applicants were made to Mr Robinson for use by him in preparing a report for the purposes of the litigation. (D) In Interchase Corporation (supra) it was held unanimously by the Court of Appeal of the Supreme Court of Queensland that documents brought into existence or obtained by the expert to assist in preparation of the expert's statements were not the subject of client legal privilege. Thomas J (at 162) with whom de Jersey J agreed held that: "In general, when an expert is engaged by a solicitor for the purpose of giving evidence in a case, documents generated by the expert and information recorded in one form or another by the expert in the course of forming an opinion are not a proper subject of legal professional opinion." 39 The reasoning of Pincus JA and of Thomas JA, with each of whom de Jersey J agreed, appears to have been founded on the need for the relevant communications to be between lawyer and client. In this case the communications are by clients to Mr Robinson for the sole purpose of the use for the purposes of the litigation. This is not a case where the communications sought are pre-existing documents as they were in Interchase. 40 I accept the submission for the first applicants that the Court needs to look at the particular communications to decide whether or not they were made in circumstances in which they attracted client legal privilege. If the communications do attract that privilege, it will only be lost by waiver. 41 I therefore distinguish Interchase Corporation because there the communications to the expert were in relation to the pre-existing documents not stated to be from the client asserting the privilege. 42 I return to the categories of subpoenaed items. (b) Books (Heritage Surveys) 43 These constitute possibly 12 surveys for which Mr Robinson was instructed by the applicants' solicitors. Submissions for the first applicants accept that the heritage survey reports were provided to a third party (a development proponent) so that in such instance the sole purpose would not include legal advice or litigation and no privilege could attach. (c) Video Tapes The first video recorded an occurrence during an inspection of an area. The recording was made by Mr Robinson for no purpose other than use in this proceeding. However, it was a recording by way of observation of the behaviour of an applicant. It is not a communication or document of communication to which the privilege attaches. See Commonwealth Federal Police v Propend Finance [1997] 188 CLR 501 at 508, 526 and 552, and Attorney-General (Northern Territory) v Maurice at 487. See also P. Gillies Law of Evidence in Australia, 2nd Edition, p. 440 and the authorities in footnote 41. In my view it is in the category of a fact observed and so attracts no privilege. The second video recorded what some applicants were saying in explaining the significance of a site. It was recorded at Mr Robinson's direction for the purposes of this litigation. I consider this may satisfy the sole purpose test. It is distinguishable from the first video because it is the record of an actual communication rather than a fact observed. However, it would require inspection by the Court to ascertain whether it was only recording events which occurred in public and so were not confidential. (d) Audio Tapes 44 The first audio tape was made for a purpose ancillary to a heritage survey. It cannot therefore satisfy the sole purpose test. 45 The purpose for which the second audio tape was made is not established on the evidence. It does not therefore satisfy the sole purpose test. (e) Other Documents 46 These comprise documents such as drawings, loose bits of paper, probably including annotated maps. There is no evidence that these were communications from the client to Mr Robinson and in my view it is not established they satisfy the sole purpose test. 47 Reference was also made to witness proofs or statements. These on their face would satisfy the sole purpose test. 48 Therefore, in relation to the subpoenaed material the sole purpose test would be satisfied only by the field book records of communications from any of the first applicants in the circumstances to which I have referred, and subject to inspection, possibly the second video. Are the communications confidential? 49 It is also submitted for the first respondent that none of the communications in issue is confidential in the requisite sense since the intention was always that Mr Robinson would reveal the contents of at least some of them in his report and the contents of any of them if asked in cross-examination or evidence-in-chief, and the intention has always been to call Mr Robinson, which intention was confirmed by the incorporation of his report into the first applicants' statement of facts, issues and contentions. See Propend at 508, 526 and 552, Maurice at 487; Roberts, Evidence, Proof and Practice LBC Information Services 1998 at 200, and compare ss 118 and 119 of the Evidence Act. In Propend (supra) at 526, Toohey J referred to the fact that confidentiality of itself does not create the privilege. Certainly there must be a confidential communication, but it must be given for the requisite sole purpose. 50 In his affidavit Mr Robinson deposed that he gave an undertaking to the first applicants informing them that what was conveyed to him would not be disclosed without their permission to any person other than the solicitors for the purpose of the proceeding. 51 Knowledge by Mr Robinson of the future use of the information during the course of the hearing does not in my view negate the purpose of the communication and the intention to communicate it confidentially which is to be inferred from the evidence available relating to the time at which the communications came into existence. There is no evidence, for example, that the communications took place in non-confidential circumstances. 52 Furthermore, the approval of the first applicants for the future use of the report does not support, in my view, any inference of waiver of confidentiality of any of their communications at a point in time prior to such usage. 53 In relation to the second video I have already commented on the necessity for the Court to verify whether there was confidentiality in the circumstances of its making. Waiver 54 The first applicants have voluntarily provided copies of certain statements referred to in the report of Mr Robinson to the first respondents and a copy of the typed field notes of John Laurence. I accept this voluntary disclosure does not result in any waiver of privilege on other documents such as the remainder of the field notes. 55 Waiver of privilege is to be implied and imputed by a court when by reason of some conduct on the privilege holders part it becomes unfair or misleading to maintain the privilege: See Attorney-General for the Northern Territory v Maurice (supra) at 487. As previously stated, the first applicants accept that when they call on the expert Mr Robinson to present his opinion, assumptions and facts on which the expert proceeded must be open to be explored. 56 It is said prior to that time no unfairness can exist by maintenance of the privilege. The first respondents dispute that on the basis that if disclosure only occurs then, they will have lost the opportunity to cross-examine any of the applicants on information which those applicants provided to the expert and on which he relied. The first respondents also rely on Hoad v Nationwide News (1998) 19 WAR 468 where Steytler J did not accept that no implied waiver could occur unless and until documents in question had been used in Court. He stated that principle with reference to "circumstances of this kind." The circumstances of this kind to which he referred were those involving partial disclosure of legal advice. His reasoning derives significantly when what was said in Maurice at 482 - 3, 498, 488, and 493. Nevertheless, the circumstances before him involving that partial disclosure are not the circumstances presently before me. 57 The relative unfairness is one which must be addressed in the context of the trial, if there is such unfairness to be found. The trial commenced in September and on the best estimate of the first applicant and first respondent will continue until April or August, 2000 with some intervals of non-hearing time. Delay in waiver only has these results, namely to possibly extend the time of the trial if witnesses are to be recalled for cross-examination and to impose a burden of preparation on the first respondents and other respondents in the heat of cross-examination. There is therefore to be weighed by me, what I perceive to be a forensic advantage sought by the first applicants in maintaining the privilege until a point in time when the first applicant's witnesses, who are authors of the relevant communications, are no longer available for cross-examination. 58 However, in weighing whether that is an unfairness I must consider, and I consider it is important, that none of the first applicants have been discharged so that further cross-examination of any of them concerning communications to the expert is still arguably a possibility. No unfairness, in my view, can therefore be inferred at this point in time because, if such cross-examination is allowed, it would address any arguable unfairness to the respondents, albeit at the cost of delay possibly to the progress of the trial. In any event, I consider there is a further barrier to waiver being implied. For waiver to be implied, there must have been some disclosure or use of the material, Maurice at 482 - 3 per Gibb CJ. There has to be some conduct touching the point of disclosure: Maurice at 488 per Mason and Brennan JJ citing Wigmore on Evidence. The privileged material has to be used: Maurice at 493 per Deane J and the effect of the use is such that there has to be an assertion of the effect of the privileged material or the disclosure of part of its contents. 59 It is well established that reference to a document in pleadings will not amount to a waiver if it is not re-produced in full: Maurice at 481. In Maurice it was held that the preparation, publication, tender and limited reference to the 1982 Claim Book did not impute to the Aboriginal claimants a waiver of their right to rely on client legal privilege in relation to documents which neither formed part of nor were expressly referred to in the Book. In my opinion the use of the expert's report to date in the proceeding is not such that there has been a relevant assertion of the effect of the privileged material and, in any event, the ratio of Maurice should be followed. Public Interest Immunity. 60 A claim of public interest immunity requires a court to decide: "whether the public interest which requires that the document should not be produced outweighs the public interest that a court of justice in performing its functions should not be denied access to relevant evidence: Gibbs ACJ in Sankey v Whitlam (1978) 142 CLR 1 at 38." 61 Relevant to that weighing exercise here will be the following two factors. Firstly, it is appropriate to take into account proper protection of minority rights including deeply held spiritual beliefs: Bowen CJ in Aboriginal Sites Protection Authority v Maurice (1986) 65 ALR 247 at 256. Secondly, it is relevant to consider whether disclosure would involve a breach of confidence. The concerns to that effect expressed on behalf of Mr Robinson and the Anthropological Society are akin to those expressed on behalf of the anthropologist, Mr R. B. Rayburn in the Aboriginal Sacred Sites Authority at 253 - 4. 62 The critical question is where the balance of the public interest lies, taking into account these matters and all other relevant considerations. 63 There are two features which I think are particularly important here. The first is that the first applicants have no objection to the discovery of all the subpoenaed materials at the time the expert report of Mr Robinson goes into evidence, so far as that report makes use of that subpoenaed material. It is not therefore maintained that there are any of the public interest considerations such as I have referred to which endure beyond that point in time. Secondly, the first respondents here expressly abjure that the response to the subpoena should in any way disturb the orders of the Court in respect of secret or culturally sensitive information. 64 The result is that the factors favouring non-disclosure in the public interest do not have predominant weight. They are out-weighed by the public interest in having the court not denied evidence of opinion expressed by the present witnesses upon which Mr Robinson himself relied. In my opinion, there is no public interest immunity attaching to any of the subpoenaed communications in the circumstances. Conclusion The position which I consider pertains is therefore:- (1) The first applicants are entitled to maintain their client legal privilege in communications to Mr Robinson until such time as his expert report is introduced into evidence whereupon such privilege would be waived in respect of such communications referred to therein, but not otherwise. (2) Any communications by any of the second or third applicants to Mr Robinson, whether in his report or field-notes, should be identified by him so that those applicants are given the opportunity to assert any privilege they may consider is applicable to such communications. (3) Counsel for the respondents should have the opportunity to consider whether they wish to argue that publication of any of the Heritage Surveys constituted a waiver of privilege attaching to source material, being communications from the first applicants referred to therein. (4) The second video should be inspected by the Court to ascertain whether it was made in confidential circumstances. (5) The communications and documents otherwise referred to in the subpoena are not subject to any claim of privilege. (6) Counsel for the first applicants should be given a short opportunity to propose practical steps by which privileged material may be withheld but non-privileged material made available in response to the subpoena. I add the following: I have stated in these reasons that no witness of the first applicants being discharged, it remains open to the Court to consider ordering further cross-examination on presently privileged communications when privilege is waived on those communications as a consequence of tender of the expert report. In those circumstances, the first applicants may wish to consider whether there would be any prejudice to them in waiving the privilege after conclusion of the cultural evidence of their witnesses. This would enable the respondents to examine the formerly privileged material in the interval between the taking of cultural and expert evidence. This would avoid a delay in the court's time-tabling next year. It would mean the initial presentation of cultural evidence would not have been arguably side-tracked by cross-examination on such communications. It would also mean the respondents could be expected to return to court next year, or at some other date, better informed on the need to cross-examine any of the undischarged witnesses of the first applicants. I certify that the preceding sixty-four (64) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice R D NICHOLSON J. Associate: Dated: 25 October 1999 Counsel for the first applicants: M Barker QC W de Mars Solicitor for the first applicants: Aboriginal Legal Service of Western Australia (Inc) No appearance for the second applicants No appearance for the third applicants Counsel for the first respondents: K Pettit S Wright Solicitor for the first Respondents: Crown Solicitor's Office Counsel for the 2A respondents: J Allanson S Nash Solicitors for the 2A respondents: Australian Government Solicitors No appearance for the 2B respondents Counsel for the fourth respondents: M Gregory Solicitors for the fourth respondents: Minter Ellison Counsel for the fifth respondents: D Martino Solicitors for the fifth respondents: Jackson Macdonald No appearance for the sixth, seventh, and eleventh respondents No appearance for the eighth, twelve A and twelve B respondents Counsel for the ninth and tenth respondents: G Gishubl Solicitors for the ninth and tenth respondents: Jackson Macdonald No appearance for the thirteenth, fifteenth, sixteenth and seventeenth respondents Counsel for fourteen C respondents: R Butler No appearance for the nineteen B respondents No appearance for nineteen D respondents No appearance for the twenty second respondents Date of Hearing: 8 October 1999 Date of Judgment: 25 October 1999	7,320
federal_court_of_australia:fca/single/2013/2013fca0995	decision	commonwealth	federal_court_of_australia	text/html	2013-10-02 00:00:00	Kastrinakis v Australian Community Pharmacy Authority [2013] FCA 995	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2013/2013fca0995	2024-09-13T22:45:01.427692+10:00	FEDERAL COURT OF AUSTRALIA Kastrinakis v Australian Community Pharmacy Authority [2013] FCA 995 Citation: Kastrinakis v Australian Community Pharmacy Authority [2013] FCA 995 Parties: STEVEN KASTRINAKIS & ORS v AUSTRALIAN COMMUNITY PHARMACY AUTHORITY & ORS File number: VID 111 of 2013 Judge: DAVIES J Date of judgment: 2 October 2013 Catchwords: ADMINISTRATIVE LAW – judicial review – approval of pharmacists to supply pharmaceutical benefits from particular premises - National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (Cth) – requirement that premises be 1.5 kilometres from the nearest approved premises – whether minimum distance requirement a jurisdictional fact – whether "no evidence" to justify decision to approve – whether the decision maker took into account an irrelevant consideration – whether the decision maker failed to take into account a relevant consideration – whether an improper exercise of power – application granted. PRACTICE AND PROCEDURE – whether particular applicants have standing to bring claim – whether persons who are aggrieved – Pharmacy Guild of Australia v Australian Community Pharmacy Authority (1996) 70 FCR 462 followed. Legislation: Administrative Decisions (Judicial Review) Act 1997 (Cth), s 5 National Health Act 1953 (Cth), ss 90, 99K National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (Cth) Cases cited: Pharmacy Guild of Australia v Australian Community Pharmacy Authority (1996) 70 FCR 462 Karalis v Australian Community Pharmacy (1998) 90 FCR 473 Australian Heritage Commission v Mount Isa Mines Ltd (1995) 60 FCR 456 Australian Heritage Commission v Mount Isa Mines Ltd (1997) 187 CLR 297 Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 135 Cabal v Attorney-General of the Commonwealth (2001) 113 FCR 154 Timbarra Protection Coalition Inc v Ross Mining NL (1999) 46 NSWLR 55 Curragh Queensland Mining Ltd v Daniel (1992) 34 FCR 212 Minister for Immigration and Multicultural Affairs v Rajamanikkam (2002) 210 CLR 222 Deloitte Touche Tohmatsu (a firm) v Deputy Commissioner of Taxation [1998] FCA 1439 Date of hearing: 24 July 2013 Date of last submissions: 24 July 2013 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 37 Counsel for the Applicants: S R Senathirajah Solicitor for the Applicants: Maddocks Lawyers Counsel for the First and Second Respondents: D O'Donovan Solicitor for the First and Second Respondents: Australian Government Solicitor Counsel for the Third and Fourth Respondents: M Hoyne Solicitor for the Third and Fourth Respondents: Best Hooper IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 111 of 2013 BETWEEN: STEVEN KASTRINAKIS & ORS Applicants AND: AUSTRALIAN COMMUNITY PHARMACY AUTHORITY & ORS Respondents JUDGE: DAVIES J DATE OF ORDER: 2 OCTOBER 2013 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The application is granted. 2. The decision of the first respondent to recommend that the second respondent grant the third and fourth respondents approval under s 90(1) of the National Health Act 1953 (Cth) to supply pharmaceutical benefits at Shop 8, Eastwood Village Shopping Centre, Bairnsdale in the State of Victoria ("the premises"), is set aside as at the date of this order. 3. The decision of the second respondent made pursuant to s 90 of the National Health Act 1953 (Cth) to grant approval to the third and fourth respondents to supply pharmaceutical benefits at the premises is set aside as at the date of this order. 4. The third and fourth respondent's application for approval in respect of the premises is referred back to the first and second respondents respectively for consideration in accordance with the law. 5. There is no order as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 111 of 2013 BETWEEN: STEVEN KASTRINAKIS & ORS Applicant AND: AUSTRALIAN COMMUNITY PHARMACY AUTHORITY & ORS Respondents JUDGE: DAVIES J DATE: 2 October 2013 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 The applicants seek judicial review of: the decision of the first respondent ("the Authority") under s 99K(1) of the National Health Act 1953 (Cth) ("National Health Act") to recommend that the second respondent ("the Secretary") grant the third and fourth respondents approval under s 90(1) of the National Health Act to supply pharmaceutical benefits at a new pharmacy situated at Shop 8, Eastwood Village Shopping Centre, Bairnsdale ("the proposed premises"); and the decision of the Secretary made pursuant to s 90 of the National Health Act to grant that approval ("the decisions"). 2 The decisions were made upon satisfaction that the third and fourth respondents had met all the requirements specified in the National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (Cth) ("the Rules"). Those requirements relevantly included the requirement for the proposed premises to be at least 1.5 kilometres by straight line from the nearest approved premises: Sch 1, Part 2, Item 130 of the Rules. The Authority and the Secretary both accepted that a Google Earth map provided by the third and fourth respondents showed that this requirement was met. That map showed that the straight line distance between a location designated as 66 Howitt Avenue, Eastwood and the nearest approved premises at 46-56 Nicholson Street, Bairnsdale is approximately 1,807 metres. 3 The first and second applicants are the proprietors of the pharmacy at 46-56 Nicholson Street, Bairnsdale and the third to seventh applicants are the proprietors of another nearby pharmacy located at 190-192 Main Street, Bairnsdale. The applicants have claimed that the distance between pharmacies should have been measured from 30 Howitt Avenue Eastwood, not 66 Howitt Avenue, Eastwood and, on that basis, that the minimum distance requirement was not met. A surveyor's report they obtained shows that the straight line distance between 30 Howitt Avenue and the nearest approved premises is 1453.3 metres, which is less than the prescribed minimum 1.5 kilometres. This surveyor's report was not before the Authority or the Secretary when they made their decisions. 4 It was not in dispute that the actual location of the proposed premises is at 30 Howitt Ave on the corner of Evergreen Way and Howitt Avenue. It was explained by the applicants in evidence that 66 Howitt Ave was used as the reference point in the application for approval because that was the address stated on the planning permit that authorised the development of the land on which the shopping centre complex was built. 5 The applicants rely upon several of the grounds of review specified in s 5 of the Administrative Decisions (Judicial Review) Act 1997 (Cth) ("the ADJR Act"), alleging: that the decisions should be set aside because they were not authorised by the National Health Act or by the Rules: s 5(1)(d); that there was no jurisdiction to make the decisions: s 5(1)(c); that there was "no evidence" to justify the decisions: s 5(1)(h); that the making of the decisions was an improper exercise of power: s 5(1)(e); and that procedures that were required by law to be observed in connection of the making of the decisions were not observed: s 5(1)(b). 6 It is necessary to say something more about the facts and governing legislation before dealing with the grounds of review. factUAL CONTEXT 7 On 17 September 2012, the third and fourth respondents submitted an application to the Department of Human Services, Medicare, for approval to supply pharmaceutical benefits at a premises designated as: Shop 8, Eastwood Village Shopping Centre, cnr Evergreen Way and Howitt Avenue, Eastwood 3875. 8 Enclosed with the application was a Google Earth map which was described as showing the measurement from: The proposed premises at Shop 8, Eastwood Village Shopping Centre to [the nearest approved premises] at 46 Nicholson Street, Bairnsdale. The Google Earth map designated 66 Howitt Avenue as the address for Shop 8, Eastwood Village and the measurement showed a distance of 1,807 metres from that address to the nearest approved premises. 9 On 24 September 2012, the Authority wrote to three nearby pharmacists, including the applicants, seeking comments on whether the application met the relevant requirements of the Rules. The Authority received comments and supporting documents from the three pharmacists, including the applicants, on 11 and 12 October 2012. No objections were raised that the minimum distance requirement was not met. 10 The Authority considered the application at its meeting on 26 October 2012 and made the recommendation that the third and fourth respondents should be approved under s 90 of the National Health Act to supply pharmaceutical benefits at premises identified as: Shop 8, Eastwood Village Shopping Centre, Cnr Evergreen Way & Howitt Avenue, Eastwood. The Authority was satisfied on the basis of the Google Earth map that Shop 8, Eastwood Village Shopping Centre was at least 1.5 kilometres by straight line from the nearest approved premises. The Secretary agreed with the Authority's recommendation, relying on the same Google Earth map. The legislative scheme 11 The supply of Commonwealth-subsidised medications ("pharmaceutical benefits") through the Pharmaceutical Benefits Scheme is regulated by Part VII of the National Health Act. A pharmacist must have approval from the Secretary to supply pharmaceutical benefits at particular premises. To obtain approval the pharmacist makes application to the Secretary, who must then refer the application to the Authority: National Health Act, s 90(3A). The Authority's function is to consider applications for approval to supply and to make recommendations to the Secretary in respect of whether approval should be granted and, if so, the conditions to which the approval should be subject: National Health Act, s 99K. The Secretary can only grant approval if the Authority recommends the grant of approval, though the Secretary may refuse to grant approval even if the grant has been recommended by the Authority: National Health Act, s 90(3B). 12 In making its recommendation the Authority must comply with the Rules: National Health Act, s 99K(2). The Rules contain the pharmacy location requirements that must be satisfied for the Authority to recommend to the Secretary that approval should be granted, including the requirement contained in Item 130 of Part 2 to Sch 1 ("the minimum distance requirement") that: The proposed premises [must be] at least 1.5 km, in a straight line, from the nearest approved premises. 13 Rule 8(1) describes how a straight line distance is to be measured between two premises: … a reference to the distance between 2 premises in a straight line is a reference to the distance, measured in a straight line, from the centre, at ground level, of the public entrance of the first premises to the centre, at ground level, of the public entrance of the second premises. 14 The Authority must recommend approval if all the applicable requirements are met: r 10; and must recommend that the applicant not be approved if an applicable requirement is not met: r 11. GROUNDS 1 AND 2 – NO AUTHORITY AND NO JURISDICTION to make the decisions 15 These grounds can be considered together as they were argued on the same basis. 16 It was contended that the minimum distance requirement prescribes an objective jurisdictional fact, which makes the exercise of the powers of the Authority and the Secretary to grant approval contingent on the actual fact of a minimum 1.5 kilometre distance between the proposed premises and the nearest approved pharmacy. It was further submitted that the applicants have shown by the unchallenged surveyor's report that the actual distance is less than 1.5 kilometres. 17 No cases have considered the minimum distance requirement but there is support for this contention having regard to the objective language of the requirement read in conjunction with rr 10 and 11 which are mandatory in terms. However, the third and fourth respondents argued that I should find that the minimum distance requirement is an evaluative fact, involving an exercise of judgment about whether the requirement is met. The third and fourth respondents relied on Pharmacy Guild of Australia v Australian Community Pharmacy Authority (1996) 70 FCR 462 per Branson J and Karalis v Australian Community Pharmacy (1998) 90 FCR 473 ("Karalis") per Goldberg J in support of this submission. 18 Those cases concerned a different requirement that was also couched in objective terms. The Rules (as they were at the time) required a maximum distance between the old and new premises "measured door to door by the shortest lawful access route" if an applicant had approval under s 90 of the National Health Act in respect of premises and was relocating. The Courts in both cases construed the requirement as involving an exercise of judgment and not simply the determination of an objective fact. In both cases, the Courts expressly followed the reasoning of the dissenting judgment of Black CJ in Australian Heritage Commission v Mount Isa Mines Ltd (1995) 60 FCR 456 at 465-7 (which the High Court upheld in effect in Australian Heritage Commission v Mount Isa Mines Ltd (1997) 187 CLR 297). In issue in Australian Heritage Commission v Mount Isa Mines Ltd was whether the eligibility of a place for inclusion of the heritage register was a jurisdictional fact. Black CJ stated that: In considering the present question it is appropriate to examine first the nature of the task committed to the Commission under the Act. Reference to the definition of the national estate in s 4 of the Act reveals that the task of determining whether a place is part of the national estate may be a difficult and complicated one, involving the careful assessment of complex facts and the formation of opinions and value judgments on a potentially very wide range of matters. Questions of science, history and aesthetics may well need to be considered. Many branches of science, from biology to geology, may be involved. A wide range of historical and cultural issues might need to be considered if, to take just one example, it were necessary to determine whether a place had a special value for future generations by reason of a strong association with a particular cultural group for social, cultural or spiritual reasons: see s4(1A)(g). In such circumstances the very nature of the task of identifying places that are part of the national estate is suggestive of an intention that the body established by the Parliament with the function of identification is to have the power to make a conclusive determination of that matter. What the respondent argues is "a jurisdictional fact", namely the identity of a place as part of the national estate, is a conclusion of fact and one that must often rest on a range of potentially difficult and complicated facts, assessments and value judgments. If the conclusion that a place is part of the national estate were to be seen as a jurisdictional fact, one of the Commission's most important functions, and a key function in the overall scheme of the Act, would be performed only provisionally. Even where none of the familiar grounds of judicial review could be made out, and there was no suggestion that the Commission had acted otherwise than according to law, the identification of a place as part of the national estate could still be challenged on the facts. Despite the possible application of the principle that weight is given to the findings of fact of a specialist tribunal concerning a jurisdictional fact, there would be something approaching merits review of the Commission's decision since the matter for factual review would be, essentially, the performance of the whole function of identification. The inconvenience of such a result, an inconvenience that would be of a large dimension having regard to the subject matter of the "jurisdictional fact", is a powerful indication that it was not the intention of the Parliament that the finding should, in effect, be only provisional. Rather it suggests that it was the Parliament's intention that the power of the Commission to enter a place in the Register of the National Estate was to be contingent upon the Commission's own view of the matter. Inconvenience is a matter to be considered in ascertaining the intention of the Parliament in this area: Parisienne Basket Shoes v Whyte at 393 per Dixon J; cf Tasmanian Conservation Trust Inc v Minister for Resources (1995) 55 FCR 516 at 538-539 per Sackville J. 19 In Pharmacy Guild of Australia v Australian Community Pharmacy Authority, Branson J applied similar reasoning when she stated at 476: There is, in my view, a real difficulty in seeking to construe the determination as making the power of the Authority to make a favourable recommendation contingent upon the actual existence of a state of fact, as opposed to its own determination of that state of fact. The recommendation of the Authority is necessary before the Secretary can approve an application under s 90 of the Act. The Authority is established with a membership calculated to lead to substantial industry input into its decision making processes. The rules bind the Authority but have no direct relevance to the discretion of the Secretary under s 90(1) of the Act. If the power of the Authority to recommend an approval under s 90 of the Act is contingent upon the actual existence of the prescribed distance, measured by the prescribed route, between the two relevant sites, the Secretary would be unable to act on the recommendation of the Authority until he or she had satisfied himself or herself of the actual existence of that prescribed distance, a task by the rules given to the Authority with its industry representation. In strict theory, the validity of the recommendation would remain an outstanding question until a court or tribunal possessing power to determine the question decided that the prescribed distance did in fact exist (Parisienne Basket Shoes Pty Ltd v Whyte at 391 per Dixon J). Plainly, in my view, neither the Act nor the determination discloses an intention that the Secretary should review the work of the Authority in this way. Branson J considered that although the Rules drew a distinction between matters of fact and matters in respect of which the Authority was to be "satisfied", this distinction did not reflect an intention that the Authority's power to act was contingent upon the actual existence of those matters of fact. Her Honour reasoned that that the distinction between matters of fact and matters in respect of which the Authority was required to be satisfied reflected a distinction between matters capable of objective determination and those which involved an exercise of judgment. 20 In Karalis, Goldberg J rejected the submission that Branson J's reasoning was clearly wrong and that he should not follow her decision. His Honour reasoned: Although par 6(a) is expressed in absolute or objective terms in the sense that it refers to the measurement of a particular route and par 6(b) is expressed in terms of the Authority being satisfied that certain matters exist, I do not consider that the change in words is intended to reflect the fact that the Authority's decision or recommendation is dependent on the fact of the measurement of that route being objectively true. Rather the change in terminology is reflective of the nature of the inquiry to be made. Both sub-pars (a) and (b) are introduced by the words "and one of the following circumstances applies" and, in my opinion, the intention to be deduced from the structure of par 6, taken as a whole, is that the existence of the circumstances which apply is to be determined by the Authority forming the view that they apply. I consider that the application of the principles and considerations referred to by Black CJ in Australian Heritage Commission v Mount Isa Mines Ltd support this conclusion. In particular I have had regard to the relationship between the functions of the Authority and the Secretary and the inconvenience to which a contrary decision would lead. It would leave as an open question whether the Secretary's approval was based on a valid recommendation: at 484. Goldberg J considered that the interpretation of whether something was "the shortest lawful access route" may require an exercise of judgment and assessment and concluded that the power of the Authority to recommend approval was not contingent on the existence of an objective fact that the relevant distance was not exceeded by the shortest lawful access route but on the Authority's opinion that there was the relevant maximum distance. 21 The applicants sought to distinguish those authorities on the basis that the minimum distance requirement in Item 131 of Part 2 to Sch 1 of the Rules involves a simple and objective measurement from one point to another and does not require any exercise of judgment. The applicants also argued that the law as it now stands in light of the High Court decision in Enfield City Corporation v Development Assessment Commission (2000) 199 CLR 135 has given primacy to language and overtaken the approach followed in Pharmacy Guild of Australia v Australian Community Pharmacy Authority and Karalis. Reference was made to Cabal v Attorney-General of the Commonwealth (2001) 113 FCR 154, where Weinberg J stated at [72] that he considered that the approach taken by the High Court in Enfield City Corporation v Development Assessment Commission was somewhat broader than that which has found favour in earlier decisions, including Australian Heritage Commission v Mount Isa Mines Ltd and that there was "nothing special about the task of statutory construction with regard to the determination of whether a factual reference in a statutory formulation is a 'jurisdictional fact' and that all the normal rules of statutory construction apply". 22 In issue in Enfield City Corporation v Development Assessment Commission was a determination made by a relevant authority on an application relating to a proposed development, that the proposed development was "general industry" rather than "special industry", which the authority then dealt with on that basis as required by the regulations. The validity of the authority's determination that the proposed development was "general industry" was challenged as a jurisdictional fact. The High Court held that the criterion of "special industry" was a matter of fact that did not depend on the satisfaction or opinion of the authority, reasoning that taken as a whole the relevant text of the statutory provision was not expressed so as to turn on the satisfaction or opinion of the relevant authority as to the classification of the proposed development. The High Court also held that where the legality of a decision depends on a jurisdictional fact, it is the function of the Court to determine whether the fact does or does not exist having regard to the evidence before the Court, as opposed to the material that had been before the original decision maker. 23 In the present case, the starting point is the text considered in its statutory context. The language of the minimum distance requirement is expressed objectively as a factual requirement in contrast to other requirements prescribed by the Rules that depend upon the Authority's "satisfaction" of certain matters. This suggests that Parliament intended to make a distinction, though the use of objective language is not determinative as the authorities make clear. As Spigelman CJ said in Timbarra Protection Coalition Inc v Ross Mining NL (1999) 46 NSWLR 55 at [89] a matter was less likely to be intended by Parliament to be an objective fact if it was "characteristically, a matter on which reasonable minds may differ": cf Pharmacy Guild of Australia v Australian Community Pharmacy Authority at 476. The applicants reasoned that the minimum distance requirement is not, however, a matter on which reasonable minds may differ because it is a straight line door to door measurement which involves no element of judgment. There is considerable force in that submission, which I accept. 24 I do not consider it necessary to express a view on whether Pharmacy Guild of Australia v Australian Community Pharmacy Authority and Karalis would be decided differently following Enfield City Corporation v Development Assessment Commission. Those cases can be distinguished upon the basis that they related to a different requirement with some differences in statutory context. It is significant that the requirement under consideration here stipulates in express terms a fact that is objectively determinable, not requiring any degree of evaluation. This is reinforced by r 8 which delineates the reference points from which the measurement is to be taken. There is no element of judgment involved. 25 I am satisfied that the minimum distance requirement is a jurisdictional fact and that the jurisdiction of the Authority and the Secretary to exercise their powers in relation to a grant of approval is made subject to the existence in fact that the minimum distance requirement is met. As Spigelman CJ stated in Timbarra Protection Coalition Inc v Ross Mining NL at [37] – [38]: The issue of jurisdictional fact turns and turns only, on the proper construction of the statute: see, eg Ex parte Redgrave; Re Bennett (1946) 46 SR (NSW) 122 at 125; 63 WN (NSW) 31 at 33. The Parliament can make any fact a jurisdictional fact, in the relevant sense: that it must exist in fact (objectivity) and that the legislation intends that the absence or presence of the fact will invalidate action under the statute (essentially): Project Blue Sky Inc v Australian Broadcasting Authority (1998) 72 ALJR 841 at 859 – 861; 153 ALR 490 at 515-517. "Objectivity" and "essentiality" are two interrelated elements in the determination of whether a factual reference in a statutory formulation is a jurisdictional fact in the relevant sense. They are inter-related because indicators of "essentiality" will often suggest "objectivity". "Essentiality" is mandated by r 11 which provides that the Authority must not make a recommendation for approval unless, amongst other things, the minimum distance requirement is met. 26 In this case, the undisputed fact is that the proposed premises is less than 1.5 kilometres from the nearest approved premises. In that circumstance, it follows that the minimum distance requirement was not met and in consequence both decisions are affected by jurisdictional error. 27 If am wrong and the minimum distance requirement turns upon the Authority's opinion or judgment of that fact, such opinion or judgment, in any event, was not in my view formed reasonably upon the material before the Authority and Secretary: Enfield City Corporation v Development Assessment Commission at [34]. The third and fourth respondents argued that the Authority and Secretary reasonably believed on the basis of the material provided to them that the location of the proposed premises was 66 Howitt Avenue. Assuming the correctness of that submission, it does not assist them. The Google Earth map on which the Authority and Secretary both relied to satisfy themselves that the requirement was met, was measured from a point that was not the actual location of the proposed premises and, therefore, was not evidence before them of the straight line distance between the proposed premises and the nearest approved premises. There was simply no evidence at all of the distance between the proposed premises and the nearest approved premises on which to satisfy themselves that the minimum distance requirement was met. To put it another way, the measurement in the Google Earth map was not the measurement required by r 8 of the Rules and the Google Earth map did not, and could not, constitute evidence of the minimum distance requirement. 28 Accordingly, these grounds have been made out. Ground 3 –The "no evidence" ground 29 This ground requires the applicants to show that there was no evidence or other material to justify the making of the decisions and that: a) the Authority and Secretary were obliged by law to reach their decisions only if the minimum distance requirement was met and there was an absence of evidence or either material from which they could reasonably be satisfied that the requirement was met; or b) that they based their decision on the existence of the fact that the minimum distance requirement was met and that fact does not exist: AD(JR) Act, s 5(3); Curragh Queensland Mining Ltd v Daniel (1992) 34 FCR 212 at 220-1; Minister for Immigration and Multicultural Affairs v Rajamanikkam (2002) 210 CLR 222 at 234, 240 and 257. 30 Ground three must also succeed and the reasons may be shortly stated. As the Google Earth map showed a measurement taken from a wrong location, the map was not evidence before the Authority and Secretary of the actual distance between the two premises. The first limb is satisfied because the minimum distance is a jurisdictional fact and there was no other material before them from which they could reasonably be satisfied that the requirement was met. The second limb is also satisfied because the actual distance is less than the prescribed minimum distance. Ground 4 - An improper exercise of power 31 Section 5(2) of the AD(JR) Act provides that it is an improper exercise of power within the meaning of s 5(1) for a decision maker to take into account irrelevant considerations or fail to take into account relevant considerations in the exercise of a power. 32 This ground is also made out. In relying upon the Google Earth map, the Secretary and the Authority took into account an irrelevant consideration because the map showed the measurement from the wrong location and failed to take into account the consideration that they were bound to take into account: viz, the actual distance between the proposed premises and the nearest approved premises. 33 However, the applicants' additional contention that the Authority and Secretary failed to take into account a "relevant consideration", namely what the handbook published by the Department of Health and Ageing said about the kind of supporting evidence that should be provided to satisfy the minimum distance requirement, cannot be accepted. The purpose of the handbook is to provide information and guidance to pharmacists who wish to make an application for approval to supply pharmaceutical benefits. Amongst other things, the handbook states that if the distance separating the nearest approved pharmacy and the proposed premises is substantially greater than 1.5 kilometres "it may be sufficient" to provide a scaled map highlighting the two premises and the approximate straight line distance using the scale on the map as the basis. If the distance between both premises is "very near to the required distance", the handbook advises that "applicants should provide a surveyor's report of the measurement of the straight line distance" and then sets out what the surveyor's report "should include". These are not "policies" or guidelines to which the Authority and Secretary must have regard in exercising their powers. The argument misconceives Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 at 420-1 upon which the applicants relied in support of this contention. ground 5 - failure to follow procedures required by law 34 This ground relies on the same point about the handbook. For the same reasons, this ground must fail. STANding of the third to seventh respondents 35 It was faintly argued by the third and fourth respondents that the third to seventh applicants do not have standing to bring these proceedings because their pharmacies are not within 1.5 kilometres from the proposed premises. This argument is also rejected. Standing depends on whether the third to seventh applicants are "persons who are aggrieved" by the decisions of the Authority and Secretary: AD(JR) Act, ss 3(4) and 5. It is well established law that a "person aggrieved" does not have to establish that he or she has a legal interest at stake in the making of the decision. It is sufficient to give standing that the third to seventh applicants can show a grievance that they will suffer as a result of the decisions complained about beyond that which they have as ordinary members of the public. I adopt and apply the reasoning of Branson J in Pharmacy Guild of Australia v Australian Community Pharmacy Authority: The statutory provisions with which this case is concerned are (putting aside certain amendments which do not go to the broad purpose of the provisions) the same as those considered by the Full Court of this Court in Pharmacy Restructuring Authority v Martin. In that case the Court stated (at 597): "The relevant provisions are not concerned with minimizing competition in the pharmaceutical industry but with reducing the Commonwealth's financial burden in providing pharmaceutical benefits while maintaining an acceptable level of community service." The means by which the above objective was to be achieved is revealed by cl 3 of the agreement. Such means involve the maintenance of the benefits of restructuring in the pharmaceutical industry and the enhancement of the development of "an effective, efficient and well-distributed community pharmacy service in Australia". It seems to me that the second to fifth applicants have, by reason of par 6(c) of the determination, an interest which rises above that of an ordinary member of the public in the development and maintenance of "an effective, efficient and well-distributed community pharmacy service" in that small portion of Australia in the near vicinity of the Kareela premises. Their interest is, in my view, an interest which is relevant to the process which the Act establishes and to the decision here challenged, and it is not in conflict with the interests which the Act promotes (see Alphapharm Pty Ltd v SmithKline Beecham (Australia) Pty Ltd (1994) 49 FCR 250 at 261 per Davies J): at 473. The third to seventh applicants are proprietors of another nearby pharmacy and I accept that this gives them an interest which rises above that of an ordinary member of the public. relief 36 There will be orders setting aside the recommendation of the Authority and the approval of the Secretary. I will hear submissions on when those orders should become effective. I will also make an order referring the third and fourth respondent's application for approval in respect of the premises to the Authority and the Secretary respectively for further consideration according to law. 37 I shall hear the parties on the question of costs. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Davies. Associate: Dated: 2 October 2013 SCHEDULE OF PARTIES First Applicant Steven Kastrinakis Second Applicant John Kardis Third Applicant Timothy Daniel Shelton Fourth Applicant David Louis Preston Fifth Applicant Katie Louise Wait Sixth Applicant Lachlan James Pearce Seventh Applicant Michelle Anne Shelton First Respondent Australian Community Pharmacy Authority Second Respondent Secretary of the Department of Health and Ageing Third Respondent Lusha Liu Fourth Respondent Betty Karalis	7,299
federal_court_of_australia:fca/single/2001/2001fca1149	decision	commonwealth	federal_court_of_australia	text/html	2001-08-23 00:00:00	Woolgar v O'Neill [2001] FCA 1149	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2001/2001fca1149	2024-09-13T22:45:02.524196+10:00	FEDERAL COURT OF AUSTRALIA Woolgar v O'Neill [2001] FCA 1149 INDUSTRIAL LAW – rules of organisation require Branch to pay proportion of contributions already collected to National Council – whether rules impose conflicting duties on officers of the organisation – whether the rules impose conditions that are oppressive, unreasonable or unjust. Workplace Relations Act 1996 (Cth), ss 3(g), 187A(c), 196(c), 209. Municipal Officers' Association of Australia v Lancaster (1981) 54 FLR 129, cited. Doyle v Australian Workers Union (1986) 12 FCR 197, cited. Roughan v Day (1991) 32 FCR 581, cited. TONY WOOLGAR v MICHELE O'NEILL & ORS N 551 of 2001 SACKVILLE J SYDNEY 23 AUGUST 2001 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 551 OF 2001 BETWEEN: TONY WOOLGAR APPLICANT AND: MICHELLE O'NEILL FIRST RESPONDENT JARROD SMITH SECOND RESPONDENT TERESA WEISS THIRD RESPONDENT DOROTHY PETERSON FOURTH RESPONDENT JUDGE: SACKVILLE J DATE OF ORDER: 23 AUGUST 2001 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The first respondent take all steps, within her power, necessary to cause to be paid out of the funds of the Victorian Branch of the Textile Clothing and Footwear Union of Australia ("the Union") to the applicant, on behalf of the National Council of the Union, an amount equivalent to twenty per cent of all contributions, other than entrance fees and commissions, collected or received by the Victorian Branch of the Union between 1 April 2000 and 31 December 2000. 2. The third and fourth respondents sign all necessary cheques or instruments that may be necessary to facilitate the payment referred to in order 1. 3. The applicant have liberty to apply in relation to these orders on three days' notice. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 551 OF 2001 BETWEEN: TONY WOOLGAR APPLICANT AND: MICHELE O'NEILL FIRST RESPONDENT JARROD SMITH SECOND RESPONDENT TERESA WEISS THIRD RESPONDENT DOROTHY PETERSON FOURTH RESPONDENT JUDGE: SACKVILLE J DATE: 23 AUGUST 2001 PLACE: SYDNEY REASONS FOR JUDGMENT the proceedings 1 The applicant is the National Secretary of the Textile Clothing and Footwear Union of Australia (the "Union"), elected to that position most recently in 2000. The first respondent is the Secretary of the Victorian Branch of the Union. The third respondent is one of two trustees of the Victorian Branch and has filed a submitting appearance. The fourth respondent, so I was informed, was to replace the second respondent as the other trustee of the Victorian Branch shortly after the hearing in this matter. The fourth respondent was, without objection, added as a party to the proceedings at the hearing, apparently in anticipation of her taking up office as a trustee. 2 The first, second and fourth respondents were represented at the hearing by Mr Borenstein. I refer to them collectively as "the respondents". Mr Rothman SC and Mr Hatcher appeared for the applicant. 3 The applicant seeks an order pursuant to s 209(1) of the Workplace Relations Act 1996 (Cth) ("the Act") giving directions for the performance or observance of r 53A of the registered Rules of the Union ("the Rules"). The insertion of r 53A and other alterations to the Rules were certified by the Deputy Industrial Registrar pursuant to s 205(1) of the Act on 16 February 2001 and took effect on that date. 4 Rule 53A provides as follows: "53A – VICTORIAN BRANCH PAYMENT OF OUTSTANDING CAPITATION FEES (a) Notwithstanding the other provisions of these rules (including rules 51(e) and 53), the Secretary of the Victorian Branch shall, not later than 5pm on the day occurring 7 days after this rule takes effect pursuant to section 205 of the Workplace Relations Act 1996, take all necessary steps to cause to be paid out of the Victorian Branch funds to the National Secretary on behalf of the National Council an amount equal to 20% of the contributions (other than entrance fees and commissions) collected or received by the Victorian branch from members of the Victorian branch between the 1st April 2000 and the 31st December 2000. (b) The Trustees of the Victorian Branch shall sign all necessary cheques and/or instruments that may be required to facilitate the payments prescribed in subrule (a) of this rule. (c) Any payment made pursuant to this rule shall be in satisfaction of any capitation fee which became or becomes payable by the Victorian Branch pursuant to rule 53 of these rules in respect to the June, September and December quarter in the year 2000." 5 It will be seen that s 53A(a) refers to r 53. That rule, which deals with capitation fees, was altered as from 16 February 2001. Rule 53, in both its old and new forms, is set out later in this judgment (see [13], [15]). The National Council referred to in r 53A is the supreme governing body of the Union and has the management and control of the Union: r 22(a). 6 The orders sought by the applicant mirror the language of r 53A. They are as follows: "1. An order that the First Respondent take all necessary steps to cause to be paid out of the funds of the Victorian Branch of the Union to the Applicant, on behalf of the National Council of the Union, an amount equivalent to 20% of all contributions, other than entrance fees and commissions collected by or received by the Victorian Branch of the Union between 1 April 2000 and 31 December 2000. 2. An order that the Second, and/or the Third and/or the Fourth Respondents sign all necessary cheques and/or instruments that may be necessary to facilitate the payment required by Order 1." legislation 7 Section 209 of the Act relevantly provides as follows: "209(1) A member of an organisation may apply to the Court for an order under this section in relation to the organisation. … 209(7) Where the Court, in considering an application under this section, finds that the whole or a part of a rule of the organisation concerned contravenes section 196 or that the rules of the organisation concerned contravene that section in a particular respect, the Court may, by order, make a declaration to that effect. … 209(9)In this section: … 'order under this section' means an order giving directions for the performance or observance of any of the rules of an organisation by any person who is under an obligation to perform or observe those rules." 8 The respondents contended, inter alia, that r 53A contravenes s 196(c) of the Act and that, accordingly, a declaration to that effect should be made pursuant to s 209(7) of the Act. Section 196(c) is in the following terms: "The rules of an organisation: … (c) shall not impose on applicants for membership, or members, of the organisation, conditions, obligations or restrictions that, having regard to the objects of this Act and the purposes of the registration of organisations under this Act, are oppressive, unreasonable or unjust." background 9 The Union is a product of the amalgamation of two unions that took place in 1992. The Union has Branches in all Australian States. Its current membership, so I was told, is about 20,000. The Union's registered office is in Sydney. 10 Until about December 2000, the Union had a national office staff of five. According to the applicant's uncontradicted evidence, the staff were all retrenched in December 2000 as a result of the Victorian Branch's refusal to pay capitation fees to the National Council. Rule 53A was the response of the National Council to that refusal. 11 The conflict between the National Council and the Victorian Branch apparently relates to a resolution passed by the National Council on 23 August 2000 authorising the applicant, as National Secretary, to take the necessary steps to create a federation with the Transport Workers' Union of Australia. That resolution was rescinded on 4 April 2000 but the dispute concerning capitation fees in respect of the period 1 April to 31 December 2000 remains. The evidence suggests that the amount in dispute is between $270,000 and $300,000. capitation fees 12 There was initially some confusion at the hearing concerning the form of the Rules governing capitation fees prior to the alteration of r 53 on 16 February 2001. The position became clearer as the result of the tender of r 53 in its old form (that is, the form it took from 1992 until its alteration on 16 February 2001). 13 The old r 53, so far as relevant, provided as follows: "(a) In each financial year, each Branch shall remit to the National Council by way of capitation fees such percentage, not exceeding thirty per cent (30%) as is determined by the National Council at its annual meeting in the immediately preceding financial year of the contributions (other than entrance fees and commissions) collected or received by the Branch from members of each Branch." 14 It is common ground that capitation fees were initially set in 1992 but that, for some unexplained reason, the National Council did not thereafter determine the capitation fees at its annual meeting each year. Rather, each Branch paid its capitation fees apparently (although this is not entirely clear) by reference to the percentages determined in 1992. I infer from the evidence that the Victorian Branch regularly paid to the National Council capitation fees at the rate of twenty per cent of the contributions collected or received by it (other than entrance fees and commissions), until it ceased to do so in respect of contributions collected or received during the period from 1 April 2000 to 31 December 2000. 15 The new r 53 relevantly provides as follows: "(a) National Council shall fix from time to time a capitation fee being the percentage or percentages, not exceeding thirty per cent (30%), of the contributions (other than entrance fees and commissions) collected or received by the Branch from members of the Branch. (b) The National Council may fix different capitation fees in respect to different Branches of the Union." the rules 16 Reference should be made to some of the other Rules referred to in argument. 17 The National Secretary of the Union is required to receive all moneys and to pay them to the credit of the Union (r 29(c)(iii)), issue receipts (r 29(c)(iv)) and keep books of account (r 29(c)(v)). The National Secretary also has power to require inspection of all books and other documents in connection with the conduct of any Branch (r 29(c)(xviii)). 18 Subject to the control of members of the Branch in meeting assembled, a Branch Committee has power to conduct and manage the affairs of the Branch (r 38). The duties of the Secretary of a Branch include the following (r 41(c)): "(ii) arrange and organise the conduct of the business and correspondence of the Branch; … (vi) have custody of the financial records and produce them for inspection at all reasonable times when requested by the President or the Committee of the Branch; … (xiii) subject to any direction of the Committee of the Branch, appoint, engage, control and dismiss such clerical and other staff as may be necessary for the conduct of the affairs of the Branch; (xiv) with a Trustee of the Branch, sign all cheques; (xv) administer the work of the Branch in accordance with these Rules and with the directions and decisions of the Branch committee; (xvi) be the Officer to sue and be sued on behalf of the Branch." Rule 41(e) provides as follows: "The Funds and property of the Branch shall be vested in the Trustees of the Branch who shall deal with the same as directed by resolution of the Committee of the Branch." 19 The funds and property of the Union consist of, inter alia, any moneys paid to the National Council by Branches by way of capitation fees or for other purposes as required by decisions of the National Council (r 50(a)(ii)). All funds and property of the Union are vested in the Union (r 50(b)). 20 The funds and property of a Branch consist of, inter alia, the amount of entrance fees, subscriptions, fines and levies collected by the Branch less so much as is payable by the Branch to the National Executive by way of capitation fees or otherwise (r 51(a)(ii)). All funds and property of a Branch are vested in the Trustees of that Branch (r 51(b)). All cheques and other instruments for the withdrawal of any funds of a Branch of the Union from any bank or other account must be signed by the Secretary and one of the Trustees of that Branch (r 51(d)). THE APPLICANT'S SUBMISSIONS 21 The applicant contended that r 53A should be given effect according to its clear terms. It is expressed to apply notwithstanding any other provisions of the Rules. It requires the Secretary of the Victorian Branch to "take all necessary steps" to cause to be paid out of Branch funds an amount equal to twenty per cent of the contributions collected or received by the Victorian Branch between 1 April 2000 and 31 December 2000. The rule assumes neither that the procedure contemplated by the old r 53 has been complied with nor that capitation fees in respect of the relevant period are due to the National Council. Rule 53A(a) merely requires the Secretary of the Victorian Branch to take the necessary steps to cause payment to be made of a sum equivalent to twenty per cent of the contributions already collected by the Branch during that period. The trustees are required, pursuant to r 53A(b), to sign a cheque or other instrument to facilitate the payments. Rule 53A(c) is simply designed to ensure that the Victorian Branch does not become liable to pay capitation fees twice in respect of the same period. reasoning 22 Mr Borenstein on behalf of the respondents did not dispute that r 53A had been validly certified. Nor did he dispute that the Victorian Branch has sufficient funds out of which the payment contemplated by r 53A can be made. He also accepted that the Victorian Branch collected or received contributions during the relevant period and, indeed, elicited from the applicant in cross examination an estimate that twenty per cent of those contributions amounts to approximately $270,000 to $300,000. construction issues 23 Mr Borenstein advanced a number of arguments concerning the construction of r 53A in opposition to the relief sought by the applicant. He also relied on these arguments to support the respondents' claim to a declaration under s 209(7) of the Act that s 53A contravenes s 196(c). 24 First, he submitted that r 53A(a) purports to impose obligations on the Branch Secretary that are impossible for her to fulfil, since the funds and property of the Branch are not vested in her, but in the trustees of the Victorian Branch. Moreover, so it was argued, the rule is unclear when it refers to the Branch Secretary taking "all necessary steps" to procure a particular result. Mr Borenstein submitted that if the requirements of r 53A are impossible of performance, no order can be made under s 209 of the Act. Further, any rule imposing obligations impossible to carry out should be regarded as oppressive, unreasonable or unjust. 25 In my view, r 53A(a) cannot be read as imposing an obligation on the Branch Secretary to take all necessary steps, whether or not within her power, to cause the relevant amount to be paid to the National Council. Rule 53A itself recognises, in sub-rule (b) that the trustees must participate in the process by signing all necessary cheques or other instruments required to facilitate payment (see r 51(d)). In context, it seems to me that r 53A(a) contemplates that the Branch Secretary must take all necessary steps within her power to cause the amount to be paid. These steps would include either drawing a cheque herself or directing staff to do so (r 41(c)(ii), (vi), (xiii), (xv)), signing the cheque (r 41(c)(xiv)) and forwarding the cheque to the National Secretary (r 41(c)(ii), (xv)). Since r 53A(a) applies notwithstanding any other rule, the Branch Secretary would be obliged to comply with r 53A(a) rather than any inconsistent direction given to her, for example, by the Branch Committee. Any such direction would not be given in conformity with the Rules. 26 When I put this construction of r 53A(a) to Mr Borenstein he stated that he did not wish to argue against it and, indeed, indicated that it met the first respondent's concerns on this aspect of the case. For his part, Mr Rothman agreed that any order made in the proceedings should be framed so as to require only that the first respondent take the necessary steps within her power to cause the required payment to be made. 27 Secondly, Mr Borenstein pointed out that the introductory words to r 53A(a) ("Notwithstanding the other provisions of these rules…") are not replicated in r 53A(b). It follows, so he argued, that the trustees might find themselves in a position of conflict with the Branch Committee if it directs that available funds be allocated to some purpose other than payment to the National Council (see rr 38, 51(c)). The trustees might therefore be unable to perform the duties imposed on them by r 53A(b). 28 In my opinion, the entirety of r 53A is intended to be subject to the introductory words in r 53A(a). Subrules (a) and (b) are plainly closely interrelated. Subrule (b) imposes an obligation on the trustees to sign cheques or other instruments required to facilitate the payments prescribed in sub-rule (a). The intention of the rule read as a whole, particularly having regard to the factual matrix, is that payment of the amount prescribed in subrule (a) is not to be frustrated by the operation of any other rule that otherwise might curtail or qualify the obligation imposed by r 53A(b) on the trustees. The construction propounded by Mr Borenstein would effectively nullify the rule if the Branch Committee continued to oppose paying the funds to the National Council. That cannot be what was intended. 29 On this construction of r 53A, there is no question of the trustees facing conflicting duties under the Rules. Their obligation is to comply with the requirements of r 53A(b). Nor can there be any question of the trustees' fiduciary duties to the Branch members somehow being inappropriately modified (as Mr Borenstein seemed to suggest). The fact that the trustees owe fiduciary duties to members is not inconsistent with their conforming to the requirements of valid rules of the Union. 30 Thirdly, Mr Borenstein submitted that r 53A is drafted on the false assumption that, at the date the rule came into effect, the Victorian Branch was obliged to pay capitation fees pursuant to the old r 53. If the drafter did make such an assumption, so it was argued, it is likely to have been incorrect, since the National Council did not pass the annual resolutions required by the old r 53. As I followed the argument, Mr Borenstein contended that the fact that r 53A had been drafted on a false assumption as to the Victorian Branch's legal obligations to remit capitation fees supported the proposition that r 53A imposes obligations that are oppressive, unreasonable or unjust. 31 In my view it is clear that r 53A is not drafted on the assumption that the Victorian Branch is legally obliged to pay capitation fees in respect of the period 1 April 2001 to 31 December 2001. The obligations imposed by r 53A are framed by reference to "an amount equal to 20% of the contributions...collected or received" by the Victorian Branch during the period. This formula assumes nothing except, perhaps, that contributions were in fact collected and received by the Branch during that period. The formula employed in r 53A is also apt to ensure that the amount due to the National Council is readily quantifiable. 32 Nor does r 53A(c) make the assumption identified by Mr Borenstein. Sub-rule (c) ensures that any payment made to the National Council pursuant to r 53A is in satisfaction of any capitation fee which became or becomes payable in respect of the relevant period. As Mr Rothman submitted, r 53A(c) is designed to avoid the Victorian Branch being liable to pay capitation fees twice in respect of the same period. oppressive, unreasonable or unjust? 33 Mr Borenstein's next submission was that r 53A imposes on members of the Union obligations that are "oppressive, unreasonable or unjust" within s 196(c) of the Act. As I have noted, Mr Borenstein invited the Court to make a declaration to that effect, pursuant to the power granted by s 209(7) of the Act. 34 The principles governing the application of what is now s 196(c) of the Act were stated by Deane J in Municipal Officers' Association of Australia v Lancaster (1981) 54 FLR 129. His Honour said this in relation to the predecessor of s 196(c), namely s 140(1)(c) of the Conciliation and Arbitration Act 1904 (Cth) (at 165): "This Court has no authority generally to supervise the content of the rules or to require that the rules comply with what those constituting the court might see as preferable, desirable or ideal. To put the matter differently, it is for the members, or those entrusted by the members in that regard, to decide the content of the rules. The function of this Court is to determine, in accordance with ordinary judicial procedure, whether some provision or provisions of the rules adopted by, or on behalf of, the members can properly be described not merely as undesirable but as oppressive, unreasonable or unjust." In Doyle v Australian Workers' Union (1986) 12 FCR 197, at 205-206, the Full Court explained the position as follows: "The starting point of any s 140 case is the right of an organisation to choose its own rules and internal structures, within the framework provided by the Act. … The primary justification for the existence of a rule of an organisation is simply that the organisation has adopted that rule. It is then necessary to apply s 140(1)(c) to the particular provision, measuring its effect. The Act assumes that the rules of an organization may impose conditions, obligations or restrictions which are not oppressive, unreasonable or unjust. The mere imposition by the rules of conditions, obligations or restrictions is not evidence that those conditions, obligations or restrictions are oppressive, unreasonable or unjust. Their effect must be examined, in the particular circumstances of the organisation, and by reference to both the objects of the Act, and the purposes of the registration of organisations under the Act." 35 The contention that r 53A is oppressive, unreasonable or unjust was based primarily on the respondents' suggested construction of the rule. It was said that r 53A is too unclear to be capable of enforcement and, in any event, leaves the respondents in a position of uncertainty should the Victorian Branch Committee continue to oppose payment to the National Council of an amount equivalent to twenty per cent of contributions during the relevant period. I have already addressed and rejected the respondents' submissions on the construction of r 53A. 36 Mr Borenstein contended that, independently of the construction issues, r 53A is oppressive, unjust or unreasonable because it imposes a retrospective obligation on the Victorian Branch. He did not dispute that rules of a union can be expressed to operate retrospectively: cf Roughan v Day (1991) 32 FCR 581. His submission, as I understand it, is that the Victorian Branch is entitled to expect that the procedures laid down by the Rules will be adhered to. 37 The authorities require the question posed by s 196(c) of the Act to be answered having regard to the particular circumstances of the case. In the present case, the circumstances include the fact that the Branches of the Union, including the Victorian Branch, have acted for a considerable period on the basis that a proportion of contributions collected or received each year are to be paid to the National Committee. There was no suggestion that the figure of twenty per cent of contributions adopted by r 53A departed from the long established practice followed by the Victorian Branch. Moreover, s 53A is expressed to operate only in relation to contributions actually collected or received by the Victorian Branch during the relevant period. These circumstances suggest that s 53(a) does not impose obligations that can be characterised as oppressive, unjust or unreasonable. 38 In considering the application of s 196(c), it is also necessary to take into account the objects of the Act. These objects include ensuring that registered organisations are able to operate effectively (s 3(g)), and encouraging "the efficient management of organisations" (s 187A(c)). The applicant gave unchallenged evidence not only that staff had been retrenched, but that the Union has been placed in "a serious financial position" and is "seriously limited in the service it can provide to its members at the national level". Nor was he challenged on his evidence that it was the failure of the Victorian Branch (the largest Branch of the Union) to adhere to the practice of paying a proportion of contributions collected as received by it that had created the difficulties. In view of this evidence, it is difficult to say that r 53A imposes obligations that are outside the objects sought to be achieved by the Act. Indeed, it is at least open to conclude that the rule advances the objects I have identified. 39 I should add this observation. Mr Borenstein accepted in argument that it was open to the National Council to adopt a rule achieving the objective sought by r 53A provided the rule was "properly drawn". The respondents' objection, as he put it, was that the rule was not so drawn. While recognising that a failure to follow appropriate procedures may be a source of injustice in a particular case, Mr Borenstein's comments rather suggest that there is nothing oppressive, unjust or unreasonable in the objective sought by r 53A. 40 Finally, Mr Borenstein submitted that, in exercise of my discretion, I should decline to grant relief to the applicant. In substance, however, the only matters relied upon to support this submission were those I have already rejected. In my opinion, no reason has been put forward for withholding relief to the applicant. conclusion 41 The applicant has made out his case for relief under s 209(1) of the Act. The following orders should be made: 1. The first respondent take all steps, within her power, necessary to cause to be paid out of the funds of the Victorian Branch of the Union to the applicant, on behalf of the National Council of the Union, an amount equivalent to twenty per cent of all contributions, other than entrance fees and commissions, collected or received by the Victorian Branch of the Union between 1 April 2000 and 31 December 2000. 2. The third and fourth respondents sign all necessary cheques or instruments that may be necessary to facilitate the payment referred to in order 1. 3. The applicant have liberty to apply in relation to these orders on three days' notice. 42 I have limited order 2 to the third and fourth respondents since, as I understand the position explained at the hearing, the second respondent is no longer a trustee of the Victorian Branch. If there is any difficulty about the form of this order, the applicant may take advantage of the liberty to apply to the Court. 43 Mr Borenstein sought deferral of the orders for six months. No evidence was put forward to support this contention and no substantial reason given for taking this course. I see no justification for deferring implementation of the orders. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice SACKVILLE. Associate: Dated: 23 August 2001 Counsel for the Applicant: Mr S Rothman SC with Mr A Hatcher Solicitor for the Applicant: W G McNally & Co Counsel for the First, Second and Fourth Respondents: Mr H Borenstein Solicitor for the First, Second and Fourth Respondents: Slater & Gordon Date of Hearing: 16 August 2001 Date of Judgment: 23 August 2001	6,317
federal_court_of_australia:fca/single/2009/2009fca1050	decision	commonwealth	federal_court_of_australia	text/html	2009-09-18 00:00:00	Rana v Musolino [2009] FCA 1050	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2009/2009fca1050	2024-09-13T22:45:02.895587+10:00	FEDERAL COURT OF AUSTRALIA Rana v Musolino [2009] FCA 1050 BANKRUPTCY – whether show cause proceedings in the High Court vested in bankrupt applicant's trustee – applicant challenging trustee's decision to issue notice of discontinuance in High Court – whether decision challenged in show cause proceeding related in part to a claim for damages for "personal injury or wrong" – personal claim integrally interconnected with substantive non-personal claims – unnecessary to consider apportionment PRACTICE AND PROCEDURE – summary dismissal – Federal Court of Australia Act 1976 (Cth) s 31A – Federal Court Rules O 20 r 5 – application having no reasonable prospects of success – High Court seized of the matter Administrative Decisions (Judicial Review) Act 1976 (Cth) Bankruptcy Act 1966 (Cth) ss 58(1), 60(2), 60(3), 60(4)(a), 60(5), 116(2)(g), 134(e), 134(j), 134(o), 178 Federal Court of Australia Act 1976 s 31A Trade Practices Act 1974 (Cth) s 52 Federal Court Rules O 20 r 5 Tait v Harris [2003] FCA 446 cited Daemar v Industrial Commission of New South Wales (1988) 12 NSWLR 45 applied Cirillo v Consolidated Press Property Pty Ltd [2007] FCA 592 cited Rana v University of Adelaide [No 2] [2008] FCA 494 cited Walton v Gardiner (1993) 177 CLR 378 cited Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 applied Daemar v Industrial Commission of New South Wales [No 2] (1990) 22 NSWLR 178 considered Madden v Madden [1995] FCA 297 cited Fitzpatrick v Keelty [2008] FCA 35cited Cox v Journeux [No 2] (1935) 52 CLR 713 cited Faulkner v Bluett (1981) 52 FLR 115 cited Rogers v Asset Loan Co Pty Ltd [2006] FCA 434 cited 3 The Laws of Australia, "Bankruptcy" at [3.8.940] RANJIT SHAMSHER JUNG BAHDUR RANA v ROSEMARIE MUSOLINO, OFFICIAL TRUSTEE IN BANKRUPTCY and AUSTRALIAN GOVERNMENT SOLICITOR No SAD 206 of 2008 FINN J 18 SEPTEMBER 2009 ADELAIDE IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 206 of 2008 BETWEEN: RANJIT SHAMSHER JUNG BAHDUR RANA Applicant AND: ROSEMARIE MUSOLINO First Respondent OFFICIAL TRUSTEE IN BANKRUPTCY Second Respondent AUSTRALIAN GOVERNMENT SOLICITOR Third Respondent JUDGE: FINN J DATE OF ORDER: 18 SEPTEMBER 2009 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: 1. The application be dismissed against each respondent. 2. The applicant pay the costs of each respondent. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION SAD 206 of 2008 BETWEEN: RANJIT SHAMSHER JUNG BAHDUR RANA Applicant AND: ROSEMARIE MUSOLINO First Respondent OFFICIAL TRUSTEE IN BANKRUPTCY Second Respondent AUSTRALIAN GOVERNMENT SOLICITOR Third Respondent JUDGE: FINN J DATE: 18 SEPTEMBER 2009 PLACE: ADELAIDE REASONS FOR JUDGMENT 1 Ranjit Rana became bankrupt on 13 August 2008. Prior to that date he had a multiplicity of proceedings in this Court. His present amended application, in form at least, relates to decisions allegedly taken by the three respondents in relation to some number of the proceedings in which he was unsuccessful. It has been brought, nominally as will be seen, under the Administrative Decisions (Judicial Review) Act 1976 (Cth). Its scope and flavour are betrayed in the first three paragraphs of the amended application: Application to review the decisions of the 1st, 2nd and 3rd respondents not to allow the applicant to pursue his constitutional writ or apply for writ to show cause, in matters decided in the Federal Court of Australia in matters numbers SAD 47, 48, 83 and 124, which so far has High Court numbers A 20 and 32 of 2008, and others are being not accepted by the decision of the 1st respondent in a letter sent to the applicant on 4/12/2008. Application to review the conduct of the 3rd respondent under which it keeps on giving erroneous advice to the 1st to the 2nd respondents that the applicant is a bankrupt, and that he and others in Australian Government Solicitors have been sued with the intent as a vexatious litigant, and such actions has no prospect of success, even they may be couched in language of personal injuries and wrongs to the appellant. Application to review conduct in which all of the respondents proposes to engage by which the applicant cannot issue writs and/or seek special leave due to effect of the s 60(2) and (3) of the Bankruptcy Act 1966 (Cth). All of the respondents claim that the advice of the 3rd respondent is clear that the applicant has no standing in all actions now in High Court and/or as proposed there to fall within s 60(4) of the Bankruptcy Act 1966. 2 The proceeding itself is now the subject of a motion for summary judgment by the Official Trustee under s 31A of the Federal Court of Australia Act 1976 or else for dismissal under O 20 r 5 of the Federal Court Rules. 3 Insofar as it relates to the third respondent, the Australian Government Solicitor, the proceedings has been discontinued by the Official Trustee. The action against the third respondent was in any event incompetent. 4 The first respondent, a Deputy Registrar of the High Court of Australia, has agreed to abide by any order of the Court save as to costs. As I understand Mr Rana's application against the Registrar it is without foundation once its essence is appreciated. The Official Trustee having filed a notice of discontinuance in an application in the High Court in A20 of 2008 for an order to show cause against a judge of this Court, the Registrar has taken no further steps in that matter. Unless and until the Official Trustee's decision to file that notice is declared invalid, the Registrar was entitled to act upon it. In any event, any decisions taken by the Registrar in relation to the acceptance or otherwise of material for filing in the High Court, even where potentially amenable to review under the AD(JR) Act; see Tait v Harris [2003] FCA 446; are not ones in relation to which I should make any determination. Such matters, which involve the conduct of the High Court's own officers in the discharge of their duties, are, in my view, ones for that Court itself properly to determine. 5 The real respondent in this matter is the Official Trustee and Mr Rana's complaints are in relation to decisions allegedly taken by the Trustee in relation to proceedings which Mr Rana has prosecuted and lost in this Court (whether at first instance or on appeal). 6 Because the application relates to decisions taken by the Trustee in that capacity, the application has been dealt with as well as if it were made under s 178 of the Bankruptcy Act 1966 (Cth). The section provides: 178(1) If the bankrupt, a creditor or any other person is affected by an act, omission or decision of the trustee, he or she may apply to the Court, and the Court may make such order in the matter as it thinks just and equitable. 178(2) The application must be made not later than 60 days after the day on which the person became aware of the trustee's act, omission or decision. I simply note that the application initiating this proceeding appears to have been filed within the time limited by s 178(2) in respect of what I consider to be operative decisions of the Trustee in this matter. 7 I should make several additional comments by way of preface concerning this proceeding. First, to the extent that Mr Rana seeks curial relief in respect of actions which have not yet occurred or decisions which have not been taken, I obviously will not entertain those matters. It is not my function to provide what will in essence be advisory opinions or answers to what might well be hypothetical issues. Secondly, the material that Mr Rana has put on in support of his application is in some degree impenetrable. I have attempted to reduce his complaints to what I consider could constitute justiciable issues. THE BANKRUPTCY ACT SETTING 8 A sequestration order was made against Mr Rana on 13 August 2008 and the Official Trustee was appointed trustee of his bankrupt estate. Some number of the Federal Court decisions referred to in his amended application were heard and disposed of prior to Mr Rana's bankruptcy. In relation to others, the appellate processes had not by then been exhausted. 9 Insofar as presently relevant, s 58(1)(a) of the Bankruptcy Act provides that: 58(1) Subject to this Act, where a debtor becomes a bankrupt: (a) the property of the bankrupt, not being after-acquired property, vests forthwith in the Official Trustee … 10 Section 60(2) to (4) provide in turn: 60(2) An action commenced by a person who subsequently becomes a bankrupt is, upon his or her becoming a bankrupt, stayed until the trustee makes election, in writing, to prosecute or discontinue the action. 60(3) If the trustee does not make such an election within 28 days after notice of the action is served upon him or her by a defendant or other party to the action, he or she shall be deemed to have abandoned the action. 60(4) Notwithstanding anything contained in this section, a bankrupt may continue, in his or her own name, an action commenced by him or her before he or she became a bankrupt in respect of: (a) any personal injury or wrong done to the bankrupt, his or her spouse or a member of his or her family … An "action" is defined in s 60(5) to mean any civil proceedings, "whether in law or in equity". 11 Finally, s 116 of the Act, insofar as presently relevant, states: 116(1) Subject to this Act: (a) all property that belonged to, or was vested in, a bankrupt at the commencement of the bankruptcy … (b) the capacity to exercise, and to take proceedings for exercising all such powers in, over or in respect of property as might have been exercised by the bankrupt for his or her own benefit at the commencement of the bankruptcy or at any time after the commencement of the bankruptcy and before his or her discharge; and … is property divisible amongst the creditors of the bankrupt. 116(2) Subsection (1) does not extend to the following property: … (g) any right of the bankrupt to recover damages or compensation: (i) for personal injury or wrong done to the bankrupt, the spouse of the bankrupt or a member of the family of the bankrupt; … and any damages or compensation recovered by the bankrupt (whether before or after he or she became a bankrupt) in respect of such an injury or wrong or the death of such a person. 12 These provisions have been subjected to considerable judicial exegesis. It suffices for present purposes if I refer without further comment to observations of Kirby P in Daemar v Industrial Commission of New South Wales (1988) 12 NSWLR 45 at 50: These provisions make it clear that the scheme and purpose of the Act is, upon the debtor's becoming a bankrupt, to transfer property rights, including certainly the right to sue in respect of claims to property, from the bankrupt to his trustee. This is so, notwithstanding that it involves personal inconvenience to the bankrupt: see Faulkner v Bluett (1981) 52 FLR 115 at 119. Indeed, it is so notwithstanding the fact that it deprives the bankrupt of important civil rights which he or she would otherwise normally enjoy. It is of the essence of bankruptcy, as provided for by the Act, that property which belongs to the bankrupt, including choses in action (other than those which are specifically exempted) are vested upon bankruptcy in the bankrupt's trustee. THE VARIOUS PROCEEDINGS ALLEGEDLY AFFECTED BY THE TRUSTEE'S "DECISIONS" 13 As I noted earlier, the Amended Application in this matter refers to a number of decisions of this Court – and anticipates others – in relation to which it is alleged, the Trustee has taken, or will take, decisions to block proceedings by Mr Rana for constitutional writs or writs to show cause. The allegation is for the most part without foundation, although some of the decisions have been ones in which the Trustee has decided, favourably to Mr Rana, that the actions in question fell within the "personal injury or wrong" exception of s 60(4) of the Bankruptcy Act. 14 For ease in exposition I will use the Court numbering of the various proceedings that are said to be presently relevant. I will deal first with the Federal Court matters and then the two High Court proceedings. (i) SAD 48 of 2008 15 This was an application for an extension of time to appeal from a decision of a judge of this Court made on 3 April 2008. The application was refused by Mansfield J on 20 October 2008. The Trustee was not a party to the proceeding. It came to the view that s 60(4) of the Act applied to the action as it involved predominantly issues concerning a claim by Mr Rana for personal injuries compensation. Mr Rana was advised of this view by letter dated 10 December 2008. Mr Rana could not claim to be "a person aggrieved" by such a decision of the Trustee for AD(JR) Act purposes. The evidence put on on behalf of the Trustee, which I accept, is that it made no decision, act or omission detrimental to Mr Rana in SAD 48 of 2008. 16 I find Mr Rana has no reasonable ground for impugning the Trustee's decision under the AD(JR) Act or s 178 of the Bankruptcy Act. (ii) SAD 83 of 2008 17 On 17 June 2008 a judge of this Court dismissed an application of Mr Rana as vexatious. An appeal from that decision to the Full Court of this Court was dismissed on 21 November 2008. The Trustee was not a party to those proceedings and again took the view that the action was excepted by s 60(4) although it did not communicate this to Mr Rana. No application for special leave was made. 18 My conclusion in relation to this matter is the same as in relation to SAD 48 of 2008 and for the same reasons. Mr Rana has no reasonable or available ground for impugning the Trustee's decision under the AD(JR) Act or s 178 of the Bankruptcy Act. (iii) SAD 124 of 2008 19 This was an appeal by Mr Rana from the decision of the Federal Magistrate who made the sequestration order against him. The Trustee wrote to the court on 29 August 2008 notifying its decision to elect to discontinue the appeal. Nonetheless, the matter properly was heard: Cirillo v Consolidated Press Property Pty Ltd [2007] FCA 592 at [11]; and the appeal was dismissed on 20 October 2008. An application was made to the High Court for special leave. As will be seen below that application has been dismissed. 20 There is no decision of the Trustee in relation to the appeal to the Federal Court that could now found proceedings under the AD(JR) Act or s 178 of the Bankruptcy Act. (iv) A 32 of 2008 21 This was the application for special leave to appeal against the decision in SAD 124 of 2008. It was dismissed on 29 April 2009. The Official Trustee does not appear, on the evidence before me, to have made any decision after the decision in SAD 124 of 2008 which could now be the subject of review in this matter. (v) A 20 of 2008 22 On 25 August 2008 Mr Rana filed an application in the High Court for an order to show cause seeking relief by way mandamus and prohibition against a judge of this Court and certiorari to quash his decision of 17 June 2008 in SAD 47 of 2008. On 28 November 2008 the Trustee executed a notice of discontinuance in relation to this application. An amended version of it was filed on 23 December 2008. The Trustee was of the view that an application for relief under s 75(v) of the Constitution vested in it pursuant to s 58 of the Bankruptcy Act as it did not comprise such an action for personal injury or wrong done to Mr Rana as was contemplated by s 116(2)(g) of the Act. The evidence is that at no time did Mr Rana seek the Trustee's consent to institute or maintain the action which was commenced after he had become a bankrupt. 23 The substantive proceeding (SAD 12 of 2008) which gave rise to the decision in SAD 47 of 2008 to put the matter shortly, related to the preparation and communication of a psychiatric report in circumstances which allegedly gave rise to breaches of contract, breaches of confidence, negligence, defamation and contravention of s 52 of the Trade Practices Act 1974 (Cth) by one or other of the five respondents. They were the University of Adelaide, the Repatriation Commission, the University of South Australia, the Australian Government Solicitor and the Chief of Army. 24 Justice Lander gave summary judgment for all five respondents under s 31A of the Federal Court of Australia Act on 17 March (1st, 2nd, 4th and 5th respondents) and (3rd respondent) 7 April 2008. 25 In the decision refusing the application for an extension of time in which to appeal against the above orders, Lander J indicated that judgment had been entered against Mr Rana under s 31A, not because of some failure in the pleading to identify a cause of action: Judgment was entered against him [on 17 March] because, manifestly, in the manner in which the proceeding was presented, he had no claim against any of those four respondents. He could not have, in my opinion, amended his statement of claim so as to cure those defects: Rana v University of Adelaide [2008] FCA 940 at [14]. See also Rana v University of Adelaide [No 2] [2008] FCA 494 at [7] in relation to the 3rd respondent where the claim dismissed was based on an email found to be not authentic. 26 I would interpolate that, having regard to the complaints made by Mr Rana against the various respondents, the proceeding before Lander J was, manifestly, an abuse of process: it was "foredoomed to fail": Walton v Gardiner (1993) 177 CLR 378 at 393. 27 The preliminary point to be noted about A 20 of 2008 is that the action was commenced after Mr Rana's bankruptcy. Importantly it thus falls outside of the provisions of s 60(2) and (4) of the Bankruptcy Act. This requires emphasis. In Daemar a proceedings by way of summons claiming orders in the nature of prerogative relief (together with damages and declaratory relief) was held by the Court of Appeal of New South Wales to be an "action" for the purposes of s 60(2) of the Bankruptcy Act. It was, in the circumstances, further held to be an action in which the plaintiff sought relief affecting his property. It was not one in respect of any personal injury or wrong done to the bankrupt, Mr Daemar, for the purposes of the s 60(4) exemption from the s 60(2) stay. 28 I am for present purposes obliged to accept the Court's ruling in relation to its characterisation of the proceedings in that case as "an action": Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at [135]. 29 The Bankruptcy Act does not make express provision for actions instituted by a bankrupt after his or her bankruptcy in respect of a cause of action which either predates or post-dates the bankruptcy. The effect of the bankruptcy on that cause of action is said to be governed by s 58 and s 116 of the Act, these being the provisions relating to the vesting of the bankrupt's property in the trustee in bankruptcy and to the property available for distribution among the creditors: see 3 The Laws of Australia, "Bankruptcy" at [3.8.940]. If such be the case, the issue which arises is not, as in Daemar,with the question whether Mr Rana's show cause proceedings is an "action". Rather, it is with whether it is "property" passing to the Trustee under s 58(1) and, if so, whether it is divisible amongst his creditors under s 116(1) or exempted therefrom by s 116(2)(g) (ie is it a "right … to recover damages or compensation … for personal injury or wrong done to [him]"). 30 In Daemar Kirby P acknowledged the possibility of "a serious disharmony" between s 60(2) and s 58(1) and their respective operations upon claims brought, respectively, before and after bankruptcy supervened: at 53 and 55. In the case there before the Court, the claim (as noted) was instituted before the bankruptcy and thus fell clearly within s 60(2). His Honour went on to say (at 55): If the section is clear, as I believe it to be, the fact that it may sometimes provide a wider provision for a stay on proceedings commenced before bankruptcy than would effectively be secured by proceedings commenced after bankruptcy does not avail the claimant. Especially because the Parliament has specifically adumbrated the exceptions to the operation of the statutory stay, in the terms of s 60(4), this indicates that it attended to the way in which prior civil action should go forward at the option only of the trustee, or be stayed by the statute. 31 The scheme of Part IV, Division 4 of the Bankruptcy Act (which contains s 58(1) and s 60(2) and (4)) would appear to proceed upon the premise that, subject to s 60(4), all "actions" encompassed by s 60(2) have been vested in the trustee by s 58(1) such that in the administration of the bankrupt's estate, he or she can make the election envisaged by s 60. Such vesting necessarily presupposes that all such actions were the bankrupt's property. 32 In Daemar v Industrial Commission of New South Wales [No 2] (1990) 22 NSWLR 178, the New South Wales Court of Appeal revisited its earlier orders. Mr Daemar had by now been discharged from bankruptcy and sought the vacation or variation of the stay which the Court had held was in place by force of s 60(2). 33 The orders that had been made against Mr Daemar in earlier litigation and which were the subject of the prerogative relief sought, were ones which in part affected the rights of a third party. A pecuniary award had been made in that party's favour and Mr Daemar was seeking to impugn that award in his action for prerogative relief. In approaching the matter, the Court first addressed the question of the status of an action vested in the trustee after the discharge of a bankrupt. This brought into focus the position of the third party. President Kirby (at 185) accepted the proposition that property vested in a trustee at the time of sequestration remains vested in that trustee, even after the discharge of the bankrupt. His Honour then observed (ibid): Therefore, the "action" which the claimant had to challenge the orders of the Industrial Commission so far, at least, as it relates to the claim for relief from the burden of those orders requiring him to pay an amount to the second opponent, remains vested in the trustee: see also Selig v Lion [1891] 1 QB 513. The trustee declines to bring proceedings, as trustee, although by the authority of Bennett v Gamgee, Re Summerhayes and Kwok he might have done so during the bankruptcy. By the authority of Pegler v Dale he still remains vested with the chose in action. (Emphasis added.) 34 The reason for the limitation I have emphasised became more apparent in the following passages. Mr Daemar had, in Daemar [No 2], sought to limit the relief claimed to the prerogative orders only. This in turn became the focus of Kirby P's reasons (at 185-186): That leaves only the question of whether, as later narrowed to a claim for prerogative relief only, the claimant should be permitted to pursue his challenge in the Court to the alleged excess of jurisdiction and other legal errors on the part of the Industrial Commission. It will be remembered that the claimant has sought to do this by proposing that the Court confine his relief to that prerogative in nature and even to the point of removing the second and third opponents from the record so that no relief would be sought against them. The earlier decision of the Court did not determine that the claimant was forever barred from bringing proceedings for prerogative relief against the Industrial Commission. It could scarcely have done so. As was there pointed out, such proceedings may be commenced by any person. They need not be brought before the Court by the person(s) most directly concerned, although a lack of connection will be a consideration taken into account in the provision of relief: R v Justices of Surrey (1870) LR 5 QB 466; Farquharson v Morgan [1894] 1 QB 552 at 556: see, however, M Aronson and N Franklin, Review of Administrative Action (1987) Law Book Co at 441f and cases there cited. The basic function of the court, in affording relief prerogative in nature, is not to provide a private litigant with a personal benefit (although that may be an indirect consequence of the order) but to uphold the law and to require subordinate office-holders to remain within the law and to act fairly in their observance of their lawful functions: see R v Electricity Commissioners; Ex parte London Electricity Joint Committee Co (1920) Ltd [1924] 1 KB 161 at 205. Because the strictly prerogative relief which the claimant seeks is not wholly personal to him, but inheres in the legal system itself, it is not such as to belong to the trustee as a private chose in action even after the claimant's discharge from bankruptcy. This conclusion can be tested in the following way. There is no time limit for the commencement of proceedings for relief prerogative in nature. Delay will be a consideration, taken into account by the Court, when determining whether to provide the relief. That is why it is conventionally described as discretionary in character. But, unlike an appeal, there is no fixed time for the commencement of such proceedings. The claimant, who is under no relevant disability, being now discharged from bankruptcy, could therefore commence proceedings forthwith against the Industrial Commission seeking relief prerogative in nature against it. He could do so by fresh process: cf Want v Moss and Wife (1890) 6 WN(NSW) 102 at 103. (Emphasis added.) 35 The Court, in the end, refused to permit the proceedings to go forward even if so confined because it would lack utility. This was because it would still affect impermissibly the third party's award against Mr Daemar. 36 It is, with respect, difficult to extract a simple explanation from the reasoning of the Daemar cases as to the force and effect of the Bankruptcy Act on an "action" for relief in the nature of prerogative relief. If, as I have suggested above, s 60(2) is premised upon the action in question being the bankrupt's property and thus having vested in the trustee, then, for the reasons given by Kirby P in Daemar [No 2], I would with respect have some difficulty in characterising an "action" that was simply for relief in the nature of a constitutional writ, as being the personal property of a bankrupt: and cf the definition of "property" in s 5(1) of the Act. My difficulty is compounded by Kirby P's description of a claim for prerogative relief as not belonging to the trustee "as a private chose in action even after the claimant's discharge from bankruptcy". If this suggests it changes its proprietary character on discharge it is difficult to see why this should be so. 37 Perhaps the better explanation of the two decisions is that (i) s 60(2) encompasses all of the bankrupt's actions (for prerogative relief or otherwise) save for those exempted by s 60(4), but that the bankrupt has the clear statutory right under s 178(1) to challenge the trustee's election not to prosecute or to discontinue such an action; and (ii) after the bankrupt is discharged, he or she is entitled to initiate new proceedings for prerogative relief but that the fate of those proceedings may be influenced by its affects upon the continuing administration of the bankrupt's estate and, in particular, by whether the prerogative relief sought can properly be characterised as being, in substance, in respect of the property of the bankrupt. 38 The present, as I have noted, is not a s 60 case, and neither is Mr Rana an undischarged bankrupt. Nonetheless I consider I am obliged to follow the reasoning of the Daemar cases insofar as it has a direct bearing upon the matter before me: cf Farar Constructions. Whatever my own concerns, they are decisions of long standing which have been considered and applied without demur including in decisions of this Court: see eg Madden v Madden [1995] FCA 297; Fitzpatrick v Keelty [2008] FCA 35. 39 For present purposes, the first Daemar decision would seem to be authority for at least the proposition that an action for prerogative relief in relation to orders made in a proceeding in which (i) a cause of action is asserted by or against the applicant and (ii) the applicant is unsuccessful in prosecuting or resisting that claim, is to be characterised as an action to which s 60 applies if it is instituted prior to the applicant's bankruptcy. In other words the action for prerogative relief takes its character, in part at least, from the character of the rights sought to be vindicated in the proceedings in which the orders were made which have become the subject of the prerogative relief sought. Hence there was the concern in the first Daemar decision with whether the "action" in that case affected Daemar's "property" or his "personal interests" only for s 60(2) and (4) purposes. 40 Though Kirby P adverted to the potential for "serious disharmony" between proceedings instituted prior to, and those commenced subsequent to, bankruptcy if s 58(1) and s 60(2) had differing compasses, I do not consider that such in fact is the legislative intention disclosed by these two provisions in the scheme of the Act at least insofar as it applies to an action having the character I have described in the preceding paragraph. My view in this is reinforced by what I consider to be the clear legislative intent to exempt from control by the trustee, an action by the bankrupt which is in respect of any personal injury or wrong done to the bankrupt and this irrespective of when the action was instituted: cf s 60(4) and s 116(2)(g)(i). I conclude in consequence that such an action for prerogative relief, if it is not exempted by s 116(2)(g)(i), is vested in the trustee in bankruptcy and as such can be prosecuted, defended, compromised or discontinued by the trustee in the exercise of his or her powers under s 134(e), (j) and (o) of the Act. 41 Mr Rana's obvious motivation in instituting the show cause action was as a step along the way to establishing and vindicating the right he alleges he has to recover damages for a personal injury or wrong to him. This is clear on the face of the application which joined all of the respondents in the proceeding before Lander J. Moreover the grounds on which relief was sought were directed at those respondents. It is not for me in this proceeding to consider whether he had standing to institute the action. That is a matter for the High Court. My present concern, rather, is with whether it can properly be said he is able to seek succour in s 116(2)(g) and hence challenge the trustee's discontinuance of the proceeding. I do not consider that he can do so. 42 I can state my reasons shortly. First, though the various causes of action are widely cast in the Statement of Claim, at their centre are claims for breaches of contracts against some of the respondents and breaches of confidence, with satellite claims for negligence, defamation (to which I will refer separately below) and contraventions of s 52 of the Trade Practices Act against one or other of them. The contracts in question were a series of settlement agreements with several of the respondents in respect of outstanding litigations against them. The damages said to flow from all of these various wrongs, as best one can understand it, appears to be constituted primarily by a claim for $4,000,000 for "the loss and damage occurring to the applicant's compensation and benefits claims against the Commonwealth … and its various agencies". It is to say the least difficult to see how such damages could be said to result from the wrong alleged. They clearly are not relevantly damages for a "personal injury or wrong done to [him]": cf s 60(4) and s 116(2)(g). 43 In Cox v Journeux [No 2] (1935) 52 CLR 713 Dixon J indicated (at 721) that the test whether the above Bankruptcy Act formula was satisfied was – … whether the damages or part of them are to be estimated by immediate reference to pain felt by the bankrupt in respect of his mind, body or character and without reference to his rights of property. The losses of compensation and benefits from the Commonwealth which Mr Rana claims by way of damages are manifestly not so estimated. Rather, they are presumably referable to entitlements which he alleges he has against the Commonwealth and its agencies but of which he has been deprived. To the extent that these make up the major part of the damages he claims, then the causes of action to which they relate have passed to the Trustee to the exclusion of Mr Rana. 44 As to Mr Rana's alleged cause of action for damages against the University of Adelaide for defamation for which the University was alleged to be vicariously liable, the claim, while hopelessly misconceived, was in form for a personal injury or wrong done to him: s 116(2)(g). As such, it could be said not to be of a type that would vest in the Trustee. Nonetheless, it failed for the same reason as did all of the claims made against the University. The actions giving rise to those claims were done by a person acting in his private capacity and not as an employee of the University. In this sense this claim was integrally interconnected in the proceedings with the other non-personal claims made in SAD 12 of 2008 which made up the real substance of that litigation. In these circumstances I regard it as unnecessary here to enter upon any consideration of apportionment of Mr Rana's claims against the University: cf Faulkner v Bluett (1981) 52 FLR 115 at 115; Rogers v Asset Loan Co Pty Ltd [2006] FCA 434 at [47] and [51] for the purposes of A20 of 2008. Apportionment was not raised before me in any event. It was for the Trustee, not Mr Rana, to determine whether the show cause application would be prosecuted. 45 Distinctly, I am not satisfied that Mr Rana is seeking to vindicate or establish a "personal wrong or injury" for s 116(2)(g) purposes. All of the claims he advanced (in SAD 12 of 2008) against all five respondents were struck out as abuses of process. No legally intelligible claims were disclosed against four of the respondents; the remaining claim against the University of South Australia was also struck out for the same reason, his Honour having found it was based on a document relied upon by Mr Rana which was "not authentic": Rana v University of Adelaide (No 2) at [7]. The proceedings before Lander J were doomed to failure. The imagined claims made did not give that degree of authenticity to the rights asserted such as would justify characterising them as rights to recover damages for personal injury or wrong to the bankrupt for s 116(2)(g) purposes. They are illusory rights. 46 The final comment I should make is this. If I was not satisfied that, for whatever reason, the show cause action had not vested in the Trustee, I would not have declined to award Mr Rana relief on the grounds of futility. The present proceedings is quite unlike Daemar [No 2]. The High Court, not this Court, is seized of the show cause application. It is not for me to express a view on whether the High Court action is either competent or has any prospects of success. It is for that Court to do so. CONCLUSION 47 Having found that the proceeding A20 of 2008 was one for the Trustee and not Mr Rana to prosecute – if it was to be prosecuted at all – the Trustee's decision to discontinue it was, on the material before me, unimpeachable. That decision as I have indicated was the only one which raised any issue of substance for the purposes either of the AD(JR) Act or s 178 of the Bankruptcy Act. I have already indicated why there are no grounds at all for providing relief against the Trustee in respect of his decisions (actual or alleged) concerning the other proceedings referred to in Mr Rana's application. 48 Accordingly, I will give summary judgment in favour of the respondents and will order that the proceeding be dismissed against each respondent. I will also order the applicant pay the costs of each respondent. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn. Associate: Dated: 18 September 2009 Counsel for the Applicant: The Applicant appeared in person. Counsel for the First Respondent: The First Respondent did not appear. Counsel for the Second Respondent: G Gretsas Solicitor for the Second Respondent: Gretsas & Associates Counsel for the Third Respondent: The Third Respondent did not appear. Date of Submissions: 20 and 25 May 2009 Date of Judgment: 18 September 2009	8,713
federal_court_of_australia:fca/single/2014/2014fca0160	decision	commonwealth	federal_court_of_australia	text/html	2014-03-05 00:00:00	Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2014] FCA 160	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2014/2014fca0160	2024-09-13T22:45:04.253731+10:00	FEDERAL COURT OF AUSTRALIA Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2014] FCA 160 Citation: Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2014] FCA 160 Parties: DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE v CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION and MICHAEL McDERMOTT File number: SAD 181 of 2013 Judge: WHITE J Date of judgment: 5 March 2014 Catchwords: INDUSTRIAL LAW – admitted contraventions of s 355 of the Fair Work Act 2009 (Cth) – principles relating to imposition of agreed pecuniary penalties – relevance of previous contraventions of industrial legislation – previous contraventions by a separate branch or division of a union Legislation: Building and Construction Industry Improvement Act 2005 (Cth), s 43 Crimes Act 1914 (Cth), s 4AA Fair Work Act 2009 (Cth), s 355, 363, 484, 539, 546 and 793 Fair Work (Registered Organisations) Act 2009 (Cth), s 27 Cases cited: Alfred v CFMEU [2011] FCA 556 Australian Building and Construction Commissioner v CFMEU (No 2) [2010] FCA 977; (2010) 199 IR 373 Australian Competition and Consumer Commission v AGL Sales Pty Ltd [2013] FCA 1030 Australian Securities and Investment Commission v Ingleby [2013] VSCA 49; (2013) 275 FLR 171 Cahill v CFMEU (No 4) [2009] FCA 1040; (2009) 189 IR 304 CFMEU v Hamberger [2003] FCAFC 38; (2003) 127 FCR 309; CFMEU v John Holland Pty Ltd [2010] FCAFC 90; (2010) 186 FCR 88 Cruse v Multiplex Ltd [2008] FCAFC 179; (2008) 172 FCR 279 Draffin v CFMEU [2009] FCAFC 120; (2009) 189 IR 145 Finance Sector Union v Commonwealth Bank of Australia [2005] FCA 1847; (2005) 224 ALR 467 Leighton Contractors Pty Ltd v CFMEU [2006] WASC 317; (2006) 164 IR 375 Minister for Industry, Tourism and Resources v Mobil Oil Australia [2004] FCAFC 72 NW Frozen Foods v Australian Competition and Consumer Commission (1996) 71 FCR 285 Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union [2008] FCAFC 170; (2008) 171 FCR 357 R v McInerney (1986) 42 SASR 111 Ryan v The Queen [2001] HCA 21; (2001) 206 CLR 267 Stuart v CFMEU [2010] FCAFC 65; (2010) 185 FCR 308 Stuart-Mahoney v CFMEU [2008] FCA 1426; (2008) 177 IR 61 Temple v Powell [2008] FCA 714; (2008) 169 FCR 169 Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 Veen v The Queen (No 2) (1988) 164 CLR 465 Weininger v The Queen [2003] HCA 14; (2003) 212 CLR 629 Williams v CFMEU (No 2) [2009] FCA 548; (2009) 182 IR 327 Wilson v Nesbit [2009] FCA 1574; (2009) 195 IR 399 Woodside Burrup Pty Ltd v CFMEU [2011] FCA 949; (2011) 209 IR 302 Date of hearing: 31 January 2014 Place: Adelaide Division: FAIR WORK DIVISION Category: Catchwords Number of paragraphs: 66 Counsel for the Applicant: Mr M Roder SC Solicitor for the Applicant: Fox Tucker Lawyers Counsel for the Respondents: Mr S Dolphin Solicitor for the Respondents: Lieschke & Weatherill Lawyers IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY FAIR WORK DIVISION SAD 181 of 2013 BETWEEN: DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE Applicant AND: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION First Respondent MICHAEL McDERMOTT Second Respondent JUDGE: WHITE J DATE OF ORDER: 5 march 2014 WHERE MADE: ADELAIDE THE COURT DECLARES THAT: On 22 June 2012, each of the respondents contravened s 355 of the Fair Work Act 2009 (Cth) by: (a) organising employees of BD Steel Fixing (SA) Pty Ltd to agree not to work until Mr Dominick Lewis was reinstated; and (b) threatening that employees of BD Steel Fixing (SA) Pty Ltd would not work until Mr Lewis was reinstated, with the intention to coerce BD Steel Fixing (SA) Pty Ltd to accede to the demand to reinstate Mr Lewis. THE COURT ORDERS THAT: 1. The first respondent is to pay a pecuniary penalty of $16,500. 2. The second respondent is to pay a pecuniary penalty of $1,320. 3. The payments in orders 1 and 2 above are to be made to the Commonwealth within 21 days of the date of this order. 4. The remaining claims of the applicant in the application filed on 11 July 2013 are dismissed. 5. By consent, there be no order as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY FAIR WORK DIVISION SAD 181 of 2013 BETWEEN: DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE Applicant AND: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION First Respondent MICHAEL McDERMOTT Second Respondent JUDGE: WHITE J DATE: 5 march 2014 PLACE: ADELAIDE REASONS FOR JUDGMENT 1 In these proceedings, the Director of the Fair Work Building Industry Inspectorate (the Director) seeks declarations that each respondent contravened s 355 of the Fair Work Act 2009 (Cth) (FW Act) on 21 and 22 June 2012, and seeks the imposition of penalties in relation to those contraventions. He alleges that the second respondent (Mr McDermott), who is an officer of the first respondent (the CFMEU), threatened to have employees of BD Steel Fixing (SA) Pty Ltd (BDSF) withdraw their labour and that he organised action with the intention of coercing BDSF to employ Dominick Lewis, a CFMEU member. 2 The parties have now reached agreement for the disposition of the proceedings and have filed a Statement of Agreed Facts and Admissions (the Agreed Facts). They are agreed that the Court should make a declaration as follows: On 22 June 2012, each of the respondents contravened s 355 of the Fair Work Act 2009 (Cth) by: (a) organising the BDSF employees to agree not to work until Mr Lewis was reinstated; and (b) threatening that the BDSF employees would not work until Mr Lewis was reinstated, with the intention to coerce BDSF to accede to their demands to reinstate Mr Lewis. 3 The parties join in submitting that the Court should impose penalties of $16,500 and $1,320 on the CFMEU and Mr McDermott respectively in respect of these contraventions. Section 355 4 Section 355 proscribes certain forms of coercive conduct. It provides: A person must not organise or take, or threaten to organise or take, any action against another person with intent to coerce the other person, or a third person, to: (a) employ, or not employ, a particular person; or (b) engage, or not engage, a particular independent contractor; or (c) allocate, or not allocate, particular duties or responsibilities to a particular employee or independent contractor; or (d) designate a particular employee or independent contractor as having, or not having, particular duties or responsibilities. Note: This section is a civil remedy provision (see Part 4-1). It is subpar (a) which is relevant presently. The circumstances of the contraventions 5 On the basis of the Agreed Facts and the submissions of the parties, I make the following findings. 6 The CFMEU is an organisation of employees registered under the Fair Work (Registered Organisations) Act 2009 (Cth) and, by reason of s 27 of that Act, a body corporate. Mr McDermott is an employee of the CFMEU's Construction and General Division engaged in its South Australian Divisional Branch. He is also an officer of the CFMEU and, accordingly, conduct by him within the scope of his actual or apparent authority is to be taken to be the conduct of the CFMEU: ss 363 and 793 of the FW Act. 7 In June 2012, Mr Dominick Lewis was a member of the CFMEU. He was employed by BDSF initially as a steel fixer and later as a steel fixer, plan reader and leading hand in the building and construction project being carried out by Hansen Yuncken Pty Ltd at 80 Grenfell Street, Adelaide (the Harris Scarfe Project). In addition, he was the elected Health and Safety Representative (HSR) for the BDSF employees on the site. BDSF terminated Mr Lewis' employment on 20 June 2012 because of a reduction in the available work at the Harris Scarfe Project. In accordance with the relevant industrial instrument, it gave Mr Lewis 24 hours' notice. 8 Mr McDermott learned of the termination shortly after it occurred. He formed the view that Mr Lewis had been terminated because he was the BDSF employees' HSR. 9 At relevant times, Mr Blazevic was the sole director of BDSF and in control of that company. BDSF had been engaged by Hansen Yuncken to provide steel reinforcement services in the Harris Scarfe Project. 10 On 21 June 2012, Mr McDermott telephoned Mr Blazevic and a conversation to the following effect ensued: (a) Mr McDermott complained to Mr Blazevic that Mr Lewis had been dismissed because he was the HSR for the BDSF employees. (b) Mr Blazevic denied this assertion. He told Mr McDermott that Mr Lewis' employment had been terminated because of a reduction in the work available on the site and that he had informed his employees some months previously that this would happen. (c) Mr McDermott insisted that Mr Lewis had been terminated because he was the HSR for the BDSF employees. 11 On the morning of Friday, 22 June 2012, BDSF employees were scheduled to start work at 7.00am on the Harris Scarfe Project. However, the weather was inclement and they could not commence. Under the provisions of the relevant industrial instrument, when inclement weather precludes work being offered to employees for a period of four hours, they are entitled to leave the site and to be paid for that day's work. The BDSF employees, about 20 in number, were waiting in the lunch room pending the offer of suitable alternative duties. 12 Earlier that morning, Mr McDermott entered the construction site, having the previous day sent a notice of intention to do so under s 484 of the FW Act. Mr McDermott spoke to Mr Knowles, a site manager employed by Hansen Yuncken. He suggested that Mr Knowles should gather the Safety Committee and carry out a site walk to ascertain dry areas at which the workers could work safely. 13 Later, at about 7.00am, Mr McDermott engaged in the following conduct: (a) He organised a meeting of the BDSF employees who were CFMEU members and who were in the lunch room as a result of the inclement weather; (b) At that meeting, he proposed that the BDSF employees should not perform work until Mr Lewis was reinstated, using words to the effect that they "should back Dominick up"; (c) He told the meeting on two or more occasions that "Dominick had been dismissed the previous day as he was the elected HSR and that the employees should not work until Dominick had got his job back"; and (d) He organised a vote, by a show of hands, in which the majority of BDSF employees agreed not to work until Mr Lewis was reinstated. It is the conduct set out in (b), (c) and (d) which is the subject of the first limb of the agreed declaration. 14 After the meeting, Mr McDermott said to Mr Americo, the Project Manager of Form 700 Pty Ltd which was carrying out form work services on the Harris Scarfe Project, words to the effect: If the rain clears and all other inclement weather issues are sorted out, the steel fixers will remain in the shed until Dominick gets his job back. 15 Mr McDermott then had a further conversation with Mr Knowles in which he said words to the following effect: The guys are in the shed at the moment because of rain. If suitable work is offered that is out of the rain and is otherwise safe, the guys will stay in the sheds until Dominick gets his job back. During the course of this conversation, Mr Knowles requested Mr McDermott to leave the site but Mr McDermott refused, citing his concerns about the health and safety of CFMEU members having regard to the inclement weather. 16 Mr McDermott then telephoned Mr Blazevic and they had a conversation to the following effect: McDermott: I just had a talk to the boys and if the rain clears the boys have agreed to put down tools until Dominick gets his job back. Blazevic: I can't give you something that I haven't got. McDermott: You do, I think you can find a job for him on the Project or somewhere else. Blazevic: I don't need that many workers. 17 At about 9.00am on 22 June, Mr McDermott had a conversation with Mr Andreou, Hansen Yuncken's Construction Manager, to the following effect: Andreou: We have maintained a reasonable dialogue in the past and this is inconsistent with what has happened in the past. McDermott: Even if all of the inclement weather issues are sorted out, the men aren't going back until Dominick gets his job back, but I'll speak to the guys. Subsequently, Mr McDermott spoke again to Mr Andreou and said words to the effect: A vote has been taken and my members are going out at lunch time [12 noon]. 18 At about 10.15am that day, Mr McDermott telephoned Mr Blazevic a second time and said words to the effect that he should do the right thing and give Mr Lewis his job back. Mr Blazevic responded with words to the effect that he did not have work and that, if he did, there would not be a problem. 19 It is the conduct of Mr McDermott commencing after the meeting of the BDSF employees and concluding with his second telephone call to Mr Blazevic recounted above, to which the second limb of the agreed declaration refers. 20 The BDSF employees at the Harris Scarfe Project remained in the lunch room until 11.00am. Shortly afterwards, they left the site in accordance with the inclement weather provisions contained in the relevant industrial instrument. They did not carry out any work on the site that day. They returned to work as normal on Monday, 25 June 2012. 21 The CFMEU and Mr McDermott admit that Mr McDermott took the action described above with the intention of coercing BDSF to accede to his demand to reinstate Mr Lewis. Mr McDermott acknowledges his contravention of s 355(a) of the FW Act. Having regard to s 363 of the FW Act, the CFMEU acknowledges that it too has contravened s 355(a) by reason of Mr McDermott's conduct. 22 I consider that the Agreed Facts, together with the matters about which the parties informed me in submissions, do provide a sound basis for the Court's determination of the appropriate orders in this case. The imposition of agreed pecuniary penalties 23 Both counsel submitted that it was appropriate for the Court to give effect to the penalties upon which they had agreed. The principles on which this Court acts in relation to the imposition of agreed pecuniary penalties have been discussed in a number of cases and, in particular, in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 and Minister for Industry, Tourism and Resources v Mobil Oil Australia [2004] FCAFC 72. In Mobil Oil, at [51], the Full Court identified the following propositions in the reasons in NW Frozen Foods: (i) It is the responsibility of the Court to determine the appropriate penalty to be imposed under s 76 of the [Trade Practices Act 1974 (Cth)] in respect of a contravention of the TP Act. (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. 24 The Court in Mobil Oil then added a number of further observations, concluding with the following propositions, at [58]: (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. All the authorities emphasise that the Court is not to act as a mere rubber stamp of the parties' agreement. At [70] in Mobil Oil, the Full Court said: … The Court must form its own view about the appropriate range of penalties, on the basis of the agreed facts or evidence. If the Court considers that the information supplied by the parties is inadequate, or requires elaboration or verification, it is free to request more detailed information or to ask that the information, or any aspect of it, be verified on oath or affirmation. In the unlikely event of the parties being unwilling to respond to the Court's request, the Court might well take the view that it is not prepared to act on the agreed material in the manner sought by the parties. 25 In Australian Securities and Investment Commission v Ingleby [2013] VSCA 49; (2013) 275 FLR 171, the Court of Appeal of the Supreme Court of Victoria (Weinberg JA with whom Hargrave AJA agreed and Harper JA agreed on this issue) critiqued the reasoning in NW Frozen Foods and Mobil Oil and expressed the view that they were "wrongly decided" (at [28]-[29], 180; see also [99], 194; [102], 194-5). Middleton J reviewed that critique in Australian Competition and Consumer Commission v AGL Sales Pty Ltd [2013] FCA 1030 but concluded that he should, in the circumstances of that case, be guided by the approach set out in the decisions of the Full Court of this Court. 26 The parties in this case made their submissions on 31 January 2014. On 12 February 2014, while judgment was reserved, the High Court delivered judgment in Barbaro v The Queen [2014] HCA 2. The majority of the Court held in Barbaro that the prosecution should not be permitted to make a submission to a sentencing judge as to the specific penalty, or the range of penalties, which would be appropriate in the case. 27 Although the decision in Barbaro concerned sentencing in the criminal courts, the reasons of the High Court appear also to have relevance to the imposition of civil penalties. They may require this Court to review the approach set out in NW Frozen Foods and Mobil Oil. 28 However, I consider that such a review is neither necessary nor appropriate presently. In the first place, the decisions of the Full Court, even if not strictly binding, are of considerable persuasive value and should, in my opinion, be followed in the circumstances of this case. 29 Secondly, the parties have not made any submissions as to the effect of Barbaro in the present context. 30 Thirdly, the submissions as to the agreed penalties have been made. There are practical difficulties in the submissions being withdrawn. They could be ignored and the parties then given the opportunity to be heard further. However, that is unnecessary because, as will be seen, I consider that penalties of the order proposed by the parties are, in any event, appropriate. 31 This means that the implications of the decision in Barbaro in relation to the imposition of civil penalties need not be addressed presently. Principles relating to the determination of penalty 32 The relevant principles to be applied in determining the appropriate penalty in a case such as the present are well-settled and need not be rehearsed in these reasons. It is sufficient to refer to Stuart-Mahoney v CFMEU [2008] FCA 1426 at [40]; (2008) 177 IR 61 at 69; Temple v Powell [2008] FCA 714 at [56]-[78]; (2008) 169 FCR 169 at 186-91; and to Cahill v CFMEU (No 4) [2009] FCA 1040 at [9]-[10]; (2009) 189 IR 304 at 308. It is, however, pertinent to note that courts now tend to regard contraventions of industrial laws more seriously than may have been the case generally in the past: Finance Sector Union v Commonwealth Bank of Australia [2005] FCA 1847 at [72]; (2005) 224 ALR 467 at 487; Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union [2008] FCAFC 170 at [61]-[62]; (2008) 171 FCR 357 at 376-7. 33 The matters to which the Court may have regard in assessing penalty include: (a) The nature and extent of the conduct which led to the breaches. (b) The circumstances in which that relevant conduct took place. (c) The nature and extent of any loss or damage sustained as a result of the breaches. (d) Whether there has been similar previous conduct by the respondent. (e) Whether the breaches were properly distinct or arose out of the one course of conduct. (f) The size of the business enterprise involved. (g) Whether or not the breaches were deliberate. (h) Whether senior management was involved in the breaches. (i) Whether the party committing the breach has exhibited contrition. (j) Whether the party committing the breach has taken corrective action. (k) Whether the party committing the breach has cooperated with the enforcement authorities. (l) The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements. (m) The need for specific and general deterrence. Several of these matters are pertinent in the present case. Consideration 34 The maximum penalty for a contravention of s 355 is 300 penalty units for a body corporate and 60 penalty units for an individual: ss 539(2) and 546(2) of the FW Act. A penalty unit at 22 June 2012 was $110: s 4AA(1) of the Crimes Act 1914 (Cth). Accordingly, the maximum penalty for the contravention of s 355 in the case of the CFMEU is $33,000 and, in the case of Mr McDermott, $6,600. 35 The penalty proposed by the parties in the case of the CFMEU is, accordingly, 50% of the maximum and, in the case of Mr McDermott, 20% of the maximum. 36 Although Mr McDermott's conduct comprised different elements, he has, appropriately, been charged with a single contravention of s 355. All of the elements occurred on the one day and within the space of a few hours. They were of a similar kind and had a single focus, namely, the reinstatement of Mr Lewis. 37 The conduct was of a serious kind, involving the foreshadowed withdrawal of work by about 20 employees unless BDSF acceded to Mr McDermott's demand. It was common ground that BDSF was the only steel fixing sub-contractor on the Harris Scarfe Project so that the withdrawal of their labour would have meant that no steel fixing work could be carried out. Mr McDermott's conduct had the potential, therefore, to cause significant disruption to the performance of work. 38 However, because of the continuing inclement weather, and the absence of suitable alternative duties, Mr McDermott's conduct did not have a practical effect. The BDSF employees did not actually withdraw their labour to support Mr McDermott's demand. No work hours were lost because of his action. 39 I take into account the Director's acknowledgement that Mr McDermott had a genuine belief that Mr Lewis had been terminated because he was the HSR for the BDSF employees. His conduct was prompted by that belief. Accordingly, the contravention is not aggravated by the circumstance that it had as its object some more sinister purpose. 40 I also accept the respondents' submission that Mr McDermott's conduct appears to have been of an ad hoc kind rather than forming part of a premeditated and carefully planned strategy. 41 Section 355 was enacted as part of the FW Act and came into operation on 1 July 2009. However, the former Building and Construction Industry Improvement Act 2005 (Cth) (BCII Act) contained in s 43 a relevantly identical provision. The subject matter of ss 355 and 43 is the proscription of coercive conducted directed to the employment or non-employment of particular employees or independent contractors or directed to the work and designation of particular employees and independent contractors. 42 This is the first occasion on which the CFMEU has been dealt with by a court for a contravention of s 355. However, between 2008 and 2012 (and before the present contravention), the CFMEU was dealt with by courts on at least seven separate occasions involving, in all, 15 breaches, for contraventions of s 43 of the BCII Act. In the same period, its officers and employees were also dealt with for numerous contraventions of s 43. 43 This is a significant record of engagement by the CFMEU in conduct of the kind proscribed by s 355. 44 In addition, between 2000 and 2013, the CFMEU has been dealt with by courts on a further 19 occasions for contraventions of provisions in industrial legislation proscribing other forms of coercive conduct. For example, the CFMEU has admitted numerous contraventions of s 44 of the BCII Act, which proscribed taking or threatening to take action with the intent to coerce a person to agree to make, vary or terminate a building enterprise agreement (Wilson v Nesbit [2009] FCA 1574; (2009) 195 IR 399; Stuart v CFMEU [2010] FCAFC 65; (2010) 185 FCR 308; Alfred v CFMEU [2011] FCA 556). It has been dealt with for contravening s 289P of the Workplace Relations Act 1996 (Cth), by taking or threatening to take action to coerce an employer to dismiss or otherwise prejudice an employee because of the employee's refusal to join a union (CFMEU v Hamberger [2003] FCAFC 38; (2003) 127 FCR 309), and s 187AB the Workplace Relations Act 1996 (Cth), by engaging in or threatening to engage in industrial action to coerce an employer to make a payment to an employee in relation to a period in which the employee engaged in industrial action (Cruse v Multiplex Ltd [2008] FCAFC 179; (2008) 172 FCR 279). Each of those contraventions occurred before the conduct in the present case. 45 Further still, the CFMEU has been dealt with on numerous occasions for contraventions of provisions in industrial legislation which do not involve coercive conduct. It is not necessary presently to detail those contraventions. 46 Both parties made a number of submissions as to the significance of the history of contraventions by the CFMEU. Those submissions went principally to two issues: whether regard should be had only to the CFMEU's previous contraventions which were of a like kind to the present; and whether any regard could be had to contraventions by divisions other than the South Australian Divisional Branch of the CFMEU. In many respects, the first issue does not arise in a practical way in the present case because, even if regard is had only to the CFMEU's contraventions of s 43 of the former BCII Act, its antecedent history must be regarded as significant. 47 It is appropriate to commence consideration of the parties' submissions by reference to matters of underlying principle. The general principle relating to the relevance of prior offences to the fixing of sentences for criminal offences was stated by the High Court in Veen v The Queen (No 2) (1988) 164 CLR 465 at 477-8: … [T]he antecedent criminal history of an offender is a factor which may be taken into account in determining the sentence to be imposed, but it cannot be given such weight as to lead to the imposition of a penalty which is disproportionate to the gravity of the instant offence. To do so would be to impose a fresh penalty for past offences: … The antecedent criminal history is relevant, however, to show whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law. In the latter case, retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted. It is legitimate to take account of the antecedent criminal history when it illuminates the moral culpability of the offender in the instant case, or shows his dangerous propensity or shows a need to impose condign punishment to deter the offender and other offenders from committing further offences of a like kind. Counsel for the applicant submitted that antecedent criminal history was relevant only to a prisoner's claim for leniency. That is not and has never been the approach of the courts in this country and it would be at odds with the community's understanding of what is relevant to the assessment of criminal penalties. (Citation omitted) 48 In R v McInerney (1986) 42 SASR 111, King CJ explained the ways in which previous offending may be relevant in the sentencing process (at 113): … Offences committed prior to sentence for the offence under consideration may affect the sentence in two ways. They may diminish or abrogate any leniency by reason of good character. They may, moreover, lead to a greater sentence than would otherwise be imposed, although within the proper limits indicated by the facts of the immediate crime, for the purpose of personal deterrence; the prisoner's record may indicate that greater punishment is needed to protect the public by deterring him from further crime. Where the other offences have been committed before the commission of the immediate offence, their relevance is clear in the generality of cases. The offender has committed the offence not as a first offender but as a person whose character is affected by previous offending. He must be sentenced against the background of his record … The effect of the prior offences is more cogent if they have been the subject of conviction before the immediate offence. In such cases, the offender has committed the immediate offence notwithstanding the formal judgment and condemnation of the law in respect of the earlier offences and notwithstanding the warning as to the future which the conviction experience implies. 49 In Ryan v The Queen [2001] HCA 21 at [67]; (2001) 206 CLR 267 at 287-8, Gummow J cited this passage in McInerney when stating that, whilst "good character" may operate in mitigation, "bad character" cannot operate in aggravation because a person is not to be punished, or punished again, for crimes other than that for which sentencing is passed. 50 The High Court again addressed the significance of a previous record in the sentencing process in Weininger v The Queen [2003] HCA 14 at [32]; (2003) 212 CLR 629 at 640. The plurality said: … A person who has been convicted of, or admits to, the commission of other offences will, all other things being equal, ordinarily receive a heavier sentence than a person who has previously led a blameless life. Imposing a sentence heavier than otherwise would have been passed is not to sentence the first person again for offences of which he or she was earlier convicted or to sentence that offender for the offences admitted but not charged. It is to do no more than give effect to the well-established principle (in this case established by statute) that the character and antecedents of the offender are, to the extent that they are relevant and known to the sentencing court, to be taken into account in fixing the sentence to be passed. Taking all aspects, both positive and negative, of an offender's known character and antecedents into account in sentencing for an offence is not to punish the offender again for those earlier matters; it is to take proper account of matters which are relevant to fixing the sentence under consideration. (Emphasis added) 51 These principles, although developed in relation to the sentencing of criminal offences, are apposite to the fixation of penalties for contraventions of the present kind. Rehabilitation, which is an element in criminal sentencing, may have no part in fixing the pecuniary penalty for a civil contravention (Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 at 51,152) but, nevertheless, the principles are appropriate. 52 Not all prior offending will be relevant, or relevant in the same way, to the sentencing. Much will depend on the nature of the prior offending, the time when the prior offending occurred and, in limited cases, the circumstances in which it occurred. Ordinarily, previous offending of a generally similar kind will be particularly relevant, but even conduct of that kind may lose some or all of its significance if it occurred at a time well-distant from the current offending. 53 Even when the previous offending involved conduct of a different character, it may still be relevant to sentencing. Depending upon the circumstances, a history of previous convictions may indicate an attitude of defiance of, or indifference to, compliance with the law. In either case, considerations of personal deterrence will usually be important in the sentencing process. Obviously enough, a history of prior offences will usually preclude lenience being extended to an offender by reason that the offence under consideration is a single and isolated incursion into criminal behaviour. 54 Like Jessup J in Williams v CFMEU (No 2) [2009] FCA 548 at [16]; (2009) 182 IR 327 at 335, I consider that there is no reason why previous contraventions which are otherwise relevant should be excluded from consideration simply because they arose under legislation different from that presently before the Court. What is important is the quality of the conduct in each case and its relevance to the norms of industrial behaviour which the current legislation seeks to establish or support. 55 Even if regard is had in the present case only to the previous contraventions of s 43 of the former BCII Act, the CFMEU has a significant antecedent history. I indicate, however, that I also consider it to be appropriate to have regard to the CFMEU's history of contraventions of other provisions in industrial legislation proscribing forms of coercive conduct. In those circumstances, it is unnecessary to express a concluded view about the relevance of the other aspects of the CFMEU's antecedent history. 56 The CFMEU's history and the nature of its present contravention indicate that deterrence, both general and specific, should be a significant consideration in the fixation of an appropriate penalty. The CFMEU is not, of course, to be punished again for its previous contraventions but its history does mean that it is not entitled to any leniency by reason of a previous good record, or by reason of a history of attempting to comply with provisions such as s 355. The penalty is to be fixed in the context of the CFMEU's previous record. 57 The respondents referred to authority indicating that contraventions by a different branch of the CFMEU are of no or less weight than contraventions within the same branch: Australian Building and Construction Commissioner v CFMEU (No 2) [2010] FCA 977 at [48(11)]-[49]; (2010) 199 IR 373 at 383; Temple v Powell [2008] FCA 714 at [63]; (2008) 169 FCR 169 at 188; Leighton Contractors Pty Ltd v CFMEU [2006] WASC 317 at [67]; (2006) 164 IR 375 at 390. However, there is authority to the contrary: Williams v CFMEU (No 2) [2009] FCA 548 at [18]-[25]; (2009) 182 IR 327 at 336-8; Woodside Burrup Pty Ltd v CFMEU [2011] FCA 949 at [61]-[64]; (2011) 209 IR 302 at 315-6; CFMEU v John Holland Pty Ltd [2010] FCAFC 90 at [143]; (2010) 186 FCR 88 at 128; and I note that, in Draffin v CFMEU [2009] FCAFC 120 at [72]; (2009) 189 IR 145 at 154-5, the Full Court doubted, but did not decide, the correctness of the CFMEU's submission that contraventions by its branches in States other than Victoria ought not to be taken into account. 58 I favour the latter view. I do not consider it correct in principle that a previous contravention by an organisation which is otherwise relevant should be ignored altogether when fixing penalty, or be given less weight, only because it occurred in another State and by a different branch of the organisation. That is not to preclude the possibility that the evidence in a given case may suggest a proper reason for regarding a contravention committed within another branch as being of no, or less, relevance. That evidence may, for example, relate to the way in which the entity organises itself so as to make each branch autonomous, or indicate that the behaviour of one branch may be regarded as atypical of the organisation. There may be other possibilities, but such cases are unlikely to be commonplace. 59 In the present case, the respondents did not present any evidence of this kind. Accordingly, although I accept their submission that none of the contraventions of the CFMEU of s 43 of the BCII Act or of the other industrial provisions proscribing coercive conduct have occurred in South Australia, I do not regard that as diminishing the significance to be attached to the CFMEU's antecedent history. 60 Mr McDermott's position is different. As at June 2012, he had been employed by the CFMEU for over five and a half years. It is to his credit that he has no prior contraventions of industrial laws. 61 It is also to the respondents' credit that they have conceded liability and agreed on facts and penalty: Draffin v CFMEU [2009] FCAFC 120 at [95]. By their acknowledgement of their respective contraventions, the respondents have avoided the time and expense of a trial. Further, they participated in a protracted mediation which, although not producing immediately a negotiated result, did assist in the resolution of the action. I accept that this is an indication of willingness on their part to facilitate the course of justice. At the same time, I note that both the CFMEU and Mr McDermott filed defences in this Court on 23 August 2013 in which they denied the contraventions, so that it cannot be said that their acknowledgements were made at the first reasonable opportunity. 62 Neither respondent has made any expression of contrition or regret. The Court was not told of any apology having been extended to Mr Blazevic. Nor was the Court told of any procedures put in place by the CFMEU to prevent a recurrence of such conduct. 63 The Court is required to take into account all these factors. Having done so, I consider that the penalties proposed by the parties can be regarded as appropriate. Had it not been for the matters for which the respondents are to be given credit, higher penalties, particularly in the case of the CFMEU, may have been appropriate. It is also appropriate that the penalty to be imposed on the CFMEU itself be a higher proportion of the applicable maximum than in the case of Mr McDermott, having regard to its prior history. Accordingly, they are the penalties which I impose. Declarations 64 I am satisfied that it is appropriate to make declarations in the form proposed by the parties, albeit with some minor amendments. 65 I note that the Director no longer seeks any declaration with respect to the alleged conduct of Mr McDermott on 21 June 2012. That aspect of the application should be dismissed. Conclusion 66 For the reasons given above, I make the following declaration: On 22 June 2012, each of the respondents contravened s 355 of the Fair Work Act 2009 (Cth) by: (a) organising the BDSF employees to agree not to work until Mr Lewis was reinstated; and (b) threatening that the BDSF employees would not work until Mr Lewis was reinstated, with the intention to coerce BDSF to accede to their demands to reinstate Mr Lewis; and I make the following orders: (c) The first respondent is to pay a pecuniary penalty of $16,500. (d) The second respondent is to pay a pecuniary penalty of $1,320. (e) Those payments are to be made to the Commonwealth within 21 days of the date of this order. (f) The remaining claims of the applicant in the application filed on 11 July 2013 are dismissed. (g) By consent, there be no order as to costs. I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice White. Associate: Dated: 5 March 2014	9,764
federal_court_of_australia:fca/single/2017/2017fca0897	decision	commonwealth	federal_court_of_australia	text/html	2017-09-21 00:00:00	Nugawela v Deputy Commissioner of Taxation [2017] FCA 897	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2017/2017fca0897	2024-09-13T22:45:05.324253+10:00	FEDERAL COURT OF AUSTRALIA Nugawela v Deputy Commissioner of Taxation [2017] FCA 897 File number: WAD 434 of 2017 Judge: BARKER J Date of judgment: 21 September 2017 Catchwords: PRACTICE AND PROCEDEURE – application to stay sequestration orders and proceedings pending determination of appeal – where appellant seeks to appeal Federal Circuit Court decision upholding sequestration orders – whether grounds of appeal are arguable – whether grounds of appeal have rational prospect of success – balance of convenience – application dismissed Legislation: Bankruptcy Act 1966 (Cth) Federal Circuit Court of Australia Act 1999 (Cth) s 42 Income Tax Assessment Act 1997 (Cth) Taxation Administration Act 1953 (Cth) Pt IVC Cases cited: Deputy Commissioner of Taxation v Nugawela [2015] WASC 468 Nugawela v Deputy Commissioner of Taxation (No 2) [2017] FCCA 1999 Nugawela v Deputy Commissioner of Taxation [2016] FCA 578 Nugawela v Deputy Commissioner of Taxation [2016] FCAFC 164 Nugawela v Deputy Commissioner of Taxation [2017] FCCA 1289 Nugawela v Deputy Commissioner of Taxation [2017] HCASL 114 Nugawela v Deputy Commissioner of Taxation [2017] WASCA 9 Nugawela v Deputy Commissioner of Taxation [No 2] [2017] WASCA 66 R v Deputy Commissioner of Taxation (WA); Ex parte Briggs (1986) 12 FCR 301; (1986) 69 ALR 185 Date of hearing: 5 and 6 September 2017 Registry: Western Australia Division: General Division National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Category: Catchwords Number of paragraphs: 64 Counsel for the Appellant: The Appellant appeared in person Counsel for the Respondent: Mr CM Slater Solicitor for the Respondent: Australian Government Solicitor ORDERS WAD 434 of 2017 BETWEEN: PATRICK ALLEN NUGAWELA Appellant AND: DEPUTY COMMISSIONER OF TAXATION Respondent JUDGE: BARKER J DATE OF ORDER: 21 SEPTEMBER 2017 THE COURT ORDERS THAT: 1. The appellant's interlocutory application dated 31 August 2017 be dismissed. 2. The respondent's costs of the application dated 31 August 2017 be taxed and paid by the appellant or from the appellant's estate in bankruptcy in accordance with the provisions of the Bankruptcy Act 1966 (Cth) whichever is appropriate at the time payment is required. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT BARKER J: 1 Dr Patrick Allen Nugawela has been in disputation with the Australian Taxation Office (ATO) for some years. 2 On 19 August 2015, the Deputy Commissioner of Taxation obtained summary judgment against him in the Supreme Court of Western Australia in the sum of $1,668,164.16. The judgment sum was comprised of statutory debts in relation to income tax, penalties and interest charges pursuant to the Income Tax Assessment Act 1997 (Cth) and the Taxation Administration Act 1953 (Cth). See Deputy Commissioner of Taxation v Nugawela [2015] WASC 468. 3 In the course of argument resisting summary judgment, amongst other issues raised, Dr Nugawela contested the extent of his liability for the two financial years 2007 and 2008. 4 The judge, Justice Kenneth Martin, at [28] of his reasons for summary judgment, noted that in respect of those two financial years, Dr Nugawela had caused his accountants to file tax returns the week before the hearing, ostensibly for the purpose of challenging, under Pt IVC of the Taxation Administration Act, the default assessments which had earlier been made by the ATO. 5 At [35]-[36], the judge said that the fact that someone disputes a tax assessment does not, on the face of it, entitle them to withhold from paying the amount indicated as payable in their assessment, although it is open to apply for a stay of a motion for summary judgment or the execution of a summary judgment in respect of tax recovery proceedings where there are pending tax objection proceedings. However, the judge noted that those situations do not inevitably lead to the grant of a stay. 6 Dr Nugawela also raised a range of issues, including the flooding of his medical practice in January 2014, and his own psychological problems from 2003, as reasons why summary judgment should not be entered. 7 The judge ultimately found, at [51], that nothing had been presented by Dr Nugawela to undermine the prima facie correctness of the default assessments made in respect of the two disputed financial years, or otherwise to show a reason why summary judgment should not be ordered. 8 An appeal from the summary judgment orders to the Court of Appeal of the Supreme Court of Western Australia failed. See Nugawela v Deputy Commissioner of Taxation [2017] WASCA 9. The Court of Appeal, at [26], did not find it necessary to decide whether the judge should have allowed an adjournment of the application before him until after the Deputy Commissioner had considered the tax returns the appellant had lodged the week before the summary judgment hearing. 9 At [26], the Court of Appeal noted that, in any event, the question of an adjournment had been overtaken by events. It noted that, after the hearing of the summary judgment application, the Deputy Commissioner in fact varied the original default assessments in light of the tax returns that the appellant had recently lodged. The Court said that even if it were established that the primary judge was in error in refusing an adjournment, there would be no injustice to Dr Nugawela if that decision were not set aside as no purpose would be served by setting it aside. 10 In relation to a further ground where Dr Nugawela submitted, in effect, that there was an arguable case that the notices of assessment issued initially by the Deputy Commissioner were invalid because the amount of each of the assessments was a figure "plucked from the air" or had no rational basis, the Court of Appeal said that the decision of the Full Court of this Court in R v Deputy Commissioner of Taxation (WA); Ex parte Briggs (1986) 12 FCR 301; (1986) 69 ALR 185 did not assist the appellant. 11 At [29], the Court of Appeal said that in Briggs, the Deputy Commissioner conceded that neither he nor his officers had made any attempt to ascertain the taxpayer's taxable income, or carried out any proper investigation of the taxpayer's affairs, prior to making the assessments, and that the notices of assessment had been issued simply for the purpose of forcing the taxpayer to consult with the Deputy Commissioner or his officers. The assessments were thus considered invalid. 12 At [30], the Court of Appeal noted there was no evidence in the case of Dr Nugawela that the notices of assessment were the result of anything other than a proper attempt by the ATO to assess Dr Nugawela's liability. The Court also said there was no evidence from which an inference to the contrary might properly be drawn. It went on to note that, in fact, an audit of Dr Nugawela's taxation affairs had been conducted by the ATO in 2011, before the notice of assessment was issued to him. 13 The Court of Appeal also dealt with some of the matters concerning Dr Nugawela's personal circumstances, including his psychological health. They did not, however, consider those issues provided any defence to the Deputy Commissioner's claim. 14 The Court of Appeal also dealt with a question about the solicitors for Dr Nugawela before Justice Kenneth Martin, representing him "unwillingly". At [37], the Court of Appeal observed as follows: We do not accept what we understand to be a further contention by the appellant that, in circumstances where the primary judge knew that the appellant's solicitors were representing him unwillingly, it was incumbent upon his Honour to indicate any concerns he had about the sufficiency of the appellant's evidence and to enable the appellant to make good any deficiencies by a further affidavit. First, there was no evidence that the appellant's solicitors were representing him unwillingly. Secondly, it was no part of the role of the primary judge to provide a critique of the appellant's evidence so that the appellant might supplement it as necessary. The appellant was given a reasonable opportunity to file any affidavit evidence on which he sought to rely (a time period that was extended at his request after he failed to comply with the original time limit) and it was up to the appellant and his legal advisers to ensure that that evidence was put before his Honour. If at the hearing there were perceived to be deficiencies in it, it was for the appellant's counsel to apply to the primary judge for an opportunity to file additional affidavit evidence. No such application was made. We might add that had it been made it is unlikely to have been granted in circumstances where his Honour had earlier extended the time for the filing of the appellant's affidavit on the express basis that if the time limit was not complied with the appellant would not be permitted to adduce any evidence. 15 Following the entry of summary judgment, but before the Court of Appeal decision, the Deputy Commissioner issued a bankruptcy notice. A challenge to its validity in this Court failed. See Nugawela v Deputy Commissioner of Taxation [2016] FCA 578 (McKerracher J). 16 In that decision, McKerracher J had the opportunity to revisit the history of the litigation, briefly mentioned above, in the course of coming to his decision. The question of the appropriateness of the assessment of taxation in the 2007 and 2008 years was raised. 17 At [67] of his decision, McKerracher J noted that Dr Nugawela's rights were not concluded at that point because the petitioning creditor (the Deputy Commissioner) would have to verify the amount due at the time of petitioning. 18 At [68], McKerracher J said that, as to other issues apart from quantum, such as flooding and the like: It may be that the relevant debts have been varied, but the complaints raised and the defences offered in relation to the non-compliance with meeting tax obligations are the same issues which were raised in the Supreme Court, and (with respect) quite properly there rejected given the statutory assumptions on which the Commissioner and the Court proceeded. 19 Then, at [69], McKerracher J stated: The absence of any prospects of demonstrating that he has a valid counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt under s 40(1)(g) precludes reliance upon s 40(1)(g) of the Bankruptcy Act and would also necessarily strongly militate against any application for leave being granted to extend the time for compliance with the bankruptcy notice, even if the Original Application were lodged within time. 20 Dr Nugawela appealed that decision to the Full Court of this Court, which dismissed the appeal. See Nugawela v Deputy Commissioner of Taxation [2016] FCAFC 164. 21 Before the Full Court, Dr Nugawela sought to rely on additional evidence, much of which, the Court noted, at [17], was concerned with his personal circumstances as to why he had not filed tax returns or paid tax since 2000; the burdens imposed on him and his medical practice following the ATO audit in 2011; his attempts to rebuild his medical practice that was subject to a garnishee order which had been issued by the Deputy Commissioner; and other issues, including the flood damage previously mentioned and his deteriorating mental state. 22 The Full Court, at [19], also noted the Deputy Commissioner's submission that Dr Nugawela admitted debt in the Part IVC review process in the sum of $148,632.36, and did not challenge the tax assessment for the years 2003 and 2004, which amounted to $29,711.64; and had not challenged the general interest charges and penalties of $926,590.71. The Deputy Commissioner accepted that if the challenges of Dr Nugawela were successful and the general interest charges and penalties were reduced, this would amount to $165,026.03. The amount Dr Nugawela would then admit to owing would be $343,370.03. 23 The Full Court rejected that there was any error in McKerracher J's decision in not finding a need to "go behind" the summary judgment so as to relitigate it. 24 It also dismissed a claim that the judge erred in failing to exercise a discretion to grant an extension of time to challenge the bankruptcy notice and a range of other grounds. 25 At [42], the Full Court stated: Finally, even if there had been an error by the primary judge (which there was not) in the re-exercise of discretion, we would not extend time within which to set aside the bankruptcy notice or stay any action upon it. Particular discretionary factors in this case include the very lengthy period of lack of compliance from 2000 onwards, during a period when Dr Nugawela had access to lawyers and accountants sporadically. And although we take into account the stress upon Dr Nugawela and his mental state, his affidavit evidence and conduct of this appeal demonstrates that he is well capable of making decisions in what he perceives to be his interests. Finally, although Dr Nugawela filed a lengthy affidavit, he did not depose to the extent of his net assets. It is possible that he has sufficient resources to contest the creditor's petition which he opposes and the AAT proceedings. He is able to contest these proceedings in the absence of an extension of time or a stay. 26 Subsequent to the decision of the Court of Appeal, in 2017 Dr Nugawela sought special leave to appeal from the Court of Appeal's decision to the High Court of Australia. Before that special leave application was determined, Dr Nugawela sought a stay on the summary judgment pending the determination of the special leave application. That application was rejected by the Court of Appeal. See Nugawela v Deputy Commissioner of Taxation [No 2] [2017] WASCA 66. 27 In refusing the stay application, the Court of Appeal, at [5], said that the judgment was simply one for a money sum and there was no question as to the capacity of the Deputy Commissioner to repay the money in the event of a successful appeal. 28 At [7], the Court of Appeal also said that it was not satisfied that there was a substantial prospect that special leave would be granted on any of the proposed grounds. 29 Subsequently, the special leave application was also refused on the basis that it did "not raise any reason to doubt the correctness of the decision of the Court of Appeal …". See Nugawela v Deputy Commissioner of Taxation [2017] HCASL 114. 30 The matter of the bankruptcy then proceeded. On 21 February 2017, a Registrar of the Federal Circuit Court of Australia made a sequestration order under the Bankruptcy Act 1966 (Cth) against Dr Nugawela's estate. 31 On 10 March 2017, Dr Nugawela applied to the Federal Circuit Court to review the Registrar's orders. He also separately filed an interim application with that Court for a stay of the sequestration order. That stay application was allowed on an interim basis on 14 March 2017, pending further orders of the Court. 32 The stay application was heard on 14 March 2017 and 2 June 2017. On 19 June 2017, the Federal Circuit Court (Judge Lucev) dismissed the application. See Deputy Commissioner of Taxation v Nugawela [2017] FCCA 1289. 33 Judge Lucev then proceeded to hear and determine the application of Dr Nugawela for review of the Registrar's sequestration orders. 34 On 9 August 2017, Judge Lucev made a number of orders which included an order dismissing the oral application made by counsel on behalf of Dr Nugawela for an adjournment of the proceedings before him on the day the review application was listed for hearing; an order dismissing the stay application of 6 July 2017; and an order dismissing Dr Nugawela's application for review of the Registrar's sequestration orders. 35 Dr Nugawela has recently appealed from these orders of the Federal Circuit Court. 36 By an application to this Court dated 31 August 2017, which is the particular matter now before me, Dr Nugawela seeks to stay all proceedings of sequestration pending the determination of his appeal. 37 The stay application was listed for hearing before me on 5 September 2017, at which time, in light of written submissions recently filed on behalf of the Deputy Commissioner opposing a stay, Dr Nugawela sought an adjournment to the following day, which I granted. The following day he himself presented extensive written submissions. 38 The parties were substantially in agreement that the question pertinent to whether or not a stay of the sequestration order should be permitted pending the appeal required consideration of whether there was any arguable appeal point with a rational or reasonable prospect of success, as well as the balance of convenience. 39 Put simply, in light of much of the preceding litigation history that I have alluded to above, the Deputy Commissioner contends there is no rational prospect of success on any of the grounds of appeal. 40 The grounds of appeal, stated in the notice of appeal, are as follows: 1.1 The learned Judge erred in the exercise of his discretion in failing or refusing to grant a short/reasonable adjournment to enable the appellant's newly-appointed counsel, any or reasonable time to properly represent the appellant in the de novo rehearing against the Registrar's granting of the sequestration order. Particulars (a) the learned Judge failed to take into account relevant considerations in the exercise of his discretion; (b) the learned Judge's discretion miscarried in that no reasonable decision-maker would have come to the extempore conclusion that he did; (c) further or amended particulars to be provided upon receipt of the learned Judge's reasons for decision. 1.2 The learned Judge failed to provide any or adequate reasons for making the decision referred to in ground 1.1 above. 2. In failing or refusing to grant any or a short/reasonable adjournment to enable the appellant's newly-appointed counsel any or reasonable time to properly represent the appellant in the de novo rehearing against the Registrar's granting of the sequestration order, the learned Judge demonstrated a reasonable apprehension of, or actual bias or predisposition against the appellant personally or against the appellant's application. Particulars (a) In refusing a previous stay application, the learned Judge had previously (at [71]) stated that that it 'was not apparent that Dr Nugawela will be able to resist the issuance of a sequestration order in the de novo hearing of the Review Application'; (b) a consideration of the transcript of proceedings on 9 August 2017 demonstrates (on balance) that the learned Judge had already decided to dismiss the appellant's de novo review application; (c) further or amended particulars to be provided upon receipt of the learned Judge's reasons for decision. 3. In failing or refusing to grant any or a short/reasonable adjournment to enable the appellant's newly-appointed counsel, reasonable time to properly represent the appellant in the de novo rehearing against the Registrar's granting of the sequestration order, the learned Judge denied procedural fairness to the appellant. 4. The learned Judge erred in extemporaneously dismissing the appellant's application for a de novo review of the Registrar's summary making of the sequestration order and/or failed to give any or adequate reasons for such dismissal, when: (a) there was a genuine, unresolved (or judicially unresolved) disagreement as to the underlying debt owed; (b) no court had as yet 'gone behind' the judgment debt as required/permitted, and as (for instance) observed by McKerracher J in Nugawela v Deputy Commissioner of Taxation [2016] FCA 578; (c) the respondent's conscious maladministration had yet to be judicially determined or examined. 5. Further or amended grounds of appeal to be provided after receipt of the learned Judge's reasons for decision. 41 Pursuant to ground of appeal 5, no further or amended grounds of appeal have been indicated by Dr Nugawela. 42 I will set out the Deputy Commissioner's written submissions because, without doing so, the written submissions made by Dr Nugawela in response to them, which I will also record, will be difficult to appreciate. 43 The Deputy Commissioner relevantly submits as follows: Requirements for a stay: 'arguable point' or 'rational prospect of success' 22. The respondent opposes a stay, the appeal grounds are not arguable nor do they have a rational prospect of success. 23. Grounds 1 and 3 of the appellant's notice of appeal say an error arises from the failure to afford him procedural fairness and refusing an adjournment. 24. Ground 2: asserts that an error arose from an apprehended bias. 25. Ground 4 raises errors in relation to resolving three matters: (1) the quantum of the debt - genuine unresolved disagreement as to the underlying debt owed; (2) no court has gone behind the judgment; and (3) conscious maladministration or vindictive action. These matters are set out below, none of them are sufficiently arguable that they warrant a stay of the administration of this bankrupt estate. Grounds 1 and 3 procedural fairness and the respondent's health 26. The discretion to adjourn is an interlocutory decision reviewable on the grounds set out in House v R (1936) 55 CLR 499 at 504 - 505. 27. The Federal Circuit Court carefully considered the question of an adjournment and refused it [2017] FCCA 1999 at [5] - [11]. No error is discernible. 28. The appellant refers to the effect of the appellant's audit and the litigation on his health [Affidavit of Dr Nugawela sworn 10 March 2017 para 61]. 29. There was at the date of these submissions no admissible independent medical evidence to support the assertion. 30. The question of the health of the appellant was raised and rejected by: (1) The Full Court of the Federal Court [2016] FCAFC 164 at [42]. (2) The WA Court of Appeal [2017] WASCA 9 at [32] - [38]. (3) The Federal Circuit Court of Australia [2017] FCCA 1999 at [72]. Ground 2 Apprehended bias 31. An objection to the constitution of a court or tribunal on the ground of apprehended bias may be waived, and, if a litigant who is aware of the circumstances constituting a ground for such objection fails to object, then a waiver will result, see Vakauta v Kelly (1989) 167 CLR 568 at 572, 577-9 and Smits v Roach (2006) 227 CLR 423 at [43]. 32. According to Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427 at [31]: 'the test to be applied in Australia in determining whether a judge is disqualified by reason of the appearance of bias (in this case, in the form of prejudgment) is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide.' 33. The bias is said to arise from statements in an earlier decision to refuse a stay [2017] FCCA 1289. The appellant's legal advisers were present in court at the later time of judgment on the application to adjourn. There was no application for a different judge at that time. 34. The apprehended bias objection should be considered waived and this appeal ground is either not reasonably arguable or it has no rational prospects for success. Ground 4(1) the quantum of the debt and 4(2) going behind the judgment; 35. The appellant disputes the judgment [Affidavit of Dr Nugawela sworn 31 August 2017 para 3, 10, 11, 12, 14, 27, 43, 48, 50, 64, 69]. 36. The question whether there is a basis to go behind the judgment was considered and rejected by: (1) The Federal Court [2016] FCA 578 at [55] - [69]. (2) The Full Court of the Federal Court [2016] FCAFC 164 at [23] - [31]. (3) The WA Court of Appeal rejected the suggestion that the audit process could be relevant to the amount of the assessments [2017] WASCA 9 at [19] - [31]. (4) The Federal Circuit Court of Australia and dismissed in [2017] FCCA 1999 at [60]. 37. The Administrative Appeals Tribunal appeal relates only to the assessments and penalties for the years ending 30 June 2007 and 2008, the other objections were rejected. There is no objection process that relates to the penalties the undisputed amount of which, together with general interest charge, is $629,799.94. 38. The appellant refers to a genuine dispute as to the debt owed to the respondent but does not offer any evidence in opposition [Affidavit of Dr Nugawela sworn 31 August 2017 para 26, 31, 32, 42]. 39. The existence of a continuing debt owed to the respondent was addressed by the Federal Circuit Court in substance accepting the evidence of the respondent [2017] FCCA 1999, [62] - [64]. 40. The absence of evidence that demonstrates that the appellant has a 'reasonably arguable case' in the Administrative Appeals Tribunal renders the appeal ground devoid of merit see Deputy Commissioner of Taxation v Caporale Group Pty Ltd [2011] FCA 1189 at [9] - [14]. In any event the appeal under Part IVC TAA53 relates to only part of the debt. Ground 4(3) conscious maladministration or vindictive action 41. The appellant refers to the process of the audit conducted by the respondent and the consequences of the audit or the assessments on the value of his medical business. 42. The basis for this claim is either already rejected by other courts or not currently capable of being progressed or likely to be refused because of alternate relief available under Part IVC TAA53 in the Administrative Appeals Tribunal see Deputy Commissioner of Taxation v Futuris [2008] HCA 32; (2008) 237 CLR 146 at [10]. 43. In any event, an appeal on this point lacks a rational basis for success as the appellant had not established a 'reasonably arguable case' in the s39B Judiciary Act 1903 (Cth) proceedings see Deputy Commissioner of Taxation v Caporale Group Pty Ltd [2011] FCA 1189 at [13]. 44. The question of conscious maladministration was raised and abandoned before or rejected by: (1) The Federal Court [2016] FCA 578 at [51] - [58]. (2) The Full Court of the Federal Court [2016] FCAFC 164 at [40]. (3) The WA Court of Appeal [2017] WASCA 9 at [30], [31]. (4) The Federal Circuit Court of Australia [2017] FCCA 1999 at [79]. Requirements for a stay: Balance of convenience 45. The appellant has not sought to establish his solvency. In the absence of that evidence it is not possible to establish a consequence for him that warrants protection. There is no basis to believe that this appeal will be rendered nugatory or that practical difficulties may arise in relief that may be granted if successful. 46. The absence of this evidence was considered fatal to the application for a stay of the enforcement of the judgment in the WA Court of Appeal [2017] WASCA 66 at [5]. 47. A further delay in the administration of the bankrupt estate of the appellant would prejudice the public interest in recovering taxation obligations and avoiding the continuance of insolvent trading. ALTERNATE TO VEST POWERS TO APPEAL 48. The application to vest rights of appeal should be dismissed. The suggestion arises from similar orders in Stratton v Bowles [2014] FCA 1180. The vesting of powers in that case assisted a related Family Court appeal. 49. The vesting did not concern the prosecution of the appeal against the sequestration orders themselves. That appeal was permitted as the appeal rights are not 'property' under s 5(1) of the Bankruptcy Act 1966 (Cth) (see Cummings v Claremont Petroleum NL (1996) 185 CLR 124 at 132-136 per Brennan CJ and Gaudron and McHugh JJ). 44 In his written submissions, Dr Nugawela dealt with the following paragraphs of the Deputy Commissioner's submissions, as follows: PARA 3 a) The Appellant rejects the Respondent's submissions for a dismissal of a stay and contends there are persuasive grounds for granting a stay pending the outcome of the Federal Court of Australia (FCA) Appeal. PARA 5 a) The Appellant draws attention to the error of law in stating that Part IVC proceedings had not commenced and that discretion to grant a one-month adjournment on Southgate principles was therefore denied for consideration. This error of law was condoned by the Respondent as Model Litigant and finally admitted at a subsequent hearing. b) The error of law in terms of Part IVC proceedings is highly significant because the judgment debt was in contest for a significant quantum of more than half million for a two-year period for 2007 and 2008. Notwithstanding the 'conclusive evidence' provisions, there was a legitimate expectation that the litigation would not proceed if the dispute was related to quantum as the Tax Policy provides. c) The error of law is far more significant because a proper assessment of the tax liability would have been far more easily resolved in terms of solvency rather than a highly inflated and purported tax assessment. d) The Appellant was represented by unwilling counsel who asked to be released and whom the same judge had refused to release. The Appellant was therefore disadvantaged by hostile counsel. e) The Appellant was also under medical treatment for a diagnosed depression disorder and on the facts and evidence available to the judge, through interlocutories on appointment of a Next Friend, there was sufficient information for it to be open to the judge to ensure Equality Before the Law and exercise discretion in granting a one-month extension. PARA 6 a) The respondent allowed the review to the sum of quarter million! This is a significant error of assessment for a 2-year period! It has not yet been determined if the original default assessment was 'plucked out' of the air and if the amounts across the 10-year audit period was done on the same basis. Nonetheless, the Respondent is able to proceed on the basis of 'conclusive evidence' provisions to create bankruptcy rather than enabling negotiation and resolution thorough solvent status of a fair and proper tax liability to ensure recovery of public funds. The priority and policy appears to be sacrifice of public funds through creation of insolvency and bankruptcy instead of a policy of recovery of funds. This might be regarded as procedural unfairness to the Appellant in terms of abuse of process of the 'conclusive evidence' provision by the Respondent. b) The Respondent delayed providing a taxation objection to the Appellant and issued this concurrently with a Bankruptcy Notice. There was no apparent intention to allow procedural fairness and Futuris constitutional rights to challenge an improper tax assessment. c) The Administrative Appeals Tribunal (AAT) review is not adjourned but in the Respondent's haste to bankrupt the Appellant, the trustee has now made a decision to abandon the proceedings, thus blocking access to natural justice through the Futuris constitutional rights of challenge. PARA 7 a) The Appellant objected to the Bankruptcy Notice on the grounds of misstatement. This matter has yet to be properly tested and adequately examined. b) There are credits that have been omitted and information was not available to the Appellant to quantify the exact position of a fair and proper tax liability. This is currently being undertaken and the estimated tax liability is well below the default assessments applied. Nonetheless, the law permits the Respondent to pursue an improper tax liability on the basis of 'conclusive evidence' without any regard to destruction of livelihoods and reduced capacity to recover public funds. PARA 8 a) The Appellant did not have access to information required to evidence that the tax liability was seriously erroneous and that solvency could be evidenced on the basis of a fair and proper assessment of tax liability. b) The AAT proceedings were incomplete but the race to bankruptcy was relentlessly pursued by the Respondent against the Appellant within their 'conclusive evidence' provisions. PARA 9 a) The Appellant did not have the required or sufficient information to evidence the Respondent's errors. b) Some significant issues could not be tested such as the quantum of the Medicare garnishee and other credits because the pleadings were insufficient. PARA 10 a) The Respondent has full discretion to allow out-of-time tax lodgments but prefers to adopt an adversarial approach and cause the Appellant to pursue channels of litigation. b) The Appellant filed Tax Objections for the years 2005, 2006, 2009 and 2010 in November 2016. All four Tax Objections were subsequently disallowed. c) These assessments were filed as Tax Objections to the default assessments, and not as amended assessments, and therefore the Respondent has legislative power and discretion to allow the tax objections to be considered and to review or revise the claimed tax liability. d) By refusing the Tax Objection lodged, the Respondent is able to cling to its alleged tax liability and create a high-debt status for the Appellant denying procedural fairness in being able to challenge a tax liability. e) The Respondent's Objection Decisions for the four years were lodged and accepted by the Administrative Appeals Tribunal. PARA 11 a) The Registrar refused to go behind the judgment debt. b) The Registrar failed to assess the accuracy of the Respondent's affidavits verifying debt. c) The Registrar failed to consider Medicare garnishee and other credits. d) The Registrar did not consider the legality, appropriateness and harshness of the Respondent's decision to impose a 100% Medicare Garnishee (Edelston v Wilcox FCT (1988) 83 ALR; PSLA 2011/18). e) The Registrar failed to consider a Part IVC application was on foot at the AAT, which was to be heard within three weeks, and yet he proceeded to sequester the Appellant's estate, thereby putting the AAT Review Application on hold; thus, denying quantification of the debt under the Tax Administration Act 1953 (Cth) and in breach of the Appellant's constitutional rights. f) The Registrar failed to consider the Respondent's terms of reference and conduct of the ten-year audit. PARA 12 a) The application to the High Court was framed on very specific grounds and several issues were not framed or pleaded. b) The High Court ruled therefore that 'the Application for Special Leave does not raise any reason to doubt the correctness of the decision of the Court of Appeal of the Supreme Court of Western Australia'. c) On that same day, the High Court determined an application on conscious maladministration in Gould v DCT [2017] HCASL 126 stating that 'the decision of the Full Court of the Federal Court is not attended with sufficient doubt to warrant the grant of Special Leave. The application should be dismissed. It would be futile to grant an extension of time'. This quite clearly indicates that it was the 'application' that was inadequate in the Appellants' pleadings rather than an endorsement of the decision of the Court of Appeal. d) The Appellant was self-represented. e) New information has since become available to the Appellant that was not previously included for consideration. PARA 13 a) The Respondent requested an adjournment claiming that the Appellant was a bankrupt with no standing to proceed in this matter. A stay of all proceedings of sequestration and a stay of sequestration order was in place. The issue of standing in the light of the fact that there were stays and the effect of those stays was not discussed b) The Appellant was not accorded procedural fairness in seeking legal advice if the stays had no effect whatsoever in proceeding with the s 39b Judiciary Act 1903 (Cth) application. The Appellant is of the view that the Respondent wished to avoid accountability of judicial review which could expose the procedural unfairness and natural justice issues claimed by the Appellant. c) The subsequent removal of the stay has enabled the trustee to abandon the application, further disadvantaging the Appellant from rights at law which have been systematically blocked. d) The Appellant seeks an order from the Court to enable the trustee to exercise and prosecute such rights at the direction of the appellant; or to permit the appellant to exercise and prosecute such rights for himself. (Stratton v Bowles Orders) PARA 14 a) The Stay was removed on application by the Respondent. PARA 15 a) Under the Bankruptcy Rules the Registrar was only permitted to grant a 21-day stay pending any further applications that might arise for a review or further stay. b) This was an application for an extension of stay permitted under the Federal Circuit Court Rules. The stay was requested pending a de novo hearing of the review of the decision of a Registrar. c) Unfortunately, or by design, the Stay Application was listed on the same day as the Review hearing and the Appellant was not accorded sufficient time to review the reasons for the refusal of the Stay Application and consider legal advice on the matter. d) The Reasons for judgement was issued on 31 August 2017, less than a week ago. PARA 16 a) The Appellant had not contested the programming orders made when a stay was refused on 19 June 2017. b) The Appellant subsequently requested the Respondent for an adjustment of the hearing date on 9 August 2017. The Respondent declined. c) The Appellant wrote to the Justice Lucev explaining the need for an adjustment of hearing on 9 August 2017. The Appellant was advised to have this decided at a stay hearing. As pointed out, the Stay hearing was then listed on the same morning as the de novo Review application d) The Appellant had several incidents take place in the 4 weeks of July-August that required court hearings at other courts in relation to an outstanding tenancy issue that the Courts were aware of since 2015 which involved a restraining order against the landlord. This had a medical impact on the Appellant. In addition, the Appellant's father-in-law passed away. The Appellant was in a medically unfit state to adequately brief a lawyer. e) Eventually, the Appellant managed to secure legal representation who requested an adjournment to sufficiently prepare for the de novo hearing. f) The Appellant was medically unfit to attend Court and had medical evidence but was not able to present it to Court nor forward it to his legal representative in sufficient time. However, there was sufficient history of medical illness since 2011 that had been previously adduced and it was sufficiently open to the court to grant an adjournment to enable the Appellant's lawyers to adequately represent him. g) The Court declined an adjournment. The Appellant's lawyers withdrew. h) The Court dismissed the de novo Review Application in the absence of the Appellant. i) The Reasons for the Judgment were issued on 31 August 2017, less than a week ago and three weeks after the case was dismissed. j) The Appellant has filed an Appeal without the benefit of the Reasons document. k) The Appellant has filed the Application for a Stay without the benefit of a Reasons document. l) The Appellant has had less than a week to fully consider the Reasons document and to seek legal advice on the matter. m) The Appellant has only just received this submission from the Respondent and has been granted a 24-hour adjournment to respond. LEGISLATIVE FRAMEWORK PARA 17 (2) However, an appellant or interested person may apply to the Court for an order to stay the execution of the proceeding until the appeal is heard and determined. The law allows for a stay pending an appeal being heard and determined. RELEVANT PRINCIPLES PARA 22 a) The Appellant does not accept the Respondent's views on this matter as they remain unsubstantiated. PARA 26 a) The case concerns a sentence of a term of imprisonment which required judicial discretion. There is no bankruptcy offence here nor imprisonment. ADDRESSING GROUNDS FOR DISCRETION The discretion to adjourn is an interlocutory decision – Justice Lucev erred in his discretion not to grant an adjournment. The general principles hold in the Appellant's favour as it can be evidenced that the Justice Lucev's decision: 1) Did not take into account Relevant Factors (a) Absence of the Appellant – the hearing rule. (b) Need for legal representatives to adequately prepare and refusal to grant an adjournment for even 24 hours. (c) Sufficient medical evidence of ill health since 2011. It was sufficiently open to the court to consider if legal representatives were given an adjournment, medical evidence could be provided and the Professor Skerritt could be present to give expert witness evidence. 2) Focused on Irrelevant Factors a) Reasons focus on the Notice to Produce – this is extraneous to being denied the opportunity to have a de novo hearing related to sequestration. The Notice to Produce issue arose from orders sought by the Respondent and could have been adjourned to an interlocutory without disturbing the proceedings of a de novo. b) A de novo hearing is a fresh hearing of a case. It gives the Appellant a last chance to present reasons why sequestration should be avoided. The concern with past cases is redundant. The Court itself endorses this point of view when transcripts and the notes of the Registrar's hearing were requested. 3) Unreasonable and Plainly Unjust a) Counsel sought an adjournment of 1 week to prepare for the case. It was declined as was an amended request for 48 hours, and then 24 hours. As a result, counsel was left with no option but to withdraw. b) This is decision that no reasonable person of authority would extend to well-established senior legal representatives of an Appellant experiencing a mental disorder and facing the dire consequences of sequestration and being deprived of natural justice to contest an unfair tax liability. PARA 27 a) Paras 5-11 of [2017[ FCCA 1999 are infected with error. b) Para 5 - The application for adjournment was to allow preparation and representation for the de novo review. At that stage, the AAT hearing were frozen. c) Para 6 – The enclosed report from Professor Skerritt speaks for itself. It is not open to the Court to determine how a consultant physician should make an assessment. d) Para 7 – The presumptions contained in Para 7 are not in keeping with a fresh de novo hearing. e) Para 8 – These are matters outside the control of the Appellant. f) Para 9 – There is evidence as indicated in Para 6. g) Para 10 –This para 1o reflects that the Court's view is already prejudiced. It has already determined and formed a view of what might be put before the Court in due course. PARA 28 a) There has been long-standing medical evidence by the Appellant's consultant psychiatrist and it cannot be dismissed. b) Medical evidence has been provided to the Court since 2011 and over the years a 'portfolio' of evidence has been adduced in Court documents Book B). c) Independent medical evidence has never been requested before and is not a pre-requisite for certification. PARA 29 a) Health has not been an issue since November 2016 as reflected in Professor Skerritt's report dated 18 November 2016. b) Health issues recurred when an incident occurred in June 2017 in a separate forum. c) If necessary, the Appellant's health can be fully canvassed in the Court of Appeal and at a de novo hearing. d) Courts may not recognize the impact and effect of a diagnosed depression disorder. The AGS Equality Before the Law lists depression as a mental disorder and hence consideration should be extended when an appellant requires more time to process information as Professor Skerritt has assessed in a professional capacity. e) The judge had no basis for discrediting a member of the medical profession without sufficient evidence or basis for impeaching his credibility as a medical professional and University Professor!!!! PARA 31 a) The Appellant has not failed to object – and is now raising an objection. b) The Appellant was not present in Court to object! PARA 32 a) There is ample evidence of statements made by Lucev J that a fairminded person could reasonably apprehend as bias. b) However, this is a matter to be fully exposed in the Appeal and given 24 hours to respond at depth to this submission does not afford a fair and unbiased approach to the hearing rule. PARA 33 a) The application by the legal representatives was for an adjournment. Had this been granted one of the issues to be raised was recusal of Lucev J on the grounds that he had fettered his decision in the earlier stay application. PARA 34 a) The Respondent is understandably not an unbiased party in this action and in making this claim to waiver bias. b) This is a matter that should properly be considered by an Appeal judge. PARA 36 a) The High Court in Ramsay Health Care Australia Pty Ltd v Compton [2017] HCA 28 offers a binding ruling to the previous Courts that have rejected going behind the judgment debt. As in Ramsay, a judgment debt was contested. However, in the Appellant's case, unlike Ramsay, the judge made a serious error of law that led to Summary Judgment. There are several parallels and distinctions that provide a strong case for going behind the judgment debt. This will be tested in the Appeal Court. b) This ruling by the High Court on 17 August was not available at the time of the Stay Application. c) There is new information which neither of the courts mentioned have considered or been tested. d) The purpose of this opportunity for a de novo hearing is precisely to allow for a fair and full hearing over what has progressively emerged and been obtained under Freedom of Information legislation. PARA 37 a) The Appellant has submitted 2005, 2006, 2007, 2008, 2009, 2010. These are pending at the AAT but opportunity to have this assessed has been denied by the trustee. b) The GIC is cancelled by the 2011-2012 tax lodgments. PARA 38 a) The absence of the Appellant did not allow the opportunity of a fair hearing to present the evidence. b) This is a matter for the Appeal Court and may require proper discovery. c) The Appellant should have his constitutional rights to contest tax under Part IVC and/or s 39b Judiciary Act 1903 (Cth) as noted in Futuris. The trustee has sought to block this process and should be directed by the Court to enable a proper a proper assessment of the Appellant's tax liability. PARA 39 a) The evidence was unrebutted in a hearing where the Appellant was absent. b) If there was a continuing debt, bankruptcy would simply pass the burden to the public. It would be to the taxpayers favor if a properly assessed tax liability can be obtained and payments be made, so that public policy of recovery is upheld rather than negated by bankruptcy. PARA 40 a) The Respondent has no basis for making a claim which has not been tested due to the sequestration orders of the Registrar which has blocked the AAT proceedings. b) The AAT hearings which would have enabled this were adjourned by the Respondent at their request and caused further delays in having the matter resolved. c) Then after the stay was lifted, the Respondent made a move to place all proceedings on hold, enabling the trustee to make a decision to abandon! d) Futuris constitutional rights to challenge a tax liability have been systematically removed. PARA 41 a) The earnings and income of the business was severely decimated by the 100% Medicare garnishee. b) The income earned which is reflected in subsequent tax returns speak for themselves. PARA 42 a) The is no alternate relief because of the orders of the Registrar and the actions of the trustee. b) The outcomes of other courts is still subject to review and does not preclude a de novo hearing where there is new or additional evidence, c) There is no evidence this has been rejected and it is highly speculative that is likely to be refused. There is no substantive evidence for this assertion. PARA 43 a) In the event of an Appeal, the Appellant will ask the de novo hearing be combined with the s 39b Judiciary Act 1903 (Cth) hearing. PARA 44 a) Conscious Maladministration can only be tested under s 39B Judiciary Act 1903 (Cth) actions which has yet to be advanced. PARAS 41-44 OVERVIEW a) The province of Conscious Maladministration rests with s 39b Judiciary Act 1903 (Cth) and is outside the jurisdiction of other courts beyond an expression of opinion. b) All these matters from para 41-44 have been systematically blocked by delays on the part of the RESPONDENT asking for adjournments on the one hand, while progressing with creditors petition and sequestration such that the race to bankruptcy status would remove all rights of challenge. c) This was foreshadowed by Whitlam J in McCallum v Commissioner of Taxation [1997] FCA 533; (1997) 75 FCR 458, where his Honour said (at 469): The Commissioner issues an assessment. The taxpayer objects to it. The assessment may be recovered as a debt. The Commissioner proceeds to do so. The taxpayer seeks a stay, but on the principles enunciated by the Court of Appeal in Deputy Commissioner of Taxation (Cth) v Mackey (1982) 64 FLR 432 the stay is refused. The Commissioner proceeds to judgment and then issues a bankruptcy notice. That notice can not be challenged because if one sought to go behind the judgment debt one is met by an assessment unchallengeable under s 177: Clyne v Deputy Federal Commissioner of Taxation (Cth) (1982) 82 ATC 4510; Clyne v Deputy Commissioner of Taxation (Cth) (1983) 83 ATC 4532. On the same basis, the taxpayer is made bankrupt. He is insolvent as a result of the tax debt. There may or may not be other creditors. The Commissioner appoints a trustee in bankruptcy or perhaps the Official Receiver becomes trustee. In either case the trustee has no interest in fighting the objection in the Administrative Appeals Tribunal. It is immaterial to the trustee. And the trustee has no funds to do so. Hence the taxpayer loses the right to appeal and is made bankrupt without ever having a right to challenge the assessment. It could not happen, could it? In my view, the Court should adopt an interpretation of s 14ZZ which ensures that taxpayers will always have a right to challenge assessments made against them. … PARA 45 a) The issue of solvency has been complicated by the actions and persistent failure of the Respondent to make a serious effort to assess tax liability. b) The Appellant has property that warrants protection for the benefit of third parties. c) In this respect reference is made to a notice from the Respondent's trustee dated 1 September 2017 which threatens the livelihood of the Appellant, his family and any other dependents. See letter. PARA 46 a) The absence of evidence was the consequence of 'a very brief affidavit' prepared under strict time constraints. PARA 47 a) There is no intention for further delay. The intention is to obtain natural justice and procedural fairness since this Appeal will enable a de novo hearing which was dismissed and denied. b) The Appellant's legal personal representatives have agreed to work with the trustee and the Appellant to work out suitable arrangements pending the Appeal and de novo hearing. c) As such, there is no prejudice to public interest if a non-adversarial approach can be adopted by all parties concerned, protecting and according the respective rights and interests to each of the parties fairly and in a reasonable manner. ALTERNATE TO VEST POWERS TO APPEAL PARA 48 a) The principles of justice in Stratton v Bowles apply here notwithstanding that the substantive issue in that case related to a Family Court matter. This is in like manner to the Respondent's use of House v King to draw out principles for the use of discretion in a substantive matter of a criminal matter which has no bearing on this context. b) The Appellant seeks fair opportunity to be heard by the AAT as an independent Tribunal on a merits review of decisions made by the Respondent. The AAT was established precisely to allow for accountability mechanisms for decisions made by government which impact adversely on the rights of individual citizens. PARA 49 a) However, the legislation also provides for the trustee to exercise discretion in granting a bankrupt to proceed. b) There is no prejudice to the Respondent or to the trustee as the appellant is self-represented in these matters and hence will not incur additional costs. c) In fact, prejudice to the Appellant arises as the Appellant has already incurred fees in preparation for related tax matters and has invested personal time and energy in preparation for the appropriate hearings. d) The wasted effort is of lesser significance than the denial of procedural fairness and natural justice. CONCLUSION PARA 50 a) The Orders sought by the Appellant be granted pending the outcome of the FCA Appeal. 45 At the hearing for the stay, Dr Nugawela made the following additional oral submissions: DR NUGAWELA: Thank you, your Honour. In addition to what has already been presented, I would like to state that they are reasons which are particularly persuasive in my mind. Firstly, there's an appeal on foot. And unless the stay is granted, a successful appeal will effectively be nugatory. There's also the question of hardship and my livelihood. If the trustee does secure the property at 126 Coolibah Drive, Greenwood, I will lose my livelihood in its entirety. I'm the sole breadwinner and my family members and I would be placed in extreme and dire hardship. The taxpayer burden increases since the members of my family and I will need to rely on Centrelink income support. The action threatened by the trustee amounts to ..... by implication. There's a need to avoid reputational damage, as this is critical to the medical practice and would cause permanent and lasting damage. There are other interests that also need to be protected. The legal interests of Karen Nugawela and my two children need to be considered. There is a Family Court order in place, which the trustee is aware of. Now, as for financial statements, my records were largely destroyed in floods. HIS HONOUR: Say that again. DR NUGAWELA: My records were largely destroyed in floods in my medical premises. And this is detailed in the documents in the books that I have filed with the Circuit Court in this action. There's a book A and a book B with substantial documentation and photographs that were a part of the court record. HIS HONOUR: Right. DR NUGAWELA: The surgery is also my part-time residence. That was my home in my early days. And I would also need the facilities there to enable preparation for legal documents and research. There's the question of public interest. The surgery has been in Greenwood since 1979. I have been the practitioner there for that entire period. Many longstanding and aged-care patients continue under my care. Their immediate and long-term care will be adversely affected. Closure of the surgery will affect records held for patients. And many of the surrounding practices are no longer taking new patients. I would like to draw the court's attention to Ramsay v Compton. It's a decision that was not available until, I think, 21 August, where going behind a judgment in a trial, where both sides were represented and where the debt was admitted, the significance is not the conclusive evidence of assessment, but adjournment to allow the debt to be quantified. And they're processes that are under the taxation law and well-described in Futuris. Medical reasons: my medical condition has been known to the court since 2011. It is not new. And it also forms part of the books of records that the court has. It does not appear to have been fully recognised, if the certificates are considered in isolation, particularly the certificate that was tendered at the stay hearing. I'm still under medical care and medical advice. And as for funds, my financial position is still being clarified. Equity was offered to the Taxation Office in August 2015, during the hearing in the Supreme Court. It was declined by letter from Andrew Orm, the Deputy Commissioner of Taxation for Dispute Resolution. Solvency is based not only on cash on hand, but also what is available. We will be able to cover our estimate of debt, but the inflated debt needs quantification, either under the AAT or the section 35 action or both. HIS HONOUR: Are you saying that you are solvent, on that broad view? DR NUGAWELA: On that broad view, yes. HIS HONOUR: But does that mean in reducing – first, in reducing the current debt by completing the assessment and then you think you can show that you're solvent? DR NUGAWELA: Yes, your Honour. HIS HONOUR: So what are the numbers that you are referring to? What is the number at which you would be solvent? DR NUGAWELA: I think it was around 150,000. HIS HONOUR: So you would be solvent at 150,000? DR NUGAWELA: Yes. As to beyond that, I have to consider the matter further. HIS HONOUR: And have you identified how you would cover 150,000? DR NUGAWELA: Yes, your Honour. HIS HONOUR: Where does that come from? DR NUGAWELA: It comes from equity in property. HIS HONOUR: That's the Greenwood property, is it? DR NUGAWELA: The Greenwood and other property. Also it's cash that is available to me from outside sources that do not belong to me at the present time. HIS HONOUR: Right. Yes. Thank you. DR NUGAWELA: One final point – I think I've already covered it, with respect to provision of a response to the reasons. Your Honour, I have a dry mouth due to medications. Can I seek permission to munch something during these proceedings? HIS HONOUR: By all means. DR NUGAWELA: Yes. Thank you, your Honour. That's all I have to say. HIS HONOUR: All right. Thank you very much. You're, of course, relying on the materials that you've filed, as well as the submissions that you filed today. You're relying on them in a formal sense. I'm just noting that for the record. DR NUGAWELA: Thank you. 46 I have come to the conclusion that a stay on the sequestration order should not be ordered pending the hearing of the appeal. I do not consider that the appeal grounds have sufficient merit that, when taken with the balance of convenience, should result in a stay being ordered. 47 Grounds 1 and 3 complain of the failure of the primary judge in the Federal Circuit Court to allow an adjournment at the commencement of the hearing of the review of the Registrar's sequestration orders. 48 In his reasons for judgment, in Deputy Commissioner of Taxation v Nugawela (No 2) [2017] FCCA 1999, Judge Lucev relevantly noted, at [3], that at the final hearing he dealt with an oral application for an adjournment of the review hearing by counsel, which he refused and gave oral reasons for. In the judgment, at [5]-[10], the judge dealt with the reasons for refusing that adjournment application in more detail. 49 The judge noted: Receipt of medical evidence of Professor Skerritt, which he said was not current, in that it was dated 27 June 2017 and indicated a reassessment in a month's time of Dr Nugawela's condition, and there was no evidence of any reassessment. The Court was also not satisfied that an adjournment should be granted on the basis of there being further evidence to be put before the Court from a tax agent for Dr Nugawela in relation to the Part IVC proceedings. The judge noted that the Registrar in the Court was apprised of the status of those proceedings quite fully, and in any event, those proceedings related only to a part of any debt that might be owed by Dr Nugawela as there were other outstanding debts which the Part IVC proceedings did not address. As a result, it would not be assisted by any evidence from the tax agent on the current status of the Part IVC proceedings. The Court also took into account the interests of the administration of justice and the interests of justice and the terms of s 42 of the Federal Circuit Court of Australia Act 1999 (Cth) requiring a Court to deal with matters with expedition and less technically procedurally than might be done in a superior State or Federal Court. The judge also noted he had approximately 550 matters in his docket with limited assistance available from elsewhere. This was to make the point that if the matter were adjourned, notwithstanding the best efforts of the Court, it might not be possible to bring the matter back on with any expedition. So far as an adjournment was sought to allow lawyers, lately instructed by Dr Nugawela, to prepare, their state of preparation, or lack thereof, was a consequence of the lateness of the instructions they had received. There was nothing apparent on the evidence which would indicate there was any impediment to Dr Nugawela having instructed them earlier. So far as prejudice to the parties was concerned, the Court's view was that Dr Nugawela was not as prejudiced as the Deputy Commissioner in relation to the proceedings. 50 Following the refusal of the adjournment, which was made by counsel lately instructed in the matter, counsel withdrew, that being counsel's only brief in relation to his appearance on the hearing of the review application. Dr Nugawela did not himself then appear at the hearing. The Court then proceeded to conduct the review application. 51 In those circumstances, it is very difficult to see how Dr Nugawela can reasonably complain about the judge's exercise of discretion in refusing to grant an adjournment on the day the matter was listed for hearing of the review application, as asserted in grounds 1 and 3 of the notice of appeal. Those grounds do not actually state, as a ground, that the hearing should have been adjourned because Dr Nugawela was not there. If that were to be implied as a ground, plainly Dr Nugawela should have been in attendance and could not have assumed that the Court was going to grant an adjournment because his lawyer appeared to request an adjournment of the hearing. 52 I consider there is very little prospect of grounds 1 and 3 succeeding. 53 As to ground 2, that the judge demonstrated a reasonable apprehension of, or actual, bias, or predisposition against Dr Nugawela, the statements of the judge attributed to him, arose in his earlier, 19 June 2017, decision to refuse a stay. No question concerning the judge having a bias was raised at that date, or when Dr Nugawela's lawyers were later present in court, or when judgment on the stay was delivered, or on counsel's application to adjourn on the day of the review hearing. There was never any application for a different judge to hear the matter at any time. 54 The comment said to be indicative of a predisposed attitude to the matters in issue, in any event, simply seems to identify what the judge's appreciation of the position was without Dr Nugawela leading any evidence on matters material to the creditor's petition. 55 I consider this ground lacks cogency and is insufficient to form the basis of a stay order. 56 The fourth ground of the appeal is that the judge erred in dismissing the application for a de novo review of the Registrar's sequestration orders and/or failing to give any or adequate reasons when there was an unresolved disagreement as to the underlying debt; no court had as yet "gone behind" the judgment debt "as required/permitted", and as (for instance) observed by McKerracher J in Nugawela v Deputy Commissioner of Taxation [2016] FCA 578; and the respondent's conscious maladministration was yet to be judicially determined or examined. 57 This ground tends to involve a number of sub-issues. As can be seen, the judge initially dismissed the review application but gave reasons subsequently. Thus, the question of not giving adequate reasons immediately falls away. 58 The additional proposition is that the underlying debt could be disputed. In other words, Dr Nugawela wishes to revisit the summary judgment granted by Justice Kenneth Martin in the Supreme Court of Western Australia in 2015. That judgment was the subject of an appeal to the Court of Appeal, which was dismissed. There was a special leave application to the High Court which was refused in respect of the same matter. Justice McKerracher, of this Court, also made comments unfavourable to Dr Nugawela's position, as noted above, when he challenged the validity of the bankruptcy notice. And the Full Court of this Court was similarly not well disposed to the propositions put by Dr Nugawela in that regard noting a residual undisputed judgment debt. 59 The fact of the matter is that the underlying debt is not in dispute. As counsel for the Deputy Commissioner submitted at the hearing before me, the initial amount in the summary judgment was subsequently reduced when the Deputy Commissioner varied the assessments for two income years, 2007 and 2008, in question. There is currently no other Part IVC review proceedings on foot. The Trustee in Bankruptcy has not elected to continue subsequent review proceedings in respect of earlier income years. 60 Even if there were some success, as noted above, and the 2007 and 2008 years were to be revised, there is still a substantial debt due and owing to the Deputy Commissioner. 61 The reality is that no material evidence has been led at any point to suggest that Dr Nugawela is or might suddenly become solvent in respect of the undoubted debts that remain due and owing. 62 Thus, he falls back on the challenge to the administration of the taxation legislation by the Deputy Commissioner, complaining of "conscious maladministration". That proposition has not been supported by any relevant evidence. Indeed, the point has been made, as set out above, in the Court of Appeal, that unlike in the Briggs case, the initial default assessments of tax followed a 2011 ATO audit. Thus, this is not a case where the Deputy Commissioner can be said to have "plucked out of the air" a default assessment in order to make the taxpayer talk to him. 63 In all the circumstances, I do not consider there is any reasonable basis of the fourth ground of appeal succeeding, and it cannot support a stay. 64 In these circumstances, and taking into account the inconvenience that would be visited upon the Deputy Commissioner having regard to a regularly obtained judgment, the subsequent revision of the initial assessments, and the enormous and long litigation over the summary judgment debt since 2015, Dr Nugawela's application to stay the sequestration orders pending the appeal should be refused with costs. 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. Associate: Dated: 21 September 2017	14,848
federal_court_of_australia:fca/full/2002/2002fcafc0052	decision	commonwealth	federal_court_of_australia	text/html	2002-03-08 00:00:00	Qubaiaa v Minister for Immigration and Multicultural Affairs [2002] FCAFC 52; [2002] FCA 227	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2002/2002fcafc0052	2024-09-13T22:45:05.641088+10:00	Qubaiaa v Minister for Immigration and Multicultural Affairs [2002] FCAFC 52 Qubaiaa v Minister for Immigration and Multicultural Affairs [2002] FCA 227 NOTE: CHANGES TO THE MEDIUM NEUTRAL CITATION (MNC) The Federal Court adopted a new medium neutral citation (FCAFC) for Full Court judgments effective from 1 January 2002. Single Judge judgments will not be affected and will retain the FCA medium neutral citation. The transitional arrangements are as follows: * All Full Court judgments delivered prior to 1 January 2002 will retain the FCA medium neutral citation. * All Full Court judgments delivered between 1 January 2002 to 30 April 2002 have been assigned parallel medium neutral citations in both the FCA and FCAFC series. * All Full Court judgments delivered from 1 May 2002 will contain the FCAFC medium neutral citation only. FEDERAL COURT OF AUSTRALIA Qubaiaa v Minister for Immigration and Multicultural Affairs [2002] FCA 227 MOHAMMAD QUBAIAA v MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS W 406 OF 2001 HEEREY, MARSHALL AND DOWSETT JJ PERTH 8 MARCH 2002 IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W 406 OF 2001 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: MOHAMMAD QUBAIAA APPELLANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS RESPONDENT JUDGES: HEEREY, MARSHALL AND DOWSETT JJ DATE OF ORDER: 8 MARCH 2002 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The appellant pay the respondent's costs of the appeal. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W 406 OF 2001 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: MOHAMMAD QUBAIAA APPELLANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AFFAIRS RESPONDENT JUDGES: HEEREY, MARSHALL AND DOWSETT JJ DATE OF ORDER: 8 MARCH 2002 WHERE MADE: PERTH REASONS FOR JUDGMENT THE COURT 1 On 10 August 2001 Hely J dismissed an application by the appellant to review a decision of the Refugee Review Tribunal ("the RRT") that the appellant was not entitled to a protection visa. 2 The appellant entered Australia on 22 December 2000. He had resided in Syria since 1982. He is a stateless person of Palestinian ethnicity. Before the RRT the appellant claimed that he escaped illegally from Syria after he was arrested, beaten and tortured by the intelligence service who suspected him of being a member of the Al-Tahrir Party. 3 The RRT disbelieved the appellant's claims. It found that the appellant would be of no interest to the Syrian authorities if returned to Syria. It also did not accept that the appellant departed Syria illegally. The RRT noted that the appellant was in possession of a Palestinian travel document when he left Syria with a visa to enter Indonesia. 4 The only ground of review pursued by pro bono senior counsel on the appellant's behalf before Hely J was that the RRT erred in law by failing to address what might happen to an unregistered Palestinian who is returned to Syria. 5 It is not surprising that this ground of review did not succeed before Hely J, given that the RRT observed at p.15 of its reasons for decision that it had considered the appellant's claim that he was unregistered together with "other facts" when determining whether the appellant would be able to return to Syria. The lack of registration arose from the fact that the appellant was born in Libya. His parents and two of his sisters were registered with the appropriate United Nations agency as Palestinians living in Syria. 6 Hely J noted that the RRT had found that for the purpose of obtaining travel documents the appellant had appropriate registration. The RRT also noted at p.16 of its reasons for decision that it had not found that the appellant had suffered "any significant detriment or disadvantage by having been born in Libya". Further the RRT was satisfied that the appellant had sufficient links with Syria to enable him to return there. 7 Hely J observed at [14] that: "(the) RRT's decision proceeds upon the basis that Syria will re-admit the applicant. RRT did not address and was not required to address, what might happen to a person who was an unregistered Palestinian returning to Syria if only because the Tribunal found that he was registered. The issue of whether the applicant would be permitted to return to Syria safely arose originally in association with his claim that he had been arrested for political reasons and that he left Syria illegally. As already indicated, those claims failed. If RRT is wrong in its assessment that the applicant will be permitted to return to Syria, then it may be that the applicant's future will be uncertain. If he is not permitted to enter Syria, he might be returned to Australia until Australia is able to find some other country prepared to take him. But Mr Barker QC frankly accepted that he could not establish that any difficulties which the future might hold for the applicant in that respect are within the terms of the Convention. That being so, the fact (if it is a fact) that the applicant faces an uncertain future in terms of his re-admission to Syria does not give rise to a well-founded fear of persecution for a Convention reason, given RRT's rejection of the applicant's claims." 8 We respectfully agree with those conclusions of his Honour. Nothing was advanced before us on appeal which would lead to a contrary view being accepted. The matters raised by the appellant on the appeal all went to the merits of his case for a protection visa, rather than to disclosing error in the reasoning of Hely J. In our view the appeal should be dismissed. We see no reason why costs should not follow the event. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Heerey, Marshall and Dowsett. Associate: Dated: 8 March 2002 The appellant appeared in person. Counsel for the Respondent: Mr P Macliver Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 8 March 2002 Date of Judgment: 8 March 2002	1,508
federal_court_of_australia:fca/single/2017/2017fca1075	decision	commonwealth	federal_court_of_australia	text/html	2017-09-11 00:00:00	InterPharma Pty Ltd v Hospira, Inc [2017] FCA 1075	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2017/2017fca1075	2024-09-13T22:45:05.719699+10:00	FEDERAL COURT OF AUSTRALIA InterPharma Pty Ltd v Hospira, Inc [2017] FCA 1075 File number: VID 885 of 2017 Judge: KENNY J Date of judgment: 11 September 2017 Catchwords: PRACTICE AND PROCEDURE – Application for interim interlocutory injunction – relief granted Legislation: Patents Act 1990 (Cth) Cases cited: Australian Broadcasting Corporation v O'Neill [2006] HCA 46; 227 CLR 57 Otsuka Pharmaceutical Co Ltd v Generic Health Pty Ltd (No 4) [2015] FCA 634; 113 IPR 191 Samsung Electronics Co Ltd v Apple Inc [2011] FCAFC 156; 217 FCR 238 Date of hearing: 7 September 2017 Registry: Victoria Division: General Division National Practice Area: Intellectual Property Sub-area: Patents and associated Statutes Category: Catchwords Number of paragraphs: 42 Counsel for the Cross-Claimants: Mr T Cordiner QC Solicitor for the Cross-Claimants: Minter Ellison Counsel for the Cross-Respondent: Ms H Rofe QC Solicitor for the Cross-Respondent: Stephens Lawyers & Consultants ORDERS VID 885 of 2017 BETWEEN: INTERPHARMA PTY LTD (ACN 099 877 899) Applicant AND: HOSPIRA, INC First Respondent ORION CORPORATION Second Respondent AND BETWEEN: HOSPIRA, INC (and another named in the Schedule) First Cross-Claimant AND: INTERPHARMA PTY LTD (ACN 099 877 899) Cross-Respondent JUDGE: KENNY J DATE OF ORDER: 11 SEPTEMBER 2017 PENAL NOTICE TO: INTERPHARMA PTY LTD (ACN 099 877 899) IF YOU (being the person bound by this order): (A) Refuse or neglect to do any act within the time specified in this order for the doing of the act; or (B) Disobey the Order by doing an act which the order requires you not to do, You will be liable to imprisonment, sequestration of property or other punishment. Any other person who knows of this order and does anything which helps or permits you to breach the terms of this order may be similarly punished. UPON the cross-claimants jointly and severally undertaking to the Court by their counsel: a. to submit to such order, if any, as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person, whether or not that person is a party to the proceedings, affected by the operation of the order, or undertaking or any continuation, with or without variation of the order or undertaking; and b. to pay the compensation referred to in (a) to the person affected by the operation of the order or undertaking; THE COURT ORDERS THAT: 1. Until the hearing and determination of the application for interlocutory relief set out in the Notice of cross-claim dated 18 August 2017, fixed for hearing on 23 November 2017, the cross-respondent, by itself, its directors, officers, servants, agents or howsoever otherwise, be restrained from engaging or threatening to engage in the following acts within the patent area (as that term is defined in the Patents Act 1990 (Cth)) without the licence or authority of the cross-claimants: (a) making, marketing, selling, supplying or otherwise disposing of any medicament for use in intensive care unit sedation containing dexmedetomidine or a pharmaceutically acceptable salt thereof (Generic Dexmedetomidine Product); (b) offering to make, sell, supply or otherwise dispose of any Generic Dexmedetomidine Product; (c) using or importing any Generic Dexmedetomidine Product; (d) authorising, inducing, procuring or joining in a common design with any other person to do any of the acts referred to in sub-paragraphs (a) to (c) above. 2. Within 3 business days of the making of these orders, the cross-respondent recall, purchase back, or take all other necessary steps to immediately recover, all stock of dexmedetomidine that has been supplied, sold, delivered or transferred to its Australian distributor pursuant to the Tax Invoice dated 31 August 2017 (being Confidential Exhibit DG-9 to the Affidavit of David Gray made 1 September 2017 and marked "Exhibit CR-6") (the Stock). 3. Within 4 business days of the making of these orders, the cross-respondent provide to the cross-claimants an affidavit sworn by an authorised officer of the cross-respondent that identifies all steps taken to comply with Order 2 above. 4. The parties have liberty to apply to the Docket Judge. 5. Unless a party notifies the Court in writing by 4:00 pm on 13 September 2017 that it opposes this order as to costs, the cross-respondent pay the cross-claimants' costs of the application for interim injunction, as agreed or taxed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT KENNY J: INtroduction 1 The cross-claimants, Hospira, Inc (Hospira) and Pfizer Australia Pty Ltd (Pfizer Australia), apply for an interim interlocutory injunction to restrain the cross-respondent, InterPharma Pty Ltd (InterPharma) from, amongst other things, offering to supply and supplying any medicament for use in intensive care unit (ICU) sedation containing dexmedetomidine or a pharmaceutically acceptable salt thereof (the InterPharma Products). 2 The interim injunction is sought up to the hearing and determination of the cross-claimants' claim for interlocutory injunctive relief, which is set down for hearing on 23 November 2017. 3 This application for interim injunctive relief was sought after the cross-claimants had filed their cross-claim on 18 August 2017 and the Court, having initially indicated that their interlocutory injunction application could be heard on 8 September 2017, was obliged to vacate that date and re-schedule the hearing for 23 November 2017. The cross-claimants have made application for an interim injunction, in circumstances where InterPharma: (a) declined to give undertakings sought by the cross-claimants not to supply or offer to supply the InterPharma Products prior to 23 November 2017; (b) declined to give undertakings sought by the cross-claimants not to rely on the change in the hearing date as a reason why the interlocutory injunction should not be granted; and (c) without notice to the cross-claimants commenced offering to supply, or market, the InterPharma Products in Australia. 4 In support of its application for interim injunctive relief, Hospira relies on an affidavit of Nicholas Peter Goodwin affirmed on 6 September 2017, an affidavit of Shyama Usha Jayaswal affirmed on 6 September 2017, an affidavit of Stephen John Munro affirmed on 5 September 2017 and a further affidavit of Nicholas Peter Goodwin affirmed on 8 September 2017. In opposition, InterPharma relies on an affidavit of David Gray sworn on 1 September 2017, an affidavit of Julian Ronald Stephens sworn on 7 September 2017 and an affidavit of Drew Williams affirmed on 8 September 2017. 5 For the reasons set out below, in the circumstances disclosed to the Court on the cross-claimants' present application, I would grant the interim relief sought by them. 6 In their cross-claim, the cross-claimants alleged that, in threatening and continuing to threaten to sell and selling the InterPharma Products, InterPharma will infringe all claims of Australian Patent No 754484 titled "Use of dexmedetomidine for ICU sedation" (the Patent). In its statement of claim, InterPharma has claimed that the Patent is invalid, alleging lack of novelty and inventive step, as well as lack of fair basis and clarity. Invalidity is denied by the opposing parties. 7 Up until 16 August 2017, Hospira and Orion Corporation (Orion) were the patentees of the Patent. For present purposes it may be accepted that, on 17 August 2017, Orion assigned its right, title and interest in the Patent to Hospira and, since that date, Pfizer Australia has been the exclusive licensee of the Patent. The evidence presently before the Court indicated that the cross-claimants, by their predecessors in title, have been marketing their dexmedetomidine product since around 2003. 8 It may also be accepted for present purposes that InterPharma carries on business as an importer and distributor of pharmaceutical products for sale in Australia. legal framework 9 The relevant legal framework and principles regarding the grant of interim injunctive relief were not in dispute: reference was made to Samsung Electronics Co Ltd v Apple Inc [2011] FCAFC 156; 217 FCR 238 at [44]-[48] (Dowsett, Foster and Yates JJ) (Samsung). The following is a brief and necessarily non-exhaustive outline of some of the relevant principles. 10 Before granting interlocutory injunctive relief, a court will have regard to the principles set out in Australian Broadcasting Corporation v O'Neill [2006] HCA 46; 227 CLR 57 at [19] (Gleeson CJ and Crennan J) and [65]-[72] (Gummow and Hayne JJ). These principles also inform the grant of interim injunctive relief, although the temporally-limited nature of that relief should be kept in mind, at least in so far as it may affect the balance of convenience. 11 Before granting the relief sought in this case, the Court must be satisfied that the cross-claimants have a prima facie case such that, if the evidence remains the same, there is a probability that they will succeed at trial; and that the balance of convenience favors the grant of the interim injunction. In considering the balance of convenience, the question is whether the injury that the cross-claimants are likely to suffer if the injunction is refused outweighs the injury the cross-respondent might suffer if the injunction is granted. Also when assessing the balance of convenience, there is a question whether the party seeking the injunction is likely to suffer injury for which damages will not be an adequate remedy. While this question is sometimes treated as a separate and distinct question to that concerning the balance of convenience, the Full Court in Samsung at [63] said that "[t]he interaction between the Court's assessment of the likely harm to the plaintiff, if no injunction is granted, and its assessment of the adequacy of damages as a remedy, will always be an important factor in the Court's determination of where the balance of convenience and justice lies". 12 In determining whether or not to grant the relief sought, it can also be relevant to consider the relative strengths of the cross-claimants' case on infringement and InterPharma's challenge to the validity of the Patent. Prima facie case in the relevant sense? 13 The Patent claims an earliest priority date of 1 April 1998. It was filed on 31 March 1999 and therefore expires on 31 March 2019. 14 Stated very briefly, the Patent relates to the use of dexmedetomidine (or a pharmaceutically acceptable salt thereof) in ICU sedation and the use of that compound in the manufacture of a medicament for ICU sedation. The independent claims of the Patent are: (a) Claim 1: "Use of dexmedetomidine or a pharmaceutically acceptable salt thereof in the manufacture of a medicament for use in intensive care unit sedation"; (b) Claim 13: "A method of sedating a patient in an intensive care unit, wherein said method comprises administering dexmedetomidine or a pharmaceutically acceptable salt thereof to a patient in need thereof"; (c) Claim 15: "A method of sedating an intensive care unit patient, comprising administering a pharmaceutical composition to the patient, wherein the pharmaceutical composition comprises an active agent and an inactive agent, wherein the active agent consists of dexmedetomidine or a pharmaceutically acceptable salt thereof"; and (d) Claim 26: "Use of dexmedetomidine or a pharmaceutically acceptable salt thereof in the intensive care unit sedation". 15 Mr Cordiner QC, for the cross-claimants, submitted, and for present purposes I accept, that claim 1 was in the "Swiss-style" form, since it was in the form: "the use of compound X in/for the manufacture of a medicament for a specified (and new) therapeutic use". As Mr Cordiner submitted, Yates J considered the interpretation of claims in this form in Otsuka Pharmaceutical Co Ltd v Generic Health Pty Ltd (No 4) [2015] FCA 634; 113 IPR 191 (Otsuka) at [100]-[121]. Mr Cordiner submitted, and for present purposes I accept, that claims 13, 15 and 26 are method of treatment claims, as explained by Yates J in Otsuka. 16 The evidence currently before the Court indicates that InterPharma obtained registration on the Australian Register of Therapeutic Goods (ARTG) of various products that contain dexmedetomidine hydrochloride (a pharmaceutically acceptable salt of dexmedetomidine), that were entered in the ARTG on 13 July 2017. The product information for the InterPharma Products states that the drug is indicated for the claimed indication. Subject to issues of validity, having regard to the discussion in Otsuka at [163]-[174], it would appear that the cross-claimants have a prima facie case of infringement of claim 1 such that, if the evidence remains the same, there is a probability that they will succeed at trial. Again, subject to issues of validity, having regard to s 117(1) and (2)(c) of the Patents Act 1990 (Cth) (Patents Act) and that InterPharma threatens to supply the InterPharma Products with instructions (being the Product Information) to use the InterPharma Products, it would also appear that the cross-claimants have a prima facie case of infringement of claims 13, 15 and 26 such that, if the evidence remains the same, there is a probability that they will succeed at trial. There would appear to be a further basis to substantiate infringement of these claims under s 117(1) and (2)(b) of the Patents Act, again subject to issues of validity. 17 On the evidence presently before the Court, I am therefore satisfied that, subject to issues of validity, the cross-claimants have a prima facie case against InterPharma regarding the apprehended infringement of the Patent, such that, if the evidence remains the same, there is a probability that they will succeed at trial. 18 As already mentioned, InterPharma alleges that the Patent is invalid. At the hearing, Ms Rofe QC, for InterPharma, submitted that InterPharma had a strong prima facie case on validity, particularly with respect to lack of novelty. She also outlined briefly the basis of InterPharma's case on lack of fair basis. Notwithstanding Ms Rofe's clear submissions, the evidence presently before the Court does not permit assessment of InterPharma's case on invalidity. 19 For present purposes, I am satisfied that the cross-claimants have met the relevant prima facie case requirement. Balance of convenience 20 On balance, I am satisfied that the balance of convenience favours the grant of interim injunctive relief. 21 First, the grant of this relief would, so it seems to me, best protect the practical status quo until the interlocutory injunction application can be heard in November 2017. The cross-claimants' product, Precedex, was first launched in Australia in around 2003 by a predecessor in title as the sole distributor of dexmedetomidine in Australia. In about 2004, Hospira emerged from the predecessor in title and acquired the rights to promote and sell Precedex in Australia. On the evidence presently before the Court, these rights have continued to be exercised by Hospira and subsequently by both cross-claimants. 22 Accordingly, until very recently, the cross-claimants by their predecessors in title have been the sole distributor of dexmedetomidine in Australia. Further, the Patent has remained registered for some time, without challenge, and has eighteen months to expiry in March 2019. 23 The cross-claimants filed their cross-claim seeking interlocutory (and permanent) injunctions on 18 August 2017. The evidence before the Court indicates that some time prior to 31 August 2017 InterPharma placed an order for the supply of the InterPharma Products with its supplier and that product was supplied on that date to InterPharma in Australia and then sent to InterPharma's distributor. Mr Gray deposes that it was his expectation that the distributor had sufficient quantity of the InterPharma Products to meet market demand for about 5 months. The attention of the cross-claimants was drawn to this development only when they began to receive new pricing requests under contracts with their customers. These requests were apparently triggered by InterPharma's activities in marketing the InterPharma Products. There is no evidence before the Court that there have yet been any sales of the InterPharma Products to customers. 24 In the circumstances, protection of the status quo by interim injunctive relief favors the cross-claimants. 25 Secondly, the evidence before the Court at present shows that the cross-claimants have an established market position in relation to its products, and that market position is likely to be substantially adversely affected by the entry of the InterPharma Products. The evidence currently before the Court is that, if InterPharma continues to market the InterPharma Products, there will be a great deal of commercial pressure on the cross-claimants to drop their price or lose market share to InterPharma. Either outcome would cause them substantial financial loss. 26 I interpolate here that, with respect to this kind of loss, the question arises as to whether damages would be an adequate remedy, as indeed Ms Rofe, for InterPharma, submitted they would. In this connection, Ms Rofe submitted that the cross-claimants would not be irreparably harmed, and damages would be readily calculable (citing Bayer Pharma Aktiengesellschaft v Generic Health Pty Ltd [2017] FCA 250) if an interim injunction were not granted, because the cross-claimants' product has had over 10 years of sales (with them or their predecessors, the sole suppliers), and the Patent would expire in 18 months. In any event, Ms Rofe submitted, there will be entry of generics into the market in 18 months, so InterPharma's entry would only bring forward the discounting that would occur at that time. 27 Although the question of the adequacy of damages as a remedy is not free from doubt, on the evidence and the submissions before the Court, I accept Mr Cordiner's submissions that damages would be very difficult to calculate. This is because the evidence before the Court indicates any assessment of damages would be made in the following circumstances. (a) The cross-claimants' product, Precedex, is a substitutable product, which competes with other significantly less expensive sedation drugs (principally propofol and midazolam) although these drugs do not provide all the advantages of Precedex. (b) Precedex is provided in both a concentrate formulation and a ready-to-use formulation. As the ready-to-use formulation is a relatively recent entrant into the market, the percentage split between the two products is still unsettled.. (c) Notwithstanding that the drug has been on the market since 2003, the market for dexmedetomidine is not "mature" in the sense that it is relatively stable and has predictable growth trends. Rather, although the market volume has been increasing, it has not done so at a consistent rate and has not been steady for a material period of time. (d) The use of Precedex varies across the market, with some hospitals using Precedex widely, and others using Precedex only in certain situations, or not at all. This variable use also reflects the difference in price between Precedex and its main competitors and is also said to reflect various levels of knowledge and levels of acceptance of the benefits of Precedex over its competitors. (e) The entry of InterPharma to the market will significantly disrupt the market in terms of pricing of dexmedetomidine and in terms of overall sales of dexmedetomidine. 28 Furthermore, Mr Munro deposed that the entry of InterPharma into the market would immediately give rise to a contractual right for most of the cross-claimants' customers to renegotiate the price at which they purchase Precedex from the cross-claimants. Once the contractual price was re-negotiated, the cross-claimants would be unable to consider raising the price until the next round of its customers' purchasing decisions, which might not be for a number of years. 29 Also significant in this context is the fact that the evidence before the Court indicates that the cross-claimants may suffer reputational harm should InterPharma enter the market, for which damages would not be an adequate remedy. In his affidavit, Mr Goodwin deposes that, if InterPharma was, after trial, enjoined from marketing and supplying the InterPharma Products, the cross-claimants would be at significant risk of reputational damage were they to raise the price of Precedex to the price at which it was sold before InterPharma entered the market. On the other hand, if the cross-claimants were to maintain the depressed prices after InterPharma was enjoined after trial, its pecuniary loss of profits would be even greater. 30 In assessing the harm to the cross-respondent from granting interim relief, I have borne in mind Ms Rofe's criticism of the cross-claimants' evidence and that, as she submitted, it would be difficult to quantify the damage to InterPharma if an interim injunction were granted, since InterPharma had not entered the market. As Ms Rofe noted, the assessment of the cross-respondent's damages would involve assessing a number of counterfactuals with accompanying uncertainties. Ms Rofe also noted that, if an interim injunction were granted, it was possible that InterPharma would lose its "first mover advantage", and the quantification of the benefit it lost would be difficult. Ms Rofe drew attention to the fact that InterPharma had purchased the InterPharma Products to sell in Australia and, bearing in mind that they had an expiry date, InterPharma would have less time to sell them assuming no injunction were granted after the hearing in November 2017. On balance, however, in the circumstances and on the evidence before the Court, none of these considerations persuade me that the cross-claimants should not have interim injunctive relief. 31 Bearing in mind all the above-mentioned matters and the matters discussed hereafter, I am satisfied that, as best I can determine now on the evidence before the Court, the injury that cross-claimants are likely to suffer if interim injunctive relief is refused outweighs the injury the cross-respondent might suffer if that relief is granted. 32 Before considering the final two matters raised by the parties, I observe that both the cross-claimants and the cross-respondent referred to the public interest. Ms Rofe asserted that there was a public interest in hospitals being able to purchase dexmedetomidine products at a reduced price. The cross-claimants, on the other hand, placed some evidence before the Court that they would no longer invest in clinical trials of the drug and market education as to its benefits. In the end, these considerations, though important in other contexts, were not central to the cases that the parties sought to make. 33 The last two matters raised by the parties were InterPharma's failure to "clear the way" and the advantage that might be secured by the cross-claimants if they had the benefit of interim injunctive relief. 34 There was some evidence before the Court that InterPharma must have filed its application to the ARTG to market the relevant drug at least 12 months before its ARTG listing was published. It may be inferred, therefore, that it had an intention to enter the market at least 12 months before the ARTG listing was published. As already stated, the cross-claimants first learnt of InterPharma's products shortly after they were registered on the ARTG on 13 July 2017. InterPharma did not commence proceedings alleging the Patent's invalidity until 8 August 2017. It is, I accept, on the present state of the evidence unlikely that InterPharma began the process of applying to register the drug on the ARTG without being aware of the Patent. InterPharma, it may be accepted, took no steps to "clear the way" before launching the InterPharma Products. 35 This is, as Ms Rofe acknowledged, one factor to be considered with other factors and, although not determinative, it is a factor that militates against InterPharma to an extent (acknowledging that there are many reasons why a company may not commence proceedings in the years before entering the market). 36 The final matter that led to the filing of two affidavits following the hearing was whether the cross-claimants would use the period of the interim injunction to transition its customers to the ready-to-use form of dexmedetomidine by restricting provision of the product in concentrate form, and encouraging its customers to purchase only the ready-to-use product. At the hearing, Ms Rofe submitted that InterPharma had a real concern that the cross-claimants would take advantage of the opportunity afforded by an interim interlocutory injunction to act in this way. Ms Rofe stated that the concern of InterPharma was that it had only obtained registration from the ARTG for the concentrate form of dexmedetomidine, did not have registration of the ready-to-use form, and that the cross-claimants would seek to shrink the market for concentrate by transitioning their customers to the ready-to-use form. 37 The cross-claimants requested and were given leave to file a further affidavit of Nicholas Peter Goodwin affirmed on 8 September 2017, responding to these submissions. InterPharma later sought and was granted leave to file the affidavit of Drew Williams affirmed on 8 September 2017, in response. 38 In his affidavit of 8 September 2017, Mr Goodwin deposed that the cross-claimants intend to continue to supply both concentrate and ready-to-use dexmedetomidine products, and that they are not trying to convert the market to the ready-to-use product. He deposed that preferences as to those products differ between medical practitioners, and that the employees with whom he works are aware of the need and desire for both forms of the product. 39 Mr Williams deposed that he had had discussions with hospital pharmacy customers since 1 September 2017 in a number of States, and in those discussions he was informed that Pfizer Australia had been out of the concentrate form of Precedex, and that those customers had purchased the ready-to-use form. Annexed to Mr Williams' affidavit was a copy of a notification published on the HPS website, indicating that in December 2016 Pfizer Australia was experiencing a supply constraint on the concentrate form of Precedex, but that the ready-to-use form was still available. The notification indicated that Pfizer Australia expected distribution to be constrained until early March 2017. Mr Williams further deposed that since approximately April or May 2017 he has been aware that the ready-to-use form of Precedex has been available at a price approximately 10% below that of the concentrate form. 40 For present purposes, I accept that the cross-claimants could seek to transition their customers from the concentrate product to the ready-to-use product. There is, however, no reason to disbelieve Mr Goodwin's statement that Pfizer Australia will continue to supply both forms of the product and that the supply of these forms will continue to be affected by the preferences of medical practitioners. This is consistent with Mr Goodwin's earlier affidavit evidence. Taking Mr Williams' evidence at its highest (and leaving aside any issues that might be raised with respect to his evidence), it does not seem to me that his evidence necessitates the rejection of Mr Goodwin's further affidavit evidence; and nor would it lead me to a contrary conclusion about the grant of interim interlocutory relief. Disposition 41 The cross-claimants submitted, and I accept, that there had been no relevant delay on their part that would tell against the grant of interim interlocutory relief. For the reasons stated, I would grant this relief. 42 The cross-claimants indicated by their counsel that they would give the usual undertaking as to damages. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. Associate: Dated: 11 September 2017 SCHEDULE OF PARTIES VID 885 of 2017 Cross-Claimants Second Cross-Claimant: PFIZER AUSTRALIA PTY LTD	6,314
federal_court_of_australia:fca/single/2007/2007fca0070	decision	commonwealth	federal_court_of_australia	text/html	2007-02-08 00:00:00	Knight v Beyond Properties Pty Ltd [2007] FCA 70	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2007/2007fca0070	2024-09-13T22:45:07.044321+10:00	FEDERAL COURT OF AUSTRALIA Knight v Beyond Properties Pty Ltd [2007] FCA 70 INTELLECTUAL PROPERTY – Passing Off – Misleading or Deceptive Conduct – Whether reputation in jurisdiction– Whether real possibility of deception – Descriptive name – Distinctive secondary meaning required – Attributes of class or classes to whom representation made – Relevance of erroneous assumption – Doctrine of instruments of deception. Copyright Act 1968 (Cth) s44A. Trade Marks Act 1955 (Cth) Trade Practices Act 1974 (Cth) s 52. Angelides v James Stedman Hendersons Sweets Ltd (1927) 40 CLR 43 Australian Woollen Mills Ltd v F S Walton & Co Ltd (1937) 58 CLR 641 British Telecommunications plc v One in a Million Ltd (1998) 42 IPR 289 Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd (1980) 55 ALJR 333 Campomar Sociedad, Limitada v Nike International Limited (2000) 202 CLR 45 Colbeam Palmer Ltd v Stock Affiliates Pty Ltd (1968) 122 CLR 25 Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 Douglas Pharmaceuticals Ltd v Nutripharm New Zealand Ltd(1997) 42 IPR 407 Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 Knight v Beyond Properties Pty Ltd (No 2) [2006] FCA 192 Knight v Beyond Properties Pty Ltd (No 3) [2006] FCA 193 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 Turner v General Motors (Australia) Pty Ltd (1929) 42 CLR 352 ANDREW KNIGHT v BEYOND PROPERTIES PTY LTD, BEYOND INTERNATIONAL LTD, DISCOVERY COMMUNICATIONS INC, THE SPECIAL BROADCASTING SERVICE CORPORATION, FOXTEL MANAGEMENT PTY LTD AND BEYOND PRODUCTIONS PTY LTD NSD 131 OF 2005 BUCHANAN J 8 fEBRUARY 2007 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 131 OF 2005 BETWEEN: ANDREW KNIGHT Applicant/Cross Respondent AND: BEYOND PROPERTIES PTY LTD First Respondent/First Cross-Claimant BEYOND INTERNATIONAL LTD Second Respondent/Second Cross-Claimant DISCOVERY COMMUNICATIONS INC Third Respondent THE SPECIAL BROADCASTING SERVICE CORPORATION Fourth Respondent FOXTEL MANAGEMENT PTY LTD Fifth Respondent BEYOND PRODUCTIONS PTY LTD Sixth Respondent JUDGE: BUCHANAN J DATE OF ORDER: 8 February 2007 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application is dismissed. 2. The cross-claim is dismissed. 3. The applicant pay the respondents' costs in relation to the application as agreed or taxed. 4. The first and second respondents pay the applicant's costs in relation to the cross-claim as agreed or taxed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 131 OF 2005 BETWEEN: ANDREW KNIGHT Applicant /Cross Respondent AND: BEYOND PROPERTIES PTY LTD First Respondent/First Cross-Claimant BEYOND INTERNATIONAL LTD Second Respondent/Second Cross-Claimant DISCOVERY COMMUNICATIONS INC Third Respondent THE SPECIAL BROADCASTING SERVICE CORPORATION Fourth Respondent FOXTEL MANAGEMENT PTY LTD Fifth Respondent BEYOND PRODUCTIONS PTY LTD Sixth Respondent JUDGE: BUCHANAN J DATE: 8 February 2007 PLACE: SYDNEY REASONS FOR JUDGMENT BUCHANAN J: Introductory Matters Nature of the Proceedings 1 This case concerns alleged contraventions of s 52 of the Trade Practices Act 1974 (Cth) ('the TP Act') and commission of the tort of passing-off. 2 The contraventions and tortious conduct are said to be constituted by the production and distribution of a series of TV programs entitled 'Mythbusters' ('the Mythbusters TV show') and three books ('the spin-off books'). The spin-off books were brought into existence as a result of the popularity of the Mythbusters TV show. They contain written and pictorial representations of the content of various episodes of the Mythbusters TV show. The spin-off books are entitled, respectively: Mythbusters: The Explosive Truth Behind 30 of the Most Perplexing Urban Legends of All Time, Mythbusters: Don't Try This at Home, and Busted. 3 The first, second and sixth respondents ('Beyond' or 'the Beyond interests') are members of the 'Beyond' group of Australian companies which produced the Mythbusters TV show. 4 The third respondent (Discovery Channel) is the American corporation to whom the Mythbusters TV show was sold by Beyond. It distributed the TV show initially in the USA and later in Australia. 5 I shall describe the development of the Mythbusters TV show and its sale to Discovery Channel in due course. For the moment it is sufficient to say that Discovery Channel accepted the concept for the show in about October 2001. The show went into production in June 2002 and was first screened on TV in the USA on 23 January 2003. 6 The fourth and fifth respondents (SBS and Foxtel) are Australian corporations which have screened the Mythbusters TV show in Australia. Foxtel first screened the Mythbusters TV show on pay television in Australia on 27 September 2004. SBS did so, on free-to-air television, on 3 January 2005. 7 The applicant, Andrew Knight is also known as Bowvayne, or sometimes simply as Bow. He is, amongst other things, an author of children's books. He claims the right to the name 'Mythbusters' as a result of his own use of it in various of his books and in other ways. 8 Mr Knight alleges that the respondents have, by their conduct, misrepresented that the Mythbusters TV show and the 'spin-off' books are in some way endorsed by or connected with him ('the misrepresentation'), and that he has suffered loss and damage as a result. 9 Three of Mr Knight's books have the word 'Mythbusters' in their title ('the Mythbusters books'). They are: Mythbusters: First Cases; Mythbusters: Nutcases; and Mythbusters: Real-Life Adventures in the World of the Supernatural. They were published in 1991, 1993 and 1996 by Dynatron Productions, Elfshot Productions and Puffin Books respectively (it became clear from the evidence that the first two books were really self-published by Mr Knight). 10 Mr Knight is the self-styled leader of the 'Mythbusters team' an eclectic group who pursue mystery, myths, ghosts and goblins to various parts of the world. Typical of Mr Knight's promotion (in a 1993 letter) of the Mythbusters team is the following: 'The Mythbusters are a wacky team who travel the world looking for monsters, ghosts, UFOs, buried treasures and things that go bump in the night. They are in the grand English literary tradition of jolly children who have lots of scrapes and see extraordinary things. But the Mythbusters are real and they're grown men who don't have to be home in time for tea. And extraordinary things they have seen: A monster lurking in a British seaside resort, fantastically coloured UFOs in Czechoslovakia's Carpathian mountains … and that's just for starters.' 11 Mr Knight had plans for the production of his own TV series, identically entitled 'Mythbusters'. He feels greatly aggrieved by the entry to the TV market of a show with what he regards as his name 'Mythbusters'. 12 Over the period from about 1993 Mr Knight made a series of efforts, in the UK and in Australia, personally and through others, to interest a TV broadcaster or production house in the development of a TV series, featuring himself and his Mythbusters team, using material and stories of the kind in his books. None of his efforts, or those on his behalf, resulted in any agreement to fund the production of such a series. 13 One of the production houses to whom an approach was made was Beyond. That fact, and certain other circumstances that I shall discuss, provided the foundation for an allegation by Mr Knight that his ideas for a TV series had been taken by Beyond and used to its own advantage. 14 Despite Mr Knight's ambitions for his own TV show, his belief that the name Mythbusters was his commercial property and the fact that in about 2000 he both registered it as a business name in South Australia and obtained the domain name 'mythbusters.com.au' (both of which registrations were allowed to lapse in 2003) he did not, prior to the events which led to this case, make any application to register 'Mythbusters' as a trade mark. Accordingly, he does not have available to him, in the present proceedings, the statutory protection provided by the Trade Marks Act 1955 (Cth). Some Issues of Principle 15 The essence of the tort of passing-off is a wrongful representation, usually implied by conduct, of a non-existent association with the plaintiff. The plaintiff must thereby be damaged to secure an effective remedy. 16 No actionable misrepresentation can occur unless the plaintiff has a relevant reputation in the jurisdiction (Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302) ('Conagra'). Reputation may be established in advance of actually trading in the jurisdiction (e.g. by advertising or declaration of intent to trade) but a sufficient reputation to establish likelihood of damage, as a matter of fact, must be shown (Conagra 33 FCR per Lockhart J at 343). 17 The date at which reputation is to be assessed is the date upon which the impugned conduct commenced (Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd (1980) 55 ALJR 333 at 338). 18 In an action for contravention of s 52 of the TP Act, assuming that the other elements of the case are proved, actual damage to the plaintiff or applicant need not be established. It is sufficient to show misleading or deceptive conduct, or conduct that is likely to mislead or deceive. 19 In a case, such as the present, where both causes of action are founded on the same allegations, there will be little occasion to make a distinction between them, unless damage cannot be shown. 20 Where the case is not one about direct representations to identified persons evaluation of the conduct alleged to constitute a misrepresentation, and be misleading and deceptive, requires identification of a class of persons to whom the representation is made, some objective attribution of characteristics to the 'ordinary' or 'reasonable' members of that class and evaluation of the quality of impugned conduct by reference to the likely reactions of the members of the class thereby established (Campomar Sociedad, Limitada v Nike International Limited (2000) 202 CLR 45 ('Campomar'). 21 In such a case the Court should itself make the necessary evaluation. The test is an objective one (Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 ('Taco Bell') per Deane and Fitzgerald JJ at 202; Camponar 202 CLRat [102]). 22 When evidence is relied upon to suggest that identified persons within the class have actually been misled it is necessary to inquire why any misconception has arisen so that a determination may be made whether it is due to misleading or deceptive conduct on the part of a respondent or for some other reason (Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 ('Hornsby Building Information Centre') per Stephen J at 228; Taco Bell 42 ALR at 202-3; Campomar 202 CLRat [98]). Separating the Causes of Action 23 The misrepresentation, and misleading and deceptive conduct, alleged in the present case are said to arise by implication from the conduct of the respondents in producing, distributing and screening the Mythbusters TV show and publishing, or permitting the publication of, the spin-off books. At the time the Mythbusters TV show was first screened in Australia by either Foxtel or SBS the spin-off books had not been published. The causes of action relating to the spin-off books were added by amendment to the Statement of Claim during the course of the proceedings, and require separate consideration. Accordingly, when I come to discuss the competing cases in more detail, I will deal first with the misrepresentation alleged to have been made by the screening of the Mythbusters TV show. I shall later deal separately with the spin-off books in their own right. Two Groups of TV Consumers 24 Mr Knight proceeds upon a Further Amended Statement of Claim filed on 27 September 2006. The Further Amended Statement of Claim does not, and nor did any of its predecessors, identify any particular group to whom a relevant misrepresentation is alleged to have been made. 25 It is not contended that Mr Knight's case is made out by reference to direct representations made by the respondents to identified persons. It is therefore necessary to identify a class (or classes) of persons to whom the representations were alleged to have been made before evaluating the content and quality of the suggested representations, the reliability of the implication relied upon and the likely effect of the representations upon members of the identified class. 26 The case concerning the Mythbusters TV show, as developed by the evidence and submissions, was not limited to members of the general television viewing audience. When Mr Knight's case was opened, Ms Chrysanthou advanced a contention that the persons to whom the misrepresentation was made were not limited to those who might watch the Mythbusters TV show as ordinary consumers. There was, it was argued, a second group made up of 'trade' consumers. 27 In final written submissions she identified the two groups as follows: '24. The first group is the ordinary consumer who watches television and/or reads books. 25. The second group comprises members of the television and book publishing trade.' 28 The first group is too widely defined for my immediate purposes because, as I have said, I propose first to consider the Mythbusters TV show. In that context the essential attribute of members of the relevant class is that they watch television. Accordingly, I will describe the first group as 'members of the television viewing public' 29 The second group is also too widely defined, partly for the same reason and also because the term 'television trade' is too general for present purposes. Later in her written submissions, Ms Chrysanthou submitted: 'The evidence reflects the extent of the reputation of the Applicant's MYTHBUSTERS television series among Australian television executives and organisations and shows that the Applicant's MYTHBUSTERS reputation is significant and widespread, particularly given that the Australian television market is relatively small.' (Emphasis added) 30 In my view this submission yields a more accurate and satisfactory description of the second group which was relied upon in the evidence and submissions. I shall describe this group as 'TV broadcasters and television production executives'. It includes the television broadcasting stations which might purchase a TV show or series and the executives of both the broadcasting stations and also the production houses which develop and market such shows or series. 31 Because there are two groups of persons to whom the misrepresentation is alleged to have been made by the Mythbusters TV show, and their characteristics differ, it will be necessary, to some extent, to deal with them separately. In particular, different issues arise concerning reputation and the likelihood of deception. The Respondents' Defence 32 The respondents' answer to Mr Knight's overall case is fairly straightforward. To begin with, although accepting that Mr Knight has some reputation as an author of children's books they deny that he has any demonstrated reputation in Australia amongst members of the television viewing public. The absence of reputation, it is contended, renders unnecessary any enquiry concerning deception so far as this group is concerned. Secondly they say that, in any event, no deception of this group was established or should be inferred. 33 As to TV broadcasters and television production executives who are potential purchasers of Mr Knight's intended TV series the respondents say members of this group would never be deceived into thinking the Mythbusters TV show was associated with Mr Knight because the rigour of the scrutiny required for any planned TV series would necessarily dispel any misconception or assumption which could conceivably arise from the use of the name 'Mythbusters'. 34 The respondents make a further answer also. They contend that the name Mythbusters is descriptive – it is a catchy description of the content of the Mythbusters TV show. By way of support for this contention they point to the evidence, which I shall later describe, about how the name 'Mythbusters' came to be adopted for the Mythbusters TV show. This evidence, it is contended, makes good their proposition that the name is, and was chosen because it is, essentially descriptive of the content and style of the Mythbusters TV show itself. In those circumstances, and in the absence of any statutory protection, it is necessary for Mr Knight to establish, they say, that the word 'Mythbusters' has acquired a secondary meaning which is distinctive of his endeavours. They deny that this has happened. 35 So far as the spin-off books are concerned the respondents argue that the books are really incapable of being confused with Mr Knight's books. They are, by their style and content, so clearly and distinctively reflections of the Mythbusters TV show that no possibility for confusion, much less deception, in the minds of those who might purchase such books, can arise. 36 It is accepted that publication of the third spin-off book can be attributed to Beyond interests but they point out that the first and second spin-off books are not sold, published, or licensed for publication, in Australia by any of the respondents. They were brought into Australia for sale by other interests as permitted by s 44A of the Copyright Act 1968 (Cth). Such conduct the respondents say, if it is relevant at all, is not to be laid at their door. Allegations of Intentional Deception 37 Mr Knight's case was opened and closed with contentions that not only was there deception of relevant classes of persons but the deception was intentional. In effect his allegation was that the name 'Mythbusters' was deliberately appropriated by Beyond who had been put into possession of it, as an effective title for a TV series, by associates of Mr Knight during their endeavours to promote his plans for his own TV series. 38 Although it will be necessary to deal with this issue, at one level it represents a distraction from the real issues in the case. This is not a case where the outcome could turn ultimately upon the subjective position taken by the parties or the intentional misappropriation of the name 'Mythbusters', if that were established. The issues in the present case about the Mythbusters TV show must necessarily be resolved by a more objective examination of the effect of the respondents' conduct in producing, distributing and screening the Mythbusters TV show upon the likely perceptions of the two groups identified. Concentration upon allegations of intent risks masking the real issue for examination which is whether a conclusion should be reached that the use of the name 'Mythbusters' was in fact likely to deceive relevant consumers and as a result cause damage to Mr Knight's business, goodwill or reputation. Mr Knight's Books, Television Aspirations and other matters 39 It was emphasised by Mr Knight's counsel that no attempt had been made to demonstrate all aspects of his public life (e.g. as a musician) or to show the extent of those parts of his work that might evidence his general reputation internationally (e.g. book translations and sales in many other parts of the world). I accept that this is so, but that is no doubt because such matters are not relevant to his present causes of action. Mr Knight's Books 40 Mr Knight gave evidence that under the nom-de-plume Bowvayne he has written (or co-written) the following books: a) The Forbidden Jewel(1987); b) All Manner of Magic (1990); c) Mythbusters: First Cases (1991); d) Liar Bird; e) One Joke Too Many; f) Superstickous; g) Treasure Map; h) Mythbusters: Nut Cases (1993); i) Creative Sparkle (1996); j) J Monster Store; k) Mythbusters: Real Life Adventures in the World of the Superanatural (1996); l) Skin Deep (1997); m) A Turn in the Grave (2004); and n) A Spell Behind Bars (2004). (I have emphasised the Mythbusters books, which are those relevant for the present proceedings.) 41 The Mythbusters books may, in my view, fairly be described as children's books. They are also properly viewed as works of fiction and the first Mythbusters book in fact describes itself as a novel in the 'About the Authors' section. The themes with which they deal are based in fantasy. 42 The first Mythbusters book was co-authored with Chris Strange. It contains three stories: The Pier Marine Monster, The Hamadryads and Clapham Wood. The authors place themselves at the centre of the stories. The first story concerns what is suggested to be 'an extremely rare species of dinosaur' which, after detection at Worthing Pier eventually 'sinks into the night-ocean like a stone'. 43 The second involves UFOs in the Carpathian mountains near the Czechoslovakian/Polish border. The authors say, as the story concludes when they are saved from 'Bald Egg' and 'Voijta',two murderous Czech's: 'The hamadryads are an intriguing link between the old folktales of the faeries and the space-age extra-terrestrials. It is not inconceivable that these two well-known phenomena are one and the same thing. These hamadryads have apparently harnessed the elemental forces and use them like "travel machines". Is this something our scientists could learn from?' 44 The third story involves strange happenings in Clapham Wood – attributed to a 'Clapparitian' which 'must exist in a different dimension from the one we live in. No creature in human experience can be so small and so large at the same time'. 45 The second Mythbusters book also contains three stories: The Ghost and the Graveyard, The Roc and Clapham Wood Revisited. 46 The third Mythbusters book, published by Puffin, republishes three of the earlier stories (Clapham Wood, The Ghost and the Graveyard and The Roc) and adds a fourth – Bunyips and Big Cats. 47 These three books represent, in Australia at least, the most public use of the term Mythbusters by Mr Knight. It is primarily on them that his reputation in Australia depends, directly or indirectly. Television Appearances 48 Mr Knight claims use of the name Mythbusters from 1988 in the UK as a result of television appearances. 49 In 1988 he appeared on a TV program in the UK called 'Coast to Coast'. Thereafter he appeared on the same program in 1991 and 1992 and on (UK) Channel 4's 'The Big Breakfast' in 1993 and 1996. 50 I was asked to, and did, view relevant excerpts from the 1988 'Coast to Coast' program and the 1993 'Big Breakfast' program. The first excerpt was a short interview of about three minutes. Mr Knight was interviewed as a 'personality' in keeping with the apparent light entertainment genre of this program. The 'Big Breakfast' show excerpt, five years later, also appeared to be a piece of light entertainment with imaginary or contrived 'mythbusting equipment' being used to detect a 'spectral wolf'. 51 Mr Knight also made television appearances in Australia. He appeared on 'The Today Show' with Liz Hayes in 1991, 'Adelaide Today' with Jan Beazleyin 1991 and 1995, on Foxtel's 'Klub House' in 1996 and on 'AM Adelaide' in 1997. The principal purpose of these interviews appears to have been the promotion of his books but he also relies on them in their own right to show that he had a reputation in Australia and was to some extent in the public eye. Other Examples of Mr Knight's Public Profile 52 Mr Knight is also a musician. In 1992 he held a concert in the UK called 'Mythbusters and Friends Concert'. I know little about it except that tickets to the concert on 18 May 1992 cost Ł5 each. 53 There are in evidence in Mr Knight's case a series of newspaper articles published about him in the United Kingdom between 1988 and 1996. They relate to Mr Knight as a personality and to his literary efforts. 54 Reference was made in his case also to newspaper articles or references to him in Australia between 1991 and 2004 (of 14 such articles 8 were in the Advertiser in Adelaide where he resides a large part of his time). His books were promoted on radio (principally in 1995) and in 1996 the third Mythbusters book was promoted by its distribution to a range of magazines, radio stations, newspapers and journalists. 55 Mr Knight made a 'live' appearance at the Royal Adelaide Show in 1999, talked about his "experiences as a Mythbuster" and donated some books for sale for the benefit of The Spastic Centres. He gave talks at Australian schools in 1991, 1996 and 2000. In 2000 and 2003 he donated books to the Women's and Children's Hospital in Adelaide to be sold for fundraising purposes. 56 In 2000 students at LoretoCollege in Adelaide had a private screening of a demonstration video made the previous year which was intended to serve as a vehicle for promoting his ideas for a TV show, about which more is said in the following section. This video is available on Mr Knight's web site but has not been shown on television. Efforts to Develop a TV Show 57 In 1993 Mr Knight's UK agent, Ms Macdougall, tried to interest the BBC in the idea of presenting the Mythbusters team led by Mr Knight in some role on television. She also suggested he was in negotiations towards a television series. (It might be noted in passing that although the first Mythbusters book bears a 1991 copyright date, she said it was to be published in the UK in mid-1993.) Her letter reads: '7th June 1993 Paul Smith Producer Children's BBC Television Centre Wood Lane London W12 7RJ Dear Paul Smith I wonder if you can find a home on Children's TV for The Mythbusters – a team of wonderfully creative, wacky, enthusiastic and personable British eccentrics who spend large amounts of time loaded down with equipment in dark woods, windswept beaches and eerie houses. Mythbusters Bowvayne and Digwood would be happy to come to your studio in their mythbusting gear to tell you about their extraordinary work (their next big project is to track down a surviving woolly mammoth in Tibet). Or they could take a team mythbusting – there must be a White City Will-o'-the-Wisp they could investigate. Their first few adventures are recorded in MYTHBUSTERS: First Cases, which will be published on 8th July (copy enclosed). MYTHBUSTERS: Nut Cases will follow in November to coincide with the release of the Mythbusters' theme song – a television series is under negotiation for 1994. I do hope this idea catches your imagination and look forward to hearing from you. With best wishes, Beth Macdougall For Midas Public Relations …' 58 The suggestion that 'a television series is under negotiation for 1994' puts the matter rather too highly but an optimistic tone about such matters appears to be expected, or at least accepted, in the entertainment business. This was not the only example of such material. It is one of a number of suggestions in various letters written on his behalf that television programs were under active development or even in production. The evidence before me suggests that was not the case. 59 Evidently, material with ideas for a television program was sent to BBC Television in early 1994 because Mr Eric Rowan, Executive Producer, Children's Factual Programmes for BBC Television wrote to Mr Knight on 6 April 1994 saying (in part): 'Thank you for sending your programme idea "Mythbusters". As I've explained to Michaela Strachan I have received other ideas broadly along similar lines. Clearly it has potential but I feel it would need a considerable amount of further development before we could feel really confident with it.' 60 Mr Knight responded quickly. His letter of 12 April 1994 begins: 'Thank you for your positive initial response to the Mythbusters TV series. I hope we can transform its potential into exciting television. What makes Mythbusters unique is that we will actually capture monsters and ghosts on screen!' 61 The letter concludes: 'Incidentally, an Australian television company is very excited about Mythbusters' potential and I am flying down there to meet them next month.' 62 During 1994 Mr Knight engaged in negotiations with a UK production company, Kick Screen Limited ('Kick Screen'). The idea of a television program was included in the matters under discussion. In a letter dated 21 June 1994, Mr Ian Llande from Kick Screen made a proposal to him that he make an agreement in general terms which included the following: 'Andrew Knight under the name of Bowvayne hereby confirms his consent for Kick Screen Ltd to develop and adapt his books "Mythbusters – Suit Cases" [sic] and other books written or to be written within the Mythbuster Book Series for the purposes of a proposed live action series of 13 x 30 minute episode.' 63 The generality of the proposal made it unattractive to Mr Knight who replied on 6 July 1994 saying: 'Thank you for your letter of intent dated the 21st June. In response I have to say that I could not possibly sign or agree to any proposal set in such general terms.' 64 Negotiations continued around the possibility of the grant of an option but without agreement being reached. Nevertheless Mr Llande promoted the idea of a television series to various people in the UK and Australia. 65 Mr Llande gave affidavit evidence in the proceedings. He confirmed the negotiations. He also deposed to promoting the idea of a Mythbusters television series with David Cowperthwaite (the Group Marketing and Sales Director of Channel 9 Australia) and Teresa Plummer-Andrews (Head of Children's Acquisition and Development at the BBC) at an international conference in 1994. They were each given a small brochure entitled 'Mythbusters – The Adventure Continues! – an idea for a television series based on the books by Bowvayne' and subtitled 'Mythbusters – 13 x 26 minute series for children's television'. 66 This brochure includes a woolly mammoth logo incorporating the name 'Mythbusters', all of which is pictorially represented upon the form of key. Kick Screen's use of these devices in connection with its plans to market Mr Knight's ideas for a television series appears to have led to some discussion about who might be entitled to claim any rights in the designs. Consideration of that matter led to a letter of advice from one of Mr Knight's advisers in the UK, Mr Roger Palmer, to his agent, Ms Beth Macdougall dated 29 March 1994 in which the similarities and dissimilarities between the Kick Screen devices and those used in the Mythbusters books were discussed. The letter includes the following passage: As we discussed before, registering Mythbusters is probably the only way to protect the title. However it is not a cheap option – at least if carried out on a reasonably widespread basis. I would suggest that the moment has not yet come to do it – at least on the strength of this; though if Bowvayne does want to register it and you would like to do so through me I will of course be happy to help.' 67 Mr Knight, in his oral evidence before me, expressed regret that he had not been advised to take a different course with respect to registration of the 'Mythbusters' name. Prior to the occurrence of the matters that led to the present proceedings there is no evidence of any further consideration being given, either in the UK or Australia, to seeking registration of the name 'Mythbusters' as a trademark. 68 At about this time, 1994, the idea for a television production appeared to concentrate on the idea of a co-production with the BBC. At one stage thought was given to a co-production between the BBC and Mr Cowperthwaite's Banksia Productions in Australia, at another time between the BBC and Nickelodeon in the UK. However, none of the initiatives resulted in any agreement. 69 Things seemed more positive in April 1996. Tanya Seven wrote, on behalf of Martin Hughes, Senior Producer, BBC Children's Comedy: 'Many thanks for your package of 3rd March. May I first apologise for the long delay in replying. I have been very tied up with the series Out of Tune which had its run extended at amazingly short notice! I think this treatment reads well, although perhaps a little 'formal' in places. The budget too looks extremely competitive. Can you really do it for this price? We are currently compiling our 1996/97 offers and I would be keen to include Mythbusters in this. My deadline is 15 April, and for this I would be keen to know how far you have progressed with Nickleodeon [sic], and whether they are considering this as a co-production. (A contact name there would be useful too). I know its terribly short notice, but I would be grateful if you could let me have this information by the end of the week. (Please note our new fax number is: 0181 225 7916) I look forward to hearing from you … Yours sincerely, pp Tanya Seven Martin Hughes Senior Producer Children's Comedy' However, this too came to nothing. 70 Later, negotiations began with the South Australian Film Corporation and an Australian production company, Rising Sun Pictures. Then, in 1997 it appeared that negotiations began in earnest with Mr Robert George of Bluestone Pictures Pty Ltd ('Bluestone Pictures'), another Australian production company. Bluestone Pictures was the corporate vehicle for a network of six successful Australian television producers. 71 There was discussion around this time between Mr Palmer, Mr Knight's agent Ms Macdougall and Bluestone Pictures about the extent to which Kick Screen might have a residual claim on any right to promote the idea of a TV series. Ms Macdougall wrote to Jane Ballantyne of Bluestone Pictures on 20 March 1997 saying, amongst other things: 'I have had a long conversation with Ian Llande and he has been frank about the situation. He concedes that the Kickscreen [sic] deal is in limbo and accepts the fact that Bow will need to go elsewhere to get Mythbusters to the screen.' 72 However, the arrangements with Bluestone Pictures did not come to fruition. Part of the reason appeared to revolve around differences in artistic and commercial priorities between Mr George and Mr Knight. Mr George thought any realistic project depended upon funding being available in response to favourable taxation treatment for the production of children's television programs, in particular children's drama. In order to qualify for these taxation arrangements certain conditions had to be met, both with respect to the storyline and by having children as the primary characters. Application of these conditions would have required Mr Knight to move substantially away from his own Mythbusters concept which involved him and other members of the Mythbusters team in their own dramatised escapades. Mr Knight's formula was designed to appeal to children, and it may be assumed that it did, at least so far as his books are concerned, but it did not meet the test required for the production of children's drama of the category which interested Mr George. 73 There were some other differences of opinion also. Mr George felt that the storylines were undeveloped. Mr Knight for his part had reservations about providing more detail or literary input without a commercial arrangement being reached. The rights and wrongs of the situation do not matter. In the end no agreement was reached and Mr Knight and Mr George went their separate ways. However there is no reason to doubt that the concept, at least with some development along the lines suggested by Mr George, had commercial potential. 74 Mr Knight turned his attention to marketing his ideas for a television series directly to Australian television channels. Accordingly he wrote on 24 July 1997 to Mr David Lyle, Program Development Director of the Nine Network Australia. 75 The letter said, in part: 'Although the novels are aimed at the 10+ children's market, the proposed television series would be for anyone interested in the unexplained. It would be magazine-style format with an "on-the-hoof" feel. Possessing both the real-life drama of "Real TV", and the supernatural intrigue of "The X-Files", "Mythbusters" unique twist lies in the revelations each show. We're not going to muck around. We're actually going to film ghosts, monsters and UFOs. Exhaustive research over the past decade means we have a lot of prime locations both in Australia and worldwide where "things happen".' 76 Channel 9's programming schedule, Mr Lyle replied, could not accommodate the proposal. The idea was 'pitched' to Ms Tamara Burnstock and Ms Virginia Lumsden at the ABC but without success. A company called Beach Street Productions followed up with the ABC on Mr Knight's behalf but also without a positive response. Mr Williams of Beach Street Productions told Mr Knight that he had endeavoured to interest Channel 10 in the project. This also did not lead to any ongoing interest. Mr Williams approached Mr Lyle again with the project. The approach was unsuccessful. 77 On 11 July 1998 Ms Macdougall wrote, on Mr Knight's behalf to both Ms Theresa Plummer-Andrews of BBC Children's Television and Ms Janie Grace, Managing Director of Nickelodeon, seeking to rekindle interest. The letters suggest that a 'proposal and costings have now been accepted by Channel 10 Australia on the condition that matching funding can be found from overseas'. 78 Again, nothing came from this approach. Apparently, a further approach was made on Mr Knight's behalf to the BBC in 2003 but, again, without success. The Approach to Beyond 79 In November 1998 Mr Knight entered into a partnership with Mr Bruce Harley to co-write any further Mythbuster novels and the scripts for any TV series. Mr Harley became involved in the attempts to find an interested producer. He apparently contacted and sent material to a number of broadcasters and to XYZ Entertainment Pty Ltd ('XYZ Entertainment'). There is no doubt he also contacted Beyond although there is a dispute about whether he sent any material to Beyond. 80 There is documentary evidence of the approaches to XYZ Entertainment and Beyond. However, it consists only of letters from each of them to Mr Harley dated 28 January 1999 and 29 January 1999 respectively. 81 The letter from XYZ Entertainment was as follows: 'Dear Bruce, Re: Mythbusters All the best with pushing this project and your others forward. Here's the material returned as promised on [sic] our phone call today. Keep me posted on how things are going and if you ever want to have a bit of a chat about some projects you're trying to develop with people please feel welcome to give me a call. Ian Fairweather Executive Producer Drama' (Emphasis added) It is clear from the terms of this letter that Mr Harley had sent some material to XYZ Entertainment and that it was returned to him but exactly what was sent and returned is not identified. 82 Mr Knight's evidence was that the material sent in late 1998 / early 1999 to various organisations consisted of a copy of his third Mythbusters book (published by Puffin) and a 'bible' (a television industry term describing a concept for a television production). Mr Knight's case was that receipt of this material was evidenced both by the letter from XYZ Entertainment and also by a letter from Beyond dated 29 January 1999. 83 The letter from Beyond reads: 'Friday, January 29, 1999 Bruce Harley 164 Barnard Street North Adelaide 5066 Dear Bruce RE: MYTHBUSTERS We appreciate your interest in Beyond. However, before we can look at your material, we need to be sure that you understand our position, and our intentions. If you do not want us to examine your material after you have read this letter, please let me know immediately. As the Beyond companies are in the business of developing, making and selling films and television programs, it is possible that we are already involved in some way with a project that is similar to yours, or which would compete with yours. Once we have read and examined your material, we may find that it is similar or competitive to an existing project. If that happens, we will let you know and you can then decide whether you want to withdraw your submission. If we continue our involvement with the other project or projects, we will have no obligation at all to you, and you will have no claim at all against us, or any of our business partners. While we will take all reasonable care of your material, we expect that you have kept copies for your own protection. Please understand that we cannot be responsible for any loss of, or damage to your material. In sending us this material, you are stating that you have the right to offer it to us for our consideration, and that it is original work. If after we have examined your material, we are interested in developing it further, we may talk to you about the possibility of doing so. Signing this letter does not create any obligation for us to make any offer, or for you to accept any offer we may later make to you. If you are happy for us to go ahead and consider your material on the basis outlined in this letter, please sign and return this letter to us. Yours sincerely, JOHN LUSCOMBE Head of Production' (emphasis added) 84 The title of the letter should be noted. There can be no doubt that in some fashion or other Mr Harley had communicated to Beyond his desire to advance, for Beyond's consideration, a project known as 'MYTHBUSTERS'. 85 The parts of the letter which I have emphasised suggest that some material had been sent to and received by Beyond. Stating, for example, that 'we will take all reasonable care of your material' and 'we expect you have kept copies' and 'we cannot be responsible for any loss' etc. are almost meaningless in any other context. That view would also accord with the fact that, as disclosed by the XYZ Entertainment letter, some material had been sent to that organisation. 86 There is other evidence to suggest that Mr Harley sent material to Beyond at about this time. The only available evidence is necessarily hearsay because Mr Harley died in 1999. 87 Mr Robert Williams is a television director. I have already referred to his production company (Beach Street). Mr James Adolph gave his occupation as 'cameraman' but he has worked in the television industry as a television producer, director and production manager. He has a production company called Video Artworks. He arranged a production team to produce a 1999 demonstration video for Mr Knight and was subsequently involved, in 2004, in further efforts to raise funds for Mr Knight's television project. Mr Knight, Mr Adolph and Mr Williams testified to being present in a meeting in late 1998 at which Mr Harley indicated that he had sent material, including 'the bible', to Beyond. Mr Adolph and Mr Williams gave evidence they were surprised and disapproving because they had reservations about Beyond and felt that progress was being made at the time with 'pitches' to Channel 10, Channel 9 and the ABC. 88 The respondent's case, however, was that on the whole of the evidence I should not conclude that any material was actually sent to Beyond. The contention was based both upon submissions that the hearsay evidence of Mr Harley's statements lacked credibility and should not be accepted and also upon evidence about the practices followed by Beyond with respect to 'unsolicited' material. 89 Ms Joanna Telfer was Ms Luscombe's Personal Assistant in 1999. Part of her role was dealing with material sent to Beyond for its consideration. Ms Telfer's evidence was that, as Mr Luscombe's personal secretary, she had a particular responsibility for dealing with 'unsolicited submissions'. Beyond's policy was not to review such material unless a letter like that sent to Mr Harley was countersigned and returned. 90 It was Ms Telfer who signed the letter to Mr Harley and was responsible for sending letters of that kind. In her evidence she said that there were two standard letters sent to persons who provided concept material to Beyond, or proposed doing so. The first, like the one to Mr Harley, began 'We appreciate your interest in Beyond.' The other began 'Thank you for sending this to us for consideration. We appreciate your interest in Beyond.' 91 Ms Telfer said a letter of the first type was sent to people who enquired about sending material to Beyond, for example by telephone, but had not actually done so. The second was sent to people who had in fact sent material. However, she had no recollection of the letter to Mr Harley and, in view of its terms, in my view it would be unsafe to conclude solely from this evidence, that no material had been sent and that the letter to Mr Harley was only a response to an oral contact. 92 Ms Telfer was also in charge of ensuring that an entry was made in a database to record receipt of any concept material sent to Beyond in the way it was suggested Mr Harley had done. The invariable practice, she said, was to record receipt of such material in the database. The entry was not removed if the material was returned. Ms Telfer's evidence was that there was no record in the database, or otherwise, of any material ever being received from Mr Harley. 93 She said, in any event, if material had been received, and a letter was sent in the form set out earlier and no signed copy was returned then, after a period of time, she would send the materials back. She attached sample letters where this practice had been followed. There is no evidence that Mr Harley or Mr Knight ever counter-signed the letter to open the way for examination of any material by Beyond. I infer that never happened. 94 Although the matter is very finely balanced I am prepared to assume that some material was sent to Beyond by Mr Harley. This would be consistent with the fact that material was sent to XYZ Entertainment, the terms of the letter to Mr Harley, and the evidence of his statements in the meeting attended by Mr Knight, Mr Adolph and Mr Williams in late 1998. I am also prepared to assume that the material sent was the third Mythbusters book and 'the bible', which was Exhibit AKF in Mr Knight's case. 95 The evidence was too flimsy, however, to support a conclusion that anyone at Beyond ever studied or considered any material sent by Mr Harley. In the end, it does not matter. None of the material which is alleged to have been sent to Beyond bears any real resemblance to the content of the Mythbusters TV show which was later produced by Beyond Productions. 96 Exhibit AKF (the bible) is entitled 'Mythbusters Real-Life Adventures in the World of the Supernatural'. It makes clear that the proposal is based on the Mythbusters books. It also says: 'Mythbusters offers the expectation of catching ghosts, monsters, beasts (allegedly extinct), UFO's and finding hidden treasures.' 97 Making the assumptions I have in favour of Mr Knight's case, that this material was sent by Mr Harley and received by Beyond, it nevertheless provides no foundation for any suggestion that Beyond used the concept being advanced by Mr Knight to develop the Mythbusters TV show. Ultimately, no such suggestion was seriously pressed. It is use of the name 'Mythbusters' which is at the heart of the case, rather than any replication of Mr Knight's ideas or storylines. 98 It was also suggested by Mr Knight that further material was sent by Mr Harley to Beyond in 2000. The material it is suggested was sent by Mr Harley on this second occasion included a 'gatefold' brochure (the term gatefold refers to the manner in which it is folded and opens), a TV 'pilot' and a written explanation of the 'pilot'. Material of the same kind was sent to other organizations at about this time. 99 In one of his affidavits Mr Knight swore that a draft of a letter sent on this second occasion to Beyond from Mr Harley was annexed to that affidavit. The two pages which make up that annexure comprise a mixture of typing (in two different fonts) and handwriting which was identified as both Mr Harley's and Mr Knight's. The two pages contain passages which are reflected in the gatefold brochure and the explanation of the TV 'pilot'. In his oral evidence Mr Knight abandoned any suggestion that the materials which comprised the annexure were a draft letter. The contention was unsustainable. 100 There is no satisfactory evidence that this material was sent to or received by Beyond. I am not prepared to assume that it was in fact sent to Beyond. Even if it was it would not take Mr Knight's case very far. 101 The TV 'pilot' is a 10 minute video. It was inaccurate to call this video a 'pilot'. That is not how it was described in Mr Knight's own correspondence with his agent, Ms Macdougall, in 2002 where it was referred to as a 'demonstration video (as opposed to a pilot)'. In this correspondence Mr Knight recorded that it was concluded from meetings in 2000 'that there were problems with the Mythbusters demonstration video. It was a confusing mix of styles and needed to be given a distinct direction'. He conceded in cross-examination that a pilot was conventionally a full-length episode. Presumably a pilot is produced to show how the finished product would appear to the viewing public. The demonstration video was certainly not in this category. The use of the term 'pilot' in his evidence was unfortunate and distracting because it is clearly not how he or his advisers had regarded the demonstration video. 102 However, it may be accepted that the demonstration video provided a tangible indication of the nature and potential content of Mr Knight's proposals for his own TV series. I was asked to watch it and did so. I see no similarity between the content of the demonstration video and the content of the Mythbusters TV show. Apart from anything else (such as the style of the two productions) one is a depiction of fantasy themes (in this case a ghost – which is represented in the demonstration video moving in the background) while the other depicts an investigation which proceeds by actual demonstration of step-by-step reconstruction of the activity in question. 103 Mr Knight's contention is that the two suggested approaches by Mr Harley put Beyond into possession of a valuable idea which it otherwise would not have developed for itself. As I have already said, ultimately no serious suggestion was advanced that the Mythbusters TV show reflects Mr Knight's storylines or published material so the relevance of this part of his case is doubtful. His complaint is really about use of the name Mythbusters. Obviously Mr Harley communicated the name Mythbusters in some form or other. The response to Mr Harley dated 29 January 1999 certainly makes it clear that was the title under which Mr Harley approached Beyond (in whatever form he did so) and under which Beyond responded to him. 104 Whether Beyond first heard the name from Mr Harley, or happened upon it in some other way, will not determine its likely impact on members of either of the two groups suggested by Mr Knight to have been deceived by the Mythbusters TV show. 105 Later I deal with the history of the development and sale of the Mythbuster's TV show to Discovery Channel by Beyond. It will be seen that, on the evidence about this issue, the use of the name Mythbusters was, whether it came from the depths of Mr Luscombe's consciousness or not, a belated choice. It was used because it was a catchy term descriptive of the activities portrayed by the Mythbusters TV show. Discussions with Imagination 106 In 2000 Mr Knight entered into discussions with Imagination Entertainment Pty Ltd ('Imagination') about the possibility of an agreement for Imagination to develop the television series idea beyond a concept. Mr Knight said in his affidavit evidence: 'Negotiations with Imagination went very quiet in or about late 2000 early 2001 for reasons I do not know and baffled me at that time as Imagination seemed keen to proceed with my MYTHBUSTERS project.' 107 In final submissions it was suggested there was 'collusion' on the part of Beyond and Imagination. There is no evidence of this. The suggestion was part of the theme in Mr Knight's case, to which I have already referred, that Beyond was motivated by an illicit desire to misappropriate his intellectual property. 108 Negotiations with Imagination were conducted between Mr David Day (Mr Knight's manager from early 1999) and Mr Bill Davidson, Head of Television for Imagination. Some suggestions for contractual terms were exchanged in mid-2000. Mr Davidson was not called as a witness. Mr Day gave evidence, however, that Mr Davidson left Imagination in late 2000 and that he thereafter waited throughout 2001 and into 2002 for someone from Imagination to contact him to recommence negotiations. This does not suggest any sense of urgency on either side. 109 Part of the discussions before Mr Davidson left concerned the quality of the demonstration video, which was shown to Imagination personnel, including Mr Davidson. It is clear from the limited evidence of exchanges between Mr Day and Mr Davidson, and from Mr Knight's own communication with his UK agent in 2002, that the demonstration video was not regarded by Mr Knight or his advisers as sufficiently developed to form the real basis of a TV series. I have already expressed my view that it has nothing in common with the Mythbusters TV show. 110 Nevertheless, it was suggested that the real reason for negotiations with Imagination going 'quiet' was that Mr John Gregory, who had left Beyond and gone to Imagination in December 2000, passed to Mr Luscombe details of Mr Knight's proposals for a television series, including the proposal to entitle it 'Mythbusters'. There was no direct evidence to this effect and it was denied by Mr Luscombe. 111 There is other evidence that at about this time Imagination decided to withdraw altogether from its connection with television production and return to its basic core business of producing board games. 112 There is no foundation in the evidence upon which I could simply conjecture that there was collusion by Imagination and Beyond to deceptively take Mr Knight's ideas. 2004 Management Team 113 Mr Andrew Graham is a consultant who specialises in raising finance. A good deal of his work is in connection with the mining industry. Mr James Adolph has been referred to already. He is involved with the Australian television industry and since 1997 has been involved in the advancement of Mr Knight's television aspirations. According to the evidence of Mr Knight, Mr Adolph and Mr Graham, Mr Adolph approached Mr Graham early in 2004 to assist with raising funds for Mr Knight's television project. A face to face meeting occurred in August 2004. Mr Graham's prior commitments prevented anything concrete being done until October 2004. At that time a 'management team' consisting of the three of them was created. Mr Graham deposed that he was subsequently successful in attracting a group of investors known as the 'Winners Alliance' to agree to advance $5 million towards a television production on Mr Knight's behalf. He said the negotiations were quite intensive in December 2004 and early January 2005. 114 The purpose of the evidence about the successful attraction of investors and the suggested commitment of $5 million was to provide evidence of damage, a necessary element in the passing-off action. The major proportion of the damage alleged (as advanced by Mr Graham's analysis) related to the proposition that substantial amounts of 'back end' revenue would be derived from a successful TV series. In other words the revenue from the TV series itself (the front end revenue) although significant, was expected to be minor by comparison with revenue generated by merchandising and spin-off sales. 115 The negotiations came to an abrupt halt immediately after the screening on SBS of the Mythbusters TV show on 3 January 2005. This event prompted a series of telephone calls over the next day or so during which, according to Mr Graham, some investors expressed their lack of satisfaction with this development in very strong terms. The funding plans were suspended and have not been resumed although Mr Graham assured the court in his oral evidence that the investors remained interested in proceeding with a television production if conditions were right. 116 Although it is clear from the evidence that the Mythbusters TV show had already been shown in Australia on Foxtel before the 'management team' was created, Mr Graham said that he had no knowledge, prior to the telephone calls commencing around 3 January 2005, that the Mythbusters TV show had been produced. 117 Mr Adolph conceded in his evidence that before he contacted Mr Graham to secure funding he had seen a magazine article in a publication entitled 'Encore' disclosing the fact that another group was going to produce a show called 'Mythbusters' but said he had not told Mr Graham. Asked why he did not tell Mr Graham about this matter he replied that it was not 'his area to do that' even though he brought Mr Graham into the management team. 118 Mr Knight, on his own evidence, had known from much earlier in 2004 that Beyond was producing a Mythbusters TV show. He also deposed to the fact that he did not inform Mr Graham that a rival TV show had actually been produced. 119 There are features of this evidence which strain credulity. However, I do not need to resolve that issue in this judgment. I will accept, and it does not really seem ever to have been seriously in issue, that some damage to Mr Knight's plans and aspirations has resulted from the production, distribution and screening of the Mythbuster's TV show in Australia. 120 Damage is one ingredient of Mr Knight's passing-off action although not a necessary ingredient in his invocation of s 52 of the TP Act. It only becomes relevant to quantify it in the event that the conduct of the respondents is actionable. According to the arrangements for hearing this case, directed at an earlier stage by Lindgren J, the proceedings are not, at the moment, directed to the quantification of loss or damage. It is not necessary for me, therefore, to make any judgment about whether the optimism reflected in Mr Graham's financial model is well founded. Book Sales 121 Mr Knight claimed substantial sales of the Mythbusters books in Australia. The respondents disputed the levels of book sales in Australia. Mr Knight's evidence about the issue consisted almost entirely of reliance upon secondary evidence of print runs. I was invited, in effect, to infer that this was reliable evidence of the level of actual sales. There was some other evidence of distribution of his books but no figures were given – e.g. an independent witness confirmed a donation of an unspecified number of books in 2000 and 2003 to assist the Women's and Children's Hospital in Adelaide and Mr Knight said in 1999 he donated some books to be sold for the Spastic Centre. 122 Curiously, no direct evidence of book sales was proffered, nor were any business records produced which might enable reliable calculations to be made – e.g. receipts related to actual sales, royalties, payments of pro rata fees and commissions to others etc. - or any taxation records. Neither was any convincing explanation proffered for the absence of basic material or records of this kind. 123 Had it been necessary to make positive findings on this issue I could not have been satisfied that the level of sales was as claimed by Mr Knight. However, the question of, at least some, reputation as an author of children's books in Australia was not put in issue. Accordingly it is not necessary to make firm findings about the actual level of book sales. Beyond and the Mythbusters TV Show The Beyond Structure 124 Mr Borglund, the Managing Director of the Beyond interests, described the Beyond group and its constituents, relevantly for these proceedings, as follows in his second affidavit: '10. The Beyond Group of Companies is, relevantly, comprised of the following: 10.1 Beyond International Limited (Beyond International); 10.2 Beyond International Services Limited (Beyond InternationalServices); 10.3 Beyond Properties Pty Limited (Beyond Properties); 10.4 Beyond Productions Pty Limited (Beyond Productions); 10.5 Beyond Entertainment Pty Limited (Beyond Entertainment); 10.6 Beyond Entertainment Limited (Beyond Entertainment (Ireland)); and 10.7 Beyond Distribution Pty Limited (Beyond Distribution), (Beyond Group) … 11 All intellectual property owned by the Beyond Group as at today is either owned by Beyond Properties or Beyond TV Properties Limited (a company incorporated in Bermuda) or Beyond Entertainment (Ireland). 12 Beyond Productions is the production service company of the Beyond Group. It is responsible for the actual making of all Beyond programs (excluding joint ventures and some co-productions). … 15. Beyond International is the parent company of the Beyond Group and is listed on the ASX (Code BYI).' (I have emphasised the three Beyond companies which are parties in the present proceedings.) Development of the Mythbusters TV Show 125 Peter Rees is an Executive Producer now employed by Beyond Productions. He gave affidavit evidence in the proceedings. He was not cross-examined. He worked from about 1997 (prior to his present employment by Beyond) on the general concepts which led ultimately to the Mythbusters TV show. In that year he devised a concept, which he called 'Declassified', for a television series based on military research and development, using urban legends and conspiracy theories as introductions to the scientific and technological aspects of the show. The proposal was submitted to Beyond. 126 At about the same time he submitted to Beyond a proposal for an 'urban adventurers concept' which he had written with another person. The second proposal led a development option agreement and was pitched to the Learning Channel in late 1997. However, neither proposal, Declassified or Urban Adventurers, was ever produced as a television program or series. 127 From January 1999 to 2001 he worked on television documentary programs produced by Beyond Productions entitled 'Stings, Fangs and Spines' and 'Born Against the Odds'. The programs used science to explore common misconceptions or, as he put it, to 'debunk myths'. 128 During the same period he developed an 'urban legends program concept' which he called 'Tall Tales or True'. It was this particular concept which he ultimately developed into the Mythbusters television program. According to Mr Rees' evidence he was also working on the development of other concepts or titles which were linked to the same general idea. The working titles were 'The Buzz: The New Science of Gossip', 'Legend Seekers' and 'Slaves to Superstition'. All these concepts, on Mr Rees' evidence, coalesced with 'Tall Tales or True' into the single production that became titled 'Mythbusters'. 129 Mr John Luscombe is the General Manager of the sixth respondent, Beyond Productions. His duties include the development of new television projects. Mr Luscombe's evidence was that he was approached by Mr Rees in about 2000 to discuss a concept regarding 'urban legends'. He approved Pat McInerney, a Beyond productions employee, working as a researcher for further development work on the concept with Mr Rees. At this time the concept also had the working title 'Legend Seekers'. 130 The Tall Tales or True/Legend Seekers concept was pitched to Discovery Channel in May 2001 in the USA. The pitch was made by Mr Luscombe. Mr Rees was involved in preparing the documents. The pitch documents were tendered in evidence before me. Although they were marked as confidential exhibits (JL1 and JL2), I can mention some salient features without compromising that characteristic. 131 JL1 commences with the title 'The Legend Seeker'. Shortly thereafter there appears in bold capitalised letters 'Tall Tales … or True'. The second page contains reference to 'urban legends' and two references to 'The Legend Busters'. Page 3 refers to 'Urban Legend" and 'our team of "Legend Busters"'. Page 4 refers to Myth Detection. Page 5 refers to 'Malicious Myths'. The document is seven pages in length. It is widely spaced. It is intended to catch the attention. The concepts it suggests and explores are not ones which find any reflection, so far as I can see, in Mr Knight's books or television proposals. 132 JL2 is entitled 'Tall Tales … or True?'. It refers on page 3 to 'urban legends', 'the Legend Busters' (twice) and 'tall tales'. Page 4 refers to the team of 'Legend Busters'. Page 5 refers to 'The Myth Busters'. Two people are identified. Both worked in the USA. Neither is suggested in the evidence before me to have any connection at all with Mr Knight. In a photograph of one of these persons appears a poster entitled 'Urban Legend'. Page 6 refers to 'Myth Detection'. There is nothing on the face of this material (JL1 and JL2) to suggest any connection with Mr Knight, his books or his concepts. 133 According to Mr Luscombe confidential exhibit JL2 was given on 31 May 2001 to Ms Andrea Meditch of Discovery Channel during a meeting which took place over the course of a day and at which a number of television concepts were pitched to Discovery Channel including the 'Tall Tales or True?' concept. He stated that Ms Meditch was enthusiastic about the pitch but not about the title. He then suggested alternative titles of 'Myth Busters' or 'Legend Busters'. 134 By July 2001 the proposal had been renamed 'Myth Busters'. It was to be a program which attempted to validate urban myths. It will be noted that the title was made up still of two words. The separation of the title into two separate words appears to have continued through 2002. It was under the name 'MYTH BUSTERS' that searches were undertaken for trademark and patent search purposes in the USA in July and August 2002 At some point in time, which is not clear on the evidence, the two names were amalgamated into one. 135 A revised proposal was sent to Ms Meditch on 23 August 2001. It is apparent from this proposal for a three episode program that the two presenters who, in due course, appeared in the series had not yet been proposed (or perhaps even identified). Mr Luscombe and Ms Meditch exchanged emails on 19 October 2001. Ms Meditch expressed interest in a three episode program. A 'pitch report' dated 24 October 2001, recording a further meeting with Ms Meditch on that day confirms Discovery Channel's acceptance of at least a three episode program. The presenters had still to be finalised at this time. 136 Pre-production work (including finding suitable hosts) commenced in late October 2001 and shooting of the first three episodes commenced in June 2002. The first series (three episodes) was delivered to Discovery Channel by Beyond on 25 October 2002. To November 2006 a further 69 episodes had been made and delivered. 137 Following the success of the negotiations with Discovery Channel Mr Luscombe set about marketing the broadcast rights in Australia. He had meetings with representatives of the ABC (between 12 September 2001 and 1 October 2004), Channel 9 (between 22 November 2001 and 1 October 2003), Channel 10 (between 21 October 2002 and 11 March 2004) and Channel 7 (between 15 February 2002 and 16 March 2004). He named, in his affidavit evidence, the television executives with whom the meetings were held. 138 No attempt was made by Mr Knight to suggest any deception of, or misrepresentation to, these persons or that there was any likelihood of confusion or misunderstanding about the origins and creators of the Mythbusters TV show. 139 By agreement with Discovery Channel and Beyond, Foxtel obtained pay TV broadcast rights in Australia in July 2004. SBS acquired the rights in Australia for free-to-air broadcasts on 16 September 2004. 140 Interestingly, Mr Rees' evidence was that he had thought of the title Myth Busters but put it aside because it was too close to 'Ghostbusters'. When Mr Luscombe at a development meeting at some time in 2001 offered the opinion that Myth Busters would be a good title two others at the meeting were critical of the name as internally contradictory, one saying 'A myth is a myth because you can't validate it'. According to Mr Rees they were happy however to proceed with the program title because none of the titles which he had suggested (which I have referred to earlier) were acceptable to the broadcaster. 141 There seems no basis upon which to reject the evidence about the development and adoption of the name 'Mythbusters' which was given by Mr Luscombe and Mr Rees. According to that evidence it had nothing to do with Mr Knight or his ideas. Mr Rees said that he had never heard of Mr Knight or his books under the name Mythbusters or at all. 142 I have dealt with the evidence about this matter in a little detail because it is relevant to the suggestion which Mr Knight wishes to advance that the Beyond interests were infected with some fraudulent intent in their adoption of the title 'Mythbusters' for the TV series of that name. On the evidence there is no foundation for the proposition, which appears to me to be borne of Mr Knight's sense of grievance rather than anything else. As I observed earlier, I do not think that, ultimately, this issue bears upon the disposition of his claim. The allegations of misrepresentation and of misleading or deceptive conduct are to be judged objectively by their likely effect, rather than, on the facts of this case at least, by reference to underlying motivation. ELEMENTS OF THE CAUSES OF ACTION 143 The tort of passing-off is based in protection of property (see Angelides v James Stedman Hendersons Sweets Ltd (1927) 40 CLR 43 at 60 ('Angelides'); Colbeam Palmer Ltd v Stock Affiliates Pty Ltd (1968) 122 CLR 25 at 33; Conagra 33 FCR at 308 and 340; Campomar 202 CLR at [48] and [108]. 144 Section 52 of the TP Act is first and foremost concerned with the protection of consumers but it also may be used to protect business, goodwill or reputation (see Hornsby Building Information Centre 140 CLR at 224-6. 145 Mr Knight must establish a number of matters to succeed. He must establish a relevant misrepresentation, or the likelihood of misleading or deception. This task involves the demonstration of a relevant reputation against which to test the suggested misrepresentation. It also involves an examination of the character of the suggested misrepresentation, or deceptive or misleading conduct, to see whether the conduct is properly so characterised. 146 Because the essence of Mr Knight's complaint is the use, by the respondents, of the title 'Mythbusters', and he has no statutory right to protected use of the term, he must show that he has acquired a proprietary interest in it. Because the name is, to an extent at least, descriptive he cannot do this if the name has not acquired a secondary meaning distinctively associated with him (see Angelides 40 CLR at 60). 147 Finally, because the passing-off action protects or vindicates a proprietary interest he must, to succeed in this action, show damage. Relevant Date 148 The parties were not agreed upon the relevant date at which to test the respondents' conduct against Mr Knight's asserted rights. The respondents suggested the date of the first screening of the Mythbusters TV show in Australia – 27 September 2004. Mr Knight suggested October 2001 when the title for the Mythbusters TV show was used or revealed in a non-confidential way. 149 There were two groups of consumers ultimately relied on by Mr Knight in relation to the Mythbusters TV show. The relevant date is bound to be different for each group. In my view for members of the television viewing public the relevant date is the date of first screening in Australia, 27 September 2004. For the other group consisting of TV broadcasters and television production executives the date must accord with the time at which an attempt was made by Beyond to sell the concept of a new TV show, bearing the name 'Mythbusters', to a prospective purchaser. 150 On the evidence this first occurred in July 2001 in the USA when Beyond was marketing the TV show to Discovery Channel and the name 'Mythbusters' was accepted but that was outside the jurisdiction. On Mr Luscombe's evidence, attempts to market the broadcast rights in Australia to TV broadcasters and television production executives commenced on about 12 September 2001. In my view that is the relevant date for that group. 151 However, in my view, nothing really turns on the selection of date. The question of the appropriate date does not affect any of the critical findings made in this judgment. Reputation 152 There is no doubt Mr Knight has had some success as an author of children's books. Indeed the respondents did not dispute that he had some reputation in Australia as an author of children's books. 153 It is true that there was little objective evidence of the level of sales of the Mythbusters books in Australia. I found it unusual that he was either unable, or unwilling, to provide financial material from his own resources which might enable appropriate calculations to be made giving an order of magnitude of these sales. Whatever the reason, I was left with the task of drawing inferences from the evidence that print runs had been ordered, that books had been delivered to him in Australia, that some books had been distributed through charity organisations and that the first book was currently available for purchase through Dymocks. It is not possible from this material, especially in light of the fact, as the respondents contended, that he acknowledged that the bulk of any sales occurred outside Australia, to feel a comfortable sense of persuasion that the sales were of an especially high order. 154 Nevertheless, there can be no denying that Mr Knight's success in Australia as an author is in part due to the three books in question. In my view he succeeded in establishing that he has a reputation in Australia as the author of children's books bearing the name 'Mythbusters'. 155 In addition, I feel that I cannot put aside as altogether irrelevant the other evidence of promotion of him personally, the Mythbusters books and his other books. This promotion took a variety of forms. Some of it involved articles by newspaper journalists (perhaps with the assistance of material provided by him but that is not to the point), radio interviews (which were not available to be heard but I accept took place) and television interviews, some of which were shown to me. 156 However, acceptance of his reputation in those respects is far from an end to the matter. An assessment needs to be made first whether Mr Knight's reputation in connection with his Mythbusters books and more generally can be attributed to members of the television viewing public in a way, and at a level, that makes it likely that a significant number would associate him with the Mythbusters TV show. He asserts it should. The respondents take a different position. 157 I have found this issue a difficult one to determine. In the end it turns on an impression formed from reading, listening to and considering the whole of the evidence. I have concluded that there is no basis to positively find, infer or assume an association in the minds of members of the television viewing public between either Mr Knight or his Mythbusters books and the Mythbusters TV show. 158 There is no direct evidence that Mr Knight's reputation with the general public creates an association with television. There is no evidence that Mr Knight has any television presence in Australia other than as an occasional interviewee. He has not had any TV show produced in Australia. He suggests he can rely on the fact his demonstration video was screened to a small private audience in 2000 and has been available on his internet site since 2003. I do not agree. These circumstances do not establish any connection of the requisite kind and significance with ordinary members of the television viewing public. 159 Although reputation may be established by advance publicity or advertising that is not what happened in this case. His own attempts to develop a television series were not public and they were unsuccessful. There was no evidence of any announcement in the public arena which might alert members of the Australian television viewing public to the fact that Mr Knight had concrete plans in the foreseeable future for the screening of a TV show entitled Mythbusters. Any occasional comment to that general effect over the years could not generate a reputation to that effect. 160 In the circumstances, for this reason alone, I am not persuaded that the production or screening of the Mythbusters TV show constitutes a misrepresentation to members of the television viewing public that it was his program or endorsed by or associated in any way with him. I shall, however, return to deal with the issue of misrepresentation and deception shortly on the alternative assumption that my conclusion of lack of reputation with the general television viewing public is incorrect. 161 I am, on the other hand, satisfied that Mr Knight had the requisite reputation with a sufficient number of the second group on which he relies – TV broadcasters and television production executives. His credentials as an author clearly provided a respectable foundation for his attempts to broaden the exploitation of his concept of mythbusting to include a television series. There can be no denying that he was successful in generating some interest for these ideas in both the United Kingdom and in Australia. 162 His efforts were persistent. The fact that he had no ultimate success did not extinguish his reputation in the market consisting of TV broadcasters and television production executives. It is impossible to resist the conclusion that Mr Knight had a reputation with members of the group whom he tried to interest in the idea of a series based upon his concepts. Reputation alone cannot sustain his causes of action but in this market, at least, I am satisfied it was established. Deception and Misrepresentation 163 I shall use the term 'deception' here to embrace all aspects of both causes of action which relate to the need to establish misrepresentation or misleading or deceptive conduct. There is no need, for present purposes, to make any distinction. 164 Within the group made up of members of the television viewing public I do not think there is any realistic possibility of deception if reputation had been established. 165 In Campomar 202 CLR 45, the High Court explained the judicial method for evaluating the likelihood of deception when a representation is alleged to have been made to members of the public generally. It is necessary to proceed upon an attribution of presumed characteristics to 'ordinary' or 'reasonable' members of the class. The following observations were made: 'It is in these cases of representations to the public, of which the first appeal is one, that there enter the "ordinary" or "reasonable" members of the class of prospective purchasers. Although a class of consumers may be expected to include a wide range of persons, in isolating the "ordinary" or "reasonable" members of that class, there is an objective attribution of certain characteristics.' (at [102]) … 'Where the persons in question are not identified individuals to whom a particular misrepresentation has been made or from whom a relevant fact, circumstance or proposal was withheld, but are members of a class to which the conduct in question was directed in a general sense, it is necessary to isolate by some criterion a representative member of that class.' (at [103]) … 'The initial question which must be determined is whether the misconceptions, or deceptions, alleged to arise or to be likely to arise are properly to be attributed to the ordinary or reasonable members of the classes of prospective purchasers.' (at [105]) 166 In relation to this group Mr Knight's evidentiary case did not rest solely on the inferences to be drawn about the likely reaction of typical members of the general television viewing public (which I shall discuss a little later). He called a series of witnesses to depose to their initial belief that he must have been associated with the Mythbusters TV show. They were all friends or associates. Their beliefs were very much coloured by their personal association with him. They knew of his books and were aware of his ambitions to have his own TV series produced. They said in their evidence that they immediately assumed, when they heard of the Mythbusters TV show, that it must be associated with him. This belief was clearly predicated upon an assumption which they made from information they had gleaned from him. It cannot fairly be said to be the result of the use by the Beyond interests of the name 'Mythbusters' or any other conduct of the respondents. 167 The fact that these witnesses made an erroneous assumption about Mr Knight's connection with the Mythbusters TV show, and their beliefs were for that reason misplaced, does not, of itself, deny the possibility of deception, either of them or more generally. 168 In Campomar 202 CLR 45, the High Court pointed out that an action under s 52 of the TP Act cannot be defeated simply by pointing to an 'erroneous assumption' because 'no conduct can mislead or deceive unless the representee labours under some erroneous assumption' (at [104] quoting Deane and Fitzgerald JJ in Taco Bell 42 ALR at 200). The High Court accordingly rejected the existence or reliability of any general 'erroneous assumption' doctrine that would defeat a claim by showing that a prospective purchaser could only be misled by wrongly assuming some 'endorsement by, or other association with, the plaintiff' (see 202 CLR at [110]). 169 It follows that the evidence called by Mr Knight from the witnesses in question is not to be rejected simply because their impressions or reactions were coloured or affected by a wrongful assumption. 170 However, the High Court in Campomar expressly approved the observations of Deane and Fitzgerald JJ in Taco Bell 42 ALR at 201 that the 'question whether particular conduct causes confusion or wonderment cannot be substituted for the question whether the conduct answers the statutory description contained in s 52' (202 CLR at [106]). 171 The passage approved from Taco Bell comes from the final sentence in two paragraphs which are set out hereunder: 'Confusion In McWilliam's v McDonald's ((1980) 33 ALR 394), the Full Court held that, although the conduct of McWilliam's was likely to have caused confusion or wonderment, it did not appear that in the particular circumstances of that case the conduct was misleading or deceptive or likely to mislead or deceive. As we read their Honours' judgments, that was a factual conclusion. Their Honours were not suggesting that there is, for the purposes of s 52 of the Act, a necessary dichotomy between "confusion" on the one hand and "misleading or deception" on the other. Conduct which produces or contributes to confusion or uncertainty may or may not be misleading or deceptive for the purposes of s 52. In some circumstances, conduct could conceivably be properly categorized as misleading or deceptive for the very reason that it represents that confusion or uncertainty exists where, in truth, there is no proper room for either. Ordinarily, however, a tendency to cause confusion or uncertainty will not suffice to establish that conduct is of the type described in s 52. The question whether particular conduct causes confusion or wonderment cannot be substituted for the question whether the conduct answers the statutory description contained in s 52.' (Emphasis added) 172 Accordingly, mere confusion or uncertainty, whether in the minds of particular individuals or generally, will not establish that misleading or deception has occurred. It is to the quality of the conduct that attention must be given – not to the subjective reaction of some members of the class. As I indicated earlier, the misunderstanding, by the witnesses called in Mr Knight's case, of the true position concerning the provenance of the Mythbusters TV show cannot be attributed to Beyond or the other respondents. 173 The particular knowledge and association of the witnesses relied on by Mr Knight prevents them, in any event, being regarded as representative of the class as a whole. Upon this point being made by counsel for the Beyond interests, initially in cross-examination, counsel for Mr Knight, in submissions, disclaimed any central role for the evidence of these witnesses. Accepting that the issue of likelihood of deception was to be determined by the court itself she submitted that the evidence of the witnesses was merely additional and I was invited to infer that 'there must be consumers whose identities we do not know, who do not know the Applicant and do not have any special knowledge of the Applicant, but know of his MYTHBUSTERS'. 174 This submission correctly accepts that the reactions of these witnesses, who each had a pre-existing association of some kind or other with Mr Knight, are not a reliable or representative guide to the reactions to be imputed to ordinary or typical members of the class in question. I may turn to deal, then, with my assessment of the perceptions to be objectively attributed to the members of the television viewing public in general, putting aside for this purpose the evidence I have referred to above. 175 I read the Mythbusters books and watched Mr Knight's demonstration video. I studied the 'bible' said to have been sent by Mr Harley to Beyond (and to major Australian TV networks) and also the 'gatefold brochure' and the explanation of the demonstration video which was circulated in 2000. I watched the first episode of the Mythbusters TV show as shown on Foxtel and three others supplied in evidence as later shown on, and sold by, SBS. 176 In my view an 'ordinary' or 'reasonable' member of the public familiar with the Mythbusters books, or even the content proposed by Mr Knight for his own TV show, would not linger under any misapprehension that the books or his proposals were in any way related to the Mythbusters TV show for longer than a few seconds. 177 The first episode of three made initially for the Discovery Channel announces, for example, in the opening moments, that the viewer is going to see what happens when a rocket attached to a Chevrolet motor car is ignited – 'We're going to find out what happens when you strap a rocket to a 67 Chevvy. Oh yeah!'. The content and style of presentation of this episode and each of the others that I was asked to watch find no parallel in the Mythbusters books or, for that matter, Mr Knight's other material which was not in the public domain. 178 Mr Knight's endeavours, and the way his concept of mythbusting is portrayed in all its manifestations, are highly idiosyncratic and depend upon an indissoluble connection with his persona Bowvayne. Bowvayne and the Mythbusters' team are the hub around which the concept revolves. Moreover, the concept of mythbusting, as they go about it, involves, as a central component, the idea of mystery and even magic. 179 Both in oral evidence and in submissions on his behalf, it was clear that Mr Knight could not, and did not, suggest that the content and style of the Mythbusters TV show was suggestive of his own work. It clearly is not. The only thing in common between the two concepts is the name. It was the use of the name that was at the heart of Mr Knight's case. The basis for his complaint, in the end, and the sole foundation for his case, is the fact that the Mythbusters TV show used the same name he had used as part of the title for three of his books and wished to use for his own TV show. 180 However, any misconception or confusion which might arise from the name itself would, in my view, or at least should, be immediately dispelled on actually watching the Mythbusters TV show. Even from those witnesses who knew Mr Knight, were familiar with his books or knew of his plans for his own TV show, there was no evidence that those who actually watched the Mythbusters TV show believed, after watching it, that it reflected his concepts or was associated with him. 181 In my view Mr Knight has been unable to establish any misrepresentation by the respondents to ordinary members of the television viewing public. For the reasons I have given, viewed objectively, the production, distribution and screening of the Mythbusters TV show does not misrepresent to members of the television viewing public that it is endorsed by or associated with Mr Knight. 182 What of the specialised class who saw his proposals in detail? Accepting, as I have, the existence of some reputation with those in the market for television programs of the kind Mr Knight was attempting to devise and sell, I also agree with the submissions of the respondents that there was no possibility of deception of members of the second group – TV broadcasters and television production executives. 183 In this class also there was no evidence of the terms of direct representation by any of the respondents to identified persons and again it is necessary to 'isolate by some criterion a representative member of that class' (Campomar 202 CLR 34 at [103]). In the case of this group it is much less likely that any belief would be formed or relied upon without adequate investigation (see Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 per Mason J at 209 and 211). 184 The evidence disclosed that the process of developing TV programs involves not only substantial periods of time but close attention to the development of program content. Concepts and ideas are at the beginning of the process. Many are discarded and rejected at an early stage. Those that show commercial promise are subject to development, change and transformation – sometimes radical. Selection of the right name is a part of the process. 185 It cannot be assumed that those in this second group would proceed upon a casual acceptance, based upon the name Mythbusters, of the association Mr Knight suggests. The rigour of the commercial exercise at the heart of his endeavours, and those of Beyond, render this improbable to the point of being fanciful. An 'ordinary' or 'reasonable' member of this class must be taken to be one who would, even on an initial encounter, on watching the Mythbusters TV show note the attribution of the show to Beyond as producer and, having regard to the content and style of the Mythbusters TV show, conclude that the show had no connection with Mr Knight, his Mythbusters books or his own plans for a television series. 186 There is, accordingly, no realistic possibility of any confusion concerning the possibility of an association between Mr Knight and the Mythbusters TV show. The Mythbusters TV show could not, by reference to its content, or even its name, be confused with Mr Knight's attempts to generate interest in his own TV series based on his books, or any similar idea related to his 'Mythbusters team'. 187 While it is true, for example, that Mr George from Bluestone Pictures and Ms Burnstock from the ABC, whom Mr Knight attempted to interest in his own plans, initially assumed a connection upon hearing the name of the Mythbusters TV show, there is no evidence of any lingering mistake. 188 On Mr Luscombe's evidence he attempted to market the broadcasting rights in Australia for the Mythbusters TV show widely amongst Australian free-to-air television networks. None of the persons identified by him was required to give evidence for Mr Knight. No assumption can be made, much less any inference drawn, that the Mythbusters TV show, whether by content or name, suggested any association with Mr Knight, his books or his plans for his own TV show. 189 I conclude there was no likelihood of deception amongst the group made up of TV broadcasters and television production executives. Intention to Deceive 190 The suggested approaches by Mr Harley to Beyond and the postulated link with Mr Gregory's arrival at Imagination from Beyond, the fact that negotiations with Imagination went 'quiet' and the adoption by Beyond some months later of the title Mythbusters for the show it was pitching to Discovery Channel provided the foundation for a submission that Beyond had acted with an intention to deceive. I have already indicated that I do not accept the evidentiary premises upon which this argument depends. Furthermore, the argument lacks an underpinning logical foundation. 191 Although passing-off may be innocent, in the classic passing-off case (to use the words of Dixon J in Turner v General Motors (Australia) Pty Ltd (1929) 42 CLR 352) there is an 'intention and desire to appropriate … the advantage of a business reputation which belonged to another' (at 368). 192 That element is absent in the present case. There is no basis to think that Beyond wished to trade off any reputation possessed by Mr Knight or that the success of the Mythbusters TV show would be enhanced with the viewing public if, erroneously, it was believed that Mr Knight was associated with it. Nor is there any basis to think the Mythbusters TV show would more readily be sold, or funds received for its development, if such a belief existed. 193 The Mythbusters TV show was sold in 2001 to Discovery Channel. Rights to broadcast it were sold in Australia in 2004 to SBS and Foxtel. There is no evidence, and was no attempt to make a case, that any of those transactions proceeded upon any misapprehension that Mr Knight was somehow connected with it or that anybody who watched the show would make that assumption. 194 In Australian Woollen Mills Ltd v F S Walton & Co Ltd (1937) 58 CLR 641 Dixon and McTiernan JJ said at 657 'when a dishonest trader fashions an implement or weapon for the purpose of misleading potential customers he at least provides a reliable and expert opinion on the question whether what he has done is in fact likely to deceive'. 195 However, in Campomar 202 CLR 45 in its unanimous judgment the High Court observed (at [33]): 'even an imitation of one product by another does not necessarily bespeak an intention to deceive.' 196 In Conagra 33 FCRLockhart J said at 345: 'But deliberate copying of the plaintiff's goods does not always evidence an intention to deceive; it may indicate nothing more than realisation that the plaintiff has a useful idea which the defendant can turn to his own advantage, though not intending to pass off his goods as those of the plaintiff. 197 I dealt earlier with the evidence concerning the way in which Beyond came to choose the name Mythbusters for its own television program. It has not been demonstrated that the Beyond interests set out to copy the 'Mythbusters' name for reasons which I have earlier given. Even if it had done so this would not be sufficient to make out a case of passing off, or of intention to mislead. Secondary Meaning 198 Mr Knight's complaint, indeed his whole case, depends upon the notion that the name 'Mythbusters' is his and cannot be used without his permission. 199 The respondents claim that the name 'Mythbusters' is a descriptive term (involving the 'busting' of myths) and it must, for Mr Knight to succeed, have acquired a secondary meaning distinctively associated with him. I agree. 200 Mr Knight does not have a registered trade mark in the name Mythbusters. The absence of a registered trade mark denies him enforceable rights under the legislative scheme established by the Trade Marks Act 1995 (Cth). In the absence of any formal protection of the name 'Mythbusters' by its registration under that Act he is obliged to demonstrate a distinctive secondary meaning associated with him, in order to establish a sufficient proprietary interest for his passing-off action and a foundation for the allegation of misleading or deceptive conduct in his s 52 case. In my view he has not done so. 201 I have earlier described the way in which the title 'Mythbusters' came to be selected by Beyond for the Mythbusters TV show. That process emphasises the use and attraction of the descriptive elements in the name. It is a sufficiently practical illustration to deny the proposition that the name is uniquely new and without a descriptive character. 202 The field was not fully occupied by Mr Knight's use of the name, or his own desire to use it in connection with a television series. The way to occupy that field in Australia, and preserve it for his own use, was to register a trade mark. That was not done. No application was made before the Beyond interests commenced to use the name, although competing applications have now been made. I need say nothing about the merits of those applications which are for resolution in another forum. Damage 203 It may be assumed that the screening of the Mythbusters TV show has effectively precluded the development by Mr Knight of a program with the same name. In this sense his plans have been thwarted. It may also be accepted that there was some chance that eventually his efforts may have met with some success, a television program may have been produced and financial rewards may have followed. 204 It is impossible to attribute a value to this possibility although, in my view, it is not open to speculate that the lost chance was very valuable. Allowing for the fact that it takes time to develop such concepts and that initial failure does not spell the end of any realistic commercial possibility, it must be recognised that Mr Knight has endeavoured for many years now to arrange for the production of a television series of his own design both in Australia and in the United Kingdom and that such a series has never, in fact, eventuated. 205 Nonetheless, if the other elements of his case had been established, I am satisfied that damage, sufficient to make out this element of the passing-off case, has been established. 206 In light of my other findings, there is no basis for the grant of any relief concerning the Mythbusters TV show and I need not further explore the way in which any damage might be redressed had the case succeeded. The Spin-Off Books 207 The first and second spin-off books were published by Simon and Schuster Inc trading as Simon Spotlight Entertainment ('Simon and Schuster') and John Wiley & Sons Inc ('Wiley') respectively after the proceedings were commenced. Mr Knight sought to join them to the proceedings. On 10 March 2006 Lindgren J refused this application (Knight v Beyond Properties Pty Ltd (No. 2) [2006] FCA 192). Lindgren J felt that any causes of action which existed against Simon Schuster and Wiley, who were licensed to publish and sell the books in the United States and Canada but not in Australia, should be pursued separately. Although there may have been some overlap with the present proceedings it was not desirable, in his Honour's view, that the present proceedings be extended to embrace them. 208 During the course of the proceedings I permitted Mr Knight to amend his Statement of Claim to plead causes of action against the first, second, third and sixth respondents in relation to the three spin-off books. The amendment was permitted in circumstances where, although it was opposed by the respondents, counsel for the respondents very fairly and properly conceded that he could not argue any question of prejudice arising from the amendment. 209 All the spin-off books are obviously a representation of the Mythbusters TV show. Had I accepted that the Mythbusters TV show provided a sound foundation for Mr Knight's causes of action the publication of the spin-off books could be seen as a further manifestation, or even aggravation, of that conduct. However, as I have rejected the claims based on the Mythbusters TV show they must be considered in their own right. 210 The Mythbusters books and the spin-off books are markedly different in every respect – size, appearance, concept and content. In any view there is no possibility of confusion between them. The Mythbusters books are small, slim, typed in modest script and font, consisting of three or four short stories each. The spin-off books are large, glossy with high visual impact, full of still photos from the Mythbusters TV show and with very little story content. 211 Ironically perhaps, any side by side comparison would be likely to produce a strongly instinctive rejection of any suggestion that one implicitly represented an association with the other. In my view Mr Knight's causes of action with respect to the spin-off books must be rejected. 212 In light of this finding it is only necessary to deal briefly with another contention on Mr Knight's behalf 213 It cannot be, and is not, alleged that any of the respondents is the publisher of the first or second Mythbusters book although it is admitted on the pleadings that the third Mythbusters book is published by the first, second or sixth respondent. To overcome the lack of direct connection to publication of the first and second spin-off books Mr Knight sought to rely on the doctrine of 'instruments of deception' and, by that route, to attribute ultimate responsibility to one or more of the respondents with respect to the first and second spin-off books. 214 That contention faces very substantial obstacles. The application of this doctrine involves proven conduct within the relevant jurisdiction, even though the effects may manifest and complete the cause of action beyond the jurisdiction. 215 One class of case concerning instruments of deception involves the opportunistic registration of domain names which are uniquely connected with a well-known enterprise for the purpose of demanding a substantial premium to ensure they are not used. Examples in the UK include 'marksandspencer.co.uk' and 'britishtelecom.co.uk' (see British Telecommunications plc v One in a Million Ltd (1998) 42 IPR 289). The present is not such a case. 216 Another class of case involves consideration of conduct which, although potentially deceptive, does not ultimately involve a misrepresentation within the jurisdiction itself, but elsewhere. In some such cases it has been held that the conduct is nevertheless actionable as passing-off (see Douglas Pharmaceuticals Ltd v Nutripharm New Zealand Ltd(1997) 42 IPR 407). The rationale appears to be that the tort is justiciable against a defendant within the jurisdiction, even though the cause of action is only completed by the manifestation of a necessary element outside the jurisdiction. 217 Whatever the reach of such an approach it does not fit the facts of the present case. In the present case Mr Knight sought to apply the doctrine to books imported into Australia where not only had licensing for publication, and publication itself, occurred outside the jurisdiction but neither the importers nor publishers were parties to the proceedings. 218 Simon and Schuster and Wiley were licensed to publish the first and second books in the United States and Canada and did so. That conduct is not actionable in the present proceedings. They are not parties to the proceedings. The books were presumably imported into Australia in accordance with the liberty preserved by s 44A of the Copyright Act 1968 (Cth). It has not been shown that any of the respondents are responsible for or have any connection with their importation or sale in Australia. In my view the doctrine of 'instruments of deception' has no application to these circumstances. 219 It follows from these various conclusions that so much of the Further Amended Statement of Claim as attempts to raise causes of action in passing-off or under s 52 of the TP Act with respect to any or all of the spin-off books must also be dismissed. Costs 220 Mr Knight's application must be dismissed. The respondents sought their costs of defending the application and there is no reason why they should not have an order to that effect. 221 The first and second respondents cross-claimed against Mr Knight. The basis of the cross-claim was that letters written by him or on his behalf to customers and prospective customers of the cross-claimants (including the third, fourth and fifth respondents) were themselves misleading and deceptive. 222 After the cross-claim was filed Mr Knight wrote to the BBC and Qantas asserting his entitlement to use of the 'Mythbusters' name, referring to the litigation and indicating that if the BBC or Qantas screened the series made by Beyond (as they proposed to do) they may be joined as additional respondents to the proceedings. This prompted an application by the first and second respondents for interlocutory injunctive relief to restrain any further such correspondence. This application was refused by Lindgren J with costs (Knight v Beyond Properties Pty Ltd (No 3) [2006] FCA 193). 223 Ultimately, very little time was spent in the actual hearing on the issues raised by the cross-claim. On the last day of the trial I was told the cross-claim was not pressed. That was a principled approach to take but, in my view, it was really a recognition of the inevitable. 224 Although I have been spared a little extra effort in dealing with the matter, Mr Knight's legal representatives were not. No doubt some additional costs were involved in dealing with the issues raised by the cross-claim by way of preparation of affidavits and other work. In the circumstances I do not think it would be right for Mr Knight to be left to bear all his costs on this issue. In my view Mr Knight is entitled to his costs in relation to the cross-claim which I will formally dismiss. Conclusion 225 In the light of the findings above I will make orders to the effect that each of the application and the cross-claim be dismissed with costs. I certify that the preceding two hundred and twenty-five (225) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. Associate: Dated: 8 February 2007 Counsel for the Applicant: Ms S Chrysanthou Solicitor for the Applicant: Ms E Ciccocioppo Counsel for the Respondent: Mr D K Catterns QC and Ms S J Goddard Solicitor for the Respondent: Phillips Fox Dates of Hearing: 25, 26, 27, 28, 29 September, 5 October and 9 November 2006 Date of Judgment: 8 February 2007	22,387
federal_court_of_australia:fca/single/1997/1997fca1523	decision	commonwealth	federal_court_of_australia	text/html	1997-11-11 00:00:00	Hanave Pty Ltd v LFOT Pty Ltd (formerly known as Jagar Projects Pty Ltd)(No 2) [1997] FCA 1523	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1997/1997fca1523	2024-09-13T22:45:09.470749+10:00	IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 721 of 1995 BETWEEN: hanave pty ltd Applicant AND: lfot pty ltd (formerly known as JAGAR PROJECTS PTY LTD Respondent JUDGES: MOORE DATE OF ORDER: 11 NOVEMBER 1997 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Leave is given to the applicant to withdraw the concession made by it on 15 April 1997. 2. Liberty to apply Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 721 of 1995 BETWEEN: hanave pty ltd Applicant AND: lfot pty ltd (formerly known as JAGAR PROJECTS PTY LIMITED) Respondent JUDGES: MOORE DATE: 11 NOVEMBER 1997 PLACE: SYDNEY REASONS FOR JUDGMENT (Delivered ex tempore) I publish my reasons. [Written reasons were published.] As to the liberty to apply can I just make it plain, and I think it is plain in any event from my reasons, that that is a liberty to apply on the basis that the respondents may wish to adduce further evidence, or indeed there may be other matters they want to raise, having regard to the leave that I have given.Whilst I do not say this in the reasons, leave should be exercised promptly if it is to be exercised. In relation to the conduct of the matter more generally, may I just say I would like to secure from the applicant and the respondents a chronology probably to accompany the written submissions, and what I would also like is a chronological list of documents that are relied upon in the evidentiary case of the parties. In other words, I want a document that sets out all the documents that each party relies on. The applicant need prepare a chronology in relation to their documents and the respondents a chronology in relation to their documents, so that in due course I have a chronological list of the documents that are relied upon and a reference to where they are found, either in the bundle or in the exhibits. I say that because it has become apparent to me that it is going to be very difficult to find my way through the documents without such material. I will not give a direction to that effect. If there is any uncertainty about what it is that I want, the parties may contact my associate and it will be put in writing. I certify that this and the preceding one (1) page are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore Associate: Dated: 11 November 1997 Counsel for the Applicant: Mr G J McVay Solicitor for the Applicant: Gilbert Mane Solicitors Counsel for the Respondent: Mr C Hodgekiss Solicitor for the Respondent: Hunt and Hunt Date of Hearing: 11 November 1997 Date of Judgment: 11 November 1997	694
federal_court_of_australia:fca/single/2023/2023fca0182	decision	commonwealth	federal_court_of_australia	text/html	2023-03-08 00:00:00	Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 8) [2023] FCA 182	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2023/2023fca0182	2024-09-13T22:45:10.057806+10:00	FEDERAL COURT OF AUSTRALIA Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 8) [2023] FCA 182 File number: NSD 200 of 2019 Judgment of: BESANKO J Date of judgment: 8 March 2023 Catchwords: PATENTS — two patents for methods, apparatuses and systems for vehicle detection and determination of vehicle overstay in time-limited parking space — wireless communication between subterraneous detection apparatus and above-ground detection collection apparatus PATENTS — claims for infringement of claims against two respondents — infringement issues – cross-claim alleging invalidity — claims for additional damages PATENTS — infringement — proper construction of claims — whether the first respondent's vehicle overstay detection system used a wake-up signal — whether the claims include a method or system where the determination of vehicle overstay is made by the above-ground detection collection apparatus instead of the subterraneous detection apparatus PATENTS — infringement — whether first respondent is liable for infringing acts because it has authorised those acts, or because it is a joint tortfeasor in relation to those acts — limitation period and s 120(4) of the Patents Act 1990 (Cth) — authorisation under s 13 of the Patents Act 1990 (Cth) — construction of Deed of Release dated 18 June 2014 PATENTS — infringement — claims for additional damages — whether infringements have been flagrant — whether infringing conduct repeated without restraint — whether benefit obtained because of infringing conduct — requirement to consider all matters appearing under s 122(1A) of the Patents Act 1990 (Cth) PATENTS — best method — whether patentee has described best method known to it of performing the invention — alleged failure by patentee to disclose transceiver (ASTRX2 transceiver) used by it and known to be the best transceiver for working the invention — advantages of ASTRX2 transceiver — identification of the invention PATENTS — best method — whether patentee has described best method known to it of performing the invention — alleged failure by patentee to describe the antenna developed and used by it — nature and features of antenna — work performed by patentee in designing, developing and tuning antenna PATENTS — sufficiency — whether the patentee has fully described the invention — alleged failure to describe antenna PATENTS — entitlement — whether a person not named in the patent as an inventor was a co-inventor of the invention — whether work done by person with respect to antenna and Production Circuit Boards was a material contribution to the invention — whether, in any event, it would be just and equitable under s 138(4) of the Patents Act 1990 (Cth) to make an order PATENTS — inventive step — claim that invention obvious in light of common general knowledge — field of the invention — the content of common general knowledge — evidence of disadvantages of existing methods of detection of vehicle overstay — expert evidence in the field of electronic engineering — whether skilled addressee would be led directly as a matter of course to the invention PATENTS — fair basis — whether claims not involving a wake-up signal fairly based on matter in the specifications of the patents — test for fair basis — relevance of previous decision of this Court in Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd (trading as Database Consultants Australia) (No 2) [2013] FCA 395; (2013) 101 IPR 496 PATENTS — false suggestion and misrepresentation — whether patents or claims in patents obtained by false suggestion —relevance of position taken by Commissioner of Patents PATENTS — lack of clarity and failure to define the invention — whether claims in First Patent which do not require vehicle overstay to be determined by the subterraneous detection apparatus lack clarity and fail to define the invention Legislation: Evidence Act 1995 (Cth) s 136 Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) Patents Act 1990 (Cth) ss 7, 13, 15, 18, 22A, 40, 117, 120, 122, 123, 138 Intellectual Property Legislation Amendment (Raising the Bar) Regulations 2013 (No 1) (Cth) Cases cited: Adelaide Corporation v Australasian Performing Right Association Limited [1928] HCA 10; (1928) 40 CLR 481 Aktiebolaget Hässle v Alphapharm Pty Ltd [2002] HCA 59; (2002) 212 CLR 411 Apotex Pty Ltd v Les Laboratoires Servier (No 2) [2012] FCA 748; (2012) 293 ALR 272 Apotex Pty Ltd v Warner-Lambert Co LLC (No 2) [2016] FCA 1238; (2016) 122 IPR 17 AstraZeneca AB v Apotex Pty Ltd [2014] FCAFC 99; (2014) 226 FCR 324 AstraZeneca AB v Apotex Pty Ltd [2015] HCA 30; (2015) 257 CLR 356 Bayer Pharma Aktiengesellschaft v Genentech, Inc [2012] FCA 1467; (2012) 98 IPR 424 Bitech Engineering v Garth Living Pty Ltd [2010] FCAFC 75; (2010) 86 IPR 468 Blueport Nominees Pty Ltd v Sewerage Management Services Pty Ltd [2015] FCA 631; (2015) 251 FCR 127 Britax Childcare Pty Ltd v Infa-Secure Pty Ltd (No 3) [2012] FCA 1019 British Acoustic Films Ltd v Nettlefold Productions (1936) 53 RPC 221 Collins v Northern Territory [2007] FCAFC 152; (2007) 161 FCR 549 Dynamic Supplies Pty Ltd v Tonnex International Pty Limited (No 3) [2014] FCA 909; (2014) 312 ALR 705; (2014) 107 IPR 548 E I Du Pont de Nemours & Co v ICI Chemicals & Polymers Limited [2005] FCA 892; (2005) 66 IPR 462 Elconnex Pty Ltd v Gerard Industries Pty Ltd (1992) 25 IPR 173 Eli Lilly & Co v Pfizer Overseas Pharmaceuticals [2005] FCA 67; (2005) 218 ALR 408; (2005) 64 IPR 506 Firebelt Pty Ltd v Brambles Australia Ltd [2000] FCA 1689; (2000) 51 IPR 531 Firebelt Pty Ltd v Brambles Australia Ltd [2002] HCA 21; (2002) 76 ALJR 816; (2002) 188 ALR 280 Futuretronics.com.au Pty Limited v Graphix Labels Pty Ltd (No 2) [2008] FCA 746; (2008) 76 IPR 763 General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457 GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser Healthcare (UK) Ltd [2016] FCAFC 90; (2016) 120 IPR 406 GlaxoSmithKline Consumer Healthcare Investments (Ireland) (No 2) Ltd v Generic Partners Pty Ltd [2018] FCAFC 71; (2018) 264 FCR 474 Graham Hart (1971) Pty Ltd v SW Hart & Co Pty Ltd [1978] HCA 61; (1978) 141 CLR 305 ICI Chemicals & Polymers Ltd v Lubrizol Corp Inc [1999] FCA 345; (1999) 45 IPR 577 ICI Chemicals & Polymers Ltd v Lubrizol Corporation Inc [2000] FCA 1349; (2000) 106 FCR 214 Industrial Galvanizers Corporation Pty Ltd v Safe Direction Pty Ltd [2018] FCA 1192; (2018) 135 IPR 220 Innovative Agriculture Products Pty Ltd v Cranshaw (1996) 35 IPR 643 JMVB Enterprises Pty Ltd v Camoflag Pty Ltd [2005] FCA 1474; (2005) 67 IPR 68 Jupiters Ltd v Neurizon Pty Ltd [2005] FCAFC 90; (2005) 222 ALR 155; (2005) 65 IPR 86 Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd [2001] HCA 8; (2001) 207 CLR 1 Les Laboratoires Servier v Apotex Pty Ltd [2016] FCAFC 27; (2016) 247 FCR 61 Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 58; (2004) 217 CLR 274 Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [No 2] [2007] HCA 21; (2007) 235 CLR 173 Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd [1980] HCA 9; (1980) 144 CLR 253 Morton-Norwich Products Inc v Intercen Ltd [1978] RPC 501 Northern Territory v Collins [2008] HCA 49; (2008) 235 CLR 619 Oxworks Trading Pty Ltd v Gram Engineering Pty Ltd [2019] FCAFC 240; (2019) 154 IPR 215 Pfizer Overseas Pharmaceuticals v Eli Lilly & Co [2005] FCAFC 224; (2005) 225 ALR 416; (2005) 68 IPR 1 PhotoCure ASA v Queen's University at Kingston [2005] FCA 344; (2005) 216 ALR 41; (2005) 64 IPR 314 Polwood Pty Ltd v Foxworth Pty Ltd [2008] FCAFC 9; (2008) 165 FCR 527 Prestige Group (Aust) Pty Ltd v Dart Industries Inc (1990) 26 FCR 197 Raleigh Cycle Co Ltd v H Miller & Co Ltd [1948] 1 All ER 308; (1948) 65 RPC 141 Ranbaxy Australia Pty Ltd v Warner-Lambert Co LLC [2008] FCAFC 82; (2008) 77 IPR 449 RD Werner & Co Inc v Bailey Aluminium Products Pty Ltd (1989) 25 FCR 565; (1989) 13 IPR 513 Re Alsop's Patent [1907] 24 RPC 733 Rescare Ltd v Anaesthetic Supplies Pty Ltd (1992) 25 IPR 119; (1992) 111 ALR 205 Sandvik Intellectual Property AB v Quarry Mining & Construction Equipment Pty Ltd [2016] FCA 236; (2016) 118 IPR 421 Sandvik Intellectual Property AB v Quarry Mining & Construction Equipment Pty Ltd [2017] FCAFC 138; (2017) 348 ALR 156; (2017) 126 IPR 427 University of New South Wales v Moorhouse [1975] HCA 26; (1975) 133 CLR 1 Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd (trading as Database Consultants Australia) (No 2) [2013] FCA 395; (2013) 101 IPR 496 Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 4) [2020] FCA 819 Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 6) [2020] FCA 1866 Vidal Dyes Syndicate Ltd v Levinstein Ltd (1912) 29 RPC 245 Warner-Lambert Co LLC v Apotex Pty Limited (No 2) [2018] FCAFC 26; (2018) 355 ALR 44; (2018) 129 IPR 205 Zetco Pty Ltd v Austworld Commodities Pty Ltd (No 2) [2011] FCA 848 Division: General Division Registry: New South Wales National Practice Area: Intellectual Property Sub-area: Patents and associated Statutes Number of paragraphs: 672 Dates of hearing: 22–26, 29–31 March 2021 & 15–16 April 2021 Counsel for the Applicant/Cross-Respondent: Mr R Cobden SC with Ms P Arcus and Ms J Ambikapathy Solicitor for the Applicant/Cross-Respondent: Johnson Winter & Slattery Counsel for the First Respondent/Cross-Claimant: Mr B Caine QC with Ms C Cunliffe Solicitor for the First Respondent/Cross-Claimant: Norton Rose Fulbright Australia Counsel for the Second Respondent: Mr H Bevan with Mr A McRobert Solicitor for the Second Respondent: Ashurst Australia ORDERS NSD 200 of 2019 BETWEEN: VEHICLE MONITORING SYSTEMS PTY LIMITED ACN 107 396 136 Applicant AND: SARB MANAGEMENT GROUP PTY LTD (T/A DATABASE CONSULTANTS AUSTRALIA) ACN 106 549 722 First Respondent CITY OF MELBOURNE Second Respondent AND BETWEEN: SARB MANAGEMENT GROUP PTY LTD (T/A DATABASE CONSULTANTS AUSTRALIA) ACN 106 549 722 Cross-Claimant AND: VEHICLE MONITORING SYSTEMS PTY LIMITED ACN 107 396 136 Cross-Respondent order made by: BESANKO J DATE OF ORDER: 8 March 2023 THE COURT ORDERS THAT: 1. The applicant bring in draft minutes of order reflecting the conclusions in these reasons and the parties will be heard as to the terms of the orders. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT BESANKO J: Introduction 1 Vehicle Monitoring Systems Pty Limited (VMS) is the registered owner of two patents. The first patent is Australian Patent No. 2005243110 and bears the title "Method, apparatus and system for parking overstay detection" (the First Patent). The second patent is Australian Patent No. 2011204924 (the Second Patent) and has the same title. The invention is for identifying the overstay of a vehicle in a parking space and involves a battery-powered subterraneous detection apparatus (DA) to detect the presence of a vehicle in a parking space, the storage of data in that apparatus and the wireless transmission of that data to a data collection apparatus (DCA) and the indication by that device to an operator of identified instances of vehicle overstay in a parking space. The DCA may be portable and may retrieve data from the DA whilst the DCA is located in a moving vehicle. The wireless retrieval of data from the DA may be performed in response to receipt of a wireless wake-up signal from a DCA. 2 In earlier periods of time, the DA was referred to as a vehicle detection unit (VDU) or an in-ground unit (IGU). In earlier periods of time, the DCA was referred to as a drive-by enforcement vehicle (DEV) or the in-vehicle unit (IVU) and may consist of a handheld unit (HHU) and a transient middle tier (TMT) which is a belt-worn device which communicates with the HHU by Bluetooth. 3 VMS has brought a proceeding in this Court against SARB Management Group Pty Ltd (t/a Database Consultants Australia) (SARB) and the City of Melbourne (CoM) for relief in relation to alleged infringements of the patents. 4 The claim by VMS against SARB is that it has directly and indirectly infringed claims in the First Patent and claims in the Second Patent by its conduct in connection with vehicle detection sensors, systems and methods known as PinForce. There are three versions of SARB's PinForce Sensors, PinForce Systems and PinForce Methods. The First PinForce Sensor and First PinForce System was made, sold, used and kept by SARB and the subject of authorisation by SARB to local government councils to use, between approximately October 2007 and December 2016 (PinForce Version 1). Between approximately January 2016 and December 2016, PinForce Version 1 was progressively upgraded to the Third PinForce Sensor and Third PinForce System. 5 The Second PinForce Sensor and Second PinForce System was made, sold, used and kept by SARB and the subject of authorisation by SARB to local government councils to use, between approximately November 2014 and December 2016 (PinForce Version 2). Between approximately November and December 2016, PinForce Version 2 was progressively upgraded to the Third PinForce Sensor and Third PinForce System. 6 The Third PinForce Sensor and Third PinForce System was made, sold, used and kept by SARB and the subject of authorisation by SARB to local government councils to use from approximately December 2014 (PinForce Version 3). 7 VMS seeks declarations, injunctions, orders for delivery up, damages or an account of profits and additional damages under s 122(1A) of the Patents Act 1990 (Cth) (the Act) against SARB. 8 The relief which VMS seeks against CoM is similar, although the relief is based on claims of direct infringement by CoM. 9 On 6 April 2020, the Court made the following orders in this proceeding: 1. Pursuant to r 30.01 of the Federal Court Rules 2011 (Cth), the quantum of any pecuniary relief be heard and determined separately from, and after, the determination of all issues of liability for infringement and patent validity. 2. For the avoidance of doubt: (a) the issues of liability for infringement include all questions of liability for authorisation of any infringement, of liability for additional damages and any question of innocent infringement under s 123 of the Patents Act 1990 (Cth); (b) the issues of quantum include the quantum of any additional damages and the allegations of double-recovery that are pleaded in paragraphs 10(b) and 11(b) of the First Respondent's Defence filed 28 February 2020 and paragraphs 18(d) and 19(e) of the Second Respondent's Defence filed 28 February 2020. 10 With respect to paragraph 2(a) of the orders, the following matters should be noted. The authorisation of infringements are actionable by reason of s 13 of the Act and VMS's case is that SARB has authorised local government councils to use the PinForce Sensors and the PinForce Systems and that SARB has, in Australia, authorised other persons to use the PinForce Sensors and the PinForce Systems in one or more methods for identifying overstay of a vehicle in a parking space. As I have said, the claim for additional damages is made under s 122(1A) of the Act and is made against both respondents and under the orders, the Court is to determine liability for additional damages at this stage, but the quantum thereof (assuming liability for additional damages is established) is to be determined at a later stage. With respect to innocent infringement under s 123 of the Act, that is a basis upon which a Court may refuse relief by way of damages or an account of profits. The defence was raised by CoM in its Amended Defence, but it was not pursued by CoM in closing submissions and need not be considered any further. 11 With respect to paragraph 2(b) of the orders, the following matters should be noted. The allegations of double recovery are made by both SARB and CoM. The allegations are based on a Deed of Release dated 18 June 2014. SARB alleges in its Further Amended Defence that in relation to the PinForce Sensors and PinForce Systems, VMS has already been compensated under the Deed of Release for loss and damage alleged to arise from the supply or use of the PinForce Sensors and PinForce Systems which were sold or supplied by SARB prior to 9 May 2013, "including in respect of allegations arising from the use of those PinForce Sensors and PinForce Systems after that date". SARB advances a similar plea in response to the alleged infringement of PinForce Methods. CoM advances equivalent pleas in its Amended Defence. The issue of double recovery is, like the quantum of additional damages (assuming liability for additional damages is established), to be determined at a later stage. 12 SARB has filed a Notice of Cross-Claim in which it seeks orders from the Court under s 138(3) of the Act revoking the First Patent and the Second Patent. SARB did not press in its closing submissions all of its pleaded grounds of invalidity. 13 The infringement issues of which there were four include issues of construction. 14 The first issue raises the meaning of "wake-up signal" in certain claims in the patents and whether PinForce Version 1 and PinForce Version 2 used a wake-up signal. 15 The second issue raises the construction of certain claims in the First Patent and whether the claims include a method or system where the determination of vehicle overstay is made by the DCA instead of the DA, it being accepted that in the case of PinForce Version 3, all capability of determining vehicle overstay in the DA has been removed and vehicle overstay is determined by the DCA. 16 The third issue raises a question as to the infringing acts for which SARB is liable because it has authorised those acts, or because it is a joint tortfeasor in relation to these acts. It is also necessary to consider in this context the construction of the Deed of Release dated 18 June 2014. 17 The final issue is whether SARB and CoM are liable for additional damages under s 122(1A) of the Act. 18 The grounds of invalidity which were pursued by SARB in its closing submissions are as follows: (1) In relation to both patents, a failure to describe in the complete specification the best method known to VMS of performing the invention (s 40(2)(a)); (2) In relation to both patents, a failure by VMS to describe the invention fully (s 40(2)(a)); (3) In relation to both patents, a claim that VMS was not the inventor, or the sole inventor, of the invention and did not derive title from the inventor under s 15 of the Act and is not entitled to the First Patent or the Second Patent and it is just and equitable that the patents be revoked under s 138(3) of the Act; (4) In relation to both patents, and in respect of those claims that do not involve the use of wake-up signals (i.e., claims 1 and 6–10 (to the extent they depend on claim 1) and 30–32 of the First Patent and claims 1–25 and 27–29 of the Second Patent), the claims are not fairly based on the matter described in the specification (s 40(3)); (5) In relation to both patents, the "invention" lacks an inventive step having regard to common general knowledge as it existed in the patent area before the earliest priority date of the claims (s 18(1)(b)(ii)). In relation to this ground, SARB relies only on common general knowledge and does not rely on any information of the kind identified in s 7(3) of the Act; (6) In relation to the First Patent and if, contrary to earlier contentions made by SARB, claims 21–23 and 28–32 encompass a system in which the DCA determines vehicle overstay, then the First Patent, or at least those claims in the First Patent, should be revoked because: (a) the Patent or those claims were obtained by false suggestion or misrepresentation (s 138(3)(d)); and (b) they lack clarity and therefore do not comply with s 40(3); and (c) they lack definition and therefore do not comply with s 40(2)(b). 19 CoM adopted SARB's submissions in relation to infringement and invalidity. CoM confined its closing submissions (written and oral) to the reasons it contends an award of additional damages should not be made against it. 20 The relevant version of the Act and Regulations for the purpose of this proceeding is that in force prior to the amendments made to the Act by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) (the Raising the Bar Act) and the Intellectual Property Legislation Amendment (Raising the Bar) Regulations 2013 (No 1) (Cth). The First Patent 21 The complete specification of the First Patent was published and became open for public inspection on 24 November 2005. The application for the First Patent was made on 9 May 2005 and the patent was sealed on 13 March 2008. The priority date for the claims in the First Patent is 17 May 2004. The inventor named in the First Patent is Mr Fraser John Welch. 22 The First Patent identifies the field of the invention as relating to parking violations and, more particularly, to the detection of vehicles that overstay a defined time interval in parking spaces. 23 In the section in the specification entitled "Background", the traditional methods of detecting vehicles that have exceeded the time limit of a parking space are described. A traditional method of placing a chalk mark on the tyre of a vehicle in a parking space and then returning at a later time to check if any of the vehicles with "chalked" tyres are still parked is described. The inefficiencies and disadvantages said to be associated with that method are identified and then a statement is made that a need thus exists for a method, an apparatus and a system that overcomes, or at least ameliorates, one or more of the described disadvantages. 24 In the "Summary" section in the specification, three aspects of the invention are described. Those descriptions of aspects of the invention correspond with claims 1, 11 and 21 respectively. 25 The first aspect is the provision of a method performed by a subterraneous DA for identifying overstay of a vehicle in a parking space. The method comprises the steps of detecting the presence of a vehicle in the parking space, processing and storing data relating to the presence of the vehicle in the parking space, determining whether the vehicle has overstayed a defined duration in the parking space, and wirelessly transmitting data relating to identified instances of overstay of the vehicle in the parking space. 26 The second aspect is the provision of a battery-powered apparatus for subterraneous installation for identifying overstay of a vehicle in a parking space. The apparatus comprises a detector adapted to detect the presence of a vehicle in the parking space, a processor coupled to the detector for processing and storing data received from the detector, and determining whether the vehicle has overstayed a defined duration in the parking space, a radio receiver coupled to the processor for receiving wake-up signals, and a radio transmitter coupled to the processor for transmitting data relating to identified instances of overstay of the vehicle in the parking space. 27 The third aspect is the provision of a system for identifying overstay of vehicles in parking spaces. The system comprises a plurality of battery-powered DAs for identifying overstay of vehicles in respective parking spaces when subterraneously installed, and a DCA for wirelessly retrieving data from the plurality of battery-powered detecting apparatuses. The DCA comprises a radio transmitter for transmitting wake-up signals to ones of the plurality of battery-powered DAs, a radio receiver for receiving data from woken-up ones of the plurality of battery-powered DAs, a memory unit for storing data and instructions to be performed by a processing unit, and a processing unit coupled to the radio transmitter, the radio receiver and the memory unit. The processing unit is programmed to process data received via the radio receiver and to indicate instances of vehicle overstay to an operator. The data relates to identified instances of vehicle overstay in the respective parking space. 28 The specification then contains the following passages (on p 3) which were the subject of expert evidence and of submissions by the parties: Repeated wireless wake-up of a detection apparatus is typically performed irregularly with respect to time depending on the presence of a data collection device. Wireless retrieval of data may be performed in response to wireless wake-up of a detection apparatus. Overstay of a vehicle in a parking space may be determined at the detection apparatus by processing data received from the detector. The data collection apparatus may be portable and may retrieve the data from the detection apparatus whilst the data collection apparatus is located in a moving vehicle. Data relating to presence of a vehicle may comprise presence duration of the vehicle in the parking space, movements of the vehicle in and out of the parking space with corresponding time-stamp information, and/or an indication of overstay of the vehicle in the parking space. Vehicle presence detection may be performed by a magnetometer that detects changes in the earth's magnetic field caused by presence or absence of a vehicle in the parking space. The detection apparatus may be encased in a self-contained, sealed housing for subterraneous installation in a parking space. The radio transmitter and/or radio receiver may operate in the ultra-high frequency (UHF) band and may jointly be practised as a transceiver. 29 The specification contains nine drawings, diagrams or figures which are described in the specification. 30 The body of the specification states that a "small number of embodiments are described hereinafter, by way of example only, with reference to the accompanying drawings" and contains the following brief description of the drawings, diagrams or figures: Fig. 1 is a flow diagram of a method for identifying overstay of a vehicle in a parking space; Fig. 2 is a block diagram of a detection apparatus for monitoring presence of a vehicle in a parking space; Fig. 3 is a block diagram of a data collection apparatus for retrieving data from one or more detection apparatuses; Fig. 4 is block diagram of another data collection apparatus for retrieving data from one or more detection apparatuses; Fig. 5 is a schematic diagram of a system for identifying overstay of vehicles in parking spaces; Fig. 6 is a schematic diagram of another system for identifying overstay of vehicles in parking spaces; Fig. 7 is a schematic diagram of a further system for identifying overstay of vehicles in parking spaces; Fig. 8 is a flow diagram of a method of operating a detection apparatus according to an embodiment of the present invention; and Fig. 9 is a flow diagram of a method of operating a collection apparatus according to an embodiment of the present invention. 31 Figures 1, 2, 4, 5, 6, 8 and 9 are as follows: 32 A detailed description of the methods, apparatuses and systems largely by reference to the figures, extends over approximately 10 pages in the specification. In light of the issues between the parties, it is necessary to set out the following passages: In relation to Figure 1 Page 4 Fig. 1 is a flow diagram of a method for identifying overstay of a vehicle in a parking space. Presence of a vehicle in the parking space is detected using a detection apparatus in step 110. Data relating to presence of the vehicle is processed and stored in the detection apparatus at step 120. The detection apparatus is wirelessly woken-up at step 130 and at least a portion of the data is retrieved from the detection apparatus at step 140. Overstay of the vehicle in the parking space is indicated based on the retrieved data at step 150. In relation to Figure 2 Fig. 2 is a block diagram of an apparatus 200 for monitoring presence of a vehicle in a parking space. …. Page 5 The radio receiver 240 and radio transmitter 250 are practised as a 433 MHz ultra-high frequency (UHF) radio transceiver for transmitting and receiving radio signals to and from a data collection apparatus, respectively. Various UHF transceivers may be practised such as the Micrel MICRF501 transceiver, which requires to be turned on for approximately 1ms before RF carrier energy can be detected. However, persons skilled in the art would readily understand that other types of transmitters, receivers or transceivers may be practised such as low frequency (LF) transceivers. Other UHF frequencies may also be practised such as in frequency bands commonly used for low powered devices, including 868 MHz, 915 MHz and 2.4 GHz. The battery 260 comprises a lithium manganese dioxide (LiMnO2) battery, which may be capable of providing the apparatus 200 with 5 to 10 years of continuous operation. Again, persons skilled in the art would readily understand that various other battery types may be practised in place of a LiMnO2 battery. Page 6 The apparatus 200 generally operates in a low-power mode while detecting vehicle movements and presence in a corresponding parking space, which may be practised on a continuous or periodic (e.g., interrupt driven) basis to conserve battery life. Although the radio receiver 240 of the apparatus 200 consumes a small amount of power (relative to other radio receivers), the radio receiver 240 is only turned on for the shortest possible time duration at regular intervals to detect the presence of a data collection apparatus. At other times, the radio receiver 240 is turned off to conserve battery life. … In one embodiment, the apparatus 200 determines and maintains three primary types of information: • Current Status The current status of the parking space in terms of vehicle presence (i.e., present or not present) and the amount of time the space has remained in the present state. • Historical Vehicle Movements Page 7 A record of each vehicle movement in the parking space including the date and time of the movement. • Overstay Situation Detected when a vehicle remains in said parking space for a duration longer than a defined time interval. The apparatus 200 may optionally be programmed with information relating to the hours of operation and parking time limits that apply to an associated parking space based on the time of day and day of week. Decisions concerning overstay can thus be made by the apparatus 200 based on different time limits that may apply to the parking space at different times. Information may also be downloaded to the apparatus 200 using a radio receiver in the apparatus 200. The same radio receiver as used for receiving wake-up signals or a separate radio receiver may be used for this purpose. The downloaded information may comprise, but is not limited to: • application firmware for the apparatus 200, • a table of operating hours and time limits (time of day and day of week) applicable to an associated parking space, • operating parameters for the apparatus 200, and • information for updating or synchronising the real-time clock with a more accurate real-time source. Alternatively, decisions relating to vehicle overstay can be made by a data collection apparatus that collects data from the apparatus 200 via a radio communication link rather than by the apparatus 200. … In relation to Figure 4 Page 9 A data collection apparatus transmits a wake-up signal (e.g., RF carrier followed by a defined message) and listens for valid responses from detection apparatuses. If no response is received from a detection apparatus, the data collection apparatus repeatedly transmits the wake-up signal. … In relation to Figure 6 Page 10 Fig. 6 is a schematic diagram of another system for identifying overstay of vehicles in parking spaces. Fig. 6 shows detection apparatuses 612, 622, … 662 installed in parking spaces 610, 620, …, 660, respectively. Vehicles 624 and 644 are parked in parking spaces 620 and 640, respectively. Detection apparatuses 622 and 642 are shown in radio communication with a data collection device 680 by means of jagged lines 672 and 674, respectively. The data collection device 680 may be of fixed location remote from the parking spaces 610 620, …, 660 or may comprise a hand-held portable apparatus carried by a pedestrian enforcement officer. … In relation to Figure 8 Page 11 Fig. 8 is a flow diagram of a method of operating a detection apparatus such the apparatus 200 in Fig. 2. A cycle of operation begins at step 810. After a wait period of duration t1 at step 820, the radio receiver is turned on at step 830. After a further wait period of duration t2 at step 840, for the radio receiver to stabilise, the received radio frequency signal strength (RSSI) is measured at step 850. At step 860, a determination is made whether the signal strength of a detected RF carrier is larger than a defined threshold. If an RF carrier of sufficient signal strength is detected (Y), a determination is made at step 870 whether the RF carrier relates to a data collection apparatus. If a data collection apparatus is detected (Y), a communications session between the detector apparatus and the data collection apparatus occurs at step 880. Such a session typically involves transmission and reception by both the detector apparatus and the data collection apparatus. The radio receiver and transmitter are turned off at step 890 and a new operation cycle begins at step 810. If an RF carrier of sufficient signal strength is not detected (N), at step 860, the radio receiver is turned off at step 890 and a new operation cycle begins at step 810. If a data collection apparatus is not detected (N), at step 870, the radio receiver is turned off at step 890 and a new operation cycle begins at step 810. The duration t2 is determined according to the type of radio receiver used and is typically of the order of 1 millisecond. Setting the duration t1 to 250 milliseconds implies an on:off duty cycle of 1:250. A typical low-power receiver may consume 5 to 10mA in receiver mode and the average power consumption of the data collection apparatus detection process is thus 20 to 40 µA. 33 Again, in light of the issues between the parties, it is necessary to set out the following claims in the First Patent: 1. A method performed by a subterraneous detection apparatus for identifying overstay of a vehicle in a parking space, said method comprising the steps of: detecting presence of a vehicle in said parking space; processing and storing data relating to presence of said vehicle in said parking space; determining whether said vehicle has overstayed a defined time duration in said parking space; and wirelessly transmitting data relating to identified instances of overstay of said vehicle in said parking space. 2. The method of claim 1, wherein said step of wirelessly transmitting is performed in response to receipt of a wireless wake-up signal. 3. The method of claim 2, wherein wireless wake-up signals are received irregularly with respect to time. … 8. The method of claim 1 or claim 2, comprising the further step of determining an overstay duration of the vehicle in said parking space and storing a record thereof. … 11. A battery-powered apparatus for subterraneous installation for identifying overstay of a vehicle in a parking space, said apparatus comprising: a detector adapted to detect presence of a vehicle in the parking space; a processor coupled to said detector, said processor adapted to process and store data received from said detector and to determine whether said vehicle has overstayed a defined time duration in said parking space; a radio receiver coupled to said processor for receiving wake-up signals; and a radio transmitter coupled to said processor for transmitting data relating to identified instances of overstay of said vehicle in said parking space. … 21. A system for identifying overstay of vehicles in parking spaces, said system comprising: a plurality of battery-powered detection apparatuses for identifying overstay of vehicles in respective parking spaces when subterraneously installed; and a data collection apparatus for wirelessly retrieving data from said plurality of battery-powered detection apparatuses, said data collection apparatus comprising: a radio transmitter for transmitting wake-up signals to ones of said plurality of battery-powered detection apparatuses; a radio receiver for receiving data from woken-up ones of said plurality of battery-powered detection apparatuses; a memory unit for storing data and instructions to be performed by a processing unit; and a processing unit coupled to said radio transmitter, said radio receiver and said memory unit; said processing unit programmed to process said data received via said radio receiver and to indicate incidences of vehicle overstay to an operator; said data relates to identified instances of vehicle overstay in a respective parking space. 22. The system of claim 21, wherein said data is received from one of said battery-powered detection apparatuses in response to receipt of a wake-up signal transmitted from said data collection apparatus. 23. The system of claim 22, wherein said data collection apparatus is portable. … 28. The battery-powered apparatus of claim 11, wherein said radio receiver is only turned on to receive said wake-up signals for short durations to conserve power in said battery-powered detection apparatus. 29. The method claim 1, comprising the further step of selectively enabling receipt of said wake-up signal for short durations to conserve power in said subterraneous detection apparatus. 30. A method performed by a subterraneous detection apparatus for identifying overstay of a vehicle in a parking space, said method substantially as herein described with reference to an embodiment shown in the accompanying drawings. 31. A battery-powered apparatus for subterraneous installation for identifying overstay of a vehicle in a parking space, said apparatus substantially as herein described with reference to an embodiment shown in the accompanying drawings. 32. A system for identifying overstay of vehicles in parking spaces, said system substantially as herein described with reference to an embodiment shown in the accompanying drawings. The Second Patent 34 The complete specification for the Second Patent was published and became open to the public for inspection on 11 August 2011. The application for the patent was made on 21 July 2011 and the patent was sealed on 4 February 2016. The priority date for the claims in the Second Patent is (as with the claims in the First Patent) 17 May 2004. The inventor named in the Second Patent is Mr Fraser John Welch. 35 The Second Patent describes the invention in very similar terms to the description of the invention in the First Patent. The different consistory clauses in the Second Patent reflect the different language of the claims. The nine drawings, diagrams or figures in the Second Patent are identical to the nine drawings or figures in the First Patent. 36 Again, in light of the issues between the parties, it is necessary to set out the following claims in the Second Patent: 1. A method for identifying vehicles that overstay a parking time limit associated with a parking space, said method comprising the steps of: detecting presence of a vehicle in said parking space using a battery-powered apparatus encased in a self-contained, sealed housing; processing and storing, in said battery-powered apparatus encased in a self-contained, sealed housing, data relating to presence of said vehicle in said parking space; determining from said stored data by said battery-powered apparatus encased in a self-contained, sealed housing and independently of any parking payment system, whether said vehicle has overstayed said parking time limit associated with said parking space; detecting presence of a data collection apparatus within wireless communication range of said detection apparatus; and when presence of said data collection apparatus is detected, wirelessly transmitting from said battery-powered apparatus encased in a self-contained, sealed housing, data relating to an identified instance of said vehicle overstaying said parking time limit associated with said parking space. … 10. A battery-powered apparatus for identifying vehicles that overstay a parking time limit associated with a parking space, said apparatus comprising: a detector adapted to detect presence of a vehicle in said parking space; a processor coupled to said detector, said processor adapted to process and store data received from said detector and to determine from said data and independently of any parking payment system whether said vehicle has overstayed a parking time limit associated with said parking space; a radio receiver coupled to said processor for receiving radio signals from a data collection apparatus; and a radio transmitter coupled to said processor for transmitting data relating to identified instances of said vehicles overstaying said parking time limit associated with said parking space; wherein said battery powered apparatus is encased in a self-contained, sealed housing. … 25. A method for identifying overstay of a vehicle in a parking space, said method comprising the steps of: detecting presence of a vehicle in said parking space using a battery-powered apparatus encased in a self-contained, sealed housing; processing and storing, in said battery-powered apparatus encased in a self-contained, sealed housing, data relating to presence of said vehicle in said parking space; determining from said stored data by said battery-powered apparatus encased in a self-contained, sealed housing and independently of any parking payment system, whether said vehicle has overstayed a defined time duration in said parking space; and wirelessly transmitting, from said battery-powered apparatus encased in a self-contained, sealed housing, data relating to an identified instance of overstay of said vehicle in said parking space. 26. An apparatus for identifying overstay of a vehicle in a parking space, said apparatus comprising: a detector adapted to detect presence of a vehicle in the parking space; a processor coupled to said detector, said processor adapted to process and store data received from said detector and to determine from said data and independently of any parking payment system whether said vehicle has overstayed a defined time duration in said parking space; a radio receiver coupled to said processor for receiving wake-up signals; and a radio transmitter coupled to said processor for transmitting data relating to identified instances of overstay of said vehicle in said parking space; and a battery for providing power to said detector, processor, radio receiver, and radio transmitter; wherein said apparatus is encased in a self-contained, sealed housing. 27. A method for identifying overstay of a vehicle in a parking space, said method comprising the steps of: detecting presence of a vehicle in said parking space using a battery-powered apparatus; processing and storing, in said battery-powered apparatus, data relating to presence of said vehicle in said parking space; determining from said stored data by said battery-powered apparatus and independently of any parking payment system, whether said vehicle has overstayed a defined time duration in said parking space; and wirelessly transmitting, from said battery-powered apparatus, data relating to an identified instance of overstay of said vehicle in said parking space. 28. An apparatus for identifying overstay of a vehicle in a parking space, said apparatus comprising: a detector adapted to detect presence of a vehicle in the parking space; a processor coupled to said detector, said processor adapted to process and store data received from said detector and to determine from said data and independently of any parking payment system whether said vehicle has overstayed a defined time duration in said parking space; a radio transmitter coupled to said processor for transmitting data relating to identified instances of overstay of said vehicle in said parking space; and a battery for providing power to said detector, processor, and radio transmitter; The Decision of this Court in 2013 37 VMS was the registered owner of Innovation Patent No 2010101354 which bears the title "Method, apparatus and system for parking overstay detection". The Innovation Patent was certified on 14 January 2011. The complete application for the patent was filed on 2 December 2010 as a divisional application of Patent Application No. 2008200089 (the Parent Application). The Parent Application was filed on 8 January 2008 as a divisional application of the First Patent. The Innovation Patent expired on 9 May 2013. 38 VMS instituted a proceeding in this Court against SARB alleging that the supply of SARB's VDU known as the PinForce Sentinel VDU which was used in a method for detecting the overstay of a vehicle in a parking space, infringed the claims in the Innovation Patent. The Court upheld the validity of the Innovation Patent and found that the claims had been infringed by SARB (Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd (trading as Database Consultants Australia) (No 2) [2013] FCA 395; (2013) 101 IPR 496 (VMS 2013)). 39 A construction issue resolved by the Court in VMS 2013 was whether the PinForce Sentinel VDU had a radio receiver for receiving wake-up signals within claim 2 of the Innovation Patent. Claim 2 of the Innovation Patent and claim 26 of the Second Patent are in identical terms. The Court described the PinForce Sentinel VDU in detail. The Court found that it infringed claim 2 of the Innovation Patent. 40 As I have said, an issue arises in this proceeding as to the meaning of "wake-up signal" in claims in the First Patent and the Second Patent and whether PinForce Version 1 and PinForce Version 2 wirelessly transmits data in response to receipt of a wireless wake-up signal. VMS filed a Reply in this proceeding in which it alleged that by reason of the findings in VMS 2013, an estoppel in relation to that issue arose against SARB. The plea of issue estoppel is no longer pressed by VMS. VMS now submits that the findings in VMS 2013 are highly persuasive. 41 The decision in VMS 2013 is relevant in another respect. In this proceeding, SARB contends that for the purposes of claims 1, 6–10 (insofar as they depend on claim 1) and 30–32 of the First Patent and claims 1–25 and 27–29 of the Second Patent, there is no real and reasonably clear disclosure of a system/apparatus/method in which the DA communicates with the DCA without the aid of wake-up signals and, in those circumstances, those claims are not fairly based. VMS contends that a "materially identical argument" was put to this Court in VMS 2013 and rejected by the Court. 42 There was an appeal to the Full Court of this Court against the orders made in VMS 2013 and the appeal was heard. However, the proceeding was resolved before judgment was delivered when VMS and SARB entered into the Deed of Release dated 18 June 2014. The Infringement Issues 43 The infringement issues raise issues as to the proper construction of claims in the patents. The principles of claim construction are well established and are not in dispute in this case. In the circumstances, it is sufficient to set out the statement of those principles by the Full Court of this Court in Jupiters Ltd v Neurizon Pty Ltd [2005] FCAFC 90; (2005) 222 ALR 155; (2005) 65 IPR 86 (at [67]): (i) the proper construction of a specification is a matter of law: Décor Corp Pty Ltd v Dart Industries Inc (1988) 13 IPR 385 at 400; (ii) a patent specification should be given a purposive, not a purely literal, construction: Flexible Steel Lacing Company v Beltreco Ltd (2000) 49 IPR 331 at [81]; and it is not to be read in the abstract but is to be construed in the light of the common general knowledge and the art before the priority date: Kimberley-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1 at [24]; (iii) the words used in a specification are to be given the meaning which the normal person skilled in the art would attach to them, having regard to his or her own general knowledge and to what is disclosed in the body of the specification: Décor Corp Pty Ltd at 391; (iv) while the claims are to be construed in the context of the specification as a whole, it is not legitimate to narrow or expand the boundaries of monopoly as fixed by the words of a claim by adding to those words glosses drawn from other parts of the specification, although terms in the claim which are unclear may be defined by reference to the body of the specification: Kimberley-Clark v Arico at [15]; Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588 at 610; Interlego AG v Toltoys Pty Ltd (1973) 130 CLR 461 at 478; the body of a specification cannot be used to change a clear claim for one subject matter into a claim for another and different subject matter: Electric & Musical Industries Ltd v Lissen Ltd [1938] 56 RPC 23 at 39; (v) experts can give evidence on the meaning which those skilled in the art would give to technical or scientific terms and phrases and on unusual or special meanings to be given by skilled addressees to words which might otherwise bear their ordinary meaning: Sartas No 1 Pty Ltd v Koukourou & Partners Pty Ltd (1994) 30 IPR 479 at 485-486; the Court is to place itself in the position of some person acquainted with the surrounding circumstances as to the state of the art and manufacture at the time (Kimberley-Clark v Arico at [24]); and (vi) it is for the Court, not for any witness however expert, to construe the specification; Sartas No 1 Pty Ltd, at 485–486. Issue 1 44 The first issue raises the meaning of "wake-up signal" in certain claims in the patents and whether PinForce Version 1 and PinForce Version 2 used a wake-up signal. 45 A wake-up signal is referred to in two contexts in the First Patent. First, it is referred to in the context of a step being performed in response to receipt of a wireless wake-up signal, that step being the wireless transmission of data relating to identified instances of overstay of a vehicle in a parking space as in claim 2 of the First Patent. The second is as an integer of the DA being a radio receiver coupled to the processor (previously identified) for receiving wake-up signals as in claim 11 in the First Patent and claim 26 in the Second Patent. 46 VMS adduced evidence from Mr Tony Spirovski. Mr Spirovski is an electrical engineer. He is the sole employee or consultant of a consulting company that specialises in electronics design. He is a qualified electrical engineer who has specialised in working with sensing devices, RF (radio frequency) communications and communication devices concerned with the generation, transmission, processing, exchange and storage of data. He has had a long involvement as an independent expert witness in disputes between VMS and SARB. 47 SARB adduced evidence from Mr Jefferson Harcourt. Mr Harcourt has an Associate Diploma of Mechanical Engineering (Manufacturing) and a Bachelor of Engineering (Honours) in Electronics and Communication Engineering. He sets out his work history in his affidavit at considerable length. It is not necessary for me to repeat it. I accept that he has specialised knowledge in the field of electronics and communications engineering technologies. 48 Each expert provided lengthy affidavits dealing with the issues of infringement and invalidity. They then participated in a conference of experts in which they addressed a number of agreed questions. A joint experts' report (JER) was prepared. The experts then gave evidence in this proceeding in a joint session of evidence over a period of three days. There was no challenge to the expertise of either witness, although SARB made a general challenge to Mr Spirovski's evidence which I will address later in these reasons. 49 The experts were asked in the conference of experts to identify any points of agreement or disagreement between them regarding their understanding of the term "wake-up signal" in the claims in the First Patent and the Second Patent (being claims 2, 3, 4, 5, 11, 12, 13, 21, 22, 28 and 29 in the First Patent and claim 26 in the Second Patent) in light of the specifications of the First Patent and the Second Patent respectively. 50 In the JER, the experts indicated that they agreed that the term "wake-up signal" is somewhat confusing in that the processor and receiver in the DA are active in order to receive the wake-up signal. They agreed that rather, the wake-up signal acts as a keep awake signal to alert the DA to the presence of the DCA within radio communications range and that when the wake-up signal is received, the DA and the DCA engage in a communications session. 51 In addition to the joint observations, Mr Spirovski made the following observations. A wake-up signal within the meaning of the claims in the First Patent is a wireless radio signal that is transmitted by a transient DCA to notify a data detection apparatus that it is within radio communications range. The effect of the wake-up signal is to halt the data detection apparatus' power-saving operating cycle which involves the processor and transceiver being in various states of activity and inactivity, and to keep the processor and radio receiver in an active state, once the DCA is within range, in order to have a communications session with the DCA. 52 In addition to the joint observations, Mr Harcourt made the following observations. A wake-up signal initiates change in a system's power state from a sleep state to a run or active state. In a sleep state, the device is in, or close to, hibernation. The device may "wake" to perform certain routine tasks, and return to sleep. In the case of both patents, the "wake-up signal" is not waking the device from a typical sleep state, but rather initiates a communications session between the IGU and the HHU (TMT and HHU). The IGU is already awake as it must be awake to receive and process messages from the HHU. The wake-up signal would have been better labelled as an "initiate communications request" or "HHU beacon", as it is not technically waking the IGU (DA) up. 53 The experts were also asked to address in the conference of experts any points of agreement or disagreement between them regarding whether PinForce Version 1 uses a wake-up signal as claimed in claims 2, 3, 4, 11, 12, 21, 22, 28 and 29 of the First Patent and claim 26 of the Second Patent. 54 In the JER, the experts indicated that they disagreed as to the signal which acts as the "wake-up signal" within the meaning of the claims in the First Patent. It followed that they disagreed as to which device is sending the wake-up signal. 55 Mr Spirovski expressed the opinion that the [REDACTED] informs the IGU that the TMT is within radio communications range. The effect of receiving the [REDACTED] causes the processor and transceiver in the IGU to [REDACTED]. The [REDACTED] is synonymous with the wake-up signal in the First Patent. The use of a wake-up signal in the form of a [REDACTED]. 56 Mr Harcourt expressed the view that claim 2 of the First Patent discloses that the IGU will wirelessly transmit data in response to a wake-up signal sent by the DCA. The transfer of data is thus initiated by the DCA which sends the so-called "wake-up signal". [REDACTED] 57 It is convenient to note at this point that the notion of performing a communications session is identified in Fig 8 (at step 880) and in Fig 9 (at step 950). It should also be noted that in VMS 2013 (at [79]), Yates J considered the meaning of wake-up signals within claim 2 of the Innovation Patent and said that they are: signals that are sent wirelessly by a data collection apparatus to a detection apparatus that, upon receipt by the detection apparatus, activate it to engage in a communications session with the data collection apparatus, in which the detection apparatus wirelessly transmits data relating to identified instances of overstay of a vehicle in a parking space. 58 VMS submits that the following matters are common ground between it and SARB as to the operation of PinForce Version 1. First, PinForce Version 1 has a battery-powered DA that identifies overstay, by the use of a magnetic sensor, the readings of which are used to detect vehicle presence and which is coupled to a microprocessor in a module that includes, inter alia, a radio transceiver. [REDACTED]. 59 In VMS 2013, the Court set out the process in the case of the PinForce Sentinel VDU which takes place when the DA attempts to communicate with a TMT. The Court's description was relied on by VMS in this case although, at the same time, I did not understand VMS to dispute the description contained in SARB's outline of closing written submissions which is set out below (at [63]). The description of the process given by the Court in VMS 2013 (at [90]) is as follows: [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] 60 [REDACTED]. 61 In VMS 2013, the Court held that SARB's PinForce Sentinel VDU possessed all of the essential features of claim 2 in the Innovation Patent. 62 Mr Stephen Toal is the Director of Development at SARB and he is one of three main shareholders in the company, including as he put it, through entities controlled by him. He has approximately 37 years' experience in software development, "working primarily for system vendors developing and supplying off-the-shelf systems and consulting to large corporate clients". His work history includes leading SARB's design team in developing the "PinForce Sentinel" vehicle detection and parking management system from 2006 to 2012. Mr Toal gave evidence in this case as he had in VMS 2013. 63 SARB set out a description of the process in its outline of closing written submissions on infringement. That description is based on the evidence of Mr Toal and various documents. It is an accurate description of the process and, as I have said, I did not understand VMS to dispute that that is the case. It is as follows: [REDACTED] [REDACTED] REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] (Footnotes omitted.) 64 VMS submits in this case that while Mr Toal provides additional evidence of the information contained in the [REDACTED] and how the communications session is established between the DA and the DCA when there is a violation or pending violation, neither of those matters should lead to a different conclusion in this case from the conclusion reached by the Court in VMS 2013. VMS makes the point that the information provided in the [REDACTED] from the DA was not identified with any precision in VMS 2013. In his evidence in re-examination in VMS 2013, Mr Toal said that the key piece of information was the reason for connecting. He said that there was also other information about how much parking event data has been collected, and other fields. He said: I don't recall all of them off the top of my head. 65 Mr Toal said he believed it was the information set out in the VDU functional specification. 66 In his evidence before this Court, Mr Harcourt agreed that the [REDACTED]. He agreed that while some information was included in the [REDACTED]. 67 Mr Spirovski did not consider that the [REDACTED]. 68 Mr Harcourt expressed the opinion that Mr Spirovski's opinion was incorrect and that it was flawed by reason of his consideration of the Zigbee protocol. In response, Mr Spirovski said the following: This has nothing to do with the Zigbee protocol. [REDACTED] 69 Mr Spirovski was cross-examined at some length about the extent to which he had relied on his knowledge of the Zigbee protocol in formulating his opinion. The Zigbee protocol is a global standard that relates to wireless networking and it relates to the products which have a similar functionality to SARB's products. Mr Spirovski described the Zigbee protocol as a framework that specifically relates to the construction of mesh networks and low power devices and it is targeted towards a particular class of device. He agreed that a fair way to describe it was that it provides the "broad communications architecture". Mr Spirovski was taken through paragraphs in his affidavit which referred to the Zigbee protocol. He expressed a number of opinions in para 125 of his first affidavit based on his knowledge of the Zigbee protocol and two product specifications, specification 1.0 and specification 2.0. He was taken to Mr Toal's evidence about the communications protocol actually adopted by SARB. He was asked to assume that Mr Toal's evidence is correct. He was also taken to the Verified Product and Method Description verified on 24 April 2020 (VPMD). He agreed that some of the opinions he expressed were incorrect on the assumption that Mr Toal's description of how the process worked was correct. For example, he gave the following evidence: MR CAINE: So that lays to rest, does it not, the evidence you give about what might be a logical design choice in 127. It's simply not a feature of the version 1 SARB product. MR SPIROVSKI: Yes. It's – the logic aspect of it has to do with needlessly sending additional data. But that's – that's a logical perspective based on how I would design a system. If Mr Toal's evidence says it's done otherwise, then it's done otherwise. 70 The criticism of Mr Spirovski's approach went further than this and I deal with the additional criticisms of Mr Spirovski's approach below. VMS submits that SARB's criticism of Mr Spirovski in terms of his reliance on the Zigbee protocol and the functional specifications "goes nowhere" because Mr Spirovski has based his opinions, or has also based his opinions, on more fundamental considerations. 71 VMS submits that the [REDACTED]. VMS submits that I should reach the same conclusions as the Court did in VMS 2013. 72 As I have already said, the Court in VMS 2013 noted that [REDACTED] [REDACTED]. 73 The Court then noted that the evidence before the Court was unclear as to precisely what part of the overstay information was included in the [REDACTED] [REDACTED] 74 The key point put by SARB in response to VMS's submissions was expressed by it in various ways. It submits that it is the [REDACTED] containing the connection information which initiates the communications between the DCA and the DA. It submits that the DA initiates communications with the DCA. It submits that the [REDACTED] is in and of itself a communication that contains useful data, including overstay information and it is the initial transmission in the sequence of transmissions and responses. SARB submits that the DA and the DCA have already engaged in a communications session before the DCA sends its response. 75 SARB submits that the decision in VMS 2013 should not be followed because the Court in that case did not have the benefit of Mr Toal's evidence about the connection information contained in the [REDACTED] and details of how the communications session is established between the DA and the DCA and details of how the PinForce Version 1 departed from the [REDACTED]. SARB submits that a proper understanding of these matters is essential to the correct conclusion that the PinForce Version 1 did not use a wake-up signal as claimed. SARB refers to Fig 8 and the significance of performing a communications session and submits that the crucial point is, in effect, which of the two devices initiates the communications session. SARB submits that that is the [REDACTED] containing the connection information which initiates the communications session. 76 SARB submits that the wake-up scheme of the invention as revealed in the claims is that it is the DCA which initiates the communications session and that that is not the case with the PinForce Version 1. SARB refers to the significance of the communications session to the decision in VMS 2013. It submits that this Court has fresh evidence from Mr Toal and, furthermore, that the opinions of Mr Spirovski have been shown to be flawed. 77 In my opinion, the essence of the Court's reasoning in VMS 2013 applies having regard to the evidence advanced in this case and, with respect, that reasoning is correct. The notion of which device initiates the communications session was a matter raised before the Court in VMS 2013. For example, in paras 45 and 46 in confidential exhibit STO1 referred to in the affidavit of Mr Toal affirmed on 22 December 2011, the following appears: 45 In [13(c)] Mr Spirovski also states: [REDACTED]; 46 This is also incorrect. The VDU [REDACTED]. 78 In my opinion, as VMS submits, reference to "initial communication" or "initiating the communications session" is irrelevant because neither of those matters is referred to in the claims and it is not the communications session that is the subject of the claims. The communications session which is the subject of the claims is that which follows the wake-up signal. Furthermore, data related to identified instances of overstay of a vehicle, in that magnetic data is undoubtedly data that relates to identified instances of overstay of the vehicle, is transmitted in response to receipt of a wireless wake-up signal. 79 In my opinion, the PinForce Version 1 (and the PinForce Version 2) infringes claims 2, 3, 4, 5, 11, 12, 13, 21, 22, 28 and 29 of the First Patent and claim 26 of the Second Patent and the contention by SARB that PinForce Version 1 does not involve the use of a wake-up signal or provide for data to be transmitted when a DCA is detected, should be rejected. 80 SARB raised a separate point which appears to be correct and that is that PinForce Version 1 and PinForce Version 2 do not infringe claim 8 in the First Patent because the DA does not involve the further step of determining an overstay duration of the vehicle in the said parking space (emphasis added). 81 Before leaving this section of the reasons, I will address by way of a summary a submission made by SARB that seems to bear upon Mr Spirovski's approach to giving evidence in relation to this issue and, as I would apprehend it, other issues in the case. SARB submits that Mr Spirovski speculated on the basis that SARB had used the Zigbee protocol in circumstances where he knew when he made his affidavit that Mr Toal had given evidence in 2011 that SARB's DAs only utilised a subset of the Zigbee protocol. Furthermore, SARB submits that Mr Spirovski's evidence did not reflect the VPMD or Mr Toal's 2011 evidence, both of which Mr Spirovski had to hand when he made his affidavit. SARB submits that Mr Spirovski was aware from Mr Toal's 2011 evidence that the SARB functional specifications did not accurately describe PinForce Version 1. The submission seemed to be that Mr Spirovski proceeded on a basis he knew to be incorrect. I reject that submission. 82 SARB referred to the fact that in Mr Spirovski's first affidavit in this proceeding, he said that he was provided with, and had read, affidavits sworn in the VMS 2013 proceedings. One of those affidavits was an affidavit of Mr Spirovski himself sworn on 27 February 2012 in which he said: Zigbee standard 22. In paragraphs 31 to 33 of Confidential Exhibit ST02, Mr Toal states that I may have assumed that [REDACTED] 83 Counsel for VMS took me through the history of the matter. He started with a redacted document dated 22 December 2009 and a second redacted document dated on various dates in 2009 (VDU Technical Specification). Counsel submits that that was all Mr Spirovski had at the beginning of 2020. VMS was then given an unverified VPMD and then a verified VPMD which contained marked up a number of additions. VMS asked to look at the underlying documents and received the various functional specifications and specifications set out in a table in para 100 of Mr Spirovski's first affidavit. 84 Counsel took me to para 115 and following of Mr Spirovski's affidavit where he sets out his instructions which were to consider the function and specifications of 1.0 to 3.1 and to describe the process by which the IGU and the TMT establish a communications session. Mr Spirovski was asked to assume that the documents relate to the PinForce Version 1. There are a number of references to the Zigbee protocol in the documents. VMS prepared a 24 page document which, among other things, linked paragraphs in Mr Spirovski's affidavit with paragraphs in the Sentinel Functional specifications. I do not propose to go through this document in detail. It is sufficient that I do not consider that Mr Spirovski prepared his evidence on a basis which he knew to be wrong (see transcript pp 758–761, 779–781). Issue 2 85 The second issue raises the construction of certain claims in the First Patent and whether the claims include a method or system where the determination of vehicle overstay is made by the DCA instead of the DA. 86 It is agreed between the experts that in the case of PinForce Version 3, all capability of determining overstay in the DA has been removed. Vehicle overstay is determined by the HHU. The issue is whether, on the correct construction of claims 21–23 and 28–32 of the First Patent, either the DA or the DCA can make the determination that a vehicle has overstayed. VMS's case is that on the correct construction of those claims, either the DA or the DCA can make the determination that a vehicle has overstayed. SARB's case is that those claims are restricted to systems or methods in which the DA, and only the DA, makes the determination that a vehicle has overstayed. 87 In the joint conference of experts, the experts addressed this issue as an issue involving proper construction of the claims and an issue as to whether PinForce Version 3 fell within the terms of the claims as so construed. As there is no dispute about how the PinForce Version 3 operates in this respect, the issue is, in essence, one of construction. 88 With respect to the construction of the claims, the experts were asked to identify any points of agreement or disagreement between them regarding their understanding of which component(s) of the system or method claimed are responsible for determining overstay of vehicles in parking spaces within claims 21–23 and 28–32 of the First Patent. 89 The experts agreed that the system as disclosed in the First Patent is capable of determining overstay in the DCA. However, they disagree as to whether claims 21–23 and 28–32 of the First Patent indicate that the DCA performs the overstay determination. 90 In addition to the joint observations, Mr Spirovski made the following observations. He said that in order to determine overstay, the system needs to have the following information: (1) the arrival time of the vehicle; (2) the identification of the parking space; (3) the parking time rules associated with that parking space; and (4) the current time. The First Patent discloses a DCA that has all of the means necessary for determining overstay within the apparatus. The First Patent also discloses a system where the DA is operated in a reduced capacity that transmits a subset of the necessary information to the DCA and the DCA is used to determine overstay of the vehicle as part of the system. In this context, Mr Spirovski referred to p 7 lines 21–23 of the First Patent, which is set out above, but which I repeat here for convenience: Alternatively, decisions relating to vehicle overstay can be made by a data collection apparatus that collects data from the apparatus 200 via a radio communication link rather than by the apparatus 200. 91 In addition to the joint observations, Mr Harcourt made the following observations. He said that claim 21 of the First Patent states that the vehicle detector (i.e., the DA) determines overstay. The passage on p 7 lines 21–23 of the First Patent states that decisions relating to overstay can be made by a HHU. The meaning which Mr Harcourt gives to this passage is that overstay is still determined in the IGU (DA), but decisions relating to the information can be made in the DCA or HHU. Mr Harcourt's opinion is that the system could theoretically support the determination of overstay outside the DA, but the First Patent clearly states that the DA determines overstay. Mr Harcourt expresses the opinion that "considerable thought" is required in order to decide how overstay could be determined in the DCA or HHU and the First Patent is silent on that matter. 92 The experts were also asked to address in the joint conference of experts any points of agreement or disagreement between them regarding their understanding of Figs 1 to 9 of the First Patent, including by reference to the description of those figures in the specification. 93 The experts agreed that, in the case of Fig 1, the DCA indicates overstay based on retrieved data stored in the DA. However, they disagree as to whether the retrieved data already contains a determination of overstay made by the DA. They agree on the meaning and description of the other figures. 94 In addition to the joint observations, Mr Spirovski made the following observations. Fig 1 is a general system overview of overstay determination and the figure discloses that at least the vehicle presence data is stored in the DA and later retrieved by the DCA. The figure allows for an overstay determination to be made by either the DA or the DCA. 95 In addition to the joint observations, Mr Harcourt made the following observations. In the case of the method shown in Fig 1, overstay is determined by the DA and this information is then retrieved by the DCA and indicated on the HHU based on the retrieved data (Mr Harcourt's emphasis). There is no reference in the figure to other data sources and Mr Harcourt states that he can only infer that all data relating to overstay is retrieved from the DA. Mr Harcourt expresses the opinion that the word "indicated" means to "pass through information" and display it to a user. There is no mention of further processing or calculation with respect to the data, which Mr Harcourt believes would have been described in the First Patent if that was a feature of the system. 96 The experts were asked to identify in the joint conference of experts any points of agreement or disagreement between them as to whether the PinForce Version 3 is, in substance, the same as, or different to, the embodiments shown in Figs 1, 2, 4, 5, 6, 8 and 9 in the First Patent. They agreed in regards to the embodiments in Figs 2, 4, 5, 6, 8 and 9 in the First Patent, that the PinForce Version 3 is substantially the same as the system in the First Patent. They disagree that PinForce Version 3 in regards to the embodiment shown in Fig 1 in the First Patent is substantially the same as the system of the First Patent. 97 In addition to the joint observations, Mr Spirovski made the following observations. PinForce Version 3 is the same in substance as the system of the First Patent operating in the configuration where the DCA determines overstay. Mr Spirovski refers to and relies upon his comments with respect to the construction of claims 21–23 and 28–32 of the First Patent (see [90] above). Mr Spirovski agrees that the DA in the PinForce Version 3 cannot determine overstay. 98 In addition to the joint observations, Mr Harcourt made the following observations. Step 150 in Fig 1 reads as overstay indicated based on the retrieved data from the DA (IGU). There is no reference to retrieving data from anywhere else so the retrieved data must therefore include overstay information. It follows, according to Mr Harcourt, that Fig 1 does not match in substance the PinForce Version 3. 99 Finally, the experts were asked to identify in the joint conference of experts any points of agreement or disagreement between them with respect to the related question of whether PinForce Version 3 has all of the features of the system claimed in claim 21 of the First Patent. The experts referred to their previous comments. In addition, they noted that they agree that the system as disclosed in the First Patent is capable of determining overstay in the DCA. However, they disagree as to whether claim 21 of the First Patent discloses that the DCA performs the overstay determination. 100 Before turning to consider first, the proper construction of claim 21 and whether it includes a system in which vehicle overstay is determined in the DCA and then, if not, the same question in relation to the omnibus claims (claims 30–32), it is necessary to highlight certain evidence given by the experts. 101 The third aspect of the invention is the consistory clauses for claim 21 and is described above (at [27]). 102 Mr Spirovski was cross-examined by counsel for SARB about the scope of the third aspect of the invention. He gave the following evidence: MR CAINE: And just by way of broad overview, you will see that set out on page 2 are three aspects of the invention. The first one is a method, the second one in the middle paragraph is an apparatus, and the third one is a system. Do you see that? MR SPIROVSKI: Looking. So method, apparatus and the system. Yes. MR CAINE: Okay. And is it your understanding that the invention has those three aspects as described on pages 2 and 3? MR SPIROVSKI: Yes. 103 Mr Spirovski then agreed that, in the case of the first aspect (method) and the second aspect (apparatus), the determination of vehicle overstay takes place in the DA. 104 Mr Spirovski was then taken through the elements of the third aspect and he gave the following evidence: MR CAINE: So what is being described there is that the data apparatuses have determined or calculated that there have been identified instances of vehicle overstay. MR SPIROVSKI: Yes, in that summary. MR CAINE: Yes. And the processing unit in the data-collection apparatus is programmed to process those instances of vehicle overstay - - - MR SPIROVSKI: Yes. MR CAINE: - - - and to indicate those instances to an operator – an end user such as a parking officer. MR SPIROVSKI: Yes. MR CAINE: And that means that the data-collection apparatus will pass on the information from the – sorry – it will pass on the information to the end user that it has received from the detection apparatus. MR SPIROVSKI: It – it says to process. It doesn't indicate what processing is done and exactly what is passed on or – or determined from – from the received data. MR CAINE: So let's just take that step by step. It's telling you that the data received is data from the detection apparatus which has previously determined whether there is vehicle overstay. MR SPIROVSKI: Yes. MR CAINE: And then what the data-collection apparatus is doing is to pass on, that is, to indicate instances of vehicle overstay that it has received from the detection apparatus. MR SPIROVSKI: That's some of the data, yes, but as a summary it doesn't include any detail as to what is being processed. MR CAINE: No. But what's it not saying is that the data-collection apparatus is itself calculating or determining vehicle overstay. MR SPIROVSKI: Not there it isn't, no. 105 Counsel for SARB returned to the topic the next day in order to clarify one of Mr Spirovski's answers. Mr Spirovski gave the following evidence: MR CAINE: Thank you. All I wish to do, Mr Spirovski, is just clarify one question and answer between you and I. At transcript page 403, towards the bottom of the page at about line 42, I asked you a question about the data-collection apparatus and some of its features, and then at the top of page 404 I said: The processing unit is programmed to process the data it receives from the detection apparatus – and at this stage I'm walking through the third aspect of the invention. I refer there to the data that's received from the detection apparatus and you say "yes". And then I say: And that data provided by the detection apparatuses is data that relates to identified instances of overstay – and you say "yes". And then the question I put to you is: So what is being described there is that the data apparatuses have determined or calculated that there have been identified instances of vehicle overstay. Now, what I wanted to ask you was did you – and you say: Yes, in that summary. First of all, that summary was the third aspect that we were talking about – third aspect of the invention? MR SPIROVSKI: ..... MR CAINE: And did you understand my question when I referred to data apparatuses to mean the detection apparatuses had determined or calculated identified instances of vehicle overstay or would your answer be the same had I referred to detection apparatuses rather than data apparatuses, which was inelegant? MR SPIROVSKI: Detection apparatuses. 106 SARB submits that it is significant in terms of the proper construction of claim 21 that Mr Spirovski agreed that in the system described in the consistory clause for claim 21, the determination of vehicle overstay is made in the DA. 107 Mr Spirovski did make it clear on a number of occasions that his opinion was that the description of the third aspect of the invention was only a summary and a description of one embodiment of the invention. He did not resile from his opinion that the relevant claims in the First Patent included a system or method in which vehicle overstay was determined by the DCA. He made it clear that his opinion was based on the specification as a whole. 108 Mr Spirovski referred to a number of passages in the specification of the First Patent in support of his opinion that a product, system and method wherein the determination of vehicle overstay is made in the DCA is within the terms of claim 21 or the omnibus claims. 109 First, he referred to the passage on p 3 of the First Patent which is set out above (at [28]) and which I repeat here for convenience: Overstay of a vehicle in a parking space may be determined at the detection apparatus by processing data received from the detector. Mr Spirovski relies on the fact that the word may has been used in this passage and the use of that word carries the implication that overstay of a vehicle may not be determined in the DA. 110 Secondly, Mr Spirovski referred to the passage on p 3 of the First Patent which again, is set out above (at [28]) and which I repeat here for convenience: The data collection apparatus may be portable and may retrieve the data from the detection apparatus whilst the data collection apparatus is located in a moving vehicle. Data relating to presence of a vehicle may comprise presence duration of the vehicle in the parking space, movements of the vehicle in and out of the parking space with corresponding time-stamp information, and/or an indication of overstay of the vehicle in the parking space. Mr Spirovski placed emphasis on the use of and/or in the above passage. He interprets the passage to mean that the DA may, for example, send data relating to the presence duration of the vehicle in the parking space and movements of the vehicle in and out of the parking space with corresponding time-stamp information, but not data which includes an indication of overstay of the vehicle in the parking space. In those circumstances, the DCA would have to determine the overstay of the vehicle. 111 SARB submits in response to this interpretation of the passage that the passage can be read in a way which gives it work to do, but is quite neutral with respect to the present issue. The DA may send only an indication of the overstay of the vehicle in the parking space and not the other information or it may send the first two types of information, but not the third because there is no overstay of the vehicle in the parking space. 112 Thirdly, Mr Spirovski places great reliance on the passage at p 7 lines 21–23 of the First Patent which is set out above (at [90]) in support of his opinion. This passage appears in the detailed description of Fig 2 which is a block diagram of a DA (or IGU) designated 200. The figure does not show or refer to the DCA. 113 Mr Spirovski expresses the opinion that there is nothing in claim 21 or Fig 1 which precludes the determination of vehicle overstay by the DCA. There is no statement that the determination of vehicle overstay can only be made by the DA. Step 150 in Fig 1 refers to "[i]ndicate overstay of vehicle in the parking space based on the retrieved data". The ordinary mean of "indicate" is to show or to make known. Step 140 in Fig 1 is described as the wireless retrieval of at least portion of the data from the DA and that accommodates the determination of vehicle overstay by the DCA. The argument, as I understand it, is that if the receiving device is receiving only portion of the data, it then is doing something with the data and not simply receiving it. Mr Spirovski said that, in his opinion, there is nothing in Fig 1 to indicate where vehicle overstay is determined. Mr Spirovski said that there would be no difficulty with the DCA determining vehicle overstay. The hardware of the DA and the DCA is the same irrespective of where vehicle overstay is determined and the software programming necessary to implement either option would be "straightforward and routine". He said in his oral evidence that the decision made by the DCA would be made in the same way as the DA, "using the same equations". 114 Mr Harcourt does not consider the passage relied on by Mr Spirovski on p 7 lines 21–23 of the First Patent has the significance to the present issue that Mr Spirovski attributes to it. He expresses the opinion that the reference in the passage to "decisions relating to vehicle overstay" does not mean determinations of vehicle overstay, but rather, decisions made subsequent to determinations of vehicle overstay. It became apparent in Mr Harcourt's cross-examination that he had in mind, at least in part, decisions made not by the DCA, but by the parking officer. As I understand it, Mr Harcourt's opinion is that the passage deals with decisions made by the DA "being overruled or perhaps upheld". He gave the following example: … even if the device is broken and the operator – the parking officer is confident that the vehicle has, indeed, been there for a long time and overstayed, may issue the fine regardless of what the VDU tells him or her. 115 Mr Harcourt points to what he says is a further difficulty with Mr Spirovski's construction of the passage on p 7 lines 21–23 of the specification and that is there is no indication anywhere in the specification as to how the DCA would make determinations of vehicle overstay. Mr Harcourt disagrees with the suggestion by VMS that it can be readily concluded that vehicle overstay would be determined by the DCA in the same way it would be determined by the DA. Mr Harcourt also disagreed with the suggestion by VMS that there was nothing sophisticated about the programming of the DCA. This point is linked to Mr Harcourt's opinion that the system disclosed in the First Patent is capable of determining vehicle overstay in the DCA. Mr Harcourt explained that this was theoretically the case, but not practically the case because, as he explained in his oral evidence, there is no information in the specification as to how that could be done in circumstances in which there are many indications in the specification that vehicle overstay is determined by the DA. 116 In forming his opinion that the passage relied on by Mr Spirovski is not dealing with determinations of vehicle overstay, Mr Harcourt also relies on the fact that Fig 2 in the detailed description of which the passage appears, does not show the determination of vehicle overstay by a DCA. That is true as Fig 2 is a representation of the DA. 117 Mr Harcourt agreed in cross-examination that there is nothing in Fig 1 that "explicitly confines the determination of overstay to the detection apparatus" and that vehicle overstay could be determined in the DCA. 118 As I understand it, the experts agreed that none of the other figures provide any indication of where vehicle overstay is determined. Mr Harcourt made it clear that his agreement is simply having regard to "the elements described in each figure". 119 Finally, Mr Harcourt agreed that, unlike the first and second aspects and claims 1 and 11, the words "determining whether said vehicle has overstayed" do not appear in the third aspect or claim 21 and he agreed that the third aspect and claim 21 had in contemplation that data received from the DA will be processed in some way by the processing unit inside the DCA. 120 I turn now to the issue of whether a system which has the integers of claims 21–23 of the First Patent, but in which the determination of vehicle overstay is made by the DCA rather than the DA, falls within the claims. 121 The experts expressed opposing views and that remained the position after they had given their oral evidence. 122 The starting point is the text of claim 21. 123 The chapeau in claim 21 provides that the claim is for a system for identifying overstay of vehicles in parking spaces. That is the purpose of the system. All other things being equal, a system in which vehicle overstay is determined by the DA and a system in which vehicle overstay is determined by the DCA both have that purpose. Relatedly, I reject the suggestion that where vehicle overstay is determined by the DCA, there is no longer a DA which has the purpose of identifying the overstay of vehicles. The DA would still be performing a key role in the objective or purpose of the system. 124 The system comprises a plurality of DAs and a DCA. The DCA comprises a number of pieces of hardware for various purposes and it includes a processing unit programmed to process data received by the radio receiver of the DCA from the DA and to indicate incidences of vehicle overstay to an operator. In this particular context, "indicate" means to "show or make known" (Macquarie Dictionary (6th ed), 2013). To provide an indication of incidences of vehicle overstay is a function of the DCA. 125 The "said data", that is, the data received by the DCA from the DA is data that "relates to" identified instances of vehicle overstay in a respective parking space. In ordinary usage, "relates to" is a broad phrase which indicates an association or a connection between two or more things. In this case, the connection must be between the data received by the DCA from the DA and identified instances of vehicle overstay in a respective parking space. Data falling short of a vehicle overstay determination such as vehicle presence data and a record of vehicle movement in the parking space, including the date and time of movement, is data relating to vehicle overstay, but is it data relating to "identified" incidences of vehicle overstay? In my opinion, there is an ambiguity in the phrase between data which includes the identified instances of vehicle overstay, that is, the determination of vehicle overstay and data which may lead to the identification of instances of vehicle overstay. In those circumstances, it is appropriate to consider the rest of the specification in order to resolve the ambiguity. 126 The Summary of the Invention includes the consistory clauses of the three principal claims in the First Patent, being claims 1, 11 and 21. The first aspect of the invention is a method performed by the DA and the description identifies the steps in claim 1 and one of those steps is determining whether a vehicle has overstayed a defined duration in a parking space. The second aspect of the invention is an apparatus, being the DA, and the description identifies the composition of the DA in claim 11 and one of those components is a processor coupled to the detector for, among other things, determining whether the vehicle has overstayed a defined time duration in the parking space. Clearly, in the case of the first and second aspects of the invention, vehicle overstay is determined by the DA. Mr Spirovski agreed with this conclusion and with the obvious fact that there is no reference to the DCA in either the first or second aspect of the invention. The third aspect of the invention is a system and the description mirrors the terms of claim 21. Mr Spirovski was cross-examined about the description of the third aspect of the invention and he agreed that in the description of the third aspect of the invention, "in that summary", as he put it, the DA was determining vehicle overstay. SARB submits that considerable weight should be placed on this evidence. VMS submits that the cross-examination was confusing in its sequence and that Mr Spirovski was frequently interrupted. In my opinion, whatever confusion there might have been when Mr Spirovski was first cross-examined about the topic, was removed when counsel for SARB returned to the topic on the following day. There is more force in VMS's second point that whatever view Mr Spirovski might have expressed about the description of the third aspect considered in isolation, he certainly did not resile from his view that considering the specification as a whole, a system in which vehicle overstay is determined by the DCA falls within the relevant claims in the First Patent. In any event, the question of construction is ultimately one for the Court and I consider the same ambiguity arises in the description of the third aspect of the invention as arises in claim 21. 127 VMS (and Mr Spirovski) relied on two other passages in the Summary of the Invention in support of its argument that the relevant claims encompass a system in which vehicle overstay is determined by the DCA. 128 First, VMS and Mr Spirovski rely on the first paragraph in the passage set out above at [28]. 129 VMS places emphasis on the word "may" and suggests that it allowed of the possibility that the DCA determined vehicle overstay. That is true, but it seems to me to be a fairly weak point, bearing in mind that the passage is directed to the DA and says nothing expressly about the DCA. 130 Secondly, VMS and Mr Spirovski rely on the second paragraph in the passage set out above at [28]. 131 VMS places emphasis on the "and/or" in this passage. The "and" means that all three pieces of information may be part of the data and the "or" means that only one or two pieces of information may be part of the data. If it was only the first two pieces of information, the determination of vehicle overstay would have to be made by the DCA. 132 The three pieces of information identified in the above passage correspond with the description of the three primary types of information determined and maintained by the DA in the embodiment described in the detailed descriptions of Fig 2 (p 6 line 28–p 7 line 5) (see [32] above). 133 As set out above, SARB submits that the second passage relied on by VMS and Mr Spirovski is neutral as far as the present question is concerned because it has work to do where vehicle overstay is determined, and only determined, by the DA and it provided two examples of where that is the case (at [111]). 134 Mr Spirovski was cross-examined about this second possibility and, in that context, he agreed that the "and/or" does not mean that the DCA is determining overstay, "it just means there's no overstay for the detection apparatus to report". In my opinion, the "and/or" does cover that case. However, it is not restricted to that case and the question of construction is ultimately one for the Court. At the same time, there is nothing in the passage which expressly indicates that vehicle overstay may be determined by the DCA. 135 The next passage is the key passage relied on by VMS in support of its argument that the relevant claims include a system in which the DCA determines vehicle overstay. That is the passage which is set out on p 7 of the specification (see [32] above). 136 The passage appears in the detailed description of Fig 2 and Fig 2 is a block diagram of a DA for monitoring the presence of a vehicle in a parking space. 137 The context of the passage is provided by the passage which immediately precedes it rather than the passage which follows it. 138 After describing the various components of the DA and how it may be installed in or on the parking space, there is a description of one embodiment of the DA in which the three pieces of data or information are referred to and in this embodiment, it is clear that the DA determines vehicle overstay. Instruction is given as to the determination of overstay where different time limits apply to a parking space based on the time of day and day of week and as to the information which may be downloaded to the DA. 139 The relevant passage then appears. I will come to the construction of the passage shortly, but first I make clear the reason(s) why regard can be had to it in the proper construction of claim 21. 140 Claim 21 refers to DAs and that permits reference to the description of a DA in the detailed description of a DA in connection with Fig 2. Further, or in the alternative, reference to the detailed description of a DA is permitted by Fig 1 which is a flow diagram of a method for identifying overstay of a vehicle in a parking space and which refers to a DA. 141 As to the construction of the passage, I consider that "decisions relating to vehicle overstay" means, in context, determinations of vehicle overstay. That, to my mind, is the natural reading of the passage in context, including the reference in an earlier passage to "In one embodiment" and the use of "alternatively" and "rather than". It follows that I reject Mr Harcourt's interpretation of the passage which, with respect, I consider somewhat artificial and strained. 142 The second problem with the passage raised by Mr Harcourt was that there is no indication in the passage, or indeed in any other part of the specification, as to how the DCA would go about determining vehicle overstay. In those circumstances, the First Patent should not be construed to include what would be essentially a different system in which the DCA determines vehicle overstay. As I have said, this lack of information seems to be what lay behind his distinction between his statement that it was theoretically possible for vehicle overstay to be determined by the DCA, but in the absence of further information, it was not provided for in the First Patent. As the problem identified by Mr Harcourt was "teased out" in cross-examination, it became clear that the uncertainty was not in not knowing that the parking rules would have to be programmed into the DCA because that was clear. The problem was with other issues and the example Mr Harcourt gave was in identifying the parking space. I prefer the evidence of Mr Spirovski on this issue, both at a general level — the software programming necessary to implement the option would be straightforward and routine — and at the specific level that the sensor itself transmits the information as to which parking space is being dealt with. The other point to note is that in the context of other issues in the case, Mr Harcourt was asked to address how he would have designed and made a system for detecting unauthorised vehicles as at May 2004. As to the option he put forward of mobile data terminals, he said that either the sensors themselves or the personal digital assistant (PDA) could determine vehicle overstay and that the system would work using either option, "so the decision of which to implement is a matter of design choice, personal preference and the requirements of the client". 143 As to Fig 1, there was not a significant difference between the experts with Mr Spirovski saying that under the method identified in Fig 1, either the DA or the DCA could determine vehicle overstay and Mr Harcourt saying that, in the case of the method shown in Fig 1, there was no requirement that vehicle overstay be determined by the DA and determination of vehicle overstay by the DCA is not explicitly ruled out. 144 In my opinion, the ambiguity in claim 21 should be resolved in holding that it includes a system in which vehicle overstay is determined by the DCA having regard to the passage on p 7 and, to a lesser extent, the other passages relied on by VMS and Mr Spirovski. 145 I turn now to VMS's alternative argument to the effect the SARB's PinForce Version 3 falls within the omnibus claims. Claims 30, 31 and 32 are set out above. The claims include a method performed by a subterraneous DA, a battery-powered apparatus for subterraneous installation and a system for identifying overstay of a vehicle(s) in a parking space(s), said method, apparatus or system "substantially as herein described with reference to an embodiment shown in the accompanying drawings". 146 In view of my conclusions with respect to claim 21, it is not strictly necessary for me to decide whether PinForce Version 3 falls within one of the omnibus claims. VMS submitted that it would be relevant to do so if the Court was against it "on the grammatical structure of claim 21". 147 In Raleigh Cycle Co Ltd v H Miller & Co Ltd [1948] 1 All ER 308; (1948) 65 RPC 141, Lord Morton of Henryton discussed omnibus claims and, in the course of his discussion, said the following (at 157 and 159–160): For many years it has been a common practice to insert, as the last claim in a patent specification, a claim on the same lines as Claim 5 in the present case. I think that the reason why such a claim has been inserted, in the present case and in countless other cases, is as follows. The patentee fears that his earlier claims may be held invalid, because they cover too wide an area or fail sufficiently and clearly to ascertain the scope of the monopoly claimed. He reasons as follows: "If I have made a patentable invention and have described the preferred embodiment of my invention clearly and accurately, and without any insufficiency in the directions given, I must surely be entitled to protection for that preferred embodiment, and that protection may fairly extend to cover anything which is substantially the same as the preferred embodiment." … The word [substantially] merely indicates that the patentees are not limiting their monopoly to an electric generator which corresponds in every detail with the generator shown in the drawings, but claim the right to object to the manufacture or sale of an electric generator which is in substance the same as the generator so shown. It may be said with some force that the rights of the patentees would have been the same if the word "substantially" had been omitted from the claim. Even so, its presence cannot render the claim invalid. It may be a matter of some difficulty, in some cases, for the Court to decide whether an alleged infringement is or is not substantially the same as the electric generator shown in the drawings, but the Court does not shrink from such a task. (See also Britax Childcare Pty Ltd v Infa-Secure Pty Ltd (No 3) [2012] FCA 1019 (Britax Childcare v Infa-Secure) at [23]–[30] per Middleton J; Rescare Ltd v Anaesthetic Supplies Pty Ltd (1992) 25 IPR 119; (1992) 111 ALR 205 at 241 per Gummow J.) 148 GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser Healthcare (UK) Ltd [2016] FCAFC 90; (2016) 120 IPR 406 (GlaxoSmithKline) provides an example of the construction process in relation to an omnibus claim and the limits depending on the terms of the specification of the expression "substantially as herein described". An issue in that case was the construction of an omnibus claim which related to a liquid dispensing apparatus, "substantially as described with reference to the drawings and/or examples" (claim 9) and whether an alternative syringe fell within the terms of the claim. The Full Court said that when an omnibus claim is in issue, greater emphasis is generally placed by the words of the claim on the body of the specification to provide the necessary definition of the invention as required by s 40(2)(b) of the Act. In GlaxoSmithKline, the consistory statement for the first aspect of the invention found expression in an earlier claim (claim 1) and given that the specification made it clear that the example is of the first aspect of the invention, then it followed that the invention defined in claim 9 cannot be wider in scope than the invention defined in claim 1. The Court said in that case that the use of the word "substantially" in claim 9 in the expression "substantially as described with reference to the drawings and/or examples" does not extend the definition of the invention to the "substantial idea" disclosed by the specification and shown in the drawings. 149 Blanco White TA, Patents for Inventions (5th ed, Stevens & Sons, London, 1983) at 2–113 states that claims which are framed by reference to words, such as described or substantially as described, are construed by reference to the exact wording of the claim and the remainder of the specification, but there are a number of rules which are normally applicable. Those rules include the following: (1) the word "substantially" means "in substance" and for the most part is without effect. It does not broaden a claim such that an essential feature of the invention is replaced by something else. This means that as the essential features of the invention are identified by reference to the specification, the word "substantially" "can only rarely broaden the claim beyond what the consistory clause and the main claims specify"; (2) where claims of this type follow after broad claims, they are taken as attempts to claim the features of the (or a) preferred embodiment; and (3) the position is different where claims of this type are used, not merely to wind up after the broad claims, but among the broad claims and, in such cases, it cannot be presumed that the invention is meant to confine the invention to the features of the preferred embodiment. 150 VMS's argument that the omnibus claims included a method, apparatus or system in which vehicle overstay was determined by the DCA is along similar lines to its argument that claim 21 included a system in which vehicle overstay was determined by the DCA. The focus of its argument was claim 32. It submitted that it is clear from Fig 1 and step 150 that at that point, the DCA is determining vehicle overstay. From there, one goes to Fig 2 and the description associated with that figure as to what constitutes a DA. Within that description is the reference to the alternative location of decisions or determinations as to vehicle overstay and the alternative location is the DCA. It submits that the experts agreed that in the system disclosed in the First Patent, vehicle overstay is capable of being determined by the DCA. It submits that in the case of an omnibus claim, greater attention is placed by the words of the claim on the body of the specification and the essential features of the invention as described therein. 151 Attention is not focused on the consistory statements. There is no difficulty with insufficient information to indicate how vehicle overstay is determined by the DCA as the same method can be used as is described in relation to the DA. VMS relies on the same passages in the description of Fig 2 as it identified in its submissions in relation to claim 21. There is no indication in any of the figures in the First Patent that vehicle overstay is to be determined in the DA. As to Fig 1, there is no step in the method that refers to the DA determining vehicle overstay. The reference in step 140 to at least portion of the data being retrieved from the DA indicates that Fig 1 and not necessarily a determination of vehicle overstay means that Fig 1 allows for the DA or the DCA to determine vehicle overstay. In other words, the figure does not indicate which device determines overstay, thus allowing for both. 152 SARB submits that the omnibus claims do not extend to a case where vehicle overstay is not determined in the DA. Claim 30 is a method claim which reflects the first aspect of the invention, claim 1 (where the DA determines vehicle overstay) and Fig 1 and claim 31 is an apparatus claim which reflects the second aspect of the invention, claim 11 (where the DA determines vehicle overstay) and Fig 2 and claim 32 is a system claim which reflects the third aspect of the invention, claim 21 and Figs 5, 6 and 7. 153 SARB submits that with respect to Fig 2, the passage relied on by VMS on p 7 does not describe an embodiment, method or system of the invention and Fig 2 itself does not even show the DCA and there is no drawing or diagram showing an alternative system where vehicle overstay is determined by the DCA. Fig 1 does not assist VMS for the reasons SARB advanced in relation to claim 21. It neither shows the DCA determining vehicle overstay or contains a reference to that in the description. Nor does any of the figures of a system indicate vehicle overstay being determined in the DCA. 154 In light of the relevant principles and the evidence, I am unable to see how VMS can succeed on the omnibus claims as an alternative argument. If it is correct about the construction of claim 21, then it is also correct about the omnibus claims. If VMS is not correct about claim 21, then the arguments which defeat its submission with respect to claim 21 also defeat its submission with respect to the omnibus claims. Issue 3 155 The third issue raises a question as to the infringing acts for which SARB is liable because it has authorised those acts, or because it is a joint tortfeasor in relation to those acts, and includes the construction of the Deed of Release dated 18 June 2014. 156 In its Amended Statement of Claim (ASOC), VMS pleads that from a date not known to it, but at least since October 2007, SARB has made, offered to make, sold or otherwise disposed of, offered to sell or otherwise dispose of, supplied, used, offered to use, kept for the purpose of doing the acts described aforesaid and authorised local government councils to use one or more vehicle detection sensor units and one or more vehicle detection systems. In response to that plea, SARB pleads as follows: 10 As to paragraph 10, the First Respondent: (a) says that, pursuant to section 120(4) of the Patents Act 1990 (Cth), the Applicant is statute-barred from pursuing any claim for the alleged infringement of the First Patent or the Second Patent arising from the supply or use of the PinForce Sensors and Systems which were sold or supplied by the First Respondent in Australia prior to 15 February 2013 (including in respect of allegations arising from the use of those PinForce Sensors and Systems after that date); (b) says that the Applicant has already been compensated under the Deed of Release between the Applicant and the First Respondent dated 18 June 2014 (Deed) for loss and damage alleged to arise from the supply or use of the PinForce Sensors and Systems which were sold or supplied by the First Respondent prior to 9 May 2013 (including in respect of allegations arising from the use of those PinForce Sensors and Systems after that date); Particulars The Deed is in the possession of the solicitors for the First Respondent and may be inspected at their office by appointment. (c) says further that the Applicant authorised the First Respondent to use, and authorised local government councils to use, the PinForce Sensors and Systems referred to in paragraph 10(b) above pursuant to the Deed; Particulars The First Respondent refers to and repeats the particulars to paragraph 10(b), above. (d) admits that since approximately October 2007, the First Respondent has made, sold or otherwise disposed of, offered to sell or otherwise dispose of, supplied, used, kept and authorised local government councils to use PinForce Sensors and PinForce Systems in Australia; … 157 In para 11 of the ASOC, VMS pleads that from a date not known to it, but at least since 2009, SARB has, in Australia, offered to use, used, and authorised other persons to use, the PinForce Sensors and the PinForce Systems in one or more methods for identifying overstay of a vehicle in a parking space. In response to that plea, SARB pleads in its Further Amended Defence as follows: 11 As to paragraph 11, the First Respondent: (a) says that, pursuant to section 120(4) of the Patents Act 1990 (Cth), the Applicant is statute-barred from pursuing any claim for the alleged infringement of the First Patent or the Second Patent in respect of PinForce Sensors and PinForce Systems which were sold or supplied by the First Respondent in Australia prior to 15 February 2013 (including in respect of allegations arising from the use of those PinForce Sensors and Systems after that date); (b) says that the Applicant has already been compensated for loss and damage alleged to arise from PinForce Sensors and Systems sold or supplied by the First Respondent prior to 9 May 2013, pursuant to the Deed (including in respect of allegations arising from the use of those PinForce Sensors and Systems after that date). Particulars The Deed is in the possession of the solicitors for the First Respondent and may be inspected at their office by appointment. (c) says further that the Applicant authorised the First Respondent to use, and authorise local government councils to use, the PinForce Sensors and Systems referred to in paragraph 11(b) above in PinForce Methods, pursuant to the Deed. Particulars The First Respondent refers to and repeats the particulars to paragraph 11(b), above. (d) admits that since approximately October 2007, the First Respondent has used, and authorised local government councils to use, the PinForce Sensors and PinForce Systems in PinForce Methods in Australia. … 158 I will refer to the matter raised in paras 10(a) and 11(a) of SARB's Further Amended Defence as the limitation issue; the matter raised in paras 10(b) and 11(b) as the double recovery issue; and the matter raised in paras 10(c) and 11(c) as the authorisation issue. 159 The allegation by SARB that VMS is precluded from recovering damages or loss of profits for infringements after 9 May 2013 in respect of sensors or systems sold or supplied prior to that date because it has already been compensated for that loss under the Deed of Release, that is, the double recovery issue, is part of the issues of quantum referred to in the orders made on 6 April 2020. It is not to be determined at this stage (see the orders set out in [9] above). 160 I turn to consider the limitation issue. 161 This proceeding was commenced on 14 February 2019. Section 120(4) of the Act provides as follows: (4) Infringement proceedings must be started within: (a) 3 years from the day on which the relevant patent is granted; or (b) 6 years from the day on which the infringing act was done; whichever period ends later. 162 The relevant paragraph for the purposes of the issues in this case is s 120(4)(b) and the effect of that paragraph is that VMS is precluded from recovering damages or loss of profits in respect of infringing acts by SARB prior to 15 February 2013. That matter is not in dispute. 163 For reasons it is not necessary to relate, it has been agreed between the parties that VMS will not seek to recover damages or loss of profits in respect of conduct by SARB between 15 February 2013 and 9 May 2013. The latter date is the date VMS's Innovation Patent expired. It follows, as I understand the concession, that VMS will not seek to recover damages or an account of profits in respect of infringing acts by SARB prior to 9 May 2013. 164 The limitation issue is whether VMS is able to recover damages or loss of profits against SARB in relation to uses by SARB's clients after 9 May 2013, that is, within the agreed limitation period, in respect of sensors and systems supplied by SARB to those clients prior to that date, that is, outside the agreed limitation period. VMS contends that it is able to do so and, in support of that contention, it relies on two bases of liability: authorisation by SARB under s 13 of the Act of its (SARB's) clients to exploit the invention; and liability with its clients as joint tortfeasors. 165 There is a Position Statement and Response Position Statement on Infringement filed pursuant to the Practice Directions of the Court for each version of the sensor, system and method of SARB. It is sufficient for present purposes to quote from that Position Statement and Response on Infringement applicable to PinForce Version 1. It provides: 5. There is a dispute between the parties as to whether: a. any acts of exploitation occurring after 15 February 2013 are statute-barred, where the First PinForce Sensor or First PinForce System being used or otherwise exploited was supplied before 15 February 2013. This dispute extends to whether SARB is liable for authorising the allegedly infringing uses by local councils after 15 February 2013, where the First PinForce Sensor or First PinForce System was supplied before 15 February 2013. VMS will contend, and SARB will dispute, that each alleged act of authorisation is a separate act of infringement and a separate statutory tort; and (b) VMS authorised SARB to use, and authorised local government councils to use the First PinForce Sensor or First PinForce System which were sold or supplied by SARB prior to 9 May 2013 pursuant to the Deed of Release between VMS and SARB dated 18 June 2014. This dispute extends to whether SARB is liable for authorising the allegedly infringing uses by local councils after 9 May 2013, where the First PinForce Sensor or First PinForce System was supplied before 9 May 2013. VMS will contend, and SARB will dispute, that each alleged act of authorisation is a separate act of infringement and a separate statutory tort. 6. Relevantly to [5] above, VMS will contend and SARB will dispute, that each use by a local council of a sensor or system on or after 15 February 2013 or 9 May 2013 is an act of infringement that was authorised by SARB on the date of the use, and that SARB is liable for each such infringing use as a joint tortfeasor, having regard to the ongoing relationship between SARB and each of its local council clients under contracts requiring SARB to provide the relevant local council with service, maintenance, firmware upgrades and/or other assistance. Further or alternatively, VMS contends, and SARB disputes, that each act of service, maintenance, firmware upgrade and/or other assistance provided by SARB after 15 February 2013 is an act of authorisation to use the claimed sensors, systems and methods. In this regard, it is noted that page 2 of the PSPMD states that the firmware used in the First PinForce Sensor, First PinForce System and First PinForce Sensor [sic] was upgraded over time from version 1.0 to version 3.0. However, PSPMD does not identify when each firmware upgrade occurred, or what changes it involved. VMS is seeking further information from SARB in this regard. Given the lack of clarity in SARB's defence, it is necessary for SARB to respond to the issues identified in [5] and [6] of this position statement when filing and serving its responsive position statement on infringement. 7. SARB says that SARB's Verified PinForce Sentinel Product and Method Description dated 24 April 2020 (VPSPMD) explains the upgrades to the firmware used in the First PinForce Sensor, First PinForce System and First PinForce Method and the dates of these upgrades. SARB says further that these upgrades do not affect SARB's position on why each of the claim integers set out below is absent in the First PinForce Sensor, First PinForce System and First PinForce Method. … 166 The following matters should be noted about the terms of this Position Statement and Response Position Statement on Infringement. First, the PSPMD (PinForce Sentinel Product and Method Description) served on 28 February 2020 was replaced by the Verified Product and Method Description dated 24 April 2020. Secondly, as I have already said, the relevant date is 9 May 2013, not 15 February 2013. Finally, the acts of authorisation or joint tortfeasance are said to be acts of service, maintenance, firmware upgrade and/or other assistance under contracts. 167 SARB submits (as I understood it) that VMS's argument fails at the first hurdle because it has led no evidence as to the nature and timing of these acts as would enable the Court to conclude that SARB was a joint tortfeasor in any case, let alone in every case. 168 This argument must be rejected because the point has effectively been decided against SARB in a previous decision in this proceeding. 169 In Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 4) [2020] FCA 819, the Court addressed an application by VMS for discovery of documents by SARB. One of the categories of documents sought by VMS from SARB was as follows: All contracts in relation to sensors and/or systems supplied or sold by [SARB] before 9 May 2013, including for the provision of any servicing, maintenance, upgrades or other services/assistance provided on or after that date, in respect of any sensors and/or systems supplied or sold beforehand. 170 The basis upon which VMS sought discovery of these documents by SARB is that SARB pleaded that all claims against it relating to the use of sensors after 15 February 2013 are statute-barred if the sensor being used was supplied before that date. In addition, SARB contended that, under a Deed of Settlement entered into by VMS on 9 May 2013, VMS authorised all future uses of sensors supplied before 9 May 2013. 171 The Court noted that VMS's case is that each use of the sensors or systems by a local council on or after 15 February 2013 or 9 May 2013 is an act of infringement that was authorised by SARB on the date of the use, and that SARB is liable for each such infringing use as a joint tortfeasor on the date of the use. VMS relied on the ongoing relationship between SARB and each of its local council clients under contracts requiring SARB to provide service, maintenance, firmware upgrades and assistance after 15 February 2013 and 9 May 2013 in respect of sensors/systems supplied beforehand. 172 The Court noted SARB's submission that the information in Annexure A, which is an annexure to the VPMD, is sufficient to identify the dates on which SARB first supplied its sensors to each client council and the length of this supply. It submitted that, to the extent that VMS required further clarity on whether any sensors were supplied after 9 May 2013 pursuant to contracts entered into before that date, SARB will amend the annexure to identify any such sensors. 173 The Court described the information in Annexure A as "information in relation to SARB's supply of PinForce Sensors and Systems, including the clients to whom PinForce Sensors and Systems were supplied, the date of use of those sensors and systems, and the number of sensors supplied and in operation". 174 The Court refused VMS's application for discovery in respect of the category of documents identified above. The Court said (at [24]–[25]): 24 As to the question of any ongoing relationship between SARB and its local council clients under contracts requiring SARB to provide service, maintenance, firmware upgrades and assistance, SARB admits that it provides such service, maintenance, upgrades and assistance, where necessary, during the course of its contracts. 25 I am not persuaded that discovery of these documents is required. The question whether VMS's claims of infringement are statute-barred or whether, by the deed of settlement entered into on 9 May 2013, VMS authorised all future uses of sensors, supplied before 9 May 2013, can be determined as a matter of principle, on the information presently at VMS's disposal, without the need for the documents it seeks in this category. Moreover, in its amended defence filed on 24 April 2020 in response to VMS's amended statement of claim, SARB admits the acts of authorisation that have been pleaded. As to its allegations of joint tortfeasance, this issue can be determined having regard to SARB's admission that it provides service, maintenance, upgrades and assistance, where necessary, during the course of its contracts. VMS does not need access to the contracts themselves in order to litigate those allegations. 175 This Court has already decided that the issue can be decided on SARB's admission that it provides service, maintenance, upgrades and assistance where necessary during the course of its contracts. 176 Next, SARB submits that on the evidence before the Court, VMS is not entitled to relief in respect of any alleged infringing uses of the First and Second Versions where the alleged act of infringement by SARB (whether direct or indirect) occurred prior to 9 May 2013, even where the use by SARB's clients occurred after that date. It submits that the infringing act of authorisation was given to each client only once and that was when it supplied the relevant products. It submits that its actions after 9 May 2013 do not constitute fresh torts and it refers in this context to Blueport Nominees Pty Ltd v Sewerage Management Services Pty Ltd [2015] FCA 631; (2015) 251 FCR 127 (Blueport Nominees) at [93]–[96]. 177 VMS submits that based on authorisation under s 13 of the Act and/or the doctrine of joint tortfeasance, every use by SARB's clients after 9 May 2013 constitutes a separate infringement which was authorised by SARB as at the date of the primary alleged infringement and that SARB is liable for each infringing use. The acts of authorisation and/or joint tortfeasance are the acts involved in the ongoing relationship between SARB and each of its local council clients under contracts requiring SARB to provide the relevant local government council with service, maintenance, firmware upgrades and/or other assistance. 178 SARB accepts that if it is otherwise unsuccessful, it will be liable in respect of products sold or supplied after 9 May 2013 because that is fresh conduct not covered by the terms of the Deed of Release between SARB and VMS dated 18 June 2014. 179 As far as the meaning of the word "authorise" in s 13 of the Act is concerned, assistance may be gained by the authorities which have considered the meaning of the word "authorizes" in s 36(1) of the Copyright Act 1968 (Cth). In University of New South Wales v Moorhouse [1975] HCA 26; (1975) 133 CLR 1, Gibbs J (as his Honour then was) said (at 12): The word "authorize", in legislation of similar intendment to s 36 of the Act, has been held judicially to have its dictionary meaning of "sanction, approve, countenance": Falcon v Famous Players Film Co; Adelaide Corporation v Australasian Performing Right Association Ltd. It can also mean "permit", and in Adelaide Corporation v Australasian Performing Right Association Ltd. "authorize" and "permit" appear to have been treated as synonymous. (Citations omitted.) 180 Justice Jacobs said (at 20–21): It is established that the word is not limited to the authorizing of an agent by a principal. Where there is such an authority the act of the agent is the act of the principal and thus the principal himself may be said to do the act comprised in the copyright. But authorization is wider than authority. It has, in relation to a similar use in previous copyright legislation, been given the meaning, taken from the Oxford Dictionary, of "sanction, approve, countenance". See Falcon v Famous Players Film Co. which was approved in Adelaide Corporation v Australasian Performing Right Association Ltd. I have no doubt that the word is used in the same sense in s 36(1). It is a wide meaning which in cases of permission or invitation is apt to apply both where an express permission or invitation is extended to do the act comprised in the copyright and where such a permission or invitation may be implied. Where a general permission or invitation may be implied it is clearly unnecessary that the authorizing party have knowledge that a particular act comprised in the copyright will be done. The acts and omissions of the alleged authorizing party must be looked at in the circumstances in which the act comprised in the copyright is done. The circumstances will include the likelihood that such an act will be done. "… [t]he Court may infer an authorization or permission from acts which fall short of being direct and positive; … indifference, exhibited by acts of commission or omission, may reach a degree from which authorization or permission may be inferred. It is a question of fact in each case what is the true inference to be drawn from the conduct of the person who is said to have authorized …" (per Bankes L.J. in Performing Right Society Ltd. v. Ciryl Theatrical Syndicate Ltd.). (Citations omitted.) 181 In my opinion, VMS's claim based on authorisation within s 13 of the Act fails. First, I reject VMS's submission that the admission by SARB in its Further Amended Defence that it authorised local government councils to use sensors, systems and methods in Australia means that with respect to sensors and systems sold or supplied by SARB to local government councils outside the limitation period, that is, in this case before 9 May 2013, SARB is to be taken as authorising infringing uses by the local government councils within the limitation period. The issue was not the subject of detailed submissions and, insofar as it is dealt with by authority to which I was referred, the authority is in favour of SARB's submission that it is not liable (Blueport Nominees at [91]–[92]; see also Bodkin C, Patent Law in Australia (3rd ed, Lawbook Co, 2019) at [41830]). 182 Secondly, there does not appear to be any scope to argue that there is authorisation by reason of a mere failure to act within the limitation period. In Adelaide Corporation v Australasian Performing Right Association Limited [1928] HCA 10; (1928) 40 CLR 481, Knox CJ said (at 487): I agree with the learned Judges of the Supreme Court in thinking that indifference or omission is "permission" within the plain meaning of that word where the party charged (1) knows or has reason to anticipate or suspect that the particular act is to be or is likely to be done, (2) has the power to prevent it, (3) makes default in some duty of control or interference arising under the circumstances of the case, and (4) thereby fails to prevent it. This statement of the legal position was not challenged in argument before this court. Justice Isaacs (as his Honour then was) said (at 490–491): As an illustration, a person "permits" his hall to be used for the public performance of a play or a song, if he knows or has reason to know or believe that the particular play or song (Performing Right Society Ltd v Ciryl Theatrical Syndicate Ltd) will or may be performed, and having the legal power to prevent it, nevertheless disregards that power and allows his property to be used for the purpose. (Citation omitted; see also Apotex Pty Ltd v Les Laboratoires Servier (No 2) [2012] FCA 748; (2012) 293 ALR 272 (Apotex v Servier (No 2)) at [27]–[30] per Bennett J.) 183 In this case, SARB has sold or otherwise disposed of PinForce Sensors and Systems and at the time of sale or disposal, has authorised local councils to use PinForce Sensors, Systems and Methods. Subject to the third argument, SARB has had no power to prevent local councils from using the PinForce Sensors, Systems and Methods. 184 Thirdly, VMS submits that the acts SARB performed within the limitation period with respect to PinForce Sensors and Systems supplied outside the limitation period and those acts were "provided to local government councils, under contracts requiring SARB to provide the relevant local council with service, maintenance, firmware upgrade and/or other assistance", was authorisation within s 13 of the Act and/or were sufficient acts to constitute SARB as a joint tortfeasor with the users of the PinForce Sensors, Systems and Methods. 185 I do not propose to discuss the principles of liability based on an allegation that the parties are joint tortfeasors. They are dealt with in the standard texts (Bodkin C, Patent Law in Australia (3rd ed, Lawbook Co, 2019) at [42180]–[42220] and Birss C, Terrell on the Law of Patents (19th ed, Sweet & Maxwell, 2020) at 14-198–14-226) and are, with respect, clearly stated in cases such as Bayer Pharma Aktiengesellschaft v Genentech, Inc [2012] FCA 1467; (2012) 98 IPR 424 at [27]; Apotex v Servier (No 2) at [22]–[26] per Bennett J; Morton-Norwich Products Inc v Intercen Ltd [1978] RPC 501). 186 In my opinion, the acts of service, maintenance, firmware upgrade and/or other assistance do not give rise to liability, assuming as I take it to be the case those acts were performed pursuant to lawfully binding contracts entered into before the beginning of the limitation period, because there would be no power to prevent the use and no procuring, inducing or acting in concert in the relevant sense. 187 One final issue needs to be addressed before I leave the limitation issue and that concerns liability under s 117 of the Act. It is that it is no longer in dispute between the parties that "supply" within s 117(1) of the Act encompasses "a permission to take possession or physical control of something" (Collins v Northern Territory [2007] FCAFC 152; (2007) 161 FCR 549 at [74] per French J; and Northern Territory v Collins [2008] HCA 49; (2008) 235 CLR 619 at [55] per Hayne J). 188 The next argument relates to the Deed of Release and is a defence raised by SARB. As I have said, the Deed of Release was entered into in respect of the proceedings concerning the Innovation Patent and the alleged infringement of that Patent by SARB in its conduct in respect of PinForce Version 1. As I have said, SARB's contention is that VMS is not entitled to relief in respect of any infringing uses where the products were sold or supplied by SARB prior to 9 May 2013, even where the use by SARB's clients continued after that date. An alternative basis to that already put upon which SARB seeks to support that proposition is that VMS is precluded from claiming such relief because of an implied authorisation given by VMS under the Deed of Release. 189 The Deed of Release provides for SARB to pay an amount defined as the settlement amount to VMS within 21 days of the date of the Deed. It provides for the resolution of the trial proceeding and the appeal in VMS 2013. Clause 6 provides for a release. It is in the following terms: 6.1 On and from the date of receipt of payment of the Settlement Amount under clause 3, VMS releases and discharges SARB from all Claims for any infringements or exploitations of the VMS Innovation Patent that happened prior to its expiry. 6.2 VMS will not threaten or commence any action, proceeding or suit against any third party to whom SARB has supplied the SARB Product, for any Claims for infringements or exploitations of the VMS Innovation Patent that happened prior to its expiry, in respect of the SARB Product. 6.3 The parties acknowledge and agree that VMS does not by this Deed release, discharge or covenant not to sue SARB or any third party from any Claims for infringement and/or exploitation of any other patents or patent applications, including any patents or patent applications that may be related to the VMS Innovation Patent. 190 Clause 1 includes a definition of "Claim" as follows: (2) Claim means any present or future, actual or contingent, claim, cause of action, complaint, liability, cost or expense that any person (whether or not a Party to the Proceeding) has or might have in respect of the alleged infringements and exploitations of the VMS Innovation Patent that are the subject of the Proceedings, whether or not the facts, matters or circumstances giving rise to that Claim are known to that person or to any other person at the date of this Deed; 191 SARB submits that by cl 6.1 of the Deed, VMS acknowledged that on and from the date of the receipt of the settlement amount under cl 3, VMS released and discharged SARB from all claims for any infringements or exploitations of the Innovation Patent that happened prior to its expiry on 9 May 2013. SARB submits that VMS was aware when it signed the Deed, that SARB was likely to have supply obligations to existing clients. By entering into the Deed and accepting the substantial settlement amount, without requiring SARB to remove all existing PinForce products then in use, SARB contends that VMS impliedly authorised the ongoing use of those products that were supplied prior to 9 May 2013. Clauses 6.1 and 6.2 of the Deed released SARB from suit for acts of supply prior to 9 May 2013. Clause 6.3 placed SARB at risk of suit for acts of supply after 9 May 2013. SARB submits that, in accordance with settled principles of contract construction, the Deed must be interpreted in this manner in order to give it a sensible business interpretation. SARB submits that if VMS is correct that SARB continued to authorise the ongoing use of its products by its clients, then the fact is that by entering into the Deed of Release, VMS itself authorised that use. 192 The issue concisely expressed is whether the Deed of Release releases SARB from liability for infringements by the use of PinForce Sensors, Systems and Methods after 9 May 2013 in cases where the sensors and systems were supplied before that date. If, contrary to my view, there is liability in those circumstances, it is because acts of SARB after 9 May 2013 give rise to liability under the doctrines of authorisation or joint tortfeasorship. On that assumption, it seems to me that the Deed of Release does not release SARB in relation to such claims. That is evident on the plain wording of cl 6. Under cl 6.1, VMS releases and discharges SARB from all claims for any infringements or exploitations of the VMS Innovation Patent that happened prior to its expiry. Similar wording appears in cl 6.2. The liability being considered under the assumption identified is for infringements or exploitations after the expiration of the Innovation Patent on 9 May 2013 and, therefore, they are not the subject of the release in cll 6.1 and 6.2. Issue 4 The Claim for Additional Damages 193 The final infringement issue is whether SARB and CoM are liable for additional damages under s 122(1A) of the Act. Section 122(1A) of the Act is in the following terms: A court may include an additional amount in an assessment of damages for an infringement of a patent, if the court considers it appropriate to do so having regard to: (a) the flagrancy of the infringement; and (b) the need to deter similar infringements of patents; and (c) the conduct of the party that infringed the patent that occurred: (i) after the act constituting the infringement; or (ii) after that party was informed that it had allegedly infringed the patent; and (d) any benefit shown to have accrued to that party because of the infringement; and (e) all other relevant matters. Relevant Principles 194 The leading authority on the award of additional damages under s 122(1A) of the Act is Oxworks Trading Pty Ltd v Gram Engineering Pty Ltd [2019] FCAFC 240; (2019) 154 IPR 215 (Oxworks). The Full Court in that case said that the proper approach to the application of s 122(1A) is to consider all the matters identified in the subsection. Whilst one of the matters may by itself justify an award of additional damages, all matters must first be considered by the Court. For example, the flagrancy of the infringer's conduct may be sufficient to justify an award of additional damages, but that conclusion cannot be reached before all the other matters in the subsection are considered. Explicit findings need not necessarily be made as to each of the matters as a particular matter may not be raised on the facts or is, on the facts, trivial or insignificant. Ultimately, the statutory task is and remains a matter of considering whether it is appropriate to award additional damages, having regard to the matters identified in the subsection (Oxworks at [78]). 195 The Court in Oxworks said the following as to the meaning of the "flagrancy" of the infringement in s 122(1A) of the Act (at [69]): The authorities show that the reasonableness of arguments as to why there was no infringement is a relevant factor to take into account in considering whether the infringement was "flagrant" in the sense that word is used in s 122(1A) of the Patents Act. "Flagrant" in ordinary usage connotes conduct which could be described as "glaring, notorious, scandalous" (Oxford English Dictionary); to this the Full Court in Raben Footware v Polygram Records Inc (1997) 75 FCR 88 added: "or blatant" (at 103). The word derives from the Latin flagrans meaning "blazing, burning". The Court also noted that it was not illegitimate or flagrant for a competitor to examine the specification of a patent and attempt to work around the monopoly claimed therein (at [72]). The Court went on to say (at [73]): A competitor may take the patent, examine the scope of the claims, and endeavour to produce something that does not fall within them. Often, infringement cases are determined by having regard to contestable constructions of the claims. The fact that an alleged infringer fails to defend its reasonably arguable view as to the correct construction of the claim, and continues to produce infringing products in the face of that view, may result in an award for damages, but would not of itself trigger an entitlement to additional damages within s 122(1A) of the Patents Act. 196 In the particular case before it, the Court said in Oxworks that the infringer's non-infringement contention, although ultimately unsuccessful, was reasonably arguable and, in the circumstances of the case, that weighed "heavily" against an award of additional damages (at [77]). 197 A reasonably arguable defence to an infringement claim based on the construction of claims in the patent or other circumstances (Oxworks at [66]), or a reasonably arguable ground in a cross-claim alleging invalidity is a relevant matter (Zetco Pty Ltd v Austworld Commodities Pty Ltd (No 2) [2011] FCA 848 at [267]–[268] per Bennett J; Industrial Galvanizers Corporation Pty Ltd v Safe Direction Pty Ltd [2018] FCA 1192; (2018) 135 IPR 220 at [132]–[133] per Burley J) and may be of particular significance depending on all the circumstances of the case. 198 In conclusion, flagrancy may be established by conduct which might otherwise be described as glaring, notorious or scandalous. The cases which have considered s 115(4) of the Copyright Act 1968 (Cth) provide guidance as to the circumstances in which an award of additional damages may be made (see for example, Dynamic Supplies Pty Ltd v Tonnex International Pty Limited (No 3) [2014] FCA 909; (2014) 312 ALR 705; (2014) 107 IPR 548; Futuretronics.com.au Pty Limited v Graphix Labels Pty Ltd (No 2) [2008] FCA 746; (2008) 76 IPR 763). The Claim Against SARB 199 VMS seeks additional damages against SARB should VMS make an election to claim damages. 200 VMS claims that SARB's infringements have been flagrant. It claims that SARB knew of the existence of the patents and it knew (or was recklessly indifferent to the fact) that its conduct gave rise to infringements of the patents. Finally, VMS claims that SARB intended that a substantial benefit would accrue to it by virtue of its conduct. The particulars provided by VMS in the ASOC focus on SARB's knowledge of the patents, the fact that it has acted in direct competition with VMS and the fact that since VMS 2013, it has known that its conduct infringes the patents or has been recklessly indifferent to that possibility or risk. The ASOC stated that further particulars would be provided after discovery. That did not occur and the particulars, in effect, appeared in VMS's Closing Submissions on Construction and Infringement, which included an "Additional Damages Chronology — SARB". The chronology was, for the most part, based on the evidence of Mr Saxon Hill who is the managing director of VMS. Mr Hill gave his evidence-in-chief by way of affidavit. He was cross-examined by counsel for SARB, but not on any aspect of his evidence which bears on the accuracy of the chronology. In those circumstances, I set out the relevant aspects of the chronology: Date Event 22–24 November 2006 Mr Del Papa of SARB told of existence of 110 Patent. Mr Welch's presentation which concluded with a demonstration of PODs. 4 January 2010 Mr Hill wrote to Mr Ryan, CEO of SARB, notifying existence of the 110 Patent. 24 March 2010 VMS caused its solicitors to write to the APO requesting re-examination of SARB innovation patent; in support of the application for re-examination VMS drew the APO's attention to similarities between the 110 Patent and SARB's innovation patent. 21 June 2010 APO examiner's re-examination report on SARB's innovation patent referred to the 110 Patent. 5 May 2011 VMS proceedings against SARB for infringement of its innovation patent (Innovation Patent Proceedings). 1 June 2011 SARB sent Mr Schwarz of CoM a letter confirming that VMS had commenced proceedings against SARB and indicating SARB's intention and resolve etc. 3 May 2013 Judgment in the Innovation Patent Proceedings. 29 November 2013 SARB's notice of opposition to the grant of the 924 Patent (924 Opposition Proceedings). 4 June 2014 Mr Ryan emailed Mr Lawler of CoM setting out details of the IP dispute between VMS and SARB. 18 June 2014 VMS and SARB entered into a settlement deed in respect of the Innovation Patent Proceedings. 28 October 2015 Delegate dismisses the 924 Opposition Proceedings. 12 November 2018 VMS (Johnson Winter & Slattery) letter of demand to SARB (Letter of Demand). 28 November 2018 NRFA responded to the Letter of Demand. 201 VMS relies on the following matters in support of its claim for additional damages. 202 SARB was aware of VMS's patents and claims to patentability since well before SARB decided to develop a system that included an underground battery-powered sensor communicating with a device above the ground and adopting a magnetometer. 203 It is not in dispute that VMS and SARB have competed with each other in the market of the provision of automated systems that detect vehicle overstay to local councils. They have each responded to requests for tenders or expressions of interest by local councils with their respective products and systems. They did for a time in 2006 explore co-operation with each other on the basis of SARB acting as distributor of the period overstay detection system (POD System) and SARB's software being used in the POD System. These negotiations came to nothing and SARB proceeded to develop its PinForce brand. Mr Hill produced two documents prepared during the negotiations both of which contained a provision stating that VMS is the owner of the hardware, software and intellectual property of and in the POD System. 204 As the chronology shows, in November 2006 Mr Welch advised Mr Del Papa of SARB of the existence of the First Patent and, on 4 January 2010, Mr Hill of VMS did so again when he wrote to the chief executive officer of SARB (Mr Declan Ryan). 205 VMS submits then that SARB has repeated its infringing conduct "without restraint". Its infringing conduct had been pointed out to it and yet it has continued. By its conduct, SARB has gained substantial profits, although the quantum of those profits is yet to be determined. 206 SARB's submissions in response were brief. In essence, it submits that all that has been shown in this case (assuming its other defences and claims do not succeed) is exploitation by it of the patented invention in circumstances of allegations of infringement that objectively could be considered to be defensible. An attempt to work around a monopoly is not conduct which can be described as "flagrant" within s 122(1A) of the Act. VMS has not identified any conduct by SARB which can be properly described as reprehensible, scandalous, glaring or notorious. 207 I turn to apply the matters in s 122(1A) to the circumstances of this case. I will come back to the issue of flagrancy after I have considered the other matters in the subsection. Neither party pointed to anything in particular in relation to the need to deter similar infringements of the patents. At a general level, it can be said that there is a need to deter similar infringements of patents. It may be assumed that this case will receive some publicity within the parking enforcement industry, although such publicity is unlikely to extend far beyond that industry. In terms of the conduct of the party that infringed the patents that occurred after the act constituting the infringement, this is a case in which the infringement has been ongoing over a number of years. That is also the position in terms of SARB's conduct after it was informed that it had allegedly infringed the patents and SARB's conduct continued even after the decision of this Court in VMS 2013. At the same time, the PinForce method, apparatus and system was modified to remove the vehicle overstay determination facility from the DA, a matter to which I will return. In terms of any benefit shown to have accrued to SARB by reason of the infringement(s), there is no evidence before the Court at this point which would enable me to quantify the benefit. I am prepared to infer from the longstanding nature of the dispute between the parties, the fact that the relevant methods, apparatuses and systems appear to have been successful in attracting a substantial number of local government clients to both businesses and the advantages of the methods, apparatuses and systems over existing methods that the PinForce methods, apparatuses and systems have resulted in not insubstantial benefits to SARB. 208 I come then to the relevance of reasonably arguable defences or reasonably arguable grounds raised in a cross-claim alleging invalidity. As I have said, such defences or grounds are relevant matters whether they fall within the rubric of whether an infringement is flagrant in the sense of glaring, notorious or blatant or within "other relevant matters" in s 122(1A)(e). 209 I have reached the conclusion that insofar as SARB has infringed by the use or supply of PinForce Version 3, the infringements are not flagrant and the other matters are not sufficient to support an award of additional damages. The submission that the claims did not include a method, apparatus or system wherein the determination of vehicle overstay was made in the DCA rather than the DA was certainly reasonably arguable. 210 The aspect of SARB's conduct where the argument in favour of an award of additional damages is at its strongest is its conduct after the delivery of judgment in VMS 2013 and with respect to PinForce Versions 1 and 2. Even though that decision dealt with a different patent, there were sufficient similarities for it to be inferred that SARB must have known that to continue to deal in PinForce Versions 1 and 2 involved a very substantial risk of infringement. In my opinion, an award of additional damages is appropriate with respect to infringements after the decision in VMS 2013, but only insofar as the infringements involve PinForce Versions 1 and 2. CoM 211 I turn now to VMS's claim that it is entitled to an award of additional damages against CoM should VMS make an election to claim damages. VMS's claim as pleaded is that CoM engaged and continues to engage in infringing conduct flagrantly, knowing the two patents subsist and knowing that its conduct constitutes an infringement of the patents, or being recklessly indifferent as to whether its conduct constitutes an infringement of the patents. In addition, CoM has intended to obtain a substantial benefit by its conduct. VMS's particulars contain no more detail than an assertion that CoM has continued its infringing conduct despite notice from VMS that its conduct infringes the patents. 212 VMS put forward a chronology of events in relation to its claim for additional damages against CoM consisting of 26 items commencing in early 2010 and ending on 12 November 2018. I will not set out that chronology. My findings as to the relevant events over the period are set out below. 213 The key points that VMS relies on in support of its claim for additional damages are as follows: (1) CoM proceeded with its use of SARB's PinForce Sensors and Systems knowing of the risk that the sensors and systems infringed the First Patent since 2010 and "a fortiori" since 2015 when it was advised by VMS that SARB's PinForce Sensors and Systems infringed the First Patent; and (2) CoM has benefited from its infringements, including by way of the receipt of fines paid by motorists for parking offences. 214 VMS relied on the evidence of Mr Hill in support of its claim for additional damages against CoM. I have already referred to Mr Hill in the context of VMS's claim for additional damages against SARB. 215 CoM relied on the evidence of Dr Kathy Alexander, Mr Samuel Schwarz, Mr Dean Robertson, Mr Geoff Robinson and Mr Geoffrey Lawler in defence of the claim for additional damages. 216 Dr Alexander was the chief executive officer of CoM from 10 April 2008 to 3 December 2014. She affirmed an affidavit on 26 October 2020, in which she states that as chief executive officer, she was responsible for overseeing all divisions of CoM, establishing and maintaining organisational arrangements to implement the decisions of council members, ensuring council decisions were successfully implemented, managing the day to day operations of CoM and providing advice to the council. Dr Alexander says that during her time as chief executive officer, CoM implemented a system to automate some of its parking functions. Dr Alexander was not required for cross-examination. 217 Mr Schwarz affirmed an affidavit on 26 October 2020 and in his affidavit, he states that from about January 2010 to about May 2012, he was the branch manager, parking and traffic at CoM. He states that in his role, he reported to Mr Lawler (see below) and his general duties pertained to anything that would affect any of the parking and traffic and some local laws in the municipality of CoM, for example, responsibility for the governance of parking and traffic inspectors. Mr Schwarz was not required for cross-examination. 218 Mr Robinson is the director of his own business, Geoff Robinson Consulting, and he has held this role since November 2017. Prior to November 2017, he was the head of engineering services at CoM and he was in this position from 1 December 2003 until 21 October 2017. Mr Robinson affirmed an affidavit on 29 October 2020 and he was cross-examined by counsel for VMS. 219 In his affidavit, Mr Robinson states that in his position at CoM, he had the following responsibilities: (a) managing all aspects of the engineering services group to ensure the provision of traffic engineering, infrastructure development, primary municipal services and environmental engineering services to the Municipality of Melbourne. (b) managing and ensuring the professional development of approximately 102 staff (being approximately three executive managers and 99 professional engineers and technical officers). (c) managing the annual group budget for both revenue and expenditure. (d) acting in other roles from time to time, such as that of acting director city planning and infrastructure. 220 During his employment with CoM and as part of his role in engineering services, Mr Robinson was involved in overseeing: (a) the early-2010 and early-2011 trials of the in-ground parking overstay sensor units conducted by DCA (which is the "name" by which he knew SARB), insofar as engineering services assisted in nominating the car parking bays where the sensors would be trialled; (b) the preparation of the technical specification for the New Technologies for Parking Enforcement in CoM, contract no. 3435 (the 2011 Contract); (c) the tender held for the 2011 Contract (the 2011 Tender); and (d) the tender held in 2015 for the Parking Enforcement Technologies Service Contract (contract no. 3534 (the 2016 Contract)) (the 2015 Tender). 221 Mr Lawler affirmed two affidavits, the first on 27 October 2020 and the second on 16 March 2021 and he was cross-examined by counsel for VMS. Mr Lawler worked in management of local government for the latter half of his career. He retired in 2020. From October 1996 to December 2017, Mr Lawler held the following positions at CoM: (a) October 1996 – June 2000, manager capital city planning / economic and strategic planning; (b) 2000 – 2016, director (a variety of portfolios); (c) December 2007 – April 2008, acting chief executive officer; and (d) July 2016 – December 2017, senior strategic advisor (part time) leading special projects involving multiple stakeholders. 222 One of the positions Mr Lawler held in the period between 2010 and December 2016 was director of city planning and infrastructure and in this position, he was responsible for the general management of that division of CoM, which sometimes involved making decisions to appoint relevant providers to CoM depending on whether those decisions were within the scope of his authority. The city planning and infrastructure division included, amongst other functions, the engineering services branch and the parking and traffic branch. 223 Mr Robertson is the director of on-street support and compliance at CoM and he has held this position since July 2017. Mr Robertson affirmed an affidavit on 27 October 2020. He was not required for cross-examination. 224 Mr Robertson states that on-street support and compliance services is a branch of approximately 250 people and is responsible for parking, local laws and animal management compliance, school crossing monitoring, issuing permits and the back office of the infringement life cycle from payments to infringement review and prosecutions. He states that in his current role, he is responsible for overseeing the operations of the on-street support and compliance services branch, including the use of parking enforcement technologies by CoM. Part of his role involves ensuring that the technology is functioning as intended (so that parking infringements are enforceable in Court if they are challenged). He has dealt with SARB (which he knows as DCA) and was a member of the tender evaluation panel for the 2015 Tender. 225 I turn to describe the events that occurred over the relevant period. 2010 226 On 13 July 2010, Mr Hill attended the Victorian Parking Steering Group Workshop and that included a presentation given by Mr Schwarz, who was then CoM branch manager for parking and traffic. During the presentation, Mr Schwarz announced that CoM was engaged in a trial of new technology for automated parking overstay detection. As he knew that VMS was not conducting this trial, Mr Hill assumed that the trial was being conducted with technology supplied by SARB or potentially another supplier of subterraneous parking detection systems. Mr Hill was aware by this time that SARB was marketing the PinForce Sentinel product. 227 Following the presentation, Mr Hill decided to send a letter to CoM notifying it of the First Patent. He gave evidence that on or about 20 July 2010, he sent such a letter to Dr Alexander, the then chief executive officer of CoM. The copy of the letter which is in evidence is dated 20 July 2010, but it is unsigned for reasons Mr Hill gives in his affidavit. Although I did not understand there to be any dispute between VMS and CoM as to whether or not the letter was actually sent by Mr Hill to CoM, to the extent that Dr Alexander's evidence that she could not remember receiving the letter suggests a negative answer, I accept the evidence of Mr Robinson and of Mr Lawler that they saw the letter. In the case of Mr Lawler, that is supported by his evidence that he asked his assistant to arrange a meeting in response and that he recalls a meeting with a representative of VMS, whom he believes was Mr Hill, after he returned from long service leave in early October 2010. 228 In the letter to Dr Alexander, Mr Hill states that he wishes to inform her of the existence of an Australian standard patent titled "Method, apparatus and system for parking overstay detection" (Patent Application No. 2005243110). Mr Hill states that a copy of this patent can be obtained from IP Australia and he gives details of where it can be inspected online. Mr Hill states that he is notifying Dr Alexander of the existence of this patent in light of the address given by Mr Schwarz at the Victorian Parking Steering Group Workshop and the fact that in his address, Mr Schwarz announced that CoM was engaged in a trial of new technology for parking overstay detection. 229 There is a dispute between VMS and CoM as to the purport of the letter and the state of mind of Mr Robinson and Mr Lawler after reading it. 230 As I have said, Mr Robinson in his position at CoM had the responsibility of acting in other positions from time to time, such as that of acting director of city planning and infrastructure and in July 2010, he was acting in that position because Mr Lawler was on long service leave between June and October 2010. Mr Robinson states in his affidavit that he recalls seeing the unsigned letter and he recalls thinking at the time he saw it that given it was unsigned, it was "sabre rattling" by VMS in an attempt to secure the position of supplier of in-ground sensors. He did not consider that there was anything to discuss with VMS as the letter appeared to him to be advertising for their equipment. In cross-examination, Mr Robinson agreed that he understood at that time that the letter was informing CoM of the existence of a patent and that VMS considered that the patent was relevant to Mr Schwarz's trial of new technology for parking overstay detection. Mr Robinson said that he did not look up the patent at the time. 231 Mr Lawler states in his second affidavit that he has a recollection of seeing the letter after he returned to work in October 2010. He was cross-examined by VMS about his actions in relation to the letter. Mr Lawler agreed that he read the letter carefully at the time and carefully enough to organise a meeting with Mr Hill after reading it. Mr Lawler accepted that he understood at the time that the letter was informing CoM of the existence of a patent and that VMS considered that its patent was relevant to Mr Schwarz's trial of new technology for parking overstay detection. He said that he did not recall looking up the patent at the time. 232 VMS relies on the content of the letter and the fact that Mr Robinson and Mr Lawler took no action in response to it in support of its claim for additional damages. I am not prepared to place any significance on the letter in that respect. I consider it was open to Mr Robinson and Mr Lawler to respond in the way they did to a letter which made no demand against CoM, and for Mr Robinson to regard the letter as being directed towards VMS's participation in CoM's trial of new technology for parking overstay detection. To the extent Mr Robinson's recollection of the letter being unsigned was one of the reasons for the evidence he gave, whereas it was Mr Hill's evidence that the copy of the letter he sent was signed, I consider it is unnecessary to make any finding on that matter because the terms of the letter itself are sufficient to lead to the conclusion I have expressed. 233 As I have said, Mr Lawler recalled a meeting with a representative of VMS, whom he believes was Mr Hill, after he returned from long service leave in early October 2010. Mr Hill states in his affidavit that within a few weeks of sending the letter around 20 July 2010, he was invited to attend a meeting with CoM in its offices. Mr Hill accepted under cross-examination that if Mr Lawler was on leave until at least 1 October 2010, any such meeting could not have happened until after that time. 234 Mr Hill said that during this discussion at the offices of CoM, although he cannot now recall the exact words used, he said to Mr Lawler words to the effect that "VMS is the holder of a patent in relation to PODS" and that "given that [CoM] is starting to trial in-ground parking detection technology we felt it important that you be made aware of this fact". He said that he also said to Mr Lawler words to the effect that "VMS is willing to undertake a trial of its PODS for [CoM]" and he said that in response, Mr Lawler said words to the effect that he "would look into it". Mr Lawler in his affidavit said that he does not recall Mr Hill saying that VMS is the holder of a patent, but that it is possible he did and that the words about participation in CoM's trial are consistent with his recollection of the meeting. Mr Lawler said that his recollection is that Mr Hill said that he wanted VMS to be able to participate in CoM's trial of parking bays. 235 To the extent there is a contest between the parties in relation to the content of the discussion between Mr Hill and Mr Lawler, I am not prepared to draw any inference against CoM on that basis, even accepting that Mr Hill said words to the effect that VMS is the holder of a patent in relation to the POD System and that Mr Lawler said words to the effect that he would look into it. As I have said, it was open to CoM employees to regard VMS's approach as being directed to the possibility of participation in CoM's trial and again, no demand against CoM was made at that time. 236 For the same reasons, I am not prepared to draw any inference against CoM on the basis of the following circumstances which occurred in the period from mid to late 2010: (1) From 29 September to 1 October 2010, Mr Hill attended the Australian National Parking Steering Group Conference in Hobart and in his affidavit, he states he was introduced to Mr Schwarz and he had a conversation with him. Mr Hill states that Mr Schwarz said to him words to the effect that "I understand you have an in-ground sensor system that several councils are using. We have been trialling the DCA sensor and I am not happy with its performance, particularly in parking spaces affected by trams. Would you be prepared to move fast to conduct a trial of your technology in Melbourne CBD?" Mr Hill states that in response, he said words to the effect that he had a strong interest in conducting such a trial with CoM. I note that Mr Schwarz in his affidavit disputes that he said he was not happy with a third party's technology that CoM was trialling and that was put to Mr Hill in cross-examination. (2) On 4 October 2010, Mr Hill sent an email to Mr Schwarz proposing a three month pilot of the POD System. The cover letter of the proposal attached to the email stated that VMS is the inventor and market leader in in-ground electronic sensing for parking enforcement and referred to VMS's "patented technology". (3) Mr Hill and Mr Welch were invited to meet with Mr Schwarz in Melbourne to discuss the proposal and this meeting took place on 13 October 2010. (4) After this meeting, Mr Hill states that he had various conversations with Mr Schwarz and Mr Alan Grant regarding pricing and installation and traffic management and that around this time, he also learned that Mr Schwarz and Mr Grant had conducted an inspection of VMS's POD System in Maribyrnong in October 2010. I note that Mr Schwarz in his affidavit states that he does not recall these matters. (5) On 4 November 2010, Mr Hill received a copy of the pilot proposal countersigned by Mr Schwarz and from the end of November 2010, VMS supplied and installed 100 in-ground sensors under the pilot program with Mr Robinson's involvement, albeit limited to advising on the location and installation requirements of VMS's sensors. (6) On 13 December 2010, Mr Hill sent an email to Mr Schwarz and Mr Grant attaching a presentation and the second slide in the presentation made reference to the POD System being a patented alerting and information system. Both Mr Schwarz and Mr Grant replied to the email on 13 and 14 December 2010, respectively. 2011 237 On 2 February 2011, Mr Hill received an email from Mr Schwarz announcing the 2011 Tender and on or around 17 February 2011, a briefing session occurred with representatives from all of the tenderers, including Mr Hill, and CoM. As the tender for the 2011 Contract involved a range of technologies and service offerings, VMS joined the "Future Parking" consortium of seven companies to bid for the tender. The consortium was led by Tenix Solutions (Tenix) and the other members of the consortium were VMS, Schweers Australia, SenSen Networks, Citywide, PaybyPhone (Verrus) and CellOPark Australia. The consortium's bid for the 2011 Tender was submitted to CoM in March 2011. The bid documents contained statements that VMS's POD System were patented and references to the First Patent. The bid documents did not state that SARB's technology infringed any VMS patent or that CoM's use of that technology would infringe VMS's rights. 238 An internal memorandum dated 21 March 2011 records that following CoM's tender evaluation, it was agreed that only one of the tenderers, SARB, would proceed to the interview stage. 239 As I have said, on 5 May 2011, VMS commenced proceedings in this Court (NSD 395 of 2011) against SARB for infringement of an Innovation Patent (the 2011 Proceedings). These proceedings resulted in the judgment, VMS 2013. CoM was not named as a respondent in the 2011 Proceedings. 240 On 1 June 2011, SARB sent a letter to CoM, attention to Mr Schwarz. The letter is signed by Ms Tasneem Allie. In cross-examination, Mr Lawler said that he recalled being shown the letter by Mr Schwarz. There is a contest between the parties as to the effect of this letter and as to Mr Lawler's state of mind after reading it. The terms of the letter are as follows: Dear Sam, Further to your request to Sandy Del Papa (of Database Consultants Australia), I confirm that Vehicle Monitoring Systems Pty Ltd ("VMS") has filed proceedings in the Federal Court of Australia alleging that Database Consultants Australia ("DCA") are infringing the VMS innovation patent, AU 2010101354 which was only applied for in December 2010 and certified in January 2011. This claim is being vigorously defended by DCA and, among other things, DCA will be seeking revocation of VMS' patent. The matter is currently being managed by Norton Rose Australia solicitors, who are engaged by DCA to respond to the claim. As proceedings are current, we are not able to provide any further detail in relation to the claim. However I offer the following information for your consideration. DCA currently holds a patent (Australian Innovation Patent No 2008100796) for a system that includes the transfer and integration of data recorded by a vehicle detection sensor to a handheld unit for the purposes of infringement issuance. VMS unsuccessfully made several attempts to have DCA's patent revoked by requesting re-examination of DCA's patent in the Australian Patents Office. Their challenges have been dismissed. VMS's claim against DCA has been filed only after: 1) VMS's failed attempts to revoke DCA's patent for an integrated sensor and infringement issuing system; and 2) DCA's current market success through the award of a number of notable commercial contracts for its integrated sensor/infringement issuing system. As previously stated, DCA is defending the claim filed by VMS and will continue to provide its superior comprehensive system and service to the market. With regards 241 Mr Schwarz states in his affidavit that at this time, he was acting in Mr Lawler's position as Mr Lawler was on leave. Mr Schwarz said that at the time, he sought advice from the internal legal team in CoM on whether this was something that CoM needed to be concerned about and he says that he does not recall what, if any, further steps were taken to address the matters in the letter. In addition, he said that he recalls having a telephone call with Mr Del Papa in which the dispute, that is to say, the 2011 Proceedings, was discussed. 242 As I have said, Mr Lawler gave evidence that he recalled reading the letter from SARB to CoM dated 1 June 2011. He recalled being shown the letter by Mr Schwarz and although he could not recall the actual date, he agreed that it would have been some time around the date of the letter. Mr Lawler agreed with the following propositions put to him by counsel for VMS: (1) when he read the letter in 2011, he understood that VMS was alleging that SARB's integrated sensor system infringed VMS's patent; (2) he understood at the time that it was a significant matter for VMS to be alleging that SARB's sensor system infringed VMS's patent rights; and (3) he understood at the time that SARB's sensor system was being used by CoM. Mr Lawler recalled that the letter was provided to the legal services branch of CoM. However, he disagreed with the proposition put to him that he understood at the time that if SARB's sensor system infringed VMS's patent rights, CoM might also infringe the same patent by its use of SARB's system. 243 VMS relies on the fact that the letter states that VMS has filed proceedings alleging that SARB is infringing its Innovation Patent, that the claim is being vigorously defended by SARB and that SARB will continue to provide its system and service to the market, i.e., to CoM. On the other hand, CoM draws attention to other aspects of the letter, including that it refers to VMS alleging infringement of VMS's Innovation Patent, which, the letter states, was only applied for in December 2010 and certified in January 2011. The letter also states that SARB currently holds its own Innovation Patent which VMS has made several unsuccessful attempts to have revoked and it is in that context, that SARB states that it will continue to provide its products and services to the market. 244 In my opinion, CoM's construction of the letter is correct and I accept Mr Lawler's disagreement with the suggestion that he (and therefore CoM) understood at the time that CoM might also infringe the same patent by its use of SARB's system. I agree that the interposition of the statement that SARB has its own Innovation Patent which VMS had unsuccessfully challenged, in between the two aspects of the letter relied on by VMS means that the letter does not have the significance VMS seeks to place on it. With respect to Mr Schwarz's evidence that at the time he sought advice from the internal legal team on whether CoM needed to be concerned about the letter and that he does not recall what, if any, further steps were taken to address these matters, I note that Mr Schwarz was not required for cross-examination. In any event, in light of my conclusion as to the effect of the letter, I infer that it was considered by CoM that no further steps needed to be taken by it. 2012 245 On 13 March 2012, a Subpoena to produce documents addressed to CoM was issued in the 2011 Proceedings at the request of VMS. The Subpoena sought documents relating to the 2011 Tender. A chain of email correspondence within CoM is in evidence and two emails, both dated 19 March 2012, are addressed first, to Mr Schwarz and second, to Mr Lawler and Dr Alexander. 246 Mr Schwarz states in his affidavit that he has no independent recollection of the Subpoena and reviewing the documents has not refreshed his memory. Mr Lawler remembers reading the email chain and he said that it was a fairly frequent occurrence for his division within the council to receive requests for documents and his primary responsibility was to be aware of the request and to ensure that the documents requested were provided as quickly as possible. Dr Alexander says she does not have any recollection of being aware of the Subpoena and considering the emails has not refreshed her memory. 247 VMS contends that it is significant that the Subpoena was brought to the attention of Mr Lawler and Dr Alexander. 248 Mr Lawler was cross-examined about the email dated 19 March 2012 and he agreed that at the time he read the email correspondence, he understood that the Subpoena related to the 2011 Tender and that SARB had been selected to provide its sensor system. Mr Lawler agreed that at the time he read the email, he understood, or, as he put it, "presumed so", that it related to Court proceedings between VMS and SARB. However, Mr Lawler did not immediately accept the proposition that the email was forwarded to him and to Dr Alexander because the subject matter was a matter of significance for CoM. Mr Lawler said that there were often requests for documents from courts of various kinds and that those requests were managed and handled by the government services branch of CoM, but the provision of documents relied on the operating branches. Nevertheless, he accepted that the subject matter was considered important enough to draw to his attention and to the attention of Dr Alexander. 249 I do not consider that the fact that a Subpoena to produce documents was issued to CoM is a matter that, without more, should be given the significance VMS sought to attach to it. I accept the evidence given by Mr Lawler that CoM often received requests for documents. The fact that the Subpoena was brought to the attention of Mr Schwarz and Mr Lawler may be explained, as Mr Lawler did in his evidence, by the circumstance that the Subpoena called for documents in relation to the 2011 Tender, which Mr Schwarz in his role as branch manager, parking and traffic was responsible for and Mr Schwarz reported to Mr Lawler. I am prepared to accept that the fact that Dr Alexander was sent the email correspondence on 19 March 2012, indicates the matter was considered to be of significance within CoM. However, such significance seems to reside in the circumstance that the 2011 Proceedings had some link to the 2011 Tender. 2014 250 The next relevant event in the chronology is an email from Mr Declan Ryan of SARB to Mr Lawler on 4 June 2014. The email refers to a conversation between the two men the previous week and Mr Ryan states that he is seeking information regarding the policy, process or other governance that was used by CoM in the 2011 Tender. Mr Ryan goes on to say the following "by way of full disclosure": On 3rd May 2013, Justice Yates of the Federal Court of NSW handed down his judgment on the proceedings brought by VMS against DCA which alleged that DCA had breached VMS innovation patent for its inground sensor. In that 63 page judgment, which Justice Yates had taken more than six months to consider, it was determined that DCA's product was in breach of the VMS patent. It is to be noted that the VMS patent expired on the 9th May 2013. It is also to be noted that the final outcome is not yet determined as the matter is before the Court of Appeals currently. Also, to be noted here, there are current proceedings by DCA against VMS (in the Federal Court of Victoria) pertaining to a breach of DCA's patent which provides DCA with exclusive rights in Australia to the provision of an integrated sensor-infringement issuing enforcement solution through the pre-population of data from the sensor to the infringement issuing device. DCA's patent is current until 22nd August 2016. DCA and VMS are currently in mediation discussions surrounding both matters and appear to be close to a resolution. … 251 Mr Lawler responded to the email on 4 June 2014 and he forwarded the correspondence to other representatives of CoM including Mr Robinson. 252 In his first affidavit, Mr Lawler refers to the email dated 4 June 2014 and he states that he does not recall the conversation with Mr Ryan referred to in the email or the precise words of the conversation, but he has a recollection of being assured by someone from SARB to the effect that SARB was confident of its position and could continue to provide services to CoM. Under cross-examination, Mr Lawler accepted as a possibility that during the conversation, Mr Ryan had advised him that VMS and SARB were in dispute in relation to intellectual property rights. Mr Lawler agreed that he understood at the time he read the email that there had been a determination by this Court that SARB's in-ground sensor product was in breach of VMS's patent. Mr Lawler said he did not recall taking any other steps after having been advised of the matters set out in Mr Ryan's email. 253 Mr Lawler was asked in cross-examination about the assurance he said he was given by a representative of SARB and he said he could not recall precisely who gave him that assurance. Mr Lawler said that the email from Mr Ryan refers to SARB and VMS being currently in mediation discussions surrounding the legal matters and that they appeared to be close to a resolution and he said that he took that as having the same effect as the matter referred to in his affidavit, that is to say, the assurance. Mr Lawler agreed that there is no explicit statement in the email that SARB was confident of its position. 254 Mr Robinson said in cross-examination that he read Mr Ryan's email dated 2 June 2014 carefully when it came in after Mr Lawler had forwarded it to him. Mr Robinson accepted that it would be his understanding that the email was saying that this Court had determined that SARB's sensor product had infringed VMS's patent and he was aware at that time that CoM was using SARB's sensor product. Mr Robinson agreed that after reading the email, he took no further action himself. 255 VMS relies on the terms of Mr Ryan's email dated 2 June 2014 and submits that it is significant that having read the email, neither Mr Lawler nor Mr Robinson took any steps or action in response. 256 CoM submits that read in its context, the email conveyed the following information: (1) that VMS's patent had expired; (2) that the dispute between VMS and SARB had not been finally determined by the Court; (3) that SARB had its own patent and was suing VMS for infringement of it; and (4) that the parties appeared to be close to resolving their dispute. CoM also relies on the evidence of Mr Lawler that he was given an assurance by a representative of SARB that SARB was confident of its position and it submits that it is significant that it was not put to Mr Lawler or Mr Robinson in cross-examination that after reading this email, either of them understood that by using SARB's technology, CoM was infringing VMS's patent. 257 In relation to the latter submission, I am prepared to proceed on the basis that both Mr Lawler and Mr Robinson were on notice that it was VMS's case that CoM was aware of a risk that it was using a product which infringed VMS's patents. So much was put to Mr Lawler with respect to other events in the chronology, such as the letter dated 1 June 2011, and was an implied or inevitable aspect of the cross-examination of Mr Robinson. However, I note that as CoM submits and as recorded above, Mr Lawler disagreed with such a proposition in relation to the letter dated 1 June 2011. 258 The starting point in assessing the significance of the email dated 4 June 2014, is the evidence of Mr Lawler and Mr Robinson in cross-examination that they understood at the time they read the email that this Court had determined that SARB's product infringed VMS's patent. In the case of Mr Robinson, it was also put to him, and he agreed, that he understood at the time that CoM was using SARB's product. The same was put to Mr Lawler when he was cross-examined about the letter dated 1 June 2011. 259 This knowledge of Mr Lawler is significant and places this point in the chronology on a different footing from the earlier events to which I have referred. However, it is still necessary to consider CoM's submission that reading the email in context, it conveyed other matters such that the issue of infringement by CoM does not have the significance VMS seeks to attribute to it, and Mr Lawler's evidence of being given an assurance by a representative of SARB. 260 In relation to the first matter, it is not surprising that in an email from a party to its commercial partner conveying advice of an adverse Court determination, the party would seek to highlight other matters favourable to the party and its position. However, that is not the end of the matter and I accept CoM's submission that in this case, the other matters identified rose higher than mere puffery and, in particular, CoM was informed that the patent it was determined SARB's product infringed had expired, that an appeal was on foot, that SARB had instituted proceedings against VMS alleging infringement of its own patent and that the parties were in mediation discussions surrounding both matters and appeared to be close to a resolution. 261 Although I have no reason to doubt Mr Lawler's honesty, I do not consider that there is sufficient evidence to support a finding that Mr Lawler had a conversation with a representative of SARB wherein he was assured of SARB's confidence in its position. I infer from Mr Lawler's evidence that the content of the conversation was to the same effect as the statement in Mr Ryan's email that the parties were in mediation discussions and that he would have regarded the latter as an assurance that the matter was not finalised. This is to be taken into account in the consideration of VMS's claim for additional damages together with the fact that CoM was made aware of a determination by this Court that SARB's product infringed VMS's Innovation Patent. 2015 262 In approximately the middle of 2015, CoM advertised the 2015 Tender for the procurement of parking enforcement technologies and services as its contract with SARB was due to expire. Mr Robertson was one of the four full voting members on the CoM tender evaluation panel for the 2015 Tender and in his affidavit, he states that CoM received tender responses from SARB and Tenix, among others. Tenix's tender response is dated 22 September 2015 and in that document, it is recorded that VMS is one of Tenix's partners in relation to the 2015 Tender. Mr Robertson describes the tender evaluation process and he states that, as far as he can recall, no patents or patent-related issues were raised or discussed at any meetings of the evaluation panel throughout the 2015 Tender process as far as he can recall, including during the presentation given by Mr Welch on behalf of VMS. Mr Robertson states that eventually, the panel created and signed the tender evaluation report recommending a successful tenderer and that the report ultimately recommended SARB. The report is annexed to Mr Robertson's affidavit and it is marked to the attention of Mr Robinson and dated 30 October 2015. 263 Mr Robinson states in his affidavit that it was his responsibility to prepare the confidential management report to the board of council members on the outcome of the 2015 Tender and the report, dated 15 December 2015, is annexed to Mr Robinson's affidavit. 264 On 16 December 2015, Mr Hill sent a letter to Mr Ben Rimmer, who at that time was chief executive officer of CoM. The letter refers to the First Patent, a copy of which was enclosed with the letter, and notes that SARB was awarded CoM's 2011 Tender under which it supplied its PinForce Sentinel system to CoM which was utilised by the in-ground sensors installed or procured by SARB under the 2011 Contract. In the letter it is alleged that SARB's system includes methods and apparatus falling within the scope of claims in the First Patent and the letter continues as follows, relevantly: 5. In short the City of Melbourne has, since approximately July 2011, infringed the Patent by using the DCA System because that system falls within the scope of the Patent claims identified above. 6. As a result of this activity, VMS is entitled to be compensated for Council's use of the DCA System until such time as the in-ground sensors are removed or no longer in use. We understand that this will occur from some time in 2016, consistent with the Invitation to Tender under Contract No. 3534. … 8. Notwithstanding the above, VMS is conscious of the significant costs and management time involved in pursuing patent infringement claims in the Federal Court, its business relationships and its obligations to resolve disputes, where possible, before commencing proceedings. 9. With this in mind, it seems to us that a commercial resolution with the City of Melbourne in relation to past and present infringement of the Patent should be actively considered in the interests of all parties. In this regard, we understand that in the 15 December 2015 council meeting a recommendation was made to award the Tender for Contract No. 3534 to a party other than our partner Tenix Solutions Pty Ltd. Further we assume that no letter of acceptance has yet been issued to the recommended successful tenderer. Accordingly we view this as a good opportunity for the City of Melbourne to engage in an expeditious settlement negotiation with VMS of the City of Melbourne's patent infringement claim as set out above, as the current tender could be factored into the negotiations, for example, by part compensating VMS for the unauthorised use of its intellectual property since 2011. 265 The 2015 Contract was ultimately awarded by CoM to SARB and the contract was signed in 2016. 266 In his affidavit, Mr Hill states that he sent the letter dated 16 December 2015 because he had become aware that the 2011 Contract was due for renewal and the purpose of the letter was to remind CoM of VMS's patents. Mr Hill states that in the letter, he set out the reasons why SARB's system infringed the First Patent and he requested a meeting to discuss the issue. 267 Mr Hill was cross-examined at length about his state of mind at the time of this letter and his purpose in sending it. He agreed that by 15 December 2015, he knew that Tenix had not been successful in the 2015 Tender and he accepted that that was the reason he sent the letter he did on 16 December 2015. It was put to Mr Hill that the references in para 9 of the letter to the 2015 Tender were intended by him as a final effort to secure the tender. He said that he did not agree with that suggestion and it was a proposal to factor into a potential settlement and something that could have been considered, but not the objective. Mr Hill said it was not the sole objective of the letter to win the tender but that "would have been nice". Mr Hill agreed that the letter was the first occasion on which he made a demand of CoM and he said it was a "reasonable statement" that the reason why he had not previously made a demand of CoM was because he did not want to put it "offside" while there was still a possibility of VMS securing a contract. 268 Mr Robinson states that he must have read the letter because it is likely it was the letter which prompted his call to Mr Hill on 18 December 2015 which he describes in his affidavit. He refers to an internal email to Mr Rimmer's executive assistant dated 18 December 2015, containing a file note of a conversation he had with Mr Hill over the telephone on that day, at the request of Mr Rimmer. Mr Robinson states he recalls making this file note and while he does not remember the precise words used in the conversation, he can recall that Mr Hill said words to the effect that SARB was "using our technology" and Mr Robinson states he replied with words to the effect that he "did not believe this to be true". He states he also said words to the effect that Mr Hill "should communicate his concerns to [SARB]". The file note prepared by Mr Robinson records that Mr Hill indicated he wanted to discuss the possibility of CoM coming to a commercial arrangement with VMS as it had, in his view, breached IP protocols in using the in-ground sensors and that Mr Robinson advised Mr Hill that CoM had not "in any way breached" IP protocols and that he rejected Mr Hill's claim and frankly was outraged that Mr Hill would think that CoM would do such a thing. The file note further records that Mr Robinson advised Mr Hill that CoM had received an unqualified offer from SARB which had been accepted by it and that he needed to convey his concerns to SARB. 269 Mr Hill also refers to the telephone conversation with Mr Robinson in his affidavit and he says that after sending the letter dated 16 December 2015, he received a telephone call from Mr Robinson, rejecting VMS's claims set out in the letter. 270 The file note prepared by Mr Robinson in relation to his telephone conversation with Mr Hill also refers to a telephone conversation Mr Robinson had with SARB shortly afterwards. Mr Robinson gives evidence about that conversation in his affidavit. Mr Robinson states that after the call with Mr Hill, he spoke with SARB's director, Mr Del Papa, and that while he does not recall the precise words used during the conversation, he sought confirmation from Mr Del Papa by asking with words to the effect of, "does [SARB] have legal rights to use the equipment" to which Mr Del Papa responded with words to the effect that "it did". Mr Robinson states that he also recalls asking for further confirmation from Mr Del Papa with words to the effect of "are there appropriate indemnification provisions in the submission from [SARB] and does [SARB] have the necessary approvals to supply all the nominated products?". Mr Robinson states that he also sought confirmation of CoM's position by asking Mr Del Papa with words to the effect of "would [CoM] be in breach of IP rights as a consequence of the contract?". Mr Robinson states that he recalls Mr Del Papa replied with words to the effect that "yes [SARB] has provided indemnification and has the approvals" and "no, [CoM] would not breach IP rights". Mr Robinson states that he recalls forming the view that the dispute was over VMS being unsuccessful in relation to the 2015 Tender and as a consequence it did not concern CoM. 271 By letter dated 21 December 2015, Mr Robinson responded to Mr Hill's letter dated 16 December 2015. In that letter, Mr Robinson notes that, as discussed by telephone, CoM rejected the claim that it had infringed VMS's patent by entering into a contract with SARB and consequently, it saw no reason to meet to discuss the matter further. Mr Robinson noted that SARB was contracted by CoM to supply parking technologies and suggested that Mr Hill contact SARB directly to discuss his concerns. 272 Finally, Mr Robertson gave evidence of a telephone conversation he had with Mr Del Papa in 2015 or 2016. He received a telephone call from Mr Del Papa, the director at SARB, in relation to a patent dispute between VMS and SARB and this telephone call was the first time he had heard about such dispute between VMS and SARB. Mr Robertson states that during the telephone call, Mr Del Papa said words to the effect of, "I'm just letting you know, there may be a case that hits the media tomorrow, in relation to the sensors that are used by [CoM] and patents owned by VMS. It has nothing to do with the City of Melbourne, I'm just letting you know." Mr Robertson states that he asked Mr Del Papa, "is there anything that [CoM] needs to do?" and Mr Del Papa responded "no, this is between VMS and [SARB]". Mr Robertson states that as a result of this conversation with Mr Del Papa, he formed the view that there was nothing required on the part of CoM. He states that he did not specifically recall discussing this telephone call with any members of his team, although he probably did. 273 VMS relies on the terms of the letter dated 16 December 2015 from Mr Hill to CoM in full. In relation to Mr Robinson's conversation with Mr Del Papa, VMS submits that the confirmation sought and obtained by Mr Robinson that SARB had legal rights to use the equipment was no more than a bare assertion and, in relation to Mr Del Papa's assurance that SARB had provided indemnification and that CoM would not breach IP rights, no details or explanations were provided. VMS submits that having been told that SARB was indemnifying it, CoM clearly decided it could simply continue to use SARB's sensors regardless of them being found to infringe VMS's patent rights. VMS relies on the file note prepared by Mr Robinson in relation to his conversation with Mr Hill and submits that its dismissive tone takes CoM "across the additional damages threshold". 274 CoM relies on Mr Hill's acceptance under cross-examination that he sent the letter dated 16 December 2015 because Tenix had been unsuccessful in the 2015 Tender and his agreement with the proposition that VMS had not previously made a demand against CoM because it did not want to put CoM "offside" while there was still a chance of VMS securing a contract with CoM. In that respect, CoM relies on para 9 of the letter dated 16 December 2015. In response, VMS submits that such reliance is misplaced because it is the conduct of CoM, not VMS, which is relevant for the purposes of the claim for additional damages. 275 In relation to Mr Robinson's conversations with Mr Hill and Mr Del Papa and his file note with respect to those conversations, CoM submits that the striking thing about those communications is not that CoM is dismissive of VMS and its claims, but rather that Mr Robinson's state of mind at the time was that he believed that CoM was not infringing VMS's rights. CoM points to the fact that Mr Robinson was not cross-examined about the letter dated 16 December 2015 or these conversations. CoM submits that from December 2015, it was faced with competing positions of VMS on the one hand, and SARB on the other and, in the circumstances, it was not unreasonable for it to rely on the latter's assurances. 2018/2019 276 The last event in the chronology before VMS's letter of demand on 12 November 2018 was Mr Robinson's letter to VMS on 21 December 2015. There was a period of almost three years between these two events. 277 On 12 November 2018, VMS through its solicitors, sent a letter of demand to CoM. The letter enclosed a draft statement of claim and it stated that unless CoM confirmed in writing, within 14 days, that it intended to fully compensate VMS for CoM's infringing conduct and to otherwise agree to appropriate restraints or measures in respect of ongoing infringement, VMS intended to file proceedings without further notice. 278 On 14 February 2019, VMS commenced these proceedings. 279 Before addressing the merits of VMS's claim against CoM for additional damages, it is necessary to address a submission by CoM about how VMS has pleaded its claim for additional damages. CoM submits that the relevant paragraph in VMS's ASOC, para 134, contains a number of matters that are pleaded conjunctively and therefore, VMS's case must be that an award of additional damages against CoM is warranted because of their combined effect. CoM submits that despite the pleading, VMS's closing submissions proceed seemingly unconstrained by the pleadings and on a disjunctive basis. 280 I do not need to determine whether CoM's characterisation of VMS's closing submissions is correct. The decision in Oxworks makes it clear that all the matters in s 122(1A) must be considered and taken into account, even though one matter may ultimately make the critical difference in terms of whether there is an award of additional damages. 281 In considering the matters in s 122(1A), it is convenient to divide the period of alleged infringement into three periods. 282 First, there is the period from about the middle of 2010 to March 2012. CoM knew in the middle of 2010 that it was involved in trials of SARB's PinForce product and system and that it was a product and system for detecting vehicle overstay and that it involved in-ground sensors. CoM knew that another supplier in the field, VMS, had heard of these trials and that this had prompted VMS to notify CoM that VMS held a patent in relation to a parking overstay detection apparatus/method/system. VMS met with CoM in late 2010. VMS indicated that it had a patent with respect to its POD System or in-ground sensor system and wished to participate in CoM's new technology trials. In late 2010, VMS and CoM were involved in a trial by CoM of VMS's POD System or in-ground sensor system. CoM was aware that VMS claimed it had rights under a patent in respect to the POD System or in-ground senor system. CoM was aware that VMS, as part of a consortium, had made a bid for a contract with CoM to begin in 2011 to supply its POD System or in-ground sensor system. The bid by the consortium was unsuccessful. SARB was successful in securing the contract and commenced supplying its PinForce product and system to CoM. By mid-2011, CoM was aware of the following matters: (1) VMS had instituted legal proceedings against SARB for patent infringement in relation to SARB's PinForce product and system. CoM was then using SARB's PinForce product and system; (2) the legal proceedings were being defended by SARB; (3) SARB held its own patent in relation to its own system, or aspects of its own system, and was advised by SARB that attempts by VMS to have that patent revoked had been unsuccessful; (4) SARB asserted that VMS's actions were motivated, or partly motivated, by SARB's success in the market; and (5) SARB would continue to provide its product and system. 283 CoM knew in March 2012 that the legal proceedings between VMS and SARB included a subpoena issued by VMS to CoM in order to obtain documents it held in relation to the 2011 Tender. 284 There is nothing to this point which would provide a basis for an award of additional damages. I am assuming, for present purposes, that conduct outside the limitation period identified in the Act (see s 120(4)) might form the basis, or part of the basis, for an award of additional damages. CoM is the customer. It is aware that its supplier is involved in a dispute with a third party and that the dispute has not been finally resolved. As at March 2012, there had been no assertion by VMS to CoM that the latter had allegedly infringed the patents. I will deal with the issue of benefit shown to have accrued to CoM because of the infringement in the context of the next period of time. 285 Secondly, there is the period between March 2012 and 15 December 2015. 286 CoM knew in the middle of 2014 that SARB had lost its patent dispute with VMS. The latter had established a breach by SARB in relation to SARB's product and system of VMS's Innovation Patent for its in-ground sensor. CoM knew that VMS's Innovation Patent expired on 9 May 2013 and it knew that SARB was appealing against the decision of the Court. It also knew that SARB had brought legal proceedings against VMS for breach of its patent and that that patent was said by SARB to be current to 22 August 2016. CoM was told by SARB that the parties were engaged in mediation and that the matters appeared close to a resolution. 287 Again, I do not consider that there is anything to this point that supports an award of additional damages against CoM. Similar factors are relevant as were relevant in relation to the first period. There is still no allegation by VMS against CoM that the latter is infringing its patents. In terms of benefit accrued to CoM because of the infringement, CoM points to evidence from Mr Robertson that the number of vehicles overstaying parking limits had decreased since the introduction of the PinForce product and system. I note this submission, but I am not inclined to place a great deal of weight on it in the absence of a detailed costings analysis. 288 The third period is from 16 December 2015 to the commencement of the proceedings on 19 February 2019. CoM was aware from 16 December 2015 that VMS was asserting the following: (1) CoM had since approximately July 2011 infringed the First Patent by using SARB's system and product which fell within the claims in the First Patent; (2) VMS was entitled to compensation; and (3) VMS took the view that commercial negotiations to resolve the dispute between it and CoM could factor in the tender that was then being considered by CoM. 289 VMS had made no previous demand of CoM in relation to its use of the PinForce product and system. In response, CoM asserted to VMS that it was not in breach of any of VMS's patent rights. At or about this time, CoM was given assurances by SARB, including as to appropriate indemnification provisions, that SARB had all the necessary legal rights to the SARB product and system. 290 From December 2015, CoM was on notice from VMS that VMS claimed that CoM was in breach of its patent rights by its use of the PinForce product and system. It decided to proceed and took no action on the basis, in whole or in part, of assurances from the supplier of the alleged infringing product and system. There is no evidence of any other advice it received at the time, either expert advice or legal advice. 291 I do not consider that the circumstances relating to the third period support an award of additional damages against CoM. Whilst it is true that from 16 December 2015, CoM was aware that VMS was claiming that CoM was in breach of VMS's patent rights, that assertion had, if I may put it this way, been a long time coming, was made in the context of a request for CoM to revisit the decision made with respect to the 2015 Tender and then was not the subject of any further action or communication by VMS until nearly three years later when a letter of demand was sent. I am not suggesting that VMS's inaction is decisive; rather it is a matter of considering CoM's conduct in all the circumstances. 292 In my opinion, VMS is not entitled to an award of additional damages against CoM. I should say that even if I had reached a contrary conclusion, that conclusion would not extend to the use by CoM of PinForce Version 3 to the extent that that occurred. I have held that the provider of PinForce Version 3 is not liable for additional damages in relation to the use or supply of that product. The customer, CoM, relied on assurances from the provider and I do not think it can be liable for additional damages in relation to the same method, apparatus or system. The Invalidity Issues Lack of Best Method, Insufficiency and Lack of Entitlement (Both Patents) The evidence relevant to the first three grounds of alleged invalidity 293 A summary of the first three grounds of alleged invalidity is as follows. SARB's case with respect to VMS's failure to describe the best method known to it of performing the invention is based on the failure to describe in the patents the ASTRX2/AMIS 52000 transceiver (the ASTRX2 transceiver) and an antenna. SARB's case with respect to VMS's failure to describe the invention fully is based on the same matters, although it emphasises in this context the failure to describe in the patents any details of the antenna scheme used by VMS and the failure to provide adequate details of the wake-up signal adopted by it. SARB's case with respect to lack of entitlement is based on the contribution of Mr Peter Crowhurst in relation to the antenna and his own work in testing various transceivers identified by Mr Welch and in developing a functioning system. 294 There is one body of evidence which is relevant to the first three grounds of alleged invalidity raised by SARB and it is convenient to describe that body of evidence before addressing each individual ground. There are some aspects of the evidence which I will need to describe in more detail when I come to consider the particular issues raised on the facts. 295 The body of evidence consists of the evidence of Mr Crowhurst and Mr Harcourt on behalf of SARB and the evidence of Mr Welch and Mr Spirovski on behalf of VMS. In addition, a number of documents were tendered by the parties. 296 It is convenient to start with the evidence of Mr Welch who is the executive director of VMS and the named inventor in both patents. His evidence was clear and provides a convenient framework in terms of the chronology of events. He was a straightforward witness and I accept his evidence. In cases of conflict, I prefer his evidence to that of Mr Crowhurst for reasons I will give. 297 Mr Welch established Focus International Pty Ltd (Focus) in 1993 and, from 1993 to 2019, Focus carried on the business of designing and manufacturing parking meters and paid parking ticket machines primarily for local councils and, in some cases, for private car park operators. Focus was involved in other projects as well. Mr Welch is the managing director of Focus. 298 In approximately 2000, Mr Welch started to give consideration to how local councils could improve the enforcement of time-limited parking. A couple of years later, Mr Welch started to develop a system called the period overstay detection system or POD System or the period longer detection system. 299 By approximately August 2003, the major components and sub-systems to be implemented in the POD System had been identified by Mr Welch and it was at that point that he decided that the development of the POD System was at the stage at which it was advantageous to build a prototype VDU and DEV components and sub-systems. An element of the POD System was the wireless communication of data from the VDU to the DEV and Mr Welch identified a transceiver for the POD System which was manufactured by a company called RF Waves. Mr Welch explained his reasons for selecting that transceiver which I do not need to repeat. The use of that transceiver did not proceed because Mr Welch considered that it did not operate well in wet conditions. 300 In or about July or August 2003, Mr Welch identified another transceiver for the VDU. This transceiver was the ASTRX2 transceiver and it was a product manufactured by a company known as AMI Semiconductor (AMIS). Mr Welch was particularly interested in the ASTRX2 transceiver because it used power saving mechanisms such as a "sniff mode" and a "quick start" oscillator. The ASTRX2 transceiver was an ultra-high frequency (UHF) transceiver. 301 The ASTRX2 transceiver was not available through AMIS's Australian distributor, Arrow Australia, and in those circumstances, Mr Welch contacted AMIS directly for information about the product. On 13 August 2003, he was advised by AMIS that because the ASTRX2 transceiver had been developed in co-operation with a particular customer, it could only be supplied to "non-competitors". 302 Mr Welch said that in order to conserve the battery life of the VDU, the VDU was to operate in a low power mode or "sleep" mode until a DEV came within wireless communication range and sent a RF signal to the VDU communicating with the VDU to "wake up" and transmit data. This mode of operation was adopted to prevent the VDU from remaining active to "listen" for a DEV or to unnecessarily transmit data when there is no DEV in range to receive that data. Mr Welch said that he had not, at that point, decided whether the "wake up" signal was to be transmitted on a low frequency (LF) or an UHF. 303 In or about July 2003, Mr Welch started making inquiries with Braemac about a low-power LF receiver manufactured by ATMEL. Braemac supplied electronics components to Focus. The ATMEL receiver was called an ATA5283. 304 In or about mid-2003, Mr Welch was seeking an electronics engineer with expertise in RF communications to work on the POD System and another project (Smart Card Reader Projects) that Focus was developing and, with that in mind, he approached Mr David Murrell who was a field application engineer at Braemac. The Smart Card Reader Projects involved a RF integrated circuit. Mr Welch said in evidence that Focus was a small company with approximately four or five employees at the time and it did not have an electronics engineer with expertise in RF communications within the company. Mr Murrell recommended Mr Crowhurst to Mr Welch and provided him with Mr Crowhurst's contact details. 305 Mr Welch contacted Mr Crowhurst by telephone after 11 August 2003. He has no recollection of the contents of his conversation with Mr Crowhurst. Mr Welch met with Mr Crowhurst on 9 October 2003. His recollection of what they discussed at that meeting is limited to the fact that they discussed the RF communication requirements for the POD System and the Smart Card Reader Projects and Mr Crowhurst's background and experience in RF engineering and antenna design. Mr Welch recalls being particularly interested in Mr Crowhurst's work on keyless entry and tyre pressure monitoring systems that used LF wake-up schemes. 306 At some point during or after his meeting with Mr Crowhurst on 9 October 2003, Mr Welch engaged Mr Crowhurst on behalf of Focus as an independent contractor to undertake tasks in relation to both the POD System and the Smart Card Reader Projects. He said that he initially engaged Mr Crowhurst to design and match an antenna for the VDU that could operate underground, communicate with a DEV in a car travelling past at over 60 kilometres per hour, have an LF or UHF wake-up scheme and that could fit into a small cylindrical canister containing the VDU. In order to choose between the LF or UHF wake-up scheme, Mr Welch asked Mr Crowhurst to demonstrate the range that could be achieved using the LF receiver. He also engaged him to create the schematic and layout for the printed circuit board (PCB) for the VDU. Mr Welch explained that the PCB was to be installed in the sealed housing of the VDU. The schematic for the PCB was required to show the components of the PCB and the interconnections between them, including the circuitry for the transceiver, microcontroller, magnetometer and battery. Mr Welch explained that laying out the PCB involved determining the physical placement of the components and their interconnections. He said that at that time he was aware that there was a specific electronics engineering design software program called "Protel" which was used to prepare the types of schematics and layouts which were required. 307 In or about March 2004, Mr Welch engaged Mr Crowhurst to design and build a test jig and test specification for the manufacture of the VDU and in or about April 2004, he engaged Mr Crowhurst to match and tune the antenna in the DEV and prepare the PCB for the DEV. 308 Mr Welch is unable to recall the precise date Mr Crowhurst commenced work on the POD System, but said that it was at some point after his meeting with Mr Crowhurst on 9 October 2003. 309 VMS was incorporated on 15 December 2003 for the purpose of commercialising the POD System. Mr Crowhurst was issued shares in VMS as compensation for his services to VMS and Focus for his work on the POD System and he was paid a lump sum of approximately $20,000. In or around 2004, Mr Crowhurst was separately remunerated for his work on the Smart Card Reader Projects. 310 On or around 23 December 2003, Mr Crowhurst was provided with a Share Subscription Agreement, a Confidential Disclosure Deed and an Application Form for the issue of the shares. 311 The Share Subscription Agreement is dated 23 December 2003 and the parties to the agreement are VMS, Mr Welch, Mr Crowhurst, Mr Saxon John Hill and a company called Tencap Pty Ltd. The Agreement has a number of schedules, including a Confidential Disclosure Deed. Mr Crowhurst was to receive nine shares in the company for $0 per share with a note to the effect that the consideration for the issue of the shares was the "technical design, documentation and development services Mr Crowhurst has provided and will continue to provide to VMS". The Share Subscription Agreement contains a statement that Mr Welch is the first and true inventor of the technology being the parking restriction enforcement invention known as the Period Longer Detection System "invented solely by Welch". At or about this time, Focus entered into a Development, Commercialisation and Supply Agreement with VMS for the further development, testing and documentation of the POD System. 312 Mr Welch sets out in his affidavit his best recollection of the work done by Mr Crowhurst in the period from December 2003 to July 2004. For present purposes, it is sufficient to refer to the following matters. 313 Mr Crowhurst performed some work on preparing a technical description of the POD System for a patent application. 314 On 19 December 2003, Mr Welch provided to Mr Crowhurst a number of manufacturer's (i.e., AMIS's) information sheets about the ASTRX2 transceiver. A good deal of evidence in this case was directed to the information contained in these information sheets. For convenience, I will call them the Data Sheets, although at the same time I note that in the industry, some of them are described in other ways such as Application Notes. They are documents produced by the manufacturer of the transceiver, in this case, AMIS. 315 Between December 2003 and January 2004, Mr Crowhurst, among other tasks, prepared schematics and layouts of the PCB for the VDU. Mr Welch explained in his evidence that Mr Crowhurst was only working on the RF communications component of the PCB for the VDU and that meant that Mr Crowhurst prepared the schematics and layouts of the other components of the PCB from information provided by Mr Welch and other individuals at Focus who were working on other elements of the POD System. 316 Mr Welch said that the PCB schematics he received from Mr Crowhurst in January 2004 showed the following matters in relation to the RF components of the PCB: (a) PCB 1 and PCB 2 incorporated the ATMEL ATA5283 LF receiver. The LF receiver was for an LF wake up scheme (which was abandoned). (b) PCB 1 and PCB 3 included the AMIS ASTRX2 transceiver (433 MHz) and two separate antennas. The AMIS ASTRX2 transceiver was a UHF transceiver, for the transmission of data from the VDU to the DEV. The AMIS ASTRX2 required two separate antennas, one to transmit data and one to receive data. (c) In PCB 1, the passive components in the voltage controlled oscillator ("VCO1" and "VCO2"), the Loop Filter ("LP Filter"), the current bias resistor ("CREF") and the crystal oscillator ("X1" and "X2") circuits, elements of the RF communications circuit, were as specified in the ASTRX2 Data Sheet. Capacitors, resistors and inductors are commonly referred to as "passive components". The values assigned to each of these components were also the same as (in some instances), or very similar to (in others), the values specified in the ASTRX2 Data Sheet. (d) PCB 2 incorporated the ATMEL U2741B transceiver (433 MHz) and a single antenna. The ATMEL U2741B transceiver was an alternative UHF transceiver, for the transmission of data from the VDU to the DEV. The ATMEL U2741B transceiver required only a single antenna, which was used both to transmit and receive data. (e) PCB 3 was the same as PCB 1, except that the LF receiver had been removed from PCB 3, there were two capacitors in the voltage controlled oscillator circuit ("VC01" and "VC02") in PCB 3 (C1a and C1) as opposed to only one capacitor in PCB 1 (C14) and a capacitor (C15) had been added to PCB 3. (para 44 of Mr Welch's affidavit dated 12 March 2021.) In summary, these subparagraphs refer to one ATMEL receiver, the ASTRX2 transceiver and an ATMEL transceiver. ATMEL is a different supplier from AMIS. In para 44(c), Mr Welch identifies components in PCB 1 where the components and the values assigned to them are the same or very similar to the Data Sheets. 317 Mr Welch outlined the work carried out by Mr Crowhurst in the course of February 2004 and the PCB schematics he received from Mr Crowhurst in that month. Mr Crowhurst's work included bringing a network analyser and a spectrum analyser to the workshop and using it to test the operation and performance of the RF network (transmitting and receiving data) and to tune and match the antenna to the transceiver. Mr Welch said that he understood that the tuning and matching of the antenna is reflected by changes to the values assigned to certain passive components of the transceiver circuits. With respect to the PCB schematics, Mr Welch noted that PCB 3 and PCB 4 were identical and with respect to PCB 5, he said the following: The PCB schematics I received from Mr Crowhurst in February 2004 show the following in relation to the RF components of the PCB: (a) … (b) In PCB 5 the passive components in the RF receive ("RX1") and RF transmit ("RFOUT" and "REF PWR") circuits now reflected those specified in the ASTRX2 Data Sheet. The values assigned to these components were also the same (in some instances), or very similar to (in others), those specified in the ASTRX2 Data Sheet. Test points were also added at various points on PCB 5 (royal blue dots labelled "TP"). These test points were used to test the operation of certain components on the PCB. (para 47 of Mr Welch's affidavit.) 318 Mr Welch said that after PCB 5 in February 2004, very little changed in the RF components of the PCB schematics. He described in a general way the changes which were made. First, there were no changes to the passive components in the transmit, receive and oscillator circuits of the PCB and only a handful of changes to their component values. Secondly, there were some minor adjustments to the layout of the PCB which Mr Welch described as design choices required for manufacture that he directed Mr Crowhurst to make. Mr Welch explained that from PCB 7 to PCB 8, some of the values in the RF related circuits changed, "mostly as a result of further tuning and matching of the antenna by Mr Crowhurst". 319 Mr Welch also outlined the work carried out by Mr Crowhurst in March 2004 to June 2004. It is not necessary for me to set out the details. 320 Mr Welch said that the provisional patent application relating to the POD System was filed in May 2004. In that same month, the VDU prototype, including the PCB for the VDU, was also completed. He said that from around May 2004, the focus of Mr Crowhurst's work on the POD System was the manufacture of the PCB for the VDU. Mr Crowhurst also worked on the Smart Card Reader Projects between December 2003 and June 2004. 321 Mr Crowhurst continued to work periodically on other projects for Focus from June 2004 to approximately March 2008. 322 Mr Welch said that in February 2005 when the PCBs in the first manufacturing batch of the IGU were being tested and calibrated, there was 40–50% failure rate in relation to the ASTRX2 transceiver and that, as a result, the ASTRX2 transceiver had to be replaced in all 500 units. Mr Welch expressed the opinion in his evidence that the failures appeared to be a fault in the particular batch of the ASTRX2 transceiver. It appears from the evidence that there were no problems with the replacement devices and later batches. 323 On 22 November 2004, Mr Crowhurst sent to Mr Welch the final PCB schematic and layout for the manufacture of the VDUs. Mr Welch said that the Production PCB was a "tidied up" version of the PCB that Mr Crowhurst produced at or around the time of the first manufacturing run of the circuit board for the VDU. The Production PCB was very similar to PCB 8. 324 For the purposes of his evidence in the case, Mr Welch prepared an annotated version of the Production PCB. In that document, he identified and labelled the main components of the PCB, being the circuitry for the battery, magnetometer, microcontroller, reset generator, the ASTRX2 transceiver and the antennas. He also prepared another annotated version of the Production PCB in which he highlighted the components that Mr Crowhurst worked on in blue, yellow, green and pink, and the layout and components specified in the Data Sheets highlighted in blue, yellow and green. He identified the following aspects of the Production PCB which were specified in the Data Sheets: (1) the voltage controlled oscillator circuit; (2) the loop filter design; (3) the crystal oscillator circuit; (4) the resistor; (5) the RF receiver circuit; and (6) the RF transmit circuit. 325 As I have said, Mr Crowhurst's work for Focus and VMS ceased in approximately March 2008. Mr Welch said that he stayed in touch with Mr Crowhurst until approximately late 2010, speaking on the telephone and occasionally meeting him for a drink. From in or around early 2011, he did not hear from Mr Crowhurst and was unaware of what he was doing or where he was working. Mr Crowhurst sold all of his shares in VMS in two tranches in 2009 and 2012 respectively. Mr Welch said that at no time since 2003, has Mr Crowhurst raised with him, or, so far as he is aware, anyone else from VMS that he (Mr Crowhurst) should be named as the inventor of the First Patent or of the Second Patent, or that he had some entitlement to the First Patent or the Second Patent. Furthermore, at no time between December 2003 and late 2020, has Mr Crowhurst raised with Mr Welch, or as far as Mr Welch is aware, with anyone else from VMS that he considered himself an inventor, or the inventor, of the POD System. Mr Welch's recollection is that Mr Crowhurst acknowledged Mr Welch as the inventor of the POD System at all relevant times during that period. 326 Mr Welch said that prior to the engagement of Mr Crowhurst, neither he nor Focus were seeking assistance from Mr Crowhurst to fix any problem or failure with the in-ground parking overstay detection system. Mr Welch explained that Focus did not have an engineer with RF communications expertise and that he needed someone with this expertise to "build the RF communications component of the system using components that had already been identified, to test the viability of an LF wake up system and to create the PCB schematic and layout". He said that at the time he first contacted Mr Crowhurst, he had already identified a number of components and concepts that were ready to be implemented and built into prototypes and an LF frequency was only being considered for the wake-up scheme. He said that he had identified the ASTRX2 transceiver from AMIS before he first contacted Mr Crowhurst. 327 The following matters emerged from Mr Welch's cross-examination. In August 2003, Focus had decided to build a prototype of two components of the POD System, being the VDU and the DEV. The intention was that the VDU was to communicate wirelessly with the DEV. For that to occur, it was necessary to build the RF communications component of the system. Mr Welch said that Focus required the skills and experience to tune the RF frontend of the two devices. Mr Welch confirmed that the component he identifies in para 44(a) of his affidavit is the ATMEL LF receiver, the component he identifies in paras 44(b) and (c) is the ASTRX2 transceiver and the component he identifies in para 44(d) is an ATMEL UHF transceiver. Mr Welch's understanding is that prior to the engagement of Mr Crowhurst, nobody at Focus had tested the two transceivers and one receiver referred to in para 44 of his affidavit or prepared PCB schematics or layouts in relation to the RF components of the PCBs. He could not recall anybody at Focus testing any transceiver other than those referred to in para 44 of his affidavit. He could not recall Mr Crowhurst testing any transceivers, creating a PCB schematic or layout which included any transceiver other than those referred to in para 44 of his affidavit. He did not believe that Mr Crowhurst did any work to design and match an antenna for the VDU in relation to any transceiver or receiver other than the three components referred to in para 44. He does not recall Mr Crowhurst testing any transceiver or receiver other than those referred to in para 44. Mr Welch could not identify any other devices being considered other than those identified in para 44 of his affidavit after Mr Crowhurst had been engaged. 328 Mr Welch acknowledged that prior to Mr Crowhurst's engagement, no-one at Focus had sufficient RF communications expertise to design the RF communications component of the VDU. He agreed that Focus needed an electronics engineer with RF communications expertise to build the RF communications component responsible for RF communication in the POD System and that Focus needed a person with Mr Crowhurst's experience to design and match an antenna that went with the transceiver that ultimately formed part of the POD System. He agreed that initially Mr Crowhurst was engaged by Focus to design the antenna for the VDU and to create the schematics and layouts for the PCB for use in the VDU. 329 Mr Welch agreed that the ASTRX2 transceiver and the AMIS 52000 transceiver are, for all intents and purposes, the same product or device, save and except that there is a difference in size and, therefore, the footprint is slightly different. 330 Mr Welch was asked about Mr Crowhurst's work to design an antenna for the VDU that tuned and matched the antenna to the ASTRX2 transceiver. He agreed with the proposition that in order for the RF network to transmit and receive data effectively, the antenna associated with the transceiver had to be designed and adapted so that it could effectively communicate with the DEV in circumstances where the transceiver was located underground and the DEV was in a car that might be travelling past at more than 60 kilometres per hour. 331 Mr Welch was asked a number of questions concerning his opinion as to the advantages of the ASTRX2 transceiver. He agreed that the ASTRX2 transceiver had the advantage that the receiver could turn itself on, rather than utilise an external device such as the microcontroller to turn the receiver on. That was because it had its own internal timer that was used to determine the wake-up period and those periods were predetermined. It did not require the external processor to do that and, as the external processor used more power, that meant that there is a power saving. Furthermore, Mr Welch agreed that one of the advantages of the ASTRX2 transceiver was that the period that it is awake and seeking to detect a signal is brief and that has the effect of saving power. 332 Mr Welch was asked about the manufacturer's assertion that the ASTRX2 transceiver has a unique quick start component. He agreed that the manufacturer was asserting that there is a time saving and, therefore, a power saving, in that the transmitter and the receiver can both be powered up quickly. He agreed that the manufacturer was asserting that the oscillator used in the transceiver resulted in a meaningful saving in power. He agreed that the quick start oscillator contributes to the power saving capacity of the device. 333 In broad terms, Mr Welch agreed that two advantages of the ASTRX2 transceiver were that it did not stay awake for very long because it did not need to and it did not transmit data when it was unnecessary to do so. 334 Mr Welch agreed that the ASTRX2 transceiver met his objectives and he was particularly interested in it. He agreed that the power saving mechanisms were desirable features of the ASTRX2 transceiver and those features included the "sniff mode" and the "quick start oscillator". He agreed that he and Mr Crowhurst were ultimately satisfied that the ASTRX2 transceiver "ticked all the boxes as far as a transceiver component in the system was concerned". 335 Mr Welch was unable to say whether a member of the public prepared to satisfy the manufacturer's commercial terms could obtain the documents relating to the ASTRX2 transceiver from the manufacturer or an evaluation kit with samples. 336 Mr Welch agreed that he would have taken any concern raised by Mr Crowhurst with respect to the use of the ASTRX2 transceiver very seriously. As it happened, Mr Crowhurst did not raise any concern. 337 Mr Welch agreed that the ASTRX2 transceiver was the lead candidate in the project as far as transceivers were concerned if it did what the manufacturer asserted. 338 Mr Welch agreed that properly considered, there were two candidates for the transceiver — the ASTRX2 transceiver and the ATMEL U2741B transceiver — and that the ASTRX2 transceiver was the better candidate. 339 Mr Welch agreed that the ASTRX2 transceiver was used in almost all of the test PCBs and was used in the production PCB. He agreed that the ASTRX2 transceiver was used in the Maribyrnong field trials in March 2005 and in relation to the tender to Maribyrnong after the field trials. 340 Mr Welch agreed that the ASTRX2 transceiver was the best transceiver known to him and VMS for use in the communications component of the POD System. 341 I turn now to the evidence of Mr Crowhurst. The circumstances in which Mr Crowhurst came to give his evidence-in-chief were unusual. They are identified in my reasons in Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 6) [2020] FCA 1866. In the course of those reasons, I said the following (at [47] and [48]): 47 Mr Crowhurst was examined by SARB on 25 November 2020. That came about in the following circumstances. SARB claimed that Mr Crowhurst had information relevant to their existing pleas of insufficiency and lack of best method. He would not speak to SARB because of the confidentiality obligations he owed to VMS. He could be subpoenaed to attend at trial, but that had the potential to disrupt the trial because the parties will not have advance notice of what he is going to say as it will be the case with other witnesses who have either provided affidavits or will do so. 48 On 13 November 2020, the Court made the following orders, relevantly: 1 Pursuant to sections 23, 37P(2) and (3) of the Federal Court of Australia Act 1976 (Cth) (the Act) Mr Peter Crowhurst be deposed on oath or affirmation by counsel for the First Respondent before Justice Besanko on 25 November 2020 at 10.30 am (AEDT) (Oral Examination). 2 The First Respondent be granted leave to, and must, issue to Mr Crowhurst a subpoena to attend to give evidence for the purposes of Order 1 above, returnable on the date specified in Order 1 above. 3 At the Oral Examination, there be no cross-examination. 4 The evidence at the Oral Examination be recorded in a transcript in accordance with the usual processes of the Federal Court of Australia. 5 Objections to evidence be permitted to be made by the Applicant and recorded on the transcript, and determined by the Court as it deems fit. 6 The transcript of the Oral Examination may be tendered at the hearing in this proceeding in March 2021, subject to: (a) Mr Crowhurst being available for cross-examination if required by the Applicant; (b) any rulings as to objections made by Justice Besanko; and (c) appropriate confidentiality orders being made over information contained in the transcript. 342 The material which was produced at or following Mr Crowhurst's examination on 25 November 2020 was a transcript of his evidence and a small number of documents, the most significant of which were as follows: (1) Mr Crowhurst's handwritten notes of tests carried out by him and calculations he made (Mr Crowhurst's handwritten notes); (2) Data Sheets for "AMIS-53000 Frequency Agile Transceiver" dated February 2006; and (3) Mr Crowhurst's curriculum vitae. 343 The transcript of Mr Crowhurst's examination was intended to serve the same purpose as an affidavit before trial. 344 VMS raised a general objection to the tender of the transcript and other documents by SARB at the trial. The basis of the objection was that the transcript of Mr Crowhurst's evidence and the other documents were so confusing and unclear, that it would create substantial prejudice to VMS if they were admitted. The transcript and other documents were said to fall a long way short of the equivalent of an affidavit before trial. 345 I heard submissions on the objection and overruled it. Having said that, there was a good deal of force in the objection. VMS identified three areas in which Mr Crowhurst's evidence was confusing and unclear and they are as follows: (1) Mr Crowhurst's evidence about when various events occurred; (2) Mr Crowhurst's identification of what he states are relevant documents; and (3) the tests and calculations in Mr Crowhurst's handwritten notes. As I will make clear, a number of these problems endure and affect the weight I am prepared to put on Mr Crowhurst's evidence. Nevertheless, I was not satisfied the problems were of such magnitude that I should rule that the whole of Mr Crowhurst's evidence was inadmissible, particularly having regard to the circumstances in which it was adduced by SARB. It is worth recording at this point, for reasons which will become clear, that SARB's counsel said in the course of submissions with respect to the objection that Mr Crowhurst's evidence was important with respect to two issues and counsel identified those issues as his work in relation to the antenna and his work in relation to identifying the appropriate transceiver. 346 VMS submitted, in the alternative to its general objection, that various parts of the transcript and accompanying documents were inadmissible or should be the subject of limitations as to use under s 136 of the Evidence Act 1995 (Cth). My rulings as to those matters are set out in the transcript. 347 I am not prepared to place any significant weight on Mr Crowhurst's evidence. I do not suggest any dishonesty on his part, but his recollection of events was generally poor and unreliable and his evidence of what he did relevant to the invalidity grounds was vague and non-specific and, therefore, difficult to follow. His self-assessment of the importance and value of his work was unreliable. His combativeness on the first day he was cross-examined was puzzling. 348 Mr Crowhurst dealt with one additional topic in examination-in-chief at the trial. He conceded that his reference at his examination on 25 November 2020 to the AMIS 53000 frequency agile transceiver was a mistake and the reference should have been to the AMIS 52000 or the ASTRX2 transceiver. He said that, in his opinion, the ASTRX2 transceiver and the AMIS 52000 transceiver are essentially the same device. It would seem that the AMIS 53000 transceiver was a later device manufactured and supplied by AMIS. 349 Mr Crowhurst gave evidence of the work he did in relation to the antenna for the transceiver. His evidence of the work and his assessment of its nature and value included the following: (1) the antenna was his design and it was innovative; (2) the purpose of the antenna is, among other things, to receive all signals which are transmitted; (3) using equipment such as sophisticated spectrum analysers, network analysers and a numerical package, he was able to "conformally map" the performance of the antenna which he explained as a matching process between the performance of an antenna out of the ground with an antenna in the ground. He said that he took a series of measurements, processed them and then translated them to component values into a printed circuit. That resulted in an indication of performance. The conformal mapping exercise was carried out over three to four months; (4) the antenna was substantially smaller than would normally be used and so it was necessary to apply "certain principles" to make it "behave as a larger geometry". He referred to a "very specific method or engineering approach to create what appears as a larger geometry". In cross-examination, Mr Crowhurst appeared to describe a two stage process of reduction from one metre to 25 centimetres and then a further reduction from that size to the size of the antenna on the PCB; (5) he designed, he said, the electronic hardware, the RF components and "all of those parts that went into the board". (6) the work he performed was innovative and he explained that assertion in the following way: So the antenna design was innovative, and I will say that on the basis that the ground needed to be matched. So there were aspects of the antenna designed where I used sophisticated spectrum analysers, network analysers and what is known as a numerical package to simulate the design and self-serenade. Using these tools, I was able to conformally map – ie – the performance of the antenna out of the ground to match what was required in ground. So the surroundings – as a child, you go up onto the roof and dad adjusts the TV antenna. And as he adjusts it, it's perfect. He lets it go; the signal varies. It's the same thing for the in-ground transmitter antenna. It needed to be matched so that it was perfectly in tune with its environment. I did this by taking a series of measurements, mathematically processing them and then translating them to component values onto the printed circuit board, which gave us the performance. This evidence was received as evidence of what was done, not as evidence that it was innovative. A little later, Mr Crowhurst returned to conformal mapping and why he described his work as innovative: And why did you regard it as innovative?---Because it called upon some work that I had gained understanding in from Bosch. And that is to conformally map a particular type of area to another area. So it called upon me to translate things from air to things in the bitumen. So the bitumen surrounding has specific artefacts that will shift the frequency of the antenna. And in order to adjust for that shift, you have to compensate for it. There is this compensation that is – I would describe – quite innovative. (7) work was performed with a block of tar or road material with a hole in it. Mr Welch had removed a portion of the road surface and provided it to Mr Crowhurst so that he could match the antenna; and (8) in explaining what he meant by tuning the geometry within the AMIS range, Mr Crowhurst said that he would be looking for a centred or slightly offset tuning range, so that he could actually make sure the AMIS has the ability to fully compensate for temperature and antenna variations. 350 Two matters involving what were said to be techniques applied by Mr Crowhurst were emphasised by SARB. They involve the conformal mapping referred to by Mr Crowhurst and the process whereby the size of the antenna is reduced so that it fits on the PCB. Some details of the technique Mr Crowhurst described as "conformal mapping" were explained by Mr Crowhurst, but just how it was innovative or involved complexity was never explained. No details of the "technique" used to make the final reduction in the size of the antenna so that it fitted onto a PCB were provided. I will return to this evidence, and the observations I have made with respect to it, later in these reasons. 351 Page 36 of Mr Crowhurst's handwritten notes, among others, was said by Mr Crowhurst to show the transponder and the tar block. There is a spectrum analyser with an antenna approximately one metre from the transponder in the ground and Mr Crowhurst said: … we were able to measure the transmitted hour [sic] by changing the antenna components. 352 Mr Crowhurst described the work which is shown on p 38 of the handwritten notes and then on pp 35, 36 and 40 as follows: Now in order to make those measurements the same, I – I had to perform some – the idea is to create the antenna that behaves the same or has the same performance in the tar block as it does in air. So, in order to use that I had to use a calibrated cable from my network analyser and measure the impedance of the antenna in the ground. And that final circuit value or one of the final circuit values is reflected on page 40. And the circuit values – is this right – reflect what – a specification for the circuit which will produce the required outcome for the antenna?---Correct. That's right. There's one other component to consider with this and that is these components have a tolerance. You will have one value and it will have a variation of that value. That variation is seen in production in high volume. So there – I would have actually looked for other values but that – that – to the best of my recollection, that was the antenna geometry and values of capacitors that I remember having. And so you've referred us to pages, I think, 35, 36, 38 and 40?---Yes. The balance of the pages consist of what as a general description?---Further refinement of the testing and analysis. So there's an aspect for component variations and there's an aspect to evaluate what those variations will look like over a production. 353 Mr Crowhurst said the Data Sheets which he produced for AMIS 53000 frequency agile transceiver described the transceiver which was used in the installation for the Maribyrnong Council and that it was the "Holy Grail" for Mr Welch's parking overstay system and that it met all of his requirements. As I have previously said, that reference is not a reference to the correct component. Mr Crowhurst described the ASTRX2 transceiver as an "incredible part" and a "good find" because it included sniffing or polling and waking up on received strength indicator. Mr Crowhurst said that he provided information to Mr Welch as to the requirements of a desirable part and Mr Welch went off and found the part that matched the requirements, "that we had identified". 354 A number of issues were clarified in Mr Crowhurst's cross-examination. 355 First, Mr Crowhurst was asked about his view concerning the identity of the inventor of the invention. In the Share Subscription Agreement which Mr Crowhurst executed, it is made clear that Mr Welch is the first and true inventor of the technology and that he is the sole inventor of the technology. The technology is described as the parking restriction enforcement invention known as the period longer detection system. Mr Crowhurst was asked about inventorship in the context of questions he was asked in cross-examination which suggested to him that he was giving evidence in order to advance his own claims. Mr Crowhurst was asked the questions in the context of the annotated schematic of the PCB prepared by Mr Welch and attached to Mr Welch's affidavit. This is the schematic which has been annotated by Mr Welch by reference to the Data Sheets. In the context of that schematic, Mr Crowhurst said that this was his work and that he claimed his work. He did not deny Mr Welch's claim to be the true inventor of the period longer detection system. He drew upon an analogy of the wheel not being the car. Later in his cross-examination, he agreed that Mr Welch was the one true inventor of the parking overstay detector system as was specified in the agreement and that there was no argument from him that it was a novel and inventive concept. He said that he was not arguing about the identity of the inventor. 356 Secondly, Mr Crowhurst was asked about Mr Welch's opinion as to the schematic of the PCB which he (Mr Welch) had annotated. Mr Crowhurst was asked whether he agreed that the components in boxes outlined in red were derived directly from the ASTRX2 Data Sheets. He said that the topologies were very similar. He was asked whether he would be surprised if they were identical. In answer, he said that it is the component values that are salient in this regard. Mr Crowhurst was asked to elaborate on this comment in re-examination. As far as his evidence may be understood, his elaboration was that the manufacturer's specifications were only a starting point and the tolerance of the capacitors and the technology of the capacitors and the possibility of stray capacitants is critical. He said that topology is what the circuit needs to see and the values are what must be selected for a particular application. 357 Thirdly, Mr Crowhurst was asked about the work he did on the antenna. Mr Crowhurst agreed that the idea of having an antenna on a PCB was well known in the industry in late 2003 and early 2004. Mr Crowhurst did not agree with the proposition that, as a general rule in the case of antennas, "bigger is better". He said that antennas operate at a specific wavelength proportional to the frequency of transmission. Mr Crowhurst referred to specific techniques for reducing antenna size. Mr Crowhurst said in answer to a question as to whether it was a routine decision to use a printed antenna on a PCB of small dimensions that is going to be placed into a self-contained underground unit, that in fact it was a compelled decision. It was put to him that it was also a matter of compulsion to use two antennas. He did not agree with this suggestion and he referred to an in-vehicle D unit where only one antenna was used because there was an RF switch which enabled the operator to switch between transmit and receive. He agreed that if not compelled, then the use of two antennas is entirely in accordance with the ASTRX2 transceiver. Mr Crowhurst was asked in re-examination about the technique for reducing antenna size. His answer did not seem to address that topic, but related to the "technique" of conformal mapping. He said that this technique was designed to compensate for, by way of example, the artefact of the tar seal, in the case of an in-ground unit. He said the technique was conformal mapping and that it was not a standard technique and it is not documented in any of the documents produced in evidence. He said that free space is measured. Then, the impact of the in-ground unit is measured, and … we compensate or we map the complex impedance from free space to ground through adjustment of the component values. 358 He referred to the technique as a very specific one and he referred to it in the context of the test he performed with the piece of tar or road material. He then said this: … So we would tune it for one frequency, knowing that it would be out, and then by the time we had inserted the key fob into the tar seal, it would be on channel. 359 Fourthly, and related to the third matter, Mr Crowhurst was asked about the work he did on the piece of tar seal. He said that he took a piece of tar seal, analysed the influence of the tar seal which is capacitive and then matched the antenna and tuned it for the tar seal and the correct frequency. He said that he believed that while the patent claims the parking overstay detection system is new and novel, so too are the antennas that were developed to put a sensor in the ground. Mr Crowhurst undertook testing of a circuit board, both in the air and under tar. He said that Mr Welch had gone out and cut up a piece of road so that he had a block of equivalent material to road tar that was available to him in which to place the unit. Mr Crowhurst said that he asked Mr Welch to obtain a piece of road that was at least quarter wavelength square. Some tests were done on the benchtop and others were done in the tar block. Mr Crowhurst said that he used a network analyser and a spectrum analyser. As I have said, in re-examination Mr Crowhurst again explained the technique which he adopted. He said that he had developed it at Robert Bosch Australia Pty Ltd (Robert Bosch) and that it involved taking the piece of tar seal provided to him by Mr Welch and analysing the influence of the tar seal which was capacitive. He then matched the antenna and tuned it. He said that what he was examining was the influence of the tar seal on the tuned resonant circuit. He calculated the amount of pull or shift the tar seal had had on the frequency and then he adjusted in the complex plane with his simulator doing some sums. He then adjusted that value, compensating for the tar seal back to the resonant circuit values. 360 Finally, Mr Crowhurst was asked about the features capacity of the Protel software. Mr Crowhurst described the benefit of Protel software as allowing an integrated electrical design at schematic capture to be "completely validated". He said that this meant that designers could set up a series of electrical rules that validate inputs to outputs and outputs to inputs and passive components. He did not agree that the Protel software enabled the designer to drag and drop components from a library of components into a schematic and that the software resulted in significant automation of a total map of circuit layout. He said that in sensitive layouts, all components are placed by hand. He said that in terms of layout for digital techniques, there is a lot of technology associated with the collection of transmission lines, the distance of the PCB, the substrates used, the dielectric constants and it is not the case that it is an automatic process of "just shaking a box and hoping the bits will fall into place". He did not agree with the proposition that with the use of the Protel software, the designer dragged and dropped the components into place using Protel and that that was an automated process thereafter. Mr Crowhurst had Protel software on his computer when he was working with Mr Welch. 361 As I have said, I found Mr Crowhurst's recollection of events to be generally poor and unreliable. The following are examples of this, although clearly they are not all of equal significance. 362 First, Mr Crowhurst's initial recollection of when he first did work for Mr Welch was "Circa 2001" when, in fact, it was in the second half of 2003. 363 Secondly, Mr Crowhurst initially produced the Data Sheets for the wrong AMIS device. 364 Thirdly, it became clear in cross-examination that Mr Crowhurst made a number of errors in the curriculum vitae he produced in connection with his examination on 25 November 2020. It quickly became apparent that that document contained numerous errors in terms of the periods of his employment with various employers. One error as to the dates of his employment by a particular employer was substantially wrong in circumstances in which he had used the location of that employment to identify the place where he had dinner with Mr Welch. In fairness, he did correct that evidence later. I will not describe further these aspects of his cross-examination. It is sufficient for me to record that Mr Crowhurst was unable to explain the reasons for the errors in his curriculum vitae other than by conduct which can only be characterised as careless. Furthermore, I found that even some of his evidence correcting the dates was initially confusing. 365 Fourthly, and it seems to me that this is a significant error, Mr Crowhurst's evidence is wrong when he said he had a conversation with Mr Welch and Mr Welch went off and found the ASTRX2 transceiver. Mr Crowhurst said, or at least implied, that he specified a number of requirements and Mr Welch went off with those requirements in mind and found the ASTRX2 transceiver. Mr Welch found the ASTRX2 transceiver before he met Mr Crowhurst and SARB did not suggest the contrary in its closing submissions. 366 Fifthly, the most benevolent construction of Mr Crowhurst's evidence on the first day he was cross-examined about his recollection of the contents of his first telephone conversation with Mr Welch was that it proceeded the way it did because he recognised he had no genuine recollection of that conversation. 367 As I have said, I find it difficult on the evidence Mr Crowhurst gave to assess the nature and extent of the work he did in fixing the values for the antenna system and in reducing the size of the antenna so that it fitted on the PCB. 368 Other aspects of Mr Crowhurst's evidence that I take into account are the fact that he fenced with the cross-examiner as to whether he knew a Mr "Jeff" Harcourt and that he did, from time to time, provide lengthy and apparently unresponsive answers. The answer he gave in re-examination when asked about techniques for reducing antenna size is as good an example of this as any other example. 369 I turn now to the evidence of Mr Spirovski and Mr Harcourt. Mr Spirovski and Mr Harcourt were asked to identify in the joint conference of experts any points of agreement or disagreement between them regarding whether further information is required for the skilled person reading the First Patent and the Second Patent to understand or address certain matters. 370 The first matter is the identification of the appropriate antenna and any other hardware or software to communicate data from the subterraneous DA. The experts agreed that the development of an antenna can be complex. They disagreed as to whether the level of information disclosed in the Patent is sufficient for someone skilled in the art to implement an antenna suitable for the application. Mr Spirovski said that compact antenna designs for operating at the disclosed frequencies were well known and reliably used in a number of applications in 2004. Many of these applications would require radio operation across solid barriers such as walls. A thin layer of road material would present a similar design challenge to transmitting radio signals through such solid barriers. 371 Mr Harcourt, on the other hand, said that some research was required to confirm the best antenna type, configuration, power level and mechanical mounting e.g., plastic lid with antenna underneath. In his opinion, a poorly considered approach may waste significant battery power or have poor operating characteristics in terms of range or blackspots or both. Weather such as water on the ground and snow can cause problems and considerable variation in performance. A robust design would not simply fall into place based on the information in the First Patent, even for a typically skilled person. 372 Mr Harcourt said in his oral evidence that in 2004, there would have been 20 to 30 options in terms of available transceivers. In relation to transceiver chips in 2004 available for any purpose, such transceivers would have a connection either for an antenna circuit which terminates in an antenna, or connections for an antenna. There would be provision for two antennas, one to receive and one to transmit, although sometimes they would be combined into a single antenna and that was an option in 2004. He said that there would either be a single antenna which both transmits and receives, or a separate antenna for each process. The manufacturers of chips would leave it up to the purchasers to select an appropriate antenna and typically, they would provide some recommendations as well. Mr Harcourt agreed that in 2004, one well-known solution, if a designer was working with a transceiver on a circuit board, was to have a loop antenna printed on the circuit board. Such configurations were in widespread use in 2004. 373 Mr Spirovski agreed that as at the relevant date, his choice of a suitable antenna for implementing the invention would be a compact antenna, that is, either a helical or loop antenna. In the case of a small self-contained unit, a circuit board with a printed antenna was a very common solution. Mr Harcourt said: "Not exclusively, but yes. A common solution". He agreed that within limits in the case of the printed antenna solution, a general rule of thumb that could be followed was that the area enclosed by the antenna loop would be as large as possible. He added the caveat that he is not an antenna designer. He agreed that in the case of a printed loop antenna on a circuit board, it would need to be matched to the antenna circuit that was part of the transceiver chip. Manufacturers would provide information that would enable the matching process to be "kicked off". Mr Harcourt explained in his oral evidence the matters that would need to be taken into account in order for two devices to communicate with each other. In the case of a device one centimetre below the road surface, it would be necessary to conduct tests which mimic the circumstances as far as possible. One approach was to use a tar block with a hole in it, although Mr Harcourt did not accept that that approach appropriately mimicked the circumstances. Mr Harcourt agreed that if that was an approach adopted, then it would be a process of trial and error to find the proper setting. 374 Mr Spirovski said in his oral evidence in the context of a discussion about barriers between an antenna and the air, that, in his opinion, there was always a solution for this application. He said: MR SPIROVSKI: It's – it's difficult to go back to 2004. In 2004, myself, I was actively involved in – in creating small handheld devices for communicating – keyless entry systems, garage door openers, collision-avoidance systems – and we used for those a range of antennas. Sometimes it's just a single piece of wire of a certain length. Sometimes it was loop antenna, sometimes it was little – just a coiled piece of wire, but in all cases there was no difficulty creating the circuit and/or tuning the circuit. 375 The key point Mr Spirovski made was that in 2004, the interference caused by the fact the unit was buried in the road presented a challenge no different from other commercial applications operating at the relevant frequencies and he gave the examples of keyless entry systems for cars and buildings, including garage doors, remote alarm system activation devices, Wi-Fi and Bluetooth. 376 Mr Spirovski referred to Mr Harcourt's evidence that the patents do not mention the type of antenna which is used and that antenna design is a complex area that is typically solved through a process of experimentation to design the optimal system and said that he did not agree that the choice or design of a suitable antenna to implement the invention disclosed in the patents would be complex. In his evidence, he said the following: As at May 2004, if I was choosing a suitable antenna to implement the invention disclosed in the patents, I would have chosen a "compact antenna", either a helical antenna or loop antenna. The antenna must match the driver of the transceiver. Information on how to match an antenna to a particular transceiver is typically provided by the manufacturer of the transceiver. Therefore, once I had selected the antenna type and transceiver for the detection apparatus, I would have known that the manufacturer would provide the information I needed to match the antenna to the transceiver. This would have been a straightforward and routine process. 377 This was a point upon which Mr Spirovski and Mr Harcourt disagreed. It was put to Mr Harcourt that in terms of testing, he would put his device in something that approximated the conditions of being on the road and take the device through various settings and see which one was the best. Mr Harcourt agreed that that is how one would proceed, but went on to say: … And to your point of approximating or mimicking the environment, you could imagine the variables involved with different road surfaces and materials, it can be quite an elaborate exercise. 378 Mr Spirovski was taken to the Data Sheets and taken through the Key Features and Product Description. He was asked about the quick start oscillator. Mr Spirovski agreed that if the receiver is on for 2.5 milliseconds and off for 2.5 milliseconds, the start-up time for the ASTRX2 receiver, its 50 microseconds would be 0.05 milliseconds. Mr Spirovski agreed that in the example given, there is a meaningful saving in power. He agreed that the manufacturer was asserting in the Data Sheets that there is a meaningful saving in power in using the quick start oscillator in comparison with other devices. 379 Mr Spirovski agreed that the receiver in the ASTRX2 transceiver is woken up by its own internal timer which turns the receiver on at predetermined intervals. Mr Spirovski characterised the transceiver as semi-intelligent. He would characterise a Bluetooth receiver as super-intelligent. He agreed the ASTRX2 transceiver is not a simple transceiver. He agreed that because the ASTRX2 transceiver is able to wake itself up using its own internal timer, it does not require an external microcontroller or microprocessor to wake up the receiver and that this gives rise to a saving in power because the microcontroller consumes more power than the component in the receiver which is waking it up. He did say that a proper comparison could only be made if it is known what microprocessor is being used because, he observed, there are some extremely low power microprocessors. He said that one needed to look at the system as a whole to make such comparisons. 380 Mr Spirovski agreed that one of the attractive features of the ASTRX2 transceiver is that the transceiver could wake the receiver up to listen for incoming signals and it did not unnecessarily use extra power that would otherwise be required if the microcontroller woke the receiver up. He agreed that if the receiver can be woken up more quickly and it is able to turn itself off and wait for another predetermined signal, there is a saving in power consumption. 381 Mr Spirovski agreed that in addition to selecting a transceiver, it would be necessary for the designer to design an antenna that matched the transceiver. He agreed that there were no statements in the patents describing a particular antenna type, or a particular antenna configuration, or a particular power level that might apply to the antenna. 382 Mr Spirovski agreed that it is important to match the outputting impedance of the transceiver chip with the impedance of the transmit antenna and associated networks. Mr Spirovski described "impedance" in its simplest terms to mean resistance to the flow of electricity. He agreed that if there is a proper matching, the maximum level of the RF signal output by the transceiver is transmitted out of the antenna. If there is not a proper match, a portion of the transmitted signal does not go to the antenna. The same need to match applies to the input impedance of the transceiver chip and the impedance of the receive antenna and its associated network of components. If that is not done, then the received signal strength indicator (RSSI) threshold of the sniff mode in the ASTRX2 transceiver will not function effectively. 383 Mr Spirovski agreed that the designer of the system trying to match the output and input impedances of the transceiver with the impedance of the transmit and receive antennas must take account of manufacturing and temperature tolerances. There may be a variance between theoretical and actual impedances. 384 The trim function of the ASTRX2 transceiver which is designed to account for any variations due to manufacturing tolerances is an important feature of the device. It means that the designer can optimally match the circuitry of the transceiver with the antenna circuitry. Mr Spirovski said that optimal matching of the circuitry and the antenna is not one value and that is shown by the fact that most transceivers do not have or use a trim function. Mr Spirovski considered that the trim function was an advantageous feature, but not an absolutely necessary feature of transceiver chips. The trim function allows the designer to use components of a wider tolerance and possibly cheaper components and then fine tune the system at the end. Mr Spirovski said that in an ideal world, the designer would not need the trim function. 385 Mr Harcourt considered the following features to be advantages of the ASTRX2 device: (1) the ASTRX2 transceiver wakes itself up independently of the external microcontroller and that leads to a very low power mode of operation; (2) the ASTRX2 transceiver's utilisation of the RSSI threshold is advantageous because it means that it is not woken up repeatedly from very low signals and again, this means that it uses less power; (3) the quick start oscillator of the ASTRX2 transceiver is an advantageous feature because the faster the radio stabilisers, the faster the RSSI can be measured and the radio put back to sleep. This results in a reduction in the use of power; and (4) the trim function of the ASTRX2 transceiver is advantageous because you can use cheaper products and adjust and trim to suit the circumstances. 386 Mr Spirovski was taken to the Micrel data sheet for the MICRF501 device (the Micrel transceiver). This is the device referred to by way of example in the specification of both patents. The Data Sheet is dated March 2003 and it describes a transceiver. Mr Spirovski agreed that the ASTRX2 transceiver had a much shorter start up time than the Micrel transceiver. He agreed that the Micrel transceiver relies on the microprocessor to wake up. He agreed that the Micrel transceiver does not operate its receiver in sniff mode and that it does not have an RSSI threshold which operates in the same way as the ASTRX2 transceiver. The ASTRX2 transceiver has a better start up oscillator. The Micrel transceiver does not have the trim function. 387 Mr Spirovski agreed that as a component, the ASTRX2 transceiver is a better transceiver in working the invention than the Micrel transceiver on the basis of power. However, Mr Spirovski considered that there are other considerations, such as cost, availability and lead times etc. Mr Spirovski considered that the trim function was a bonus and not absolutely necessary. 388 Mr Harcourt considered that the ASTRX2 transceiver is clearly the better transceiver. He identified the quick start feature, the sniff mode, the ability to wake itself up without involving the microcontroller as all leading to a significantly better power performance. He also considered the trim function to be advantageous as it means "we can use a wider component tolerance with greater flexibility with production variations and, therefore, its advantageous for that reason as well". 389 The evidence of the experts is to the effect that a number of the parameters for the ASTRX2 transceiver are programmable. That is a matter that is made clear in the Data Sheets for the ASTRX2 transceiver and I refer, for example, to Data Sheets numbered 100, 101 and 106. In addition, factors which can affect at least some of the parameters include environment, temperature, component tolerance and physical circuits. 390 The next matter the experts were asked to identify in the joint conference of experts was any points of agreement or disagreement about whether further information is required for the skilled person reading the First Patent or the Second Patent to understand or address the communication of data from the DA using a functioning wake-up scheme. 391 The experts agreed that the First Patent discloses a wake-up scheme. They disagreed on the specific nature and the level of detail required in the wake-up scheme as disclosed in the First Patent. 392 Mr Spirovski considered that the wake-up scheme as disclosed in the patents is about alerting the DA to the presence of a transient DCA within radio communication range and this is disclosed in the patents in Figs 8 and 9 and in the description of these figures in the specification. 393 By contrast, Mr Harcourt expressed the following view: A skilled person would implement a wireless communication network, however it is my opinion that there will be hidden complexity in the implementation. In my experience the detail in the minutia is critical, and can create significant project risk in the implementation. It is my opinion that a patent describing a novel communication and wake-up scheme would have significant detail describing the current methods, the improvement, and detail in implementing those improvements. The 110 Patent does not do this, but rather simply describes a wake-up signal at a conceptual level. Wake-up signals are commonplace and not novel. The 110 Patent affords the skilled reader no advantage or improvement, and leaves it to the reader to implement in-line with their own understanding of wake up schemes. 394 The First Patent contains a description of the flow diagram of a method of operating a DA (Fig 8), such as the apparatus shown in Fig 2. That description is set out above (at [32]). There is a similar description of Fig 8 in the Second Patent (p 11 lines 10–132). 395 The wake-up scheme of the patents is disclosed in Figs 8 and 9 and the descriptions thereof. Mr Spirovski said, and I accept, that the scheme shown in Fig 8 may be performed in a number of ways. In the case of the use of a simple receiver, the steps 850, 860 and 870 may be performed by the processor, whereas in the case of an intelligent receiver (which may have an internal processor) those steps could be performed by the receiver. The term "wake-up" signal is not defined in the patents, save and except for a reference to what Mr Spirovski called the second aspect of a wake-up scheme, being the detection of an external apparatus for the purpose of communication. The reference is to a wake-up signal "(e.g., RF carrier followed by a defined message)" (First Patent p 9 lines 21–23). The first aspect of a wake-up scheme (according to Mr Spirovski) is a device which goes to sleep periodically. The ASTRX2 transceiver has the following features: (1) performs steps 810 to 860 shown in Fig 8; (2) can be programmed so that t2 (i.e., the wait period between turning on the receiver and the measurement of the RF signal strength (RSSI)) is consistent with the example value referred to in the patents; and (3) can be programmed so that t1 (the sniff interval) is consistent with the example value referred to in the patents. 396 In the context of questions about Fig 8, Mr Spirovski agreed that one implication of the wake-up signal is that there is a power-saving wake-up scheme which is part of the method, apparatus and system of the invention. He said that the second implication is that one is dealing with transient communications in the context of the First Patent. He agreed with the proposition that it is a very important feature of the invention in all its manifestations that power savings are achieved. He agreed that power saving is a critical consideration in the context of an in-ground unit that is powered by a battery. 397 Before leaving this section of the reasons, I note that the following facts are admitted. 398 In around November 2004, VMS submitted a proposal to Maribyrnong Council to supply its POD System for evaluation and trial and that proposal included POD System IGUs, IVUs and a back-office system. Between around November 2004 and March 2005, Maribyrnong Council accepted VMS's proposal. In March 2005, VMS installed approximately 500 POD System IGUs in parking bays in Maribyrnong Council and at about the same time, VMS supplied the Council with IVUs and personal digital assistants for use in conjunction with the POD System IGUs. 399 On 31 March 2005, Maribyrnong Council issued its first infringement notice using the POD System and by the end of October 2005, the Council had issued over approximately 4,000 parking infringements using the POD System. Lack of Best Method 400 The version of s 40 of the Act which is relevant in the case of both patents is the version in force before the Raising the Bar Act. The section was in the following terms: 40 Specifications (1) A provisional specification must describe the invention. (2) A complete specification must: (a) describe the invention fully, including the best method known to the applicant of performing the invention; and (b) where it relates to an application for a standard patent—end with a claim or claims defining the invention; and (c) where it relates to an application for an innovation patent—end with at least one and no more than 5 claims defining the invention. (3) The claim or claims must be clear and succinct and fairly based on the matter described in the specification. (4) The claim or claims must relate to one invention only. 401 The relevant date for the purposes of determining whether the requirement on the patentee that he or she disclose the best method known to them of performing the invention is the date of the filing of the application which in the case of the First Patent is 9 May 2005 and in the case of the Second Patent is 21 July 2011. The obligation on the applicant for the patent is to describe the best method known to the applicant of performing the invention as at those dates. 402 The particulars of this ground as pleaded and pressed in closing submissions are as follows: The specification does not include the best method known to VMS of communicating data from the subterraneous DA using a functioning wake-up scheme because they do not describe the ASTRX2. The specification does not include the best method known to VMS of designing or adjusting an antenna (and any other necessary hardware or software) to reliably communicate data from the subterraneous DA because they do not describe an antenna. 403 The Full Court of this Court considered the best method requirement in s 40(2)(a) of the Act as applicable in this case in Les Laboratoires Servier v Apotex Pty Ltd [2016] FCAFC 27; (2016) 247 FCR 61. The Court considered the relationship between the best method requirement and the requirement to describe the invention fully or the sufficiency requirement. The Court rejected a submission that the best method requirement is a subset of sufficiency and enablement, or that there is no separate, additional or "residual" best method requirement. After reviewing a number of authorities, the Court said (at [108]): From the above authorities the following principles may be gleaned: • Different policy reasons support the obligation to describe the invention fully and the obligation to provide the best method known to the patentee of performing the invention. The purpose of the former obligation is to circumscribe the monopoly granted to the patentee; the purpose of the latter is to allow the public the full benefit of that invention when the monopoly expires. • Although a patentee might not be explicitly required to act in good faith, principles of good faith underlie the best method requirement. • Even where legislation has not included an explicit "best method" requirement, courts have considered it to be a separate and additional requirement to the obligation to provide a sufficient description of the invention. • The nature and extent of the disclosure required to satisfy the best method requirement will depend on the nature of the invention itself. Accordingly, a distinction between products and processes that ignores the specific features of the invention claimed is unhelpful. 404 Later in its reasons, the Court said (at [123]–[126], [129]–[130]): 123 Section 40(2)(a) requires that the best method of performing the invention be provided. Perform is relevantly defined in the Macquarie Dictionary to include: "to carry out; execute, do"; and "to carry into effect; fulfil". The meanings of "perform" in the Shorter Oxford English Dictionary are relevantly "execute, accomplish, do, (any action, operation or process undertaken or ordered)" and "make or construct (an object)". 124 The key to understanding the obligation of the patentee is to understand that the section is directed to the method of performance of the invention. The monopoly is circumscribed by the claims but the nature of the invention is as described in the whole of the specification. This approach accords with that adopted by Lord Nicholls in Van Der Lely and by the Full Court in Firebelt. 125 Section 40(2)(a) expressly uses the word "method". Method is relevantly defined in the Macquarie Dictionary as: "a mode of procedure" and "a way of doing something". 126 There is no distinction drawn in the language of the statute between a product and a process in providing for the obligation to provide the best method of performing the invention. … 129 It can be accepted that there are cases where the claim is to a product or class of products and the best method requirement is satisfied by a description of the best embodiment known to the patentee at the relevant time. It can also be accepted that there are cases where the claim is to a product and there is no requirement to provide a method of using that product. It is also the case that there is no requirement actually to have carried out the best method and that a prediction will suffice (New England Biolabs Inc v Hoffmann-La Roche AG (2004) 63 IPR 524; [2004] FCA 1651 at [33]). However, it is necessary to understand the invention itself (Expo-Net). As was succinctly stated by Lord Hoffman in Kirin-Amgen Inc v Hoechst Marion Roussel Ltd (2004) 64 IPR 444 at [104]: in order to decide whether the invention has been fully enabled, you first have to decide what the invention is. Lord Hoffman was there addressing the sufficiency requirement, but the observation applies equally to the best method requirement. The nature of the invention will determine what is "best" in the circumstances. 130 The centrality of the invention is also emphasised in the approach that has been adopted in Australia, for example in Lockwood Security. 405 In Firebelt Pty Ltd v Brambles Australia Ltd [2000] FCA 1689; (2000) 51 IPR 531 (Firebelt v Brambles Australia), the Full Court of this Court considered the best method requirement in s 40(2)(a) as applicable in this case. The Full Court set out the consistory clause of the claimed invention in that case (at [18]): The consistory clause of the invention is as follows: "In one aspect, the present invention resides in a side loading refuse vehicle having a cab, the combination of an elongate refuse storage tank divided into longitudinally extending tank sections, a loading mechanism adjacent a side of the refuse vehicle and a refuse transfer mechanism for delivering refuse or other material emptied into the vehicle by the loading mechanism to the respective tank sections, the loading mechanism having a lid opening device and the loading mechanism being adapted to engage a bin of the type having a pivoting lid by remote control from the cab, raise the lid and empty the bin into the vehicle, the bin holding recyclable waste separately from other waste in the bin and upon being emptied into the vehicle, the recyclable waste and the other waste are separately delivered by the transfer mechanism to respective ones of the said tank sections." Annexed to his Honour's judgment was a list indicating the essential features of the combination patent: "(a) In a side loading refuse vehicle (b) having a cab (c) the combination of an elongate refuse storage tank divided into longitudinally extending tank sections (d) a loading mechanism adjacent to the side of the refuse vehicle and (e) a refuse transfer mechanism for delivering refuse or other material emptied into the vehicle by the loading mechanism to the respective tanks (f) the loading mechanism having a lid opening device and (g) the loading mechanism being adapted to engage a bin of the type having a pivoting lid by remote control from the cab (h) raise the lid and (i) empty the bin into the vehicle (j) the bin holding recyclable waste separately from other waste in the bin, and (k) upon being emptied into the vehicle, the recyclable waste and other waste are separately delivered by the transfer mechanism to the respective ones of the tank sections. (l) the combination in claim 1 wherein the tank sections are located one above the other. (m) The combination of claim 1 or claim 2 wherein the transfer mechanism is an active transfer mechanism." It should be said that features (f), (g) and (h) identify three features of the loading mechanism. 406 The claimed invention in Firebelt v Brambles Australia was a combination of features. Although a lid opening device was an essential feature of the invention, no particular type of lid opening device was claimed. That fact was crucial in the reasoning of the Full Court because the Court reasoned that the obligation was to describe the best method of performing the invention and that obligation was not breached even if the applicant for the patent knew of, but did not disclose, a better lid opening device in circumstances where the invention claimed was not of a particular lid opening device operating at any particular time. The Full Court said (at [52]–[53]): 52 The invention claimed is not of a particular type of lid opening device operating at any particular time. There is therefore no statutory obligation to describe which of the contemplated lid opening devices was considered to be the best, nor the preferred timing, contrary to his Honour's understanding of the section. 53 The requirement of s 40(2) of the Act is that the patentee is required to give the best information in his power as to how to carry out the invention. That requirement is ordinarily satisfied by including in the specification a detailed description of one or more preferred embodiments of the invention offered, with reference to drawings of specific mechanisms or structures or examples of specific process conditions or chemical formulations, depending on the field of the invention and the nature of the instruction to be conveyed. It is necessary to have regard to what is the invention claimed in the petty patent. The invention here claimed is not a particular type of lid opening device operating at any particular time. It is only if it were such a claim that there might be a failure such as the primary judge found. 407 In Sandvik Intellectual Property AB v Quarry Mining & Construction Equipment Pty Ltd [2016] FCA 236; (2016) 118 IPR 421 (Sandvik), the invention which was the subject of the patent was for an extension drilling system used in subterranean mining operations such as coal mining used to install bolts to secure the structure of roof tunnels. Justice Jessup held that the applicant for the patent had not described the best method known to it of performing the invention because it knew of a better sealing member than that described in the specification. His Honour referred to the following passage from the reasons of Fletcher-Moulton LJ in Vidal Dyes Syndicate Ltd v Levinstein Ltd (1912) 29 RPC 245 (Vidal Dyes Syndicate v Levinstein) (at 269): It is settled law that a patentee must act towards the public uberrima fide, and must give the best information in his power as to how to carry out the invention. He is therefore bound to tell the public all the steps that can advantageously be taken in carrying out the invention. But he is not limited to claiming only the best way of carrying it out. 408 His Honour said that the best method of carrying out the invention need not be claimed, but it must be described. He went on to say (at [224]–[226]): 224 … In the present case, the inventors did claim what was, ostensibly at least, the best way of carrying out the invention claimed in Claims 1-5: the use of the device set out in Fig 3 was incorporated into Claim 6. Importantly, the inventors made it clear in the specification that this was the "drive chuck preferred": a formula, I take it, intended to equate to what was the best known method. 225 The difficulty was (and is), of course, that what was thereby described was not the best method known to the inventors. When the complete specification was filed in May 1998, the applicants had developed, to the detailed technical drawing stage, a sealing member that was better than any described in the specification. 226 For the above reasons, I accept the respondent's case that the complete specification for the Patent did not describe the best method known to the inventors for performing the invention, as required by s 40(2)(a) of the Act. 409 There is perhaps a fine line between the decision in Sandvik at first instance and the decision in Firebelt v Brambles Australia. On appeal in Sandvik, the Full Court upheld the decision at first instance (Sandvik Intellectual Property AB v Quarry Mining & Construction Equipment Pty Ltd [2017] FCAFC 138; (2017) 348 ALR 156; (2017) 126 IPR 427). After referring to the authorities, the Court identified the relevant principles as follows (at [115]): For present purposes, the following key principles may be stated on the basis of the authorities set out above: (a) The purpose of the requirement in s 40(2)(a) to disclose the best method known to the applicant of performing the invention is to allow the public the full benefit of the invention when the monopoly expires: Servier at [108]. (b) Although a patentee might not be explicitly required to act in good faith, principles of good faith underlie the best method requirement: Servier at [108]. (c) The nature and extent of the disclosure required to satisfy the best method requirement will depend on the nature of the invention itself: Firebelt at [52]-[53]; Servier at [108]. (d) The key to understanding the obligation of the patentee is to understand that the section is directed to the method of performance of the invention. The monopoly is circumscribed by the claims, but the nature of the invention is as described in the whole of the specification: Servier at [124]. (e) The requirement to describe the best method of performing the invention is ordinarily satisfied by including in the specification a detailed description of one or more preferred embodiments of the invention: Firebelt at [53]; Servier at [104]. See also Blanco White (5th ed) at [4-516]; Bodkin C, Patent Law in Australia (2nd ed, Thomson Reuters, 2014) at [5280]. 410 The Full Court distinguished the decision in Firebelt v Brambles Australia by saying that in the case before it, even accepting that the water seal was not part of the invention, it was necessary and important to perform the invention or carry it into effect and there was a real issue that needed to be overcome in designing an effective water seal (at [125] and see also [118] and [121]). The Court also made the point that there is a limit to "what can usefully be drawn from the factual outcome of another case on an issue such as this" (at [126]). 411 Finally for present purposes, I refer to the decision of the Full Court of this Court in GlaxoSmithKline Consumer Healthcare Investments (Ireland) (No 2) Ltd v Generic Partners Pty Ltd [2018] FCAFC 71; (2018) 264 FCR 474. The Court said that whether the necessary disclosure (i.e., of the best method) is made is essentially a question of fact. The Court should approach the matter in a practical and common sense manner and should have regard to the following matters: (1) the nature of the invention; (2) the significance of what is and what is not disclosed; (3) the public policy rationale which lies behind the best method requirement as explained by, among others, Fletcher-Moulten LJ in Vidal Dyes Syndicate v Levinstein referred to above; and (4) the need to bear in mind that merely showing that a skilled addressee could ascertain by routine experiment the best method actually known to the applicant for the patent is not an answer to an allegation of a breach of the best method requirement. 412 With respect to the fourth point, the Full Court said (at [192]): Whether or not it will be open to the patent applicant to not disclose relevant information on the basis that it is available to the skilled addressee by routine experimentation will depend on the importance of the information in question, the practicality of disclosing it, and the extent of the burden imposed on the skilled addressee who is left to rely upon routine experimentation. That question is, as we have already mentioned, to be addressed in a practical and common sense manner. The ASTRX2 transceiver 413 SARB's case is that VMS failed to comply with the best method requirement by failing to describe the ASTRX2 transceiver in the specifications of the patents. 414 Figure 2 of both patents is a block diagram of the IGU or DA. It identifies, among other devices, a radio receiver (240) and a radio transceiver (250). The description of these devices in the specifications states that these devices are practised as a 433 MHz UHF radio receiver for transmitting and receiving radio signals to and from a DCA, respectively. The description states that various UHF transceivers may be practised "such as the Micrel MICRF501 transceiver, which requires to be turned on for approximately 1ms before RF carrier energy can be detected". The description goes on to state: However, persons skilled in the art would readily understand that other types of transmitters, receivers or transceivers may be practised such as low frequency (LF) transceivers. Other UHF frequencies may also be practised … 415 Figure 8 of both patents is a flow diagram of a method of operating a DA such as the apparatus in Fig 2. The operation at each step from 810 to 890 is described in the specifications. A wait period described as "t1" (820) is identified and it relates to start of the cycle (810) and the turning on of the radio receiver (830). There is a second wait period identified as "t2" (840) and it relates to the stabilisation of the radio receiver between it being turned on and the received RF signal strength (RSSI) being measured (850). The description further provides that the duration of t2 is determined according to the type of radio receiver and "is typically of the order of 1 millisecond" and that setting the duration of t1 "implies an on:off duty cycle of 1:250". The description also provides an indication of power consumption of a typical low-power radio receiver and the average power consumption of the DCA detection process (20 to 40 microamperes). 416 The starting point in SARB's submissions is the undoubtedly correct proposition that the transceiver is a vital part of the RF communications component and that the component would not function without it. 417 As set out above, Mr Welch found the ASTRX2 transceiver in July or August 2003 and he was particularly interested in it because of certain power-saving mechanisms it used (at [300]). Mr Welch considered other transceivers such as the one manufactured by RF Waves, but that was discarded (at [299]). The transceivers or receivers tested other than the ASTRX2 transceiver are identified above (at [316] and [327]). They were either abandoned or not taken into production. No other transceivers or receivers were tested other than those identified (see [327]). The only transceivers incorporated into a developed PCB or tested by Mr Crowhurst were the ATMEL U2741B and the ASTRX2 and Mr Welch could not recall any other transceiver or device being evaluated. Mr Welch agreed that of the two transceivers, the ASTRX2 transceiver was the better candidate (at [338]). It was used in almost all the test PCBs and was used in the production PCB. It was used in the Maribyrnong field trials in March 2005 and in relation to the tender to Maribyrnong after the field trials (at [339]). Mr Welch considered that the ASTRX2 transceiver "ticked all of the boxes" as the transceiver component in the POD System and he agreed that it was the best transceiver known to him and VMS for use in the RF communications component in the POD System (at [340]). 418 The evidence is that the ASTRX2 transceiver had various features that contributed to power savings. I will not repeat the evidence described above of Mr Welch (at [331]–[334]), Mr Spirovski (at [378]–[380]) and Mr Harcourt (at [385] and [388]). 419 The ASTRX2 transceiver also had a trim function which is a function used to fine tune the input and output impedances of the transceiver to the actual impedances of the antennas and their networks as manufactured and produced to account for variances in manufacturing tolerances. This was an advantage primarily because more widely "tolerated" components could be used and they are cheaper. Mr Spirovski said, and I accept, that the trim function is a bonus, but not absolutely necessary and that he rarely needed to use such a feature. 420 The patents identify the Micrel transceiver as suitable for working the invention. The times and estimated power consumption in the specifications are consistent with the use of the Micrel transceiver. The stabilisation period for the radio receiver i.e., t2 in the specifications, is 1 millisecond which is the start-up time of the Micrel transceiver compared with the much shorter start-up time of the ASTRX2 transceiver of 50–55 microseconds or 0.05 milliseconds. 421 The Micrel transceiver compares unfavourably with the ASTRX2 transceiver in that: (1) it cannot wake itself up and it relies on the microprocessor to wake it up; (2) it involved the use of the microcontroller to receive and transmit data; (3) it had a considerably longer start-up time of at least one millisecond; (4) it did not have a sniff mode; (5) it did not have an RSSI threshold which operated in the same way as the ASTRX2 transceiver; and (6) it has an inferior start-up oscillator to that of the ASTRX2 transceiver. 422 The Micrel transceiver does not have a trim function. 423 At the same time, the Data Sheets for the Micrel transceiver indicate that the circuit is designed so that other parts of the device are not turned on during start-up so as to save on power consumption. 424 Mr Harcourt, when asked which of the ASTRX2 transceiver and the Micrel transceiver is the better transceiver for working the invention, said that it is clear that the ASTRX2 transceiver is the better device. He explained that was because of the features which all lead to significantly better power performance. Mr Spirovski, when asked to focus on the transceiver, said that on the basis of power, the ASTRX2 transceiver is a better transceiver for working the invention than the Micrel transceiver. He said that as a component, the ASTRX2 transceiver appeared to be the better device, but it is also necessary to take into account the whole device and other factors "such as cost, availability, lead times, etcetera". 425 SARB submitted that not only has VMS not disclosed the best transceiver known to it, but it has failed to disclose fully the wake-up scheme used by it in that had it disclosed the ASTRX2 transceiver and how it worked, it would have been clear that the wake-up scheme shown in Fig 8 could be implemented as a wake-up scheme in which the radio signal was responsible for the external microcontroller waking up. Mr Spirovski agreed that steps 850, 860 and 870 could be performed by an intelligent transceiver and the first time the external microprocessor became involved was at step 880 with the qualification the intelligent transceiver was likely to have some form of processor built into it. It would be possible with a "less intelligent" transceiver for the transceiver to carry out steps 850 and 860 and it would not be necessary to wake-up the external microprocessor until step 870. 426 VMS submitted that SARB bears the onus of proof and that when the facts are carefully considered, the correct conclusion is that it has not failed to comply with the best method requirement. It complied with that requirement by its description of the wake-up system in the specifications by reference to Fig 8 and it was not required to identify a transceiver component. VMS relies heavily on the absence of evidence as to the following matters: (1) The operational parameters, including t1 and t2 in the patents, are identified in the specifications at p 11 lines 10–31 and there is no evidence that they did not reflect the best method known to VMS of performing a functioning wake-up scheme; (2) The operational parameters implemented by VMS in the POD System, that is to say, there is no evidence that VMS did not implement the operational parameters in the patents; (3) That the use of the ASTRX2 transceiver in a wake-up scheme is a different way of making a wake-up scheme to that described in the patents; and (4) That performing the wake-up scheme with the ASTRX2 transceiver rather than other transceivers avoids any particular pitfalls or difficulties in performing the communication of data from the subterraneous DA. 427 The starting point is the wake-up scheme described in the patents. The wake-up scheme is described in Figs 8 and 9 and the descriptions of those figures. The scheme shown in Fig 8 may be implemented in a number of ways in the sense of the functions performed by the receiver and those performed by the microprocessor. As already mentioned, example values for the operation of the scheme are provided. "Wake-up signal" is not defined in the specifications, although there is reference to a DCA transmitting a wake-up signal, for example, an RF carrier followed by a defined message and listening for valid responses from DAs. 428 The evidence revealed the links between the steps in Fig 8 with the features of the ASTRX2 transceiver as follows: (1) The ASTRX2 transceiver periodically waking up and detecting RSSI signal strength functions (i.e., steps 810 to 860) is performed by the transceiver and the quick start feature relates to the wait period, t2, for the radio receiver to stabilise or settle. Mr Harcourt agreed that if this period is too short that can lead to false positives. The period can be affected by the environment, including the temperature, component tolerances and the physical circuits. In the ASTRX2 transceiver, the length of this period may be programmed within specified parameters by reference to an Offset Durell Timer, an RSSI Delay or a Data Filter Delay; and (2) The sniff mode feature in the ASTRX2 transceiver relates to the t1 period. As Mr Spirovski said, a sniff interval of 255 milliseconds can be programmed. In fact, the programmable range is 0.5 microseconds to 16.32 seconds. 429 There is no dispute that the ASTRX2 transceiver can be programmed within certain ranges and the selection of the specific values in those ranges depends on the specific application. The programmable ranges are consistent with the parameters for the transceiver in the patents. 430 VMS submits, correctly in my opinion, that it was not put to Mr Welch that the parameters in the patents did not reflect the best method of a wake-up scheme. It is also true that Mr Welch was not asked about the parameters actually used in the POD System. 431 Mr Harcourt considered that if the system described in the patents had been successfully commercialised, it is likely a more sophisticated and efficient wake-up scheme would have been implemented and he gave as an example, the possibility of addressing the issue by utilising an interrupt-driver wake-up scheme which is more complex than the simple polling scheme described in the patents. However, I am persuaded by the evidence of Mr Spirovski that the wake-up scheme described in the patents is an efficient and adequate wake-up scheme and there is no reason to think on the evidence that Mr Welch knew of a more sophisticated wake-up scheme. 432 VMS's responses to various submissions made by SARB are as follows. 433 First, the power saving advantages of the ASTRX2 transceiver are based on the Data Sheets and an assertion that the ASTRX2 transceiver operates at very low power is made in a context in which no specific transceiver is identified as a comparator. The patents refer to the Micrel transceiver and states that other transceivers may be practised. There were a number of transceivers available at the relevant date. 434 Secondly, whilst the operational parameters in the patents are consistent with the use of the Micrel transceiver, the said parameters are also consistent with the programmable ranges of the relevant parameters in the ASTRX2 transceiver. It is true that the Data Sheets for the ASTRX2 transceiver referred to potential power savings, but Mr Welch's evidence went no further than saying that he was interested in the ASTRX2 transceiver because it might achieve power savings and it was the lead candidate if it did what the brochure said. The power savings were never quantified in the evidence and, as Mr Spirovski said, there are other considerations such as "cost, availability, lead times, etcetera". 435 I do not consider the trim function standing alone to be of significance in light of Mr Spirovski's evidence. 436 In my opinion, the patents provide for a wake-up scheme and describe certain parameters within which the scheme may operate. The wake-up scheme operating within those parameters is efficient and adequate. The inventor, Mr Welch, agreed that the ASTRX2 transceiver was the best transceiver known to him and VMS for use in the RF communications component of the POD System. However, there is nothing to indicate that Mr Welch knew of a better method of performing the wake-up scheme than that described in the patents or that the ASTRX2 transceiver used in the POD System were programmed other than in accordance with the parameters. In those circumstances, VMS did not fail to describe in the specifications of the patents the best method known to it of performing the invention. 437 VMS advanced two further independent grounds for rejecting the lack of best method ground. In view of the conclusions I have already expressed, it is not strictly necessary for me to consider these grounds. However, I do so for the sake of completeness. The independent grounds advanced by VMS must be rejected. 438 VMS advanced as an independent ground for rejecting SARB's submission that it failed to describe the best method known to it of performing the invention, the problems experienced by VMS with a batch of ASTRX2 transceivers in February 2005. This was close to the date upon which the application was made. Mr Harcourt agreed that a device which had a failure rate of 40 to 50% could not be endorsed unreservedly and he said that he would "have to disclose the failure rate as well". 439 Mr Welch referred to the failure rate with a particular batch of units, but he does not suggest, at least in express terms, that this is the reason, or a reason, the ASTRX2 transceiver is not referred to in the specifications. In fact, he does not address the topic of the reasons why the ASTRX2 transceiver was not referred to in the specifications and he was not asked about it by either party. 440 VMS relies on the onus of proof and submits that the onus is on SARB to establish that VMS has failed to describe the best method known to it of performing the invention. If an equally probable inference is that the failure of the ASTRX2 transceivers was the reason the transceiver was not disclosed in the specifications, then SARB would have failed to discharges its onus. 441 Mr Welch's evidence is that the failure of the ASTRX2 transceivers was in "February 2005" and that these failures appeared to be a failure in a particular batch of the ASTRX2 transceivers. It transpired that that was the case, that is, there was a failure in a particular batch of transceivers. The email exchange between Mr Welch and AMIS produced by Mr Welch dealing with the failure of the batch of ASTRX2 transceivers range in date from 9 February 2005 to 7 April 2005. On 7 April 2005, Mr Welch wrote to AMIS referring to the failure of the first batch and he said "[s]o far, devices from later batches seem OK". In my opinion, that does not suggest that by the application date of 9 May 2005, the failure of the first batch was still operative with respect to the ASTRX2 transceiver. 442 VMS also advanced as an independent ground for rejecting SARB's submission that it failed to describe the best method known to it of performing the invention, the circumstance that (so it contends) the ASTRX2 transceiver was not publicly or generally available. I have already referred to the fact that the ASTRX2 transceiver was not available through AMIS's Australian distributor, Arrow Australia, and the circumstances under which Mr Welch obtained the ASTRX2 transceivers from AMIS (at [301]). Mr Welch produced the email he received from AMIS on 13 August 2003. It was in the following terms: Hello Fraser, thank you for contacting AMIS about the ASTRX2 part and please, accept my apology for the delay of the reply. I am currently travelling in Europe. Anyway, in order to receive more information about the ASTRX2 as well as samples, we will need approval from our US business unit. ASTRX2 was developed in cooperation with a customer. We have permission of the customer to market the device to non-competitors. The typical ASTRX2 customer we would like to service is: 1) Not involved in Home or Building Fire and Security products – what is your application? 2) A well-known company with existing and historic successful product sales. 3) Possesses a sophisticated technical staff capable of designing their product around the ASTRX2 data sheet and application notes. 4) Is interested in at least 25,000 units per year as a minimum. 5) Preferably the customer would represent the Automotive, Medical, or Industrial marketplace. Could you please, comment on the above points and then register at the MyAMIS web site (can be reached through www.amis.com) to request the full datasheet? Please, provide a company overview for your company and some information about the end customers (if the design is done on behalf of somebody else). Best regards, Olaf Gresens 443 The fact is that VMS was able to obtain sufficient quantities of the ASTRX2 transceiver for its purposes prior to 9 May 2005 and I do not consider that such limitations on supply as there were constitute a reason VMS was not required (assuming there was otherwise an obligation to describe the ASTRX2 transceiver) to describe it. 444 For the reasons I have given earlier, the lack of best method ground of invalidity, insofar as it involved the ASTRX2 transceiver, is rejected. The antennas 445 For the reasons which follow, SARB has not established that by not referring to the antennas at all in the specifications of the patents, VMS has failed to describe the best method known to it of performing the invention. 446 It is not disputed that the method and system would not work at all without an antenna. I will refer to antenna, while noting that the POD System developed by VMS used two antennas, one for receiving signals and the other for sending them. As Mr Harcourt explained, radio transmissions are always sent via an antenna in the transmitting device. Antennas convert the electrical current flowing through the wires in the device into an electromagnetic wave form carrying that energy through free space so that it can be wirelessly transmitted to remote locations. Mr Harcourt explained difficulties which may arise in the transmission of radio signals: It is difficult to transmit radio signals from devices in which the antenna is buried, because most of the energy being transmitted is absorbed by the ground, and only a small amount escapes into the air. Different materials have different levels of conductivity, and additional difficulties arise in certain environmental conditions, for example when the ground is wet. Further, objects between the transmitter and the receiver (such as the vehicle parked on top of the Detector Unit), and radio frequency noise from other transmissions in the vicinity can also interfere with transmissions. 447 SARB's case is that the patents do not describe the following: (1) the antenna type, configuration or power level; (2) how the output impedance of the transceiver is best matched to the impedance of the transmit antenna and its associated network of components. This matching is necessary to ensure maximum power is transmitted from the transceiver to the antenna, avoiding a reduction in the range of the resulting signal and ensuring that transmission is on the chosen frequency; (3) how the input impedance of the transceiver chip is best matched to the impedance of the receive antenna and its associated network of components. This matching ensures the transceiver is able to detect RF signals; (4) the additional impedance matching necessary to account for changes to impedance arising because the device was located below the road surface; (5) Mr Crowhurst's conformal mapping technique used to compensate for the effect of tar seal; (6) the technique Mr Crowhurst used for reducing the antenna to less than a quarter of a wavelength (that is, the resonance circuit); (7) that the best transceiver was the ASTRX2 transceiver; and (8) that the RF communications component of the IGU or DA was operable over varying temperatures. 448 SARB relies on Mr Harcourt's evidence that he would have expected the patents to include details on the type of antenna because antenna design is a complex area that is typically solved through a process of experimentation to design the optimal system and involves input from a specialist with experience in antenna design. It also relies on Mr Welch's evidence that in order for the RF network to transmit and receive data effectively, the antenna associated with the transceiver had to be designed and adapted so that it communicated effectively with the IVU in circumstances in which the transceiver was located underground and the IVU was in a motor vehicle that might be travelling past at more than 60 kilometres per hour. 449 I have already referred to Mr Crowhurst's evidence. Nevertheless, it is helpful to identify the precise detail of that evidence. Mr Crowhurst said in his evidence-in-chief the following: (1) His assessment of his antenna design was that it was innovative based on the fact that "the ground needed to be matched"; (2) Aspects of his antenna design involved the use of "sophisticated spectrum analysers, network analysers" and a numerical package to simulate the design and self-serenade. These tools were used to conformally map, that is, the performance of the antenna out of the ground to match what is required in ground. Mr Crowhurst did this by taking a series of measurements, "mathematically processing them" and then translating them to component values into the PCB which gave the performance; (3) The application required antennas of a particular size which are less than a quarter of a wavelength and that means they are electrostatic problem antennas and they are smaller than Mr Crowhurst would normally use; and (4) Antennas of such small size require very specific and technical treatment to allow them to perform as "larger-style geometries". The specific or technical treatments or principles are applied so that in compressing a quarter wavelength part down to a fraction of what a wavelength should be allows the antenna to behave as a larger geometry. There was some further explanation of conformal mapping and reference to the process of reducing the size of the antenna to several centimetres by Mr Crowhurst in cross-examination. (5) Conformal mapping designed to compensate for the artefact of the tar seal is not standard and it is not referred to in any documents produced to Mr Crowhurst. It involves measuring the free space change and then measuring the difference of the impact of the IGU. An exercise is carried out of compensating or mapping the complex impedance from free space to ground through adjustment of the component values. (6) The tar seal acts like the addition of a capacitor to the tuned component of the antenna. Capacitors change the centre frequency of operation which means insufficient power is transmitted out of the ground; (7) Mr Crowhurst considered that influence of the tar seal on a tuned resonant circuit. A calculation of the amount of pull or shift the tar seal has had on frequency is performed. An adjustment is made in the complex plane with a simulator "doing some sums". An adjustment is then made of that value compensating for the tar seal back to the resonant circuit values. The antenna would shift in frequency when placed in the road. The channel of the antenna can be shifted by up to 40dB, "so just by pulling the antenna away, I can reduce the range profoundly, so this is quite key in [ensuring] that the radio, one, remains on channel, and two, has appropriate range"; (8) According to Mr Crowhurst, conformal mapping was a technique he developed during his employment at Robert Bosch when he took a piece of tar seal, analysed the influence of the tar seal which was capacitive and matched the antenna and tuned it for the tar seal and the correct frequency. He said, as I understood him, that the technique was not an established one; and (9) The reduction of the antenna size involves a specific technique and the antenna is reduced to substantially less than a quarter wavelength. 450 Finally, SARB relies on the importance of the particular transceiver to the task of tuning the antenna. The ASTRX2 transceiver provides tuning ranges for the antenna which Mr Crowhurst said would be selected for the antenna geometry. The ASTRX2 transceiver has a tuning range because of small differences in capacitors. The antenna geometry is tuned to be within the centre tuning range of the ASTRX2 transceiver. Mr Crowhurst explained that part of the reason for this is to compensate for temperature variations. Mr Spirovski also referred to the need to take into account temperature variations in the matching or tuning process. The manufacturers of transceivers provided information to purchasers to assist in the process of matching the antenna to the antenna circuit of the transceiver. In short, SARB submits that absent a reference to the ASTRX2 transceiver, the skilled addressee would not be led to the Data Sheets and evaluation kit. It points to Mr Spirovski's evidence that he only learnt of the existence of the ASTRX2 transceiver when preparing to give oral evidence in the proceeding. 451 On the one hand, SARB submits that at the time VMS filed the patent applications, it knew of better ways of working the invention than those described in the specifications because it had developed a functioning antenna. 452 On the other hand, VMS submits that there is nothing new or radical about the use of an antenna to wirelessly transmit data. That proposition is correct. VMS further submits that SARB has not shown that VMS considered at the filing date that the antenna it used was essential to the best method of performing the reliable communication of data from the subterraneous DA. The best method of performing the invention is not a description of a particular antenna, but rather a description of wirelessly communicating data. 453 Mr Harcourt said in evidence that standard terminology and common sense is to the effect that a wake-up event means a system which moves from a sleep or low-powered state to an awake mode. This is a "very, very, very common feature of most systems in the world" and there is a standard nomenclature and understanding about what constitutes "sleep", "wake" and a "wake-up signal". VMS points to Mr Harcourt's evidence that in 2004, there were 20 to 30 options in transceivers and separate receivers and transmitters. Mr Spirovski's evidence was to similar effect. The reference in the specifications to the Micrel transceiver would indicate to the person skilled in the art that he or she may opt, from hundreds of options, for a similar device or they may opt for a smarter transceiver. There was certainly a choice in terms of the number of transceivers, receivers and processors that could be used to implement the wake-up scheme described in the patents. 454 I accept Mr Spirovski's evidence that the antenna used must match what he called the "driver" of the transceiver. Manufacturers of transceivers typically provide information about how to match an antenna to the particular transceiver. Mr Harcourt agreed that manufacturers provide information to purchasers to get the process of matching the antenna to the antenna circuit of the transceiver, "kicked off". Mr Harcourt said in terms of antenna it is necessary to have something that meets the product's (i.e., the transceiver) requirements. VMS submits, in my view correctly, that, in those circumstances, it is unsurprising that the patents do not mention an antenna and do not describe how to design or adjust an antenna to reliably communicate data from the subterraneous DA. 455 The type of antenna used by VMS in its POD System was a printed loop antenna on a circuit board. Mr Harcourt said in 2004 in the case of selecting an antenna to work with a transceiver which was on a circuit board, the use of a loop antenna which was printed on the circuit board was widespread and that an antenna printed on a circuit board was a very common solution in the case of a small self-contained unit the size of a USB key or a piece of soap. In addition to this, there is the evidence of Mr Spirovski previously referred to that if in May 2004 he was selecting an antenna to implement the invention, he would have chosen a "compact antenna", either a helical antenna or loop antenna. As I have already said, once the transceiver and the type of antenna have been selected, the person skilled in the art in 2004 would know that the manufacturers of the transceiver would provide information as to how the antenna and the transceiver are to be matched. I accept Mr Spirovski's evidence that this matching process would have been straightforward and routine and the disclosure of the transceiver to be used provides sufficient information to the person skilled in the art to develop a suitable antenna. 456 The evidence of Mr Harcourt and Mr Crowhurst does not persuade me otherwise. 457 It is true that Mr Harcourt said that the development of an antenna can be complex and that it may involve a significant testing program. I have already referred to Mr Harcourt's evidence about the difficulties of transmitting radio signals from devices buried in the ground (at [446]). Mr Spirovski disagreed; he did not consider that the choice or design of a suitable antenna to implement the invention would be complex. Mr Spirovski said, and I accept, that the optimisation of the fine tuning of the input and output impedances of the transceiver with the actual impedances of the antenna to account for manufacturing tolerances and operating conditions is not necessary in the sense that it is not one value, but rather a range of values or a "curve". The trim function which assists in the fine tuning process is a bonus and it is not absolutely necessary. The fact that the DA is buried and is to transmit signals from that position raises issues routinely encountered as at 2004. It is easy to determine the rate of absorption of energy by the material the signal is to penetrate. A radio signal must penetrate solid material in the case of garage entry. The barrier will reduce signal strength, but as Mr Spirovski said, there is always a solution in this application. Mr Harcourt agreed it would be a matter of running tests to make sure the device and the antenna were working correctly. I do not consider that Mr Harcourt's evidence establishes that any challenges to the functioning of antennas in the DA underground could not be routinely solved in 2004. 458 I have already referred to the reasons I am not prepared to place any significant weight on Mr Crowhurst's evidence. Mr Crowhurst's description of his work, particularly his description of what he called conformal mapping and the reduction of the antenna size lacked a clear and, importantly, comprehensible description of the work he carried out such that a logical and balanced assessment of the nature of that work and its complexity can be made. I have already referred to his evidence about conformal mapping which was based, he said, on an undocumented understanding gained while working at Robert Bosch between 1995 and 2001. The technique Mr Crowhurst said that he used to reduce the antenna size was never properly explained. 459 Mr Crowhurst said in cross-examination that in the case of a PCB of small dimensions which was to be placed in a self-contained underground unit, the use of a printed antenna was a "compelled decision" and he agreed that the use of two antennas was entirely in accordance with the requirements of the ASTRX2 transceiver. He agreed that the idea of having an antenna on a PCB was well known in late 2003 and early 2004. He said that the loop antenna was substantially smaller than a wavelength and that it was based on the application of a known technique he had applied in previous work. The manufacturer, AMIS, specified the topology and component values for the RF communications component of the PCB except for the antenna circuit and he agreed that the topologies he used were very similar. 460 The evidence of Mr Welch and Mr Crowhurst establishes that Mr Crowhurst commenced work on the PCB schematics and layouts in approximately December 2003. The PCB schematics and layouts produced by Mr Welch show that Mr Crowhurst only ever considered the option of a printed antenna which is entirely consistent with his evidence that a printed antenna was a compelled decision. Furthermore, other than making the antenna larger when the footprint of the ASTRX2 transceiver reduced in size, the PCB schematics and layouts show that the design of the antenna did not change after January 2004. 461 Mr Crowhurst's handwritten notes of his work on the antenna in the IGU and the other evidence in the case provide a reasonably accurate indication of the time he spent working on the antenna and those aspects he was working on. 462 As Mr Crowhurst put it, the handwritten notes "covers off" his work on the design of the antenna in the IGU. The work recorded in Mr Crowhurst's notebook could not have been started prior to 17 February 2004. There are two antenna circuits, a receive antenna circuit and a transmit antenna circuit and, as I understand Mr Crowhurst's evidence, from the beginning of March to mid to late April 2004, the only adjustments he made to the receive antenna circuit were to two component values at the far end of the receive antenna circuit and for the transmit antenna circuit, to the three component values at the far end of the circuit. Mr Crowhurst agreed that there was no change in the antenna circuit topology after early April 2004. The values for the production unit or version were settled upon by mid to late April 2004, according to the evidence of Mr Crowhurst, and it follows that the values were determined within a period of four to eight weeks. Mr Crowhurst seemed to suggest in his evidence-in-chief that the "mapping of the system" exercise took in the order of three to four months, but I do not consider this to be a reliable estimate. 463 I have already indicated that I have a number of reservations about Mr Crowhurst's evidence. I place no weight on his own description of his work as innovative and complex or involving complexity. 464 Mr Crowhurst conducted his tests in relation to the impedance of the antenna with units in the tar block or on the bench. The numbers produced are displayed on the screen of the testing device. He agreed that it is a matter of ordinary practice to set the antenna up in the circumstances in which it is to operate and then conduct the tests in the manner he indicated. In my opinion, the testing in the tar block and in the air was routine. 465 VMS pointed out correctly, that there is no evidence Mr Crowhurst was involved in or undertook any field testing. Mr Harcourt was asked about the tests which should be carried out to ensure the transceiver and the antenna were working correctly. He seemed to suggest that mimicking the environment e.g., water, ice and snow and different road surfaces and materials would be "quite an elaborate exercise". VMS's response to this evidence is two-fold. First, it submits that such testing would, in any event, be routine. Secondly, and more to the point in my view, is that Mr Crowhurst did not carry out any such testing. 466 In my opinion, VMS has not failed to describe the best method of performing the invention by not describing the matters relating to the antenna identified by SARB. The work required for the antenna was routine work for the person skilled in the art. Approaching the matter in a practical and common sense manner, there is, in my view, nothing about the importance of the information or the practicality of disclosing it or the extent of the burden imposed on the person skilled in the art who is left to rely on routine experimentation that brings this case within a case where disclosure should made. 467 The lack of best method ground of invalidity is rejected. Lack of Sufficiency 468 The particulars of this ground as settled upon by SARB in its closing submissions were as follows: 1. The specification does not provide sufficient information to enable the person skilled in the relevant art to communicate data from the subterraneous DA using a functioning wake-up scheme, without new inventions or additions or prolonged study of matters presenting initial difficulty in that VMS did not provide details of the wake-up signal adopted by it, that is to say, details of the particular intelligent transceiver it used and its features, including the transceiver's ability to wake itself up and use a low power sniff mode and RSSI threshold to minimise power usage. 2. The specification does not provide sufficient information to enable the person skilled in the relevant art to identify or design an appropriate antenna (and any necessary hardware or software) to reliably communicate data from the subterraneous DA without new inventions or additions or prolonged study of matters presenting initial difficulty, that is to say, details as follows: (1) the use of two antennas and the reasons for that; (2) the need to reduce the antenna size by using a resonance circuit; (3) the use of conformal mapping to account for the effect of the road surface on the antenna signal — a process which utilised new techniques developed by Mr Crowhurst when he worked for Bosch which Mr Crowhurst asserted were not known in the field; and (4) the tuning of the antenna. 469 Both SARB and VMS relied on their written submissions in relation to the lack of sufficiency ground. VMS said in its oral submissions that it had dealt with the issue when it set out its criticisms of Mr Crowhurst's evidence. 470 The Australian leading authority on the meaning of s 40(2)(a) of the Act as applicable in this case is Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd [2001] HCA 8; (2001) 207 CLR 1 (Kimberly-Clark) at [14], [24]–[25]. The High Court in that case emphasised three matters. First, in considering whether the complete specification describes the invention fully, it is necessary to consider not only the body of the specification, but also the claims. Secondly, the complete specification is not to be read in the abstract, but is to be construed by the person skilled in the art in light of the common general knowledge at the priority date. Thirdly, the question is whether the disclosure enables the addressee of the specification to produce something within each claim without new inventions or additions or prolonged study of matters presenting additional difficulty. The High Court in Kimberly-Clark endorsed the following passage in Blanco White TA, Patents for Inventions (5th ed, Stevens & Sons, London 1983) at §4-502: To be proper and sufficient, the complete specification as a whole (that is, read together with the claims, and in light of the drawings, if any) must in the first place contain such instructions as will enable all those to whom the specification is addressed to produce something within each claim "by following the directions of the specification, without any new inventions or additions of their own" and without "prolonged study of matters which present some initial difficulty". (Footnotes omitted; see also Pfizer Overseas Pharmaceuticals v Eli Lilly & Co [2005] FCAFC 224; (2005) 225 ALR 416; (2005) 68 IPR 1 (Pfizer Overseas Pharmaceuticals v Eli Lilly) at [325]–[330] and Warner Lambert Co LLC v Apotex Pty Limited (No 2) [2018] FCAFC 26; (2018) 355 ALR 44 at [99]–[120].) 471 The following additional matters are also important. The fact that testing is necessary and the fact that the steps in the testing call for skill does not establish insufficiency where the steps are essentially routine for the skilled addressee. Routine is not used as a synonym for simple and easy. The skilled addressee may be highly qualified, both academically and in terms of practical experience. As Heerey J said in Eli Lilly & Co v Pfizer Overseas Pharmaceuticals [2005] FCA 67; (2005) 64 IPR 506 (at [193]): … It would not be necessary to employ such persons unless the task they had to perform was a difficult one. 472 In Apotex Pty Ltd v Warner-Lambert Co LLC (No 2) [2016] FCA 1238; (2016) 122 IPR 17 (Apotex v Warner-Lambert (No 2)), Nicholas J said (at [259]): The description of the invention will not be insufficient merely because the skilled addressee is expected to apply considerable skill, effort and resources to make it work. If the steps required to be taken to work the invention are readily apparent to the notional skilled addressee, and they are standard or routine steps within the competence of the notional skilled addressee, then the test for sufficiency will be satisfied. 473 As to the first matter concerning a functioning wake-up scheme, SARB, in its opening submissions summarised its submission as a failure to provide in the patents adequate details of the wake-up signal and, in particular, details of the transceiver and its features. 474 As to the second matter concerning an antenna, SARB, in its opening submissions, summarised its submission as a failure to provide any details of an antenna. 475 In addition to repeating the submissions it made in support of its case with respect to the best method requirement, SARB submitted that it was significant that Mr Spirovski, who had used many devices where the transceiver is intelligent and some of the functionality is performed by the transceiver, only learned about the ASTRX transceiver in the course of preparing to give oral evidence in the proceeding. Furthermore, Mr Harcourt said that, although he was aware of the fact that there were radio receivers that could wake themselves up and then wake up the main microcontroller only upon receipt of a valid signal from that HHU at the time he prepared his evidence, he was not aware of whether or not they were available in May 2004. Mr Harcourt's evidence was that the lack of disclosure in the specification meant that to make something within the scope of the claims, a skilled addressee would be required to make new inventions or additions, or engage in prolonged study of matters presenting initial difficulty. 476 VMS's submissions were as follows. 477 There are two aspects to SARB's lack of sufficiency argument and they are that the specification does not provide sufficient information to perform the claimed methods and systems in terms of communicating data from the DA using a functioning wake-up scheme and of the design of an appropriate antenna to reliably communicate from the DA. 478 In addition to the High Court's decision in Kimberly-Clark, VMS referred to Eli Lilly & Co v Pfizer Overseas Pharmaceuticals [2005] FCA 67; (2005) 218 ALR 408; (2005) 64 IPR 506 at [193], Pfizer Overseas Pharmaceuticals v Eli Lilly at [324]; Apotex v Warner-Lambert (No 2) at [236]; and Warner-Lambert Co LLC v Apotex Pty Limited (No 2) [2018] FCAFC 26; (2018) 355 ALR 44; (2018) 129 IPR 205 at [114]–[134]. 479 With respect to the adequacy of the disclosure of a method, system or apparatus which involves communicating data from the DA using a functioning wake-up scheme, VMS submitted, correctly in my view, that the starting point is the disclosure in the specifications and not the ASTRX transceiver. VMS referred to Figs 8 and 9 and, in particular, steps 850, 860 and 870 and the accompanying description in the specification of those steps. 480 The detailed description in relation to Fig 8 includes the following: (a) step 830 when the radio receiver was turned on; (b) step 840 which involves a wait period for the radio receiver to stabilise; (c) step 850 at which point the received RF signal strength (RSSI) is measured; (d) step 860 which involves a determination as to whether the signal strength of a detected RF carrier is larger than a defined threshold; (e) step 870 if an RF carrier of sufficient signal strength is detected, a determination is made as to whether the RF carrier relates to a DCA. 481 Mr Spirovski said that each of the steps between (and including) 810 to 850 of Fig 8 do not involve wake-up signals. Step 860 involves the detection of a radio signal which could be a wake-up signal or some other kind of radio signal. It is at step 870 that the radio signal is decoded and determined to be a wake-up signal. 482 Mr Spirovski expressed the opinion that the step of determining whether the detected RF carrier is a wake-up signal from the DCA at step 870 requires the DA to process the radio signal carried by the RF carrier and make determinations as follows: (1) whether the radio signal conforms to the relevant communications protocol for the system; (2) whether the radio signal is valid, that is to say, not corrupted; (3) whether the DA is identified as the destination of the radio signal; and (4) whether the radio signal is a wake-up signal or some other kind of communication. 483 Mr Spirovski said that he knew that the step of determining whether the received RF signal is a wake-up signal from a DCA, that is say, step 870 involves the underlying steps previously referred to above out of necessity. 484 Although Mr Harcourt was critical of the way in which wake-up signal was referred to in the specifications, he had no difficulty in understanding the specific sense in which it was used in the patent. He had no difficulty in understanding the wake-up scheme of the patents. 485 With respect to the claim of a lack of sufficiency in relation to the appropriate antenna to reliably communicate data from the DA, Mr Spirovski said that he did not expect to see information about antenna design in the patents because he did not understand them to be describing any advance or invention in radio or antenna technology. In Mr Spirovski's opinion, the disclosure of the transceiver used provides sufficient information for a person in his position to develop the product with an appropriate antenna. Furthermore, VMS submitted that even if the Court were to accept that hypothetical difficulties in a subterraneous environment were established on Mr Harcourt's evidence, the description in the specification will not be insufficient where the specification does not demonstrate that what it claims actually satisfies the object of the invention. Those particular matters go to utility which is not pleaded. 486 With respect to the first particular of insufficiency concerning a functioning wake-up scheme, Mr Harcourt in his evidence identified two main types of wake-up schemes used for the purpose of initiating communications between devices. 487 The first type is a polling scheme where the transceiver in the device to be "woken-up" simply "polls" or listens at regular intervals for a signal at a particular, predetermined frequency. If no signal is received at that frequency, the transceiver takes no action until the next interval. If a signal is received at the correct frequency, the microcontroller "wakes up" to determine if the signal is coming from a relevant device and, if so, responds by sending back a packet of data. 488 Mr Harcourt expresses the opinion that broadly speaking, this is how communications occur in the system described in the patents, save and except that the microcontroller in the IGU wakes itself up at regular intervals, instructs the radio receiver to listen for signals from the HHU and responds if it receives such a signal. 489 The second type is an externally triggered interrupt-driven scheme. In an interrupt-driven scheme, there is often an additional specific piece of hardware integrated into the radio receiver in the device to be "woken-up", called a received RF signal strength (RSSI) detection block. This is a separate component which runs constantly, but has an extremely low power budget, as its sole purpose is to listen for signals at the relevant frequency. If the RSSI detection block detects the relevant signal, it instructs the microcontroller to "wake-up" to determine if it is coming from the transmitting device. This allows the microcontroller to remain in sleep mode for long stretches of time, conserving its power. Mr Harcourt expresses the opinion that the system block diagram in Fig 2 in the patents supports his understanding that the system in the patents uses a polling scheme, not an interrupt-driven scheme by reason of the fact that it does not include an RSSI detection block, which is a necessary component of an interrupt-driven scheme. 490 Mr Harcourt expresses the opinion that the use of a polling scheme is an inefficient and impractical choice, particularly where the HHU is located in a quickly moving vehicle. Mr Harcourt considers that this is because there is only a small window within which to communicate with the HHU. This, in turn, means that the IGU is constantly "polling" which uses a lot of power and will affect battery life. Mr Harcourt considers that a polling scheme is also impractical and unnecessary in circumstances where, for the vast majority of the time, there would not be a HHU within communications range. 491 As I have said, Mr Harcourt considers that if the system described in the patents had been "successfully commercialised", it is likely a more sophisticated and efficient wake-up scheme would have been implemented. In the JER, Mr Harcourt expresses the opinion that there would be hidden complexity in implementation of the functioning wake-up scheme and that the detail in the minutia is "critical" and can create significant project risk in the implementation. In his evidence at the trial, Mr Harcourt agreed that he had no difficulty in understanding the term "wake-up signal" as used in the specifications and that he believed it was a label for the radio signal sent from the HHU to the detector unit. He agreed that the skilled addressee would understand that the term "wake-up signal" was used to indicate the presence of a DCA. Mr Harcourt said that in designing and making a system for detecting unauthorised vehicles as at May 2004, he would have employed an interrupt-driven wake-up scheme in which case he would have needed to include an RSSI detection block as an additional component of the radio receiver in the sensor. This would have allowed these sensors to remain in "sleep mode" for the majority of the time and only wake-up when a PDA came into range with the advantage in decrease in their power consumption and increasing their battery life. It seems to me, however, that the critical point is that Mr Harcourt had no difficulty in understanding the wake-up scheme described in the patents. 492 I accept the opinion of Mr Spirovski that Figs 8 and 9 of the patents and the accompanying discussion of those figures disclose the details of the wake-up scheme and, in particular, steps 850 (measure RF signal strength (RSSI)), 860 (RF carrier detected above threshold?) and 870 (data collection apparatus detected?). Mr Spirovski said that each of the steps at 810 to 850 of Fig 8 do not involve wake-up signals. Step 860 deals with the detection of a radio signal which could be a wake-up signal or other kind of radio signal. It is at 870 that the radio signal is decoded and determined to be a wake-up signal. 493 With respect to the second particular of insufficiency, for the reasons previously given in relation to the best method requirement, the evidence does not establish that the absence of a description of an antenna meant that the skilled addressee could not identify or design an appropriate antenna to reliably communicate from the subterraneous DA without new inventions or additions or prolonged study of matters presenting additional difficulty. The evidence of the experts establishes that the skilled addressee would know how to implement the invention described in the patents with a subterraneous DA using an antenna. As Mr Spirovski said, he would not expect to see information about antenna design in the patents because he did not understand the patents to be describing any advance or invention in radio or antenna technology. The disclosure of the transceiver used provides sufficient information for the development of a product with an appropriate antenna. 494 VMS makes a further submission if, contrary to their previous submissions, the Court was to accept that hypothetical difficulties in a subterraneous environment were established on Mr Harcourt's evidence. The submission is that the description in the specification will not be insufficient where the specification does not demonstrate that what it claims actually satisfies the object(s) of the invention, such as the detection of vehicle presence with a particular level of accuracy or efficiency. Those matters would go to utility which is not pleaded (see Aktiebolaget Hässle v Alphapharm Pty Ltd [2002] HCA 59; (2002) 212 CLR 411 (Alphapharm) at [208]). Dr Bodkin puts the matter thus in Patent Law in Australia (3rd ed, Lawbook Co, 2019) at [26360]: Nevertheless, the position appears to be that insufficiency will arise if there is a failure of the specification to instruct the skilled reader, equipped with the relevant common general knowledge, how to make anything that falls within the claim in question, whereas inutility may only arise as a live issue if there is no insufficiency. In other words, the question of inutility does not arise unless the patent is otherwise valid. In the circumstances, I do not need to address this submission. 495 The lack of sufficiency ground of invalidity is rejected. Lack of Entitlement 496 The starting point is s 15 of the Act which is in the following terms: 15 Who may be granted a patent? (1) Subject to this Act, a patent for an invention may only be granted to a person who: (a) is the inventor; or (b) would, on the grant of a patent for the invention, be entitled to have the patent assigned to the person; or (c) derives title to the invention from the inventor or a person mentioned in paragraph (b); or (d) is the legal representative of a deceased person mentioned in paragraph (a), (b) or (c). (2) A patent may be granted to a person whether or not he or she is an Australian citizen. The concept of "the inventor" is not defined in the Act. 497 A patent may be revoked on the ground that the patentee is not entitled to the patent (s 138(3)(a)). 498 The Raising the Bar Act amended the Act to include s 22A and s 138(4). Those sections are as follows: 22A A patent is not invalid merely because: (a) a patent, or a share in the patent, was granted to a person who was not entitled to it; or (b) the patent, or a share in the patent, was not granted to a person who was entitled to it. 138 … (4) A court must not make an order under subsection (3) on the ground that the patentee is not entitled to the patent unless the court is satisfied that, in all the circumstances, it is just and equitable to do so. 499 It is accepted by the parties that the operation of the transitional provisions mean in this case that s 138(4) and an order for revocation on the ground of lack of entitlement will not be made unless, in addition, the Court is satisfied that, in all the circumstances, it is just and equitable to do so (see AstraZeneca AB v Apotex Pty Ltd [2014] FCAFC 99; (2014) 226 FCR 324 (AstraZeneca v Apotex) at [182]–[183]). 500 The leading authority on the issue of whether there are joint inventors of an invention is Polwood Pty Ltd v Foxworth Pty Ltd [2008] FCAFC 9; (2008) 165 FCR 527 (Polwood). In that case, the Full Court said (at [33]–[35]): 33 The entitlement to the grant of a patent as the inventor is not determined by quantitative contribution. The role of joint inventors does not have to have been equal; it is qualitative rather than quantitative. It may involve joint contribution or independent contributions. The issue is whether the contribution was to the invention. What constitutes the invention can be determined from the particular patent specification which includes the claims. In some cases, evidence can assist. In some cases, the reduction of a concept to a working apparatus by a person may not be part of the invention, in other cases it may be. For example, the construction of an apparatus may involve no more than carrying out the instructions in the specification. This would not normally entitle that person to joint inventorship. On the other hand joint inventorship may arise where the invention is in the apparatus itself, or where the person constructing the apparatus contributed to a different or better working of it which is then described and claimed. 34 One criterion for inventorship may be to determine whether the person's contribution had a material effect on the final invention. It may be that an invention is made as part of a collaborative effort. In those circumstances, it would ordinarily follow that the collaborators are joint inventors of the product of the collaboration. In the present case, the subject of the patent application was not part of a continuing collaboration recognised as such by the parties. 35 To ascertain the inventor for the purposes of entitlement to the grant of the patent it is therefore necessary to determine the contributions to the invention described in the patent application. The claims may assist in that determination, bearing in mind that the claims may be to less than the totality of the invention. It may also be appropriate to investigate the contributions to the inventive steps giving rise to the invention. 501 Although there was a plea that Mr Crowhurst was the sole inventor, that case was not pursued in closing submissions. SARB's case was that Mr Welch and Mr Crowhurst were joint inventors of the invention. 502 The Full Court in Polwood (at [53]) approved the observations of Crennan J in JMVB Enterprises Pty Ltd v Camoflag Pty Ltd [2005] FCA 1474; (2005) 67 IPR 68 as follows (at [132]): Rights in an invention are determined by objectively assessing contributions to the invention, rather than an assessment of the inventiveness of respective contributions. If the final concept of the invention would not have come about without a particular person's involvement, then that person has entitlement to the invention. One must have regard to the invention as a whole, as well as the component parts and the relationship between the participants. The fact that the parties were in collaboration can be a major consideration: see Illuka Midwest Ltd v Wimmera Industrial Minerals Pty Ltd (2001) 55 IPR 140; Re Upham and Commissioner of Patents (1998) 28 AAR 276; Re Applications by CSIRO and Gilbert (1995) 31 IPR 67; Row Weeder Pty Ltd v Nielsen (1997) 39 IPR 400; Sunstrum & Payette v Boland (2003) 59 IPR 146. 503 SARB's case is that Mr Crowhurst's input in relation to the antenna and his work in testing the transceivers identified by Mr Welch and in developing a functioning system made a material contribution to the claimed invention. SARB submits that without Mr Crowhurst's work, the POD System would not have worked at all because the DA would have had no ability to communicate with the DCA. SARB put its entitlement case in terms of Mr Crowhurst transforming Mr Welch's concept into a working apparatus. 504 As I have said earlier, Mr Welch gave evidence that in or around the middle of 2003, he approached a Mr David Murrell at Braemac as he was seeking an electronics engineer with expertise in RF communications to work on, inter alia, the POD System. Mr Welch said that Focus was a small company with approximately four or five employees at the time and did not have the required expertise in-house. Mr Murrell was a field application engineer at Braemac. He recommended to Mr Welch Mr Crowhurst. Mr Murrell provided Mr Crowhurst's contact details to Mr Welch. 505 In May 2004, Mr Welch did not have any tertiary qualifications in electronic engineering or the design of RF communications. Nor did he have any experience or expertise in the design of RF communications. Mr Welch agreed that he needed an electronics engineer with RF communications expertise to build the RF communications components responsible for RF communication in the POD System and that he needed someone with Mr Crowhurst's experience to design and match an antenna that went with the transceiver that ultimately formed part of the POD System. 506 Mr Welch and Mr Crowhurst agreed the terms of the latter's engagement in terms of a shareholding in VMS and cash in December 2003. 507 Mr Crowhurst said that he worked on the entire design and not just the RF section. In other words, that also included all the other circuitry. He laid out all of the board and he said that he did not send in any instance any incomplete circuit boards. To the best of his recollection, in or about mid-February 2004, nobody else was working on schematics for this system for Mr Welch and all of the designs came from him. Mr Crowhurst designed and constructed the RF communications component without which the DA could not effectively communicate with the DCA. His work in designing and matching the antennae to the ASTRX transceiver enabled the DA to wirelessly communicate with the DCA. In his evidence on 25 November 2020, he claimed that the antenna was his design. 508 Mr Crowhurst drew a distinction between the POD System which was Mr Crowhurst's work. In terms of his work, Mr Crowhurst identified his work on the PCBs and the antenna design. The following passage appears in his cross-examination: So you are – accept that you would describe what you're doing here as being in support of your claims?---No. I haven't made any claims, Mr Cobden. So is it your evidence you've never described what you're doing here as being in support of your claims? Mr Cobden, this is my work, absolutely. Mr Welch may claim to period longer detection systems. This is quite different to that. The wheel is not a car. Is it your evidence that you have not described your participation in this court as being in support of your claims; is that your evidence?---I claim this is my work, Mr Cobden. So you are here in support of your claims. You agree with that?---Insofar as this is my work, absolutely. But in regards to this schematic, I don't know that it's the final one or the production … 509 SARB submits that there is no evidence that Mr Crowhurst assigned his rights to VMS. Mr Crowhurst claims ownership in the PCBs he developed. He recognises Mr Welch as the inventor of the concept of the POD System. The fact that he recognised Mr Welch as the inventor in the Shares Subscription Agreement is not to the point. The acknowledgement that Mr Welch came up with the concept of the "period long detection system" in December 2003 was not an assignment in respect of work done by Mr Crowhurst throughout 2004. It matters not if Mr Crowhurst is an inventor of the claimed invention that he may have once signed a document which described the situation differently. SARB submits that VMS has not identified any basis on which it would not be just and equitable to revoke the patents. 510 SARB has not established that Mr Crowhurst was an inventor of the invention disclosed in the patents for the reasons which follow. 511 The following three matters, although not conclusive, suggest that Mr Crowhurst was not an inventor of the invention. 512 First, until the trial in this proceeding, Mr Crowhurst has not claimed to be an inventor of the invention. On 23 December 2003, he signed an agreement, the Share Subscription Agreement, which contained an acknowledgment that the Period Longer Detection System, or POD System, was solely invented by Mr Welch. Mr Welch said, and I accept, that at no time since 2003 has Mr Crowhurst claimed to Mr Welch or, to Mr Welch's knowledge, any other person at VMS, that he is an inventor or had some entitlement to the patents or should have been named as an inventor in the patents. 513 Secondly, it is not entirely clear whether Mr Crowhurst is claiming to be an inventor of the invention in the patents. In cross-examination in response to a suggestion that he was giving evidence to advance his claims, he said he has no claims and he had not made any claims. He then seemed to draw a distinction between the POD System which he acknowledged was Mr Welch's work and the PCB. In the context of the annotated circuit board, he said that this was "his work" and "I claim my work". It may be that this factor is more relevant to the stage, if it be reached, of considering whether it is just and equitable to revoke the patents. 514 Thirdly, SARB's case as to what it alleges to be Mr Crowhurst's contribution which had a material effect on the final invention has changed from the point in time of its pleaded case to the point in time of its closing submissions. The pleaded case was in very general terms and did not expressly identify his contribution as relating to the features of the desired transceiver, the testing and design of the antenna, the making of the PCB and the testing of various transceivers identified by Mr Welch and in developing a functioning system. At the beginning of the trial, SARB's emphasis was on Mr Crowhurst's contribution in terms of the features of the desired transceiver and the testing and design of the antenna. In closing submissions, the case that Mr Crowhurst had made a material contribution to the invention by identifying the desired features of the transceiver and following that, Mr Welch had subsequently found the ASTRX2 transceiver was abandoned in the face of clear evidence from Mr Welch that he found the ASTRX2 transceiver before he had any contact with Mr Crowhurst. I have already referred to the significant effect this circumstance has on the weight I am prepared to place on Mr Crowhurst's evidence. VMS submitted that SARB's case on entitlement in closing submissions is that Mr Crowhurst made a material contribution to the claimed invention by reason his "input in relation to the antenna, and his work in testing the various transceivers identified by Mr Welch and in developing a functioning system" is outside SARB's pleaded case on entitlement. These matters are not expressly referred to in SARB's pleadings. However, I consider that the pleadings are wide enough to include them. In my opinion, the references in the pleadings in relation to both patents to Mr Welch not developing a radio transmitter which was capable of transmitting data relating to identified instances of overstay is wide enough to cover the matters SARB now advances. 515 A starting point which provides support for SARB's entitlement case is that Mr Welch and Focus/VMS needed an electronics engineer with RF communications expertise to build the RF communications component responsible for RF communication in the POD System and to design and match an antenna that went with the transceiver to be used in the POD System. Mr Welch agreed that Mr Crowhurst was engaged to design the antenna for the VDU and to create the schematics and layouts for the PCB for the VDU. However, that is only a starting point and it is necessary to go on to consider the nature of the work Mr Crowhurst actually carried out. 516 With respect to the design and matching of the antenna, for the reasons already given, that involved no more than the application of common general knowledge. Mr Crowhurst's handwritten notes show by reference also to the documents produced by Mr Welch that Mr Crowhurst's work with respect to the antenna commenced on 17 February 2004 and concluded in approximately April 2004. There was no change in the antenna circuit topology after early April 2004 and what was changing in March and April 2004 were the two component values at the far end of the receive antenna circuit and the three at the far end of the transmit antenna. The testing to obtain those values was carried out in accordance with ordinary practice and involved processes known to any competent RF engineer. It seems that Mr Crowhurst's work in this respect took in the order of four to eight weeks. 517 With respect to the PCB, the following should be noted. The components of the PCB, including the battery, magnetometer, microcontroller and transceiver and their interconnections, including circuitry, must be physically placed on the board. As Mr Welch said, at the time there was a specific electronics engineering design software program called "Protel" which was used to prepare "these types of schematics and layouts" and Mr Crowhurst used this software. The evidence establishes that Mr Crowhurst commenced work on the preparation and layouts of the PCB for the VDU in December 2003 and January 2004. Again, as Mr Welch said and I accept, Mr Crowhurst was only working on the RF communications component of the PCB for the VDU so he prepared the schematics and layouts of the other components of the PCB from information provided by Mr Welch and other individuals at Focus working on the other elements of the POD System. 518 Mr Welch produced the schematics and layouts for the VUD sent to him by Mr Crowhurst in 2004. It is apparent from those documents that there was little change in the RF components of the PCB schematics after 17 February 2004. In my opinion, Mr Crowhurst's work on the RF communications component of the PCB, which was completed within a relatively short period of time, was routine. 519 Mr Crowhurst made reference to preparing specifications for the in-ground functional testing which specified performance characteristics of the system. These specifications were written in 2005 so that "we could actually functionally test and deploy the units in a production capacity". As VMS submitted, this work has no bearing on the invention as all such products need to be tested. As Mr Crowhurst acknowledged, the matters listed in the specification are functions of the ASTRX2 transceiver and are to be found in the manufacturer's documentation (i.e., AMIS documentation). 520 As Polwood makes clear, the contribution of the claimed inventor must be to the invention and the notion of "but for" the contribution relates to the final concept of the invention. As VMS pointed out, a prototype will not work unless those working on it do their part, but that does not answer the entitlement issue. I do not consider that Mr Crowhurst by his work in relation to the antenna, testing in late 2003 early 2004 and in relation to the RF communications component of the PCB, made a material contribution to the invention or the inventive concept. His contribution was based on common general knowledge or was routine. 521 In the circumstances, it is unnecessary to consider whether it is just and equitable to revoke the patents. Other than asserting that Mr Crowhurst had not seen the later patents which set out the invention over which Mr Welch ultimately claimed ownership, SARB contented itself with a submission that VMS had not shown that it would not be just and equitable to revoke the patents. That is not sufficient to shift the onus, even the evidentiary onus, to VMS. The evidence from Mr Crowhurst is not clear. He knew that VMS in early May 2004 was filing an application for a provisional patent. In fact, he was involved in drafting it. He said he never saw the patent that was filed "so I never had opportunity to really inform him that it might be challenged". He then went on to say that Mr Welch was the one true inventor of the POD System as articulated in the agreement and that there is no argument "about who the inventor is". The fact is Mr Crowhurst made no claim to be an inventor for over 15 years and it has not been established by SARB that it would be just and equitable to revoke the patents even if an entitlement in Mr Crowhurst had been otherwise established. 522 The lack of entitlement ground of invalidity is rejected. Lack of Fair Basis (Both Patents) 523 SARB alleges that claims 1, 6–10 (to the extent they depend on claim 1) and claims 30–32 of the First Patent, and claims 1–25 and 27–29 of the Second Patent, are not fairly based on the matter in the specification in that in each case there is no real and reasonably clear disclosure in the specification of an invention which does not involve the use of wake-up signals. Section 40(3) of the Act is set out above. It provides, inter alia, that the claim or claims must be fairly based on the matter described in the specification. 524 The test for internal fair basis is whether there is a real and reasonably clear disclosure in the body of the specification of what is then claimed. In Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 58; (2004) 217 CLR 274 (Lockwood Security v Doric), the High Court said (at [69]): "Real and reasonably clear disclosure". Section 40(3) requires, in Fullagar J's words, "a real and reasonably clear disclosure." But those words, when used in connection with s 40(3), do not limit disclosures to preferred embodiments. "The circumstance that something is a requirement for the best method of performing an invention does not make it necessarily a requirement for all claims; likewise, the circumstance that material is part of the description of the invention does not mean that it must be included as an integer of each claim. Rather, the question is whether there is a real and reasonably clear disclosure in the body of the specification of what is then claimed, so that the alleged invention as claimed is broadly, that is to say in a general sense, described in the body of the specification." Fullagar J's phrase serves the function of compelling attention to the construction of the specification as a whole, putting aside particular parts which, although in isolation they might appear to point against the "real" disclosure, are in truth only loose or stray remarks. (Citations omitted.) 525 The other point made by the High Court in Lockwood Security v Doric, which is of present relevance, relates to the relevance of a consistory clause. A mere assertion in a consistory clause will not satisfy s 40(3) and that subsection will only be satisfied if the specification read as a whole corresponds with the consistory clause (Lockwood Security v Doric at [83] and [87]; see also AstraZeneca v Apotex at [417]–[419] per Besanko, Foster, Nicholas and Yates JJ). 526 SARB submits that the specification in the case of the First Patent when read as a whole does not disclose a vehicle detection system, method or apparatus in which the DA communicates with the DCA without the aid of wake-up signals and, in those circumstances, claims 1, 6–10 (to the extent they depend on claim 1) and claims 30–32 of the First Patent are not fairly based. In a similar vein, SARB submits that claims 1–25 and 27–29 of the Second Patent lack a fair basis, because there is no real and reasonably clear disclosure in the specification of an invention which does not use wake-up signals. SARB has not otherwise particularised this alleged ground of invalidity. 527 In my opinion, this ground of alleged invalidity must be rejected. My reasons for reaching that conclusion largely reflect an acceptance of the submissions made by VMS. 528 First, in VMS 2013, Yates J considered a materially similar ground in relation to claims 1, 3, 4 and 5 of the Innovation Patent. He rejected the ground for reasons which, in my respectful opinion, are cogent and correct. The passages in the Innovation Patent quoted at [38] and [39] of VMS 2013 appear, in substance, in the specification of both the First Patent and the Second Patent. The reasons his Honour rejected the ground of alleged invalidity were as follows (at [142]–[143]): 142 I do not accept the respondent's submission that claims 1, 3, 4 and 5 of the patent are not fairly based on the matter described in the complete specification because they are not limited to a method or apparatus using wake-up signals. There is no necessity, arising by dint of s 40(3) of the Act, for the claims to be so limited. I have identified a number of passages in the parent, grandparent and provisional specifications that describe the operation of detection apparatuses that do not require a wake-up signal for their operation. I have also identified the passages in those specifications which describe the particular significance of wake-up signals where the data collection apparatus is portable or mobile and not at a fixed location. All of these passages find corresponding expression in the complete specification. In this connection, I also refer to my summary of the invention described in the specification in [9] to [42] above. Additionally, the complete specification contains consistory statements supporting each of claims 1, 3 and 4. 143 The respondent sought to treat all these disclosures, individually and cumulatively, as mere stray phrases that do not truly describe the invention. I do not accept that contention. It is true that the complete specification refers on many occasions to the use of wake-up signals. However, on a fair reading of the specification, those references are directed principally to embodiments where a portable or mobile data collection apparatus is employed. This is not to say that wake-up signals cannot be used where the data collection apparatus is at a fixed location. But there is no need for wake-up signals when a data collection apparatus is at a fixed location. In my view, this is made clear by the complete specification itself, especially (but not exclusively) in the passages I have quoted in [38] and [39] above. The specification makes plain that the invention it describes is not one limited to embodiments involving a portable or mobile data collection apparatus. It also makes plain that the invention it describes includes embodiments that employ a persistent wide area network. The recognition in the specification that some embodiments of the invention have advantages that others do not – because, advantageously a portable or mobile data collection device can be used – does not mean that the other described embodiments cannot be claimed validly. 529 Secondly, the specification in the case of each patent contains disclosure of an invention that does not involve the use of wake-up signals by way of a consistory clause for each of the independent claims and there is nothing elsewhere in the specification that means the specification read as a whole does not correspond with the consistory clause (Lockwood Security v Doric at [91]; Bitech Engineering v Garth Living Pty Ltd [2010] FCAFC 75; (2010) 86 IPR 468 at [48]). 530 Thirdly, there are clearly embodiments of the invention which do not use wake-up signals. The embodiments shown in Figs 6 and 7 and the descriptions of those figures in the body of specification may not involve wake-up signals. Furthermore, one means of carrying out the invention which would not involve a wake-up signal is identified on p 13 of each patent as follows: A further advantage of inter-detection apparatus communications is that messages such as a parking overstay alert may be forwarded from parking space to parking space, for example, to a transmitter, repeater or data collection apparatus at the end of a street. 531 Finally, it is a relevant matter that the specification of each patent uses inclusive language. An example is found on p 13 of the specification as follows: Embodiments described include detection or monitoring apparatuses that can be woken-up repeatedly, but at irregular time intervals, depending on when a data collection apparatus is present. 532 Having regard to these matters, the lack of fair basis ground of invalidity is rejected. Lack of Inventive Step (Both Patents) 533 The relevant principles are not in dispute. 534 In order for a claimed invention to be a patentable invention it must involve an inventive step. There is a presumption of inventiveness unless the contrary is shown. Section 7(2) of the Act is in the following terms: For the purposes of this Act, an invention is to be taken to involve an inventive step when compared with the prior art base unless the invention would have been obvious to a person skilled in the relevant art in the light of the common general knowledge as it existed in the patent area before the priority date of the relevant claim, whether that knowledge is considered separately or together with the information mentioned in subsection (3). 535 In this case, the relevant information is common general knowledge and SARB does not rely on any prior art information of the type identified in s 7(3) of the Act. The priority date is 17 May 2004 (PD). 536 "Obvious" has been said to mean very plain and a "scintilla of invention" is sufficient to support the validity of a patent. An invention will involve an inventive step unless it is established that the person skilled in the art would have been led to the invention directly or as a matter of course. At the same time, the High Court has approved the observations of Lockhart J in RD Werner & Co Inc v Bailey Aluminium Products Pty Ltd (1989) 25 FCR 565; (1989) 13 IPR 513 that an invention involves "some difficulty overcome, some barrier crossed" (Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [No 2] [2007] HCA 21; (2007) 235 CLR 173 (Lockwood (No 2) at [51]–[52]). The onus is on the party challenging validity to establish a lack of inventive step (Firebelt Pty Ltd v Brambles Australia Ltd [2002] HCA 21; (2002) 76 ALJR 816; (2002) 188 ALR 280 at [31]; AstraZeneca AB v Apotex Pty Ltd [2015] HCA 30; (2015) 257 CLR 356 at [18] per French CJ). 537 In the case of a combination patent, it is the inventiveness of the combination as a whole which must be examined and it is not permissible to determine inventiveness by a piecemeal examination integer by integer (Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd [1980] HCA 9; (1980) 144 CLR 253; Alphapharm at [41] per Gleeson CJ, Gaudron, Gummow and Hayne JJ; Elconnex Pty Ltd v Gerard Industries Pty Ltd (1992) 25 IPR 173 per Lockhart J). 538 The Court must be alert to avoid the use of hindsight in assessing inventive step, particularly in the case of a claim for a combination involving an interaction of integers, some or all of which are well known (Alphapharm at [21]). 539 Secondary evidence such as the commercial success of the invention, the fact that the invention satisfied a long-felt want or need, the fact that others have tried to find a solution, but have failed, and the copying of the invention by commercial competitors may all be relevant to the Court's determination of whether the claimed invention involves an inventive step. As the High Court said in Lockwood (No 2) (at [116]), the importance of secondary evidence and its weight will vary from case to case and it will not necessarily be determinative. 540 The skills of the person skilled in the art (skilled addressee) will depend on the relevant art, in other words, the field of the invention. It is well established that the skilled addressee for the purposes of determining the inventive step issue may be a team of persons (ICI Chemicals & Polymers Ltd v Lubrizol Corp Inc [1999] FCA 345; (1999) 45 IPR 577 at [100] per Emmett J; Alphapharm at [30] per Gleeson CJ, Gaudron, Gummow and Hayne JJ; at [153] per Kirby J). There is a dispute in this case about the identity of the skilled addressee. 541 Common general knowledge is a narrower conception than public knowledge. The fact that information is publicly available and even widely circulated and widely read is not enough to make it common general knowledge. As Luxmoore J said in British Acoustic Films Ltd v Nettlefold Productions (1936) 53 RPC 221 (at 250): Such a piece of knowledge only becomes general knowledge when it is generally known and accepted without question by the bulk of those who are engaged in the particular art; in other words, when it becomes part of their common stock of knowledge relating to the art. 542 In Graham Hart (1971) Pty Ltd v SW Hart & Co Pty Ltd [1978] HCA 61; (1978) 141 CLR 305, Aickin J (with whom Barwick CJ agreed) said (at 329) that common general knowledge was: … part of the ordinary equipment of all persons engaged in the relevant art, i.e. part of their general background knowledge which they put to use in the exercise of that branch of industry or manufacture. 543 SARB adduced evidence from three witnesses in support of its lack of inventive step case. Mr Harcourt gave evidence on the topic and, as I have previously said, he has expertise in the field of electronics and communications engineering technologies. Mr Craig Hawkings has expertise in the field of parking enforcement obtained from working in the local government area for a number of years. Mr Thomas Stamp has expertise in the field of electronics and communications engineering technologies. 544 The fields of expertise of the witnesses may be divided into two broad categories. The first category consists of those witnesses who have expertise in the field of the existing methods of parking enforcement as at the PD and developments in the area of parking enforcement prior to that date. The second category consists of those witnesses who had various forms of expertise in the field of electronic engineering. 545 VMS adduced evidence from four witnesses in answer to SARB's lack of inventive step case. Mr Spirovski gave evidence on the issue and, as I have previously said, he has expertise in electrical engineering specialising in electronics design. Mr Jason Pieloor is a computer systems and software engineer. At the time he swore a statutory declaration in 2014, he had had approximately 18 years' experience in the field of product development and technology solutions for embedded platforms, primarily in the subscription and pay-per-view television industry. Mr Larry Schneider has expertise in parking management, operations, planning and technology. Mr Thomas Gladwin has expertise in parking enforcement obtained from working in the local government field for a number of years. 546 In its closing submissions, SARB referred to Mr Stamp as its lead witness in support of its lack of inventive step case. It submits that Mr Harcourt's evidence supports Mr Stamp's evidence. In closing submissions, counsel for SARB referred to Mr Harcourt's evidence "as supporting evidence rather than the primary evidence". I will approach SARB's inventive step case in that way and I will, in due course, explain why Mr Harcourt's evidence provides little or no support for SARB's case. 547 VMS submitted that there had been a shift in SARB's case with respect to the skills and expertise of the skilled addressee from a case of the skilled addressee having skills and expertise in parking enforcement as it was before and at the PD and parking enforcement technology to a case where the skilled addressee has expertise in parking enforcement technology. Whether that be so or not, it is clear that SARB advances a case of the skilled addressee having expertise in parking enforcement technology and does not include a skilled addressee with skills and expertise in parking enforcement before and at the PD other than, in the case of the latter, by way of providing background information about the nature of the problem to be solved. I will return to this issue later in these reasons. 548 The problems with existing methods of enforcing time limits in vehicle parking spaces were well known and part of the common general knowledge in the parking enforcement field before and at the PD. They are described in the background section of the specifications in each patent (see at [23] above). The witnesses with experience in parking enforcement before and at the PD gave evidence of the problems. 549 Mr Schneider is a self-employed consultant. Prior to 20 December 2019, he was employed by the Australian Road Research Board Group Limited (ARRB). He described ARRB as a leading provider of advisory and consultancy services to road agencies and public and private organisations, including local councils, state governments, airports, hospitals, shopping centres and universities. Mr Schneider made a statutory declaration on 11 September 2014 which was used by VMS in the opposition proceedings in the Australian Patents Office in 2014 brought by SARB. He was also engaged by VMS in 2018 to provide expert evidence in patent proceedings in this Court involving SARB and VMS (NSD 75 of 2018). 550 In his statutory declaration in 2014, Mr Schneider said that he was, at the time of the declaration, president of Parking Australia and a manager and principal consultant of ARRB. He had worked in the fields of private and public management and equipment in Australia, New Zealand and South Africa for about 28 years. He held Bachelor degrees in Commerce, Arts and Law. In January 2004, he began working as a senior business manager at ARRB and, in January 2008, he was promoted to the role of manager and principal consultant of Luxmoore, which was a wholly owned division of ARRB specialising in the provision of consultancy services to the parking industry. He described his role at ARRB since January 2004 as one of providing advisory and consultancy services in parking management, operations, planning and technology. 551 Mr Schneider commenced work for Wilson Parking in 1985 and he was a director from 1992. He said that after January 2004, when he started with the ARRB, he provided consultancy services to local councils. Mr Schneider said that chalking was the typical method of detecting overstay in unpaid parking spaces before May 2004. Chalking required officers to go twice to every parking space to detect an infringement and where chalking was used, drivers of the vehicles could avoid infringement by rubbing chalk marks off their tyres, or by rolling their car back or forwards to hide the chalk marks. These actions by vehicle owners meant that parking officers were not able to detect all infringements. Mr Schneider said that chalking was not a very efficient system and there was room for improvement in the enforcement of time limits for unpaid parking systems in May 2004. Mr Schneider considered that that view was widely appreciated by others in the parking industry. 552 Mr Tom Gladwin was, from early 2014 to 15 January 2021, the Local Laws Supervisor at Boroondara Council in the inner-eastern suburbs of Melbourne. Between May 1996 and October 2011, Mr Gladwin was the manager of Parking and Local Laws at the Maribyrnong City Council in the inner-western suburbs of Melbourne. The responsibilities of that position included the overall responsibility for managing council's parking operations and enforcement. Mr Gladwin swore an affidavit in the VMS 2013 proceedings on behalf of VMS and he made a statutory declaration on 9 September 2014 in the opposition proceedings in the Australian Patents Office. In his oral evidence, Mr Gladwin said that before his employment by the City of Maribyrnong and since 1974, he had worked for the City of Brunswick, the City of St Kilda and the Stonnington Council. 553 Mr Gladwin said that chalking was the primary means of enforcing time-limited unpaid parking before May 2004 and that he considered chalking as at May 2004, to be "cumbersome, inefficient, slow and expensive". He identified the disadvantages of chalking as follows: (1) the markings could be rubbed out; (2) the parking officer needed to visit parking spaces twice for each offence; and (3) there was a risk of accidents in the course of checking chalking marks and relatedly, there were occupational, health and safety risks and a risk of injuries to parking officers. Mr Gladwin agreed that by reason of these disadvantages, only a very small percentage of overstaying vehicles could be identified by using the chalking method. Mr Gladwin said that he was sufficiently frustrated with the difficulties that he spoke to parking technology service providers before May 2004. Mr Gladwin identified his view to those providers to the effect that "it must be possible to do something better than chalking". He spoke to Mr Welch. Mr Gladwin said that his view was widely shared amongst those persons he spoke to, that is to say, that there must be a better way to identify overstay and to enforce time-limited parking. A better way would enable councils to collect and store data that could be used for planning and management and would increase revenue. 554 Mr Hawkings was, at the time he gave evidence, a rugby operations manager. However, he had worked in local government for approximately 18 years between 1988 and 2006. He was employed by the Sutherland Shire Council between August 1999 and March 2002 as Manager – Community Law Enforcement Officer and by the Adelaide City Council between March 2002 and December 2006 as Manager – Parking and Information Officer. In his affidavit, he described his position at the Adelaide City Council as Team Leader, Regulatory Services. In this role, he was responsible for: (a) managing over 60 officers who enforced local government legislation and regulations, primarily relating to parking enforcement. I did not personally carry out parking enforcement duties in the field in my role; (b) directing public relations and crisis communications campaigns, including drafting press releases, primarily aimed at improving the perception of parking officers within the community, and so reducing instances of officers being abused and assaulted during the course of their duties; (c) devising short- and long-term action plans to address a range of municipal needs (some examples of which are discussed in paragraph 19 below); (d) preparing memos and reports to ACC on issues such as policing strategies, dealing with complaints, recommendations for enforcement and methods for increasing efficiencies, and statistical analyses on revenue versus expenditure; and (e) negotiating contractual agreements for projects on behalf of ACC (including contracts for software, hardware and other equipment for parking enforcement) and preparing budget documents for these projects to present to Council for their approval. These projects included the introduction of PDAs for parking officers, discussed further in paragraphs 102 to 109 below. 555 Mr Hawkings gave similar evidence to the other parking experts about the use of chalking in the period prior to May 2004 as a means of parking enforcement for timed on-street parking. He also identified the disadvantages of chalking in similar terms to the other witnesses. Mr Hawkings said that he considered it "inevitable" that all stages of the parking enforcement cycle would eventually become fully automated. He did not know how long it would be before that was the case. As I understood his evidence, the concept of fully automated in his mind did not exclude humans altogether and, in fact, he said that, in his view, a human should be involved at all times in the issuing of an infringement notice. 556 I turn now to summarise the common general knowledge as at the PD. The evidence establishes that before and at the PD, enforcement of unpaid but time-limited parking was primarily carried out using manual methods such as chalking. The enforcement of parking restrictions by chalking was not a very efficient system because officers needed to go twice to every parking space to detect an infringement and where chalking was used, drivers of the vehicles could avoid infringement by rubbing chalk mark off their tyres or by rolling their car back or forwards to hide chalk marks. In addition, an infringement may be missed by a parking officer because he or she did not return to the vehicle before it was driven away. There was room for improvement in the enforcement of time limits for unpaid parking systems in May 2004 and that that was widely appreciated by others in the industry. 557 One person in the field (Mr Gladwin) was so frustrated by the difficulties caused by chalking that he discussed them with a parking technology service provider in the early 2000's and before May 2004. He had a discussion with Mr Welch before May 2004. The view that it should be possible to come up with something better than chalking was a widely held view. However, there is no evidence that any person in the parking enforcement field knew what the solution might be or that before and at the PD any local council had engaged an engineer to design or create a product to address or overcome the inefficiencies of the chalking method. I note that in this context, Mr Gladwin said that he had regular interactions with representatives from other local councils and that he expected he would have become aware of the fact if a local council had engaged an engineer to design such a product. 558 Other methods of enforcing time limits in parking spaces before and at the PD were parking meters and there were three types of parking meter systems in use in user pay parking areas, being single space coin and multi-space "pay and display" and "multi-bay" systems. "Pay and display" parking ticket machines were typically installed on the side of the street and members of the public were required, upon parking their vehicle, to walk up to the ticket machine, pay a fee, obtain a ticket from the machine and display it on the dashboard of their vehicle. "Multi-bay" parking systems were also used for on-street parking. An electronic parking meter similar to a pay and display meter was installed for a series of numbered parking bays. Members of the public were required upon parking their vehicle, to walk up to the parking meter and pay a fee corresponding to the length of time they wished to park. The equipment used in this method was similar to the equipment for "pay and display" parking, save and except that the person parking their vehicle did not need to display a ticket. These conclusions as to the state of common general knowledge are based on the evidence of Messrs Schneider and Gladwin. 559 The evidence as to trends towards the use of technology and automation in the parking enforcement industry, by May 2004 was as follows. First, personal digital assistants, or PDAs, were competing with the Autocite handheld computer and replacing handwriting in carbon copy books for the issuing of parking infringement notices. Secondly, parking meter technology was improving and those improvements included the introduction of multi-bay machines, networked meters and payment by credit card. Thirdly, the integration of infringement data with council's back-office systems was becoming more streamlined. There were no sensors used in parking enforcement before and at the PD. Nor is there any evidence that any person working in the parking enforcement field knew or considered that sensors could be used as an alternative to chalking. Mr Gladwin said that it never occurred to him before Mr Welch approached the City of Maribyrnong and proposed the trial of the POD System that a sensor detection system could be used as an alternative to chalking. Mr Gladwin said that, to his knowledge, such a proposal in parking enforcement had not previously been put forward. Mr Schneider said that, to the best of his recollection, the earliest date upon which he became aware that companies or persons were using or investigating or developing the use of sensor devices in parking enforcement was in about late 2005 or 2006 when he heard about a system called "METERI" which was subject to trials in New Zealand. Mr Hawkings did not give evidence that he was aware of sensors before and at the PD or that sensors could be used in parking enforcement or in vehicle overstay detection. 560 There was evidence about the extent of automation in the parking enforcement field before and at the PD and the extent to which those with the common general knowledge in the field anticipated that that process would continue. I do not think at the end of the evidence that any clear picture emerged. 561 Mr Gladwin did not consider it inevitable that the identification of parked vehicles which had overstayed would eventually become fully automated. 562 By contrast, Mr Hawkings considered that it was inevitable that all stages of the parking enforcement cycle would eventually become fully automated. He did not know the timeframe over which this automation would occur. He was of this view because of the rapid rate of technological development, the uptake of technology in the second and third stages of parking enforcement, and the increased efficiency and cost savings from the use of technology in those stages. He also considered that councils were keen to introduce technology that functioned as a "one stop shop" combining multiple stages of a process into a single, streamlined process. Mr Hawkings expanded on these views in his oral evidence. He referred to the following: (1) the transition from written to typed infringement notices; (2) improvements in user interface and keyboard layout in the PDA over the Autocite device; and (3) the transition from manual parking meters with a dial to electronic parking meters with digital screens. 563 However, as VMS correctly pointed out, Mr Hawkings' examples were tied to improved efficiency, rather than the level of human intervention in the process of parking enforcement because in each case, a parking officer had to observe the vehicle or read the expiry sign on the meter to determine vehicle overstay. Mr Hawkings gave the following evidence: What did you mean by "fully automated"?---What I meant by "automated" there was it was a more efficient way of issued a parking infringement notice to an illegally parked motor vehicle. By moving away from the first stage of handwritten and the second stage of the Autocite to a technologically advanced device which would help the officer be a little bit more efficient, it would streamline the process and, in my opinion, become a fully automated system. I see. And so in your interpretation – to your understanding of automated and fully automated, is that a human is involved with the process. Is that correct?---That's correct. And it is my view in parking that a – that a human should be involved at all times in the issuing of an infringement notice. 564 I turn now to address the common general knowledge of sensors as at the PD. 565 Mr Pieloor, whose qualifications are described below (at [594]–[596]), said that, while he was aware that technologies such as sensors, timers, cameras and image processing software existed before May 2004, he was not aware that any of these technologies were used in Australia or elsewhere to enforce time restrictions in parking spaces. Any solution based on sensors, timers, cameras or image processing technologies would, to Mr Pieloor's knowledge, be a new enforcement method. More generally, he said that as at May 2004, he was aware of a broad range of sensing devices and of the principles of electrical engineering that governed their operation, including inductive sensors, capacitive sensors, infrared sensors (both time of flight and interruption), pressure sensors, video cameras, radar and ultrasonic sensors. Mr Pieloor referred to seeking to improve existing systems and methods in free or paid parking and, as an alternative, investigating different technologies, including the use of "sensors, timers, signalling and/or image processing and associated reporting and enforcement mechanisms". Mr Pieloor said that one of the sensors it may be possible to investigate was the use of an inductive loop sensor. 566 Mr Spirovski gave evidence of his knowledge of sensing transducer technology as at May 2004. In his experience, sensing transducers, like most technological components, generally became progressively cheaper, smaller, more accurate and reliable and more energy efficient over time as the technology improved. He said that that was the case well before 2004 and remained the case today. The components have been integrated or packaged into single chips or modules. Mr Spirovski was, in addition to the sensing transducers identified by Mr Harcourt (i.e., light/optical transducers, sound transducers, magnetic field transducers, accelerometers, temperature transducers and capacitive sensors), aware of hydrophones, electro-magnetic sensors (for example, pulse induction devices, as opposed to inductive loops) and thermal transducers. He was also aware of "light or optical transducers": cameras and other image sensors. As at May 2004, Mr Spirovski was aware of different types of magnetometers, for example, flux-gate magnetometers and Hall-effect sensors. The magnetometers of which Mr Spirovski was aware in May 2004 were "large and inefficient devices as compared to magneto resistive magnetometers". In Mr Spirovski's opinion, Hall-effect sensors were smaller, but not suitable to measure the earth's magnetic fields. As at May 2004, Mr Spirovski was not aware of compact low power magnetometers of the type used in the patents. Mr Spirovski said that he noted that a magnetometer measures magnetic fields and that some magnetometers can measure only a changing magnetic field (to be distinguished from a change in the magnetic field). Other magnetometers can measure both static and changing magnetic fields, for example, Hall-effect sensors, flux-gate magnetometers and magneto-resistive magnetometers. Mr Spirovski said that as at May 2004, he was aware that magnetic sensors could detect the magnetic field of an object, such as a ship. He first became aware of compact low power magnetometers in around 2006. He had not turned his mind, and he was not aware of the use of magnetometers to detect the presence of vehicles such as cars. He said that using a magnetometer in this way is an indirect way of sensing, in that it involves sensing a vehicle's disturbance of the earth's magnetic field as opposed to any measurement of the magnetic field of the vehicle. Mr Spirovski first became aware of compact magnetometers to detect the presence of vehicles like motor vehicles when he was engaged in the VMS 2013 proceeding. 567 Mr Spirovski explained in his oral evidence that as at May 2004, he was aware that magnetometers measure magnetic field, but he was not aware that a magnetometer could detect metal objects or that they were used to detect objects that influence magnetic fields. Mr Harcourt on the other hand, said that he agreed with Mr Spirovski that magnetometers are really detecting or measuring the earth's magnetic field, but the fact that the field would be distorted by pieces of metal, and particularly a large piece of metal like a vehicle, was obvious to him. 568 Mr Spirovski said that he was aware at the time he gave evidence that magnetometers of the type disclosed and claimed in the patents had been available since 1996. He said that if he had a design project in May 2004, it was his practice to consider new technologies and that one source of informing himself would be to explore existing products made by well-established manufacturers. Mr Spirovski would have considered a sensor-based solution to the problem in May 2004, but he would choose an RF mixing device or a pulse indicator device over other sensors. 569 Mr Stamp said that he was aware of magnetometers in 2004. However, his experience of them to that date was large scale, that is, around one metre in width or larger, devices for use in measuring variances in the earth's magnetic field in relation to geodetic events. He only became aware that magnetometers were available in a smaller size suitable for deployment in a system such as a parking overstay detection system as a result of his involvement in the opposition in the Patents Office. 570 Mr Harcourt was the only electronic engineer who was aware of smaller magnetometers at the PD. He had used a type of magnetometer called Hall-effect sensors before May 2004. He said that the Hall-effect sensor was installed next to a motor as part of a feedback loop. When the motor was moving, the sensor counted the pulses in the magnetic field lines of the motor to ensure it was moving as instructed and had not stalled. That did not relate to a project involving parking enforcement. Mr Harcourt gave the following evidence (at T636): MR COBDEN: And I just want to suggest to you that you didn't know of a magnetometer as at May 2004 that had been used to do the following things or recommended to do the following things: measure presence or absence of a vehicle from underground and small enough to be housed in a self-contained unit with battery power. MR HARCOURT: Look, I — I knew of them. I had not used them, but — but I had some — I had some knowledge. MR COBDEN: Thanks. MR HARCOURT: Just not detailed knowledge. 571 Mr Spirovski said that Hall-effect sensors not only do not measure the earth's magnetic field, they are typically designed to measure static fields and that they would not be suitable in any way in this application. Mr Harcourt said that Hall-effect sensors could well be suitable, but it would not be his preference although it could work. 572 With respect to magnetic sensors and inductive loop sensors, inductive proximity sensors and magnetometers were part of the common general knowledge before and at the PD. However, inductive loop sensors were not suitable for the type of application involved in the invention. As to inductive proximity sensors, I deal with the knowledge as to availability of these devices in connection with Mr Stamp's evidence. As to magnetometers, although an appropriate magnetometer in terms of size and suitability was available, I am not satisfied on the evidence that that availability was part of the common general knowledge. 573 I turn now to address the evidence of Mr Stamp who was, as I have said, SARB's lead witness on lack of inventive step. 574 Mr Stamp is a director of Blue Curve Group Pty Limited (Blue Curve) which he described as "a systems engineering and project management consulting company specialising in medical device and diagnostic device product development". 575 As I have said, Mr Stamp has specialised knowledge in the field of electronics and communications engineering technologies. He made two statutory declarations in 2014 in the opposition proceedings in the Australian Patents Office, one on 28 May 2014 and the other on 5 June 2014. The second statutory declaration was not read in this proceeding and I will refer to the first statutory declaration as simply "the statutory declaration". Mr Stamp prepared a 23 page report as part of his engagement in the opposition proceedings and that report was tendered in this proceeding. 576 Mr Stamp holds a Bachelor of Engineering (Electronic and Communications Engineering) with Honours from the Royal Melbourne Institute of Technology which he obtained in 1992. In the course of his undergraduate degree, he specialised in RF design, satellite communications and network engineering technologies. Mr Stamp has carried on business through Blue Curve since 2010. From July 2005 to August 2010, he was involved in projects relating to the design of diagnostic medical devices. As Mr Stamp himself says in his statutory declaration, since 2005 he has worked exclusively in the field of medical devices. 577 Mr Stamp described his employment from 1992 to 2005 in detail. Of relevance for present purposes, is that between April 2004 and July 2005, Mr Stamp was employed by Transol as a hardware manager. Transol was an Australian-based company which developed red light camera systems for detecting and issuing tickets for traffic violations with systems deployed mainly in the United States of America. As a hardware manager at Transol, Mr Stamp managed the manufacturing, testing and roll out of red light camera systems. He worked closely with a team of engineers and designers. Mr Stamp said that a company called Redflex was at the technological forefront in the field of red light detection systems. 578 The Transol system detected traffic violations using a video camera. The Redflex system was based on the use of inductive loop technology, which Mr Stamp described as using "a magnetic field to detect the presence of cars over a crossing and correlated that data with data relating to the status of the lights (that is, whether it was red or not)". Mr Stamp said that the inductive loops used by Redflex were placed in the surface of the road. 579 It is to be noted that Mr Stamp had one month's experience with Transol before the PD. 580 In 2014, Mr Stamp was asked by Monks IP to address a particular problem. The background to the problem is taken from the First Patent and is as follows: Demand for on-street parking spaces in today's modern cities often exceeds supply, which necessitates rationing of the parking resource by implementation of time restrictions. Parking time restrictions typically vary according to the competing needs and demands of a given area. Time restricted public parking spaces may require the payment of a fee or be free of charge. Parking meters or similar devices may be installed to collect fees. In any case, time limits are applied to parking spaces to ensure equitable sharing of access to a limited public resource to promote the interests of the community. Enforcement of time restrictions in public parking spaces is a central element of any effective parking management program. Effective parking management requires regular and consistent enforcement. However, existing methods for identifying vehicles that have exceeded a parking space's time limit are inefficient. For example, a traditional method of detecting vehicles that have exceeded a parking space's time limit is to manually place a chalk mark on a tyre of each of the vehicles parked in a specific zone and then return at an appropriate time to check if any of the vehicles with "chalked" tyres are still parked. Some of the disadvantages associated with this method are: • each parking space must be visited at least twice (usually on foot), • the two visits must be timed to match the time restriction plus any grace period allowed by the enforcement authority, • parking spaces within the same general area that have different time limits (e.g., 1-hour & 2-hour) must be enforced separately, and • The system can be defeated simply by either by rubbing off the chalk mark or moving a vehicle to a different parking space after a parking officer has "chalked" types of cars in a particular area. 581 The question Mr Stamp was asked to address was as follows: Assume you are provided with this background in May 2004. Using only the background knowledge you had at that date, and having regard only to the information you would regularly have considered at that date, can you think of a solution that would overcome or at least ameliorate the foregoing disadvantages? 582 Mr Stamp's report addresses that question. 583 Mr Stamp said that there were four options and each of them involved the use of sensors. He described the options in the following way: • A system where the parking space sensors are wired to a local site controller, and then potential violation information is transmitted to a central dispatch location, which communicates with a parking officer in the field and co-ordinates the enforcement response. • A system where the parking space sensors are wired to a local site controller, and then potential violation information is transmitted directly to a parking officer in the field who initiates the enforcement response. • A system where the parking space sensors are wirelessly connected to each other in a "daisy chain" and then wirelessly to a local site controller, which transmits potential violation information is [sic] directly to a parking officer in the field who initiates the enforcement response. • A system where the parking space sensors are wirelessly connected to each other in a "daisy chain" and there is no local site controller. Potential violations are determined within the sensor chain network itself and communicated directly to a parking officer in the field who initiates the enforcement response. 584 Mr Stamp favoured the last option because it involved the quickest, lowest cost installation in part because of the reduction or even elimination of the need to cable between sensors, and the lowest operating costs. 585 In para 11.2 of his report, Mr Stamp set out what he described as a general high-level solution architecture. He states that this provided an overview or summary of all the solutions considered possible. He said that the solution components shown in the Solution Diagram (para 11.3) may be included or excluded and combined in a number of ways to create "a specific parking detection and enforcement response architecture". 586 In terms of detectors or sensors, Mr Stamp identified five possibilities and they are as follows: (1) inductive loop sensor; (2) inductive proximity sensor; (3) ultrasound sensor; (4) optical/infrared detector; and (5) video or time-lapse camera. 587 Mr Stamp said that any of the sensors could be used in any number of combinations to detect the presence of vehicles in a particular set of parking spaces. He considered the inductive loop sensor and the inductive proximity sensor to be the most viable in terms of cost, ease of installation and specificity in detecting vehicles. As to the advantages and disadvantages of those two types of sensors, he said the following: [C] Inductive Loop – traditional road loop, as used for traffic light systems, cut into the surface of the parking spot. Uses an oscillating electromagnetic field to detect when large metallic body place above it – vehicle presence detection. Detects one vehicle space per sensor. Pros: Reasonable selectivity – not susceptible to false triggering. Cons: Large install cost – cutting in the loops to the road surface. [D] Inductive proximity sensor – detects presence of vehicle using an oscillating electromagnetic field. This is similar in principle to the inductive loop, but smaller to implement and potentially easier to install. Detects one vehicle space per sensor. Pros: Reasonable selectivity – not susceptible to false triggering. Low-Medium install cost – could be cut into the surface minimally, or even glued on top. Better install costs than inductive loops. Cons: May require specific implementation or tuning for this application to ensure adequate sensitivity – not considered a major issue. 588 Furthermore, Mr Stamp said that of these two sensors, the inductive proximity sensor would be the easiest to install and was most likely to involve lower costs. This means that it was the preferred sensor for most parking detection applications outlined in his report. 589 Mr Stamp then turned to consider transmission solutions and his solutions are set out in three figures which I reproduce below: 11.7. Localised Reporting Network – wired with central controller 11.8. Localised Reporting Network – wireless with central controller 11.9. Localised Reporting Network – wireless with no central controller 590 Mr Stamp identified the third transmission solution shown in para 11.9 as involving the quickest installation and at the lowest cost. 591 Mr Stamp addressed the power for the transmission solutions and, in relation to the solution shown in para 11.9, he states that the power for the sensor chain would be provided from inbuilt solar chargers in the sensors, or an inductive charging cable. 592 In response to a question from counsel for VMS suggesting that his report was influenced by knowledge he acquired after May 2004, Mr Stamp said the following: … my frame of mind coming into this was very much one of an engineering solution framework. So … I started by imagining a range of possible solutions and then classifying those into groups and then basically trying to explain how they might be realised in the real world as particular architectures. The efficiencies and drivers around each of those choices was mine to make and was based on my general knowledge of the – particularly based on my knowledge of designing and installing red light camera systems and having some sense, I think, of the economics related to installation and operation of systems in general. … 593 I have reached the conclusion that Mr Stamp's opinions do not establish that the invention described in the patents were obvious or very plain. Those opinions do not establish that the skilled addressee would be led directly or as a matter of course to the invention. Before setting out my reasons for reaching that conclusion, it is necessary to refer to evidence given by Mr Pieloor, Mr Harcourt and Mr Spirovski. 594 Mr Pieloor is employed at Sonartech ATLAS as a senior software engineer and that position involves providing leadership and technical expertise for embedded hardware and software development for sonar signal processing related products used in the defence sector. 595 Mr Pieloor was engaged by VMS in 2014 in the opposition proceeding before the Australian Patents Office. He made a statutory declaration in that proceeding on 11 September 2014. 596 In 2014, Mr Pieloor had had approximately 18 years' experience in the field of product development and technology solutions for embedded platforms, primarily in the subscription and pay-per-view television industry. At that time, he was employed as a solutions architect at Pace Australia, a business involved in the design and building of embedded hardware systems, including set top boxes and modem and router components. Mr Pieloor holds a Bachelor of Engineering majoring in Computer Systems from the University of Tasmania, a Doctor of Philosophy involving a thesis in the field of computer engineering, specifically in the area of performance analysis of queuing systems for telecommunications networks. Mr Pieloor completed a Master of Engineering Studies between January 2011 (part-time) and 2014. He described in his affidavit his employment between October 2005 and September 2014, including as a consultant software engineer, a software architect, a senior software engineer and a solutions architect. He also described his employment from 2016 in a contract role as a senior software engineer. 597 In his statutory declaration, Mr Pieloor addressed the problem which had been presented to Mr Stamp and he addressed Mr Stamp's response to the problem. He took a very different approach to that taken by Mr Stamp. 598 Mr Pieloor expresses the opinion that he would not have been directly led by the problem statement alone before May 2004 to try any particular approach as a matter of course and, in his opinion, nor would any other suitably qualified engineer. The decision to pursue any particular approach would have been heavily influenced by the parameters fixed by the client, a matter which is not addressed in the identification of the problem. Mr Pieloor said that in the context of a client seeking to improve the efficiency of its parking enforcement practices and, in particular, to overcome one or more disadvantages associated with chalking, the first step he would have taken would be to consult with the client to understand the problem from their perspective and to identify the specific goals and boundaries or limitations that apply to any solution. He identified the following questions as critical questions that he would ask: (1) how does the client measure efficiency in parking enforcement? (2) what level of improvement in efficiency is the client seeking? and (3) what cost is the client prepared to incur to achieve the desired level of improvement? Mr Pieloor considered that these questions would, in turn, require consideration of the following seven matters: (1) what are the client's budget constraints for capital costs and applicable operational and maintenance costs? (2) what are the client's personnel requirements and resources? (3) does the client have any other commercial requirements? (4) does the client have any governance, audit or reporting requirements? (5) what are the applicable regulatory limitations? (6) what are the scalability requirements, that is, the number and kind of parking spaces, the ease of adding more parking spaces, etc.? and (7) what level of accuracy of vehicle identification is required, that is, is a reduction in the number of false positives and false negatives desired and, if so, what level of reduction would be acceptable? 599 In considering possible solutions, Mr Pieloor said that in seeking to improve existing systems and methods in free or paid parking, a variety of different technologies could have been investigated to try and come up with new methods of enforcing time-limited parking. The technologies included the use of sensors, timers, signalling and/or image processing and associated reporting and enforcement mechanisms. He gave the following example: … it may have been possible to investigate the use of an inductive loop sensor together with a mechanical, electrical or digital timer and an indicator (such as a light or mechanical flag installed at the parking space, or an adjacent display board) to detect vehicle presence and indicate when a vehicle has been present for longer than the permitted duration. An inductive loop sensor uses a loop of wire or similar conductive material to generate a magnetic field and to measure how this field changes over time (such as when a vehicle enters or exits the sensing range of the loop). … 600 Mr Pieloor said that he was aware before May 2004 that inductive loop sensors were used for traffic light control. In Mr Pieloor's opinion, the costs involved in the research and development work needed to implement a sensor-based technology of this kind for the purpose of parking enforcement were likely to have been significant. 601 Mr Pieloor does not agree with Mr Stamp that he would have been directly led as a matter of course before May 2004 to try any of the solutions proposed in Mr Stamp's report. He provides a number of reasons in support of that opinion. The problems Mr Pieloor identifies mean that he would not have investigated any system of the kind proposed by Mr Stamp before May 2004 without first gaining a better understanding of a client's specific needs and constraints or limitations, and without giving appropriate consideration to whether a client's desired efficiency of improvement could be achieved by improving existing enforcement methods at substantially less cost and complexity. He said, by way of example, that he would conduct an analysis of whether providing patrollers with mopeds, electric bikes, golf carts or similar powered transport would be likely to increase the time efficiency of the chalking method by overcoming the disadvantage of officers having to visit each parking space "on foot". The provision of powered transport to officers would have had little associated research and development or infrastructure costs, given mopeds etc., were readily available commercially before May 2004. However, such equipment would have had additional capital and operational costs. Mr Pieloor said whether this approach would have improved efficiency to the required level at an acceptable cost, would again require investigation and consultation with the client. 602 Mr Pieloor has never worked in traffic enforcement and he did not know much about cost or time-efficient methods of parking enforcement. He has never considered work to improve parking efficiencies. He made it clear that, as far as the problem is concerned, the solution he would adopt would depend on the level of efficiency the enforcement authority wanted to achieve and at what cost. 603 SARB is correct to point out that despite Mr Pieloor's opinions as described above, he immediately identified that it would be possible to use sensors, timers, signalling and/or image processing and associated reporting and enforcement mechanisms. Mr Pieloor agreed in cross-examination that whether the use of an inductive loop sensor was an appropriate solution was, like the other solutions he proposes, dependent on the results required and the client's budget. Mr Pieloor acknowledged that he was and is not an expert in sensors. He was aware that inductive sensors were installed in groups in the ground, that is, subterraneously. He agreed that if he were to be engaged to undertake a task of determining appropriate sensors, he would have undertaken research to find the best sensor available in terms of costs and efficiency. That research would involve: Either calling vendors or doing some sort of trade study, or finding a suitably qualified expert and asking them directly. 604 He would be concerned about battery life and would direct his attention to efficient power operations for sensors. 605 Mr Pieloor said that a counter could be used instead of a time of day clock for a car space with a fixed one hour limit. Nevertheless, he accepted in cross-examination that a time of day clock may be required for circumstances where the parking limits change over time and possibly for enforcement purposes to issue an infringement notice. He was clear that a time of day clock would work. Mr Pieloor agreed that as an alternative to indicators to a parking officer that there has been an overstay of a vehicle by way of a light or a mechanical flag or a display board, another way of doing the same thing is by sending a message to a parking officer. He agreed and he said that he would have known that as at May 2004. In other words, he agreed that a digital means would work. 606 Mr Harcourt was asked to provide his opinion as to how he would have designed and made a system for detecting unauthorised vehicles as at May 2004. He first addressed the design of the sensor. He said that he would have chosen a sensor which had the following features: a magnetometer as the sensor transducer, an off-the-shelf processor, an off-the-shelf radio receiver and an antenna, and a non-rechargeable battery and a power supply block. With respect to his choice of a magnetometer, Mr Harcourt said that he would have chosen this as the sensor because magnetometers are effective at detecting large metal objects such as vehicles and that as at May 2004, they were relatively cheap, could be purchased off-the-shelf and were very small so they could be installed cheaply and easily without significantly disrupting the road surface. They are able to be fully buried protecting them from vandalism and general wear and tear whilst at the same time maintaining their functionality. 607 Mr Harcourt addressed the communications platform and said that he would have experimented with Bluetooth. If this was not successful, he would have attempted to develop a proprietary communications platform on another unlicensed UHF band and, if this also was not successful, he would have chosen a licensed UHF band. The communications platform would have been bi-directional for the reasons Mr Harcourt gave in his affidavit and which it is unnecessary for me to set out. The sensor would have been embedded in the ground. It would have been sealed in a rigid plastic enclosure to protect it during transportation and from the elements, including ground water, once installed. 608 With respect to the rest of the system, Mr Harcourt would have considered two different configurations as a matter of course, in the expectation that he would be able to develop a system using either configuration. He said that the choice of which option to implement would be a matter of design choice based on personal preference and the requirements of the client, particularly in relation to the client's appetite for risk and costs considerations. 609 The first option was one of fixed gateways (Option 1). Option 1 involved wire gateways fixed in place in permanent range of the various sensors they service. These gateways would be constantly awake and ready to receive wireless radio signals. The sensors would wake themselves up when they wanted to send a communication to the gateways. The base stations would either be wired to mains power or have a solar panel and a large enough battery that they could be constantly "awake" and ready to receive messages from the sensors. Communications would travel from the gateways to a back office system located on a server, either in a data centre or in the facilities of the company providing the service, using either the cellular network or a wired internet connection. The back office system would make determinations about various matters, including whether the vehicle had overstayed the allowable parking time limit for the relevant parking space. The back office system and parking officers on the street could interact with the latter using an off-the-shelf PDA, and the system could send notifications to alert the parking officers to overstaying vehicles through a beep or alarm. 610 Mr Harcourt said that the system comprising Option 1 is the system he would implement in the first instance because of the benefits he could see to using this approach. He identified some disadvantages with Option 1. He recognised the option would require the installation of substantial infrastructure and, therefore, it would involve significant costs. Mr Harcourt said that whilst he was of the view that Option 1 is likely to represent a better long term solution, he accepted that in practice, clients such as local councils would prefer to take an incremental approach to the adoption of new technology. 611 Mr Harcourt's second option involved mobile data terminals (Option 2). Parking officers would carry a PDA or similar type of device around with them as they walked or drove around the streets. The PDA would communicate with the sensors when it came within range of them and Mr Harcourt said he would employ an interrupt-driven "wake-up" scheme. This would allow the sensors to remain in "sleep mode" for the majority of the time and only wake up when a PDA came into range, thus decreasing their power consumption and increasing battery life. The sensors would send data to the PDA relating to vehicle presence or vehicle overstay and the PDA would be loaded with a custom application allowing the parking officer to view information received from the sensors on the screen of the PDA and decide what action to take. If the parking officer decided to issue a fine based on information received from the sensors, they would already be in place to do so. 612 Mr Harcourt outlined the advantages of Option 2 which included significantly fewer upfront installation costs than Option 1. He also identified the disadvantages of Option 2 which included the need to update multiple devices — either the PDA or the sensors — if the council changed the applicable parking time limits. 613 Mr Harcourt said that in the case of Option 2, either the sensors themselves or the PDA could determine vehicle overstay. The system would work using either option, so the decision of which of the options to implement is a matter of "design choice based on personal preference and the requirements of the client". In the case of his Option 2(a), the sensors determined vehicle overstay and in the case of his Option 2(b), the PDAs determined vehicle overstay. 614 Like Mr Stamp, Mr Harcourt performed an exercise whereby he compared the integers of the method, system and apparatus he described and the integers of a number of claims in the First Patent and a number of claims in the Second Patent. He did not address all the claims in the two patents. 615 I do not consider that I can place any significant weight on the evidence of Mr Harcourt for the reasons which follow. 616 First, in Mr Harcourt's case, there is a substantial risk of hindsight bias. Mr Harcourt was given the patents before he designed and made his system for detecting unauthorised vehicles as at May 2004. Furthermore, he was familiar with SARB's apparatus which is alleged to infringe the patents. In December 2010, Mr Harcourt commenced doing work for SARB for an initial period of nine months and then for a further three months. He provided advice to SARB in relation to the design of the hardware and firmware components of SARB's vehicle detection product. He was not involved in providing advice on all aspects of the system, but he knew that SARB's in-ground sensor unit was self-contained, battery operated and equipped with RF and antenna circuitry. He was aware that it was installed subterraneously and that the overall purpose of the product or system was the detection of vehicle overstay in car parking spaces. 617 Secondly, Mr Harcourt preferred Option 1 and said that this is the system he would seek to implement in the first instance. This was a matter upon which the experts were agreed. Mr Spirovski agreed that Mr Harcourt's Option 1 had the benefits that Mr Harcourt identified and that he would also choose to implement a centralised system in the first instance. Mr Spirovski identified what he considered to be the advantages of a centralised system. 618 The significance of Mr Harcourt's preference for Option 1 and Mr Spirovski's agreement with that opinion is that, as Mr Spirovski said, the design which Mr Harcourt develops as a result of his design process is different from the methods, systems and apparatus described and claimed in the patents, both in terms of the particular set of systems, functions to be supported and how the components are organised to support their functions. Although Mr Harcourt said that his Option 2 involved "significantly fewer upfront installation costs than Option 1", and was "more compatible with existing practices for determining vehicle overstay", he agreed that he was no more familiar with the issues facing councils in operating parking enforcement systems than the ordinary motorist or pedestrian. 619 Thirdly, there is force in Mr Spirovski's evidence questioning assumptions made by Mr Harcourt in addressing the problem put before him. As Mr Spirovski states, Mr Harcourt assumed that an "unauthorised vehicle" is a vehicle which has overstayed and that the system is for on-street parking. As Mr Spirovski said, those assumptions affect the range of options to be considered in designing and making a system for detecting unauthorised vehicles. 620 Mr Harcourt goes straight to a sensor-based solution and, in particular, a magnetometer. He described a magnetometer as a device which detects static magnetic fields and typically the earth's magnetic fields. It is to be contrasted with inductive loops which only measure changes in magnetic fields. Mr Harcourt expresses the opinion that magnetometers are commonly used to detect objects which influence magnetic fields, such as coils and large metal objects such as vehicles. Mr Harcourt used a type of magnetometer called Hall-effect sensors before May 2004, including in a project he worked on at Robert Bosch while he was a student. The project involved a Hall-effect sensor being installed next to a motor as part of a feedback loop. When the motor was moving, the sensor counted the pulses in the magnetic field lines of the motor to ensure it was moving as instructed and had not stalled. In his oral evidence, Mr Harcourt agreed that Hall-effect sensors were not suitable to measure the earth's magnetic field. Mr Spirovski agreed with this opinion and said that Hall-effect sensors would not be suitable in any way for "this application". 621 Mr Spirovski expressed the opinion that, as at May 2004, there were many alternative approaches which could have been investigated by someone designing a system for detecting unauthorised vehicles. He would not have immediately opted for a sensor-based solution. He considers that the installation of multiple sensors would be a more expensive choice than the option of improving or adapting existing systems involving the manual chalking method and PDAs. Mr Spirovski said that he would consider a sensor-based solution as one possible approach, but would not have considered a sensor-based solution as the only approach. A factor which would affect whether he would pursue a sensor-based solution would be the particular requirements of the system to be designed. Furthermore, he would not have immediately opted for any particular type of sensor and would not have immediately opted for a subterraneously installed device or sensor. Mr Spirovski also pointed out that there were other choices as at May 2004 to the use of UHF radio communications to communicate data from the sensors. He refers to infrared communications as another option available for wireless communications. Mr Spirovski comments that Mr Harcourt does not provide any reasons for selecting UHF radio communications over other forms of wireless communications available as at May 2004. 622 Mr Harcourt favoured a non-rechargeable battery, but as VMS pointed out, whilst that may be a sensible and logical choice to employ in the case of a sensor-based solution buried underground, there are other solutions to a sensor-based solution. 623 As I have said, Mr Harcourt performed a similar exercise to Mr Stamp in identifying the features of his system and comparing them to the integers in claims in the patents. As with Mr Stamp, that does not advance SARB's case unless his underlying opinions are accepted. It may also be noted, as VMS pointed out, that Mr Harcourt does not address claims 5, 9, 20, 25 or 27 of the First Patent and claims 5 and 21 of the Second Patent. In addition, in his claims charts, he relies on features in Option 2 of his design solution even though he expressed a preference for Option 1 and would have implemented that option first. 624 In my opinion, Mr Stamp's evidence does not establish that the invention lacked an inventive step for the following reasons considered as a whole. 625 First, it is necessary to consider Mr Stamp's skills and experience. Mr Stamp has skills and experience in wireless sensor networks, but he has never worked in designing a parking infringement system and he did not know what technology was used in that field. Whether it is correct to characterise Mr Stamp's work with red light camera systems for approximately one month before the PD as a related field and to recognise some knowledge he had of the Redflex system, Mr Stamp himself nevertheless accepts that he has had no experience in the field of parking enforcement technology. These matters are relevant to the weight to be given to Mr Stamp's evidence (E I Du Pont de Nemours & Co v ICI Chemicals & Polymers Limited [2005] FCA 892; (2005) 66 IPR 462 at [130] per Emmett J). 626 Secondly, Mr Stamp makes no reference is his report to common general knowledge in the field of parking enforcement. As I understand it, he is not put forward by SARB as part of a team with a member who has direct knowledge of parking enforcement methods and of the common general knowledge operating in that field before and at the PD. His expertise relevant to the problem is in wireless sensor networks and, although the problem did not direct him to a sensor-based solution, it is unsurprising, as VMS put it, that, in view of his expertise, he is led directly to a sensor-based solution. He gives no consideration, for example, to the other non sensor-based solutions or improvements to the existing methods identified by Mr Pieloor. None of the persons directly involved in the field of parking enforcement who gave evidence before me — Mr Schneider, Mr Gladwin and Mr Hawkings — gave evidence that as at the PD, they considered a sensor-based solution to overcome the existing problems. 627 Thirdly, it is unclear whether Mr Stamp limited his analysis to common general knowledge. His instructions invited him to have regard to (and only to have regard to) information he would have regularly considered (emphasis added) at the PD and in his evidence he said he had regard to his knowledge as a citizen and observations as a parking officer. Furthermore, his report indicates that he had some regard to material on the internet and it is unclear whether that material is part of the common general knowledge. 628 Fourthly, Mr Stamp's report is 23 pages in length and must have taken some time to prepare. Although the report identifies one architecture or solution to the problem as the quickest in installation time and, therefore, the lowest in terms of cost, and as involving the lowest operating costs, the report does present four architectures or solutions. In the case of the four architectures each involving a number of components, Mr Stamp advises that for some of these components, a number of interchangeable solutions are possible. The solution components for detection, transmission and response are variations and "may be included or excluded or combined in a number of ways to create a specific parking detection and enforcement response architecture". Mr Stamp advances five options for sensor devices which "could be used in any number of combinations to detect the presence of vehicles in any particular set of parking spaces" and he identifies two as the most viable in terms of cost, ease of installation and specificity in terms of detecting vehicles. Mr Stamp's inductive loops were large inductive loops cut into the road surface. As VMS pointed out, it is not clear to what extent the practice of covering the cut or hole with a bitumen or adhesive solution was a practice Mr Stamp observed in Australia as distinct from the United States. Mr Stamp had not considered whether the inductive loop might be contained in housing along with other elements of his system. An optical or infrared detection requires an optical path to a vehicle in order to work and, therefore, cannot be subterraneous. A video or time lapse camera could not be subterraneous and would need to be either beside the vehicle or have an overhead view of the vehicle. Mr Stamp's preferred option was of an inductive proximity sensor because of, inter alia, lower installation costs and the fact that it could be placed in a hardened, plastic dome enclosure and glued to the top of the road. In this context, it is worth noting the evidence of Mr Harcourt that he did not know of any person as at May 2004 using inductive loops of the type used to detect vehicles at traffic lights in a self-contained battery-powered unit and that was because, for mechanical and costs reasons, it was easier to follow the existing practice of burying the wire in the ground. 629 Fifthly, it is relevant to consider the process Mr Stamp went through before he reached his preferred solution. He identified four solutions and in his oral evidence, he said that as he worked through his report, it became apparent to him that there would be significant costs associated with the roadside installation of roadside controllers and it might be advantageous to have a system where there was no roadside controller required. Ultimately, he reached his preferred solution, having regard to low installation costs and low operating costs, but as Mr Pieloor pointed out, there are other relevant considerations for an electronics engineer such as the desired level of efficiency of parking enforcement to be achieved by the solution, the client's budget for installation costs and ongoing maintenance costs, the number and skill level of the client's personnel and resources, sealability requirements, whether the client has any governance or audit and reporting requirements and the level of accuracy in vehicle identification required. As Mr Pieloor said in cross-examination when it was put to him that cutting into the road was a "very expensive solution", the notion of very expensive certainly means non-trivial costs, but beyond that one would consider economies of scale and that cost as against the cost and value of the entire system. 630 The different perspectives of costs savings which may be taken by an electronics engineer in approaching the choice of a preferred system is illustrated by Mr Pieloor's evidence. He said that if he had been tasked with implementing one of Mr Stamp's solutions, he would have been led away from the fourth solution because he would have preferred centralising common hardware and logic at a local site controller and thereby minimising the amount of hardware at each sensor. He went on to express the opinion that installation and maintenance costs and the physical space requirements for the overall system could be reduced by co-locating common sensor hardware with other system components such as display boards, wireless transceivers and power supplies. 631 Sixthly, there are difficulties and uncertainties with Mr Stamp's solutions. For example, he said that in the case of battery-powered sensors, it may be necessary to conserve battery power by periodically operating the sensors, for example, for a short period once per minute. That particular example would not produce a reliable indicator of infringement because one vehicle may leave the parking space and another enter it in the intervening period. Another example is the provision of power to one of his two preferred sensors, the inductive loop sensor. These are large items which, when used in traffic light applications, cannot be powered by batteries. That is likely to be the case also in vehicle overstay detection and, as Mr Pieloor said if he was implementing Mr Stamp's solutions, he would examine whether or not a fixed or permanent power source could be used to provide power to the sensors. Finally and significantly, Mr Stamp's preferred sensor is the inductive proximity sensor and he said that they had been in place for many years in the industrial automation and control arena. He said that there were some longer range sensors that can detect at or beyond a distance of 100 mm. He did not know whether such sensors were available "off the shelf", but he expressed the view that if not, it would have been quite possible (to use his words) to take an inductive proximity sensor to detect something as large as a car at a range of 300–400 mm from the sensor. He explained in cross-examination that, although he did not know whether that was possible, "there were quite likely parts that could have done that but it would have required further research and selection to identify that". 632 Seventhly, Mr Stamp referred to his report as a report done at a concept design level and he identified the further research he would have carried out, including those with respect to sensors. He believes that he would have identified the magnetometer. I agree with VMS's submission that the evidence as a whole indicates that Mr Stamp's solutions required substantial further thought and experimentation and that gives rise to the possibility of trial and error, dead ends and the retracing of steps referred to by the High Court in Alphapharm at [58]. 633 Finally, there is a matter for noting. I say that because if Mr Stamp's earlier opinions do not carry the day, the exercise he carried out in 2014 of comparing his solution with the integers in the Second Patent and the similar exercise in 2020 in relation to the First Patent do not advance SARB's case. VMS pointed out certain difficulties with his analysis in any event. There is nothing in that part of his report describing the fourth solution which sets out Mr Stamp's opinion as to the preferred sensor. One has to go back earlier in the report to identify this and the earlier solution contains a statement that any of the sensors described could be used in any number of combinations to detect the presence of vehicles in a particular set of parking spaces. It also emerged from cross-examination that Mr Stamp did not state expressly in his report matters he assumed based on his knowledge. Furthermore, Mr Stamp admitted in cross-examination that there was no single place in his report where all of the integers in claim 1 of the Second Patent (a method claim) are set out. 634 Taking all of these matters into account, I am not satisfied that SARB has established that the invention disclosed lacks an inventive step. 635 The skilled addressee would include both an electronics engineer and a person with expertise and experience in the field of parking enforcement before and at the PD. The skilled addressee would consider a range of options in addressing the problem, including but not limited to, a sensor-based solution. The option chosen would involve a range of considerations, including costs (installation and operation), the degree of accuracy required and available alternatives. Even if the skilled addressee was led directly as a matter of course to a sensor-based solution, I am not satisfied that that would have led to the invention. I have set out my reasons for concluding that Mr Stamp's evidence does not establish that conclusion. I am not satisfied that the skilled addressee would have been led directly as a matter of course to a magnetometer or an inductive proximity sensor for the reasons I have given in the section dealing with common general knowledge and I am not satisfied that the skilled addressee would be led directly as a matter of course to the system which is the invention. 636 In addition to these matters, this is a case in which secondary considerations are significant. 637 The invention disclosed and claimed represented a solution to a long-felt want of overcoming the drawbacks of chalking which had existed since at least the mid-1970's and which involved missed enforcement opportunities, revenue opportunities and a reduction in the availability of on-street parking for the general public. 638 The introduction of VMS's POD System in 2005, which is an embodiment of the patents, resulted in a paradigm shift. As Mr Gladwin said, the POD System was so effective at the City of Maribyrnong that the workers' union for parking officers regarded it as a threat to the workforce. At the time the system was introduced to the City of Maribyrnong, it generated a great deal of interest from local councils. Since the POD System was introduced in the City of Maribyrnong, Wilson Parking Technologies and SARB have also released sensor detection systems on the market and market their systems in competition with VMS as an alternative to chalking. Mr Hawkings said that he reported back to the Adelaide City Council on the POD System because it struck him as new technology at the time. He considered it to be innovative. He did not pursue it because of his policy at the time of waiting to see whether new developments were accepted. 639 The lack of inventive step ground of invalidity is rejected. False Suggestion and Misrepresentation (Both Patents) 640 A patent, or claims in a patent, may be revoked if the patent, or the claims in the patent, were obtained by fraud, false suggestion or misrepresentation. Fraud is not alleged by SARB in this case and this ground of invalidity is based on false suggestion or misrepresentation. 641 I have held that claims 21–23 and 28–29 and the omnibus claims (30–32) of the First Patent extend to methods, apparatuses and systems whereby vehicle overstay is determined either in the DA or the DCA. In the event that the Court reaches that conclusion, SARB contends that those claims were obtained by false suggestion or misrepresentation. 642 There is no evidence that the Commissioner of Patents has complained or complains of the conduct identified by SARB and neither the Commissioner nor her delegate gave evidence in this proceeding. 643 SARB's case is that the alleged false suggestion or misrepresentation was made in 2007 by VMS's Patent Attorneys, Spruson & Ferguson, in connection with the process of examination by IP Australia of application no 2005243110 and in response to novelty and inventive step objections raised by IP Australia, having regard to WO 2002/06,3570 A2 (VEHICLESENSE, INC.) (D1). 644 The following background is relevant to this ground. US Patent Application No 10/072,808 (Howard 1) published on 15 August 2002 and D1 are based on the same US provisional application 60/267,059 filed on 7 February 2001 and contain the same disclosure. 645 Howard 1 was part of SARB's pleaded lack of novelty case in this proceeding and was also advanced as part of (either common general knowledge or information failing within s 7(3) of the Act) SARB's pleaded lack of inventive step case in this proceeding. SARB has abandoned its novelty case and did not place any reliance on Howard 1 in its inventive step case. As I understand one submission made by VMS, it is that SARB must be taken to have accepted that by abandoning reliance on Howard 1 and, therefore, D1 which contains the same disclosure, there was and is no lawful objection to the First Patent on the basis of D1 and that, in those circumstances, whatever its Patent Attorneys said to IP Australia was and is immaterial. The submission is that it cannot be shown as a matter of fact that anything said by VMS's Patent Attorneys to IP Australia was a material inducing factor in the obtaining of the patent by VMS. Another way the submission was put was to say that if there was a representation, it was that the claimed invention was novel and involved an inventive step compared with D1 and that bearing in mind D1 and Howard involve the same disclosure and reliance on Howard 1 has been abandoned, the representation has not been shown to be false. For reasons which follow, I do not need to decide if this submission is correct. 646 The relevant communications between Spruson & Ferguson and IP Australia during the examination process were as follows. 647 On 16 February 2007, IP Australia advised Spruson & Ferguson in writing that the application had been examined and it had been determined that there were lawful grounds for objection to the application. Those grounds included a ground that claims 1, 2, 7, 9, 11, 12, 14–16, 19–22 and 24–27 were not novel and did not involve an inventive step, having regard to the prior art document which was D1. 648 On 24 May 2007, Spruson & Ferguson responded to IP Australia by claiming that the claimed invention was novel and involved an inventive step when compared to D1 because in the case of D1, parking violations are identified by wireless sensors in conjunction with a central computer, server or network whereas in the case of the claimed invention: … instances of overstay violation are determined solely by the subterraneous detection apparatus. That is, no central computer, service, network or any above-ground apparatus is needed to identify violations as instances of overstay. 649 On 7 June 2007, IP Australia provided a second examination report to Spruson & Ferguson with respect to the application. The report stated that the invention defined in claims 1, 2, 7, 9, 11, 12, 14, 19֪–22 and 24–27 was not novel and lacks an inventive step compared with the prior art document D1 "for the same reasons as given in the first report". 650 On 2 October 2007, Spruson & Ferguson responded to the second examination report and asserted that the claimed invention was novel and involved an inventive step and asserted that "the subterraneous detection apparatus of the claimed invention is battery-powered and wirelessly transmits data relating to identified instances of parking overstay" and the cited reference fails to disclose, or even suggest, that an overstay duration of a vehicle in a parking space is determined and stored by a subterraneous DA. 651 On 8 November 2007, IP Australia provided a third examination report in which it no longer advanced an objection to the application on the basis of a lack of novelty or inventive step. 652 On 16 November 2007, IP Australia advised Spruson & Ferguson that the application and complete specification were accepted and, on 13 March 2008, IP Australia advised Spruson & Ferguson that a patent had been granted in respect of the application. 653 SARB contends that but for the representations made by Spruson & Ferguson in their responses to IP Australia dated 24 May 2007 and 2 October 2007 respectively, IP Australia would not have accepted application no 2005243110. 654 The authorities which deal with the ground that a patent or claims in a patent have been obtained by false suggestion or misrepresentation include Re Alsop's Patent [1907] 24 RPC 733; Prestige Group (Aust) Pty Ltd v Dart Industries Inc (1990) 26 FCR 197; Ranbaxy Australia Pty Ltd v Warner-Lambert Co LLC [2008] FCAFC 82; (2008) 77 IPR 449 (Ranbaxy); ICI Chemicals & Polymers Ltd v Lubrizol Corporation Inc [2000] FCA 1349; (2000) 106 FCR 214 (ICI Chemicals); and Apotex Pty Ltd v ICOS Corporation (No 3) [2018] FCA 1204; (2018) 135 IPR 13. It will be sufficient for me to refer to Ranbaxy and ICI Chemicals. 655 The "but for" test is not the test of causation in this area of the law. It is sufficient if the suggestion or representation materially contributed to the Commissioner's decision to grant the patent, or was a material inducing factor leading to the grant (Ranbaxy at [82]). 656 The position taken by the Commissioner is relevant in considering this ground of invalidity. In Ranbaxy, the Court said (at [83]): Bearing in mind that the grant of a patent is a right in rem, the Commissioner could be expected to take a position if a misrepresentation did in fact play a part in the decision to grant a patent and it is a relevant factor that the Commissioner chooses not to give evidence (ICI Chemicals & Polymers Limited v The Lubrizol Corporation Inc (2000) 106 FCR 214 at 244-245). In the absence of such evidence, it is for the Court to make a finding, based on the evidence before it. In the absence of explicit evidence that the Commissioner, or the Commissioner's delegate, was in fact misled, it may nevertheless be inferred that a representation in fact contributed to the decision to grant a patent, if the representation was objectively likely to contribute to such a decision and the patent was in fact granted (see Synthetic Turf Development Pty Limited v Sports Technology International Pty Limited [2004] FCA 1179 at [2], and WM Wrigley Jr Co v Cadbury Schweppes Pty Limited (2005) 66 IPR 298 at 321). 657 Assuming fraud is not present and, as I have said, fraud is not alleged in this case, it is not sufficient to make out the ground of false suggestion or misrepresentation to prove simply that a false suggestion or misleading statement was made and nothing else. The Full Court made this clear in Ranbaxy in the following passages (at [135]–[137]): 135 The ground of false suggestion or misrepresentation must involve some misleading or deception of the Commissioner or the Commissioner's delegate, being the person who makes the grant. To establish the ground, there must be a finding that the Commissioner or the Commissioner's delegate was in some way misled or deceived by the suggestion or representation in question and that being so misled or deceived contributed to or caused the decision to grant the patent. 136 The Commissioner was a party to the proceeding but took no substantive part in the proceeding. The Commissioner may have taken the view that Ranbaxy was prosecuting the alleged grounds of invalidity with sufficient vigour for the Commissioner not to be involved. Ranbaxy adduced no evidence as to the way in which the alleged false suggestions or misrepresentations operated on the decision making process of the Commissioner. Where it is alleged that a patent was obtained on or by false suggestion or misrepresentation, it is relevant, although not decisive, that the Commissioner has made no complaint about being misled or deceived. 137 In the absence of an allegation of fraud, which involves an examination of the state of mind of the patent applicant, it is not sufficient to make out the ground of false suggestion or misrepresentation to prove simply that a false or misleading statement was made and nothing else. That is to say, even if a suggestion or representation is shown to be false or misleading, that, of itself, is not sufficient reason to draw an inference that the suggestion or representation contributed to the decision to grant the patent. 658 A submission about the meaning and effect of a piece of prior art will not necessarily involve a false suggestion or misrepresentation even where it transpires that it was wrong unless, it seems, it can be said that there was no basis for the submission (ICI Chemicals at [91]). 659 The Court in ICI Chemicals made it clear that where good faith is not in issue, it is inappropriate to apply a presumption that the misrepresentation actually misled. The Court said (at [92]): … We think it is relevant also to bear in mind that the examiner must be taken to have become thoroughly familiar with the specification and claims the subject of Lubrizol's application; the examiner should also be taken to have become familiar with at least the abstract but, we should think, more likely the complete specification, of the Japanese patent. A reaction more likely, we should think, than immediate acceptance of what was said on Lubrizol's behalf was a further consideration, by the examiner, of both. After all, where good faith is not in issue it is inappropriate to apply any presumption that the misrepresentation actually misled. … 660 The onus is on SARB to establish this ground of invalidity. Even if it be assumed that there was a false suggestion or misrepresentation, there is no presumption that the Commissioner was misled. It is true that a sufficient causal link may be inferred if the representation was objectively likely to contribute to the grant of the patent and the patent was, in fact, granted. However, I am not satisfied that in this case an inference of a sufficient causal link should be drawn, having regard to the course of the correspondence. For example, as VMS pointed out in its written submissions, there were a number of bases upon which the objections to the First Patent did not succeed, not just the scope of claims 21–23 and 28–32. The Spruson & Ferguson letter of 24 May 2007 focussed primarily on claims 1, 5, 10, 11, 15, 16 and 26 and the letter of 2 October 2007 focused primarily on claims 1, 10 and 11. 661 The false suggestion and misrepresentation ground of invalidity is rejected. Claims 21–23 and 28–32 of the First Patent lack clarity and fail to define the invention 662 SARB's case is that if claims 21–23 and 28–32 in the First Patent encompass a system, apparatus or method which does not require the DA to make the overstay determination, then the claims are not clear and do not define the invention because they do not set out how the identification of overstay is to be determined. Section 40(3) provides, inter alia, that claims in a complete specification must be clear and s 40(2)(b) provides that the claim or claims must define the invention. 663 SARB pleaded an additional ground of lack of clarity in relation to claim 29 and that related to the reference in the claim to a wake-up signal, but that ground was not pursued in closing submissions. 664 SARB submits that it is common ground between the experts that the specification provides no information about how the identification of overstay is to be determined. For example, Mr Harcourt said that the difficulty with overstay being determined by or in the DCA is that this possibility "is not discussed or described anywhere else, and there is insufficient information about how a system configured in this way works". For his part, although Mr Spirovski stated in his oral evidence that the DCA would make the decisions in exactly the same way as the DA using the same equations, he agreed that there was "no discursive account of how that might be done using the data collection apparatus". 665 SARB submits that insofar as VMS relies on the omnibus claims which use the words "substantially as herein described", they will generally be restricted to the preferred embodiment or an embodiment substantially the same as the preferred embodiment and that difficulties in meeting the requirement of clarity may arise where more than one preferred embodiment is described in the specification (Britax Childcare v Infa-Secure at [29] and [31]). 666 It is important to remember that a lack of clarity is concerned with the certainty surrounding the scope of the monopoly claimed. A skilled addressee must be able to ascertain whether what he or she proposes to do falls within the ambit of the relevant claim. There is a further relevant point and that is that a claim will not fail for lack of clarity if it identifies a workable standard suitable to the intended use. I am unable to see how it can be said the claims lack clarity. Once construed in the manner I have described, there would be no difficulty for the skilled addressee to understand the boundaries of the claims. 667 A similar conclusion follows in the case of the ground of alleged invalidity that the claims do not define the invention. In General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457, the Court of Appeal said (at 515–516): It is clear in our judgment that the question whether the patentee has sufficiently defined the scope of his claims is to be considered in relation to the facts of each case, that allowance is to be made for any difficulties to which the circumstances give rise, and that all that is required of the patentee is to give as clear a definition as the subject matter admits of. It is also clear in our judgment that, while the court is to have regard to all the relevant facts, the issue of definition is to be considered as a practical matter and little weight is to be given to puzzles set out at the edge of the claim which would not as a practical matter cause difficulty to a manufacturer wishing to satisfy himself that he is not infringing the patent. We accept also that definition of the scope of a claim is not necessarily insufficient because cases may arise in which it is difficult to decide whether there has been infringement or not provided the question can be formulated which the court has to answer in deciding the issue of infringement. 668 A lack of definition will not be established unless a claim is "incapable of resolution by a skilled addressee by the application of common sense and common knowledge" (Innovative Agriculture Products Pty Ltd v Cranshaw (1996) 35 IPR 643 at 666; PhotoCure ASA v Queen's University at Kingston [2005] FCA 344; (2005) 216 ALR 41; (2005) 64 IPR 314 at [117] per Merkel J). In my opinion, that cannot be said of the claims in this case. 669 The lack of clarity and lack of definition grounds of invalidity are rejected. Conclusions 670 The principal conclusions with respect to the infringement issues in this case are as follows: (1) The PinForce Version 1 (and PinForce Version 2) infringes claims 2, 3, 4, 5, 11, 12, 13, 21, 22, 28 and 29 of the First Patent and claim 26 of the Second Patent and the contention by the first respondent that PinForce Version 1 does not involve the use of a wake-up signal or provide for data to be transmitted when a DCA is detected is rejected; (2) Claim 21 of the First Patent includes a system in which vehicle overstay is determined by the DCA; (3) The acts of service, maintenance, firmware upgrade and/or other assistance do not give rise to liability, assuming as I take to be the case, those acts were performed pursuant to lawfully binding contracts entered into before the beginning of the limitation period because there would be no power to prevent the use and no procuring, inducing or acting in concert in the relevant sense; (4) (a) With respect to the applicant's claim for additional damages against the first respondent, an award of additional damages is justified with respect to infringements after the decision in VMS 2013, but only insofar as the infringements involve PinForce Version 1 and PinForce Version 2; and (b) With respect to the applicant's claim for additional damages against the second respondent, the claim is dismissed. These conclusions must be read in the context of these reasons and be reflected in the orders to be made. 671 The first respondent/cross-claimant's cross-claim is to be dismissed. 672 The applicant is to bring in draft minutes of order reflecting the conclusions in these reasons. I will then hear from the parties as to the terms of the orders. I certify that the preceding six hundred and seventy-two (672) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Besanko. Associate: Dated: 8 March 2023	99,829
federal_court_of_australia:fca/single/2008/2008fca1254	decision	commonwealth	federal_court_of_australia	text/html	2008-08-11 00:00:00	SZMAG v Minister for Immigration and Citizenship [2008] FCA 1254	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2008/2008fca1254	2024-09-13T22:45:10.368509+10:00	FEDERAL COURT OF AUSTRALIA SZMAG vMinister for Immigration and Citizenship [2008] FCA 1254 SZMAG v MINISTER FOR IMMIGRATION AND CITIZENSHIP and REFUGEE REVIEW TRIBUNAL NSD 743 of 2008 MOORE J 11 AUGUST 2008 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 743 of 2008 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: SZMAG Appellant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent REFUGEE REVIEW TRIBUNAL Second Respondent JUDGE: MOORE J DATE OF ORDER: 11 AUGUST 2008 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The appeal be dismissed with costs, fixed in the sum of $2,200. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 743 of 2008 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: SZMAG Appellant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP First Respondent REFUGEE REVIEW TRIBUNAL Second Respondent JUDGE: MOORE J DATE: 11 AUGUST 2008 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an appeal from a judgment of a Federal Magistrate of 6 May 2008: SZMAG v Minister For Immigration & Anor [2008] FMCA 599 in which the Federal Magistrate dismissed an application for judicial review of a decision of the Refugee Review Tribunal of 22 January 2008. In that decision the Tribunal affirmed the decision of a delegate of the Minister not to grant the applicant a protection visa. 2 The appellant is a citizen of Bangladesh. His claims for a protection visa were substantially founded on his membership of the Jatiya Party and the probability that he would be targeted by the Purbo Bangla Sarbahara Party. 3 The Tribunal accepted that the appellant was a member of the Jatiya Party, but concluded that he was, at most, a most minor functionary in that party. It concluded that he would not be the subject of persecutory conduct by members of the Sarbahara Party, and ultimately concluded that the appellant did not have a well-founded fear of persecution by reason of his political opinion. The Tribunal went on to consider, probably unnecessarily, the question of whether the appellant could relocate in Bangladesh and concluded that he could. 4 In this appeal the appellant again raises the three grounds upon which he sought to challenge the Tribunal's decision in the Federal Magistrates Court. The grounds were: (1) The Tribunal had acted in bad faith; (2) The Tribunal failed to consider the reasonableness of the appellant's relocating in Bangladesh; and (3) The Tribunal had failed to properly or adequately consider the material furnished by the appellant, which according to the appellant, demonstrated that he did have a well-founded fear of persecution. 5 The Federal Magistrate rejected each of these grounds and I can discern no error in approach adopted by the learned Federal Magistrate. Accordingly, the appellant has failed to establish any error on the part of the Federal Magistrate and the appeal should be dismissed with costs, fixed in the sum of $2,200. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore. Associate: Dated: 15 August 2008 The Appellant appeared in person. Solicitor for the First Respondent: Sparke Helmore Date of Hearing: 11 August 2008 Date of Judgment: 11 August 2008	884
federal_court_of_australia:fca/single/2012/2012fca0027	decision	commonwealth	federal_court_of_australia	text/html	2012-02-01 00:00:00	Fuller v Toms [2012] FCA 27	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2012/2012fca0027	2024-09-13T22:45:10.471708+10:00	FEDERAL COURT OF AUSTRALIA Fuller v Toms [2012] FCA 27 Citation: Fuller v Toms [2012] FCA 27 Parties: DONALD FULLER v STEPHEN NORMAN TOMS, CHARLES ERNEST BRIGHT, BRETT HEADING, PHILLIP TOYNE, AUSTRALIAN AGRICULTURAL COMPANY LIMITED, DONALD J MACKAY, STEPHEN LONIE, PETER HUGHES, NICK BURTON-TAYLOR, CHRIS ROBERTS, ARUNAS PALIULIS, ABDUL SAMAD BIN HAJI ALIAS (DATUK ABDUL SAMAD), DATO' SABRI AHMAD, DONALD GORDON MCGAUCHIE, DAVID FARLEY, J WHITEMAN, KERRY PARKER, J SLOMAN, PHILIP BEALE, DAVID R CONNOLLY, TROY SETTER, ELDERS LIMITED, STEPHEN GERLACH, LES P WOZNICZKA and MALCOLM JACKMAN File number: WAD 322 of 2011 Judge: BARKER J Date of judgment: 1 February 2012 Catchwords: PRACTICE AND PROCEDURE - application to strike out application and statement of claim – leave to amend current originating application – leave to file a substituted statement of claim – application for legal counsel – referral certificate – substituted service Legislation: Australian Consumer Law (Sch 2 to the Competition and Consumer Act 2010 (Cth)) s 18, s 18(1) Competition and Consumer Act 2010 (Cth) s 227, s 236, s 238 Corporations Act 2001 (Cth) s 79, s 109X(2), s 180(1), s 181, s 182(1), s 183(1), s 184(1), (2) and (3), s 286(1), s 295(4), s 295A(2), s 296, s 297, s 299A(1), s 344(1), s 674(2)(c)(ii), s 1317DA, s 1317E, s 1317E(1)(ja), s 1317E(1)(jaa)-(jg), s 1317HA(1), s 1317J(3A) Trade Practices Act 1974 (Cth) s 52 Federal Court Rules 2011 (Cth) R 4.12, R 4.12(1), R 4.12(2), R 4.13, R 8.06, R 10.01, R 10.23, R 10.24, R 16.02(1)(b), R 16.02(1)(d), R 16.42, R 16.43, Div 4.2 Federal Court Rules 1974 (Cth) O 80 r 4(1) Defamation Act 2005 (Qld) Defamation Act 2005 (WA) Fair Trading Act 1989 (Qld) Fair Trading Act 2010 (WA) Limitation Act 2005 (WA) s 15 Limitation of Actions Act 1974 (Qld) s 10AA Cases cited: Combis (Trustee) v Spottiswood [2011] FCA 1082 Laurie v Carroll (1958) 98 CLR 310 Plenty v Dillon (1991) 171 CLR 635 Ricegrowers Co-Operative Ltd and Seatide Pty Ltd v ABC Containerline Nv, Med Containerline Antwerp Nv, Maritime Carriers Luxembourg SA and Den Norske Bank (Luxemborg) SA [1996] FCA 657 Rivera v Minister for Home Affairs [2008] FCA 1 Taylor v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 319 Date of hearing: 19 December 2011 Place: Perth Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 121 Counsel for the Applicant: The Applicant appeared in person Counsel for the Fifth and Twenty-Second Respondents: Mr KA Barlow SC Solicitor for the Fifth and Twenty-Second Respondents: Mallesons Stephen Jaques IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 322 of 2011 BETWEEN: DONALD FULLER Applicant AND: STEPHEN NORMAN TOMS First Respondent CHARLES ERNEST BRIGHT Second Respondent BRETT HEADING Third Respondent PHILLIP TOYNE Fourth Respondent AUSTRALIAN AGRICULTURAL COMPANY LIMITED Fifth Respondent DONALD J MACKAY Sixth Respondent STEPHEN LONIE Seventh Respondent PETER HUGHES Eighth Respondent NICK BURTON-TAYLOR Ninth Respondent CHRIS ROBERTS Tenth Respondent ARUNAS PALIULIS Eleventh Respondent ABDUL SAMAD BIN HAJI ALIAS (DATUK ABDUL SAMAD) Twelfth Respondent DATO' SABRI AHMAD Thirteenth Respondent DONALD GORDON MCGAUCHIE Fourteenth Respondent DAVID FARLEY Fifteenth Respondent J WHITEMAN Sixteenth Respondent KERRY PARKER Seventeenth Respondent J SLOMAN Eighteenth Respondent PHILIP BEALE Nineteenth Respondent DAVID R CONNOLLY Twentieth Respondent TROY SETTER Twenty-First Respondent ELDERS LIMITED Twenty-Second Respondent STEPHEN GERLACH Twenty-Third Respondent LES P WOZNICZKA Twenty-Fourth Respondent MALCOLM JACKMAN Twenty-Fifth Respondent JUDGE: BARKER J DATE OF ORDER: 1 FEBRUARY 2012 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. Leave is refused to the applicant to amend the initiating application and to file a substituted statement of claim in accordance with the documents to that effect attached to his affidavit filed 5 October 2011. 2. The matter be relisted on Friday 10 February 2012 at 10:45 am to enable the Court to hear from the parties as to orders that should be made in consequence of the preceding order and in relation to costs. 3. The interlocutory application of the application for an order for substituted service filed 3 August 2011 be dismissed. 4. The Court determines that it will not issue a referral certificate under R 4.12. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 322 of 2011 BETWEEN: DONALD FULLER Applicant AND: STEPHEN NORMAN TOMS First Respondent CHARLES ERNEST BRIGHT Second Respondent BRETT HEADING Third Respondent PHILLIP TOYNE Fourth Respondent AUSTRALIAN AGRICULTURAL COMPANY LIMITED Fifth Respondent DONALD J MACKAY Sixth Respondent STEPHEN LONIE Seventh Respondent PETER HUGHES Eighth Respondent NICK BURTON-TAYLOR Ninth Respondent CHRIS ROBERTS Tenth Respondent ARUNAS PALIULIS Eleventh Respondent ABDUL SAMAD BIN HAJI ALIAS (DATUK ABDUL SAMAD) Twelfth Respondent DATO' SABRI AHMAD Thirteenth Respondent DONALD GORDON MCGAUCHIE Fourteenth Respondent DAVID FARLEY Fifteenth Respondent J WHITEMAN Sixteenth Respondent KERRY PARKER Seventeenth Respondent J SLOMAN Eighteenth Respondent PHILIP BEALE Nineteenth Respondent DAVID R CONNOLLY Twentieth Respondent TROY SETTER Twenty-First Respondent ELDERS LIMITED Twenty-Second Respondent STEPHEN GERLACH Twenty-Third Respondent LES P WOZNICZKA Twenty-Fourth Respondent MALCOLM JACKMAN Twenty-Fifth Respondent JUDGE: BARKER J DATE: 1 FEBRUARY 2012 PLACE: PERTH REASONS FOR JUDGMENT issues 1 This judgment is concerned with three pre-trial issues that have arisen in the proceeding: 1. Whether the applicant should be granted leave to amend the current originating application and file a substituted statement of claim. 2. Whether the Court should issue a referral certificate to enable the applicant to obtain pro bono legal assistance. 3. Whether the applicant should have an order for substituted service so that he is not obliged to comply with the requirement that he personally serve originating process on the individual respondents. APPLICATION FOR LEAVE TO FILE amended application and Substituted statement OF CLAIM 2 On 19 August 2011, on the application of the fifth respondent Australian Agricultural Company Limited (AACo) and the twenty second respondent (Elders) (the corporate respondents) filed 12 August 2011 to strike out both the originating Form 5 application and statement of claim in this proceeding, I ordered that the statement of claim be struck out and that the applicant on or before 2 December 2011 lodge and serve any proposed statement of claim in substitution for that struck out, failing which the proceeding be dismissed. I ordered that the leave of the Court to the filing of the substituted statement of claim be required. 3 On 5 October 2011, the applicant filed an affidavit to which he attached a proposed amended application and proposed substituted statement of claim. The applicant's affidavit also described the applicant's unsuccessful search for professional legal help to conduct his proceeding and to draft these important documents. 4 I will treat the filing of these documents as an application for leave not only to file the substituted statement of claim but also to file an amended originating application. the proposed amended application 5 By the proposed amended application, the applicant would state "[T]he nature of the application" as follows : Jointly and severally against the first four individual respondents, damages (of one sort or another) under the Defamation Act 2005 (WA) and the Defamation Act 2005 (Qld), as well as general damages, aggravated damages and exemplary damages under the common law tort of malicious prosecution "for the defamation action brought without proper or probable cause against the applicant in this matter and subsequently discontinued". Jointly and severally against the first four respondents and those other individual respondents who were from time to time directors of AACo "and the company itself", damages (or one sort or another) variously for fraudulent accounting and related misrepresentations, variously pursuant to Corporations Act 2001 (Cth) (Corporations Act), s 79, s 286(1), s 295(4), s 295A(2), s 296, s 297 and s 299A(1). Jointly and severally against all of the respondents damages (of one sort and another): "under the common law tort of deceit", "for fraudulent misrepresentation", damages (of one sort or another) pursuant to the misleading and deceptive conduct provisions of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)) (ACL), s 18, s 18(1), s 227, s 236 and s 238 and related provisions of Fair Trading Act 1989 (Qld) and related provisions of Fair Trading Act 2010 (WA); and damages (of one sort or another) pursuant to the Corporations Act, s 79, s 180(1), s 181, s 182(1), s 183(1), s 184(1), (2) and (3), s 674(2)(c)(ii) and ASX Listing Rule 3.1. 6 By the proposed amended application the applicant would claim as follows: Against the first four respondents: 1. jointly and severally special damages for defamation in the amount of $10,000,000; 2. each individually non-economic damages for defamation, in the amount of $250,000; 3. jointly and severally general damages in the amount of $4,000,000; and unspecified aggravated damages and unspecified exemplary damages, for malicious prosecution; 4. interest on each amount; 5. offsetting additional damages for all court costs awarded in the prior matter against the applicant. Jointly and severally against all the respondents general damages "including lost-opportunity damages" in the amount of $144,000,000, and unspecified aggravated damages and unspecified exemplary damages, for fraudulent misrepresentation; as well as interest and costs. The proposed substituted statement of claim 7 The proposed substituted statement of claim has the following general structure: [4]-[5] describe the applicant and refer to a group of prospective buyers that he led when Futuris (as AACo was then called) offered for sale its 43% controlling stakeholding in ASX listed AACo. [6]-[31] describe each of the first to twenty fifth respondents (not including AACo and Elders), being natural persons and their connection with one or other of AACo or Elders/Futuris. [32] describes the corporate respondents. [36]-[50] purport to provide some "history" and background to AACo and Elders/Futuris. At [34] the applicant would plead as follows: In essence, I allege that the cattle company had at the relevant time of negotiations for sale of the parent company's 43% controlling stake holding around half of the cattle it claimed to have – some 300,000 head, not the 600,000 head as allegedly fraudulently reflected in the AACo FY2008 accounts. (Emphasis in original) [51]-[71] deal with what the applicant calls "buy-in-or-buy-out negotiations" concerning the sale of the Futuris shareholding in AACo. At [72]-[74] the applicant would plead: [72] The respective financial capacities of my prospective venture partners were never in question. The probability of successful completion of whichever approach to the deal (buy-in or buy-out) by my group was high. [73] The main claim in this amended statement of claim is on the basis of a 90% probability* of successful completion of a deal at the higher proposed overall funding $3.775 billion in which my equity share at par value would have been reduced from $200m to $160m; hence basic damages claim for $144m. see La Trobe Capital & Mortgage Corporation Limited v Hay Property Consultants Pty Ltd 95% probability – [2011] FCA FC 4 [74] I would never have gone near either company if I had known the true status of AACo at that time, but both Futuris/Elders and AACo were iconic, trusted agribusiness companies in Australia; and I had recommended them to my intended major venture partners. (Emphasis in original). In [75] and earlier in [35] the applicant refers to a defamation action brought by the first four respondents against him in the Supreme Court of Queensland and pleads in effect that the defamation proceeding was designed to prevent him from negotiating for the purchase of the Futuris shareholding and, in [76], caused the loss of the opportunity to successfully negotiate for the purchase of that shareholding. At [77]-[98] the applicant provides something in the nature of a narrative concerning his reliance on the AACo accounts and the basis upon which the cattle accounts were produced. At [99] the applicant would plead that in contravention of ACL, s 18(1), AACo and Elders/Futuris and the responsible directors and officers at those times, engaged in conduct in trade or commerce that was misleading or deceptive or likely to mislead or deceive. At [100], the applicant relies on the same conduct mentioned in [99] and would plead common law deceit. Further, the applicant would plead breach of duty by the corporate respondents of their obligations to make continuing disclosure in relation to the accounts, pursuant to the International Financial Reporting Standards (IFRS), Australian Accounting Standards Board (AASB) and ASX Listing Rule 3.1 (applying s 674(2)(c)(ii) of the Corporations Act). By [105], the applicant would plead that the corporate respondents and their responsible directors at the time did not exercise their powers and discharge their duties with the degree of care and diligence required of them pursuant to s 180(1) of the Corporations Act. In [106], the applicant would plead that the two corporate respondents and responsible directors and officers did not exercise their powers and discharge their duties in good faith in the best interests of the corporation and for a proper purpose, contrary to s 181 of the Corporations Act. In [107], the allegation is that these same respondents improperly used their position to gain an advantage contrary to s 182(1) of the Corporations Act. In [108], it would be pleaded that these same respondents improperly used information contrary to s 183(1) of the Corporations Act. In [109], it would be pleaded that these same respondents were reckless or intentionally dishonest in their actions contrary to s 184(1) of the Corporations Act. By [110], it would be pleaded that these same respondents used their positions dishonestly with intention of directly or indirectly gaining an advantage contrary to s 184(2) of the Corporations Act. In [111], it would be pleaded that these same respondents obtained information contrary to s 184(3) of the Corporations Act. In [112], it would be pleaded that these same respondents failed to keep financial records in accordance with s 286(1) of the Corporations Act. Paragraphs [113]-[129] would deal with the accounts for the financial year ending 2008, here called 'FY2008'. By [130]-[143], in relation to the FY2008 accounts, the applicant would plead contraventions or causes of actions in terms identical to or substantially the same as those pleaded in [99]-[112], the details of which are set out above. Further, the applicant would plead in [144]-[149] that the named directors of AACo in so acting breached information or disclosure requirements found in the Corporations Act s 295(4), s 295A(2), s 296, s 297 and s 299A. In [149], the applicant would plead that pursuant to s 79 of the Corporations Act, all of the respondents were involved in contraventions of the Corporations Act. [150]-[179] would deal with the defamation suit, abuse of process and malicious prosecution, this being a convenient description of the claim that the applicant would make against the first four respondents in respect of the defamation proceedings they brought against him in the Supreme Court of Queensland. [180]-[197] would contain a narrative that deals with the topic AACo board and management "notorious disfunctionality going adversely to credit" (the "revolving door"). [198]-[216] would deal with what the applicant would plead are the correct cattle numbers, commencing under the heading "Keeping track of cattle numbers is not "rocket science"!". The applicant includes a "Table FY2008" which he uses to support a plea at [215] that "near-enough-to-200,000 head of branded "trade cattle"" did not actually exist at the close of the FY2008 year despite being shown in the accounts. [217]-[225] would deal with "AACo 1H2011 results" to support pleas at [220]-[225] that certain cattle disclosed in accounts do not exist. [227]-[265], the proposed substituted statement of claim would deal with a topic called "Imputation and Damage" wherein the applicant would identify damage he claims to have suffered, as well as particulars of circumstances that would justify the award of aggravated or exemplary damages. response of AACo and elders 8 Only AACo and Elders have thus far been served with the originating application and other process in this proceeding and accordingly are the only respondents to appear. They successfully moved to strike out the initial statement of claim and application and now oppose the grant of leave for the filing of the proposed amended application and proposed substituted statement of claim. 9 As to the proposed substituted statement of claim, these respondents note that in an originating application a party is required, under the heading "Nature of application" to state briefly the nature of the subject of the application and the legislative basis of the Court's discretion to hear it and grant the application sought. Under the heading "Details of the claim" a party must specify all final relief sought and provisions of legislation upon which the grant of relief may depend. 10 These respondents complain that the proposed amended application is confusing in that, under the heading "Nature of application", as against all respondents, the application seeks damages for deceit and under other heads it seeks damages pursuant to several provisions of a number of statutes. However, in the "Details of claim" heading, the applicant seeks damages for fraudulent misrepresentation. Thus the application is inconsistent with the proposed substituted statement of claim. They also say that to the extent that the claims purport to be based on statutory provisions, those provisions of themselves do not give rise to any civil causes of action. These respondents therefore contend the application is defective and ought be set aside. 11 I will however first give particular attention to the detailed claims as stated in the proposed substituted statement of claim. If they are found not to be defective or not to be defective in any serious way then no doubt the accompanying application could be further amended to reflect what is actually claimed in the statement of claim. If, however, the proposed substituted statement of claim is found to be seriously defective, then this finding will serve to suggest the apparent inadequacies of the proposed amended application are also serious. Objections to proposed substituted statement of claim: 12 General objection: AACo and Elders object to the proposed substituted statement of claim on broad terms, mentioning its prolixity, ambiguity and general confusion, as well as particular pleas made in it. 13 Nonetheless, I will deal first with the complaints made about particular paragraphs, including where appropriate the complaints about prolixity, ambiguity and irrelevancies and, having done that, will then consider the more general objections having regard to the findings I have made about the specific pleadings. 14 Essence of claims made: As may be seen from the structure of the proposed substituted statement of claim, the applicant's primary claim is that he was engaged in negotiations for a group of would-be investors with a view to purchasing the controlling interest of Futuris in AACo. He now alleges that there were difficulties created by the misrepresentations, fraud or failure of the respondents in overstating the true correct cattle inventory of AACo. The essence of the claim is that there were in fact some 200,000 cattle less than represented or disclosed at the time of negotiations. 15 Mr Fuller says that when he made statements about this discrepancy he found himself as the defendant in defamation proceedings in the Supreme Court of Queensland at the instance of the first, second, third and fourth respondents, which proceedings were ultimately withdrawn by them. He now further alleges, in effect, that the defamation proceeding taken against him were strategic in nature and designed to force him out of the negotiations for the acquisition of the controlling interest in AACo. 16 The applicant takes the view that if there had not been any relevant misrepresentations, fraud or failure to disclose the true position in relation to the cattle, as he would allege, then there would have been a real probability that he and his group of investors would have acquired the controlling stake in AACo, but as it turns out he was denied that opportunity. He would say that if that opportunity had been realised – for which he would say there was a 90% probability of success – then his share would have been a percentage of the value of the shares acquired by his group in AACo. That is how he presently calculates the proposed damages claim for "fraudulent misrepresentation" in the amount of $144 million. 17 The buy-in-or-buy-out negotiations pleadings - [51]-[76]: These are the key proposed pleadings. The respondents complain that these paragraphs are discursive and refer to irrelevant matters concerning the board of AACo and dealings between AACo and Elders/Futuris. 18 These respondents say that where these paragraphs allege negotiations between the applicant and the corporate respondents ([51], [56], [57], [61] and [69]-[71]) the pleading is vague and general. 19 Further, these respondents say that [65] and [73] assert that there was a 90% prospect that the applicant would have had a 10-12% interest in AACo (or some other entity that may have taken over AACo) valued at $160 million, resulting in a loss to him personally of $144 million. However, no contractual or other basis for the allegation is pleaded nor is there any detail of the alleged negotiations. 20 These respondents also say that, given the applicant pleads in [74] that he would not have "gone near" the corporate respondents if it were not for the allegedly incorrect accounts and he did not in fact buy any interest in either company, it is impossible to discern what loss he has suffered. He is not entitled to damages that would put him in the position in which he would have been in if the accounts had been correct, but only the position in which he would have been in if the alleged misrepresentations had not been made – in which case, as he says, he "would never gone near either company". 21 The applicant, in a written response dated 18 December 2011, seeks to answer these points in the following (summarised) way: It is necessary to read the applicants documents together, as a whole, and not by viewing each segment of the statement of claim in isolation. Events concerning Futuris/Elders are relevant. These respondents do not provide any response to the allegations concerning the "200,000 ghost cattle" and do not respond to the allegations of fraud concerning them. The respondents "mischievously misstates" paragraphs [65] and [73] in the applicant's proposed amended statement of claim and introduce "some other unspecified identity" where there was never such mention before. The complaint by the respondents that [60], [67]-[70], [74] and [75] are objectionable on the grounds of "commentary and argument" are incorrect and are borne out of factual matters by documentary evidence or are essential to the damages claim. That these respondents propound a circular theory that: if I didn't buy any shares it is impossible to discern what loss I have suffered; and that if the alleged misrepresentations hadn't been made, I would never have gone near the companies. I of course say the misrepresentations were made; and that they are the start of all the trouble; and accordingly, I am entitled to my "day in court". (Emphasis in original) 22 In my view the pleading in these paragraphs is deficient. 23 Putting it colloquially, the applicant would say that he was a serious negotiator to buy the controlling shareholding interest in AACo and that, if it had not been for the "fraudulent misrepresentation" of the corporate respondents (and others) he, in all likelihood, would have acquired that interest. He says his loss can be equated to the equity share he would have obtained, of $144 million. 24 However, it is difficult to see any basis upon which one could conclude, on the basis of the case proposed to be pleaded, that the alleged misrepresentation concerning stock numbers produced any "opportunity loss", as would be alleged. 25 In [182] of the initial statement of claim, which I ordered be struck out on 19 August 2011, the applicant pleaded he "would never have gone near either company" if he had known their true status. That plea is now to be found in identical terms in [74] of the proposed substituted statement of claim. At [183] of the original statement of claim, the applicant alleged: My envisaged, probable and documented equity share in the project was in the range of 10%-12.5% for the value of intellectual assets brought in; representing at par value some $160,000,000 to $200,000,000 in the project as a whole involving total funding of some $3.4 billion to $3.775 billion. (Emphasis in original) Now, in the proposed substituted statement of claim, the applicant would plead as follows in [72], [73] and [74]: [72] The respective financial capacities of my major prospective venture partners were never in question. The probability of successful completion of whichever approach to the deal (buy-in or buy-out) by my group was high. [73] The main claim in this amended statement of claim was on the basis of a 90% probability of successful completion of a deal at the higher proposed overall funding of $3.775 billion in which my equity share at par value would have been reduced from $200m to $160m; hence basic damages claim for $144m … [74] I would never have gone near either company if I had known the true status of AACo at that time, but both Futuris/Elders and AACo were iconic, trusted agribusiness companies in Australia; and I had recommended them to my intended major venture partners. (Emphasis in original) 26 Finally, at [75], the applicant would plead, as he had in the initial statement of claim at [185]: The defamation suit brought by the first four respondents, and especially the very dramatic public assertion of their good faith position, wrecked my credibility as indeed it was intended to do. There was no going back to the position for my project before it was adapted to include AACo. Great harm was not only done to me, but also to the financial market and to the northern Australian meat and livestock industry. (Emphasis in original) 27 In their initial submissions in support of their strike-out application, the corporate respondents submitted that the losses then alleged and claimed in respect of the cause of action in [178]-[184] of $20 million appeared to be based on the position in which the applicant asserts he would have been in if the allegedly incorrect accounts of AACo had been correct, and the proposed takeover in which the applicant was allegedly involved had proceeded. These respondents submitted in respect of that formulated claim that it misunderstood the correct method of calculating loss. These respondents submitted that if the applicant would not have attempted to negotiate a takeover of AACo had he known its true financial position, then his only loss can be any expenses which he incurred (and perhaps arguably some compensation for his time) in undertaking the alleged negotiations. On no measure could that amount to $20 million and yet he does not allege other types of loss or damage. 28 In my view, the submission in these terms made by these respondents is accurate. The current proposed pleading as set out above is, in fundamental terms, the same in the substituted statement of claim as it was in the initial statement of claim, with some refinements. The refinement is that the applicant would now plead 90% probability of successful completion, but the question remains: 90% probability of successful completion of what? If, on all the matters pleaded, it was plain that the respondents did not accept the applicant's allegations of misstatement of cattle numbers, then the precondition for this pleading, that there would have been continued negotiations on the cattle position as claimed to be true by the applicant, can never be sustained. 29 It seems to me to be a complete misconception, on the facts alleged by the applicant, for the applicant to contend that, if he can prove the alleged fraudulent misrepresentation/lack of proper disclosure on behalf of the respondents, then in all probability (leaving aside whatever the percentage of that probability might have been), he and his group would have completed the purchase of the shareholding of AACo. On his own pleading, he was never involved in negotiations on such terms. That is to say, the negotiations never proceeded on the understanding that his assertions about the number of cattle involved were correct. 30 This is not a case where an applicant proposes to plead that, as a result of conduct that was misleading or deceptive, the applicant abandoned a course of action in relation to which he had spent a certain amount of money which he now seeks to recover. Rather, the applicant simply asserts he should have been given the opportunity to negotiate for the controlling stake in AACo on the understanding that the number of cattle held by AACo was as he alleged it should have been stated, not as the respondents in fact stated it. 31 This point is ultimately emphasised by the proposed plea at [74], that: I would never have gone near either company if I had known the true status of AACo at that time. (Emphasis in original) This can only be understood to mean that if the stock position had never been "misrepresented" but had been, at material times, of the order alleged by the applicant in the proposed statement of claim (i.e. did not include the alleged 200,000 "ghost cattle") then the applicant and his group would never have negotiated or tried to negotiate and, indeed, would not have "gone near" either of the corporate respondents, and so would not have entertained the idea of acquiring the controlling stake in AACo. 32 At best, the pleading overall in this section evinces contradictory positions. On the one hand, the applicant says that if the true position, as he alleges it was, as to stock numbers, had always obtained, then he and his group would never have entered into negotiations. On the other hand, he says that if the true position as to stock, as he alleges it was, had obtained, then there is a high probability that he and his group would have acquired the controlling stake in AACo. If this had happened, then the applicant says he would have obtained a substantial equity in AACo, which opportunity he lost. Not only is this latter claim general in the extreme, without material facts in support, so as to appear mere assertion, but more specifically nothing is pleaded that discloses any reliance by the applicant on the misrepresentation he alleges. In fact he says he would not have "gone near" the corporate respondents if he had known the true position at the outset. As a result, the pleading is confused and confusing and in this sense legally embarrassing. 33 I would not allow the proposed amendments referred to in this section of the proposed substituted statement of claim. 34 Contravening Australian Consumer Law s 18 - [99] and [130]: The corporate respondents say that the applicant alleges in a broad statement that the corporate respondents and their directors and officers engaged in misleading or deceptive conduct contrary to s 18 of the ACL. However, the ACL did not exist at the relevant time, and individuals cannot themselves be directly liable for breach of s 52 of the Trade Practices Act 1974 (Cth) (TPA) absent any use by them of postal or telecommunication services in the process, which has not been alleged in the pleading. Liability could only arise, at that time, if a corporation was knowingly involved in such conduct. 35 In written submissions dated 18 December 2011 the applicant makes the following summarised responses: The respondents review everything in isolation. The applicant has alleged that every respondent knew or ought to have known that the AACo accounts were fraudulent and that the natural respondents failed to speak up when they ought to have spoken up. Section 52 of the TPA no longer exists and has been replaced by s 18 of the ACL. Companies operate through people, and if a company breaks the law it is because someone has done so on its behalf. All of the information about which the applicant complains was produced electronically, much of which was downloaded from AACo's website. The applicant's negotiations were conducted entirely by postal and telecommunication services. 36 In further written submissions dated 29 December 2011 (filed with the leave of the Court), the applicant accepts the claims in this respect should be under the TPA, as indeed he pleaded in the original statement of claim. 37 Plainly, the applicant intends to rely on the statutory provisions relevant at the time, namely the breach of s 52 of the TPA. It is also clear that the applicant wishes to rely on the use of postal and telecommunication services by all respondents. I would ordinarily, subject to more general considerations, strike out the relevant paragraphs of the pleading in [99] and [130] subject to the right to replead. 38 Fraud and deceit - [100] and [131]: The corporate respondents say the applicant alleges that the same respondents referred to in [99] and [130] engaged in fraud and deceit, but does not plead facts from which knowledge of the alleged incorrect accounts is established or may be inferred, or from which the respondents ought to have acquired the alleged knowledge. In this respect the applicant fails to comply with R 16.42 and R 16.43 of the Federal Court Rules 2011 (Cth) (Rules). 39 The applicant in written submissions dated 18 December 2011 says that it may reasonably be inferred that each and every one of the natural respondents, and the corporate respondents through the natural respondents, knew or ought to have known by virtue of their office "and each in their time" that the accounts were fraudulent; and so it is pleaded in [228]-[234] of the proposed statement of claim. 40 Rule 16.42 of the Rules which apply to this proceeding provides as follows: A party who pleads fraud, misrepresentation, unconscionable conduct, breach of trust, wilful default or undue influence must state in the pleading particulars of the facts on which the party relies. 41 Rule 16.43 takes the matter a little further in relation to conditions of mind: (1) A party who pleads a condition of mind must state in the pleading particulars of the facts on which the party relies. (2) If a party pleads that another party ought to have known something, the party must give particulars of the facts and circumstances from which the other party ought to have acquired the knowledge. (3) In this rule: condition of mind, for a party, means: (a) knowledge; and (b) any disorder or disability of the party's mind; and (c) any fraudulent intention of the party 42 Therefore, where, as here, fraud and misrepresentation are pleaded against the relevant respondents, and it is said that by virtue of their office as a director or officer a particular respondent "knew or ought to have known something" then it is necessary for the "particulars of the facts and circumstances from which the other party ought to have acquired the knowledge" be set out. 43 It appears that the applicant considers that to satisfy the Rules it is enough to allege that at material times particular respondents were directors and officers of a corporate respondent. In my view, in this case at least, to simply allege the holding of the office is an insufficient plea for the purposes of satisfying the requirements of R 16.42 or R 16.43. If an applicant pleads that because a particular respondent was a director or officer of the company and thereby had access to certain information, or was responsible for certain activities, or whatever facts are said to be relevant from which it may be inferred they knew or ought to have known something, then those facts should be fully pleaded. The other party will then know precisely why it is said they knew or ought to have known something. The general imputing of knowledge by virtue of simply holding an office is not sufficient to meet the requirements of R 16.42 and R 16.43 in relation to a pleading of the kind currently under consideration. In this the proposed pleading is deficient. 44 Failure to disclose contraventions under Corporations Act provisions - [101]-[112] and [132]-[149]: The corporate respondents say the applicant alleges breaches of various sections of the Corporations Act and the Listing Rule 3.1, however, no breach of any of those provisions gives rise to a cause of action against the corporate respondents, whether for deceit (which is the only cause of action for which relief is sought) or otherwise. 45 In oral submissions on 19 December 2011 senior counsel for these respondents, however, accepted he was wrong in saying in respect of the continuous disclosure obligation of the corporate respondents that a person who has suffered damage due to a lack of continuous disclosure by a listed public company cannot sue for loss arising from that. But senior counsel confirmed the submission that the balance of the Corporations Act proceedings are not proceedings that can be taken by a person such as Mr Fuller but may only be taken by ASIC or the corporation itself. He accepted that Mr Fuller could in an appropriate case plead a cause under the TPA (or the ACL). 46 The applicant in his written submissions dated 18 December 2011 contends: The ACL does make provision for civil action. The Corporations Act sections provide for civil penalties such as those referred to in s 1317E. Various civil provisions are also listed in s 344(1) of the Corporations Act regarding requirements for financial reports. The respondents failed to mention that the claims under these paragraphs also rely on the tort law of deceit. Read as a whole there is no confusion in the pleading and the fraud claim is pleaded clearly enough. 47 As to the last point made by the applicant in respect of the tort of deceit, the particular proposed pleading here depends entirely on contraventions of relevant statutory provisions and there is no reliance on the tort of deceit. While the applicant may consider that the same conduct amounts to the tort of deceit, that is irrelevant for the purposes of the pleading proposed by him in these paragraphs. 48 In essence, the submission made on behalf of these respondents, subject to the clarification made by senior counsel during oral submissions, are correct. It is important in any given case for an applicant to identify an entitlement to claim compensation or some remedy for breach of some statutory provision by another person. The fact that the statutory provision may make certain conduct the subject of a civil penalty does not automatically qualify a person, such as the applicant, to sue for compensation for its alleged breach. One needs to determine from the terms of the statute in question whether Parliament contemplated that a person who suffers loss or damage as a result of a breach of a statutory provision should be entitled to recover compensation if they suffer loss as a result. 49 In this particular instance s 1317HA(1) of the Corporations Act provides as follows: (1) A Court may order a person (the liable person) to compensate another person (including a corporation), or a registered scheme, for damage suffered by the person or scheme if: (a) the liable person has contravened a financial services civil penalty provision; and (b) the damage resulted from the contravention. The order must specify the amount of compensation. 50 Section 1317J(3A) of the Corporations Act provides: (3A) Any other person who suffers damage in relation to a contravention, or alleged contravention, of a financial services civil penalty provision may apply for a compensation order under section 1317HA. 51 "Financial services civil penalty provision" is defined in s 1317DA of the Corporations Act to mean a provision referred to in s 1317E(1)(ja) and (jaa)-(jg). Paragraph (ja) refers to the continuous disclosure obligations of a listed public company under s 674(2) of the Corporations Act. 52 Accordingly, an applicant, in an appropriate case, may bring an action in respect of breach of the obligations of continuous disclosure, if properly pleaded, but not otherwise. The proposed pleading here does not properly plead such a cause of action and in this respect is deficient. 53 Cattle overstatement communications - [114]-[116]: The corporate respondents say the applicant refers to steps he took to complain about the allegedly incorrect accounts, but those matters are irrelevant to any cause of action pleaded (except to show he did not rely on the 2008 accounts). 54 The applicant in his written submissions dated 18 December 2011 makes several points in relation to this objection at the same time as he deals with the respondents' objections to [117]-[129] of the proposed statement of claim, to which I will now turn as well. 55 The corporate respondents say in respect of [117]-[129] which deal with the alleged topic "[G]host cattle alleged fraud on the market", that the proposed pleadings contain a narrative description of the apparent claims, but not in a manner that identifies only the relevant facts, and go beyond the period in which the applicant is alleged to have relied on any incorrect figures. The corporate respondents submit that they are largely commentary and argumentative statements that have no place in a pleading. 56 The applicant in his submissions dated 18 December 2011: Denies that the only period of relevance is up to the point where he no longer relied on the AACo accounts and that he was demanding correction of them within one day of publication on 10 February 2009. That the respondents falsely misconstrued what is said in [117]-[129] of his proposed statement of claim, thereby implying that they do not know the basis of the claim. Repeats the allegation that none of the accounts for FY2006, FY2007 and FY2008 have ever been recast in line with compliance with IFRS and AASB accounting standards. The overstated "ghost cattle" have been, or mostly have been, on the books since close of FY2004 to at least the close of 1H2011 (30 June 2011 - the most recent published accounts). That it is relevant to plead an "ongoing" fraud. 57 Considering these various paragraphs about the alleged discovery of the overstated cattle and the subsequent analysis and the ongoing nature of the problem, it seems largely to be irrelevant to a claim properly pleaded. If there were a relevant allegation of misleading and deceptive conduct or fraudulent conduct in respect of the overstatement of a product that one was in effect buying, then the allegation of this description would be required together with the relevant particulars as to the nature of the misdescription. Evidence as to how it was discovered and what communications were then made in respect of them could possibly be relevant to some continuing misdescription that was the subject of a claim, but otherwise would seem largely irrelevant for pleading purposes. 58 These paragraphs are redolent of many aspects of the proposed substituted statement of claim in that they are in a form and written in terms that reflect little legal drafting experience by the author (who to be fair, does not claim any such skill) and are more in the nature of a "story" or narrative. There may or may not be aspects of what is stated in these paragraphs that could be relevant to some statement of material facts, but generally speaking they do not seem to be directly relevant. 59 I consider, as contended by the corporate respondents, the paragraphs have the real tendency to distract attention from what should be the pleaded material facts and clear statements of claim that the applicant wishes to make. If the story or narrative account is allowed to remain in a pleading document like this, then the difficulty for a respondent is to know how they should deal with the story, the narrative and the evidence that is recorded in it. Such a document is, in truth, the antithesis of a pleading required by the Rules because it prevents the parties agreeing or joining issue on material facts that relate to clearly formulated causes of action. These paragraphs do not meet the standard that must be met in progressing a claim of the nature outlined by the applicant. 60 I would therefore not grant leave for a statement to claim to contain paragraphs in these terms. I would not otherwise hazard to say whether there are material facts to be found amongst these paragraphs that might be pleaded in respect of some properly formulated claim, in respect of which the applicant might properly be advised to proceed. 61 AACo "disfunctionality" allegations - [180]-[189]: The corporate respondents say that these paragraphs are all irrelevant to any cause of action, and they are described in [180] as part of the larger single "picture". 62 The applicant in the written submissions dated 18 December 2011 contends that such "disfunctionality goes very adversely to credit" and evidences the manner in which Futuris asserted control over AACo. 63 I am not really sure what it means, in this context, to say that something like this "goes to credit". That particular form of expression used in a legal context normally pertains to the admission of evidence at a trial bearing on findings that should be made on the evidence as a whole, and does not readily admit of facts material to a pleaded cause of action. 64 If, in some other action, it were alleged that a party had acted without due care, that is to say negligently or had acted recklessly in some relevant way, then to plead how badly managed that entity was at material times might possibly have some bearing on the plea made. But those considerations are not obviously relevant to the claims of the applicant. 65 I would not grant leave to amend in respect of these paragraphs. 66 Herd movements "not rocket science" - [198]-[226]: The corporate respondents say these paragraphs repeat earlier pleadings in [90]-[118] and that the same criticisms raised in respect of them apply here. The corporate respondents say that this section of the document appears intended to allege fraudulent accounting on the part of the respondents, but is over lengthy and abstruse and does not make clear the basis on which the applicant alleges that any one or more of the respondents were fraudulent; and it constitutes commentary and is argumentative. 67 The applicant in the written submissions dated 18 December 2011, leaving aside responses to the comments regarding abstruseness and overly lengthy pleadings, makes these points: The basis for the first element of fraud is spelt out explicitly in [203] and the basis for the second element of fraud is spelt out in [208] through nine subparagraphs. Ordinarily speaking the table of reported net cash flows which is included in this section purports to set out details of how the applicant contends the fraudulent misstatements of herd numbers occurred. So far as the calculations are concerned they do attempt to provide details of how the applicant has made its calculations and purport to provide justification for the claims made that relevant respondents have a case to answer in terms of the claims made. 68 I have little doubt there are a number of irrelevancies pleaded in this section and that it could be improved. 69 The real problem at the end of the day is that the applicant's statement, in effect of why the overstatement of cattle allegation is correct, must still be shown to be misleading or deceptive and fraudulent in terms of the claims made and there are difficulties with the pleading in these latter respects, as set out above. 70 "Imputation and damage" pleading - [227]-[243]: The corporate respondents say these appear to be a summary of the allegations of fraud, defamation and loss. However, they make broad allegations without any particulars of the involvement in, a knowledge of, fraud by each respondent. For example, the applicant alleges in [235] that all respondents were fraudulent in negotiating with the applicant in 2008, even though some are not alleged to have had any involvements in those negotiations. There are claims of loss by varying direct means, such as [237], [238] and [243] there are claims of lost opportunities "in other directions" without any facts being pleaded. 71 These respondents say the applicant also appears to complain about the annual accounts of AACos from 2004 up to and including the 2011 year at [15(a)], [17(a)] and [19(a)]. However, he does not plead reliance on any year's accounts other than the 2007 and possibly 2004 to 2006, nor that any loss was caused by any errors in other year's accounts. 72 These respondents say that according to the applicant, the "damage" to his proposed buyout was done by early 2009 when he alleges it became clear that the accounts upon which he relied in his negotiations were incorrect, but AACo declined to correct them. Therefore all the allegations concerning at least the accounts of 2009, 2010 and 2011 are irrelevant to his causes of action. 73 Similarly, the respondents contend the applicant's pleading discloses no causes of action against those of the individual respondents who have only been directors of AACo since the publication of the 2008 accounts on 10 February 2009. 74 The applicant in his written submissions dated 18 December 2011 makes a number of points: The documents needs to be read together as a whole and with the proposed amended Form 5 application. As to the "claims of loss by very indirect means" the applicant is alleging that the respondents gained a benefit for themselves by fraudulent means and by intent to defraud by deceit and cause him a detriment, pecuniary or otherwise, by the same fraudulent means. Also that [2] of the substituted statement of claim are relevant and the documentary evidence is yet to be filed. As to the question of reliance at [57] the applicant makes it clear that the FY2007 accounts were the basis of his proposal subject to adjustment at 30 June. That the applicant has repeatedly alleged fraudulent non-disclosure of change of accounting methods in FY2006, FY2007 and FY2008 and fraudulent overstating of "trade" cattle inventory and related dollar values from the close of FY2004 onwards and continuing to at least the close of 1H2011. So far as the damage is concerned at [154] the applicant has stated: It all brought my project to a screeching halt! The damage was done. (Emphasis in original) So far as directors appointed since the publication of 2008 accounts are concerned, the applicant asserts that: it is simply a continuation of the same false reasoning just addressed in the previous subparagraph. 75 In my view this section of the proposed statement of claim is designed to identify the alleged loss and damage, and thus compensation, required to remedy it based on the earlier pleaded causes of action. This is not the opportunity to repeat, in different terms, what has already been pleaded. To the extent that there are overlapping causes of action and claims for damages then it is self evident that the document is apt to lead to confusion and does not clearly identify the causes of action that the applicant would pursue at trial. 76 It is also difficult to see how loss can be claimed against the individual respondents who have only been directors of a company for certain periods following a cause of action said to have primarily crystallised with the publication of the 2008 accounts on 10 February 2009. 77 At the very least, leaving aside the other justified complaints, this part of the document would need to be considerably repleaded before leave to file it could be given. 78 The defamation proceedings cause of action - [150]-[179] and [250]-[265]: The fifth and twenty second respondents, who of course are not the respondents to whom this cause of action primarily relates, observe that the pleaded causes of action are poorly pleaded and, to the extent that the applicant complains of an abuse of process, that is a matter for the Supreme Court of Queensland to determine. To the extent that there are allegations of malicious prosecution, defamation proceedings are not a recognised basis for a cause of action for a malicious prosecution of a civil claim. As to the extent the applicant purports to allege a claim in defamation, any cause of action would be statute barred under both Western Australian and Queensland law: see Limitation Act 2005 (WA) s 15; Limitation of Actions Act 1974 (Qld) s 10AA. 79 Given that the proposed pleading in respect of these matters does not directly affect AACo and Elders I will not deal with them further here. 80 General pleading objections: As I have already indicated, there is force in the general complaints of AACo and Elders that the pleading overall suffers fatally from narrative, prolixity, irrelevancies and in this sense is legally "embarrassing" in that it is not easy to draft a pleading in defence. 81 The proposed amended application and the proposed substituted statement of claim have been prepared by the applicant who is not a lawyer. Mr Fuller by his recent affidavit has indicated to the Court that he has tried unsuccessfully to obtain legal advice and representation. That said, the proceeding is one by which the applicant seeks to recover damages of many, many millions of dollars, as well as unspecified aggravated and exemplary damages. 82 Given the applicant's own appreciation of the significance and magnitude of the claims he wishes to advance, it is important that both the outline of the claim made in the formal application originating the proceeding, as well as the detailed statement of claim accompanying it, be drafted with the precision that the Rules of the Court demand so that the respondents know precisely what case is being put against them. They will then be able properly to plead to the claims made. The Rules are designed to achieve that result. 83 Under R 16.02(1(b)) of the Rules, the pleading must be as brief as the nature of the case permits. In accordance with R 16.02(1)(d), material facts must be pleaded only in relation to the case to be made out, but not "evidence" . To such a pleading a respondent can precisely respond. A respondent cannot be expected to respond to mere "background", history, narrative material or material of a general evidentiary nature. The time for providing such material is later in the proceeding when statements of proposed, relevant evidence are filed in advance of the trial and then received at trial as evidence. 84 The proposed substituted statement of claim is not a pleading to which the respondents can be expected to plead in defence. conclusion on strike out application 85 The result then is that I would refuse leave to the applicant to file the proposed substituted statement of claim having regard to the objections taken by AACo and Elders which I have largely upheld. 86 Because of the nature of these objections a question arises whether the applicant should be granted leave to file a further proposed substituted statement of claim. I will hear from the parties in that regard. 87 On the one hand, there must be finality to proceedings at some point. The applicant has had the opportunity on two occasions to file a properly pleaded statement of claim. He has, at the Court's encouragement, endeavoured to obtain legal assistance in this regard, but has failed in his attempts. He has indicated that he approached a litigation funder at one point but they were not prepared to underwrite his case. To permit the applicant to keep trying to produce an adequate document in accordance with the requirements of the Rules, may unreasonably be considered to require the corporate respondents' continued involvement in this proceeding. There is also a question whether the applicant can remedy the deficiencies identified. It is not the Court's function to undertake the drafting exercise on behalf of the applicant; nor should the Court allow itself to undertake this function indirectly. The action belongs to the applicant, not the Court. 88 On the other hand, consideration of these reasons may leave open the possibility of a pleading in a proper form in some areas, for example, as a stand-alone action against the corporate respondents based on breach of the continuing disclosure obligation imposed on a publicly listed company by s 674(2) of the Corporations Act, if not other causes of action and perhaps depending on what loss the applicant would complain of. 89 Accordingly, I will hear from the parties as to whether because to replead, if it is sought, should be refused or granted, and if granted whether it should be on terms. question of certificate for legal assistance 90 The applicant has been unable to obtain legal assistance in connection with the presentation of his case. He inquires whether the Court might grant him a referral certificate for the engagement of pro bono counsel. 91 Division 4.2 of the Rules deals with Court referral for legal assistance, R 4.12(1) provides that the Court "may" refer a party to a lawyer for legal assistance by issuing a referral certificate, in accordance with Form 9. 92 It may be noticed that the current Rules only relatively recently replaced the former Federal Court Rules 1974 (Cth) (old Rules). Under the old Rules, the Court also had the power to make a referral for legal assistance, but the equivalent rule to current R 4.12(1), namely O 80 r 4(1), qualified the referral power by providing that the Court may make the referral "if it is in the interests of the administration of justice to do so". That qualification no longer exists. 93 It is quite clear therefore that the Court's power to issue a referral certificate is very broad indeed and the observations to this effect made in respect of the former O 80 r 4(1) apply with even more force in relation to the current R 4.12(1): see generally Taylor v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 319 at [10] and Rivera v Minister for Home Affairs [2008] FCA 1 (Rivera) at [8]. 94 It should also be noticed that by R 4.13, a party has no right to apply for a referral. This too emphasises the breadth of the Court's discretionary power to control the referral process. That said, there is no difficulty with a party raising the question of referral, as the applicant has here, as a means of initiating the Court's consideration of the exercise of its discretion. 95 Rule 4.12(2) sets out the matters that the Court "may" – not "must" – take into account in deciding whether or not to make a referral, in the following terms: (a) the means of the party; (b) the capacity of the party to otherwise obtain legal assistance; (c) the nature and complexity of the proceeding; (d) any other matters the Court considers appropriate. 96 It is clear from the language used in R 4.12(2) that the Court is not limited to a consideration of the particular matters listed, nor required to take any into account, and indeed (d) emphasises that the Court can consider any matter that it considers appropriate. 97 Under the old Rules, it was considered that it would not be appropriate to make a referral "in the interests of the administration of justice" if a case were patently hopeless or there was no arguable basis for it: see Rivera at [8]. While the "interests of the administration of justice" qualification to the exercise of the power has gone in the latest version of the Rules, there is no doubt, in my mind, that the question of a patently hopeless case or one that has no arguable basis, is still a factor that may be taken into account by a Court in deciding to exercise its power to grant a referral certificate, and very often will be considered. But plainly it is not intended to be a controlling criterion, particularly as it is not one that controls the exercise of the discretion created by R 4.12(1). 98 In this case, I have decided that there is no sufficient reason to make a referral certificate, the matter having been raised with me by the applicant. 99 So far as the means of the applicant are concerned, I know very little. However, there is no need for me to inquire further for the reasons which follow. 100 As to the capacity of the applicant to otherwise obtain legal assistance, by his affidavit filed 5 October 2011, mentioned above, the applicant has advised the Court of his unsuccessful attempts to engage legal assistance after contacting the Western Australian Bar Association, the Law Society of Western Australia, Legal Aid Western Australia and several law firms, as well as a business that underwrites legal actions. It is not clear just what should be drawn from this information, but at the least it suggests to me that none of the sources to whom the applicant has gone for advice and assistance has been inclined to take the action on after due consideration of the applicant's proposed case. 101 From the applicant's point of view, the proceedings, by their nature, are complex. At one level the fact that the applicant wishes to maintain proceeding for the recovery of millions of dollars from various of the respondents, suggests complexity. I have considered in some detail the objections to the current proposed statement of claim. Whether or not one should characterise the attempt to draft pleadings as indicating complexity is perhaps a matter of judgment. I suspect the proceedings may be so called, at least factually. But even so, what the applicant has put forward in his two attempts at pleading an appropriate statement of claim, suggests to me that there is some real confusion about what can be claimed and particularly what may be claimed under the so called "opportunity loss" case. 102 Taking my rulings above into account I am not satisfied that this is the sort of case where it is appropriate for the Court to issue a referral certificate to enable pro bono counsel, at public expense, to be engaged on behalf of an applicant. 103 Therefore, having considered the issue, the Court will not issue a referral certificate under the R 4.12. application for substituted service 104 The applicant by interlocutory application filed 3 August 2011 has applied for an order for substituted service of process on the respondents other than AACo and Elders. He effectively wishes to serve the individual respondents by post or through the agency of the corporate respondents. 105 AACo and Elders point out that the applicant has not made any attempt to serve the individual respondents personally in accordance with Rules and oppose any order effectively co-opting them to be process servers. 106 The respondents submit that the applicant has not demonstrated that it is impracticable to effect personal service, or futile to attempt to do so, and in failing to do so, the applicant has not met the requirements for substituted service under 10.24 of the Rules. Nor does the applicant's evidence prove the facts required by R 10.23 for deemed service. Further, the applicant's reliance on s 109X(2) of the Corporations Act is inappropriate in the circumstances and does not overcome the need for personal service on the natural person respondents. 107 In written submissions dated 18 December 2011 the applicant makes the following (summarised) points: It is not unreasonable for the Court to exercise its discretionary powers in authorising substitute service. The Court should take into account the applicant's circumstances, because he is located 'on the opposite side of the continent' in Western Australia as opposed to Queensland. The respondents have misinterpreted s 109X(2) of the Corporations Act. 108 It is a long standing feature of both civil and criminal procedures, in the common law system, that initiating process ordinarily should be personally served on a respondent party. It is easy to understand this, as personal service ensures that legal liabilities are not imposed and decisions affecting the life and liberty of persons are not made without the affected party being given proper notice of the proceedings and the opportunity to be heard in court in relation to the case brought against them: see generally Plenty v Dillon (1991) 171 CLR 635. Additionally, the jurisdiction of a court to consider a matter may also be considered to depend not just on the initiation of a proceeding in a court, but also upon the service of the originating process on a respondent party: see generally Laurie v Carroll (1958) 98 CLR 310. 109 Where a responding party is within the jurisdiction of the relevant court, ordinarily personal service is the primary means by which service on that party is effected. If the responding party is outside the jurisdiction, then rules of court ordinarily provide for service out of the jurisdiction according to a prescribed protocol. If personal service cannot be effected in such circumstances where it is required, then ordinarily rules of court make provision for substituted service, that is, service by some means other than personal service. 110 In this regard, R 8.06 of the Rules of this Court specifies the following obligations in respect of service of originating documents: The applicant must, at least 5 days before the return date fixed by the Registrar, serve a copy of the originating application and the statement of claim or accompanying affidavit personally on each respondent named in the originating application. Note 1 The Court may extend or shorten the time for service — see rule 1.39. Note 2 For the manner of service of a document personally on individuals, corporations, associations, partnerships and business names, see Part 10. 111 Rule 10.01 then deals with service on an individual, such as the respondents in this proceeding with the exception of the two corporate respondents: A document that is to be served personally on an individual must be served by leaving the document with the individual. 112 There are, however, two circumstances where service might effectually be achieved without personal service of the relevant process. First, under R 10.23, the Court may deem a document to have been served if: (a) it is not practicable to serve a document on the person in a way required by these Rules; and (b) the party provides evidence that the document has been brought to the attention of the person to be served. 113 Rule 10.23 is not relevant in the circumstances of this case and the applicant does not rely on that Rule. There is no evidence, in any event, that the originating documents in this case have been brought to the attention of the individual respondents. 114 The second means of avoiding the obligation to personally serve the originating documents is by obtaining an order for substituted service under R 10.24, "[i]f it is not practicable to serve a document on a person in a way required by these Rules". 115 It will be noticed that under both R 10.23 and R 10.24 the power of the Court to deem service to have been effected or to order substituted service depends on it being established that "it is not practicable" to serve a document in the way required. The concept of it not being practicable to serve a document goes beyond the idea of not being convenient to a party. In the recent decision of Logan J in Combis (Trustee) v Spottiswood [2011] FCA 1082 (Combis), at [9], his Honour applied what Tamberlin J said in Ricegrowers Co-Operative Ltd and Seatide Pty Ltd v ABC Containerline Nv, Med Containerline Antwerp Nv, Maritime Carriers Luxembourg SA and Den Norske Bank (Luxemborg) SA cited in Combis as [1996] FCA 1663 but would appear to be correctly cited as [1996] FCA 657 at 3 and 4, in finding that to establish personal means of service is not practicable, a party must show there has been some attempt to effect service in accordance with the Rules, or adduce evidence that to attempt such service would obviously be futile and so not warrant any attempt at service. 116 In this case there is no evidence that there has been any attempt at personal service on any of the individual respondents and there is no suggestion of futility. Therefore it is simply not open to the Court in the current circumstances to consider making an order for substituted service on the individual respondents. 117 In summary, the point is that service of originating process under the Rules, in accordance with the long established practice in superior courts in litigation of this sort requires personal service to be attempted on persons in the jurisdiction and it is only where it proves to be impractical that alternative means of service may be contemplated. It is simply not open to the Court to make an order for substituted service at this point simply to suit the convenience of the applicant. 118 Having commenced this action it remains appropriate, in all respects, for the applicant to act in accordance with the Rules, including as to the service requirements. 119 The application for substituted service is dismissed. orders 120 The Court orders that: 1. Leave is refused to the applicant to amend the initiating application and to file a substituted statement of claim in accordance with the documents to that effect attached to his affidavit filed 5 October 2011. 2. The matter be relisted on Friday 10 February 2012 at 10:45 am to enable the Court to hear from the parties as to orders that should be made in consequence of the preceding order and in relation to costs. 3. The interlocutory application of the application for an order for substituted service filed 3 August 2011 be dismissed. 4. The Court determines that it will not issue a referral certificate under R 4.12. I certify that the preceding one hundred and twenty (120) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. Associate: Dated: 1 February 2012	15,603
federal_court_of_australia:fca/single/2007/2007fca0781	decision	commonwealth	federal_court_of_australia	text/html	2007-05-15 00:00:00	Caldar v Carlsund [2007] FCA 781	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2007/2007fca0781	2024-09-13T22:45:10.549370+10:00	FEDERAL COURT OF AUSTRALIA Caldar v Carlsund [2007] FCA 781 ADMINISTRATIVE LAW - judicial review - reviewable decisions and conduct - review sought of conduct of Deputy Registrar of the High Court - whether administrative or judicial HIGH COURT AND FEDERAL COURT - Federal Court - procedure and evidence – summary disposal and stay of proceedings Federal Court Rules O 20 r 2 Croker v Deputy Registrar of the High Court of Australia [2003] FCA 34 referred to Gunter v Doogan [2003] FCA 667 referred to RUSSELL CALDAR v DEBORAH CARLSUND AND PUBLIC TRUSTEE OF NEW SOUTH WALES NSD 121 OF 2007 MADGWICK J 15 MAY 2007 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 121 OF 2007 BETWEEN: RUSSELL CALDAR Applicant AND: DEBORAH CARLSUND First Respondent PUBLIC TRUSTEE OF NEW SOUTH WALES Second Respondent JUDGE: MADGWICK J DATE OF ORDER: 15 MAY 2007 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application of 30 January 2007 and the amended application of 6 March 2007 be dismissed. 2. The applicant is to pay the second respondent's costs. 3. The second respondent is to be entitled to be paid its costs of the proceedings from funds retained by the second respondent in the estate of Rachel Isabell Gittoes on a trustee basis to the extent that its costs are not otherwise satisfied by order 2. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 121 OF 2007 BETWEEN: RUSSELL CALDAR Applicant AND: DEBORAH CARLSUND First Respondent PUBLIC TRUSTEE OF NEW SOUTH WALES Second Respondent JUDGE: MADGWICK J DATE: 15 MAY 2007 PLACE: SYDNEY REASONS FOR JUDGMENT HIS HONOUR 1 Mr Caldar, the applicant, appears in person. He says that he presses both his original application to the Court filed on 30 January 2007 and his amended application filed on 3 April 2007. 2 The order sought in the initial application was that an intended "Special Leave to Appeal Application be removed into the High Court list." This was a reference to an intended application dated 9 September 2005 for special leave to appeal to the High Court from three judgments of individual judges of the New South Wales Supreme Court; a judgment of Giles JA of 29 August 2005, a judgment of Campbell J of 8 July 2005 and a judgment of White J of 22 April 2005. 3 The grounds of the application were said to be "Unconscionable Conduct, and Perverting the Course of Justice as referenced in the Applicant's Statutory Declaration … attached." The statutory declaration is 246 paragraphs long and encloses various documents. 4 It seems that the background to what has been a great amount of litigation is that Mr Caldar's mother, the late Mrs Rachel Gittoes, had two sons, Mr Caldar and Allan Ramon Gittoes. Mrs Gittoes died on 27 April 2001. She left a will dated 21 July 1967 which, in the events that had happened, relevantly directed her trustee to sell and convert into money all her real and personal property, and to divide the same and to hold any unconverted property in trust for her two sons as tenants in common in equal shares. 5 On 23 January 1995 it appears that the late Mrs Gittoes signed a letter which said: To Whom It May Concern My letter is to confirm I consent to my son, Russell Graham Gittoes [who as indicated is Mr Caldar] living in my house and upon my death I want him to stay living in my house and to keep my house for himself as long as he wishes. I have made this decision because Russell has taken care of me in my house, at some trouble and expense to himself, and in return I feel I should do this for him to help him in later life. I declare I have made this decision of my own free will, and have not been influenced by any person. Yours faithfully. 6 Apparently for many years Mr Caldar looked after his mother. 7 The Public Trustee of New South Wales, the respondent to the intended application for special leave to appeal, was granted letters of administration of the estate of Mrs Gittoes with the will annexed on 20 May 2002, the surviving appointed executor named in the will having renounced his position. The Public Trustee proceeded to carry out the wishes of the testator as they were expressed in the will made nearly 30 years before the letter. This involved, among other things, selling the house in which, as at the date of Mrs Gittoes' death, Mr Caldar was living; his mother was by that time residing in a nursing home. The funds obtained by conversion of Mrs Gittoes' property into money were duly divided. The Public Trustee still holds a considerable amount of money in trust for Mr Caldar and has sought to pay it to him but he declines to have it. 8 There has been a deal of litigation in which, in substance, Mr Caldar has sought to have effect given to his mother's wishes as expressed in the letter. He has formed the view that the Public Trustee has behaved wrongly, indeed with grave impropriety, and that there is much amiss in this regard in the state of public administration in New South Wales. He has had no success in the Supreme Court. 9 The amended application in this Court seeks orders that the Public Trustee, whom Mr Caldar had joined as a second respondent in his original application to this Court, should be removed as a party and that he should have "default judgment" on his claim that "his Special Leave to Appeal Application be removed into the High Court list." He asks, "alternatively," although really as preliminary matters, that I should disqualify myself from further hearing his case in this Court and that the case be referred to a Full Court. I declined these preliminary applications. 10 Ms Carlsund, the first respondent, was at all material times the Deputy Registrar of the New South Wales Registry of the High Court of Australia. She indicated her intention to abide by any order of this Court save as to costs. 11 There had been previous efforts by Mr Caldar to have his grievances ventilated in the High Court. He filed an application for special leave to appeal in matter S436/2003 in which he sought special leave to appeal against a decision of the New South Wales Court of Appeal but ultimately, on 1 April 2004, discontinued that application. Two days before such discontinuance he filed another application for special leave to appeal (S109/2004) against a decision of the New South Wales Court of Appeal and named the Public Trustee of New South Wales as the respondent. He failed to file application books as directed and the application for special leave to appeal was deemed to be abandoned pursuant to the High Court Rules. 12 On 1 February 2005 Mr Caldar filed a summons seeking reinstatement of that application for special leave to appeal. However, on 16 March 2005 Gummow J dismissed that summons. 13 There apparently followed extensive correspondence between Mr Caldar and officers of the Court in relation to Mr Caldar's wish to file another application for special leave to appeal. Of the intended application with which I am concerned Ms Carlsund took the view that it would be in breach of the rules of court of the High Court in a number of respects, namely: · seeking to roll three separate decisions of three individual justices of the Supreme Court of New South Wales into one application; · seeking to do so without first exhausting his appeal rights within the Supreme Court of New South Wales; · seeking to do so out of time without applying for an extension of time; · seeking to file an application for special leave to appeal without filing the supporting documents from the Court below required by the rules; and · seeking to file the application with a statutory declaration to be made by himself in substitution for the documents required to be filed by the rules. 14 The Public Trustee was at first disinclined to take any active part in these proceedings and indeed sought to be removed as a party. Having regard to the complexity of the background and the legally unhelpful nature of the documentation then before me, I indicated that it would be of great assistance to the Court if the Public Trustee would act as a contradictor to enable me to appreciate and sort out the issues. Reluctantly the Public Trustee agreed so to act but now wishes to have the matter go no further. 15 The Public Trustee has moved the Court for orders that Mr Caldar's application be dismissed pursuant to O 20 r 2 of the Federal Court Rules and that, except in relation to its ability to have costs orders for the proceedings to date, that it "be removed as a party to the proceedings." Order 20 r 2 provides relevantly that the Court may stay or dismiss or dismiss generally a proceeding or any claim for relief in a proceeding where it appears that no reasonable cause of action is disclosed. 16 The grounds asserted by Mr Caldar for relief against Ms Carlsund are many and various but I think they can be fairly summarised as being that she has denied the applicant natural justice; that she has behaved with impropriety and has exceeded her authority by purporting to shut the applicant out of the High Court although she is not a Justice of that Court; and that she has behaved in bad faith. Nothing in the materials put before the Court would indicate that there is any arguable basis for any of these claims. 17 It is also the position that, in seeking to apply the rules of court of the High Court to documents sought to be filed by an applicant which sought an exercise or purported to seek an exercise of the judicial power of the Court, a registrar, or deputy registrar as the case may be, is exercising the judicial power of the Court on its behalf and as such is acting judicially and not administratively: see, for example, Croker v Deputy Registrar of the High Court of Australia [2003] FCA 34; Gunter v Doogan [2003] FCA 667. 18 It follows that, in substance, Mr Caldar is seeking to have this Court call into question an exercise of the judicial power of the High Court. It is not open to this Court to do that. 19 The proceeding is doomed to failure. Accordingly, the application of 30 January 2007 and the amended application of 6 March 2007 will be dismissed with costs. 20 The respondent Public Trustee will be entitled to be paid its costs of the proceedings from funds retained by the Public Trustee in the estate of Rachel Isabell Gittoes on a trustee basis to the extent that its costs are not otherwise satisfied by the costs order I have just made. 21 I will direct that a copy of the transcript of today's proceedings be provided to the applicant without charge. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick. Associate: Dated: 22 May 2007 Counsel for the Applicant: The applicant appeared in person Solicitor for the Second Respondent: Clinch Neville Long Date of Hearing: 15 May 2007 Date of Judgment: 15 May 2007	2,551
federal_court_of_australia:fca/single/2007/2007fca0655	decision	commonwealth	federal_court_of_australia	text/html	2007-05-04 00:00:00	Shail v Commissioner of Taxation [2007] FCA 655	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2007/2007fca0655	2024-09-13T22:45:10.576749+10:00	FEDERAL COURT OF AUSTRALIA Shail v Commissioner of Taxation [2007] FCA 655 TAXATION – validity of notice of assessment – whether lack of bona fides – whether issued for an improper purpose – application of the Hickman principle – requirements of service under the Income Tax Regulations 1936 (Cth) ('the Regulations') – whether post office box address can constitute a "physical address" as well as a "postal address" for the purposes of the Regulations Income Tax Assessment Act 1936 (Cth), ss, 175, 177 Income Tax Regulations 1936 (Cth), regs 36, 40 Tax Administration Act 1953 (Cth), Sch 1, s 260-5 FJ Bloemen Pty Ltd v Commissioner of Taxation (1981) 147 CLR 360 cited Briglia v Commissioner of Taxation [2000] ATC 4,247 cited Deputy Commissioner of Taxation v Richard Walter Pty Ltd (1995) 183 CLR 168 cited Deputy Commissioner of Taxation v Naidoo [1981] 81 ATC 4,537 cited Emhill Pty Ltd v Bonsoc Pty Ltd (2005) 12 VR 129 considered Madden v Madden (1996) 65 FCR 354 followed R v Hickman; Ex parte Fox (1945) 70 CLR 598 cited Sarikaya v Victorian Workcover Authority (1997) 80 FCR 262 applied NURIYE SHAIL v COMMISSIONER OF TAXATION VID 1037 OF 2006 MIDDLETON J 4 MAY 2007 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 1037 OF 2006 BETWEEN: NURIYE SHAIL Applicant AND: THE COMMISSIONER OF TAXATION OF COMMONWEALTH OF AUSTRALIA Respondent JUDGE: MIDDLETON J DATE: 4 MAY 2007 PLACE: MELBOURNE REASONS FOR JUDGMENT Introduction 1 Pursuant to s 264(1) of the Income Tax Assessment Act 1936 (Cth) ('ITA Act'), the respondent issued a notice of assessment to the applicant in respect of the year of income ending 30 June 2005. The respondent also issued a notice under s 260-5 of Sch 1 to the Tax Administration Act 1953 (Cth) ('TAA') to each of Jason Real Estate Pty Ltd and Mr Paul Silvestri ('the Garnishee Notices'). Each of the Garnishee Notices sought that any money owed by the party in question to the applicant be paid to the respondent. 2 By notice dated 15 September 2006, the applicant objected to the notice of assessment. 3 By application and statement of claim filed on 20 September 2006 the applicant applied for relief pursuant to s 39B(1) and 39B(1A) of the Judiciary Act 1903 (Cth) and review of the decisions pursuant to the Administrative Decisions (Judicial Review) Act 1977 (Cth). Relevant background 4 The applicant was at all material times since 1992 the sole proprietor of a property situated at 11 Cameron Court, Greenvale in Victoria ('the property'). The applicant acquired the property pursuant to a Family Court Order made in late 1992. Not long after, the applicant asked her husband to be her accountant and investment adviser in relation to the properties acquired in the family law settlement. In 1994 the Shail Superannuation Fund in the joint names of the applicant and her husband was set up ('the Fund'), with money being invested in the Fund on behalf of the applicant. 5 The applicant's husband left Australia for Cyprus in about May 2005 and between May 2005 and March 2006 amounts totalling over $5 million were withdrawn from a bank account of the Fund. 6 On about 5 August 2006, the applicant entered into a contract of sale for the property with a purchaser, Mr Paul Silvestri, for the amount of $510,000 with 10% deposit payable immediately, and settlement to occur on 22 September 2006. 7 On about 21 August 2006, the respondent sought information about the contract of sale of the property through the real estate agent engaged for the sale of the property, Jason Real Estate Pty Ltd. On 24 August 2006, the respondent, through his delegate the Deputy Commissioner, made an assessment of the applicant's income and tax payable in respect of the year ended 30 June 2005. The assessment provided that the applicant's taxable income was $1.73 million for that year, and the tax payable was $842,062, due and payable on 5 June 2006 pursuant to s 204 of the ITA Act. 8 On 25 August 2006, an officer of the respondent left the notice of assessment at the applicant's post office box along with an information letter and reasons for decision. On the same day the Garnishee Notices were served upon Mr Silvestri and Jason Real Estate Pty Ltd. 9 On 29 August 2006, the applicant sent a facsimile to Mr Zafiriou, an officer of the respondent, requesting further information about the Garnishee Notice served on her real estate agent, Jason Real Estate Pty Ltd. In the facsimile she indicated that she had not received any notice of assessment or other information. On the same date, Mr Zafiriou responded to the applicant's facsimile, enclosing the assessment and copies of the Garnishee Notices. In response, the applicant requested details of the basis upon which the respondent calculated the applicant's taxable income. On 31 August 2006, Mr Zafiriou responded by way of facsimile enclosing an explanation to the assessment. 10 On application for interlocutory relief, on 20 September 2006 the Court made interlocutory orders to the following effect: 1. That until 25 September 2006 or further order the respondent be restrained from trying to recover money due under the contract of sale between the applicant and the purchaser in respect of the property from the purchaser or the applicant's real estate agent. 2. That the proceeds of sale under the said contract be paid into Court to be held until the determination of the proceedings or further order, without prejudice to the respondent's rights under the Garnishee Notices. 11 Pursuant to the interlocutory orders, upon settlement of the sale of the said contract the net proceeds of sale were paid into Court. Grounds for review 12 The applicant challenged the validity of the assessment on the grounds that it was made with a lack of bona fides, or for an improper purpose, and there was no genuine attempt to make an assessment of the applicant's tax liability. The applicant challenged the Garnishee Notices on the basis that the respondent issued them for an improper purpose. Further, the applicant challenged the validity of the Garnishee Notices on the basis that the assessment was not effectively served on her in accordance with the Income Tax Regulations 1936 (Cth) ('the Regulations') prior to the service of the Garnishee Notices. Principles of law to be applied 13 Section 175 of the ITA Act provides: The validity of any assessment shall not be affected by reason that any of the provisions of this Act have not been complied with. 14 Section 175 preserves the validity of an assessment even though there has been some non-compliance with another provision in the ITA Act. However, in the High Court decision of Deputy Commissioner of Taxation v Richard Walter Pty Ltd (1995) 183 CLR 168 at 182 Mason CJ stated of s 175 (footnotes omitted): This section does not relieve the Commissioner from performing his duty to make an assessment. The section does not create a valid assessment where none has been made at all. The section requires an actual assessment as a condition of its operation. But otherwise, the effect of s 175 is that compliance with particular provisions of the Act is not essential to the validity of an assessment. 15 In another High Court decision, that of FJ Bloemen Pty Ltd v Commissioner of Taxation (1981) 147 CLR 360 at 371, Mason and Wilson JJ stated that s 175 cannot "create a valid assessment where no assessment has been made at all. The section requires an actual assessment as a condition of its operation". 16 Section 175 is often used in conjunction with s 177. Section 177(1) of the ITA Act provides: The production of a notice of assessment, or of a document under the hand of the Commissioner, a Second Commissioner, or a Deputy Commissioner, purporting to be a copy of a notice of assessment, shall be conclusive evidence of the due making of the assessment and, except in proceedings under Part IVC of the Taxation Administration Act 1953 on a review or appeal relating to the assessment, that the amount and all the particulars of the assessment are correct. 17 Subject to the application of the principle in R v Hickman; Ex parte Fox (1945) 70 CLR 598 ('the Hickman principle'), ss 175 and 177(1) operate to preclude a taxpayer from challenging an assessment except in objection, review and appeal proceedings brought pursuant to Part IVC of the TAA: Richard Walter 183 CLR at 186 per Mason CJ, at 197-199 per Brennan J, at 211 per Deane and Gaudron JJ, at 222-223 per Toohey J; and at 233 per Dawson J. 18 The Hickman principle states that a privative clause (s 175 in this case) is given effect only if the purported exercise of the power is bona fide, relates to the subject matter of the legislation and is reasonably capable of reference to the power given to the body exercising it. 19 In Richard Walter 183 CLR at 199, Brennan J stated that the Hickman principle should be applied in the construction of s 175 (footnotes omitted): The jurisdiction of the Federal Court on appeal from, or of the Administrative Appeals Tribunal on review of, a decision on an objection extends to every issue which affects the amounts ultimately included in the taxable income or tax liability of a taxpayer. If any of these issues be resolved in favour of the taxpayer, an amendment of the assessment so as to reduce the taxable income or the tax liability of the taxpayer must follow. The width of that jurisdiction and the evidence purpose of the Act to channel all issues as to the true tax liability of the taxpayer into the objection, review and appeal procedures found the clearest implication that exceptions to the broadest literal application of s 175 must be narrowly confined and a corresponding operation must be attributed to s 177(1). As the scheme of the Act is to protect the validity of notices of assessment while allowing a taxpayer a full opportunity to have the general provisions of the Act affecting tax liability applied, I would construe the term "due making of the assessment" in s 177(1) as extending to every purported exercise of the power to ascertain the taxable income and tax liability of a taxpayer which satisfies the criteria expressed by the Hickman principle. 20 His Honour went on to explain the application of the Hickman principle to a notice of assessment, at 199-200 (footnotes omitted): The power to make an assessment is exercised by ascertaining the taxpayer's taxable income and defining the resulting tax liability of the taxpayer. If it appears, either on the face of a notice of assessment or from elsewhere that the Commissioner has not attempted in good faith to determine the taxable income or has not made an assessment definitive of the tax liability of the taxpayer, the assessment does not attract the protection of s 175. Nor, in my opinion, does s 177(1) make the production of such a purported notice of assessment conclusive evidence of the due making of the assessment. 21 It is also important to remember that the fact that an assessment may be incorrect or based upon insufficient facts does not demonstrate a lack of bona fides. In the decision of Briglia v Commissioner of Taxation [2000] ATC 4,247 the court held that two assessments which included the same amount in the assessable income of two different taxpayers for the same year were valid. At [9], Kenny J held that an incorrect assessment was not sufficient to evidence a lack of bona fides: Plainly enough, an incorrect assessment does not demonstrate an absence of bona fides on the Deputy Commissioner's part. The decision in Richard Walter also makes it clear that the existence of two assessments, which include the same amount in respect of the same year of income but issued to different taxpayers, does not demonstrate a want of bona fides on the Commissioner's part, providing that at the time the Commissioner made the assessments he was bona fide able to form the view that each assessment could be correct: see Richard Walter at 188, 200, 202 and Darrell Lea at 186. It follows from this that uncertainty on the Deputy Commissioner's part as to the facts relevant to the exercise of his power of assessment does not evidence any absence of bona fides in the Hickman sense. As Brennan J said in Richard Walter at 200-201: It must be remembered that the Commissioner's function is administrative, not judicial. The power to assess is, as s 167 shows, not limited to cases where the Commissioner has enough information on which to make a positive finding of fact. The Commissioner is not required to determine on the balance of probabilities that one person rather than another is the person subject to the tax liability in respect of the particular income. 22 The principles of law are well established and not in dispute as between the parties. Except in very limited circumstances, the taxpayer's rights to dispute liability to taxation are provided for by the objection, review and appeal procedures in Pt IVC of the TAA and are to be pursued by those procedures rather than by proceedings such as this one. However, if it appears, either on the face of a notice of assessment or from elsewhere, that the Commissioner has acted for an improper purpose, has not attempted in good faith to determine the taxable income or has not made an assessment definitive of the tax liability of the taxpayer, the assessment will not attract the protection of s 175. Lack of bona fides or improper purpose and no assessment of liability 23 The applicant relied upon a number of factors in support of her contentions, which can be summarised as follows: · The assessment was tentative or provisional; · The respondent did not make any real or genuine attempt to assess the applicant's taxable income, nor embarked upon any process of inquiry to determine the applicant's income; and · The assessment was issued solely for the purpose of issuing the Garnishee Notices. 24 The applicant relied upon a number of factual matters in support of her case. In my view, taking the facts together, they do not lend any support to sustain the factors relied upon by the applicant. The respondent was involved in gathering information relevant to the assessment well prior to the making of the assessment. Nothing in the explanation of the respondent as to the assessment, or in any documentation emanating from the respondent, gives any indication of a lack of bona fides or an improper purpose, or a failure to properly evaluate the assessment. The fact that the respondent did not make further inquiries of the applicant, or failed to accept her version of events does not support a finding of a lack of bona fides or an improper purpose. It may well be that the respondent has not given sufficient weight to some of the factual contentions raised by the applicant, but this does not mean the process of assessment is relevantly flawed. In my view, the best the applicant can do in this case is to ask me to draw the inference of a lack of bona fides and the existence of an improper purpose upon the basis of the timing of events, the factual position as asserted by the applicant, and the failure of the respondent to investigate further the position of the applicant in view of her willingness to co-operate. 25 However, I do not consider the evidence of the applicant sufficient to prove on the balance of probabilities a lack of bona fides, an improper purpose or a failure to genuinely make an assessment by the respondent. 26 On the basis of the evidence relied upon by the applicant, I do not think it was incumbent upon the respondent to introduce any evidence to refute the suggested inference of lack of bona fides or improper purpose I have been asked to draw by the applicant, and the failure to call a witness cannot fill the gaps in the evidence of the applicant. 27 A principal contention of the applicant was that, taking into account the chronology of events and surrounding circumstances, the sole or driving purpose of the making of the assessment was to allow the respondent to issue the Garnishee Notices, and that this was an improper purpose. The applicant relied upon a passage of Einfeld J in Madden v Madden (1996) 65 FCR 354 at 370: As tax collection is not part of tax assessment, the Hickman principle that the assessment must have been made in a bona fide attempt to exercise the powers conferred by the Tax Act, that is, the powers of assessment, seems to me to lead to the conclusion that a motive of collection from a known fund rather than by a genuine assessment of tax due is a breach of the principle. It is one thing to raise an assessment having regard to tax collection, even to enhance the ability to collect the tax — the Tax Act provides as much: see for example ss 167 and 205. However, it is entirely another matter to raise the assessment with speed, imprecision and inadequacy of examination, investigation and inquiry in order to take advantage of a window of opportunity for its simple collection. In other words, raising an assessment in order to collect tax, rather than to determine the tax due, is not a bona fide attempt to exercise the powers of assessment conferred by the Tax Act. The consequence of an improper exercise of power is to take advantage of the taxpayer in a way which cannot be redressed within the internal appeal and review procedures of the Tax Act itself. Once the notice of assessment has been served, the taxpayer is liable to tax and s 218 may be activated. In this case the result has been bankruptcy. If the Commissioner was motivated to raise this assessment in order to serve a s 218 notice on the police, the assessment would in my opinion not have been made for a proper purpose and would accordingly be invalid 28 Even if there was a perceived urgency to issue the Garnishee Notices, I am not satisfied that the applicant has demonstrated that the assessment was raised in order to collect tax. I do not find any "speed", "imprecision", or "inadequacy of examination, investigation and inquiry" in the making of the assessment, or for the purpose of taking advantage of any "window of opportunity" to collect tax. The investigation into the applicant had been ongoing for some time before the assessment was made, and there is no other evidence of any inadequacy of examination, investigation or inquiry. Assuming the approach of Einfied J is correct, I am not satisfied that the assessment was made other than in circumstances of determining the tax due. 29 Even if the assessment was issued in conjunction with the issue of the Garnishee Notices, this does not lead to the conclusion that the assessment is invalid. To my mind there is a similarity to the position confronting the court in Madden 65 FCR 354 where at 395, Foster J (with whom Shepherd J agreed) dismissed an application based on a similar argument in relation to the issue of a s 218 notice, an equivalent to a notice under s 260-5: As I see it, the appellant's contention amounts really to this. He alleges that the assessment was invalid because it was issued by the Commissioner in abuse of his power to assess…, in that it was not a bona fide attempt to assess the amount upon which tax should be levied but was a mere device to enable the issue of the s 218 notice… In the first place, I am unable to attribute any significance to the fact that the assessment was issued in conjunction with and motivated by a desire to take advantage of s 218. There is sufficient indication of urgency in the situation to warrant the steps that were taken. In my opinion, the s 218 connection is a purely neutral fact in the determination of whether the assessment itself was invalid. 30 With regard to the applicant's submissions that the assessment was raised for an improper purpose or lacked bona fides and there was no genuine or rational attempt to properly assess and make proper inquiries, I find no proper factual basis upon which this claim can succeed. I also cannot be satisfied that the assessment was tentative or provisional. The notice of assessment clearly sets out the applicant's taxable income, and a fixed sum that is due and payable. There is no indication that the tax liability stated is tentative or provisional: see Richard Walter at 237 per McHugh J. 31 The variety of matters upon which the applicant sought to rely go no further than establishing that the respondent might have taken an alternative view as to the assessment. The matters relied upon could usefully be raised in Pt IVC proceedings in challenging the amount of the tax liability, however, they do not assist in the determination of the validity of the assessment itself in the Hickman sense. 32 Accordingly, the applicant's grounds that challenge the validity of the assessment are not made out and must fail. Given my findings below in relation to the validity of the Garnishee Notices, I need not consider whether the Garnishee Notices were themselves issued for an improper purpose. Service of the notice of assessment 33 It is beyond question that there is no valid notice of assessment until service of the notice has been effected: Bloemen 147 CLR 360. The requirement of service has implications in this case for the validity of the Garnishee Notices, because the effectiveness of the Garnishee Notices depends upon there being a debt due to the Commonwealth, which in turn depends upon service of the notice of assessment being effected prior to the service of the Garnishee Notices. If the notice of assessment was not effectively served on 25 August 2006, then the Garnishee Notices are invalid. 34 According to the evidence of Mr Zafiriou, whom I accept as being a truthful witness, on 25 August 2006, an officer of the respondent, Mr Fisher, placed the notice of assessment in post office box 311 at Dallas Post Office in Victoria, the post office box of the applicant. On the same day, Mr Zafiriou gave the Garnishee Notices to Mr Silvestri and Jason Real Estate Pty Ltd. The evidence is unsatisfactory as to the exact sequence of these events on the 25 August 2006, but because of the view I take, it is unnecessary to consider the evidence in this regard any further. 35 The starting point is s 174 of the ITA Act, which provides that as soon as conveniently may be after any assessment is made, the Commissioner must serve notice thereof in writing by post or otherwise upon the taxpayer: s 174(1). The respondent submitted that the service of the notice was effected on 25 August 2006, and relied upon two submissions. 36 The respondent's primary submission was that the placing of the notice of assessment in the applicant's post office box conformed to the requirements of the Regulations and as a result was deemed service. In particular, the respondent sought to rely upon reg 40(1), which provides: The Commissioner may serve a document on a person for the purposes of the Act and these Regulations by: (a) if the person has given a preferred address for service that is a physical address – leaving a copy of the document at that address; or (b) if the person has given a preferred address for service that is a postal address – posting a copy of the document to that address; or (c) if the person has given a preferred address for service that is an electronic address – delivering an electronic copy of the document to that address. 37 The respondent submitted that the applicant's post office box address is a physical address (as well as a postal address) and accordingly service was effected when the notice of assessment was left at the post office box. 38 The question of what is a preferred address for service is dealt with in reg 36: (1) An address in Australia used by or associated with a person is a preferred address for service of the person if: (a) it is of one of the following kinds of addresses: (i) a physical address; (ii) a postal address; (iii) an electronic address; and (b) the person has given it to the Commissioner as an address for the service of documents by the Commissioner under the Act or these Regulations; and (c) the designation of the address or other circumstances indicate that the person wishes the address to be used by the Commissioner in preference to other addresses of the person, whether generally or in specific circumstances. (2) The designation of an address in a form or correspondence as an 'address for service', a 'preferred address', an 'address for correspondence' or similar term satisfies paragraph (1)(c). 39 Two preliminary issues arise before it can be determined that the notice of assessment has been validly served according to the respondent's primary submission. 40 The first issue is the type of address given, specifically whether it was a postal address or a physical address. An address may be both a physical address and a postal address, as for example a street address. 41 The respondent submitted that in most cases, the postal address and physical address are interchangeable. Whilst I agree with this submission, there may be instances, however, where a physical address does not constitute a postal address, such as remote locations which are not serviced by the postal authority. Further, leaving aside for the moment the circumstances of this case, there may be examples of postal addresses that do not constitute physical addresses, such as document exchange ('DX') addresses. Such addresses are merely reference points for the mailing of articles. In such an instance, one cannot leave an article at the address but must post it through the postal authority, who will deliver the article to its designated recipient. 42 The reference to a 'physical address' lends itself to the concept of an address at which articles may be physically left, as opposed to a place to which articles may be posted. The observations of Black CJ in Sarikaya v Victorian Workcover Authority (1997) 80 FCR 262 at 263, albeit in a slightly different context, tends to support this view: In the present context, a post office box is not, in my view, the "address of a place" at which a document may be "left" for a person. The ordinary notion of a "post office box" is of a container at a post office into which mail that has been duly posted is placed by the postal authorities for retrieval by or on behalf of the holder of the box. Whether or not such a box is, in this context, the "address of a place", it is not the address of a place at which a document may be "left" by way of service. 43 Those observations were made by Black CJ in the context of O 7, r 6(1) of the Federal Court Rules (Cth) which requires a party to a proceeding to provide an address for service at which documents may "be left for the person". Looking at reg 36 on its own, the question is only whether the address is a physical address, as opposed to the other question of whether the address is one at which articles can actually be left. However, the similarity is more obvious when reg 36 is viewed in conjunction with reg 40(1), which provides that, where a physical address is given by a person, service can be effected by "leaving a copy of the document at that address". Therefore, the question really is whether the address is one at which articles are capable of being left. If one answers that question in the negative – the address is not one at which a document is capable of being left – it follows that the address cannot constitute a physical address for the purposes of the Regulations. 44 Ordinarily, a person cannot leave articles at a post office box, but rather must send the article by way of post, which the postal authority will then deliver to the box. There is no doubt that the physical post office box is a tangibly identifiable place, and in that sense, it is a physical place. However, it does not follow that it is a physical address for the purposes of reg 40(1). In my view a post office box address cannot constitute a physical address because it is, ordinarily, an address to which articles can only be posted. 45 The second issue is whether the applicant actually gave the respondent a preferred address for service. The evidence shows that the applicant gave the relevant post office box address in her income tax return for the year ended 30 June 2004. Some doubt was raised about this at the hearing, however I am content to proceed on the basis that the post office box address was the applicant's preferred address for service. It is therefore unnecessary to consider reg 38 which provides for substitution of a preferred address for service. 46 Therefore, on having taken the view that the post office box address does not constitute a physical address for the purposes of reg 40(1), I find that the Regulations cannot be relied upon to deem the leaving of the notice of assessment by the respondent at the applicant's post office box on 25 August 2006 as effective service on that date. 47 This leads me to the respondent's second argument, which was that, absent deemed service pursuant to reg 40(1), service was still effected on 25 August 2006 by leaving the notice of assessment at the post office box. 48 The respondent submitted that it had done more than what was required by the relevant legislation and accordingly service was good. In support of this proposition, the respondent relied upon the decision of the Victorian Court of Appeal in Emhill Pty Ltd v Bonsoc Pty Ltd (2005) 12 VR 129 which concerned service of a statutory demand under s 109X of the Corporations Act 2001 (Cth). That context is important because service of a statutory demand is something that requires the same rigour as the service of a notice of assessment when one is not relying on actual service. 49 In that case, the legislation provided for service of a copy of the document in question and what was served was an original. The Court of Appeal held that strict compliance with statutory requirements for service did not prevent someone from doing more than what is required in the statute. At 133, Maxwell PA held: If it is right to regard service of the original as the highest and best form of service, and service of a copy as in that sense only second-best, then it cannot be supposed that a creditor who does more than the statute requires – by serving an original rather than a mere photocopy – fails to comply. On the contrary, in my view, where doing the lesser would suffice, doing the greater must also suffice. 50 However, whilst such principles are clearly relevant to the question of service of an assessment, there is a significant point of distinction between the circumstances before the Court of Appeal and the case before me. That case concerned actual service. One can easily accept that serving an original document on a person is better, or at least no worst, than serving a photocopy. For a person to attempt to avoid service on such a technicality clearly goes against the doctrine of strict compliance. However, here the assertion is that leaving a document at a place is better than posting the document to that place. That may be true. However, in the circumstances of these proceedings the best form of service is actual service and leaving the notice of assessment at the post office box of the applicant is clearly not a better form of service. Without the benefit of the regulations or there being deemed service upon the applicant, including a deeming as to the time of service, the respondent cannot show that the notice of assessment was actually served upon the applicant prior to the service of the Garnishee Notices. As a fact, I cannot assume that the applicant, even through an agent, became aware on 25 August 2006 that the notice of assessment was placed in her post office box. There was no positive evidence before me that the applicant in fact received notice of the assessment on 25 August 2006. Indeed, the uncontested evidence of the applicant was that as at 29 August 2006 she still had no notice of the assessment. 51 It is well to remember the comments of Everett J in Deputy Commissioner of Taxation v Naidoo [1981] 81 ATC 4,537 at 4,543 to 4,544: I am in no doubt that the action of the officer of the Australian Taxation Office in taking the more direct and expeditious course of visiting the offices of the defendant's tax agents and personally delivering the notices of assessment to a partner of the firm was properly motivated, but I feel bound to hold that it did not comply with relevant provisions of the Act and Regulations. It is obviously an advantage to the Australian Taxation Office in some cases to be able to serve notices and other communications by following the method prescribed by either para (b) or para (c) of reg 59, but I consider that, if it does so, it is bound to adhere strictly to the letter of the regulation. Any departure from a plain and natural interpretation of the words of reg 59 could bring doubt and uncertainty into an area which is clear and definite. Regulation 59 is a protection for the Deputy Commissioner against taxpayers who may seek to evade their tax obligations by avoiding service of documents. The Taxation Office merely has to follow an appropriate option given by reg 59 to be able to pursue its administrative duties. It will only encounter legal difficulties if it disregards strict compliance with reg 59, even though the departure may appear completely technical and really of no significance. 52 His Honour went on to explain that the significance of service in the context of the creation of a tax liability against a person means the requirements of service must be regarded as matters strictissimi juris. In deciding that service was not effected in that case, his Honour held at 4,544: Despite the natural belief of the Deputy Commissioner in this case that the circumstances warranted the most expeditious and certain means in his judgement of bringing the obligation of the defendant to his personal notice, it remained necessary to comply with the provisions of the Act and the Regulations. 53 The Regulations operate, to the benefit of the respondent, to provide for deemed service in situations where the taxpayer may otherwise avoid being personally served. Strict compliance with the requirements of service is necessary, absent which evidence must be adduced to prove actual service, and here that actual service on the applicant occurred on 25 August 2006 prior to the service of the Garnishee Notices. 54 It is to be noted that the operation of reg 40 does not affect the operation of other laws of the Commonwealth, states or territories that deal with the service of documents: see reg 40(3). However, given that the notice of assessment was not served by post or left at the address of the place of residence or business, neither the Evidence Act 1995 (Cth) or the Acts Interpretation Act 1901 (Cth) assist the respondent. Accordingly, I am not satisfied that the notice of assessment was served on 25 August 2006, so there was no debt due and payable to the Commonwealth on that date, and the Garnishee Notices were invalid. Effective disposal of the matter 55 Given my finding that the Garnishee Notices were invalid, the question then arises as to what to do with the money paid into Court pursuant to the interlocutory orders made on 20 September 2006. It is clear that the notice of assessment has now been served on the applicant, and the debt is due and payable. The respondent submitted that in the meantime the tax must be paid. 56 I will allow the parties time to consider their position in relation to the money in Court. Accordingly I will hear submissions as to what orders should be made in light of these reasons. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton. Associate: Dated: 4 May 2007 Counsel for the Applicant: F G A Beaumont QC with E Power Solicitor for the Applicant: Galbally and O'Bryan Counsel for the Respondent: H M Symons SC with P D Nicholas Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 22 and 23 November 2006 Date of Judgment: 4 May 2007	7,789
federal_court_of_australia:fca/single/2007/2007fca2079	decision	commonwealth	federal_court_of_australia	text/html	2007-12-13 00:00:00	Anzon Australia Limited, in the matter of Anzon Australia Limited [2007] FCA 2079	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2007/2007fca2079	2024-09-13T22:45:11.472725+10:00	FEDERAL COURT OF AUSTRALIA Anzon Australia Limited, in the matter of Anzon Australia Limited [2007] FCA 2079 ANZON AUSTRALIA LIMITED (ABN 46 107 406 771) NSD 2390 OF 2007 LINDGREN J 13 DECEMBER 2007 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2390 OF 2007 IN THE MATTER OF ANZON AUSTRALIA LIMITED (abn 46 107 406 771) BETWEEN: ANZON AUSTRALIA LIMITED (ABN 46 107 406 771) Plaintiff JUDGE: LINDGREN J DATE OF ORDER: 13 DECEMBER 2007 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Pursuant to s 411(1) of the Corporations Act 2001 (Cth) (Act): (a) the plaintiff, Anzon Australia Limited (Anzon) convene a meeting (Scheme Meeting) of the ordinary shareholders in Anzon other than the holders of Excluded Shares, for the purpose of considering and, if thought fit, agreeing (with or without modification) to a Scheme of Arrangement proposed to be made between Anzon and its ordinary shareholders, other than the holders of Excluded Shares, the terms of which are contained in Annexure B of the scheme booklet which is exhibit 1 in these proceedings (Scheme Booklet); (b) the Scheme Meeting to be held on 29 January 2008 at 10am at The Bradfield Room 2 Harbourview Hotel, 17 Blue St, North Sydney; (c) Stephen Joseph Koroknay or failing him, Andrew Alexander Young act as Chairman of the Scheme Meeting; (d) the Chairperson of the Scheme Meeting have the power to adjourn the Scheme Meeting for such time that the Chairman considers appropriate; (e) the Scheme Booklet be approved for distribution to shareholders; and (f) the Scheme Booklet to be dispatched to each of the shareholders of the plaintiff be in the form or to the effect of exhibit 1 and may be sent by pre-paid post, and in the case of a member of the plaintiff whose registered address is outside the country, by pre-paid airmail post, or dispatched by air courier for overseas pre-paid post. 2. Rule 2.15 of the Federal Court (Corporations) Rules 2000 (Cth) shall not apply to the Scheme Meeting, except in so far as that rule applies Regulation 5.6.13 of the Corporations Regulations 2001 (Cth). 3. The plaintiff publish a notice of the hearing of any application for an order approving the Scheme substantially in the form of "Annexure A" hereto on or before 22 January 2008 and the plaintiff is relieved from compliance with Rule 3.4 of the Federal Court (Corporations) Rules 2000 (Cth) to the extent necessary. 4. The proceedings be stood over to 1 February 2008 at 9.30 am before Justice Lindgren, for hearing of any application to approve the Scheme. 5. The plaintiff be grated liberty to apply. (a) The plaintiff exercise the liberty to apply referred to in Order 5 if the plaintiff proposes to inform shareholders of any amendment to the Merger Ratio. 6. These Orders be entered forthwith. An "Excluded Share" is a fully paid ordinary share in Anzon held by Arc Energy Limited or its Related Bodies Corporate as defined in section 50 of the Act. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2390 OF 2007 IN THE MATTER OF ANZON AUSTRALIA LIMITED (abn 46 107 406 771) BETWEEN: ANZON AUSTRALIA LIMITED (ABN 46 107 406 771) Plaintiff JUDGE: LINDGREN J DATE: 27 DECEMBER 2007 PLACE: SYDNEY REASONS FOR JUDGMENT (first court hearing) INTRODUCTION 1 On 13 December 2007 I made an order pursuant to s 411(1) of the Corporations Act 2001 (Cth) (the Act) on the application of the plaintiff (Anzon Australia) that Anzon Australia convene a meeting of its ordinary shareholders, other than holders of excluded shares, for the purpose of their considering and, if thought fit, agreeing (with or without qualification) to a scheme of arrangement between Anzon Australia and its shareholders (Scheme Meeting, Shareholders and Scheme respectively). An excluded share is a fully paid ordinary share in Anzon Australia held by ARC Energy Limited (ARC) or its Related Bodies Corporate as defined in s 50 of the Act. 2 I also made an order pursuant to s 411(1) of the Act approving the explanatory statement required by s 412(1)(a) of the Act to accompany the notice convening the Scheme Meeting for distribution to the Shareholders. 3 The following are the reasons why I made those orders. OUTLINE OF SCHEME 4 Anzon Australia is a public company registered in Victoria. Its securities are listed on the Australian Stock Exchange (ASX). It carries on business as an oil and gas exploration company. 5 Under the proposed Scheme, the Shareholders will sell all of their shares, other than excluded shares, to ARC. ARC is a public company also listed on the ASX. 6 The consideration that the Shareholders will receive for each share in Anzon Australia is a value equal to 1.175 ARC shares for every Anzon Australia share (the Merger Ratio), subject to adjustment in certain circumstances under a reset mechanism (see para 12). 7 The Shareholders can elect to receive the consideration (Scheme Consideration) in one of the following three forms: (a) The All Shares Consideration Option, comprising 1.175 ARC Shares per ordinary share in Anzon Australia Share; (b) The Mixed Scheme Consideration Option, comprising $0.50 cash per ordinary share in Anzon Australia plus the number of ARC shares required to bring the value of the Scheme Consideration up to the value of the Merger Ratio; or (c) The Maximum Cash Consideration Option comprising: (i) $0.50 cash per ordinary share in Anzon Australia; (ii) a further cash sum being a proportionate share of the "Total Scheme Cash Pool Residual" (being $115 million less the amount of cash paid to Shareholders who elect the Mixed Scheme Consideration Option); plus (iii) the number (if any) of ARC shares required to bring the value of the Scheme Consideration up to the value of the Merger Ratio. 8 If a Shareholder does not make a valid election, that Shareholder is deemed to have elected the Maximum Cash Consideration Option for all shares held. 9 The Scheme will effect the acquisition of Anzon Australia by ARC and will result in Anzon Australia becoming a wholly owned subsidiary of ARC. Anzon Australia will then cease to the listed on the ASX. 10 Anzon Australia and ARC entered into a Merger Implementation Deed (MID) on 24 October 2007, as amended and restated on 12 December 2007. By the MID, they agreed to use their best endeavours to implement the Scheme, subject to satisfaction or waiver of various conditions precedent. The conditions precedent include Shareholder and Court approval. 11 The Scheme will be implemented as follows: (a) ARC will provide the cash component of the Scheme to Anzon Australia on the business day prior to the implementation date of the Scheme by depositing that sum into a trust account operated by Anzon Australia as trustee for the Shareholders as at the record date (being five business days prior to the implementation date); (b) On the implementation date, ARC will provide the scrip component of the Scheme Consideration to the Shareholders (other than "Ineligible Foreign Shareholders" and "Sale Facility Participants" – see respectively para 20 and para 14) by entering the shareholding details of the Shareholders in the register of members of ARC, and despatching (within five business days) to the Shareholders the relevant holding statements, share certificate or equivalent documentation representing the total number of ARC shares issued to the respective Shareholders; (c) The scrip component of the Scheme Consideration which would otherwise be required to be issued to "Ineligible Foreign Shareholders" and "Sale Facility Participants" will be issued to ABN Amro Equities Australia Limited (ABN Amro) as the entity appointed by ARC for the purposes of sale and remission of the proceeds of sale to ARC. ARC will hold the proceeds of sale on trust for such "Ineligible Foreign Shareholders" and "Sale Facility Participants" and ARC will pay the proceeds to them according to their entitlements; (d) On the implementation date, all of the shares in Anzon Australia will be transferred to ARC. 12 The reset mechanism works in the following way. ARC is entitled to reset the Merger Ratio during a "Reset Period" if: · during a "Drilling Period", a public announcement is made by ARC which provides confirmation of a "Material Discovery" having been made as a direct result of drilling on permits in which ARC holds an interest; · ARC's post-discovery share price is 15% greater than its pre-discovery share price; and · ARC's share price also outperforms the S&P/ASX Energy 200 index by a cumulative 15%. 13 The "Reset Period" is defined in the MID. Anzon Australia will notify the Shareholders of any amendment to the Merger Ratio in advance of the Scheme Meeting by making an announcement to the ASX and sending a separate communication to the Shareholders outlining the effect of the reset mechanism being triggered. 14 I have referred above to the "Sale Facility Participants". The reference is to Shareholders who, at their option, elect to dispose of the scrip component of the Scheme Consideration to which they are entitled, under a sale facility conducted by ABN Amro (Sale Facility). DEEDS POLL 15 The obligations of ARC under the Scheme, and those of ABN Amro under the Sale Facility, are supported by separate deeds poll executed by ARC and ABN Amro in favour of the Shareholders. A POSSIBLE TAKEOVER BID FOR THE SHARES IN ANZON AUSTRALIA 16 If the Scheme is not agreed to by the Shareholders, but a certain related scheme between Anzon Energy Limited (which holds approximately 53% of the shares in Anzon Australia) and its shareholders is approved both by the Court and the shareholders of Anzon Energy Limited, ARC must make a takeover bid under Ch 6 of the Act in respect of the ordinary shares in Anzon Australia. The consideration which ARC would offer under the takeover bid for each ordinary share in Anzon Australia would be the number of ARC shares equal to the Merger Ratio. There would be no cash consideration. However, Shareholders would be offered the opportunity to participate in a sale facility on terms similar to the Sale Facility that forms part of the Scheme. RECOMMENDATION BY THE DIRECTORS OF ANZON AUSTRALIA 17 The board of directors of Anzon Australia unanimously recommends that, in the absence of a superior proposal, the Shareholders vote in favour of the Scheme. INDEPENDENT EXPERT'S REPORT 18 Deloitte Corporate Finance Pty Ltd (Deloitte) was retained by the board of directors of Anzon Australia as an independent expert to assess the Scheme. Deloitte has prepared a report in which it concludes that the Scheme is in the best interests of the Shareholders in the absence of a superior proposal. Deloitte assesses the fair market value of each share in Anzon Australia to be between $1.40 and $1.60. Deloitte assesses the value of the Scheme Consideration by estimating the fair market value of a share in the proposed merged entity as being between $1.50 and $1.60. Deloitte estimates the value of the Scheme Consideration to be received by the Shareholders, that is to say, 1.175 ARC shares for every ordinary share in Anzon Australia, as being between $1.65 and $1.75 per ordinary share in Anzon Australia. PERFORMANCE RISK 19 The provision for payment of the cash component of the Scheme Consideration to Anzon Australia prior to the transfer of the Shareholders' shares in that company (see para 11(a)) is a safeguard against the risk that the Shareholders will suffer delay or default in the provision of the Scheme Consideration after their shares have been transferred to ARC. They will not be relegated to the remedy of suing on the deed poll: see KAZ Group Ltd [2004] FCA 738; Re Tempo Services Ltd (2005) 53 ACSR 523 at 524; SFE Corporation Ltd (2006) 59 ACSR 82; Re Brambles Industries (2006) 59 ACSR 501; Re APN News & Media Ltd (2007) 62 ACSR 400 at 405, at [23]. The cash component of the Scheme Consideration will be held by Anzon Australia on trust for the Shareholders according to their respective entitlements. INELIGIBLE FOREIGN SHAREHOLDERS 20 I have referred above to the "Ineligible Foreign Shareholders". This reference is to a small number of foreign shareholders in Anzon Australia in respect of whom it is proposed that the scrip component of the Scheme Consideration to which they will become entitled be issued to ABN Amro as the entity appointed by ARC for the purposes of sale and the payment of the proceeds of sale to the Shareholders. EXCLUSIVITY ("NO SHOP" AND "NO TALK") RESTRICTIONS 21 Clause 9 of the MID is an exclusivity clause which contains "no shop" and "no talk" restrictions. The period of this exclusivity clause is from the date of the MID, being 24 October 2007, until the earlier of the end date of the MID, being 31 March 2008, or the termination of the MID in accordance with its terms. The maximum period of the exclusivity clause is therefore just over five months. 22 The exclusivity provisions are subject to the overriding obligations of the directors of Anzon Australia and ARC not to breach their fiduciary duties or statutory obligations. 23 The exclusivity provisions are given appropriate prominence in the Scheme Booklet. 24 I do not think that there is anything untoward or alarming in these provisions. BREAK FEE 25 The MID provides in cl 10 for a break fee of $4 million. The break fee is reciprocal: it is payable by Anzon Australia to ARC and by ARC to Anzon Australia in the circumstances identified in the MID. 26 The break fee is not triggered merely by reason of the Shareholders voting not to agree to the Scheme. Accordingly, it is not a disincentive to the Shareholders in their consideration of the proposed merger. 27 The reasonableness and appropriateness of the break fee is supported by affidavit evidence of the kind to which I referred in Re APN News & Media Ltd (2007) 62 ACSR 400 at 411, at [55]. In particular, there is affidavit evidence of Steven Joseph Koroknay, a non-executive director and Chairman of the board of directors of Anzon Australia, to the following effect: · The break fee was agreed to as a result of normal commercial negotiations between Anzon Australia and ARC; · ARC required the break fee provision and the board of Anzon Australia was satisfied that the final form of the provision was acceptable; · The board of Anzon Australia negotiated a reverse break fee equal in amount; · Mr Koroknay believes that neither the break fee nor the exclusivity provisions mentioned above operate against the interests of the Shareholders and that it was in the interests of the Shareholders that those provisions be included in the MID; · The break fee of $4 million is approximately 0.88% of the total equity value of Anzon Australia, or 0.85% of the total equity value assuming that options to take up shares are exercised. Accordingly, the break fee is below the 1% "cap" referred to in para 7.14 of the Takeovers Panel's Guidance Note 7: Lock-up devices; and · The break fee of $4 million is approximately 0.64% of the value of the Scheme Consideration or 0.62% of the value of the Scheme Consideration assuming that options to take up shares are exercised. 28 In my view, the break fee provision should not stand in the way of the Shareholders having the opportunity to consider the Scheme. OPTION HOLDERS 29 There are 18,750,000 options on issue to subscribe for ordinary shares in Anzon Australia. Under the MID, Anzon Australia is to use its best endeavours to procure that each option holder has entered into an "Option Purchase Agreement" with ARC or exercised all of their options prior to the date of the Scheme Meeting. 30 The number of new ARC shares that each option holder will receive for each option, in consideration for the transfer of the option to ARC, will be the number of new ARC shares equal to the All Shares Consideration Option value, less the exercise price of the option. FINANCIAL ASSISTANCE 31 It is a condition precedent to the operation of the MID that Anzon Australia be "debt free" at 5 pm on the day prior to the second court hearing. 32 In so far as the repayment of debt by Anzon Australia would be likely to be financial assistance under Part 2J.3 of the Act, s 260C(5)(d) of the Act exempts "a discharge on ordinary terms of a liability that the company has incurred as a result of a transaction entered into on ordinary commercial terms" from the requirements of s 260A. 33 Moreover, s 260A(1) of the Act allows the giving of financial assistance to a person by a company for the acquisition of shares in the company or in its holding company, in the circumstances stated in paras (a), (b) or (c) of s 260A(1). The condition referred to in s 260A(1)(a) is that the giving of the financial assistance does not materially prejudice the interests of the company or its shareholders, or the company's ability to pay its creditors. 34 I accept Anzon Australia's submission that, on the evidence, the proposed discharge of Anzon Australia's liabilities would be exempt under s 260C(5)(d) of the Act and that, in any event, the giving of the financial assistance would not be prejudicial to the interests of Anzon Australia or the Shareholders or to Anzon Australia's ability to pay its creditors. I accept the submission because: (a) the Shareholders will be given the opportunity to vote on the proposed Scheme after full disclosure of the proposed repayment of debt; and (b) the proposed repayment of debt does not materially prejudice the ability of Anzon to pay its creditors, according to Mr Koroknay's affidavit evidence. CONCLUSION 35 It was for the above reasons that I was of the opinion that the Shareholders should have the opportunity of voting on the Scheme and that I ordered Anzon Australia to convene the Scheme Meeting. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate: Dated: 27 December 2007 Counsel for the plaintiff: Mr F Gleeson SC and Mr N M Bender Solicitor for the plaintiff: Deacons Counsel for ARC Energy Limited: Mr J Stoljar Solicitor for ARC Energy Limited: Mallesons Stephen Jaques Date of Hearing: 13 December 2007 Date of Judgment: 13 December 2007 Date of Publication of Reasons 27 December 2007	4,355
federal_court_of_australia:irc/1995/1995irca0713	decision	commonwealth	federal_court_of_australia	text/html	1995-12-01 00:00:00	Garry David Robertson v Queendale Investments Pty Limited, trading as Cash Converters Gosnells [1995] IRCA 713	https://www.judgments.fedcourt.gov.au/judgments/Judgments/irc/1995/1995irca0713	2024-09-13T22:45:12.784759+10:00	DECISION NO: 713/95 C A T C H W O R D S INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - ALLEGED UNLAWFUL TERMINATION - whether VALID REASON - whether PROCEDURAL FAIRNESS - negligible loss of REMUNERATION - COMPENSATION Industrial Relations Act 1988, Ss 170DC, 170DE(1), 170EA. GARRY DAVID ROBERTSON - v - QUEENDALE INVESTMENTS PTY LIMITED, TRADING AS CASH CONVERTERS GOSNELLS - WI 95/1897 BEFORE: R D FARRELL JR PLACE: PERTH DATE: 1 DECEMBER 1995 IN THE INDUSTRIAL RELATIONS) COURT OF AUSTRALIA ) WESTERN AUSTRALIA ) DISTRICT REGISTRY ) No. WI 95/1897 BETWEEN: GARRY DAVID ROBERTSON - Applicant AND QUEENDALE INVESTMENTS PTY LIMITED, TRADING AS CASH CONVERTERS GOSNELLS - Respondent MINUTE OF ORDERS BEFORE: R D FARRELL JR PLACE: PERTH DATE: 1 DECEMBER 1995 THE COURT ORDERS THAT: 1. The name of the respondent be amended to Queendale Investments Pty Ltd trading as Cash Converters Gosnells. 2. The application be allowed. 3. The respondent pay to the applicant the sum of $350 within seven days of the date of this order. NOTE:Settlement and entry of Orders is dealt with by Order 36 of the Industrial Relations Court Rules IN THE INDUSTRIAL RELATIONS) COURT OF AUSTRALIA ) WESTERN AUSTRALIA ) DISTRICT REGISTRY ) WI 95/1897 BETWEEN: GARRY DAVID ROBERTSON - Applicant AND: QUEENDALE INVESTMENTS PTY LIMITED, TRADING AS CASH CONVERTERS GOSNELLS - Respondent BEFORE: R D FARRELL PLACE: PERTH DATE: 1 DECEMBER 1995 REASONS FOR JUDGMENT (EX TEMPORE) Revised from Draft Transcript This was an application brought under section 170EA of the Industrial Relations Act 1988 for compensation as a result of the allegedly unlawful termination of the applicant, Garry David Robertson ("Mr Robertson"), by the respondent. The respondent trades under the name of Cash Converters Gosnells ("Cash Converters"). It was revealed in evidence that the respondent's correct name is in fact Queendale Investments Pty Ltd trading as Cash Converters Gosnells. The first order that I would make, in the absence of any objection, is therefore that the name of the respondent in this application be altered to reflect that fact. Cash Converters contended that Mr Robertson was dismissed for a valid reason relating to the operational requirements of the undertaking. The evidence was that 10 per cent of the shares of Cash Converters were purchased by Mr Santokh Gill, who was a sales assistant employed by the company. The other 90 per cent of the shares were controlled by Christopher Mitchell, the managing director of the company, who appeared for the company at the hearing. Mr Robertson had at that stage been employed as manager of the business for one month. Following Mr Gill's purchase of the shares, a decision was made by Cash Converters, of which Mr Gill was by then one of three directors, to make Mr Gill the manager of the company. As a result, Mr Robertson had to be moved to another position. Mr Robertson had, until that point been employed as a manager at a rate of $500 per week net. He was advised of the proposed change by Mr Mitchell one day before it took effect. He was told he would be offered the position of Buying and Loans Manager at the rate of $400 net per week, which appears to have been a little more than what was being paid to other sales assistants at the time. Mr Robertson considered his options overnight, discussing it with his wife, and decided that he had no choice but to accept the demotion. He commenced work the next day under the management of Mr Gill. I am satisfied that there was no relevant change in the employment arrangements, as opposed to the ownership, of Cash Converters. There was merely a shifting around of the same personnel within the same employment positions. The question which then arises is whether this was genuinely a change resulting from the operational requirements of the undertaking. I am not satisfied that it was. In analysing situations of this sort, one must have regard to the employment status of individuals separately from their status as a shareholder or as a director of a company. Where a person buys into and obtains control of the company, then it might be argued that, flowing from that, they have an unrestricted right to install themselves in an employment management position within the company. However, where a person buys shares in a company but does not obtain control of the company, then in my view no special privilege in connection with employment with the company should flow from that. If they are to obtain employment in the company at the expense of another of the company's employees, then it should be justifiable on the basis of merit or on the basis of the criteria set out under the Act. However, in this case the change in the employment relationship between the company and Mr Robertson did not extend to dismissal at that time. Mr Robertson was given the option of leaving or taking the lower paid job. Had he have left, he may well have been able to argue that there was, in all the circumstances, a termination at the initiative of the employer, and I'm inclined to the view that he would have been on strong ground to do so. However, for understandable reasons he chose to stay. If it was a repudiatory act on the part of the employer to present him with a demotion, then it was not a repudiation that the employee chose to accept. Accordingly, Mr Robertson stayed on, not for a short period, but rather for two months; this constituted two-thirds of his overall employment with Cash Converters Gosnells. Mr Mitchell then approached him and had a conversation which brought about the termination of Mr Robertson's employment. It was not really contested that the conversation was brief and fairly casual. In the course of it, Mr Mitchell told Mr Robertson that he did not believe that he and Mr Robertson were "getting on". He told Mr Robertson that "It wasn't working out", and advised him that his employment would come to an end at the conclusion of the following Saturday. There was dispute as to when this conversation took place. Mr Mitchell says it took place early in that week. Mr Robertson says it took place on the Friday. It is of some relevance when the conversation took place because if there was greater notice then that would tend to make the termination less harsh. On balance, I find that it is more probable that the conversation took place on the Friday than earlier in the week, and I do so chiefly because it seems to me that it would have been a matter of greater moment to Mr Robertson than to Mr Mitchell, and that Mr Robertson is therefore likely to have a better recollection of when it took place. I do not believe that either of the witnesses was intentionally giving inaccurate evidence about the matter. Assuming that that conversation took place on the Friday and the employment finished up the next day, Saturday, the question then arises, whether or not the employment was lawfully terminated at that point. Mr Robertson says that he did not realise there were any problems and that it had never been suggested to him previously that there were any problems following his demotion from the management position. In the witness box Mr Mitchell found it very difficult to articulate exactly what the problem was, other than to re-iterate that there was a problem, that it was not working out and that things were not going smoothly. The final termination could not properly be described as a termination based on the operational requirements of the undertaking. If anything, there was a vague suggestion that it had something to do with Mr Robertson's capacity or conduct. In reality, this is a case of no clear reason being given to the employee at all and, indeed, of no clear reason being able to be given to the court. If any reason going to capacity or conduct might be discerned then it is clear that any allegations of shortcomings in those areas were not put to Mr Robertson at the time of his termination as is required by section 170DC of the Act. Therefore, I find that the dismissal was unlawful, firstly, because the employer has not satisfied me that there was a valid reason for termination, as is required by Section 170DE(1), and secondly, because if there was some valid reason going to conduct and capacity it was not put to the employee, as is required by Section 170DC. In so finding, I recognise that from Mr Mitchell's point of view he made an assessment that, in a general sense, things were not running smoothly, and that he then took the decision that the solution to that perceived problem was to bring the employment of Mr Robertson to an end. I also note that Mr Mitchell took steps to try and alleviate any consequential loss to Mr Robertson resulting from his dismissal, by ringing around the other stores in the Cash Converters chain trying to arrange another job for Mr Robertson. The bottom line, however, is that had Mr Robertson not been successful in getting a new job despite Mr Mitchell's best efforts, Mr Mitchell's actions would have left Mr Robertson out of work for reasons which he did not understand and in circumstances where, as Mr Mitchell found at the hearing, it was difficult to point to what the reason for dismissal was. Now, I understand that sort of thing has been happening for years, and that in the past it has been something that employers have been able to do, but Division 3 Part VIA of the Act has now been put in place. It recognises the central importance in a person's life of their job and puts in place some processes which give an employee some security in their employment. It is not the case that an employer cannot dismiss somebody if they are not meeting the standards that the employer requires, but it is the case that the employer may have to be a little more formal about it than was previously the case, that they have to articulate to the employee what the problem is and give the employee an opportunity to fix the problem. Having said that, I turn to consider what order as to compensation, if any, I should make. In doing that I have to look at what loss Mr Robertson has suffered. He received one week's pay in lieu of notice. He was finished up on Saturday so the payment of notice would take him up to the following Saturday. I then find as a matter of fact that he started work in his new job the next Monday so it seems to me that any loss in terms of the period he was out of work is negligible. In fact, assuming he was not previously working on the Sunday, it seems to me there is no loss at all. The other possible loss would be any ongoing loss as a result of a reduction in income. Mr Robertson in his new job is earning $475 net per week. At the time he left his old job he was getting $400 net. I appreciate that at the time he commenced his old job he was getting $500 net, and there may have been some unfairness in the manner in which he was demoted, but that was not a matter he chose to pursue at the time. I do not feel that I can "concertina" these events into the one termination, in the way that I have been invited to by Mr Robertson's solicitor, given that two months elapsed between them. Accordingly, I find that the relevant figure with which his new salary of $475 net should be compared is $400 net rather than $500 net. Therefore, I find that there is no ongoing loss of salary. The final matter is the stress allegedly suffered by Mr Robertson as a result of what has happened. I am satisfied that Mr Robertson was genuinely perplexed by the circumstances of his dismissal and that this could have been avoided had the process of dismissing him been different. However, he is fortunate enough to have gone into another job which has improved his circumstances. I am proposing to make a relatively nominal award of compensation to reflect his distress arising from the circumstances of his dismissal and I would fix that award at a sum of $350. I certify that this and the preceding six pages are a true copy of the Reasons for Judgment of Judicial Registrar R D Farrell. Associate Date Counsel for the applicant: Mr D I Connor Solicitors for the applicant: Julienne Penny & Associates The respondent represented itself Hearing date: 1 December 1995 Judgment date: 1 December 1995	2,654
federal_court_of_australia:fca/single/1996/1996fca1171	decision	commonwealth	federal_court_of_australia	text/html	1996-12-17 00:00:00	Alphapharm Pty Ltd v Minister of Human Services & Health & Ors [1996] FCA 1171	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1996/1996fca1171	2024-09-13T22:45:19.113303+10:00	IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 621 of 1994 ) GENERAL DIVISION ) BETWEEN: ALPHAPHARM PTY LIMITED Applicant AND: MINISTER OF HUMAN SERVICES AND HEALTH and OTHERS Respondent Coram : Davies J Place : Sydney Dated :17 December 1996 MINUTES OF ORDER Motion dismissed. Costs in the Cause. NOTE : Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) ) No NG 621 of 1994 GENERAL DIVISION ) BETWEEN : ALPHAPHARM PTY LIMITED Applicant AND : MINISTER OF HUMAN SERVICES AND HEALTH and OTHERS Respondent Coram : Davies J Place : Sydney Dated :17 December 1996 REASONS FOR JUDGMENT This application seeks an order for further discovery. The matter arises in relation to paragraph 68 of the statement of claim which alleges that, in about early 1993, the applicant was advised by Mr Allen Brindell, Executive Officer of the Factor (f) Secretariat of 16 Phamaceutical Benefits Pricing Authority ("the PBPA"), that there was no hurry for the applicant to lodge its Phase II factor (f) application and that, in reliance on that advice, the applicant did not lodge its application until August 1993. It is alleged that the representation was made at a time when there had been a change in the funding situation and when it was known that the PBPA might not be able to favourably grant all applications made to it which met the criteria for the scheme. The order sought is that the respondents give discovery of documents relating to any representations made by the respondents, their agents or officers to any applicant for participation in Phase II of the Factor (f) scheme that there was no need to hurry in lodging their applications or that time was not otherwise of the essence in the lodging of their applications or otherwise relating to the time for lodgment of applications. The motion is brought on information that has come to hand though a judgment of Whitlam J which shows that a Miss Cox made a representation of the type alleged to have been made by Mr Brindell, but made it back in September of 1992. It does not seem to me, however, that there would be any purpose in going through the files of the respondent to determine whether any such representations were made. So far as is shown, the representation made by Miss Cox in September 1992 would have been a correct representation of the position. It is alleged that, from December 1992 to February 1993, the position changed so that the PBPA was unable to make a grant to every applicant who lodged an application meeting the criteria and came to that position through a shortage of funds. The question thus arises as to whether it would be desirable to obtain discovery of documents which might show representations during some relevant period. Mr White, counsel for the applicant, put the case primarily on the basis of similar fact evidence saying that if other representations were made, they may be relevant to the allegation made in paragraph 68 of the statement of claim, which is an allegation denied by the respondents. If there was to be similar fact evidence, it would have to deal with the position at about the time when Mr Brindell made his representation, which is said to be in February 1993. There is, however, at this stage no indication that the step of going through the documents once again, even for January or February 1993, would disclose any representation to applicants that there was no need to hurry in lodging their applications or that time was not otherwise of the essence in the lodging of their applications, which is the form of the order sought. Moreover, the remainder of the order sought is rather wider, and is not based on a similar fact basis. The documents have already been inspected and discovered in accordance with orders made. It seems to me, on balance, that it would not be likely that anything beneficial in the way of similar fact evidence would arise from a further search of the documents. As to the second element of the orders sought, "otherwise relating to the time for lodgment of applications", this seems to me to be a claim which is much wider than anything that has been made up to this point of time. Courts are now limiting their orders for discovery because it has been found that, if orders are made for the discovery of all the relevant documents, the results do not have a beneficial result taking into account the cost involved. The cost is burdensome to litigants, the discovery is time consuming and the time and cost of discovery are tending to overwhelm litigation. Throughout all the common law countries, courts are now restricting the orders that they make with respect to discovery. Many of the continental countries, of course, do not grant the wide orders of discovery that in the past years we have done and, if they make orders for discovery, these tend to be limited. They take the view that, if someone has a case, they should bring it on the material that they have. In past years, the common law countries have taken a very much wider view of that. But the results have tended to overwhelm litigation, so all courts now are restricting their orders. I do not have, in the present case, a sufficient feeling that there would be a beneficial result or that the point is so important that I should make any further order as to discovery. It seems to me that the applicant has an allegation which essentially arises out of an oral conversation and that the matter can properly be dealt with on the oral evidence. So for that reason I will refuse the order. I will order that the costs in the application be costs in the cause. I certify that this and the preceding 3 pages are a true copy of the reasons for judgment herein of his Honour Justice Davies. Associate : Date : 17 December 1996 Counsel for the applicant : R.W. White Solicitors for the applicant : Mallesons Stephen Jacques Counsel for the respondent : S.J. Gageler Solicitor for the respondent : Australian Government Solicitor Date of hearing : 17 December 1996 Date of judgment : 17 December 1996	1,327
federal_court_of_australia:fca/single/2014/2014fca1003	decision	commonwealth	federal_court_of_australia	text/html	2014-07-07 00:00:00	Prior on behalf of the Juru People v State of Queensland [2014] FCA 1003	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2014/2014fca1003	2024-09-13T22:45:22.207892+10:00	FEDERAL COURT OF AUSTRALIA Prior on behalf of the Juru People v State of Queensland [2014] FCA 1003 Citation: Prior on behalf of the Juru People v State of Queensland [2014] FCA 1003 Parties: CAROL PRIOR, RAYMOND LAMPTON, RAYMOND GASTON, COLLEEN POWER, RAYLENE OUI, TANYA CHATFIELD, IRIS GLENBAR AND LENORA ALDRIDGE ON BEHALF OF THE JURU PEOPLE v STATE OF QUEENSLAND & ORS (AS PER SCHEDULE OF RESPONDENTS) File number: QUD 554 of 2010 Judge: DOWSETT J Date of judgment: 7 July 2014 Date of hearing: 7 July 2014 Place: Darwin Division: GENERAL DIVISION Category: No Catchwords Number of paragraphs: 4 Counsel for the Applicant: Ms H Bowskill QC with Ms S Phillips Solicitor for the Applicant: North Queensland Land Council Aboriginal Corporation Solicitor for the First Respondent: Crown Law Solicitor for the Second Respondent: Australian Government Solicitor Solicitor for Ms Carol Prior: Ms Prior was self-represented IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 554 of 2010 BETWEEN: CAROL PRIOR, RAYMOND LAMPTON, RAYMOND GASTON, COLLEEN POWER, RAYLENE OUI, TANYA CHATFIELD, IRIS GLENBAR AND LENORA ALDRIDGE ON BEHALF OF THE JURU PEOPLE Applicant AND: STATE OF QUEENSLAND & ORS (AS PER SCHEDULE OF RESPONDENTS) Respondents JUDGE: DOWSETT J DATE OF ORDER: 7 JULY 2014 WHERE MADE: DARWIN THE COURT ORDERS THAT: 1. Carol Prior's name be deleted from the description of the applicant and the name Vincent Mundraby be substituted for it. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 554 of 2010 BETWEEN: CAROL PRIOR, RAYMOND LAMPTON, RAYMOND GASTON, COLLEEN POWER, RAYLENE OUI, TANYA CHATFIELD, IRIS GLENBAR AND LENORA ALDRIDGE ON BEHALF OF THE JURU PEOPLE Applicant AND: STATE OF QUEENSLAND & ORS (AS PER SCHEDULE OF RESPONDENTS) Respondents JUDGE: DOWSETT J DATE: 7 JULY 2014 PLACE: DARWIN REASONS FOR JUDGMENT 1 Since a meeting of the claim group held on 20 October 2013, and pursuant to a subsequent order of the Court, the claim group is described as all those persons who are descended from Emily Pickard, Con Lymburner, Nellie Steel (or Stell), Lena Taylor, William Morrell and his wife Bessie Rook, Jinnie Ross, Eliza Lampton, mother of Arthur Lampton, and Rosie Wake. At the same meeting, the claim group addressed the composition of the applicant. The applicant is presently comprised of Carol Prior, Raymond Lampton, Colleen Power, Raylene Oui, Tanya Chatfield, Iris Glenbar, Raymond Gaston and Lenora Aldridge. At the meeting on 20 October 2013, the claim group agreed that in the event that a member of the applicant either died or was unwilling or unable to act, another nominated person would act. In the case of Ms Prior, the resolution provided: In the event of the death, unwillingness or inability to act of Carol Prior then Vincent Mundraby shall have authority to and is authorized to be one of the persons making up the applicant. 2 The present application for a native title determination is the second involving the same claim group. It has previously obtained a consent determination over other land. Ms Prior claims membership of the claim group through Lena Taylor. Ms Taylor was also an apical ancestor in the earlier determination. It seems quite clear that the claim group has agreed that she is an apical ancestor. Ms Prior now wishes to be joined as a respondent in order to investigate and, perhaps oppose Ms Taylor's inclusion as an apical ancestor. At least implicitly, Ms Prior's authority to act as a member of the applicant was to act in accordance with the resolution of the claim group as to the description of its own composition. Ms Prior's application to be joined as a respondent for the purpose of opposing a determination which includes Ms Taylor as an apical ancestor indicates that she is no longer willing to act in accordance with instructions from the claim group. In those circumstances Mr Mundraby is now authorized to act in her place. 3 In the course of argument, it has emerged that the members of the applicant have not been given copies of the anthropological evidence upon which the consent determination is to be based. No doubt they have been acquainted with its contents, but it is unsatisfactory that litigation of this kind should be conducted upon the basis that the effective moving parties in the matter should not be allowed complete and unfettered access to the content of the most important evidence in the case. There may be exceptions to this. There may be reasons why some parts should be kept confidential but, in general, in my view at least, the lawyers should start with the assumption that the applicant members are entitled to access, and then to decide whether there is good reason for not giving them such access. By access I do not mean allowing them to examine the report in the rather artificial, and perhaps alien circumstances of a solicitor's office or a Land Council office. I see no reason why they ought not have access to copies in circumstances in which they can, at their leisure, examine and assess the information in question. I stress, however, that I accept that there may be some parts of the material in respect of which confidentiality should be maintained. 4 I order that Ms Prior's name be deleted from the description of the applicant, and the name "Vincent Mundraby" be substituted for it. I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. Associate: Dated: 15 September 2014 SCHEDULE OF RESPONDENTS STATE OF QUEENSLAND First Respondent COMMONWEALTH OF AUSTRALIA Second Respondent WHITSUNDAY REGIONAL COUNCIL Third Respondent BURDEKIN SHIRE COUNCIL Fourth Respondent ERGON ENERGY CORPORATION LIMITED Fifth Respondent PAUL CURTEIS, MELLASANNE GRAY, NOEL GRAY, KAREN QUADRELL, MATT QUADRELL, NATHAN RYNN, TRAVIS RYNN, GFB DEVELOPMENTS PTY LTD Sixth Respondent ENERGY MINERALS PTY LTD Seventh Respondent AURIZON NETWORK PTY LTD, AURIZON PROPERTY PTY LTD Eighth Respondent HANCOCK COAL INFRASTRUCTURE PTY LTD Ninth Respondent TELSTRA CORPORATION LIMITED Tenth Respondent LONDA CAMERON DAHL, PETER LEONARD DAHL, SCOTT JOSEPH JONES, SONIA ANNE JONES, STEVEN JOHN NORMAN, LESLIE JOHN PAYNE, LEONIE GALE PHILIPSON, NEVILLE JOHN PHILIPSON, ELDA RONCATO, PAUL RONCATO, DALE KELVIN SIBSON, KELVIN ROY SIBSON, LYNETTE ESTELLE SIBSON, CRAIG LYNTON WIGHT, MARK LYNTON WIGHT, RACHEL GAY WIGHT, ROBERT LYNTON WIGHT, JOHN ALEXANDER WILLIAMS, MERRILYN JEAN WILLIAMS Eleventh Respondent CHRISTINE ANNE BENVENUTI, PAUL RAYMOND BENVENUTI Twelfth Respondent	1,845
federal_court_of_australia:fca/single/1998/1998fca0899	decision	commonwealth	federal_court_of_australia	text/html	1998-07-13 00:00:00	Macks, Peter as Trustee of Bankrupt estate of Gorcilov, Donka v Ekena Pty Ltd & Anor [1998] FCA 899	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1998/1998fca0899	2024-09-13T22:45:22.268458+10:00	IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY SG 7074 of 1998 BETWEEN: peter macks as trustee of bankrupt estate of donka gorcilov Applicant AND: ekena pty ltd and another Respondent JUDGE: VON DOUSSA J DATE OF ORDER: 13 JULY 1998 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: The application for leave to appeal be dismissed with costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY SG 7074 of 1998 BETWEEN: peter macks as trustee of bankrupt estate of donka gorcilov Applicant AND: ekena pty ltd and another Respondent JUDGE: VON DOUSSA J DATE: 13 JULY 1998 PLACE: ADELAIDE REASONS FOR JUDGMENT This is an application seeking leave to appeal from a decision given by Mansfield J on 22 June 1998. The decision was an interlocutory one and it is for that reason that leave is required. By way of background history, Mrs Donka Gorcilov became bankrupt on 20 February 1998 on her own petition which referred to an act of bankruptcy which occurred on 10 July 1997. It is the contention of the present trustee in bankruptcy that the bankruptcy commenced on 10 July 1997. The present applicant in these proceedings, Mr P Macks, became the trustee of the bankrupt's estate following a meeting of creditors on 17 March 1998. The trustee alleges that following the commencement of the bankruptcy, some assets of the bankrupt were disposed of, in particular three properties, and that the proceeds of the sale of those assets found their way directly or indirectly into the respondent company, Ekena Pty Ltd ("Ekena"). The present proceedings seek to recover moneys from Ekena which the trustee asserts represent the realisation of assets of the bankrupt. The proceedings allege that the transactions which led to the realisation of the bankrupt's assets and the movement of the funds into Ekena were done for the purposes of removing the assets from the reach of the creditors and are therefore liable to be set aside. On 2 April 1998 these proceedings were commenced and injunctions were forthwith granted on an ex parte basis. The injunctions had two limbs. The first was a general Mareva injunction restraining Ekena from the disposition of its assets generally. That injunction was subject to the proviso that certain expenses - namely, legal expenses, insurance, loan and mortgage payments, lease payments, rates and taxes and statutory charges payable by the company - could be paid out of its assets generally, notwithstanding that general injunction. The other limb of the order was a specific injunction directed to nominated assets. One of those assets is a bank account with the Macquarie Bank which presently holds some $82,000. The injunction was made initially ex parte, leave being reserved to Ekena and the Macquarie Bank to apply to vary the injunction. I gather from papers on the file that the question of the injunction being justified by the trustee, on an interlocutory basis, was originally raised in April 1998 but not proceeded with. Mansfield J in his reasons for judgment refers to the fact that it seems to have been accepted at that stage that the injunction was properly in place. Thereafter however, applications were notified to the effect that Ekena would be seeking to have the specific injunction varied so as to allow costs to be paid out of the Macquarie Bank account, and on one of the earlier hearings, an order was made for the payment of $5,000 on account of legal expenses to be made. There appear to have been a number of procedural irregularities in relation to applications to vary the Mareva injunctions. There were a number of affidavits filed on behalf of Ekena, apparently in anticipation of an application made on affidavit evidence to bring about a variation. However, the affidavits subsequently were not used and the primary judge heard oral evidence from a number of witnesses over several days in support of the application to vary the injunction in relation to the Macquarie Bank account. Ultimately on 22 June 1998, his Honour dismissed the oral application to vary the injunctions. The effect of his order was to leave the injunction in place in respect of the $82,000 in the Macquarie account. His Honour at that time also gave directions for the future conduct of the case, including directions intended to have the matter ready for trial on 19 August 1998. His Honour's reasons for declining to vary the injunction were that he was not satisfied that Ekena did not have available to it other resources to defend the proceedings. The application for variation had been made to him on the basis that it was necessary for Ekena to have access to the funds so that it could prepare its defence to the various allegations made by the trustee, all of which Ekena, through its director or Mr John Phillips, had indicated were in dispute. His Honour held that he was not so satisfied for two reasons. First, he considered that there may be other assets of Ekena, not presently known to the trustee but available to it, to meet the costs of defending the proceedings. Secondly, he considered that there were other members of the bankrupt's family who had a very real interest in Ekena and the protection of its assets who could be in a position to fund the proceedings. His Honour observed in relation to the second of these matters that in a practical sense, the real dispute was between the trustee of the bankrupt estate on the one hand and members of the bankrupt's family on the other hand. Those family members had advanced funds to Ekena and now sought to claim the benefit of the funds of the company. It is clear from his Honour's reasons that he considered that the members of the family themselves would have an interest in advancing their own funds to defend the position of the company. His Honour added two other observations in the course of his reasons, although he said that he did not decide the matter on these grounds. The first of those matters was that the trustee claimed that the funds in the Macquarie Bank, which were part of the subject matter of dispute, were actually the bankrupt's property. That being so, as a matter of law, it is at the least arguable that even if the funds were released for the purposes of paying legal fees, the lawyers using those funds could be required to repay them in the event that it was proved at trial that the moneys were the property of the bankrupt. The second matter that his Honour noted was that the amount of the costs were such that if an order were made releasing funds to defend the proceedings, it is probable that the funds in the Macquarie account would be entirely exhausted before the completion of the trial. It is necessary before granting leave to appeal from an interlocutory judgment that the Court be satisfied that in all the circumstances the decision of the primary judge is attended with sufficient doubt to warrant the decision being reconsidered by a Full Court, and that the refusal of leave will not bring about a serious injustice. The decision under challenge involves the exercise of a discretion. It is necessary for a party seeking to attack a discretionary judgment to show some error in legal principle or in fact or to establish that the exercise of discretion actually made by the judge stands outside the limits of sound discretionary judgment. That is not an easy onus to discharge where the decision of the judge under challenge rests on the finding that the evidence did not satisfy the Court of a particular matter. Mr Phillips has appeared on behalf of Ekena to argue the case in support of the application for leave to appeal. He has observed that one of the difficulties seems to be that Ekena has engaged the services of a number of solicitors from time to time and that they either have not understood, or have not been able to convey sufficiently to the Court a proper understanding of, the obviously complex financial transactions of Ekena. That may be so, but it only adds support, in my view, to the position taken by the trial judge, namely that on the evidence as it was disclosed to the Court, he was not satisfied that Ekena did not have available to it resources to enable it to defend the proceedings. I have looked through the papers on the file and considered the matters that were taken into account by the trial judge. It is an understatement to say that the transactions which have gone through the accounts of Ekena in the relevant period are complex. Mr Phillips argues that the onus was on the trustee to establish that there were other assets and that the trustee has not been able to do so. In my view, that misstates the position. In the complexity of the situation, if Ekena wishes to have the injunctions varied or discharged, the onus is on it to establish the facts which make it appropriate to do so. In my view, no arguable error of law arises from the fact that the trial judge decided the matter on the basis that the onus was on Ekena to satisfy him that it did not have other resources available to defend the proceedings. I am of the view that the decision reached by his Honour is not attended with sufficient doubt to warrant the matter being reviewed by a Full Court and I say that having regard to the actual basis upon which the trial judge determined the application before him. Moreover, in my opinion, the other matters that his Honour noted on the way through - namely that the trustee claims ownership of the moneys in dispute and the fact that if orders were made varying the injunction, the result would be that the funds in dispute would be wholly expended in litigation costs - are in themselves sufficient reasons to justify a refusal to vary the injunction. Those are additional reasons, in my view, why the actual decision of the judge is not attended with sufficient doubt to warrant it being reconsidered by a Full Court. In my opinion, the application for leave to appeal should be dismissed and I order accordingly. The normal rule is that costs follow the event. In this case, the event is the outcome of the application for leave to appeal. Leave has been refused. I order that the costs of this application be the trustee's costs against the respondent Ekena. I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice von Doussa Associate: Dated: 13 July 1998 Ekena Pty Ltd was represented by its director Mr P Tomaras and, by leave, by Mr J Phillips Counsel for the Respondent: Ms S Maharaj with Mr B Roberts Solicitor for the Respondent: Kelly & Co. Date of Hearing: 13 July 1998 Date of Judgment: 13 July 1998	2,309
federal_court_of_australia:fca/single/2007/2007fca1538	decision	commonwealth	federal_court_of_australia	text/html	2007-10-05 00:00:00	Chief Executive Officer of Customs v ICB Medical Distributors Pty Ltd [2007] FCA 1538	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2007/2007fca1538	2024-09-13T22:45:22.317883+10:00	FEDERAL COURT OF AUSTRALIA Chief Executive Officer of Customs v ICB Medical Distributors Pty Ltd [2007] FCA 1538 CUSTOMS AND EXCISE – Classification of goods – shoe inserts – whether the Tribunal erred in classifying shoe inserts as 'orthopaedic appliances' for the purposes of the Customs Tariff Act 1995 (Cth) – ordinary and natural meaning – Tribunal's entitlement to have recourse to common-sense in classifying the goods ADMINISTRATIVE LAW – s 43(2B) of the Administrative Appeals Tribunal Act 1975 (Cth) – Tribunal's obligation to give reasons for its decision – whether the obligation requires the Tribunal to give a subset of reasons why it accepts or rejects individual pieces of evidence Administrative Appeals Tribunal Act 1975 (Cth) s 43(2B) Customs Tariff Act 1995 (Cth) Sch 3 Ch 64 and Ch 90 Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 followed Chandler & Co v Collector of Customs (1907) 4 CLR 1719 followed Chinese Food and Wine Supplies v Collector of Customs (Vic) (1987) 72 ALR 591 followed Collector of Customs v Agfa-Gevaert Pty Ltd (1996) 186 CLR 389 followed Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 followed Re Minister for Immigration and Multicultural Affairs; Ex parte Durairajasingham (2000) 168 ALR 407; 74 ALJR 405 cited Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme (2003) 216 CLR 212 cited Repatriation Commission v O'Brien (1985) 155 CLR 422 cited Sharp Corporation of Australia Pty Ltd v Collector of Customs (1995) 59 FCR 6 followed Times Consultants Pty Ltd v Collector of Customs (Qld) (1987) 16 FCR 449 followed CHIEF EXECUTIVE OFFICER OF CUSTOMS v ICB MEDICAL DISTRIBUTORS PTY LTD ABN 68 093 126 133 AND ADMINISTRATIVE APPEALS TRIBUNAL NSD 603 OF 2007 RARES J 5 OCTOBER 2007 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 603 OF 2007 ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY BETWEEN: CHIEF EXECUTIVE OFFICER OF CUSTOMS Applicant AND: ICB MEDICAL DISTRIBUTORS PTY LTD ABN 68 093 126 133 First Respondent ADMINISTRATIVE APPEALS TRIBUNAL Second Respondent JUDGE: RARES J DATE OF ORDER: 5 OCTOBER 2007 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The motion, notice of which was filed to be heard with the appeal, is dismissed. 2. The notice of appeal and application for an order of review is dismissed. 3. The applicant pay the first respondent's costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 603 OF 2007 ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY BETWEEN: CHIEF EXECUTIVE OFFICER OF CUSTOMS Applicant AND: ICB MEDICAL DISTRIBUTORS PTY LTD ABN 68 093 126 133 First Respondent ADMINISTRATIVE APPEALS TRIBUNAL Second Respondent JUDGE: RARES J DATE: 5 OCTOBER 2007 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The Chief Executive Officer of Customs has appealed under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) against a decision of the Administrative Appeals Tribunal. The Tribunal set aside Customs' decisions to classify patented orthotic inserts imported by ICB Medical Distributors Pty Ltd as footwear or insoles rather than as orthopaedic appliances. The Tribunal remitted the matters to Customs with a direction that the goods be assessed at nil duty. Customs also sought relief under ss 5 and 6 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) and s 39B of the Judiciary Act 1903 (Cth) in respect of the same decision. 2 The issue is whether the orthotic inserts were correctly classified by Customs under heading 6406 in Schedule 3 to the Customs Tariff Act 1995 (Cth), rather than under heading 9021, as the Tribunal decided. Customs asserted that this raised a question of law. At the hearing, Customs applied to amend its originating process by claiming a declaration as to the proper construction of Note 6 to Chapter 90 of the third schedule to the Act. I heard the application to amend as part of the principal hearing. 3 The Tribunal described the goods as: · ICB orthotic branded shoe inserts. These were sold to medical practitioners. These were made of single or dual density closed cell ethylene vinyl acetate (EVA) foam, of various lengths from two-thirds, three-quarters to full. They were imported in seven standard sizes. · 'Pedistep' branded shoe inserts. These were sold as a retail range. They were made of single density EVA foam in various lengths and in a range of standard sizes. 4 The goods are manufactured under a patent as orthotic inserts. They are included in the Australian Register of Therapeutic Goods. 5 As the Tribunal noted, a classifier of goods for the purpose of a customs tariff must look objectively at the goods in their condition as imported in order to identify objectively their classification for duty: Chinese Food and Wine Supplies v Collector of Customs (Vic) (1987) 72 ALR 591 at 599 per Lockhart J with whom Woodward and Ryan JJ agreed. The subjective intention of the manufacturer, exporter or importer is not relevant to this task. In Times Consultants Pty Ltd v Collector of Customs (Qld) (1987) 16 FCR 449 at 463, Morling and Wilcox JJ said that the classification of goods for tariff purposes was a practical, 'wharf-side' task. Morling and Wilcox JJ also said that the classifier had to consider the characteristics of the goods themselves as they would present to an informed observer. The heart of the exercise is to determine the essential character of the goods by reference to their state or condition at the time of importation (Times Consultants 16 FCR at 462). Barton J said in Chandler & Co v Collector of Customs (1907) 4 CLR 1719 at 1729: '… the dutiable classification of an imported article must be ascertained by an examination of the article itself, in the condition in which it is imported.' 6 The classification of goods in Schedule 3 to the Act must be made pursuant to the rules of interpretation in Schedule 2 (s 7 of the Act). The purpose of this requirement is to ensure consistency in the classification of goods sought to be imported into Australia with that applied by States party to the International Convention on the Harmonised Commodity Description and Coding System, made in Brussels on 14 June 1983 (ATS 1988 No 30). The Brussels Convention provides, as best as possible, uniform categories of goods and rules for their classification as an aid to facilitating international trade and consistency in customs' assessment of goods. Rule 1 in Schedule 2 to the Act provides that the titles of sections, chapters and subchapters have been provided for ease of reference only, but, for legal purposes: '… classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions ...' 7 Rule 6 in schedule 2 provides that for legal purposes, classification of goods in subheadings of a heading must be determined according to the terms of the subheadings together with any subheading notes and, mutatis mutandis, with the proceeding rules 'on the understanding that only subheadings of the same level are comparable'. For the purposes of r 6 the section and chapter notes are also to apply unless the context otherwise requires. 8 In Schedule 3 to the Act the possible headings in which the goods could have been classified were 6406 and 9021. These read: '6406 PARTS OF FOOTWEAR (INCLUDING UPPERS WHETHER OR NOT ATTACHED TO SOLES OTHER THAN OUTER SOLES); REMOVABLE IN-SOLES, HEEL CUSHIONS AND SIMILAR ARTICLES; GAITERS, LEGGINGS AND SIMILAR ARTICLES, AND PARTS THEREOF … 9021 ORTHOPAEDIC APPLIANCES, INCLUDING CRUTCHES, SURGICAL BELTS AND TRUSSES; SPLINTS AND OTHER FRACTURE APPLIANCES; ARTIFICIAL PARTS OF THE BODY; HEARING AIDS AND OTHER APPLIANCES WHICH ARE WORN OR CARRIED, OR IMPLANTED IN THE BODY, TO COMPENSATE FOR A DEFECT OR DISABILITY.' 9 Note 1(e) to Chapter 64 provides: '1. This Chapter does not cover: … (e) Orthopaedic footwear or other orthopaedic appliances, or parts thereof (9021) …' 10 Item 6406.99.20 was 'Removalable in-soles, heel cushions and similar articles'. From 1 January 2005 these attracted a rate of duty of 7.5%. 11 Relevantly, Note 6 to Chapter 90 provides as follows: 'For the purposes of 9021, "orthopaedic appliances" means appliances for: - Preventing or correcting bodily deformities; or - Supporting or holding parts of the body following an illness, operation or injury. Orthopaedic appliances include footwear and special insoles designed to correct orthopaedic conditions, provided that they are either (1) made to measure or (2) mass-produced, presented singly and not in pairs and designed to fit either foot equally. 12 Critically, the subcategories of heading 9021 were as follows: 9021.10 - Orthopaedic or fracture appliances: 9021.10.10 --- Footwear and special insoles made to measure for a specific orthopaedic disorder 9021.10.20 --- Footwear, NSA [not specified above], excluding parts, designed to correct orthopaedic conditions 9021.10.30 --- Special insoles, NSA, excluding parts, designed to correct orthopaedic conditions 9021.10.4 --- Parts for goods of 9021.10.20 or 9021.10.30 … 9021.10.90 --- Other.' 13 The first and last items (9021.10.10 and 9021.10.90) were free of duty. Item 9020.10.20 attracted 10% duty from 1 January 2005 and item 9020.10.30 attracted 7.5% duty from 1 January 2005. THE TRIBUNAL'S DECISION 14 The Tribunal conducted a hearing at which the managing director of ICB, Rodney Kielt, gave evidence and was cross-examined. Examples of the goods were in evidence before the Tribunal. 15 The Tribunal found: · the goods were devices made of EVA with a contour. The contour supports the foot of the wearer and prevents any excessive movement of the foot either inwards (pronation) or outwards (supination) when walking or running. The goods are inserted into the shoe or boot; · the goods come in various sizes in order to fit shoe sizes and types of shoes appropriately and to adjust for the wearer's weight; · the ICB orthotics brand was supplied to medical practitioners. These could be further customised by applying heat to mould them to a patient's foot; · the technical intention of the design of the goods was to develop a range of prefabricated orthotics capable of treating a variety of biomechanical anomalies that presented themselves in clinical practice; · the goods are manufactured in Taiwan. Following manufacture they are packed in pairs (left and right fitting) and labelled according to size. (Examples in the evidence show that the there is imprinted on each of the orthotic devices the words 'left' and 'right', as appropriate.) The goods are received by ICB in Australia in that configuration. 16 The Tribunal said that it was satisfied that when heading 9021 of Schedule 3 referred to 'orthopaedic appliances', no technical use of that term was intended. Customs does not challenge that finding. The Tribunal referred to a previous decision (JS Levy Corporation Pty Ltd v Collector of Customs (unreported Tribunal decision No 101; dated 8 September 1978) which had made an exhaustive review of the evidence and various medical dictionaries concerning the words 'orthopaedic appliances', and concluded: '… as a matter of ordinary English, the expression "orthopaedic appliance" embraces a device or apparatus used in the practice of orthopaedics as a means to an end in the treatment of persons suffering from bodily deformities.' The Tribunal also referred to the definition of 'orthopaedic' in the Oxford English Dictionary (1982 ed): '… relating to or concerned with the cure of deformities in children or of bodily deformities in general.' 17 The Tribunal recognised that the tariff heading referred to in its earlier decision was in different terms but it considered that the earlier Tribunal's examination and explanation of the term 'orthopaedic appliance' was on all fours with the question it had to consider. Again, there is no challenge to that finding. Nor did Customs challenge the Tribunal's finding that the appropriate classification was that the goods be recognised as 'orthotics'. The Tribunal referred to the following definitions in the Oxford English Dictionary (1982 ed) to reinforce that view: 'orthosis … An artificial external device, as a brace or splint, which may be powered or unpowered and which prevents or assists relative movement in the limbs or the spine … So ortho.tic, serving as an orthosis; of or employing an orthosis or orthoses; orthotics, the application of orthoses' 18 The Tribunal said that there was no evidence as to the aetiology of the conditions which the goods were designed to treat or correct. It referred to Mr Kielt's evidence where he said that the goods were aimed at treating pathological conditions of the lower limb caused through structural dysfunction of the foot and leg. The primary goal of the goods was to support or balance the foot in order to eliminate the need for it to compensate for a structural deformity of misalignment. In that sense, Mr Kielt said that the device was both correcting and controlling. The Tribunal found that a condition which was pathological is one caused by disease. It found that the goods will correct structural dysfunctions caused by illness, operation or injury, as well as purely constitutional conditions. It also found that the goods were clearly designed to correct bodily deformities, including the dysfunction of gait. None of these findings was challenged by Customs. 19 The Tribunal rejected ICB's argument that the goods were 'made to measure' within the meaning of Note 6 to Chapter 90 and no challenge has been made to that conclusion. 20 The Tribunal also referred to volume 5 of the Harmonised System Explanatory Notes ('Brussels Notes') commenting on Chapter 90 heading 9021. Where expressions are ambiguous, the Brussels Notes are extrinsic aids for construing headings in Schedule 3 of the Act in the interest of promoting international uniformity. But the Brussels Notes, like all extrinsic aids, provide a secondary guide and cannot displace the plain words of the statute. Extrinsic material can be used to assist in resolving ambiguity in a statutory expression. It is not available to contradict the meaning of an Act of Parliament, being a meaning taken from its proper statutory context: Barry R Liggins Pty Ltd v Comptroller-General of Customs (1991) 32 FCR 112 at 120 per Beaumont J, Lockhart and Gummow JJ concurring. There the Full Court held that these principles applied to the use which may be made of the Brussels Notes. 21 The Tribunal observed that a reading of the Brussels Notes made it clear that Note 6 to Chapter 90 was a direct transposition of the same note from the Harmonised System. The Brussels Notes specifically excluded mass-produced footwear with an arched inner sole from the heading 'orthopaedic appliances'. The Tribunal found that the goods were not footwear and that the Brussels Notes did not assist on the question before it. Again, no issue has been taken with those matters. 22 The critical part of the Tribunal's reasons for classifying the goods in item 9021.10.90 was contained in the following paragraphs: '24. However, the Applicant submitted that the subject goods were not insoles. The ordinary meaning of the "insole" is given by the Oxford English Dictionary (1970 Reprint) as: "Insole …a The inner sole of a shoe or boot. b A flat piece of warm or waterproof material laid inside the shoe." 25. At Annexure 17 of Mr Kielt's Affidavit, an extract from the catalogue of a supplier of what one termed "physical therapy supplies", draws a distinction between orthotics and shoe insoles. 26. A more technical discussion is given at Annexure 20 of Mr Kielt's Affidavit. This is a paper entitled "The History of Shoes; Shoemaking", by one Cameron Kippen of Curtain [sic] University of Technology, Perth, W.A. In that paper Kippen states: "In-sole (inner sole) A layer of material shaped to the bottom of the last and sandwiched between the outsole (or midsole) and the sole of the foot inside the shoe. The in-sole covers the join between the upper and the sole in most methods of construction and provides attachment for the upper toe box linings and welting. This provides a platform upon which the foot can operate and separates the upper from the lower. The in-sole board is necessary in shoes that are constructed using cemented or Good Year welt techniques because it is the attachment for upper and lower components. The majority of in-sole boards are made of cellulose and are treated with additives to inhibit bacterial growth. Athletic shoe wear will often have a sock line, a piece of material placed over the top of the in-sole board (glued in position or removable)." 27. In his Affidavit Mr Kielt said: "117. … Other than lining a shoe, the only other clinical function an insole could have could be in its ability to absorb shock. Example [sic] of such special insoles including [sic] silicone based products such as those on pages 67 and 68 of Annexure 16. Whilst they may absorb shock, and thereby assist in the severity of symptoms, they do not operate to correct the pathology causing the symptoms …" No evidence was called to rebut Mr Kielt's statements nor was any expert evidence called by the Respondent to dispute the Applicant's evidence as to what is an "insole". 28. I find that the subject goods are more properly defined as orthotics, ie an artificial external device, such as a brace or splint, which prevents or assists relative movement in the limbs (OED 1982 ed). The goods are more than "insoles", as that term is commonly understood. The best description of the subject goods is that they are orthotic inserts (compare for example the patent which uses this term). Likewise, the Respondent's Statement of Facts and Contentions refers to the subject goods as being "shoe inserts". This being so, they are orthopaedic appliances for correcting bodily deformities. 29. The relevant sub-headings under heading 9021 are: … 30. Quite clearly, the subject goods are not special insoles, nor are they made to measure. They are not footwear, nor are they insoles, special or otherwise. The only sub-heading that encompasses the said goods is 9021.10.90 --- Other.' 23 The Tribunal arrived at its construction by accepting ICB's argument that the goods were not insoles. As a consequence, the Tribunal reasoned that they could not be 'special insoles' either. CUSTOMS' ARGUMENTS ON APPEAL 24 Customs argued that the Tribunal fell into error because it appeared to have accepted Mr Kielt's evidence that insoles performed no clinical function to correct pathology causing symptoms. Customs contended, first, that the findings in [28] of the Tribunal's reasons were based on its acceptance of Mr Kielt's statement quoted in [27]. Customs asserted that, properly understood, Mr Kielt's evidence could only lead to the conclusion that nothing meeting the description of an 'insole' could fall within the concept of a special insole designed to correct orthopaedic conditions in Note 6 to Chapter 90. It said this was because, if Mr Kielt were correct, and if the Tribunal accepted his evidence, insoles simply were not designed to correct orthopaedic conditions. 25 Secondly, Customs contended that the Tribunal's decision did not discuss in terms its argument to that effect. For this reason Customs argued that the Tribunal fell into an error of law because: · it did not give genuine or real consideration to Customs' case and the evidence before it which supported Customs' case, part of which was dealt with in the cross-examination of Mr Kielt. For this, Customs relied on NAJT v Minister for Immigration (2005) 147 FCR 51 at 92-93 [212] per Madgwick J, with whom Conti J agreed at 96 [229]; · the Tribunal accepted a meaning for the term 'insole' which would deprive the term, as used in Note 6 to Chapter 90, of any content. 26 Customs pointed to a number of pieces of evidence before the Tribunal in which persons had used indifferently the terms 'insoles', 'inserts', 'devices' and 'orthoses'. It argued that because these terms had been used interchangeably in that material, the Tribunal had to give explicit reasons as to why it chose to find the goods were not insoles of any kind. Moreover, Customs said that the way in which the Tribunal had quoted from Mr Kielt's affidavit suggested that it accepted that no insoles could have a corrective function or alternatively that a good which could be an insole, but had a corrective function, was to be treated as an orthopaedic appliance. ICB pointed to other parts of the evidence which suggested that references to insoles being removed from shoes so that the orthotic appliance could be inserted suggested a distinction in common usage. 27 Customs referred to an extract from a textbook dealing with orthoses for the foot which Mr Kielt put in evidence before the Tribunal and about which he was questioned. That extract suggested that foot orthoses were a variety of devices used inside the shoe to influence foot position in some way. The extract noted that a variety of terms was used to describe foot orthoses. The descriptions depended upon the physical properties of the materials used in the construction of the appliance (soft, semi-rigid, or rigid), the method of fabrication (moulded or non-moulded) or the intended function or goal of the device (functional or accommodative). The extract went on to say: 'Knowledge of the physical properties of orthoses is necessary to understand the differences and indications of the various devices available on the market and their influence on function.' 28 Customs pointed to another passage in the extract as supporting its case that stated: 'Soft insoles are also useful as a temporary appliance, in combination with various posting [sic], to determine whether a permanent insole is indicated.' 29 Customs argued that this showed that it was quite possible to describe the goods here in question as 'insoles'. It also referred to part of the Australian Podiatry Manual Supplement of May 1998, which was in before the Tribunal, and described: · a cushioning orthosis as being a flexible or pliable insole made from cushioning material such as rubber or other similar composite materials; · a pressure relief orthosis as being an insole made from cushioning materials such as rubber or similar composite materials, the design of which was based on measurements of the foot and/or the shoe. The aim of this was said to provide cushioning and padding underfoot, redistribution of load from a focal point of increased pressure and shock absorption in gait. 30 ICB retorted that there were other definitions in that manual of pre-moulded or pre-formed orthoses, moulded non-cast orthoses, moulded cast orthoses and customised kinetic orthoses which were not described as insoles. 31 Customs also relied on a technical dossier produced by ICB for its Pedistep brand. That required a user to remove all arch supports or manufacturer inner soles and replace them with the Pedistep orthotics. 32 Customs argued that ICB's case before the Tribunal had been contained in Mr Kielt's evidence. There he had said that the easiest way to distinguish between an orthotic and an insole was to look at the function each performed. He described the insole as failing to perform a function because it was essentially flat and made of low density easily compressed material. He argued that because of that characteristic it could not control or hold the foot in a particular position and so was incapable of maintaining it in a neutral position during activity. For this reason he argued that an insole was only capable of enhancing the level of comfort of the wearer. He commenced par 117 of his statement, the balance of which the Tribunal quoted at [27], with the following: 'By my way of thinking, a Special Insole [sic] is an insole with some "special function" other than to line the shoe'. 33 Customs complained that its solicitor had been stopped by the Tribunal from cross-examining Mr Kielt at the hearing on the question whether orthopaedic surgeons and the like 'just wouldn't refer to an orthotic as an insole'. The reason the Tribunal gave for rejecting that question was simple and correct: Mr Kielt, not being an orthopaedic surgeon, could not speak for one. 34 In his evidence Mr Kielt also sought to explain, perhaps argumentatively, that an orthotic had distinguishing features from an insole centred around its ability to control the position of the person who had the device in his or her shoe. He sought to make the point that insoles, such as in sports shoes, or replacements of those which could be purchased commercially, had a different function. 35 The Tribunal said, correctly, that no evidence was called to dispute ICB's evidence about what an insole was. Customs accepted that this was so, but said the Tribunal erred because it did not deal expressly with its arguments based on Mr Kielt's cross-examination as to other persons' descriptions of orthotics as insoles, which appeared in annexures to his affidavits, or to the other evidence which I have set out above. Customs complained that that description carries the position no further because it was common ground the goods were inserts. It argued that the classification envisaged that 'special insoles' could be orthopaedic appliances because they could correct orthopaedic conditions or pathology. It complained that the Tribunal's reasons made no apparent attempt to deal with that context, rather accepting opinion evidence and making findings in relation to special insoles which findings, it claimed, were inconsistent with that statutory context. DID THE TRIBUNAL ERR IN FAILING TO CONSIDER CUSTOMS' CASE? 36 Here, the issue for decision by the Tribunal was a question of fact: did the goods have the essential character at the time of importation of 'orthopaedic appliances' or of 'special insoles'? The Tribunal proceeded to find as a fact that the function which the goods performed was not the function of an insole. One of the functions of an insole is to line the inside of a shoe. The Tribunal at [26] quoted from a paper entitled 'The History of Shoes: Shoemaking' by Cameron Kippen, who was an academic, which said that an insole provided 'a platform upon which the foot can operate and separates the upper [of the shoes] from the lower'. The Tribunal used this to illustrate the difference between an insole or special insoles and the orthotic inserts here. 37 The patent for the goods to which the Tribunal referred described the goods as orthotic inserts. The detailed description of the preferred embodiment of the patented goods included a statement that it: '… is adapted to be inserted into an article of footwear such that in use the insert lies between the footwear and the underside of the person's foot so as to provide a degree of biomechanical support and control for the foot.' 38 As noted above, there were many references in the evidence about particular views of what an orthosis could be called. The Tribunal did not need to go through each of these explaining its conclusions about them. Its task, as the classifier, was to examine the goods in the condition in which they were imported and form its assessment of their essential character as an informed observer: Chandler 4 CLR at 1729 per Barton J; Times Consultants 16 FCR at 462 per Morling and Wilcox JJ. 39 In characterising the goods the Tribunal was entitled to have recourse to common-sense, as Brennan CJ, Dawson, Toohey, Gaudron and McHugh JJ emphasised in Collector of Customs v Agfa-Gevaert Pty Ltd (1996) 186 CLR 389 at 400. 40 It was for the Tribunal to evaluate, as a factual matter, the essential character which it perceived the goods to have. It also had to identify what the word 'insole' meant as an ordinary English word. That is why it was open to the Tribunal to select its characterisation of the best description of the goods as being orthotic inserts of the kind described in the patent. 41 I am of opinion that Customs' characterisation of the Tribunal's approach to its case is not correct. The Tribunal's reasons show that it proceeded in a conventional manner. First, it identified what the goods were in the condition in which they came to be imported into Australia. It found that they were orthopaedic appliances within the meaning of heading 9021. It explained that this finding was made because the goods were 'more properly defined' as an artificial external device such as a brace or splint which prevented or assisted relative movement in the limbs. In this finding the Tribunal was expressing its ascertainment of the essential character of the goods. It explained that the finding was based on the ordinary and natural meaning of an orthopaedic appliance. That meaning was one which Customs accepted was open to the Tribunal based on its earlier decision in JS Levy (unreported Tribunal decision No 101; dated 8 September 1978) and the Oxford English Dictionary definition. 42 Secondly, the Tribunal explained that an insole, in its ordinary and natural meaning (the inner sole of a shoe or boot), did not have the same essential character or perform a function as extensive as that of an orthotic insert of the character of the goods. It referred to the terms of the patent for the goods and came to the conclusion that these goods did not have the essential character of goods within the meaning of the terms 'footwear' and 'special insoles' as used in Note 6 to Chapter 90. 43 In my opinion, the reasons given by the Tribunal informed the parties why it came to the conclusion that it did. It made a finding as to how the goods would be viewed by an informed observer when they arrived at the wharf in Australia. In Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272, Brennan CJ, Toohey, McHugh and Gummow JJ deprecated an attempt to scrutinise, overzealously on judicial review, the reasons of an administrative decision-maker. 44 Brennan J said in Repatriation Commission v O'Brien (1985) 155 CLR 422 at 446 that a decision of the Tribunal , if it is made in accordance with the statutory provisions that govern the exercise of its power, is not invalidated by a mere failure to expose fully the reasons for making it. Although that was a dissenting judgment, the principle his Honour stated is of general application (see Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 349 [75] per McHugh, Gummow and Hayne JJ). Of course, much will depend on the extent of the decision-maker's exposure of a reasoning process in determining whether or not the decision can stand. So, in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme (2003) 216 CLR 212 at 224 [39], Gleeson CJ, Gummow and Heydon JJ referred to the authorities which enabled a court to infer that, where a decision-maker did not give any reason for his or her decision, he or she had no good reason for it. That is not this case. An obligation to give reasons, such as is found in s 43(2B) of the Administrative Appeals Tribunal Act, did not oblige the Tribunal to give a subset of reasons why it accepted or rejected individual pieces of evidence. It is sufficient if the Tribunal, as the decision-maker, sets out its findings 'on those questions of fact which it considered to be material to the decision which it made and to the reasons it had for reaching that decision': Yusuf 206 CLR at 349 [68] per McHugh, Gummow and Hayne JJ; see too Repatriation Commission v Cotton (2006) 93 ALD 118 at 128 [42] where I cited the authorities and SZCOQ v Minister for Immigration and Multicultural Affairs [2007] FCAFC 9 at [14] per Moore J, [27]-[28] per Besanko J, and [53]-[61] per Buchanan J (dissenting). 45 The different descriptions in the evidence before the Tribunal of other goods (than those which ICB imported) made by other people in other contexts, to some of which I referred above, resulted from factual assessments about those other goods by those other persons. Customs referred the Tribunal to those matters and there is no reason to doubt that it gave genuine and real consideration to them. 46 Customs asserted that the Tribunal did not consider its argument that if one looked at how other people described other goods for non customs purposes, the Tribunal should have concluded that the application for review be dismissed. Having considered the material Customs said was not addressed by the Tribunal, I am unable to see any error of law in the Tribunal's reasons or decision. That material went to the issue of characterisation. The Tribunal explained its reasons for its characterisation of the actual goods it was considering. The Tribunal was conscious of the argument of Customs and referred to its statement of facts and contentions (at [28]). There was no need for the Tribunal to go through a myriad of individual instances of what other people considered for other purposes was an appropriate expression to use in respect of other goods. 47 I am satisfied that the Tribunal addressed the correct question, understood the arguments and had regard to all relevant considerations and ignored irrelevant ones. This was a situation in which the Tribunal was not obliged to give more reasons than s 43(2B) of the Administrative Appeals Tribunal Act required. It set out its findings on material questions of fact and referred to the evidence and other material on which they were based, explaining logically why it came to the characterisation it did: cf: Re Minister for Immigration and Multicultural Affairs; Ex parte Durairajasingham (2000) 168 ALR 407 at 422-423; 74 ALJR 405 at 416-417 [65]-[67] per McHugh J. As Davies and Beazley JJ said in Sharp Corporation of Australia Pty Ltd v Collector of Customs (1995) 59 FCR 6 at 13F-G, it is fundamentally a question of fact whether goods have an essential character and what that character is (see too at 14G-15B; and per Hill J at 16A). 48 In my opinion the Tribunal was not obliged to give any more detailed explanation than it did as its reasoning process. That process was adequately disclosed. It dealt with the sole issue before it, characterisation, in a common-sense and lucid manner. DID THE TRIBUNAL'S DECISION DENY NOTE 6 OF CHAPTER 90 OF ANY APPLICATION? 49 The function of the orthotic inserts was a critical factual matter for the Tribunal in determining how to classify the goods. If the argument for Customs were correct then the only classification into which the goods could fall was 6406.99.20. They would fall relevantly, into the item 'parts of footwear (including uppers whether or not attached to soles other than outer soles); removable in-soles, heel cushions and similar articles'. But, as Note 1(e) provides, Chapter 64 did not apply to 'orthopaedic footwear or other orthopaedic appliances or parts thereof (9021)'. By identifying the goods as an artificial external device, such as a brace or splint, which prevented or assisted relative movement in the limbs, the Tribunal was identifying their function. That identification, in essence, was substantively different to the classification in Item 6406.99.20. Removable in-soles, heel cushions and 'similar articles' do not have the same functionality as that identified for the goods by the Tribunal. 50 Before me, Customs relied on a decision of the Harmonised System Committee in its 26th Session in Brussels on 24 November 2000. The Committee determined a classification of post-operative shoes by applying the source wording of Note 6 to Chapter 90, which was taken directly from the Harmonised System wording. The Committee found that Note 6 should be interpreted as excluding footwear which had no correcting function. It found that a post-operative shoe designed to provide comfort, but not correction for the wearer, was not an orthopaedic appliance. Accordingly, the Committee regarded the correct classification for such a good as falling within subheading 6402.99. The Committee's determination was not brought to the Tribunal's attention. But in any event, Customs did not suggest here that the goods were footwear, as opposed to in-soles, for the purposes of characterisation. 51 No doubt those who framed Note 6 to Chapter 90 must have had in mind some goods capable of fitting into the description 'special insoles designed to correct orthopaedic conditions' which were mass-produced, presented singly and not in pairs and designed to fit either foot equally. The Harmonised System Committee there looked at an example of footwear which met all the latter characteristics but did not 'correct' orthopaedic conditions. The classification was arrived at because the Committee considered that the post-operative shoe there had no correcting function and so 'remained classified in heading 64.02' (emphasis added). 52 The reason those shoes remained classified in the footwear heading in Chapter 64 was because at their inception they had the character, and most particularly the function, of being footwear. An orthotic insert, as described by the Tribunal, did not appear to it to have the essential character of a good within the headings in Chapter 64. 53 In my opinion, Note 6 of Chapter 90 was not deprived of meaning by the Tribunal's decision. Reading Note 6 of Chapter 90 and Note 1(e) of Chapter 64 together shows that orthopaedic appliances are not intended to be characterised as falling under heading 6406. Footwear and 'special insoles' do fall under heading 6406 unless they meet the criteria in Note 6 of Chapter 90. As a matter of common-sense, a special insole capable of being worn indifferently under either foot which has the function of correcting orthopaedic conditions is not a good which is easy to conceive. An orthopaedic appliance, on the other hand, is readily understood. 54 It is difficult to conceive that Note 6 of Chapter 90 was framed with the intention to exclude every orthotic insert except one made to measure. Such a construction would render otiose the second category of 'footwear' or 'special insole' in Note 6. Customs did not point to a construction that gave any reality to the existence an orthotic insert which was not made to measure and which met the criteria in Note 6 of Chapter 90. That is a good reason for concluding that orthotic inserts are not, in general, to be characterised as 'special insoles': Australian Securities and Investments Commission v DB Management Pty Ltd (2000) 199 CLR 321 at 338 [34]-[35]. The argument of Customs deprives Note 1(e) of Chapter 64 of any real content because all orthotics, except those made to measure, would be excluded from being characterised as an orthopaedic appliance. Such a view is contrary to the words used in the Act and to common-sense (Agfa-Gevaert 186 CLR at 400). I reject this argument. THE APPLICATION TO AMEND AND THE DECLARATION SOUGHT BY CUSTOMS 55 Customs' proposed amended notice of appeal and application for an order for review seeks leave to add the following prayer for relief: 'That it be declared that the last paragraph to Note 6 to Chapter 90 in the Tariff Act has effect such that "footwear and special insoles designed to correct orthopaedic conditions" are "orthopaedic appliances" only if such footwear and special insoles are "either (1) made to measure or (2) mass-produced, presented singly and not in pairs and designed to fit either foot equally".' 56 In my opinion it would be inappropriate to grant such a declaration in this matter. The circumstances in which Note 6 of Chapter 9 can operate are varied. I am not in a position to review all of them or to assess the impact which any particular form of declaratory relief might have on other goods. 57 If I had found that the Tribunal made an error in its approach, it would have been appropriate to remit the matter to it to proceed in accordance with the law. 58 What a 'special insole' is in any particular case must be a question of fact, as must the question as to whether the good satisfies any of the criteria in Note 6 which might bring it to assessment under heading 9021. The proposed declaration is loosely framed and objectionable in form: Minister for Immigration and Ethnic Affairs v Guo (1997) 191 CLR 559 at 579 per Brennan CJ, Dawson, Toohey, Gaudron, McHugh and Gummow JJ. 59 Customs argued that the question of construction addressed by its proposed declaration was not determinative in the Tribunal but would be likely to be determinative if the matter were remitted. I do not agree. The characterisation of the goods would remain a question of fact on any remitter. The construction in the proposed declaration does not clarify whether the goods are or are not 'special insoles' or orthopaedic appliances outside Note 6 to Chapter 90, as I have held. Declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions: Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 582 per Mason CJ, Dawson, Toohey and Gaudron JJ. The proposed declaration does not answer any question in respect of the goods. It is framed in the abstract. 60 I am of opinion that the proposed amendment does not raise a fairly arguable claim to final relief and ought be refused: Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 at 154-155 per Dawson, Gaudron and McHugh JJ. CONCLUSION 61 Ordinarily, where an appeal is brought under s 44 of the Administrative Appeals Tribunal Act, it will not be appropriate also to entertain proceeding for relief under the Administrative Decisions (Judicial Review) Act or s 39B(1A) of the Judiciary Act: Tuite v Administrative Appeals Tribunal (1993) 40 FCR 483 at 484 per Davies J; but where, as here, there is a potential that the proper construction of the words in the Customs Tariff Act may not raise a question of law under s 44, judicial review proceedings to enable all issues to be resolved may be appropriate: see s 22 of the Federal Court of Australia Act 1976 (Cth) and cp: Rich v CGU Insurance Ltd (2005) 214 ALR 370 at 375 [20] per Gleeson CJ, McHugh and Gummow JJ. I have considered the matter on both bases. 62 In my opinion the proceedings should be dismissed with costs. I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. Associate: Dated: 5 October 2007 Counsel for the Applicant: SB Lloyd Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondent: JT Svehla Solicitor for the Respondent: Bennelong Legal Date of Hearing: 14 September 2007 Date of Judgment: 5 October 2007	9,733
federal_court_of_australia:fca/single/2022/2022fca0184	decision	commonwealth	federal_court_of_australia	text/html	2022-03-07 00:00:00	Australian Securities and Investments Commission v Rio Tinto Limited (No 2) [2022] FCA 184	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2022/2022fca0184	2024-09-13T22:45:22.478540+10:00	FEDERAL COURT OF AUSTRALIA Australian Securities and Investments Commission v Rio Tinto Limited (No 2) [2022] FCA 184 File number(s): NSD 290 of 2018 Judgment of: YATES J Date of judgment: 7 March 2022 Catchwords: CORPORATIONS – admitted contravention of s 674(2) of the Corporations Act 2001 (Cth) – continuous disclosure obligations – contravention of a financial services civil penalty provision – appropriate penalty in all the circumstances Legislation: Corporations Act 2001 (Cth) ss 111AL, 674, 676, 677, 1317DA, 1317E, 1317G Evidence Act 1995 (Cth) s 191 ASX Listing Rules r 3.1 Cases cited: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; 254 FCR 68 Australian Competition and Consumer Commission v Universal Music Australia Pty Ltd (No 2) [2002] FCA 192; 201 ALR 618 Australian Securities and Investments Commission v Hochtief Aktiengesellschaft [2016] FCA 1489; 117 ACSR 589 Australian Securities and Investments Commission v Newcrest Mining Ltd [2014] FCA 698; 101 ACSR 46 Australian Securities and Investments Commission v Westpac Banking Corporation [2018] FCA 1701; 131 ACSR 585 Australian Securities and Investments Commission, in the matter of Chemeq Limited (ACN 009 135 264) v Chemeq Limited (ACN 009 135 264) [2006] FCA 936; 234 ALR 511 Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 Flight Centre Ltd v Australian Competition and Consumer Commission (No 2) [2018] FCAFC 53; 260 FCR 68 Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 60 Date of hearing: 28 February 2022 Counsel for the Plaintiff: Mr M Darke SC and Ms S Patterson Solicitor for the Plaintiff: Australian Government Solicitor Counsel for the First Defendant: Mr N Young QC, Mr D Thomas SC, and Ms E Bathurst Solicitor for the First Defendant: Ashurst Australia Counsel for the Second Defendant: Mr N Hutley SC and Mr J Hutton Solicitor for the Second Defendant: Jones Day Counsel for the Third Defendant: Mr J Sheahan QC and Mr D Blazer Solicitor for the Third Defendant: Allen & Overy ORDERS NSD 290 of 2018 BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Plaintiff AND: RIO TINTO LIMITED ACN 004 458 404 First Defendant THOMAS ALBANESE Second Defendant GUY ELLIOTT Third Defendant order made by: YATES J DATE OF ORDER: 7 March 2022 THE COURT DECLARES THAT: 1. The first defendant contravened s 674(2) of the Corporations Act 2001 (Cth) (Corporations Act) on one occasion on and from 21 December 2012 continuing until 17 January 2013, in circumstances where: (a) on 21 December 2012, the first defendant became aware of the Orebody Information; (b) the Orebody Information was not generally available within the meaning of s 676 of the Corporations Act and for the purpose of s 674(2)(c)(i) of the Corporations Act; (c) the Orebody Information was information that a reasonable person would have expected, if it had been generally available, to have had a material effect on the price or value of the first defendant's securities, within the meaning of s 677 of the Corporations Act and for the purpose of s 674(2)(c)(ii) of the Corporations Act; (d) in the period between 21 December 2012 and 17 January 2013, the first defendant was obliged by Rule 3.1 of the listing rules of the ASX and s 674(2) of the Corporations Act to notify the ASX of the Orebody Information; and (e) in the period between 21 December 2012 and 17 January 2013, the first defendant did not notify the ASX of the Orebody Information. THE COURT ORDERS THAT: 2. Pursuant to s 1317G(1A) of the Corporations Act in respect of the contravention the subject of the above declaration, the first defendant pay a pecuniary penalty to the Commonwealth of Australia in the sum of $750,000. 3. The first defendant pay the plaintiff's costs of and incidental to these proceedings. 4. The proceedings against the first defendant otherwise be dismissed. 5. The proceedings against the second and third defendants be dismissed on the basis that there be no order as to costs as between the plaintiff and the second and third defendants. In this order, Orebody Information means, in relation to mining and exploration assets the first defendant held (through subsidiaries) in the Moatize Basin in Mozambique, known as the RTCM Coal Projects and the Minjova Tenements, and which it operated through a business unit called Rio Tinto Coal Mozambique (RTCM), information that: (a) there was a reduction in expected recoverable and mineable volumes of coking coal, or reduced degree of confidence in the potential economic extraction of the coal deposits, in respect of the RTCM Coal Projects and the Minjova Tenements; and (b) the quality and quantity of the coal resources in respect of the RTCM Coal Projects and the Minjova Tenements were not what had previously been expected, such that: (c) RTL's coal projects in the Moatize Basin were not highly prospective; (d) the RTCM Coal Projects and the Minjova Tenements did not provide an opportunity to grow and develop a world class basin of high quality coking coal; and (e) the RTCM Coal Projects and the Minjova Tenements were no longer economically viable as long-life, large-scale, Tier 1 coking coal resources. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT YATES J: INTRODUCTION 1 On 2 March 2018, the plaintiff, Australian Securities and Investments Commission (ASIC), commenced this proceeding against the defendants alleging various contraventions of the Corporations Act 2001 (Cth) (the Act). The first defendant, Rio Tinto Limited, has admitted one contravention of s 674(2) of the Act. 2 ASIC no longer seeks to bring its proceeding against the second defendant, Mr Albanese, or the third defendant, Mr Elliott, who were, at relevant times, respectively, the first defendant's Chief Executive Officer and the first defendant's Chief Financial Officer. The proceeding is to be dismissed against Mr Albanese and Mr Elliott on the basis that there be no order as to costs between ASIC and them. 3 The proceeding is now before the Court for the granting of relief against the first defendant. The form of that relief has been agreed between ASIC and the first defendant, although it remains for the Court to be satisfied that the relief is appropriate in all the circumstances of the case. 4 The Court's consideration of that question has been assisted by the filing of Joint Submissions and a Statement of Agreed Facts and Admissions dated 8 February 2022. The Statement of Agreed Facts and Admissions has been made pursuant to s 191 of the Evidence Act 1995 (Cth). 5 Two matters should be stressed. First, the Joint Submissions are the joint submissions of ASIC and the first defendant. Secondly, the Statement of Agreed Facts and Admissions reflects facts that have been agreed between ASIC and the first defendant, and admissions made by the first defendant, only for the purpose of this proceeding. The statement does not reflect facts that have been agreed between ASIC and either the second defendant or the third defendant. Further, no admissions have been made by either the second defendant or the third defendant who, at all times, have denied any wrongdoing on their part. 6 The agreed facts are set out in Schedule A to these reasons. THE ADMITTED CONTRAVENTION 7 The following facts are taken from the Statement of Agreed Facts and Admissions. 8 The first defendant is an Australian corporation listed on the Australian Securities Exchange (ASX) operated by ASX Limited. At relevant times, it was subject to, and bound by, the ASX Listing Rules. Rule 3.1 provided: Immediate notice of material information General rule 3.1 Once an entity is or becomes aware of any information concerning it that a reasonable person would expect to have a material effect on the price or value of the entity's securities, the entity must immediately tell ASX that information. … 9 At relevant times, the first defendant was, for the purposes of the Act, a "listed disclosing entity" within the meaning of s 111AL thereof. Section 674(2) applied to it: 674 Continuous disclosure—listed disclosing entity bound by a disclosure requirement in market listing rules Obligation to disclose in accordance with listing rules … (2) If: (a) this subsection applies to a listed disclosing entity; and (b) the entity has information that those provisions require the entity to notify to the market operator; and (c) that information: (i) is not generally available; and (ii) is information that a reasonable person would expect, if it were generally available, to have a material effect on the price or value of ED securities of the entity; the entity must notify the market operator of that information in accordance with those provision. Note 1: Failure to comply with this subsection is an offence (see subsection 1311(1)). Note 2: This subsection is also a civil penalty provision (see section 1317E). For relief from liability to a civil penalty relating to this subsection, see section 1317S. Note 3: An infringement notice may be issued for an alleged contravention of this subsection, see section 1317DAC. 10 The first defendant operated through a dual-listed company structure with Rio Tinto plc. Rio Tinto plc was listed on financial markets in London and New York. It is convenient to refer to this structure as the RT Group. 11 The first defendant is (and was at all relevant times) one of the largest mining and metals companies listed on the ASX, and one of the world's largest mining companies. It has (and at relevant times had) a market capitalisation among the largest 20 companies listed on the ASX. It conducts (and at relevant times conducted) mining operations in 35 countries. 12 For the financial year ending 31 December 2012: (a) the first defendant's shares were principally traded on the ASX; (b) the RT Group's consolidated sales revenue was US$50.967 billion; (c) the RT Group's earnings before interest, tax, depreciation and amortisation was US$19.411 billion; (d) the RT Group's net assets were US$58.021 billion; (e) the first defendant had issued 435,758,720 shares; and (f) the RT Group's market capitalisation was approximately US$81.97 billion. 13 As at 7 February 2022, the RT Group had a market capitalisation of approximately US$123.33 billion. 14 In 2011, a subsidiary in the RT Group acquired all the issued shares in Riversdale Mining Limited (Riversdale). Riversdale's business—known in the RT Group as Rio Tinto Coal Mozambique (RTCM)—comprised, principally, mining and exploration assets in Mozambique (the RTCM Coal Projects). 15 In December 2011, a subsidiary of Rio Tinto plc acquired tenements, with exploration licences, in an area adjoining the RTCM Coal Projects—the Minjova Tenements. The first defendant regarded the RTCM Coal Projects and the Minjova Tenements as one portfolio of mining assets for development planning purposes. 16 On about 16 March 2012, the first defendant and Rio Tinto plc released their annual report for the year ending 31 December 2011 to the ASX. The report included this statement: The Moatize basin in Mozambique is home to one of the best undeveloped coking coal resources in the world. Rio Tinto has the largest licence holding in that region and owns Tier 1 resources which are long life, will be cost competitive and will have substantial expansion options. Rio Tinto plans to significantly grow these assets and sees this region providing a development opportunity that is long term and will achieve sustainable growth over a 50-year-plus timeframe. Whilst saleable production will initially be constrained by existing rail and port infrastructure, feasibility studies into infrastructure solutions and mine expansions at Benga and the adjacent Zambeze Project are continuing in 2012. 17 At about the same time, the first defendant and Rio Tinto plc released, to the ASX, their annual review for the year ending 31 December 2011, which included the following statements: (a) We are well placed to capitalise on our leadership position. Our portfolio includes some of the world's best assets – from our world-class iron ore operations in Australia to the huge potential of our growth projects there and in Mongolia, Guinea and Mozambique; (b) During 2011 we completed the acquisition of Riversdale, which has now been renamed Rio Tinto Coal Mozambique. This provides a substantial Tier 1 coking coal development pipeline in the emerging Moatize Basin; (c) We continue to grow our world class portfolio of energy assets through the development of the recently acquired Hathor and Riversdale projects and increasing production at existing operations; (d) Our strategic investment in the highly prospective Moatize Basin in Mozambique gives us access to one of the largest undeveloped coking coal regions in the world and underlines our commitment to Africa; (e) Through the development of Mozambique's massive coal reserves we can help meet that demand and contribute to the transformation of the country's economy. 18 In the period 8 August 2012 to 17 January 2013, the first defendant made public representations (the orebody representations) in its half-year report for the period ending 30 June 2012 and at various seminars and presentations, namely: (a) the first defendant's coal projects in the Moatize Basin were highly prospective; (b) through the RTCM Coal Projects and the Minjova Tenements, there was an opportunity to grow and develop a world class basin of high quality coking coal; and (c) the RTCM Coal Projects and the Minjova Tenements were long-life Tier 1 coking coal resources. (In this context, "Tier 1" means large, long-life and low-cost mining operations, in the first (or lowest) quartile of the costs incurred by mining companies, relative to each other). 19 The product group of which RTCM was part was supported by a team within the RT Group —Technology & Innovation (T&I). This team was responsible for project development and the evaluation of resource quality and quantity. 20 T&I prepared a report (the Orebody Report) that set out the findings and conclusions of an orebody review. The Orebody Report was made available to executive officers of the first defendant, including Mr Albanese and Mr Elliott, on 21 December 2012. The executive officers who received the Orebody Report are no longer employed or otherwise involved with the first defendant. 21 The Orebody Report concluded that, based on qualitatively new test results just received concerning coal quantity and quality, the exploration and development potential of the RTCM Coal Projects and the Minjova Tenements was not as the first defendant had indicated in the orebody representations. 22 Specifically, from 21 December 2012, the first defendant was aware that: (a) there was a reduction in expected recoverable and mineable volumes of coking coal, or reduced degree of confidence in the potential economic extraction of the coal deposits, in respect of the RTCM Coal Projects and the Minjova Tenements; (b) the quality and quantity of the coal resources in respect of the RTCM Coal Projects and the Minjova Tenements was not as previously expected; (c) its coal projects in the Moatize Basin were not highly prospective; (d) the RTCM Coal Projects and the Minjova Tenements did not provide an opportunity to grow and develop a world class basin of high quality coking coal; and (e) the RTCM Coal Projects and the Minjova Tenements were no longer economically viable as long-life, large-scale, Tier 1 coking coal resources (together, the orebody information). 23 The orebody information was: (a) not "generally available" within the meaning of s 676 of the Act, and for the purpose of s 674(2)(c)(i) of the Act; (b) information that a reasonable person would have expected, if it had been generally available, to have had a "material effect" on the price or value of the first defendant's securities, within the meaning of s 677 of the Act, and for the purpose of s 674(2)(c)(ii) of the Act; (c) not discoverable by anyone outside the first defendant. 24 It is accepted that, between 21 December 2012 and 17 January 2013, the first defendant carefully assessed the implications of the orebody information. On 17 January 2013, it made an announcement to the ASX which included, amongst other things, the substance of that information. 25 However, during the period 21 December 2012 to 17 January 2013, approximately 31.06 million shares in the first defendant were traded on the ASX during ordinary trading, with a total value of approximately AU$2.063 billion. 26 The first defendant accepts that, in the period between 21 December 2012 and 17 January 2013, it was obliged, by Rule 3.1 of the ASX Listing Rules and s 674(2) of the Act, to notify the ASX of the orebody information, and that it did not do so. It admits that it contravened s 674(2) of the Act, on one occasion (on and from 21 December 2012 continuing until 17 January 2013), in failing to notify the ASX of the orebody information. It accepts that this contravention was "serious" within the meaning of s 1317G(1A)(c)(iii) of the Act (as in force at the relevant time). THE PROPOSED RELIEF 27 As between ASIC and the first defendant, the parties propose the following relief: (a) a declaration that the first defendant contravened s 674(2) of the Act in identified respects; (b) an order, in respect of that contravention, that the first defendant pay a pecuniary penalty to the Commonwealth of Australia in the amount of $750,000; (c) an order that the first defendant pay ASIC's costs of and incidental to the proceeding; and (d) an order that the proceeding be otherwise dismissed. 28 As I have noted, the proceeding is to be dismissed against the second and third defendants, with no order as to costs. 29 The making of a declaration is mandated by s 1317E(1)(jaab) of the Act (in the form it took at the time of the contravention): if the Court is satisfied (as I am) that the first defendant contravened s 674(2) of the Act, it must make a declaration of contravention. 30 At that time, s 1317E(2) provided: (2) A declaration of contravention must specify the following: (a) the Court that made the declaration; (b) the civil penalty provision that was contravened; (c) the person who contravened the provision; (d) the conduct that constituted the contravention; (e) if the contravention is of a corporation/scheme civil penalty provision—the corporation or registered scheme to which the conduct related. 31 As to the payment of a pecuniary penalty, s 1317G(1A), at that time, provided: (1A) A Court may order a person to pay the Commonwealth a pecuniary penalty of the relevant maximum amount if: (a) a declaration of contravention by the person has been made under section 1317E; and (b) the contravention is of a financial services civil penalty provision not dealt with in subsections (1E) to (1G); and (c) the contravention: (i) materially prejudices the interests of acquirers or disposers of the relevant financial products; or (ii) materially prejudices the issuer of the relevant financial products or, if the issuer is a corporation or scheme, the members of that corporation or scheme; or (iii) is serious. 32 By dint of s 1317DA of the Act, a contravention of s 674(2) was a contravention of a "financial services civil penalty provision", and so s 1317G(1A) applies in the present case (bearing in mind that a declaration of contravention will be made). The "relevant maximum amount" for a body corporate was $1 million: s 1317G(1B). As I have said, ASIC and the first defendant propose $750,000 as the appropriate penalty. THE JOINT SUBMISSIONS 33 The Joint Submissions are comprehensive. They cover the statutory framework (including the relevant ASX Listing Rules) in which the contravention arose; an analysis of the facts which provide the background against which the contravention occurred (based on the Statement of Agreed Facts and Admissions); the first defendant's contravention; the relevant provisions of the Act pursuant to which relief is proposed; the legal principles on which relief is granted; and an analysis of the salient facts of the present case which, ASIC and the first defendant contend, support the relief they jointly propose. 34 I do not propose to summarise the Joint Submissions. I will, however, record the following overarching submissions, which I accept. When referring to "the parties" I am, of course, referring to ASIC and the first defendant only. 35 First, on the basis of the agreed facts, and the first defendant's admission, I am satisfied that the first defendant contravened s 674(2) of the Act. Thus, as the parties submit, and as I have noted, a declaration of contravention under s 1317E(1) must be made. The form of the proposed declaration conforms to the requirements of s 1317E(2) of the Act, as it existed at the time of the contravention. This declaration is otherwise in an appropriate form. 36 Secondly, the first defendant's contravention was serious: s 1317G(1A)(c)(iii). Whether a contravention is "serious" is a question of fact: Australian Securities and Investments Commission v Newcrest Mining Ltd [2014] FCA 698; 101 ACSR 46 (Newcrest) at [57]; Australian Securities and Investments Commission v Hochtief Aktiengesellschaft [2016] FCA 1489; 117 ACSR 589 at [98]. 37 Here, the Orebody Report, which was the basis for the first defendant's awareness of the orebody information, was provided to its executive officers, including the second defendant and the third defendant; its contravention occurred over a period of time (almost a month); and, during the period in which it was required, but failed, to notify the ASX of the orebody information, approximately 31.06 million of its shares (with a total value of approximately AU$2.063 billion) were traded on the ASX. 38 Further, and in any event, the first defendant admits that its contravention was serious within the meaning of s 1317G(1A)(c)(iii). In Newcrest at [57], Middleton J accepted an admission for that purpose. 39 Thirdly, it is appropriate that the Court receive (and, if appropriate, accept) agreed penalty proposals. In Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 (Commonwealth v FWBII), the plurality (at [58]) said: 58 ... Subject to the court being sufficiently persuaded of the accuracy of the parties' agreement as to facts and consequences, and that the penalty which the parties propose is an appropriate remedy in the circumstances thus revealed, it is consistent with principle and, for the reasons identified in Allied Mills, highly desirable in practice for the court to accept the parties' proposal and therefore impose the proposed penalty. To do so is no different in principle or practice from approving an infant's compromise, a custody or property compromise, a group proceeding settlement or a scheme of arrangement. (Citations omitted.) 40 Of course, the Court is not bound by the parties' proposal as to the amount of the penalty. However, the question for the Court is whether the proposal fixes an appropriate amount. As fixing the amount of a civil penalty is not an exact science, there is a permissible range in which it cannot be said that one amount is, necessarily, more appropriate that another amount for the penalty. Therefore, the Court will not depart from a proposed amount (assuming it to be appropriate) merely because it might have been disposed to impose another, appropriate amount. Further, in these matters, the Court can expect that the relevant regulator (here, ASIC) will be in a position to offer informed submissions as to the effects of the contravention in question, and the level of penalty necessary to achieve statutory compliance: Commonwealth v FWBII at [47] – [48] and [60]. 41 Fourthly, the purpose of a civil penalty is primarily, if not wholly, protective in promoting the public interest in statutory compliance. Unlike criminal proceedings, notions of retribution and rehabilitation do not have a role: Commonwealth v FWBII at [55]; Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113, 254 FCR 68 (ABCC v CFMEU) at [98]. The object of a pecuniary penalty is to put a price on contravention that is sufficiently high to deter the contravenor (specific deterrence) and others who might be tempted to contravene (general deterrence): see ABCC v CFMEU at [98]. 42 Fifthly, the penalties that have been proposed in other cases can provide guidance to the Court. However, that guidance should not be deployed mechanically in the sense of working backwards or forwards from other more or less serious cases. All the circumstances of the given case must be evaluated: Flight Centre Ltd v Australian Competition and Consumer Commission (No 2) [2018] FCAFC 53; 260 FCR 68 at [69]; Australian Competition and Consumer Commission v Universal Music Australia Pty Ltd (No 2) [2002] FCA 192; 201 ALR 618 at [34]. In the present case, I have been provided with a summary of prior cases where pecuniary penalties were imposed for contraventions of continuous disclosure obligations. 43 In Australian Securities and Investments Commission, in the matter of Chemeq Limited (ACN 009 135 264) v Chemeq Limited (ACN 009 135 264) [2006] FCA 936; 234 ALR 511, French J (at [95] – [98]) discussed the factors relevant to the imposition of penalty in a non-disclosure case. His Honour summarised this discussion at [99]: 99 From the preceding discussion I extract the following factors relevant to the level of penalty for contravention of the continuous disclosure provisions. The list is non-exhaustive: 1. The extent to which the information not disclosed would have been expected to and (if applicable) did affect the price of the contravening company's shares (s 674(2)(c)). 2. The extent to which the information, if not generally available, would have been discoverable upon inquiry by a third party (s 676(2)). 3. The extent (if any) to which acquirers or disposers of the company's shares were materially prejudiced by the non-disclosure (s 1317G(1A)). 4. The extent to which (if at all) the contravention was the result of deliberate or reckless conduct by the corporation. 5. The extent to which the contravention was the result of negligent conduct by the corporation. 6. The period of time over which the contravention occurred. 7. The existence, within the corporation, of compliance systems in relation to its disclosure obligations including provisions for and evidence of education and internal enforcement of such systems. 8. Remedial and disciplinary steps taken after the contravention and directed to putting in place a compliance system or improving existing systems and disciplining officers responsible for the contravention. 9. The seniority of officers responsible for the non-disclosure and whether they included directors of the company. 10. Whether the directors of the corporation were aware of the facts which ought to have been disclosed and, if not, what processes were in place at the time, or put in place after the contravention to ensure their awareness of such facts in the future. 11. Any change in the composition of the board or senior managers since the contravention. 12. The degree of the corporation's cooperation with the regulator including any admission of contravention. 13. The prevalence of the particular class of non-disclosure in the wider corporate community. 44 There are other factors that are also relevant to the imposition of penalty, such as the size and financial position of the contravening company, and whether the company has been found to have engaged in similar conduct in the past: ABCC v CFMEU at [104]. 45 In the Joint Submissions, the parties addressed a number of these factors with reference to the Statement of Agreed Facts and Admissions, which, they say, support the conclusion that the proposed penalty of $750,000 is an appropriate penalty in all the circumstances. 46 With respect to the considerations that point towards the need for a penalty of a significant size, relative to the statutory maximum of $1 million, the parties referred to the first defendant's standing as a mining and metals company, and the RT Group's market capitalisation ([11] and [13] above; see also [12]); the fact that the contravention occurred over a period of almost one month, at which time a substantial number of the first defendant's shares were traded on the market ([24] – [26] above); and the fact that the Orebody Report (and, hence, the orebody information) was received by executive officers within the first defendant ([20] above). 47 The parties also point to a number of mitigating factors. ASIC accepts that the contravention was not deliberate or reckless; that the contravention did not arise out of a failure to exercise due care and skill; and that no officer or employee of the first defendant knowingly, wilfully, fraudulently, or dishonestly contravened any legal obligation under statute or the general law. 48 The agreed facts record that, in the period 21 December 2021 to 17 January 2013, the first defendant assessed the implications of the orebody information. As I have noted, the parties agree that the assessment was undertaken carefully. It consisted of a review of the value of the RTCM coal projects and a reassessment of the business direction of those projects. However, in undertaking its review, the first defendant did not appreciate that it was necessary to notify the ASX of the orebody information, even though it had in place processes designed to ensure that it complied with its continuous disclosure obligations. 49 In this regard, the RT Group had implemented continuous disclosure standards as part of its corporate governance standards. These standards were overseen by a Continuous Disclosure Committee, which functioned as an independent management committee. It was responsible for determining whether information relating to the first defendant required disclosure. The standards required the first defendant to make immediate disclosure to listing authorities of any information that a reasonable person would expect to have a material effect on the price or value of the first defendant's securities, in accordance with the RT Group's rules. 50 In the course of oral submissions, I asked how, given these processes, the contravention occurred? Were the first respondent's compliance processes adequate or inadequate? 51 Leading counsel for ASIC, Mr Darke SC, submitted that the apparent failure of these processes, on this occasion, did not mean that, necessarily, they were inadequate. Mr Darke submitted that, given the processes described in the Statement of Agreed Facts and Admissions, it can be said that the first defendant took its compliance obligations seriously and that the contravention was the result of inadvertent error. 52 Leading counsel for the first defendant, Mr Young QC, supported this characterisation. He emphasised the agreed fact that the first defendant's assessment of the orebody information was carefully undertaken. He submitted that the receipt and consideration of the Orebody Report overlapped the Christmas and New Year period. He referred to the report as a "fairly technical document" concerning "very recent drilling results and assays". He submitted that, during the period of non-disclosure, the first defendant's focus was on understanding, and then disclosing, the full impact of the information on the carrying value of the RTCM assets and what that might mean for the direction of the company. 53 The parties also drew attention to the fact that the first defendant has made appropriate admissions regarding the facts and its contravention. This means that a lengthy trial has been avoided. It also means that the first defendant has evinced contrition. 54 In oral submissions, Mr Young submitted that I should view the first defendant's cooperation in light of the fact that the admitted contravention was not alleged until early 2022, leading to the filing, with leave, of a further amended originating process, which deleted all previous claims to relief. He submitted that the considerable work on the evidence and on trial preparation had been undertaken with respect to previous allegations of contravention that are no longer pressed. He submitted that, in these circumstances, the first defendant has, in fact, provided "full and speedy cooperation". Mr Young also drew attention to the fact that, even in these changed circumstances, and with an agreed resolution, the first defendant has agreed to pay ASIC's costs. 55 Mr Young also drew my attention to cases dealing with the significance of the maximum penalty when fixing an appropriate penalty. He submitted that the present case is not at the higher end of offending given the mitigating factors to which I have referred. He submitted that the proposed penalty of $750,000 is, nevertheless, a significant penalty keeping in mind the maximum penalty available: Newcrest at [56], [73], and [87]; cf Australian Securities and Investments Commission v Westpac Banking Corporation [2018] FCA 1701; 131 ACSR 585 at [168], [176] – [177]. 56 Finally, the parties noted that the first defendant has not been found to have engaged in contravention of its continuous disclosure obligations in the past. CONCLUSION 57 As I have said, I am satisfied that the first defendant has contravened s 674(2) of the Act, as admitted. The Court is required to make a declaration. I will make the proposed declaration. 58 Given that the proposed declaration will be made, and given that the contravention was serious, it is appropriate that a monetary penalty be imposed. 59 I have reflected on the Joint Submissions and the oral submissions advanced at the hearing on 28 February 2022. I am satisfied that the proposed penalty of $750,000 is an appropriate penalty in all the circumstances of the case, for the reasons advanced by ASIC and the first defendant. I will impose that penalty. 60 I am satisfied that the other proposed orders should be made. I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Yates. Associate: Dated: 7 March 2022 SCHEDULE A For the purposes of this proceeding only, this Statement of Agreed Facts and Admissions (Statement) is made jointly by the Plaintiff (ASIC) and the First Defendant (RTL), pursuant to section 191 of the Evidence Act 1995 (Cth). This Statement is made jointly by ASIC and RTL in support of the settlement consent orders filed with this Statement. The facts agreed to, and the admissions made, in this Statement are solely for the purpose of this proceeding and do not constitute any admission outside of this proceeding. The Statement itself is not intended for use in any manner outside of this proceeding. A. Parties 1. The Plaintiff, ASIC, is a body corporate: (a) established by s 7 of the Australian Securities Commission Act 1989 (Cth); (b) continued by s 261 of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act); and (c) entitled to sue in its corporate name, pursuant to s 8 of the ASIC Act. 2. The First Defendant, Rio Tinto Limited (ACN 004 458 404) (RTL), at all relevant times: (a) was a corporation registered pursuant to the Corporations Act 2001 (Cth) (Corporations Act) and capable of being sued; (b) was an Australian corporation listed on the financial market known as the "Australian Securities Exchange" (ASX) operated by ASX Limited, which is a "prescribed financial market" within the meaning of section 9 of the Corporations Act; (c) had on issue securities that: (i) were traded on the ASX under the designation "RIO"; (ii) were "ED securities" within the meaning of section 111AE of the Corporations Act; and (iii) accordingly, were "quoted ED securities" within the meaning of section 111AM of the Corporations Act; (d) was, as the issuer of RTL securities: (i) subject to and bound by the listing rules of the ASX (ASX Listing Rules); (ii) a listed disclosing entity within the meaning of section 111AL of the Corporations Act; (iii) subject to the requirements of section 674 of the Corporations Act; and (iv) required by rule 3.1 of the ASX Listing Rules to notify the ASX of information of the type specified therein once RTL was or became aware of such information, for the purpose of the ASX making that information available to participants in the market. 3. At all relevant times, RTL operated through a dual listed company structure with Rio Tinto plc, which is listed on the London and New York Stock Exchanges, together the RT Group. B. Acquisition of Riversdale 4. On or about 8 April 2011, Rio Tinto Jersey Holdings 2010 Limited (RT Jersey), a subsidiary within the RT Group, acquired a controlling 52.6 per cent interest in the issued share capital of Riversdale Mining Limited (Riversdale). 5. On or about 7 July 2011, Riversdale was delisted from the ASX following despatch of compulsory acquisition notices by RT Jersey and subsequently RT Group referred to Riversdale's business as Rio Tinto Coal Mozambique (RTCM). 6. On or about 1 August 2011, RT Jersey completed its acquisition of 100% of the share capital of Riversdale. 7. RT Jersey paid cumulative consideration for Riversdale of US$4.168 billion. 8. As at the date of acquisition of Riversdale, RTCM's principal mining and exploration assets, which were all located in Mozambique, were as follows: (a) a 65% shareholding in Riversdale Mozambique Limitada, which owned an asset described as the Benga asset (Benga asset); (b) a tenement located adjacent to Benga called Zambeze (licence 946L) (Zambeze asset); and (c) a tenement located adjacent to Benga called Tete East which comprised inter alia exploration licences 945L, 948L, 937L and 935L (Tete East asset) (together, the RTCM Coal Projects). 9. Adjoining the RTCM Coal Projects were tenements with exploration licences 1173L, 1174L and 834L (Minjova Tenements). 10. Rio Tinto Mining and Exploration Ltd, a subsidiary of Rio Tinto plc, acquired interests in the Minjova Tenements in December 2011. 11. At all relevant times, RTL regarded the Minjova Tenements and the RTCM Coal Projects as one portfolio of mining assets for development planning purposes. 12. RTCM was a business unit and was allocated to the Rio Tinto Energy (RTE) product group. 13. RTE was supported by Technology & Innovation (T&I), the central team within the RT Group that was responsible for inter alia project development and the evaluation of resource quality and quantity. C. 2011 Annual Report and 2011 Annual Review 14. On or about 16 March 2012, RTL and Rio Tinto plc released their annual report for the year ending 31 December 2011 to the ASX (2011 Annual Report). 15. The 2011 Annual Report stated inter alia that: "The Moatize basin in Mozambique is home to one of the best undeveloped coking coal resources in the world. Rio Tinto has the largest licence holding in that region and owns Tier 1 resources which are long life, will be cost competitive and will have substantial expansion options. Rio Tinto plans to significantly grow these assets and sees this region providing a development opportunity that is long term and will achieve sustainable growth over a 50-year-plus timeframe. Whilst saleable production will initially be constrained by existing rail and port infrastructure, feasibility studies into infrastructure solutions and mine expansions at Benga and the adjacent Zambeze Project are continuing in 2012." 16. The term "Tier 1" was typically used within the mining industry, including by RTL, to describe large, long-life and low-cost mining operations, in the first (or lowest) quartile of the "cost curve". The cost curve is a measure of the costs incurred by mining companies, relative to each other. 17. On or about 16 March 2012, RTL and Rio Tinto plc released their annual review for the year ending 31 December 2011 to the ASX (2011 Annual Review). 18. The 2011 Annual Review stated inter alia in respect of the RTCM Coal Projects and the Minjova Tenements that: (a) "We are well placed to capitalise on our leadership position. Our portfolio includes some of the world's best assets – from our world-class iron ore operations in Australia to the huge potential of our growth projects there and in Mongolia, Guinea and Mozambique"; (b) "During 2011 we completed the acquisition of Riversdale, which has now been renamed Rio Tinto Coal Mozambique. This provides a substantial Tier 1 coking coal development pipeline in the emerging Moatize Basin"; (c) "We continue to grow our world class portfolio of energy assets through the development of the recently acquired Hathor and Riversdale projects and increasing production at existing operations"; (d) "Our strategic investment in the highly prospective Moatize Basin in Mozambique gives us access to one of the largest undeveloped coking coal regions in the world and underlines our commitment to Africa"; (e) "Through the development of Mozambique's massive coal reserves we can help meet that demand and contribute to the transformation of the country's economy". D. 2012 Half-Year Report 19. In 2012, RTL's financial half-year was the six months ending 30 June 2012 (2012 Half-Year). 20. On 8 August 2012, RTL signed and lodged with the ASX a report for the 2012 Half- Year which contained the interim financial statements for the 2012 Half-Year (2012 Half Year Report). 21. The 2012 Half Year Report stated inter alia that: (a) RTCM "owns and operates a number of exploration and early development stage projects, specialising in coal opportunities in southern Africa"; and (b) the RTCM Coal Projects "are located contiguously in the Tete and Moatize provinces of Mozambique. RTCM also has several prospective exploration tenements in the region". 22. On 8 August 2012, during the presentation to analysts about the release of the 2012 Half Year Report, RTL stated in respect of the RTCM Coal Projects and the Minjova Tenements that: (a) "Meanwhile, we're continuing exploration activity with promising results. Early indications are the exploration potential is far higher than anticipated just a year ago and beyond that of coking coal. Significant additional tonnes may be delivered. However, it is likely it will take longer to develop its infrastructure than previously planned due to the timing approvals and internal constraints on our capital. Discussions continue with the Mozambique government on a range of future infrastructure solutions"; (b) "But we have to recognize our strategy and look for the best global resources around the world. … Mozambique for coking coal would be actually putting our hands on the best quality assets in the world"; (c) "If you think about the quality of our interest in Escondida or ownership in Kennecott Utah Copper, you think about the emerging quality of what will be the Moatize Basin in terms of the next big coking coal business. … These are all quite good businesses in their own right. And any other mining company would just get their – they'd give their eye teeth for a company or a business of that quality. This is a tremendous group of assets. These are all first tier assets"; (d) "in Mozambique we have flagged that we would expect about 400,000 tonnes of production of coking coal. It's been a good quality coking coal that we've been delivering so far this year"; (e) "this is truly a world-class basin deposit". 23. On 8 August 2012, during another presentation to analysts about the release of the 2012 Half Year Report, RTL stated in respect of the RTCM Coal Projects and the Minjova Tenements that: (a) "We have some of the best quality projects in the world and the flexibility to phase investment plans"; (b) "Benga, Zambeze and the regional area that we've got in the Moatize, if anything, is more prospective than … a year ago as we look at the full range of opportunities, not just in coking coal, in other opportunities in the basin. … it is truly a unique opportunity to have, without a doubt, a first tier world-class basin of high quality, low vol[atility], hard coking coal, which is, I believe, going to be harder and harder to come by in the years to come. … this is a truly valuable asset with a lot of optionality." E. October 2012 investor presentation 24. On 9 October 2012, during the investor seminar held in London and New York (9 October 2012 Investor Presentation): (a) RTL disclosed in presentation slides which were used for the 9 October 2012 Investor Presentation and lodged with the ASX on 10 October 2012, that in respect of the RTCM Coal Projects they were "[h]ighly prospective, tier one coking coal resource with first production mid-2012 and objective of 25Mtpa high quality coking coal by 2020"; and (b) RTL stated in respect of the RTCM Coal Projects and the Minjova Tenements that: "Our focus is on large, long life assets that have options to either expand production or to extend life … If an asset is small, it must have the potential to grow to remain part of our portfolio. Interestingly, we may choose to start a greenfield development small in order to start generating income before progressively investing in growth. This is the approach taken now by several of our coal assets in Mozambique, where we've started to produce on a modest scale, but [have] a substantial resource position and multiple growth options available to us." F. November 2012 investor presentation 25. On 29 November 2012, during a presentation given at the RTL investor seminar held in Sydney (29 November 2012 Investor Presentation), it was stated that there was significant exploration activity in the Moatize Basin and RTL continued to view the Moatize Basin as a long-term opportunity with the potential to grow beyond 25mtpa. G. Orebody Representations 26. By the 2012 Half Year Report, the presentations at the investor seminars on 8 August 2012 referred to in paragraphs 22 and 23 above, the 9 October 2012 Investor Presentation and the 29 November 2012 Investor Presentation, between 8 August 2012 and 17 January 2013, RTL made public representations that: (a) RTL's coal projects in the Moatize Basin were highly prospective; and (b) through the RTCM Coal Projects and the Minjova Tenements, there was an opportunity to grow and develop a world class basin of high quality coking coal; and (c) the RTCM Coal Projects and the Minjova Tenements were long-life, Tier 1 coking coal resources, (the Orebody Representations). H. Orebody Report 27. On 21 December 2012, a report prepared by T&I, setting out the findings and conclusions of a December 2012 orebody review, was made available to executive officers of RTL, including the Chief Executive Officer and Chief Financial Officer (Orebody Report). 28. The Orebody Report concluded that, based on qualitatively new test results just received concerning coal quantity and quality, the exploration and development potential of the RTCM Coal Projects and the Minjova Tenements was not as RTL had indicated in the Orebody Representations, in that the Orebody Report stated inter alia that: (a) "recent drilling results" about coal quality, together with regional and local geological knowledge, "now provide a reasonably robust estimate of ultimate mineable coal and product potential"; (b) "Potential for economic coal extraction appears limited to the coking coal region around the Moatize/Benga center, including part of the Zambeze lease to the northwest and part of the Tete East 945L lease to the southe[a]st. The three potential mining areas cover a combined strike length of approximately 25km. To the southwest, major structures downthrow the coal measures to uneconomic depths. To the east, coal rank and product quality deteriorate and intrusives become increasingly dominant."; (c) "Faulting is ubiquitous (Figure 4). There are frequent major faults with offsets of several hundred meters which will limit continuous mining areas to blocks of a few square kilometers. In general, a series of major ~E-W faults successively downthrows coal to the south with increasing distance from the basement, initially bringing upper seams closer to the surface, then sending the whole seam package beyond economic depths. A second series of ~NE-SW faults displaces the sediments again, forming a series of up- and downthrown blocks along the strike of the basin."; (d) "At Benga the B seam is lower yielding overall and has a lower coking proportion than the C seam, and the interburden thickness is 50-70 meters. It is expected that the B seam will ultimately be excluded from the mine design on economic grounds, though a final decision will only be made in 2013. The B seam coal totals 84Mt ROM, containing an estimated 12Mt coking and 13Mt thermal products, and its removal from the schedule would leave 260Mt of ROM coal containing an estimated 69Mt coking (27% yield) and 36Mt thermal (14% yield) products, totaling 105Mt (40%). These figures represent the Benga base case …"; (e) "The Benga Mining Concession is now well-drilled (Figure 5) and geology and structures are well-understood. Surface mineable coal is constrained by the lease boundary and by major faults, and upside is therefore very limited."; (f) "The Zambeze lease is well-drilled (Figure 6). The likely economic limits of mining are largely defined by basement outcrop and major structures, and upside potential is limited. Pit limits to the west are economic in nature and may change with pricing."; (g) "Some 13 drill holes (8 fully cored) have been completed on 948L to date (Figure 9). Banded coals comprising upper seams (W - K) occur near surface in upthrown fault blocks in the western portion of the lease and at depth in the east. Geophysical logs provide coal densities generally greater than 1.8tm-3 corresponding with an ash content exceeding 40%. The well- established regional rank trend demonstrates potential for thermal coal only at open cut mining depths. The lease is consequently considered to have limited prospectivity. The westernmost limit of igneous intrusions affecting coal in the eastern Tete region leases occurs near the center of 948L."; (h) "The 937L lease is isolated, and to the North of 948 (also Figure 9). Drilling has delineated a small (1.6km x 1.0km) area of highly banded, high-ash upper seam coal of generally similar rank to coal present in 948L. A steep coal rank gradient, attributed to localized heating of coal by intrusions, is evident in the lease area. Coal within the lease is not considered prospective."; (i) "The 935L lease (Figure 10) adjoins Minjova, and geology and coal occurrences share similar features, including the effects of intrusions. Drilling in 2012 identified a small satellite coal deposit (~50Mt). An additional target exists at the south west corner of the lease which may continue on to 948L. The potential tonnage is small and coal will be thermal only."; (j) "the low margin thermal product and complicated nature of the Minjova resource means it is unlikely to be economic once capital is considered"; (k) "the estimated resources on the Tete East (except 945) and Minjova leases are not expected to translate into economic reserves"; and (l) "the Benga, Zambeze and Tete East 945 Resources in excess of the suggested mineable reserves would require different economic and physical conditions for mining to become economic". 29. Based on the Orebody Representations and the information in the Orebody Report, from 21 December 2012, RTL was aware that: (a) there was a reduction in expected recoverable and mineable volumes of coking coal, or reduced degree of confidence in the potential economic extraction of the coal deposits, in respect of the RTCM Coal Projects and the Minjova Tenements; and (b) the quality and quantity of the coal resources in respect of the RTCM Coal Projects and the Minjova Tenements were not what had previously been expected, such that: (c) RTL's coal projects in the Moatize Basin were not highly prospective; (d) the RTCM Coal Projects and the Minjova Tenements did not provide an opportunity to grow and develop a world class basin of high quality coking coal; and (e) the RTCM Coal Projects and the Minjova Tenements were no longer economically viable as long-life, large-scale, Tier 1 coking coal resources. (together, the Orebody Information). 30. Between 21 December 2012 and 17 January 2013, RTL carefully assessed the implications of the Orebody Information, and on 17 January 2013, RTL made an announcement to the ASX which included, among other things, the substance of the Orebody Information. I. Contravention of section 674(2) of the Corporations Act 31. The Orebody Information was not generally available within the meaning of s 676 of the Corporations Act and for the purpose of s 674(2)(c)(i) of the Corporations Act. 32. The Orebody Information was information that a reasonable person would have expected, if it had been generally available, to have had a material effect on the price or value of RTL's securities, within the meaning of s 677 of the Corporations Act and for the purpose of s 674(2)(c)(ii) of the Corporations Act. 33. In the period between 21 December 2012 and 17 January 2013, RTL was obliged by Rule 3.1 of the ASX Listing Rules and s 674(2) of the Corporations Act to notify the ASX of the Orebody Information. 34. In the period between 21 December 2012 and 17 January 2013, RTL did not notify the ASX of the Orebody Information. 35. RTL admits that it contravened s 674(2) of the Corporations Act on one occasion on and from 21 December 2012 continuing until 17 January 2013, in failing to notify the ASX of the Orebody Information (the Contravention). J. Other agreed facts relevant to relief sought 36. It is no part of this Statement that: (a) the 2011 Annual Report, the 2011 Annual Review, the 2012 Half Year Report, the presentations at the investor seminars on 8 August 2012 referred to in paragraphs 22 and 23 above, the 9 October 2012 Investor Presentation and the 29 November 2012 Investor Presentation were misleading or inaccurate prior to 21 December 2012; (b) RTL or any officer or employee of RTL: (i) knowingly, wilfully, fraudulently or dishonestly contravened any legal obligation under statute or under the general law; (ii) was reckless in complying with any legal obligation under statute (including the Corporations Act) or under the general law; (iii) failed to exercise due care and skill in complying with any legal obligation under statute (including the Corporations Act) or under the general law; or (iv) was involved (within the meaning of s 79 of the Corporations Act) in a contravention of any legal obligation or was otherwise accessorially liable under the general law for a contravention of any legal obligation. 37. The contravention of s 674(2) of the Corporations Act referred to in paragraph 35 above is serious within the meaning of s 1317G(1A)(c)(iii) of the Corporations Act (in force at the relevant time). Discoverable upon inquiry by a third party 38. The Orebody Information, in addition to not being generally available, was not discoverable by anyone outside RTL. 39. During the period 21 December 2012 to 17 January 2013, approximately 31.06 million shares in Rio Tinto Limited during ordinary trading were traded on the ASX, with a total value of approximately AU$2.063 billion, as set out in the table below: Rio Tinto Limited (ASX:RIO) trading data* Date Open Close High Low Volume VWAP Value (volume x VWAP) ($m) 21/12/2012 65.22 64.74 66.21 64.11 2,391,270 64.91 155.23 m 24/12/2012 65 64.84 65.25 64.74 366,989 64.95 23.83 m 27/12/2012 65.09 65.45 65.65 65.09 634,369 65.43 41.51 m 28/12/2012 65.89 66.53 66.68 65.81 1,281,671 66.45 85.17 m 31/12/2012 66.15 66.01 66.2 65.74 660,130 66.00 43.57 m 2/01/2013 67 67.62 67.8 66.57 1,668,548 67.26 112.22 m 3/01/2013 68.16 69.25 69.34 68.13 2,219,500 68.91 152.94 m 4/01/2013 68.04 68.55 68.72 67.6 2,090,819 68.27 142.74 m 7/01/2013 68.51 67.4 68.64 67.4 2,639,188 67.80 178.94 m 8/01/2013 67.52 66.6 67.52 66.2 2,490,236 66.66 165.99 m 9/01/2013 66.53 66.81 66.92 66.28 1,544,427 66.70 103.02 m 10/01/2013 66.9 67.1 67.31 66.26 1,737,828 66.92 116.30 m 11/01/2013 67 65.8 67.03 65.63 2,432,480 66.04 160.64 m 14/01/2013 65.74 65.99 65.99 65.04 1,559,799 65.62 102.35 m 15/01/2013 65.66 65.9 66.08 65.33 1,897,876 65.68 124.66 m 16/01/2013 65.9 65.55 65.91 65.21 1,987,131 65.50 130.15 m 17/01/2013 64.78 64.6 65.56 64.45 3,457,861 64.85 224.24 m *VWAP means Volume-Weighted Average Price. These figures are calculated from reported information regarding trading on ASX. Deliberateness or otherwise of the contravention 40. The Contravention was not deliberate, reckless and did not arise out of a failure to exercise due care and skill. During the period 21 December 2012 to 17 January 2013, RTL assessed the implications of the Orebody Information for RTCM (consisting of a review of the value of the RTCM Coal projects and a reassessment of the business direction of the RTCM Coal Projects). In doing so, however, RTL did not appreciate that it was necessary to notify the Orebody Information to the ASX from 21 December 2012 to 17 January 2013. Compliance systems at the time of the contravention 41. During the reporting periods relevant to the proceedings RTL had in place processes designed to ensure compliance with the continuous disclosure obligations in the Corporations Act. The RT Group had implemented continuous disclosure standards overseen by a Continuous Disclosure Committee (an independent management committee) and forming part of the RT Group's corporate governance standards. The Committee was responsible for determining whether information relating to Rio Tinto may require disclosure to the markets under the continuous disclosure requirements in the jurisdictions in which Rio Tinto is listed. The RT Group's standards required RTL to make immediate disclosure to the listing authorities of any information that a reasonable person would expect to have a material effect on the price or value of RTL's securities in accordance with their rules. 42. During the period 21 December 2012 to 17 January 2013, application of the foregoing processes in RTL's careful consideration of the Orebody Information did not cause RTL to appreciate the immediate need to notify the ASX of the Orebody Information from 21 December 2012. Relevant executive officers no longer involved in RTL 43. The executive officers who received the Orebody Report are no longer employed or otherwise involved with RTL. Size of RTL 44. RTL: (a) is (and at all material times was) one of the largest mining and metals companies listed on the ASX and one of the world's largest mining companies; (b) has (and at all material times had) a market capitalisation among the largest 20 companies listed on the ASX; and (c) conducts (and at all material times conducted) mining operations in 35 countries. 45. For the financial year ending 31 December 2012: (a) RTL's shares were principally traded on the ASX; (b) the RT Group's consolidated sales revenue was US$50.967 billion; (c) the RT Group's earnings before interest, tax, depreciation and amortisation (EBITDA) was US$19.411 billion; (d) the RT Group's net assets were US$58.021 billion; (e) the number of issued shares in RTL was 435,758,720; and (f) the RT Group's market capitalisation was approximately US$81.97 billion.1 46. As at 7 February 2022, the RT Group had a market capitalisation of approximately US$123.33 billion. 1. This was the RT Group's approximate market capitalisation as at 31 December 2012.	14,358
federal_court_of_australia:fca/single/2005/2005fca0521	decision	commonwealth	federal_court_of_australia	text/html	2005-04-27 00:00:00	SZBTQ v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCA 521	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2005/2005fca0521	2024-09-13T22:45:22.505579+10:00	FEDERAL COURT OF AUSTRALIA SZBTQ v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCA 521 SZBTQ v MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS N 426 OF 2005 MADGWICK J 27 APRIL 2005 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 426 OF 2005 BETWEEN: SZBTQ APPLICANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS RESPONDENT JUDGE: MADGWICK J DATE OF ORDER: 27 APRIL 2005 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application for leave to appeal be dismissed. 2. The applicant pay the respondent's costs assessed in the sum of $800.00. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 426 OF 2005 BETWEEN: SZBTQ APPLICANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS RESPONDENT JUDGE: MADGWICK J DATE: 27 APRIL 2005 PLACE: SYDNEY REASONS FOR JUDGMENT Madgwick J: 1 This is an application for leave to appeal from an interlocutory judgment of Federal Magistrate Driver given on 28 February 2005. His Honour dismissed an application for judicial review of an adverse decision of the Refugee Review Tribunal ('the Tribunal') on the basis that the initiating process filed by the applicant disclosed no reasonable cause of action. 2 Before this course was embarked upon, the applicant had been given an opportunity to file an amended application, which he did. Insofar as he complained of error on the part of the Tribunal, the errors alleged are entirely concerned with factual matters. As his Honour pointed out: '… the amended application asserts jurisdictional error but the particulars given are merely a challenge to the merits of the [Tribunal] decision. No legal error going to the jurisdiction of the [Tribunal] is asserted. From my reading of the [Tribunal] decision made on 1 September 2003 there was no jurisdictional error. It would follow that the decision of the [Tribunal] is a privative clause decision and on that basis the amended application is bound to fail.' 3 Before me, the applicant, although not assisted by an interpreter, spoke excellent English and well understood what I was putting to him. He was unable to suggest any other complaint other than that the Tribunal had got the facts of his case wrong. That alone is not sufficient to indicate any jurisdictional error and I would refuse leave to appeal because it seems to me there is no reasonably arguable case that the learned Federal Magistrate fell into error. Accordingly, the prospects of the appeal, if leave were given, are of insufficient moment to warrant leave being granted. 4 The application is dismissed and the applicant is to pay the costs of the respondent, assessed in the sum of $800. I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick. Associate: Dated: 5 May 2005 Solicitor for the Applicant: The applicant appeared in person Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 27 April 2005 Date of Judgment: 27 April 2005	814
federal_court_of_australia:fca/single/2004/2004fca0789	decision	commonwealth	federal_court_of_australia	text/html	2004-06-22 00:00:00	Taslim v Secretary, Department of Family & Community Services [2004] FCA 789	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2004/2004fca0789	2024-09-13T22:45:22.561583+10:00	FEDERAL COURT OF AUSTRALIA Taslim v Secretary, Department of Family & Community Services [2004] FCA 789 ADMINISTRATIVE LAW – application for Transitional Residence Certificate – meaning of 'residence' – whether error of law. Judiciary Act 1903 (Cth) Administrative Appeals Tribunal Act 1975 (Cth) Social Security Act 1991 (Cth) Commissioner of Taxation v Miller (1946) 73 CLR 93 cited Gauthiez v Minister for Immigration & Ethnic Affairs (1994) 53 FCR 512 discussed Nessa v Chief Adjudication Officer [1999] 1 WLR 1937 cited Scargill v Minister for Immigration & Multicultural & Indigenous Affairs(2003) 75 ALD 53 discussed KARAR TASLIM v SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES, DR M THORPE, MEMBER, ADMINISTRATIVE APPEALS TRIBUNAL AND ADMINISTRATIVE APPEALS TRIBUNAL N 154 OF 2004 BEAUMONT J 22 JUNE 2004 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 154 OF 2004 BETWEEN: KARAR TASLIM APPLICANT AND: SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES FIRST RESPONDENT DR M THORPE, MEMBER, ADMINISTRATIVE APPEALS TRIBUNAL SECOND RESPONDENT ADMINISTRATIVE APPEALS TRIBUNAL THIRD RESPONDENT JUDGE: BEAUMONT J DATE OF ORDER: 22 JUNE 2004 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application be dismissed. 2. The applicant pay the respondents' costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 154 OF 2004 BETWEEN: KARAR TASLIM APPLICANT AND: SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES FIRST RESPONDENT DR M THORPE, MEMBER, ADMINISTRATIVE APPEALS TRIBUNAL SECOND RESPONDENT ADMINISTRATIVE APPEALS TRIBUNAL THIRD RESPONDENT JUDGE: BEAUMONT J DATE: 22 JUNE 2004 PLACE: SYDNEY REASONS FOR JUDGMENT Beaumont J: Introduction 1 Application, under both s 39B of the Judiciary Act 1903 (Cth) and s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ('the AAT Act'), to review judicially the decision of the Administrative Appeals Tribunal ('the Tribunal') affirming a decision of a delegate of the first respondent that the applicant was not entitled to a Transitional Residence Certificate ('TRC') because the applicant was not a Protected SCV (Special Category Visa) Holder ('PSCVH') under s 7(2C) of the Social Security Act 1991 (Cth) ('the Act'). 2 By s 7(1) of the Act, a PSCVH has the meaning given by inter alia, s 7(2C), providing (relevantly) as follows: '7(2C)A person who commenced … residing in Australia during the period of 3 months beginning on 26 February 2001 is a [PSCVH] at a particular time if: (a) the time is during the period of 3 years beginning on 26 February 2001; or …' 3 For his claim to succeed, the applicant was required to show that he commenced residing in Australia in the period from 26 February 2001 to 25 May 2001. 4 Section 7(3) is also relevant for present purposes, providing: '7(3) In deciding for the purposes of this Act whether or not a person is residing in Australia, regard must be had to: (a) the nature of the accommodation used by the person in Australia; and (b) the nature and extent of the family relationships the person has in Australia; and (c) the nature and extent of the person's employment, business or financial ties with Australia; and (d) the nature and extent of the person's assets located in Australia; and (e) the frequency and duration of the person's travel outside Australia; and (f) any other matter relevant to determining whether the person intends to remain permanently in Australia.' Facts found by the Tribunal 5 The Tribunal made these findings: '4. [The applicant] is a citizen of New Zealand and at the relevant time was not an Australian citizen or the holder of a permanent visa. As a New Zealand citizen he is a holder of a temporary visa called a "special category visa" ("SCV") which is issued to holders of New Zealand passports under section 58 of the Migration Act 1958. 5. His evidence was that he arrived in Australia on 21 May 2001 and remained in Australia for six days. He stayed with a friend at Campsie. His wife, who remained in New Zealand, did not accompany him. He returned to New Zealand on 27 May 2001 because his wife was unwell. [The applicant] believed that any period of stay within the three months would qualify him as a SCV holder. 6. …[The applicant] said he made no contribution to the outgoings at Campsie and he did not pay rent. He did not work during this period but he did open a bank account with the Commonwealth Bank at Campsie. The [Social Security Appeals Tribunal] decision states that he applied for a tax file number, job search registration and a Medicare card at that time. [The applicant] has no relatives in Australia. 7. [The applicant] returned to Australia on 16 September 2002 and his wife and child joined him in Australia in 22 October 2002. [The applicant] and his family continue to reside in Australia. He has passed the English test requirement for overseas veterinary surgeons and said he intends to do the qualifying examination for Veterinary Surgery.' The Tribunal's decision 6 The Tribunal noted that in Wybrow and Secretary, Department of Social Security (AAT 8321, 19 October 1992), Deputy President McMahon held that, whilst the Act requires certain factors to be taken into account in deciding whether, for the purposes of the Act, a person is residing in Australia, they are not intended to be exhaustive and are made in relation to the ordinary concept of residence. 7 The Tribunal said: '10. The term residence encompasses temporal and emotional factors. Thus to establish residence there must be both a physical presence in the particular place as well as the intention to treat that place as "home". In Levene v Inland Revenue Commissioners (1928) AC 217 Viscount Cave LC defined "reside" as: "the word 'reside' is a familiar English word and is defined in the Oxford English Dictionary as meaning to dwell permanently or for a considerable time."' 8 The Tribunal then identified the following as facts to which the Tribunal had regard in determining whether the applicant was resident in Australia: '(a) [The applicant] lived with a friend on [a] temporary basis for six days during that three-month period. At best this constitutes a visit and cannot be construed as setting up residence. A brief visit with the said intention to reside in Australia also does not constitute residence. (b) [The applicant] had no family in Australia during that period. He was a citizen of New Zealand and his family was in New Zealand. (c) [The applicant] had no employment or prospects of employment in Australia, at that time and he had no business or financial ties. He subsequently passed the English exam for foreign veterinarians to qualify to take the qualifying exam in veterinary surgery but that was not relevant, for the three-month period. (d) [The applicant] had no personal assets in Australia during that period apart from opening a bank account during his brief stay. (e) [The applicant] only visited Australia once and was effectively living in New Zealand for the three-month period except for his six-day visit. (f) As to other matters relevant to determining whether the person intends to remain in Australia, [the applicant] referred to advice from the [first respondent] to the effect that if he returned to Australia by 2004 he would be considered an Australian resident. A note on file by Christian Ellston states: "[Word Pro rejection letter sent as claimant departed Australia on] 27/05/01. Reconsider issue of Certificate if claimant returns and reclaims before 26/02/04." Mr Carter, at the hearing, advised that this referred to a certificate of Australian residency and not a SCV.' 9 The Tribunal said that it did not consider the interpretation of the note by Christian Ellston relevant. A letter from the first respondent dated 10 September 2001 stated that there was not enough evidence to issue the applicant with a residence certificate; and that it was the task of the Tribunal to determine his resident status for the three-month period. 10 The Tribunal noted that the applicant had returned to Australia on 16 September 2002 and the first respondent has accepted that he has resided here on a permanent basis since that date; but that, in order to qualify as a SCV holder, he was required to show that he had taken up residence or had commenced residing in Australia during the three-month period from 26 February 2001 to 26 May 2001. 11 The Tribunal concluded: 'A brief visit as described by [the applicant] does not meet with the requirements of commencing to reside in this country, as required in the Act nor does the six day visit satisfy the ordinary concept, that he commenced residing during that three month period.' THe applicant's written outline of argument 12 On behalf of the applicant, Mr McNally commenced his written argument with the following contentions on 'procedural background and claims': · The applicant is a citizen of New Zealand, who arrived in Australia on 21 May 2001. His wife remained in New Zealand, as she was in an advanced state of pregnancy, and was due to give birth to their child on 21 August 2001. The applicant's wife planned to join him in Australia after the birth of their child due in August 2001. · Prior to travelling to Australia the applicant had made inquiries about recognition in Australia of his veterinarian qualifications and this was the main reason behind his decision to come to Australia to live. · The applicant brought with him a suitcase containing his own clothing and his wife's clothing and stayed at a friend's place in Campsie, contributing to food costs. · Following his arrival in Australia, the applicant opened a bank account with the Commonwealth Bank of Australia and spoke to a real estate agent about obtaining his own premises by the time his wife and new child joined him. The applicant applied for a tax file number, applied for job search registration and a Medicare card, and made inquiries about obtaining a NSW driver's licence. He also made some efforts to obtain work. · Two days after arriving in Australia, on 23 May 2001, the applicant applied for a TRC at CentreLink, expressing his intention to reside in Australia permanently. · The applicant's wife in New Zealand became ill, and on 27 May 2001, the applicant telephoned the CentreLink International Office to discuss whether his departure to New Zealand to care for his wife would affect his application for a TRC. The applicant was told by a 'Ms Karen' from CentreLink that his residency status would not be affected by such departure so long as he returned to Australia, and reapplied before 26 February 2004. Relying on that advice from CentreLink, the applicant departed Australia for New Zealand. · The applicant's wife gave birth to their son on 4 August 2001. · The applicant returned to Australia on 16 September 2002. His wife and son joined him in Australia on 24 October 2002. The applicant brought with him all of his household items, rented an apartment, obtained a job, a Medicare card and a driver's licence. He made arrangements to sit the relevant examinations to have his veterinarian qualifications recognised in Australia; all matters he had done or commenced to do by or in May 2001, before he returned to New Zealand to the aid of his ill wife. · The applicant reapplied for the residence certificate on a date that is not clear, but it appears to be by letter dated 11 January 2003. · On 20 January 2003 CentreLink rejected his application stating that he was not eligible under the definition of 'Australian resident' under social security law at any time between 26 February and 26 May 2001. 13 Mr McNally then made the following submissions with respect to the correct legal meaning of 'commenced residing' as follows: · The Tribunal correctly stated the test under s 7(2C) that, in order to establish that the applicant had commenced residing in Australia during the relevant period (the three months commencing 26 February 2001) 'there must be both a physical presence in the particular place as well as the intention to treat that place as home'. That test is supported by the decision of the Full Court of this Court in Scargill v Minister for Immigration & Multicultural & Indigenous Affairs(2003) 75 ALD 53. In considering the meaning of the words 'usually resides' in the Migration Act 1958 (Cth), the Full Court said (at [21]) that the Tribunal – '… applied a test that made decisive the combination of three matters, namely that the appellant was born in the United Kingdom, that he remained a citizen of the United Kingdom, and that by reason of him having a maternal grandparent and an uncle in the United Kingdom he had greater ties with that country than the USA. In our opinion, in so deciding, the Tribunal failed to consider the factors of physical residency and intention which are essential elements in the notion of "usually resides".' · In the present case, the meaning of the word 'residing' should be the same as that given to 'resides' in Scargill, such that the essential elements involved a physical presence in Australia, plus an intention to reside in Australia, as acknowledged by the Tribunal itself. · The physical presence element in Scargill related to a test as to whether a person 'usually resides' in a place. In the present case, s 7(2C) merely requires that a person commencedto reside in Australia during the relevant period, thus reducing the physical element to state of initiation, being satisfied in the present case from the first day that the applicant was in Australia with the requisite intention. The subsequent and unexpected health concerns of the applicant's wife, requiring him to temporarily return to New Zealand to care for her, did not destroy or otherwise negative the fact that, at that point, the applicant satisfied the criteria in s 7(2C) of the Act. The Tribunal failed to apply the proper test, a test which it had acknowledged itself, such that it thus erred in law. · The Tribunal's conclusion that the applicant did not satisfy the criteria in s 7(2C) was not supported by its own findings that the applicant was present in Australia with an intention to reside here. The Tribunal's findings in this regard, ought to have resulted in a conclusion that the criteria in s 7(2C) was satisfied. 14 Mr McNally then contended that the Tribunal accepted that the applicant was present in Australia between 21 and 27 May 2001, and that he returned to New Zealand on the latter of those dates because his wife was unwell; and appears to have accepted that the applicant had the 'said intention to reside in Australia' during his stay in May 2001; and accepted that the factors required to be considered by s 7(3) of the Act was not an exhaustive list, and that other factors may be taken into account in its task to assess whether the applicant had commenced to reside in Australia at the relevant time. But it failed to have regard to such additional factors. That is to say, the Tribunal made no reference to the following material claims that were an 'essential integer' of the applicant's claim: (a) That the applicant's wife had not travelled with him to Australia on 21 May 2001 because she was pregnant and was unable to travel at the time, but that she intended to join the applicant in Australia after the birth of their child in August 2001. (b) That the reason why the applicant had to urgently and unexpectedly return to New Zealand six days after arriving in Australia was that his pregnant wife was ill, and had no-one else to care for her. (c) That the applicant had made some efforts to obtain work in Australia and had made inquiries about obtaining a NSW driver's licence. (d) That the applicant, during his stay in May 2001, spoke to real estate agents about accommodation for himself and his family following his wife's arrival. (e) That in May 2001, the applicant had brought with him two suitcases of clothing including his wife's clothing, and that his wife was to join him after the birth of their child. (f) That prior to travelling to Australia, the applicant had made inquiries about his veterinarian qualifications being recognised in Australia, and that this was one of the main reasons behind his decision, prior to 21 May 2001, to come to Australia to live. 15 It is next put for the applicant that, whilst the Tribunal referred, in its narrative, to the following material claims that were 'essential integers' of the applicant's claim, the Tribunal did not take them into account when it made its conclusions: (a) The Tribunal stated that the applicant's study and employment plans in Australia for the future 'was not relevant, for the three-month period'. Yet the applicant's plans for the future in Australia are clearly indicative of whether he intended to reside in Australia at the relevant time, and thus was a material claim going towards an essential criterion in his claim. (b) The database entry by a CentreLink officer on 27 May 2001 stating: '27/05/01 Reconsider issue of Certificate if claimant returns and reclaims before 26/02/04'was a result of his seeking advice from CentreLink as to the effects of his departure that day (see above). The Tribunal stated that it did 'not consider the interpretation of the note by [Christian Ellston] relevant'. But it was clearly relevant, because it was a contemporaneous record of the applicant's intention to reside in Australia at that time. This was a material claim going towards that essential criteria. 16 The applicant submits that s 7(3)(f) imposed on the Tribunal a mandatory requirement to take into account these material claims by providing: '7(3) In deciding for the purposes of this Act whether or not a person is residing in Australia, regard must be had to: …. (f) any other matter relevant to determining whether the person intends to remain permanently in Australia. ([emphasis] added).' 17 In failing to have regard to these claims, the Tribunal erred at law. 18 The applicant further contends that the Tribunal's failure to deal with these claims amounted to error at law. The Full Federal Court, it is argued, summarised the position in Applicant WAEE v Minister for Immigration & Multicultural & Indigenous Affairs (2004) 75 ALD 630, as follows: '[46] It is plainly not necessary for the Tribunal to refer to every piece of evidence and every contention made by an applicant in its written reasons. 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) 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. [47] The inference that the Tribunal has failed to consider an issue may be drawn from its failure to expressly deal with that issue in its reasons. 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.' 19 Here, it is contended, the applicant made a claim that he was in Australia at the relevant time with the intention to reside in Australia from that point forward. These claims were integral matters to that essential integer of his claim. In failing to consider them, the Tribunal failed to exercise its jurisdiction and/or erred in law. 20 The Tribunal found that the applicant had no 'prospects of employment in Australia' despite clear evidence that the applicant was seeking work, had applied for a tax file number from the Australian government, had applied for job search registration, and had made inquiries regarding the recognition of his veterinarian qualifications in Australia. There was simply no evidence at all to support the Tribunal's findings in this respect, which went to one of the essential criteria required to be determined in section 7(3)(c) of the Act which provided: '7(3) In deciding for the purposes of this Act whether or not a person is residing in Australia, regard must be had to: …. (c) the nature and extent of the person's employment, business or financial ties with Australia.' 21 There being no evidence in support of that finding, the Tribunal erred in law in so finding, and such error went to an essential factor in the applicant's claim. 22 The applicant's evidence (which was not rejected) was that he telephoned CentreLink prior to his departure on 27 May 2001 to discuss whether his departure to New Zealand to care for his ill wife would have a negative effect on his application for a residency certificate (see above). The applicant's evidence, which is supported by the database entry, was that he was advised by that CentreLink officer that such departure would not disentitle him for residency status so long as he returned and reapplied before 26 February 2004. The applicant relied on that advice, apparently to his detriment, and he then departed Australia for New Zealand later that day. 23 The applicant does not suggest that he was not still required to produce at a later date sufficient evidence to prove his intentions as to residence in May 2001, but the applicant submits that by providing him with that advice, CentreLink was thereafter estopped from relying solely or materially on that departure to find against him in his application. The applicant specifically inquired as to whether his departure would lead to a rejection of his claim, and he was advised that it would not. When one has regard to the Tribunal's decision as a whole, it is clear that the reason he was rejected was the single fact that he departed Australia on 27 May 2001 and that his presence in Australia during the relevant three month period was six days only. The Tribunal ought to have considered, and acknowledged that CentreLink was estopped from relying solely or materially on that factor to reject his claim. In not so doing, the Tribunal erred at law. The authorities cited in argument on behalf of the first respondent 24 In order to understand the first respondent's contentions, reference should first be made to the principal authorities cited by Mr Reilly in the course of argument on behalf of the first respondent. 25 In Gauthiez v Minister for Immigration & Ethnic Affairs (1994) 53 FCR 512, a question arose whether, for the purposes of reg 9(2) of the Migration Regulations 1989 (Cth) the applicant 'usually resides in the same country, not being Australia …'. 26 Gummow J said (at 519): 'The meaning ordinarily given to the phrases "resides", "usually resides" and "ordinarily resides" is such as to make the result in a given case depend largely upon matters of fact and degree. That means that if, in the reasons of a body such as the Tribunal, no misapprehension of the meaning of the provision in question is disclosed, and no misconception appears as to what may amount to "residence" or "usual residence", the decision will not involve a question of law. This will be so unless the facts before the Tribunal were incapable of the legal complexion placed upon them: Commissioner of Taxation v Miller (1946) 73 CLR 93 at 104, per Dixon J.' 27 (These observations were approved by the Full Federal Court in Scargill, above (at [26]).) 28 Gummow J observed (at 519 – 520): 'However, before this Court both sides accepted the applicability to the construction of reg 9 of a passage from the speech of Lord Scarman in a case in which the House of Lords was construing the term "ordinarily resident" as it appeared in s 1 of the Education Act 1962 (UK). The decision is Regina v Barnet London Borough Council; Ex parte Shah [1983] 2 AC 309. There, in delivering the leading speech, Lord Scarman (at 340) pointed out that whilst "ordinary residence" is not a term of art in English law, it embodies an idea of which the Parliament has made increasing use in the statute law in Britain since the beginning of the 19th century. For example, the expression has been a feature of income tax legislation since 1806. After reviewing various authorities concerned with taxation, bankruptcy and family law, his Lordship (at 343-344) said: "Unless, therefore, it can be shown that the statutory framework or the legal context in which the words are used requires a different meaning, I unhesitatingly subscribe to the view that 'ordinarily resident' refers to a man's abode in a particular place or country which he has adopted voluntarily and for settled purposes as part of the regular order of his life for the time being, whether of short or of long duration."' 29 In Nessa v Chief Adjudication Officer [1999] 1 WLR 1937, upon a claim for entitlement to income support, the question arose whether a person from abroad with an intention to settle in the United Kingdom was 'habitually resident' in the United Kingdom for the purpose of the Income Support (General) Regulations 1987 (UK). 30 Lord Slynn said (at 1942): 'If Parliament had intended that a person seeking to enter the United Kingdom or such a person declaring his intention to settle here is to have income support on arrival, it could have said so. It seems to me impossible to accept the argument at one time advanced that a person who has never been here before who says on landing, "I intend to settle in the United Kingdom" and who is fully believed is automatically a person who is habitually resident here. Nor is it enough to say I am going to live at X or with Y. He must show residence in fact for a period which shows that the residence has become "habitual" and, as I see it, will or is likely to continue to be habitual. I do not consider that, when he spoke of residence for an appreciable period, Lord Brandon meant more than this. It is a question of fact to be decided on the date where the determination has to be made on the circumstances of each case whether and when that habitual residence had been established. Bringing possessions, doing everything necessary to establish residence before coming, having a right of abode, seeking to bring family, "durable ties" with the country of residence or intended residence, and many other factors have to be taken into account.' 31 In Scargill, above, the question arose, as it had in Gauthiez, whether the applicant 'usually resides in the same country, not being Australia …'. 32 The Full Federal Court said (at [17]): 'It is not contended by either party before this court that the Tribunal erred in formulating the test which should be applied to determine under reg 1.15(2)(a) where the appellant "usually resides". In Koitaki Para Rubber Estates Ltd v FCT (1941) 64 CLR 241, to which the tribunal referred, Williams J, with whose reasons Rich ACJ and McTiernan J expressed agreement, made the following observation that is pertinent to this case (at 249): The place of residence of an individual is determined, not by the situation of some business or property which he is carrying on or owns, but by reference to where he eats and sleeps and has his settled or usual abode. If he maintains a home or homes he resides in the locality or localities where it or they are situate, but he may also reside where he habitually lives even if this is in hotels or on a yacht or some other place of abode: see Halsbury's Laws of England, 2nd ed, vol 17, pp 376, 377.' 33 In answer to the applicant's estoppel argument, Mr Reilly relied upon observations of Burchett J in Minister for Immigration & Ethnic Affairs v Petrovski (1997) 73 FCR 303, a case of a passport issued in error, as follows (at 308): 'I do not think it is possible to find in the circumstances of the issue of the two passports to Mr Petrovski any foothold for an estoppel that would control the exercise of the statutory powers of the Minister, so as to compel him to grant Australian citizenship to the respondent. The attempt to argue such an estoppel was met by a phalanx of cases that cannot be breached … .' THe first respondent's written submissions 34 By his written outline, Mr Reilly, counsel for the first respondent submitted: · This is an 'appeal' on a point of law under s 44 of the AAT Act, and although the amended application also pleads s 39B of the Judiciary Act, in the absence of special circumstances, such an application should be dismissed: see Tuite v Administrative Appeals Tribunal (1993) 40 FCR 483 (per Davies J) at 484. There do not appear to be any special circumstances in this case. · The essential issue was whether the applicant had 'commenced residing' in Australia during the period 26 February to 25 May 2001 within s 7(2C). The applicant claimed to have satisfied this test on the basis of his presence in Australia for six days from 21 to 27 May 2001. · The first ground raised in the amended application claims that the Tribunal failed to give reasons for its decision. However, following Minister for Immigration & Multicultural Affairs v Yusuf (2001) 206 CLR 323, the Tribunal is only obliged to give the reasons it actually had for its decision, not those that the Court considers objectively material: see Beringer Blass Wine Estates Ltd v Geographical Indication Committee [2002] FCAFC 295 at [102]. Nor is a failure to give reasons a jurisdictional error: see Re Minister for Immigration & Multicultural & Indigenous Affairs; Ex parte Palme (2003) 201 ALR 327. In any event, the particulars given do not reveal any failure by the Tribunal to give reasons, but rather appear to be factual findings with which the applicant disagrees, which is not an error of law: see Abebe v Commonwealth (1999) 197 CLR 510 at [137]. · The second ground raised in the amended application claims that the Tribunal failed to take into account relevant considerations. The particulars given, as amplified in the applicant's submissions, appear to seek merits review rather than establishing any failure to take a relevant consideration into account. The Tribunal considered the applicant's reasons for his return to New Zealand, and the claim that he was misadvised, so the claim that the Tribunal failed to take these matters into account is insupportable. The Tribunal was not required to refer to every detail of the evidence before it: see Muralidharan v Minister for Immigration & Ethnic Affairs (1996) 62 FCR 402 at 414 per Sackville J; Minister for Immigration & Ethnic Affairs v Guo (1997) 191 CLR 559 at 593 per Kirby J. Nor does it follow that failure to refer to particular aspects of a case means that the Tribunal has failed to consider that aspect: see Steed v Minister for Immigration & Ethnic Affairs (1981) 37 ALR 620 at 621 per Fox J. There is no basis to allege that any matters raised by the applicant were not considered by the Tribunal, as opposed to not being regarded as relevant to the issue before it. Contrary to the applicant's submissions, the Tribunal did not find that the applicant lacked the necessary intention to reside in Australia, but it did not regard this as sufficient, given the brevity of his stay here. The claim that the Tribunal was in some way estopped from finding against the applicant on this basis is contrary to Petrovski, above, at 308 – 309 and the cases there cited. · The third ground raised in the amended application claims that the Tribunal failed to look beyond the matters referred to in s 7(3) of the Act. However, there is no basis to suggest that the Tribunal failed to consider any matter not within s 7(3) that was raised by the applicant. This ground appears to be in substance the same as the second ground and fails for the same reason. · The fourth ground claims that the Tribunal should have found that the applicant satisfied the test in s 7(2C). While this appears again to seek merits review, the ground, as developed in the applicant's submissions, claims that the Tribunal misinterpreted the meaning of 'residing' in s 7(2C), relying upon Scargill. The applicant appears to claim that the fact that he was physically present in Australia and intended to reside here meant that the Tribunal was bound to find in his favour. However these matters are necessary but not necessarily sufficient indicia of residency, and nothing in Scargill suggests otherwise. Thus the claim that mere physical presence combined with an intention to reside was sufficient to establish that an immigrant was 'habitually resident' in the United Kingdom upon her arrival there was rejected by the House of Lords in Nessa. Having regard to the matters in s 7(3) the term 'commenced residing' cannot be limited in the way that the applicant suggests. Rather, the matter involves a judgment of fact and degree that is for the Tribunal to make: see Gauthiez (per Gummow J) at 519E, a decision approved in Scargill. Conclusions on the appeal 35 In answer to the first respondent's written submission, summarised above, the applicant sough to distinguish the terms of the legislation in Scargill ('usually resides') and in Nessa ('habitual resident'). Whilst I accept that the legislation in those cases was, of course, expressed in language which was different from the present, it does not, in my opinion, follow that the Tribunal adopted a wrong legal test here. 36 It will be recalled that the Tribunal stated that the term 'residence' encompassed both temporal and emotional factors, so that, relying on the ordinary dictionary meaning, there must be both a physical presence in the particular place, as well as the intention to treat that place as 'home'. In my view, this was, in law, a correct analysis of the term in the present context. 37 In my opinion, there is no scope for judicial review in the present case. 38 It will be recalled that in Gauthiez, Gummow J referred to the reasons of Dixon J in Miller, at 104. Those reasons, and their context, are, in my view, particularly pertinent here, especially since the question in Miller was whether the taxpayer was (simply) 'resident' (not 'usually' or 'habitually' so) in a place. 39 In Miller, the Commissioner of Taxation (purportedly) appealed to the High Court, invoking s 196 of the Income Tax Assessment Act 1936 – 1943, from a decision of a Board of Review holding that the taxpayer, a deep-sea fisherman, was a resident of the Territories of New Guinea and Papua. 40 Under s 196(1), an appeal from a Board decision lies only if the decision involves a question of law. 41 Dixon J said (at 103): 'Having regard to the character of the place [i.e. the Milne Bay Military base in 1942 and 1943], I do not think that, had I been in the Board's place, I should have regarded the facts I have stated as leading to the conclusion that the taxpayer was a resident of Papua. But I am not satisfied that their decision involved any question of law. It is not legally impossible for a man to reside in a country, though he lives on a moving craft plying upon its rivers or within its territorial waters. Nor is it legally impossible for a man to reside at a military base, even a forward one.' 42 Likewise, it may be said in the present case, that even if all the matters relied upon by the applicant in his argument had been taken into account by a decision-maker, it is not legally impossible to conclude that the applicant did not commence residing in Australia from 21 May 2001. 43 Dixon J (at 103), referring to two decisions of the House of Lords (including Levene, above) said: 'The two cases of Levene and of Lysaght [(1928) AC 234] are as striking as they are decisive in illustrating the way in which the question of "resident" or "not resident" has become a "question of degree and therefore of fact". Lord Buckmaster said:-"It may be true that the word 'reside' or 'residence' in other Acts may have special meanings but in the Income Tax Acts it is, I think, used in its common sense and it is essentially a question of fact whether a man does or does not comply with its meaning. It is, of course, true that if the circumstances found by the Commissioners in the special case are incapable of constituting residence their conclusion cannot be protected by saying that it is a conclusion of fact since there are no materials upon which that conclusion could depend." Lord Warrington said: "I have reluctantly come to the conclusion that it is now settled by authority that the question of residence or ordinary residence is one of degree, that there is no technical or special meaning attached to either expression for the purposes of the Income Tax Act, and accordingly a decision of the Commissioners on the question is a finding of fact and cannot be reviewed unless it is made out to be based on some error in law, including the absence of evidence on which such a decision could properly be founded."' 44 Of these final observations, Dixon J observed (at 104): 'As the Board of Review is an administrative body it may be doubted whether a decision by it can be said to involve a question of law because it is based on insufficient evidence. But, no doubt, if the facts coming before the Board were incapable of the legal complexion placed upon them, that would involve a question of law and the difference is not great.' 45 In my opinion, these comments are applicable here. Dixon J proceeded to conclude his reasons (at 104): '…[T]he appeal is not properly before us unless the decision of the Board involves a question of law. The Board have given their reasons and no misapprehension of the meaning of the provision in question is disclosed and no misconception appears as to what amounts to "residence" as a general proposition. No proposition of law appears to have been assumed. It all seems to me to come back to the so-called question of fact. I am, therefore, not satisfied that the appeal lies.'' 46 In my opinion, those observations are equally applicable here. There was no error of law. The appellant's complaint is, in truth, based upon the Tribunal's factual findings. 47 Moreover, no question of estoppel can arise. There is no evidence of detriment, for one thing. Specifically, there was no reliance upon any express representation, nor any sufficiently clear and unambiguous (implied) representation, even if the difficulties in applying estoppel in administrative law, in the performance of a positive statutory duty, could be overcome (see Minister for Immigration & Ethnic Affairs v Kurtovic (1990) 21 FCR 193 per Gummow J at 207 – 218). 48 In the circumstances, it is not necessary to consider Mr Reilly's other points. Orders 49 Accordingly, it will be ordered that since the application did not raise a question of law under the AAT Act, or a 'jurisdictional error' in the application of s 39B of the Judiciary Act, it must be dismissed, with costs. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Beaumont. Associate: Dated: 22 June 2004 Counsel for the Applicant: Mr McNally Solicitor for the Applicant: Parish Patience Immigration Counsel for the Respondent: Mr T Reilly Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 9 June 2004 Date of Judgment: 22 June 2004	9,100
federal_court_of_australia:fca/single/2005/2005fca1435	decision	commonwealth	federal_court_of_australia	text/html	2005-10-12 00:00:00	Eshchenko v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1435	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2005/2005fca1435	2024-09-13T22:45:22.796460+10:00	FEDERAL COURT OF AUSTRALIA Eshchenko v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1435 MIGRATION – Non-disclosure orders under s503B(1) of the Migration Act Migration Act 1958 (Cth) ESHCHENKO v MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS NSD 1254 of 2005 ESHCHENKO v MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS NSD 1255 of 2005 GRAHAM J 12 OCTOBER 2005 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1254 OF 2005 BETWEEN: RUSLAN ESHCHENKO APPLICANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS RESPONDENT JUDGE: GRAHAM J DATE OF ORDER: 12 OCTOBER 2005 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. In the event that (a) a declaration comes into force under section 503A(3) of the Migration Act 1958 (Cth) in respect of the disclosure of specified information ("the information") in specified circumstances to this Court, and (b) the information is disclosed to the Court then the information is not to be divulged or communicated to:- (i) the Applicant in the substantive proceedings; (ii) the legal representatives of the Applicant in relation to the substantive proceedings or any of them PROVIDED HOWEVER that the information may be divulged or communicated in Court, but not otherwise, to the counsel presently retained for the Applicant or either of them upon such counsel providing to the Court undertakings in the following terms:- "UNDERTAKINGS TO THE COURT I [counsel for the applicant] undertake to the Court that in respect of such information as is the subject of an order under s503B(1) of the Migration Act 1958 (Cth) and a declaration under s503A(3) that may be divulged or communicated to me: 1. I will not make a copy of any documents containing such information nor will I remove any documents containing such information from the Court. 2. I will not divulge or communicate the information or any part thereof to any person either directly or indirectly except the Court or my fellow counsel who has given a like undertaking to the Court and then only in the absence of all other persons. 3. I will not use the information except for the purpose of the Application filed on 26 July 2005 in these proceedings and any appeals resulting therefrom. 4. Save for these proceedings and any appeal from these proceedings, I will not act for or provide advice to the applicant or any person known by me to be associated with the applicant." or, (iii) any other member of the public. 2. Upon the hearing of the substantive proceedings, all members of the public are to be excluded for the whole of the hearing. 3. No report of the substantive proceedings, other than the orders of the Court thereon, shall be published. 4. No person, without the consent in writing of a Judge of the Federal Court of Australia, shall have access to any file or record of the Court that contains the information. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1255 OF 2005 BETWEEN: LEONID ESHCHENKO APPLICANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS RESPONDENT JUDGE: GRAHAM J DATE OF ORDER: 12 OCTOBER 2005 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. In the event that (a) a declaration comes into force under section 503A(3) of the Migration Act 1958 (Cth) in respect of the disclosure of specified information ("the information") in specified circumstances to this Court, and (b) the information is disclosed to the Court then the information is not to be divulged or communicated to:- (i) the Applicant in the substantive proceedings; (ii) the legal representatives of the Applicant in relation to the substantive proceedings or any of them PROVIDED HOWEVER that the information may be divulged or communicated in Court, but not otherwise, to the counsel presently retained for the Applicant or either of them upon such counsel providing to the Court undertakings in the following terms:- "UNDERTAKINGS TO THE COURT I [counsel for the applicant] undertake to the Court that in respect of such information as is the subject of an order under s503B(1) of the Migration Act 1958 (Cth) and a declaration under s503A(3) that may be divulged or communicated to me: 1. I will not make a copy of any documents containing such information nor will I remove any documents containing such information from the Court. 2. I will not divulge or communicate the information or any part thereof to any person either directly or indirectly except the Court or my fellow counsel who has given a like undertaking to the Court and then only in the absence of all other persons. 3. I will not use the information except for the purpose of the Application filed on 26 July 2005 in these proceedings and any appeals resulting therefrom. 4. Save for these proceedings and any appeal from these proceedings, I will not act for or provide advice to the applicant or any person known by me to be associated with the applicant." or, (iii) any other member of the public. 2. Upon the hearing of the substantive proceedings, all members of the public are to be excluded for the whole of the hearing. 3. No report of the substantive proceedings, other than the orders of the Court thereon, shall be published. 4. No person, without the consent in writing of a Judge of the Federal Court of Australia, shall have access to any file or record of the Court that contains the information. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1254 OF 2005 BETWEEN: RUSLAN ESHCHENKO APPLICANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS RESPONDENT IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 1255 OF 2005 BETWEEN: LEONID ESHCHENKO APPLICANT AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS RESPONDENT JUDGE: GRAHAM J DATE: 12 OCTOBER 2005 PLACE: SYDNEY REASONS FOR JUDGMENT 1 Leonid Eshchenko and Ruslan Eshchenko are father and son. By letters dated 20 May 2005 notices were sent by the Department of Immigration and Multicultural and Indigenous Affairs to each of the Messrs Eshchenko indicating that it had come to the attention of the Department that their respective applications for visas may be liable for refusal by the Minister under s501 of the Migration Act 1958 ("the Act"). In each case the relevant grounds were specified as s501(6)(b) and 501(6)(c)(ii) of the Act. 2 Section 501(1) of the Act provides:- "501(1) The Minster may refuse to grant a visa to a person if the person does not satisfy the Minister that the person passes the character test." 3 The character test is set out in s501(6) of the Act which provides relevantly:- "501(6) For the purposes of this section, a person does not pass the character test if: … (b) the person has or has had an association with someone else, or with a group or organisation, whom the Minister reasonably suspects has been or is involved in criminal conduct; or (c) having regard to … the following: … (ii) the person's past and present general conduct; the person is not of good character; or … Otherwise, the person passes the character test." 4 In respect of Mr Ruslan Eshchenko the relevant letter included the following:- "… Matters to be taken into account include the following: → His association with a group or organisation whom the Minister reasonable (sic) suspects has been or is involved in criminal conduct → Information which is protected under s503A of the Migration Act 1958 which cannot be released to him" 5 In the letter to Mr Leonid Eshchenko the same two matters were identified as the second and third matters which might be taken into account. In his case the first matter was: " → His association with his son, Ruslan" 6 On 26 July 2005 the current proceedings were instituted by both Ruslan Eshchenko and Leonid Eshchenko by Applications under the Judiciary Act 1903 and Migration Act 1958. The essential claim in the proceedings is that the Applicants be provided with "full particulars of the matters to be taken into account by the Respondent or her Delegate when considering to refuse the Applicant's visa application" and "a reasonable opportunity to respond to any such particulars". 7 Section 503A(1) of theAct prohibits, amongst other things, authorised migration officers from divulging or communicating information to another person which has been communicated to an authorised migration officer by a gazetted agency on condition that it be treated as confidential information where the information is relevant to the exercise of a power under s501 of the Act. 8 Section 503A(2) prohibits requirements being imposed upon the Minister or authorised migration officers to divulge or communicate such information to a Court. 9 Similar restraints are imposed by s503D of the Act in respect of disclosure of the details of gazetted agencies providing such information as if such details were such information. 10 In the foregoing context I made orders on 4 August 2005 pursuant to Order 29 rule 2 of the Federal Court Rules for certain questions to be decided separately and before the trial in these proceedings. 11 The separate questions put in issue the constitutional validity of the restraints imposed by the Act in respect of the disclosure to the Court of such information. 12 In respect of the separate questions the Chief Justice has directed that the jurisdiction of the Court be exercised by a Full Court in accordance with s20(1)A of the Federal Court of Australia Act 1976 (Cth). The date fixed for the hearing of the separate questions is Wednesday 19 October next. 13 By virtue of certain matters to which I will shortly refer the constitutional issues may become moot and unnecessary for the Court to decide. 14 Section 503A(3) of the Act in effect allows the Minister to override the restrictions placed upon the communication of information to a Court. Section 503A(3) relevantly provides:- "503A(3) The Minister may, by writing, declare that subsection (1) or (2) does not prevent the disclosure of specified information in specified circumstances to … a specified court …. However, before making the declaration, the Minister must consult the gazetted agency from which the information originated." 15 It may be noted that s503A(3) does not make provision for disclosure of information to the specified Court although, arguably, the method of disclosure could be dealt with in the "specified circumstances". Absent any such provision, it would no doubt be open to the Minister or the relevant authorised migration officer to voluntarily disclose the confidential information to the Court. Alternatively, it may be that the Applicants could secure the production of the specified information to the Court by the issue of a subpoena or a Notice to Produce which could secure the disclosure to the Court, it then being a matter for the Court as to what would happen to the material so disclosed. 16 Section 503B(1) of the Act empowers the Court to make orders which it considers appropriate for the purpose of ensuring that, in the event that a Ministerial declaration comes into force under s503A(3) of the Act and the information is disclosed to the Court, the information will not be divulged or communicated to other persons. 17 Section 503B(1) of the Act relevantly provides:- "503B(1) If: (a) either: (i) information is communicated to an authorised migration officer by a gazetted agency on condition that it be treated as confidential information and the information is relevant to the exercise of a power under section 501 …; or (ii) …; and (b) the information is relevant to proceedings (the substantive proceedings) before the Federal Court … that relate to section 501 …; and (c) no declaration is in force under subsection 503A(3) authorising the disclosure of the information to the Federal Court ... for the purposes of the substantive proceedings; the Federal Court may …, on application by the Minister, make such orders as the Federal Court … considers appropriate for the purpose of ensuring that, in the event that such a declaration comes into force and the information is disclosed to the Federal Court …, the information is not divulged or communicated to: (d) the applicant in relation to the substantive proceedings; or (e) the legal representative of the applicant in relation to the substantive proceedings; or (f) any other member of the public." 18 What is presently before me in each matter is a Notice of Motion filed by the Minister on 30 September 2005 seeking orders pursuant to s503B(1) in respect of information that was communicated to an authorised migration officer by a gazetted agency in accordance with s503A(1) of the Act. 19 To enable the current applications to be made for orders under s503B(1) of the Act I made interim non-disclosure orders pursuant to s503C of the Act on 6 October last. Those orders included an order that the particular information provided to the Court for the purposes of the current applications not be divulged or communicated to the applicants, their legal representatives or any members of the public. 20 Under s503B(6) of the Act disclosure of the confidential information to the Court is permissible for the purposes of enabling the Court to make a decision on a s503B(1) application. Information so disclosed to the Court under s503B(6) is not to be treated as having been disclosed to the Court for the purposes of the substantive proceedings (see s503B(7)). 21 Should I be minded to make orders under s503B(1) of the Act, it is not incumbent upon the Minister to make a declaration under s503A(3) (see s503B(11)). 22 Section 503B(2) of the Act empowers the Court to include specific orders in the orders which it may make under section 503B(1). 23 Section 503B(5) requires the Court to have regard to nine specified matters in exercising its powers under s503B(1) of the Act. It is also required to have regard to matters specified in the regulations, but I am informed by Counsel for the parties that no relevant matters have been so specified. The Court is precluded from having regard to any other matters. 24 Section 503B(5) relevantly provides:- "503B(5) In exercising its powers under subsection (1), the Federal Court … must have regard to all of the following matters: (a) the fact that the information was communicated, or originally communicated, to an authorised migration officer by a gazetted agency on condition that it be treated as confidential information; (b) Australia's relations with other countries; (c) the need to avoid disruption to national and international efforts relating to law enforcement, criminal intelligence, criminal investigation and security intelligence; (d) in a case where the information was derived from an informant – the protection and safety of informants and of persons associated with informants; (e) the protection of the technologies and methods used (whether in or out of Australia) to collect, analyse, secure or otherwise deal with, criminal intelligence or security intelligence; (f) Australia's national security; (g) the fact that the disclosure of information may discourage gazetted agencies and informants from giving information in the future; (h) the effectiveness of the investigations of official inquiries and Royal Commissions; (i) the interests of the administration of justice; … and must not have regard to any other matters." 25 For the purposes of the applications presently before me information has been disclosed to the Court in accordance with s503B(6) of the Act. That disclosure was effected by the production to the Court of a 251 page bundle of documents in circumstances where I was invited to read copies of five letters commencing at or appearing on pages 210, 209, 205, 204 and 202 of the bundle. 26 Having regard to the terms of the documents themselves, what constitutes a gazetted agency within the meaning of s503A(9) of the Act and protective security measures directed at ensuring confidentiality in respect of information made available to various organs of government in accordance with the Commonwealth Protective Security Manual published by the Attorney-General's Department in 2000, I am satisfied that the information contained in the documents which I have been invited to read satisfies the requirements of s503B(1)(a)(i) and s503B(1)(b) of the Act. 27 There is no evidence before me of any Ministerial declaration having been made under s503A(3) of the Act. In the present circumstances I am satisfied that each of the preconditions to the Court exercising its powers under s503B(1) of the Act has been satisfied. 28 Given the legislature's obvious perception that confidentiality is highly important in this area, it does not seem to me to be appropriate to reason the case for the orders which should be made by reference to the matters to which I must have regard and to which I have had regard in accordance with s503B(5) of the Act. 29 Whilst the Minister has sought a blanket non-disclosure order, I am of the opinion that strictly limited disclosure to the Applicants' counsel presently retained by the Applicants and to no other persons should be permitted in the event that a Ministerial direction under s503A(3) comes into force and the information contained in the five copy letters to which I have referred is disclosed to the Court. In my opinion it would be appropriate for orders to be made under s503B(2) as well. 30 I will hear the parties' submissions on the question of costs. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. Associate: Dated: 12 October 2005 Counsel for the Applicant on the Motion: G R Kennett Solicitor for the Applicant on the Motion: Australian Government Solicitor Counsel for the Respondent on the Motion: S Gageler SC and N Poynder Solicitor for the Respondent on the Motion: Murray Craddock & Neumann Date of Hearing: 11 October 2005 Date of Judgment: 12 October 2005	4,288
federal_court_of_australia:fca/full/2007/2007fcafc0184	decision	commonwealth	federal_court_of_australia	text/html	2007-11-28 00:00:00	Colorado Group Limited v Strandbags Group Pty Limited [2007] FCAFC 184	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2007/2007fcafc0184	2024-09-13T22:45:23.081136+10:00	FEDERAL COURT OF AUSTRALIA Colorado Group Limited v Strandbags Group Pty Limited [2007] FCAFC 184 TRADE MARKS – ownership – first use – combination mark – whether goods "of the same kind" – whether word mark sufficiently distinctive to identify goods PASSING OFF – whether appellant raised geographical limitation of use before primary judge EVIDENCE – evidential onus of proof – whether primary judge's conclusions on evidence matters of impression Trade Marks Act 1995 (Cth) ss 14, 17, 27, 41, 44, 58, 88, 120, 122, 124 Trade Marks Registration Act 1875 (UK) s 10 Trade Practices Act 1974 (Cth) s 52 Aston v Harlee Manufacturing Co (1960) 103 CLR 391 cited Blackadder v Good Road Machinery Co Inc (1926) 38 CLR 332 cited Blount v Registrar of Trade Marks (1998) 83 FCR 50 cited Branir Pty Limited v Owston Nominees (No 2) Pty Limited (2001) 117 FCR 424 discussed, applied British Sugar Plc v James Robertson & Sons Ltd [1996] RPC 281 cited Builders Licensing Board v Sperway Constructions (Sydney) Pty Limited (1976) 135 CLR 616 cited Cabal v United Mexican States (2001) 108 FCR 311 cited Canadian Shredded Wheat Co Ltd v Kellogg Co of Canada (1938) 55 RPC 125 referred to Cantarella Bros Pty Ltd v Novadelta-Comercio E Industria De Cafes LDA (1998) 42 IPR 265 Carnival Cruise Lines Inc v Sitmar Cruises Ltd (1994) 120 ALR 495 discussed Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 discussed Coleman Company Inc v Igloo Products Corporation (1999) 48 IPR 158 cited Crooks Michell Peacock Stewart v Kaiser (1994) 29 IPR 225 cited CSR Limited v Della Maddalena (2006) 224 ALR 1 cited Daimer Industries Pty Ltd v Kabushiki Kaisha Daimaru (1993) 27 IPR 124 cited Edwards v Dennis (1885) 30 Ch D 454 cited First Quality Products v Dawyn Import & Export Pty Ltd (2000) 49 IPR 199 cited Fox v Percy (2003) 214 CLR 118 cited Gayl Porter v Victoria's Secret (1993) 28 IPR 143 cited Hamilton-Brown Shoe Co v Wolf Brothers & Co 240 US 251 (1916) referred to Howe Laboratories Inc v Daemar (1936) IPR 638 In re Grossmith's Trade mark (1889) 6 PR 189 cited In re Hicks's Trade Mark (1897) 22 VLR 636 referred to In re J B Palmer's Trade Mark (1883) 24 Ch D 504 cited Jackson & Co v Napper (1886) 35 Ch D 160 cited King v Hayward (1997) 39 IPR 431 cited Kovan Engineering (Aust) Pty Limited v Gold Peg Engineering (2006) 234 ALR 241 referred to MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 42 IPR 561 cited Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457 discussed Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414 discussed Nissan Jidosha Kabushiki Kaisha v Woolworths Ltd (1999) 45 IPR 649 cited Ocean Spray Cranberries Inc v Registrar of Trade Marks (2000) 47 IPR 579 cited Oxford University Press v Registrar of Trade Marks (1990) 24 FCR 1 cited P B Foods Ltd v Malanda Dairy Foods Ltd (1999) 47 IPR 47 discussed Perry Davis & Son v Harbord (1890) 15 App Cas 316 cited Powell v The Birmingham Vinegar Brewery Company Limited [1894] AC 8 cited Pressware International Inc v Julzar Pty Ltd (1995) 33 IPR 53 cited Re Chorlton and Dugdale's Trade Mark (1885) LT NS 337 cited Re Jellinek's Application (1946) 63 RPC 59 cited Re Spencer's Trade Mark (1886) 54 LT NS 659 cited Re The Registered Trade Mark "Yanx"; Ex parte Amalgamated Tobacco Corporation Ltd (1951) 82 CLR 199 cited Registrar of Trade Marks v W & G Du Cros Ltd [1913] AC 624 cited Richards v Butcher [1891] 2 Ch 522 cited Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd (1987) 10 IPR 402 cited Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 discussed Shell Co of Australia v Rohm and Haas Co (1949) 78 CLR 601 discussed Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 cited TGI Friday's Australia Pty Ltd v TGI Friday's Inc (2000) 48 IPR 513 referred to The Hoyts Corporation Pty Ltd v Hoyt Food Manufacturing Industries Pty Ltd (2003) 61 IPR 334 cited Unilever Australia Limited v Karounos (2001) 113 FCR 322 cited Unilever Australia Limited v Société des produits Nestle SA [2006] FCA 782 cited Vamuta Pty Ltd v Sogo Pty Ltd (1995) 31 IPR 557 cited Woolworths Ltd v BP plc (No 2) (2006) 154 FCR 97 cited Davidson M et al, Shanahan's Australian Law of Trade Marks and Passing Off (3rd Ed, Thomson Lawbook Co, 2003) Dufty A, Lahore J, Lahore Patents Trade Marks & Related Rights (LexisNexis Butterworths, 2006) Hemming HB, Sebastian's Law of Trade Marks (4th Ed) Kerly DM and Underhay FG, Kerly on Trade Marks (3rd Ed, Sweet & Maxwell, 1908) McCarthy J, Trade Marks and Unfair Competition Vol 2 (Bancroft-Whitney Co, 1984) Restatement of the Law of Torts Vol III (1938) COLORADO GROUP LIMITED AND WILLIAMS THE SHOEMEN PTY LIMITED v STRANDBAGS GROUP PTY LIMITED VID 859 OF 2006 KENNY, GYLES & ALLSOP JJ 28 NOVEMBER 2007 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 859 OF 2006 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: COLORADO GROUP LIMITED First Appellant WILLIAMS THE SHOEMEN PTY LIMITED Second Appellant AND: STRANDBAGS GROUP PTY LIMITED Respondent STRANDBAGS GROUP PTY LIMITED Cross-Appellant COLORADO GROUP LIMITED First Cross-Respondent WILLIAMS THE SHOEMEN PTY LIMITED Second Cross-Respondent JUDGES: KENNY, GYLES & ALLSOP JJ DATE OF ORDER: 28 NOVEMBER 2007 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. On or before 7 December 2007, the parties file an agreed form of order providing for the matters identified in paragraph [229] of the reasons of Allsop J, failing such agreement, on or before 7 December 2007, each party file the orders for which it contends, together with brief submissions as to the differences between them. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 859 OF 2006 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: COLORADO GROUP LIMITED First Appellant WILLIAMS THE SHOEMEN PTY LIMITED Second Appellant AND: STRANDBAGS GROUP PTY LIMITED Respondent STRANDBAGS GROUP PTY LIMITED Cross-Appellant COLORADO GROUP LIMITED First Cross-Respondent WILLIAMS THE SHOEMEN PTY LIMITED Second Cross-Respondent JUDGES: KENNY, GYLES & ALLSOP JJ DATE: 28 NOVEMBER 2007 PLACE: MELBOURNE REASONS FOR JUDGMENT KENNY J 1 These proceedings concern the use by two retailing interests of the word "Colorado" on various items, including backpacks, handbags, purses and wallets. Pursuant to the Trade Marks Act 1995 (Cth) ("the 1995 Act"), with effect from 16 February 2001, the first appellant is and has been the owner of the registered trade mark number 866291 for the word mark "Colorado" in respect of, amongst other things, bags, wallets, purses, backpacks, belts, clothing, boots, shoes, slippers and other footwear. The controversy in these proceedings stems in large part from the fact that both retailing interests used the word "Colorado" well prior to 2001. 2 I have read in draft the judgment of Allsop J, which sets out the circumstances that give rise to these proceedings and makes a detailed analysis of the evidence pertinent to the issues that now fall for determination. There is nothing to be gained by reiterating these matters. The various issues argued on the appeal, cross-appeal and appellants' notice of contention invite consideration of points of law, a detailed appreciation of the evidence, and scrutiny of the findings of fact made at first instance. 3 The first topic argued by the parties concerned the relationship of trade mark proprietorship by first use and registration. Generally speaking, there was no contest about the applicable principles in this regard. 4 In order for a person properly to register a trade mark, the person must be the owner (formerly, proprietor, which is the same thing) of the trade mark: see ss 27(1) and 58. As the learned primary judge said (in Colorado Group Ltd v Strandbags Group Pty Ltd (2006) 67 IPR 628 ("first judgment") at [23]): First, in respect of a mark which has never been used the proprietor is the person who is (or claims through) the author of the mark (which could include the copyist of a foreign mark) and intends to use it: In re Hudson's Trade-Marks (1886) 32 Ch D 311, 319-320; Shell Co of Australia Ltd v Rohm & Haas Co (1949) 78 CLR 601, 627-628. This proposition is not in doubt, although it does not assist in the present case. 5 Where a person has used a mark prior to an application for registration (as in this case), this person may be regarded as the owner of the mark, providing another person has not made earlier use of it. This proposition is relevant here. Again, to quote the primary judge (in his first judgment at [23]): In the case of an inherently distinctive mark nothing more than first use is necessary to establish proprietorship. The applicant need not show that the mark has gained public recognition. Any general use of the mark as a trade mark will be enough, although in a rare case the use may be so inconsequential that it should be ignored as de minimis … If a mark is not inherently distinctive but indicates that an article emanates from some (unusually anonymous) source because, or partly because, the mark has acquired a secondary meaning, strictly speaking first use is not sufficient to establish proprietorship. To make out proprietorship it is also necessary to show that the mark does in fact distinguish the applicant's goods from the goods of others. Even if this is not an aspect of proprietorship, unless a secondary meaning is established s 41 would bar registration of the mark. 6 The owner of a mark does not have rights at large in relation to the mark. The effect of the 1995 Act, which, in this regard, is much the same as earlier trade mark legislation, is that a trade mark must be registered in respect of particular goods or services as set out in Schedule 1 to the Trade Marks Regulations 1995 (Cth): see reg 3.1, 4.4 and Sch 1; also the 1995 Act, s 19 and 27. Ownership by first use is therefore ownership (or proprietorship) in relation to the goods or classes of goods on which the mark has first been used. The owner's right to registration in this circumstance is not limited to the identical goods or classes of goods but extends to goods or classes of goods "of the same kind": see Jackson & Co v Napper (1886) 35 Ch D 162 at 178 and In re Hick's Trade Mark (1897) 22 VLR 636 at 640 . 7 The first appellant claimed that, as at 16 February 2001, it was the owner of the mark "Colorado" in respect of (amongst other things) backpacks, bags, wallets, and purses and for services in respect of these goods. Amongst other things, the appellants contended, and the respondents denied, that they made first use of the Colorado mark on backpacks, designed predominantly for schoolchildren and sold from retails stores in 1982. It was not in dispute that the appellants used the word "Colorado" in combination with a "simple mountain motif" on backpacks and shoes before the word "Colorado" was used by the respondent or its predecessor Edgarlodge Pty Ltd ("Edgarlodge"). As a general rule, however, an owner of a combination mark is not the owner for trade mark purposes of the marks comprising each separate component of it: see In re JB Palmer's Trade-Mark (1883) 24 Ch D 504 and Richards v Butcher [1891] 2 Ch 522. Accordingly, the evidence of witnesses who were with the appellants' business in 1982 was significant for the question whether in 1982 or thereabouts the backpacks had borne the word "Colorado" without the motif. The primary judge held, however, that the evidence did not permit "any conclusion about the nature of the mark on backpacks between 1982 and, say, 1985". Since he was not satisfied that at the relevant time the mark constituted both the word and the motif, and he considered that the respondent bore the onus on the cross-claim, then the respondent failed on this issue. Before us, the respondent submitted that the primary judge was wrong as to onus; and, in any event, in their notice of contention, the appellants argued that there was sufficient evidence to find that the word "Colorado" had been used alone on backpacks from 1982. 8 I agree with Allsop J (and therefore the primary judge) that, if the evidence was unclear, the respondent failed. This is because, by its cross-claim, the respondent sought to have the first appellant's registered mark removed from the Register on the basis that its predecessor, Edgarlodge, made first use of the mark on backpacks: see ss 58, 88(1) and 88(2)(a) of the 1995 Act. Since the evidence was unclear, the respondent failed to make out its competing claim of first use. 9 Whilst it does not affect the result, I would not go so far as to say, as Allsop J does, that the primary judge should have found that Williams the Shoemen used the word "Colorado" on backpacks from 1982 other than in conjunction with a logo. Minds might reasonably differ on the effect of the relevant evidence (which is referred to Allsop J's reasons and in the first judgment of the primary judge at [31]). Having regard to this circumstance and "the subtle and imprecise, yet real" advantages the trial judge enjoyed, and giving proper weight to his assessment, I would not depart from the trial judge's finding that "one cannot say with any confidence that the mark comprised both the word and logo": see Branir Pty Limited v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 ('Branir') at 437 per Allsop J (with whom Drummond and Mansfield JJ agreed). 10 Whilst the respondent failed to establish that the appellants did not have first use of the word "Colorado" on backpacks, the first appellant retained its right to register the mark in respect of backpacks and goods "of the same kind". The Registrar accepted that the first appellant owned the mark in respect of "bags, wallets, purses, backpacks and belts" in class 18. The respondent further contested the first appellant's ownership, upon the basis that these other goods were not goods of the same kind as backpacks. 11 I agree with Allsop J that there is no error in the finding made by the primary judge (first judgment at [32]) that bags, wallets, purses and belts are not goods of the same kind as backpacks. The parties invited the Court to elucidate the phrase "of the same kind" in this context. 12 Counsel for the appellants contended that whether goods were of the same kind for this purpose should be determined "with the same degree of liberality that one approaches the matter when one is dealing with goods of the same description" elsewhere in the 1995 Act: see, e.g., ss 14 and 44(1); and ss 120(2) and (3). The authorities that have considered the phrase goods "of the same description" are numerous: see, e.g., Re Jellinek's Application (1946) 63 RPC 59 at 69-72 per Romer J; and Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 606-607 per Dixon CJ, McTiernan, Webb, Fullagar and Taylor JJ. These authorities indicate that, depending on the goods, there are various factors that may be important in determining whether goods are of the same description as other goods, including their nature and uses, and the trade channels or markets in which they are sold. The appellants' counsel submitted that the primary judge concentrated unduly on the fact that their backpacks were predominantly for use by school children and failed to pay sufficient attention to the evidence that backpacks were in some instances fashion items too. He argued that handbags, purses and wallets were the same kind of thing as backpacks because they were "receptacles which ordinary people carry around with them every day for transporting their things". 13 The respondent's counsel argued for a narrow approach to the notion of goods of "the same kind". He contended that appropriate approach was necessarily constrained by s 27 of the 1995 Act, which required that the applicant for registration be the owner of the mark "in relation to the goods and/or services". This entailed, so the respondent's counsel argued, a more refined approach to the problem of characterization than that mooted by the appellants. I accept that the respondent's approach is to be preferred, although I do not consider the authorities to be especially helpful in this regard. 14 As we have seen, generally speaking, the prior public use in Australia of a mark as a trade mark – that is, the use of the mark in relation to goods or services in order to show a connection between the goods and the user of the mark – may support the user's claim to be the "owner" of the mark for the purpose of s 27 of the 1995 Act: see Moorgate Tobacco Co Ltd v Philip Morris Ltd [No 2] (1984) 156 CLR 414 at 432 per Deane J (with whom Gibbs CJ, Mason, Wilson and Dawson JJ agreed). For this purpose, too, the owner's right to registration extends to goods "of the same kind" as the goods that have already borne the mark: see Jackson & Co v Napper (1886) 35 Ch D 162 at 178 per Stirling J and In re Hick's Trade Mark (1897) 22 VLR 636 at 640 per Holroyd J. Authoritative discussions show that this extension to goods of the same kind is confined to goods that are essentially the same, though they may differ in size, shape and name. This point is emphasised in Jackson v Napper where Stirling J gave some attention to this question in considering the difference between an axe and a hatchet. He said (at 177-178): [The Respondents] said there was a little difference in the size, as I understand, and a little difference in the shape; but can it be, that a man having made goods of a particular size, which might be designated as small axes – which in fact is the definition given in Johnson's Dictionary of a hatchet – is to be precluded from putting his mark upon things of the same description or belonging to the same class of goods, but of a different size and a different shape? The objection of course is founded on Edwards v Dennis [30 Ch D 454], in which it was held that a man having registered a mark for iron goods and having manufactured, I think, sheet-iron, and applied his mark to that, was not entitled to stop another man from using the same mark in respect of iron wire which he had never used at all. That to my mind is a totally different thing from saying that a man who has used a mark on hatchets of a particular size and shape is not entitled to use a trade-mark as applied to an axe, which is a thing of the same kind but a little different in size and a little different in shape. No doubt at first the classes of goods under the Trade Marks Act were drawn too wide, and that has led to difficulty, but if I were to accede to this notion and say that because a man had merely manufactured small axes, he was not to be allowed to register in respect of axes, the logical consequence would be that he would have to register the shapes and sizes of everything to which he attached his mark. That was an inconvenience that was never intended to be imposed on an applicant, and I hold that a man who has manufactured and applied his mark to small axes is entitled to register it in respect of axes generally. 15 In Carnival Cruise Lines Inc v Sitmar Cruises Ltd (1994) 120 ALR 495 Gummow J briefly considered whether there was any lack of identity between the services for which the respondent sought registration and those that had been previously provided by the applicant. His Honour's approach emphasised the absence of any material difference between the parties' services. He held (at 514) that the evidence did not "suggest that there is any particular difference in the character or quality of the services provided by" either party other than their geographical location. Had it been important, he would not have held that "the difference in the description of services was such as to disqualify Carnival from any other success it would otherwise have had in its opposition based on its claim to proprietorship". 16 In identifying whether or not goods or a class of goods are essentially the same as other goods or classes of goods, a decision-maker will have regard to a range of factors, depending on the goods in question. Physical and functional differences may be relevant. Other matters may be as well. There is no bright line that marks out the factors for a "same kind" inquiry from the factors for a "same description" inquiry, although these inquiries may differ in the answers they yield. Goods that are properly regarded as "essentially the same" may well cover a narrower field that goods "of the same description". 17 As Allsop J notes, this approach conforms to the approach in the Trade Mark Office in opposition proceedings based on prior use. His Honour refers to numerous examples. Other examples can be cited. In Howe Laboratories Inc v Daemar (1936) IPR 638 the services of the opponent – the treatment of motors and engines – were held not to be the same kind of thing as the applicant's lubricant conditioning agent. In Coleman Company Inc v Igloo Products Corporation (1999) 48 IPR 158 the opponent's insulated containers were held not to be the same kind of thing as the applicant's insulated thermoelectric containers. In The Hoyts Corporation Pty Ltd v Hoyt Food Manufacturing Industries Pty Ltd (2003) 61 IPR 334, the opponent's service of providing food and drink refreshments to cinema patrons was not the same kind of thing as the applicant's food goods. In Nissan Jidosha Kabushiki Kaisha v Woolworths Ltd (1999) 45 IPR 649 the clocks mounted in the opponent's vehicles were not the same kind of thing as the applicant's clocks and watches. In Cantarella Bros Pty Ltd v Novadelta-Comercio E Industria De Cafes LDA (1998) 42 IPR 265 olive oil and olive products were held not to be the same kind of thing as coffee. 18 This approach best serves the purposes of the 1995 Act. It may be borne in mind that an applicant for registration may apply for registration in respect of as broad a range of goods and services as desired. Whilst the application does not confer a right to registration, a right to registration arises once certain conditions are met, including that the mark is free from objection: see s 68. As the High Court observed in Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457 at 478, in relation to the Trade Marks Act 1955 (Cth) ("the 1955 Act"): Even so, a critical question, if not the critical question, for the Registrar to decide is whether the applicant is the proprietor in the statutory sense. If the applicant is the proprietor and there are no lawful grounds of objection, then the Registrar is bound to accept the application. 19 The Register is a public document in so far as it is open to inspection when the Trade Mark Office is open for business: see s 209. Whilst the Register may be altered or amended from time to time, it is at the heart of the statutory regime for trade mark regulation: see Pts 8 and 9 of the 1995 Act. If the acquisition of ownership of a mark by prior user were to extend to a broad ill-defined set of goods, this would have the capacity to undermine the efficiency of the registration system. 20 For these reasons and for the reasons stated by Allsop J, I agree that backpacks used predominantly by school children are not essentially the same as handbags. For largely utilitarian purposes, backpacks such as these are designed to be worn on the back and to hold the articles schoolchildren ordinarily carry between home and school, some of which may be quite heavy or bulky. Handbags are ordinarily smaller than backpacks. Handbags are generally held in the hand or worn over the shoulder. They are intended to carry the small everyday articles that an adult requires to move around the community (such as money or keys), as well as small items for personal use (such as a comb). They are also an everyday fashion item for use by women of all ages and, on occasions, by men. Plainly enough, a purse or wallet is even less like a school child's backpack than a handbag. 21 The appellants conceded that, if backpacks and handbags were not goods of the same kind, then the respondent's predecessor Edgarlodge made first use of the mark "Colorado" in respect of handbags. A further issue of proprietorship arose, however, in relation to wallets and purses. The parties approached this question on the basis that purses and wallets were goods of the same kind. On this basis, the primary judge stated his view that purses and wallets were goods of the same kind as handbags. The appellants contested this on their appeal. His Honour reached this conclusion because he considered that handbags and purses were "intended as fashion items and are used to carry small, everyday items such as money, credit cards, keys and like objects": see Colorado Group Ltd Strandbags Group Pty Ltd (No 2) (2006) 69 IPR 281 at [31]. Allsop J states the contrary view, observing that handbags often have a wider purpose than purses and wallets. There is something to be said for both points of view. Indeed, the difference of opinion highlights that the matter is essentially one of impression about which reasonable minds might well differ. 22 For my own part, I am reminded of Stirling J's comments in Jackson v Napper at 178 (set out above). A purse is usually (though not always) smaller than a handbag and often (though not always) holds only money or credit cards. A purse or wallet can be as much a fashion item as a handbag. Viewed in this way, there is no clear, generally valid, distinction to be made between handbags and purses (and therefore wallets). This supports the view, expressed by the primary judge, that handbags, purses and wallets should be regarded as goods of the same kind. In any case, I do not think it can be said that the primary judge was wrong in this conclusion, even if the Court on appeal preferred the contrary view. It follows from this that, if the point were significant, I would not interfere with the primary judge's finding in this regard: see Branir at 435-440 and Cabal v United Mexican States (2001) 108 FCR 311 at 362 per Hill, Weinberg and Dowsett JJ. 23 Having reached this conclusion, it is unnecessary for me to express a view as to whether, as the appellants assert, they made first use of the word mark "Colorado" on wallets and purses. I would add, however, that, for the reasons stated by Allsop J, I agree that it was open to the primary judge to find that Edgarlodge (the respondent's predecessor) used swing tags with the word "Colorado" on wallets and purses from before 1993. 24 It follows from the foregoing that I agree in the result as to proprietorship reached by Allsop J. 25 The second topic that arose for the Court's consideration was distinctiveness. An application for registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant's goods or services in respect of which the trade mark is sought to be registered from the goods or services of other persons: see s 41(2). In deciding whether a mark is capable of distinguishing the designated goods from the goods of others, the Registrar must take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods from the goods of others: see s 41(3). If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is so capable of distinguishing the designated goods or services, then the Registrar must consider a number of other matters: see s 41(5). If the Registrar finds that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons, then s 41(6) applies. 26 The primary judge rejected the cross-appellant's submissions that the word "Colorado" lacked distinctiveness. He held that the word "Colorado" was a geographic term, the use of which, in relation to the goods in question, was arbitrary "making it inherently distinctive and thus requiring no proof of secondary meaning": first judgment at [35]. He also rejected the possibility, "with one slight exception", that the word "Colorado" can be descriptive of backpacks or shoes: first judgment at [36]. Referring to Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 ("Clark Equipment") at 513-514 per Kitto J, the cross-appellant argued before us that the primary judge had not addressed the correct question. Clark Equipment was a decision under the 1955 Act. 27 In Clark Equipment Kitto J held that the Registrar of Trade Marks was right to refuse to accept an application for registration of the word "Michigan" in respect of earth moving and like equipment, because the word was not adapted to distinguishing these goods from the like goods of others. Kitto J said (at 513) that the ultimate question: … is not whether the mark will be adapted to distinguish the registered owner's goods if it be registered and other persons consequently find themselves precluded from using it. The question is whether the mark, considered quite apart from the effects of registration, is such that by its use the applicant is likely to attain his object of thereby distinguishing his goods from the goods of others. After referring to certain well-known statements of Lord Parker in Registrar of Trade Marks v W & G Du Cros Ltd [1913] AC 624, at 634-635, Kitto J concluded: … the question whether a mark is adapted to distinguish [must] be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives – in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sale of the signification which they ordinarily possess – will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it. 28 Obviously enough, applications to register as trade marks the names of countries, cities and geographical features will commonly fail to pass this test. Again, as Kitto J said in Clark Equipment (at 514-515): It is well settled that a geographical name, when used as a trade mark for a particular category of goods, may be saved by the nature of the goods or by some other circumstance from carrying its prima facie geographical signification, and that for that reason it may be held to be adapted to distinguish the applicant's goods. Where that is so it is because to an honest competitor the idea of using that name in relation to such goods or in such circumstances would simply not occur… The consequence is that the name of a place or of an area, whether it be a district or a county, a state or a country, can hardly ever be adapted to distinguish one person's goods from the goods of others when used simpliciter or with no addition save a description of designation of the goods, if goods of the kind are produced at the place or in the area or if it is reasonable to suppose that such goods may in the future be produced there. In such a case, the name is plainly not inherently, i.e. in its own nature, adapted to distinguish the applicant's goods; there is necessarily great difficulty in proving that by reason of use or other circumstances it does in fact distinguish his goods; and even where that difficulty is overcome there remains the virtual if not complete impossibility of satisfying the Registrar or the Court that the effect of granting registration will not be to deny the word to a person who is likely to want to use it, legitimately, in connexion with his goods for the sake of the geographical reference which it is inherently adapted to make. 29 Presumably, the phrase "inherently adapted to distinguish the designated goods from the goods of other persons" in s 41(3) of the 1995 Act is intended to be understood in light of earlier decisions under the 1955 Act, such as Clark Equipment. I agree with Gyles and Allsop JJ that the word "Colorado" as applied to backpacks, bags, wallets, purses, shoes and other goods of the first appellant was not a "fancy name" as that expression was used by Kitto J in Clark Equipment (at 515). It is the name of a State in the United States of America. There was evidence that the word was used to invoke adventure, ruggedness, trekking and like images associated with the State of Colorado, on account of the Rocky Mountains being there. The use of the word "Colorado" was entirely different from the use of the expression "North Pole" in connection with bananas, which was one of Kitto J's examples of a "fancy name". The use of the word "Colorado" was not arbitrary and its use was not equivalent to a made-up word or device. I agree in substance with Allsop J that it is likely that another trader will want to use the word "Colorado", legitimately, with regard to his goods, for the sake of the geographical reference which it is inherently adapted to make or the connotations that that geographic reference invokes. Accordingly, I agree in the conclusion of Gyles and Allsop JJ that the word "Colorado" alone is not inherently adapted to distinguish the designated goods or services of the first appellant from the goods or services of other persons. 30 Further, I agree, for the reasons stated by Allsop J, that the use by the respondent of the word "Colorado" is relevant to an inquiry under s 41(5) of the 1995 Act (and, for the same reasons, an inquiry under s 41(6)). Having regard to the evidence, which is set out in detail by Allsop J, it is tolerably clear that, as his Honour concludes, it cannot be said that, as at 2001, the appellants' use of the word "Colorado" alone or in conjunction with any device was such that the word did or would distinguish the designated goods as being the appellants'. If s 41(5) applied, then it did not assist the appellants. There seems no reason to believe that s 41(6) would offer them any greater assistance. 31 Since the respondent's use of the word "Colorado" is relevant to an inquiry under ss 41(5) and (6), the respondent's submission on its cross-appeal concerning false representation falls for consideration. The respondent submitted that a statement made to the Registrar of Trade Marks in support of the first appellant's application for registration implicitly represented that nothing of relevance happened after 1990 or 1991 and that this was plainly false. Like Allsop J, and substantially for the reasons he has stated, I would not conclude, without more, that the acceptance of the application for registration was on the basis of a false representation. 32 Since I am of the view that the trade mark "Colorado" in not capable of distinguishing the appellants' goods and services from the goods and services of others and is therefore not a registrable mark, there is no need to consider ss 120(2) and 124 of the 1995 Act. It suffices to note that Allsop J discusses the parties' submissions concerning their operation in this case. 33 For the reasons stated by Allsop J, I agree that no relevant error has been shown in the primary judge's rejection of the appellants' passing off and TPA claims. 34 For the reasons stated, I agree with the disposition of the appeal and cross-appeal proposed by Allsop J and in the orders he proposes. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. Associate: Dated: 28 November 2007 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 859 OF 2006 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: COLORADO GROUP LIMITED First Appellant WILLIAMS THE SHOEMEN PTY LIMITED Second Appellant AND: STRANDBAGS GROUP PTY LIMITED Respondent STRANDBAGS GROUP PTY LIMITED Cross-Appellant COLORADO GROUP LIMITED First Cross-Respondent WILLIAMS THE SHOEMEN PTY LIMITED Second Cross-Respondent JUDGES: KENNY, GYLES & ALLSOP JJ DATE: 28 NOVEMBER 2007 PLACE: MELBOURNE REASONS FOR JUDGMENT GYLES J 35 The issues on the appeal and cross-appeal have been comprehensively analysed in the reasons of Allsop J that I have had the benefit of reading in draft. In my opinion, the trademark "Colorado" is not capable of distinguishing the appellants' goods from the goods of other persons within the meaning of s 41 of the Trade Marks Act 1995 (Cth) (the Act) thus leading to a failure of the appeal and success of the cross-appeal as to the trade mark issues on the basis explained by Allsop J. I agree with the reasoning of Allsop J on this point but wish to add some supplementary reasons of my own. 36 An anomaly lies at the heart of the case. The appellants claim proprietorship in the mark "Colorado" from 1982 onwards. However, in practice, that word could not have been registered as a trade mark during most of that period. It was virtually impossible to obtain registration of a geographical name under the Trade Marks Act 1955 (Cth) (the 1955 Act) because of s 24(1)(d) of that Act. It is only necessary to refer to Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 and Oxford University Press v Registrar of Trade Marks (1990) 24 FCR 1 to explain the point. Colorado is a significant state in the west of the United States of America known far and wide for the Rocky Mountains and outdoor activities such as hiking, skiing, canoeing and (historically) as part of the "wild west" with cowboys and Indians. The most substantial early use of the mark on behalf of the appellants was in conjunction with a mountain logo which reinforced the geographic connotation of the word. It is to be noted that the respondent's predecessor disclaimed the word "Colorado" when application was made for registration of "Colorado" with the Indian head device in April 1991. The Indian head device was, no doubt, chosen because of the cowboy and Indian connotation of Colorado. 37 The trial judge referred to evidence that, when the Colorado stores were established in July 1993, it was intended that the stores would market their products with a "strong reference to [an] outdoors rugged lifestyle" (Colorado Group Ltd v Strandbags Group Pty Ltd (2006) 67 IPR 628, [2006] FCA 160 at [9]). The trial judge quoted the following from a report which led to the opening of the stores: "Colorado has been chosen as it has lifestyle connotations that are representative of to [sic] the brand. Within Australia the Colorado name has very strong attributes that make it the ideal promotional platform. The chain will gain instant brand value from the rich cultural and geographical images that Colorado evokes. Our consumer research tells us that the name Colorado conjures up images of;- · American · Rugged · Trekking · Rocky Mountains. The American aspect of the name is seen as an advantage, equating to;- · Fashion · Quality · Style implication (rugged)." It was suggested that the brand's "new image" be built around the Colorado mountain logo. Significantly the trial judge also referred to the following part of the report (67 IPR 628, [2006] FCA 160 at [10]): "The report also discussed 'Brand Registration'. It noted: 'Under Australian trademark law, registration of geographical names are [sic] difficult. Currently we are endeavouring to register Colorado as a business name and our distinctive mountain logo as a trademark. Should we be unsuccessful in securing binding registration, we will change to a new name, however, maintaining the identical concept.'" 38 The present Act has no equivalent of s 24(1)(d) of the 1955 Act. As Note 1 to s 41(6) indicates, the effect of that section is not very different in practice, although the door may be slightly more ajar (cf Blount Inc v Registrar of Trade Marks (1998) 83 FCR 50; MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236 at 248; Ocean Spray Cranberries Inc v Registrar of Trade Marks (2000) 47 IPR 579 at 589; Davison M, Johnston K, Kennedy P, Shanahan's Australian Law of Trade Marks & Passing Off (3rd edn, Lawbook Co, 2003), paras 6.50–6.110; Dufty A, Lahore J, Lahore Patents Trade Marks & Related Rights, LexisNexis Butterworths, 2006, 54180). No application was made for registration by the first appellant until 2001. There was evidence that the first appellant was aiming to change its image to that of "Australian lifestyle", apparently some time after 1997 or 1998, although there is no finding as to when, if at all, this became effective. Over the years there had been considerable use of the name "Colorado" with or without the Indian head device by the respondent and its predecessor, as explained by Allsop J, that use having reached considerable proportions by 2001. In those circumstances, there obviously was, and is, a serious question as to whether the first appellant could satisfy the test of distinctiveness laid down by s 41 of the Act. 39 The trial judge considered that issue in 67 IPR 628, [2006] FCA 160 at [33]–[36]. He did not refer to the terms of s 41 and did not pose the questions he answered by reference to the text of s 41. There is no discussion as to the integers of the section or how they might apply to the case. Rather, apart from a brief reference to Clark Equipment Co 111 CLR 511, the trial judge directed himself entirely by reference to United States sources. The trial judge held that "Colorado" used in connection with the kind of goods involved was an arbitrary use, the equivalent of a fancy word, and so inherently distinctive. The trial judge went on (67 IPR 628, [2006] FCA 160 at [36]): "In reaching this conclusion, I have rejected the possibility, with one slight exception, that the word "Colorado" can be descriptive of backpacks or shoes. I have referred to the evidence which is to the effect that the word "Colorado" conjures up notions of trekking, ruggedness, fashion, Rocky Mountains and so on. For the most part those ideas are concerned with the image of the brand and are not descriptive of the goods themselves. The slight exception is that the word may incidentally say something about quality (for example that the goods are "rugged" or durable) but because the word is only indirectly informative it is not likely to be perceived by many in a descriptive sense. Thus the attack based on lack of distinctiveness is not made out." 40 The question is not whether "Colorado" can be descriptive of backpacks or shoes but, if it were, I have difficulty in understanding the concept that the ideas were concerned with the image of the brand rather than the goods themselves. In my respectful submission, it is not possible to regard "Colorado" as being an arbitrary or fancy word when used in relation to goods of the relevant description. Amongst other things, it is contrary to the first appellant's own assessment of the situation. 41 As Allsop J has explained, the respondent accepted that the relevant inquiry was under s 41(5). When the questions posed by s 41(5) are addressed, in my opinion, the word "Colorado" is inherently adapted to distinguish the designated goods or services only to a slight extent. Whether taken to indicate the origin of goods or the association of the goods with the known or perceived characteristics of the American state, "Colorado" is unlikely to distinguish the goods of the first appellant compared with the goods of other parties who may legitimately choose to use the word in connection with such goods. The use or intended use of the trade mark by the first appellant can be taken to be considerable. It may be that some people would associate the mark with the first appellant and would not make the connection between the mark and the place. However, it is likely that many would. In my opinion, the use and intended use by the first appellant would not distinguish its goods in the manner required. That conclusion is put beyond doubt by considering the "other circumstances". In my opinion, they must include the considerable use of the word in connection with goods by the respondent and its predecessor. In my opinion, that circumstance is decisive against a finding that the trade mark does or will distinguish the designated goods or services of the first appellant. 42 I agree with the conclusions of Allsop J in relation to passing off and s 52 of the Trade Practices Act 1974 (Cth). I add that, in my opinion, the geographical connotation of "Colorado" is such as to render any successful claim in passing off out of the question in this case. I have a reservation as to Allsop J's conclusion that relief limited in area would not be available, but that does not arise on my view of liability. 43 I agree with the orders foreshadowed by Allsop J. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. Associate: Dated: 28 November 2007 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 859 OF 2006 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: COLORADO GROUP LIMITED First Appellant WILLIAMS THE SHOEMEN PTY LIMITED Second Appellant AND: STRANDBAGS GROUP PTY LIMITED Respondent STRANDBAGS GROUP PTY LIMITED Cross-Appellant COLORADO GROUP LIMITED First Cross-Respondent WILLIAMS THE SHOEMEN PTY LIMITED Second Cross-Respondent JUDGES: KENNY, GYLES & ALLSOP JJ DATE: 28 NOVEMBER 2007 PLACE: MELBOURNE REASONS FOR JUDGMENT ALLSOP J 44 This is an appeal and cross-appeal against orders made by a Judge of the Court in a proceeding commenced by the appellants in which they asserted that the respondent had infringed the registered trade mark "Colorado" and engaged in passing off and in conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth). The proceeding spawned a cross-claim by the respondent for revocation of the trade mark based on the use said to have been made by the respondent of the same word. Issues of authorship and concurrent user, amongst other issues, make a precise understanding of the facts essential. The primary judge delivered two judgments, on 28 February 2006 and 7 July 2006. Orders were made on the latter of these dates. 45 The following factual introduction is taken in large part from the primary judge's reasons, and also from the evidence, assisted by the joint chronology provided by the parties. Factual introduction 46 The first appellant, Colorado Group Limited ("CGL") is the registered owner of Australian Trade Mark 866291. The registration commenced on 16 February 2001. The registered mark is the word "COLORADO" and the registration is for goods and/or services set out in the certificate of registration. These included, in class 3, shoe and boot cleaning and polishing preparations and shoe and boot protection preparations; in class 9, sunglasses, cases, lenses and parts thereof; in class 14, watches; in class 18, bags, wallets, purses, backpacks and belts; in class 25, clothing, boots, shoes, slippers and other footwear, socks and hosiery; in class 26, boot and shoe laces; in class 35, advertising, business management, business administration, office functions, and services being the bringing together for the benefit of customers of a variety of goods thereafter described in classes 3, 9, 14, 18, 26 and 35. The goods referred to in class 18, in this context, included bags, belts, wallets, purses and backpacks. 47 CGL is, and has been since 1999, a public company listed on the Australian Stock Exchange. Before its listing in 1999, it was a subsidiary of an American corporation, Venator Group Inc, which was formerly known as Woolworths Corporation. Prior to 1991, two footwear retailing businesses, "Williams the Shoemen" and "Mathers for Shoes" were carried on by two subsidiaries of CGL; the second appellant, Williams the Shoemen Pty Limited ("WtS P/L") and Mathers Shoes Pty Limited, respectively. From 1991, after a restructuring of the group, CGL carried on these two businesses in its own right. 48 As described below, in 1982, the word "Colorado" began to be used in Australia on backpacks sold in "Williams the Shoemen" stores. In 1982, there were approximately 140 "Williams the Shoemen" stores around Australia run by WtS P/L. In these stores, in addition to shoes, backpacks were sold. From 1982, the word "Colorado" began to be used on backpacks with the word embroidered on the front of the backpack. It will become important in due course to understand whether, and if so from when, the word "Colorado" was used in conjunction with a logo comprising a mountain motif. The backpacks were sold all over Australia, predominantly for use by schoolchildren, and were most successfully sold in North Queensland. 49 From 1987, the word "Colorado" was also placed on shoes sold in the "Williams the Shoemen" stores, and from 1990 in "Mathers for Shoes" stores, in conjunction with a simple mountain logo in the sock of the shoe, and alone on the heel of the shoe. From 1988 to 1991 a new mountain logo was developed having three peaks. From 1991, this new mountain logo was placed on shoes bearing the word "Colorado". This new logo was placed on the inner sole, the bottom of the sole and outside on the upper of the shoes. 50 The sale of what can be referred to as Colorado backpacks through the "Williams the Shoemen" stores was modest. Considerable success was achieved in the sale of what can be called Colorado shoes through the "Williams the Shoemen" and "Mathers for Shoes" stores. In 1990, about $8 million of what can be said to be Colorado branded products, backpacks and shoes, were sold by these two chains of stores. 51 This moderate success apparently led to a desire to widen the use of the word "Colorado" by expanding the "Colorado range" of goods to include clothing and accessories and by establishing a chain of "Colorado" stores to sell such products. In the development and preparation of these commercial aims, an advertising report was prepared in late 1992. The primary judge described the key findings in this report at [9] of his reasons as follows: The store concept was wholeheartedly endorsed by both lower and middle-upper income groups. Significantly, the store concept was able to achieve interest amongst lower-income males who generally had little interest in both shopping and clothes. … The mountain graphic was a real winner and is seen to be representative of Colorado. It should be maximised in store. Despite being easily identified, it should not replace the door as it is not dramatic enough. It is graphically strong and contemporary but would soon become on [sic] of the crowd. "Colorado has been chosen as it has lifestyle connotations that are representative of to [sic] the brand. Within Australia the Colorado name has very strong attributes that make it the ideal promotional platform. The chain will gain instant brand value from the rich cultural and geographical images that Colorado evokes. Our consumer research tells us that the name Colorado conjures up images of; - • American • Rugged • Trekking • Rocky Mountains. The American aspect of the name is seen as an advantage, equating to; - • Fashion • Quality • Style implication (rugged)." [emphasis added] 52 The primary judge said that the "proposal suggested that the brand's 'new image' be built around the Colorado mountain logo." 53 In July 1992, the Woolworths Corporation resolved to proceed with the proposal to develop "Colorado" stores. In 1992 and 1993, relevant persons in CGL developed a range of products to be sold in these new stores, being clothing, footwear, accessories (including backpacks, socks, hats, underwear and shoe care products), leather and non-leather belts, bags and wallets. The first three "Colorado" stores opened in July 1993 in Doncaster, Victoria and in Parramatta and Penrith, New South Wales, A fourth store opened a month later at Darling Harbour, Sydney. These stores were fully stocked with "Colorado" branded products; some, such as bags, were marked with the word "Colorado" alone, others had the word and the mountain logo used in association with one another. The primary judge found at [12] of his first judgment that the predominant use of the word was in association with the mountain logo, particularly in relation to footwear, bags, handbags and other accessories. Six more such stores were opened between 1993 and 1996, three in New South Wales, two in Queensland and one in Victoria. A change was implemented in 1998. The number of "Colorado" stores was expanded and the marketing image of the stores was redefined. As part of this redefinition, the word "Colorado" was used principally without any associated logo and there was a widening of the range of products on which it was placed to include goods such as watches and eyewear. The idea behind these changes was to redefine the "Colorado image" to an "Australian Lifestyle" brand, and away from the previous "outdoor" image. 54 The word mark "Colorado" was only registered in 2001. There has been no registration by the appellants of any mountain logo. 55 At the time of the hearing before the primary judge, CGT operated 165 "Williams the Shoemen" stores, 96 "Mathers for Shoes" stores, 82 "Colorado" stores, 28 "JAG" stores (selling men's and women's clothing and fashion accessories) and 10 "Diana Ferrari" stores (selling women's footwear and leather goods). 56 The respondent, Strandbags Pty Limited ("Strandbags"), conducts, partly through franchises, a chain of 186 stores around Australia. It is a speciality retailer of bags, travel goods, backpacks, wallets and other small leather goods and accessories. In 1998, Strandbags purchased various businesses from a company called Edgarlodge Pty Limited ("Edgarlodge"), a company owned and controlled by Mr Lee Evans and his wife, Ms Malouf-Evans. Those businesses (with assets, including goodwill) purchased by Strandbags were known as "The Travel Bug", "The Colorado Bag Co" and "Bagstop". An asset included in the sale was a registered trade mark using the word "Colorado" with a logo depicting the head of a North American Indian as a combination mark. As is evident from the presence of the name "Colorado" in the businesses sold by Edgarlodge to Strandbags in 1998, it is necessary to trace the origins of the use of the word "Colorado" by Edgarlodge and of the registration of its "Colorado" combination trade mark. 57 During the 1980s, Edgarlodge sold bags, luggage, briefcases and accessories under the businesses called "The Travel Bug" and "Bagstop". The goods sold were initially bought from Australian importers or local manufacturers. In early 1990, Mr Evans decided to import goods using the name "Colorado". The primary judge did not believe Mr Evans' evidence about how he came to choose that name. The primary judge said that he suspected that Mr Evans had come across the name on goods (probably of one of the appellants), had formed the view that he wanted to use it, and then made business name and trade mark searches to identify any impediment to that course. It was agreed that before 1991 Edgarlodge conducted a business selling bags, baggage, briefcases, wallets and accessories under the business names "The Travel Bug" and "Bagstop". It operated only in Queensland and it did not use the mark "Colorado" on any of its goods. 58 In early 1991, Edgarlodge prepared a logo design of the head of a North American Indian for use with the word "Colorado". On 2 April 1991, Mr Evans applied to register the mark. In 1991, the combination word and logo mark was registered as a trade mark in respect of handbags, travelgoods and belts in class 18. The mark (No 552979) is as follows: 59 The primary judge described the use of this mark as follows at [17] of his first judgment as follows: …The products initially manufactured bearing the new mark (the word "Colorado" with the Indian head logo) were a range of handbags. The mark was embossed on the front of each handbag. Sales of the new line began in 1991 at Edgarlodge's then eleven Queensland stores. In 1992 changes were effected to the style of the mark "Colorado" and to the Indian head and applied to the then existing range of over twenty-four styles of handbag. The handbags proved to be popular so new products were added to the range, such as suitcases, wallets, key cases and coin purses. As the range expanded to include other products, the combination mark was applied to them as well. Between 1995 and 1998 the combination mark was applied to goods such as backpacks, briefcases and associated products as well as handbags. Depending on the size of the product, the word and logo were either stamped on a leather patch and sewn onto the product or stamped directly onto the product. As the range of goods continued to expand this practice varied. For example, the word "Colorado" was stamped onto a gold metal tag and affixed to handbags, business bags and luggage. The word "Colorado" was also printed on business card inserts that were placed inside wallets. 60 Shortly thereafter, in August 1992, Edgarlodge opened a retail store in Liverpool in Sydney that was designed as a "Colorado theme store" with the word "Colorado" in the shopfront design and products marked with the Edgarlodge combination Colorado mark sold along with other products. The store sold handbags, travel goods, wallets and associated products such as umbrellas. This store closed in 1994. At this time, other Edgarlodge stores were selling goods marked with its Colorado combination mark. 61 Between 1995 and 1997, Edgarlodge opened 14 stores trading under the name "The Colorado Bag Co". 62 By 1998, the sales of goods by Edgarlodge that were marked with the combination Colorado mark were approximately $2.08 million. 63 In 1998, Strandbags bought Edgarlodge's businesses (and related assets), including the combination trademark. The existing stock, including that marked with the combination mark was liquidated by March 1999. Strandbags then imported its own lines of goods, including footwear, leathergoods (including wallets), backpacks, travel goods and business goods marked "Colorado". A range of "Colorado" branded handbags was designed and introduced in 2002. The primary judge's conclusions 64 The primary judge found: (a) that Strandbags had not proved (the onus being on it in its claim for expungement of the mark) that the first trademark use of the word "Colorado" on backpacks was not by WtS P/L; (b) that backpacks were not goods of the same kind (or like relevant expression) as bags, wallets and purses; (c) that Edgarlodge used the word "Colorado" as a trade mark before CGL (or a relevant predecessor company) in relation to handbags, wallets and purses; (d) that CGL was not entitled to the benefit of the registered trade mark for handbags, wallets and purses; (e) that the use by Strandbags of the word "Colorado" on handbags, wallets and purses was not an infringement of the trade mark, taking into account s 120 of the Trade Marks Act 1995 (Cth) (the "1995 Act"); (f) though it was unnecessary to decide the issue, that Strandbags would also be entitled to take advantage of the defence in s 122(1)(f) of the 1995 Actthat it could obtain registration of the mark "Colorado" if it were to apply for it in relation to handbags, wallets and purses; (g) that there was no passing off or conduct in contravention of s 52 or any other provision of the Trade Practices Act. The issues 65 Numerous factual and legal issues arise on the appeal by CGL, the cross-appeal by Strandbags and under the notice of contention filed by CGL. These issues can be grouped under the headings of proprietorship, other questions of validity, infringement, passing off and misleading or deceptive conduct. It is not of utility at this point to attempt to set out exhaustively the interlocking factual and legal issues. The issues (factual and legal) will be approached in the order that they were addressed by the parties in their submissions. The first group of issues: proprietorship 66 The primary judge expressed the view at [25] of his first judgment that: …proprietorship in relation to the goods or classes of goods on which the mark has been used. The proprietor is entitled to have his mark registered in respect of those goods. This entitlement is not confined to identical goods or classes of goods. Registration may also be obtained for goods or classes of goods which is or are "a thing [or things] of the same kind" (Jackson & Co v Napper (1886) 35 Ch D 160, 178) or "like articles of production" (Columbia Mill Company v Alcorn, 150 US 460, 464 (1893)) or "articles of merchandise of the same kind" (Colman v Crump, 70 NY 573, 578 (1877)) or "kindred articles" (The Collins Co v Oliver Ames & Sons Corporation, 18 F 561, 570 (1882)), if there be any difference between these expressions. See also Edwards v Dennis (1885) 30 Ch D 454. 67 Neither side argued that this was an incorrect approach. 68 On this appeal, both sides argued that the issues on proprietorship were: Who had first used the word "Colorado" on backpacks, bags, purses and wallets? And, depending on the answer to this question, what were the consequences in terms of authorship by reference to goods "of the same kind"? 69 The primary judge posed the question in [26] of his reasons: With this background in mind the first question to be resolved on proprietorship is whether as at 16 February 2001, Colorado Group was the proprietor of the mark "Colorado" in respect of backpacks, bags, wallets, purses and belts and for services in respect of those articles. In looking at this question I will assume for the time being, though it is a matter in dispute, that the mark was capable of being distinctive of Colorado Group's goods and services. The answer to the first question requires consideration of three issues, viz (1) Was Colorado Group or its predecessor the first user of the Colorado mark on a backpack, being the article in respect of which first use is claimed? (For this purpose it is conceded that Williams the Shoemen was the predecessor of Colorado Group. It is also conceded that Williams the Shoemen was the first user of the word "Colorado" in combination with the "simple mountain motif"); (2) If the word was applied to backpacks not alone but in combination with the "simple mountain motif" can Colorado Group (or its predecessor) nevertheless claim to be the first user of the Colorado mark?; (3) If Colorado Group (or its predecessor) was the first user of the Colorado mark on backpacks, is a bag, wallet, purse or belt the same kind of article? Unless each pair of questions (1) and (3), or (2) and (3), are answered affirmatively, the registration has gone too far and either Colorado Group is not the proprietor of the Colorado mark or is not the proprietor in respect of bags, wallets, purses and belts. It may be that Edgarlodge first used the word "Colorado" on those goods, albeit in combination with the Indian head logo. (The parties were agreed that one can ignore the reference to belts.) 70 The evidence disclosed that the word "Colorado" had been used on backpacks from 1982. The evidence was not clear, however, that the word was used alone rather than in association with the mountain motif logo, in effect as a combination mark. The finding of the primary judge about this was at [31] of his first judgment, in which he agreed with the submissions put on behalf of CGL (which submissions were repeated on appeal), that it was unclear whether the word "Colorado" on backpacks was accompanied by the mountain motif logo. It was not put on the appeal by CGL that his Honour erred in failing to find positively that the word "Colorado" alone was placed on backpacks from 1982. However, in the notice of contention it was put that the evidence was sufficient to find that the word had been used alone on backpacks from 1982. 71 In answer, Strandbags said that on the evidence it could be concluded that the word "Colorado" alone was not placed on backpacks from 1982. 72 Both sides also relied on onus. In this respect, CGL had the benefit of the primary judge's view, expressed at [31] of his first judgment, that the lack of clarity was necessarily fatal to Strandbags which carried the onus on the cross-claim. Strandbags challenged this. It submitted that having proven positively a use, by it, in 1994 of the word alone on backpacks, an evidentiary onus shifted to CGL to prove that its use of the word alone on backpacks pre-dated 1994. 73 In my view, the primary judge was correct in this respect on onus, assuming that the position on the evidence was unclear. Strandbags was seeking to have a registered mark removed from the Register, on the basis being dealt with here that its predecessor (Edgarlodge) not CGL's predecessor (WtS P/L) was the first user of the mark on backpacks. It failed to prove that. 74 The appellants also pressed the Court with the evidence that they said was sufficient to found a conclusion that between 1982 and 1985 WtS P/L used the word mark "Colorado" alone in relation to backpacks. The evidence in relation to this was as follows: (a) First, Mr Darren John Williams, who commenced work in the "Williams the Shoemen" business in 1982 (then conducted by WtS P/L) swore in his affidavit that during his training in 1982 and 1983 he observed that the "Williams the Shoemen" stores were selling a style of backpack which he would describe as a small day pack with the name "Colorado" embroidered on the front, without any logo, in lower case and plain font. (b) Mr Williams was cross-examined on this issue. The cross-examination began by the cross-examiner (without objection) raising with Mr Williams that "one of the other witnesses [had] a slightly different recollection than [his]." He was then told, in effect, that the other witness said that there was a possibility that there was a logo used with the word. To this suggestion Mr Williams said, "I know they came packaged in the cartons where (sic) they were in cellophane bags with a cardboard top saying Colorado. I'm sure that there was Colorado across the top flap of the backpack. A recollection of the logo I cannot recollect. (sic)" When asked whether he could "rule it out", he said that he could not. (c) The "other witnesses" were Messrs Ainsworth and Beagley. Mr Ainsworth was a trainee manager at the Frankston "Williams the Shoemen" store from 1978 to 1980, a store manager at "Williams the Shoemen" Stores at various locations in Victoria and New South Wales from 1980 to 1988, a district manager and later buyer until 1999, a product developer, merchandising manager until 2003, when he became general manager of the "Williams the Shoemen" division. He said that from the mid-1980s to the late 1980s "Williams the Shoemen" sold backpacks "under the name 'Colorado' and using a three or four mountain peak logo". His evidence was silent on his recollection of use of the word "Colorado" before the mid 1980s. The inference is that he had no recollection. He was not cross-examined on this point. Mr Beagley, who no longer worked for the appellants, began work for CGL in 1988 as general manager buying and marketing for, amongst other divisions, "Williams the Shoemen". In his affidavit he recalls seeing in 1988 the word "Colorado" used in conjunction with a mountain top log. (d) Also, it should not be forgotten that the evidence disclosed that from the mid-1980s the use of the word was with a mountain device. Further, there was no explanation as to why the word alone would be used and then a change made to the word plus device. (e) The respondent emphasised that the evidence put before the Registrar (a declaration by a Ms Kubils and a statement by (the same) Mr Williams) did not (as did the affidavit of Mr Williams referred to at (a) above) state unequivocally that the word "Colorado" was used on backpacks without the logo. 75 The primary judge dealt with this evidence in [31] of his first judgment as follows: There is another basis for this conclusion. As regards backpacks (being the only article in respect of which there is a possibility of establishing first use of the word mark) I agree with Mr Ryan that it is unclear whether the word "Colorado" was accompanied by the logo, at least in the early years. There were only two witnesses called who were with Williams the Shoemen in 1982 and onwards, Mr Williams and Mr Ainsworth. In his affidavit Mr Williams said that the backpacks were packaged in a cellophane bag which bore the printed word "Colorado". He also said the word "Colorado" was embroidered on the front of the backpack without the "simple mountain motif". In oral evidence he said he was "sure that there was [the mark] across the top flap of the backpack. A recollection of the logo I cannot recollect." When pressed he said: "[I] couldn't rule it [the mountain logo] out." Mr Ainsworth's recollection went back only to the mid-1980s. He said that at that time the mark on the backpacks comprised the word "Colorado" and the mountain logo. Given this state of the evidence it is not possible to reach any conclusion about the nature of the mark on backpacks between 1982 and, say, 1985. In particular, one cannot say with any confidence that the mark comprised both the word and logo. This conclusion is necessarily adverse to Strandbags Group which carries the onus on the cross-claim. 76 It is important to recall that the so-called inconsistency with the evidence of other witnesses mentioned by the cross-examiner was not by any means direct. Neither Mr Ainsworth nor Mr Beagley dealt with the period 1982 to the mid-1980s. In substance Mr Williams accepted that he could not "rule out" what had been put to him as a possibility: that there was use of the word in conjunction with the logo. The cross-examiner did not, however, seek to have Mr Williams withdraw what was evidence stated otherwise with some clarity: that the word was used without the logo. The events were nearly 25 years before. The primary judge concluded as he did. It was not a conclusion based on credit. Though I am extremely reluctant to depart from the primary judge's conclusion, I do not think that it is a question in which judgment or impression affects the task of the appeal court: Branir Pty Limited v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 at 437-438 [29]-[30]. Kovan Engineering (Aust) Pty Limited v Gold Peg Engineering (2006) 234 ALR 241 at 263 [118]; Builders Licensing Board v Sperway Constructions (Sydney) Pty Limited (1976) 135 CLR 616; Fox v Percy (2003) 214 CLR 118; CSR Limited v Della Maddalena (2006) 224 ALR 1. I agree with the second last sentence of [31] in the primary judge's first judgment, but not the third last. On the balance of the evidence before the primary judge, given the unwillingness of the cross-examiner to challenge the recollection of Mr Williams any further than he did, it was open to find and indeed, on the evidence, in my view, should be found that WtS P/L used the word "Colorado" on backpacks from 1982 other than in conjunction with a logo. On the evidence, it was plain that that was use as a trade mark. 77 Thus, not only do I agree with the last sentence of the primary judge's reasons in [31], on the hypothesis that the evidence was equivocal, but also I would conclude that, in light of the limited attack in the cross-examination upon Mr Williams' evidence in chief and the terms of that sworn evidence, it can be concluded that there was use of the word as a trade mark on backpacks from 1982. 78 I do not think that the respondent can say that it discharged some evidential onus by proving when it used the word alone on backpacks, thereby requiring the appellants or prove unequivocally their earlier first use. The fact is that Mr Williams said when that first use was. His evidence was qualified to an extent in cross-examination, but the cross-examiner did not seek from him an answer that would negate his sworn evidence. In these circumstances, at the very least the respondent has not discharged its onus on the cross-claim (based on a claim derived from s 58 of the 1995 Act). The better view is, as I see it, that the failure to neutralise the evidence of Mr Williams permits a finding, notwithstanding the passage of time and the other surrounding objective circumstances, that WtS P/L did use the word "Colorado" alone on backpacks in about 1982. 79 The next issue requires consideration as to what flows from these conclusions about the evidence of use of the word "Colorado" on backpacks from 1982. 80 The primary judge posed the question in [25] and [26] of his first judgment as follows: It follows that proprietorship by first use is proprietorship in relation to the goods or classes of goods on which the mark has been used. The proprietor is entitled to have his mark registered in respect of those goods. This entitlement is not confined to identical goods or classes of goods. Registration may also be obtained for goods or classes of goods which is or are "a thing [or things] of the same kind" (Jackson & Co v Napper (1886) 35 Ch D 160, 178) or "like articles of production" (Columbia Mill Company v Alcorn, 150 US 460, 464 (1893)) or "articles of merchandise of the same kind" (Colman v Crump, 70 NY 573, 578 (1877)) or "kindred articles" (The Collins Co v Oliver Ames & Sons Corporation, 18 F 561, 570 (1882)), if there be any difference between these expressions. See also Edwards v Dennis (1885) 30 Ch D 454. With this background in mind the first question to be resolved on proprietorship is whether as at 16 February 2001, Colorado Group was the proprietor of the mark "Colorado" in respect of backpacks, bags, wallets, purses and belts and for services in respect of those articles. In looking at this question I will assume for the time being, though it is a matter in dispute, that the mark was capable of being distinctive of Colorado Group's goods and services. The answer to the first question requires consideration of three issues, viz (1) Was Colorado Group or its predecessor the first user of the Colorado mark on a backpack, being the article in respect of which first use is claimed? (For this purpose it is conceded that Williams the Shoemen was the predecessor of Colorado Group. It is also conceded that Williams the Shoemen was the first user of the word "Colorado" in combination with the "simple mountain motif"); (2) If the word was applied to backpacks not alone but in combination with the "simple mountain motif" can Colorado Group (or its predecessor) nevertheless claim to be the first user of the Colorado mark?; (3) If Colorado Group (or its predecessor) was the first user of the Colorado mark on backpacks, is a bag, wallet, purse or belt the same kind of article? Unless each pair of questions (1) and (3), or (2) and (3), are answered affirmatively, the registration has gone too far and either Colorado Group is not the proprietor of the Colorado mark or is not the proprietor in respect of bags, wallets, purses and belts. It may be that Edgarlodge first used the word "Colorado" on those goods, albeit in combination with the Indian head logo 81 The appellants agreed with the test put forward by the primary judge that first use of the word in relation to backpacks would entitle CGL to registration of the mark in respect of backpacks and other goods which might be described as "things of the same kind" or "like articles of production" or "kindred articles". Nor did the respondent disagree with the test. Rather, each saw its application differently. 82 The appellants attack the primary judge's conclusions in [32] of his first judgment which were as follows: On the last of the three questions — Are bags, wallets, purses and belts the "same kind" of goods as a backpack? — the answer in my view is in the negative. First it must be recalled that the style of backpack in respect of which the mark was used (and in respect of which it could be registered) was designed and promoted principally for use by schoolchildren for carrying stationery, books and other school items. There are other styles of backpack, for example fashion backpacks or those used for mountain-climbing and hiking, but they are not the type with which the comparison must be made. Broadly speaking, a "bag" is a receptacle made of some flexible material closed in on all sides except at the top: see Oxford English Dictionary vol 1 (2nd ed, 1989) 880. There are, however, many different types of bags. They are as varied as plastic bags, bodybags, laundry bags etc. Thus, not every bag can be the "same kind of thing" as a schoolboy's backpack. In particular, a schoolboy's backpack is not akin to a ladies handbag. Those are usually intended as a fashion item for the female consumer (albeit for an everyday use). Articles such as wallets, purses and belts are even more dissimilar to the schoolboy's backpack given their respective, and different, uses. This is not a case where the proprietor of a mark which has been applied to different kinds of articles that fall within a class or category of goods seeks to register that mark in respect of other articles within the class or category. Such a proprietor would be entitled to register his mark not only for each article in the class to which the mark has been applied but also for such other articles in the class which a consumer would reasonably believe are likely to originate from the same source. 83 The appellants submitted that his Honour's approach involved an over-dissection of the goods in question and that a backpack was simply a type of bag, as were handbags, wallets and purses. The respondent supported his Honour's approach. 84 The notion of ownership ("proprietorship" under the Trade Marks Act 1955 (Cth), the "1955 Act") is reflected in the 1995 Act, ss 27 and 58. Ownership is not restricted by prior actual use. A claimto ownership under s 28(a) may be based on use or intended use: s 27(1)(b). Thus, in this statutory context the rights that arise from use are most usually examined from the perspective of opposition. The context often is: to what extent the claim to ownership based on use and intended use is cut back by the ownership by an opponent of the trade mark by its previous use: see the 1995 Act, s 58. 85 Here, for the reasons that I have given, it can be accepted that WtS P/L used the word mark "Colorado" on backpacks from 1982. I will come shortly to the evidence about use on handbags, purses and wallets. The claim to ownership that was accepted by the Registrar was for "bags, wallets, purses, backpacks and belts" in class 18. If the respondent had sought to become registered in the way CGL was, that application could have been opposed by WtS P/L on the ground that it was the owner of the trade mark, in that, by use in 1982, it had used a sign to distinguish backpacks in the course of trade: the 1995 Act, ss 17 and 58. 86 This enquiry about proprietorship is not directed by the 1995 Act to notions of deceptive similarity or close relationship, as may be the subject of enquiry in other contexts: see the 1995 Act, ss 14, 44, 120(2) and 124(1). Indeed, this is reinforced by s 124(1). 87 The notion of ownership (or proprietorship) was discussed in In re Hicks's Trade Mark (1897) 22 VLR 636; Blackadder v Good Road Machinery Co Inc (1926) 38 CLR 332; Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457 at 477-78; Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414 at 432-34; Shell Co of Australia v Rohm and Haas Co (1949) 78 CLR 601 at 626-629; Re The Registered Trade Mark "Yanx"; Ex parte Amalgamated Tobacco Corporation Ltd (1951) 82 CLR 199; Aston v Harlee Manufacturing Co (1960) 103 CLR 391 at 399-401; Settef SpA v Riv-Oland Marble Co (Vic) Pty Ltd (1987) 10 IPR 402 at 413-414; and Carnival Cruise Lines Inc v Sitmar Cruises Ltd (1994) 120 ALR 495 at 505-514. Few of these cases discussed what might be said to be the width or scope of the right gained by use by reference to the similarity or closeness of the goods on which the mark was used to other goods. The case most usually cited in this respect is In re Hicks's Trade Mark 22 VLR 636. That case concerned a clear earlier user of the identical mark ("Empress") on identical goods (stoves) and was under a statute (the Trade Marks Act 1890 (Vic)) in which the word "proprietor" was defined as meaning "the person entitled to the trade mark by reason of his exclusive user of it." It was in this context that Holroyd J said the following, speaking for the Full Court: …In order to substantiate his application to be placed on the register for this word he must have claimed to be the proprietor, and the word "proprietor" must be taken to mean the person entitled to the exclusive use of that name. If there is anyone else who would be interfered with by the registration of the word "Empress" in the exercise of a right which such person has already acquired to use the same word in application to the same kind of thing, then ought not to have been put on the register for that trade mark, and his name will be properly removed on the application of the person whose right of user was thereby disturbed… [emphasis added] 88 In Carnival Cruises v Sitmar Cruises 120 ALR at 514, Gummow J referred to there being no differences of "character or quality" of the services in that case to gainsay that they were the "same kind of thing". 89 There is a certain difficulty in fixing upon the proper frame of reference for the enquiry identified by the words used by Holroyd J, "same kind of thing". Assistance is gained from the statutory context in which the question arises (see above), the common law notion of the right to registration from use, when that was the defining requirement: see Edwards v Dennis (1885) 30 Ch D 454 and Jackson & Co v Napper (1886) 35 Ch D 160 and the notion of the ownership of a common law trade mark: see the cases referred to by the primary judge at [25] of his first judgment (set out at [66] above). The aim of the enquiry is not to find some broad genus in which some common functional or aesthetic purpose can be identified. Nor is it an enquiry about the type of trade in which concurrent use might cause confusion. Rather, it is identifying, in a practical, common sense way, the true equivalent kind of thing or article. For example, use of a mark on hatchets or small axes, created proprietorship in relation to axes: Jackson v Napper 35 Ch D 160. This approach recognises ownership or proprietorship in a mark beyond the very goods on which the mark is used, to goods "though not identical… yet substantially the same" (Hemming HB, Sebastian's Law of Trade Marks (4th Ed) p 91) or "goods essentially the same… though they pass under a different name owing to slight variations in shape and size" (Kerly DM and Underhay FG, Kerly on Trade Marks (3rd Ed) p 206). This approach is conformable with the terms of the 1995 Act. 90 That backpacks are a type or style of bag does not answer the question as to whether they should be viewed as essentially the same goods as any bag or receptacle. The backpack is a bag with straps to be worn on the back. It is not essentially the same or the same kind of thing as other bags, handbags, purses or wallets. The task is not to identify the genus into which the goods upon which the mark was used fall, but to identify the goods. 91 This approach conforms with a tolerably settled approach in the Trade Marks Office to the same question as it arises in opposition proceedings based on prior use by the opponent. In Daimer Industries Pty Ltd v Kabushiki Kaisha Daimaru (1993) 27 IPR 124, the goods used by the opponent which were excluded from the registration of the applicant were identified as cricket balls; in Gayl Porter v Victoria's Secret (1993) 28 IPR 143, they were lingerie; in Crooks Michell Peacock Stewart v Kaiser (1994) 29 IPR 225, they were printed paper products namely reports, newsletters, brochures, plans, maps and architectural drawings being some of the goods in class 16; in Vamuta Pty Ltd v Sogo Pty Ltd (1995) 31 IPR 557, they were opal jewellery; in Pressware International Inc v Julzar Pty Ltd (1995) 33 IPR 53, they were pressed paper food containers; in King v Hayward (1997) 39 IPR 431, they were long and short sleeve T-shirts and shorts; in First Quality Products v Dawyn Import & Export Pty Ltd (2000) 49 IPR 199 they were tampons (distinguished from women's disposable underwear). This approach also reflects the views of the authors of Shanahan's Australian Law of Trade Marks and Passing Off (3rd Ed) p 58 [3.40]. 92 For these reasons, I find no error in the primary judge's conclusions in [32] of his first judgment (see [82] above). 93 The issue of proprietorship also arises in relation to wallets and purses. The appellants concede that if they are wrong (as I think they are) about the consequences of the use by WtS P/L of the word on backpacks from 1982, then the respondent's predecessor, Edgarlodge, made first use of the word mark in respect of handbags. The appellants assert, however, that CGL made first use of the word mark on wallets and purses. If one were to treat handbags as different in kind to wallets and purses, then to resolve this contest it is once again necessary to return to the minutiae of the facts. Before doing so, however, it is necessary to note that at [30]-[31] of his second judgment, the primary judge came to the conclusion that purses and wallets were goods of the same kind as handbags for the purposes of proprietorship, thus making the first use of the mark (the word "Colorado" alone) by Edgarlodge in 1991 in respect not only of handbags, but also wallets and purses. In this regard, the primary judge said the following: On the facts as I have found them, Edgarlodge was, and its successor Strandbags Group is, unambiguously the proprietor of the Colorado mark in respect of handbags because of first use. There was a contest about its first use in relation to wallets and purses. Even if that contest had been resolved differently it would not have affected the outcome. In my earlier judgment I explained that a person is entitled to registration of a mark not only in respect of goods to which the mark has been applied but also to goods or classes of goods that are "of the same kind": Jackson & Co v Napper (1886) 35 Ch D 160. This is because it is assumed that a consumer is likely to believe that the other goods originate from the same source as the goods in respect of which the mark has been used. In my view purses and wallets are goods of the same kind as handbags. Both are intended as fashion items and are used to carry small, everyday items such as money, credit cards, keys and like objects. True, handbags are usually larger than both wallets and purses but I do not think this affects the kind of goods they are. At any rate, it is often very difficult to tell the difference between what is a purse and what is a handbag these days, with many handbags being quite small in size. A consumer would expect a handbag and a purse or wallet bearing the same mark to come from the same source. Some are even matching in design. Indeed, many leading fashion houses sell lines of handbags, purses and wallets. 94 Whilst these are questions of some judgment, about which minds could reasonably differ, using the approach discussed above, I cannot agree that handbags are the same kind of thing as wallets and purses. All three items are receptacles, but wallets and purses tend to be the same object (generally for men and women respectively) used for the same purpose – to carry money, cards (mainly credit cards), receipts and the like. Handbags often fulfil a wider purpose. I accept that wallets and purses are the same kind of thing and, indeed, both sides approached the appeal on this basis. Therefore, I think that handbags, on the one hand, and wallets and purses on the other, should be dealt with separately. 95 From the mid-1980s WtS P/L sold backpacks bearing the word "Colorado" and a multiple peak mountain device. An example of a four or five peak device used with the word "Colorado" on shoe boxes sold as at 1988 is as follows: 96 Mr Beagley drew a logo that he recalled seeing when he began at WtS P/L in 1988 as follows: 97 There was also evidence of the use of something like this device in the advertising and promotion of shoes in the following form: 98 It was agreed that from 1987, WtS P/L sold shoes bearing the word "Colorado" and the simple mountain motif, and that the word "Colorado" appeared by itself on the outside of the shoe near the heel. 99 It was agreed that in the early 1990s, the "Williams the Shoemen" stores displayed products with signage bearing the word "Colorado" and a mountain peak device. 100 Mr Ainsworth gave evidence that from at least early 1994 WtS P/L sold wallets branded using a peaked logo as set out below, with the word "Colorado" in an unspecified relationship. The logo was: 101 From the early 1990s, "Williams the Shoemen" stores displayed products with signage bearing the word "Colorado" and a mountain peak device as follows: 102 Photographs in evidence revealed the use of "Colorado" and this peak logo, by the placement of the peak logo prominently above the printed words "Colorado". This was a common use by CGL in the 1990s, an example being: 103 The signage in the "Colorado" shops sometimes used the word alone, and sometimes used the word with a logo. 104 It was agreed that from 1991 Edgarlodge sold handbags bearing the word "Colorado" and the Indian head device (as to which, see [58] above). From about 1992, a metal plate bearing the word "Colorado" was affixed inside the handbags and a swing tag was attached to the handbag with the following appearing on it: BE A COLORADO COLLECTOR 105 The issue between the parties about the first use of "Colorado" on wallets and purses concerned both use by CGL and by Edgarlodge. I will deal first with the asserted use by CGL. The "Colorado" retail stores run by CGL opened in mid-1993. Mr Beagley's evidence was that these stores provided a complete range of clothing, footwear and accessories and that wallets bore the word "Colorado" plus the multi-peak device. The appellants contend that this use was substantially identical to the mark applied for, the word being "Colorado" simpliciter. The primary judge dealt with this issue in two places: [30] of his first judgment and [7]-[9] of his second judgment. In the first judgment, the primary judge said that his "impression" was that at least the word component served a distinct function as a trade mark. In his second judgment, the primary judge referred to this as "toying with" the argument. After referring to cases under the Trade Marks Registration Act 1875 (UK), s 10, his Honour concluded that one could not disentangle the word "Colorado" from the use in combination with the device and one could not conclude that there had been use of the word alone as a trademark. 106 In Carnival Cruises Lines v Sitmar Cruises 120 ALR 495 at 512-513, Gummow J discussed the need for identity of prior use and the claim to registration. He first explained the statutory context of, and reasoning in, Shell Co of Australia v Rohm and Haas 78 CLR 601 in rebutting the suggestion made by counsel that something less than substantial identity between the two marks will suffice. Gummow J referred to the phrase "substantially identical" in the infringement context (there, the 1955 Act, s 62) and the discussion by Windeyer J of that concept in Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 414. Gummow J said at 513: …It requires a total impression of similarity to emerge from a comparison between the two marks. In a real sense a claim to proprietorship of the one extends to the other. But to go beyond this is, in my view, not possible.… 107 Though it is potentially dangerous to reason from other facts, it is worth noting that in that case, whilst Gummow J said that there was no material distinction to be drawn between FUN SHIP and FUNSHIP, and that neither the use of the definite article nor of the plural created a material distinction, he concluded that FUN SHIP was for this purpose a different trade mark to SITMAR'S FUNSHIP and FAIRSTAR THE FUNSHIP. 108 This approach is consistent with the cases in the nineteenth century about what could be registered based on prior use: In re J B Palmer's Trade Mark (1883) 24 Ch D 504; Re Spencer's Trade Mark (1886) 54 LT NS 659; In re Grossmith's Trade Mark (1889) 6 PR 180; Perry Davis & Son v Harbord (1890) 15 App Cas 316; Powell v The Birmingham Vinegar Brewery Company Limited [1894] AC 8; Re Chorlton and Dugdale's Trade Mark (1885) LT NS 337. 109 The appellants relied on various infringement cases in order to support the proposition that the overwhelming or essential element or feature in the use of the word with the multiple peak device (in whatever form) was the word. After referring to Carnival Cruise Lines v Sitmar Cruises 120 ALR 495 and Shell Co v Esso 109 CLR 407, the appellants referred to P B Foods Ltd v Malanda Dairy Foods Ltd (1999) 47 IPR 47. There, Malanda had used "CHILL" in relation to flavoured milk before PB Foods. PB Foods applied to register "CHOC CHILL", subject to a claim to vary the first word to indicate a different flavour. Malanda lodged an objection to PB Foods' application. The delegate and Carr J on appeal both came to the view that Malanda's prior use of "CHILL" was substantially identical to "CHOC CHILL". The delegate then exercised a discretion under the honest concurrent user provision (the 1995 Act, s 34(1)). The reasoning of Carr J (at 47 IPR at 52-55) was that the first word "CHOC", or a word or abbreviation indicating some other flavour, was not distinctive, but was descriptive. He concluded that the essential feature of the trade mark sought to be registered as "CHOC CHILL" was "CHILL". It was the word "CHILL", his Honour said "which serves to denote the trade origin of the goods". Thus the trade mark use was found in the word "CHILL". The word "CHOC" had, his Honour said, different work to do – describing the flavour. Carr J then discussed other examples from the authorities in which weight had been placed on the existence of another word in one of the marks to destroy the conclusion of substantial identity. Important to his distinguishing of these cases was the descriptive function of the first word "CHOC" or any replacement word or abbreviation to show flavour. 110 Here, though the evidence was less than precise as to what the mark plus device use was by CGL, the examples in evidence reveal an important, perhaps even dominant, effect of the word "Colorado", but always with a device. That device was part of the trade mark use; it had a capacity to distinguish. It did not, in my view, operate as a separate mark, nor as a mere descriptor. It operated as part of a combination with the word "Colorado", in part reinforcing it. In these circumstances, I agree with the primary judge's concluded view that though the word "Colorado" is important in the impression, it cannot be said to have been used alone, rather than as part of a composite mark (with the device) to show origin. 111 Thus, I reject the argument of the appellants that they used the mark "Colorado", being the registered mark, on wallets from mid-1993. 112 The respondent accepted that its use of the "Indian head" composite mark (see [58] above) was not use of the word "Colorado" alone. 113 Mr Ryan conceded in argument that, leaving the mutual combined use of word and motif or device to one side, Edgarlodge was the first to use the word "Colorado" on wallets some time after 1995. The evidence disclosed that from 1995 Edgarlodge, began to insert a mock credit card into each wallet which bore the word "Colorado". There was a dispute as to whether swing tags were used on wallets before mid-1993 by Edgarlodge. The parties were also agreed in the approach to the appeal that wallets and purses could be dealt with together and the references in the evidence to wallets encompassed purses. 114 The appellants argued that the primary judge mistakenly found in [18] of his second judgment that the word "Colorado" on the swing tag (see [104] above) was attached to wallets (and purses) in the early 1990s. The primary judge having found this, then concluded at [19] and [20] that this was a trade mark use of the word (a conclusion that was not challenged). Thus, his Honour concluded at [21] of the second judgment that Edgarlodge's use of the word "Colorado" on handbags, wallets and purses predated the use by WtS P/L and CGL of the word on those goods. 115 This debate about whether the evidence was sufficient to permit the primary judge to conclude that swing tags bearing the word "Colorado" were used on wallets (and purses) from before mid-1993 falls away if one concludes, as I do, that the use by CGL from mid-1993 of the word "Colorado" with the motif or device was not use of the word alone. 116 For the sake of completeness, lest the matter go further, I will deal with the disputed issue as to what the evidence shows about the use of swing tags on wallets (and purses) before 1995. 117 Ms Malouf-Evans who, with her husband, Mr Evans, was involved in the running of the Edgarlodge business said clearly in cross-examination in a discussion about the use of the swing tags that swing tags were not used on wallets (and, inferentially, purses). She explained that "there was never really anything to attach it to". Mr Evans in his affidavit in chief said something similar: "For wallets, where it was often not practical to attach swing tags, a credit card shaped card bearing the word 'Colorado' was placed inside the wallets." In cross-examination, however, he divided the period up between the later period of putting the mock credit card in the wallet and an earlier period in which a swing tag was used with wallets. He then said in description of the swing tag that it was the tag which had the Indian head device. He was cross-examined as to the content of this mark by Mr Ryan who gave Mr Evans an opportunity to describe any use of the word "Colorado" alone. Mr Evans only referred to the Indian head device. So, Mr Ryan submitted before us, without recollection from Mr Evans as to the use of the word "Colorado" on the swing tag, it must have been a swing tag with only the Indian head device with the word. The difficulty with this submission is that the only swing tag referred to in the evidence of Mr Evans was one which had the Indian head device and word on one side and the words "Be a Colorado Collector" (as at [104] above) on the other. Mr Evans in fact exhibited an example of such a swing tag. Further, the cross-examination can be seen to have been conducted on the basis of an assumption that there was only one swing tag. Such a factor is one aspect of the advantage of the trial judge: Branir 117 FCR 424 at 437-38 [29]. 118 In my view, there was evidence to found the conclusion of the primary judge that swing tags with the word "Colorado" were used on wallets and purses before 1993. I see no error in the conclusion of the primary judge. Conclusions on ownership (proprietorship) 119 Thus, my conclusions are: (a) that WtS P/L made the first use of the word "Colorado" on backpacks in about 1982; (b) that said use did not give WtS P/L ownership of the word beyond backpacks to handbags, wallets and purses; and (c) that Edgarlodge made the first use of the word "Colorado" on handbags, wallets and purses. Validity 120 The parties next addressed the question of validity. I will start with distinctiveness. Distinctiveness 121 In his first judgment, the primary judge held that the word "Colorado" was not used in a geographical sense, but its use in connection with the kind of goods with which he was concerned was arbitrary, making it inherently adapted to distinguish the goods (for s 41(3)) and thus requiring no proof of secondary meaning (under s 41(5) or s 41(6)). The primary judge relied on a passage from the Restatement of the Law of Torts Vol III (1938) in respect of geographic names as follows: The reasons for the rule that geographical names cannot be trademarks do not weigh heavily when the geographical name has obviously only an arbitrary or fanciful significance in connection with the goods upon which it is used. Thus Gibraltar may be a trade-mark for automobiles since there is no likelihood that such use of the name would lead purchasers to suppose that there is any particular relation between the automobiles and the geographical locations known by that name, or any likelihood that it would seriously interfere with the freedom of merchants at Gibraltar to use that name. Again, Ethiopian may be a proper trade-mark for ladies' stockings; for, while suggestive of a certain color and sheen, it is only fancifully so and there is no likelihood that other merchants may have occasion properly to use the name Ethiopia on stockings since there is no factor of importance associating stockings with Ethiopia. Such is also the case of Pacific for bread or Arctic for refrigerators. 122 His Honour also referred to the following passage in Hamilton-Brown Shoe Co v Wolf Brothers & Co 240 US 251 (1916): …We do not regard the words 'The American Girl,' adopted and employed by complainant in connection with shoes of its manufacture, as being a geographical or descriptive term. It does not signify that the shoes are manufactured in America, or intended to be sold or used in America, nor does it indicate the quality of characteristics of the shoes. Indeed, it does not, in its primary signification, indicate shoes at all. It is a fanciful designation, arbitrarily selected by complainant's predecessors to designate shoes of their manufacture. We are convinced that it was subject to appropriation for that purpose, and it abundantly appears to have been appropriated and used by complainant and those under whom it claims. 123 Using these authorities and McCarthy on Trade Marks and Unfair Competition Vol 2[14.7], the primary judge posed three questions: …(1) Is the mark the name of the place from which the goods come?; (2) Is the geographic term likely to denote to a reasonable purchaser that the goods come from the place or region named?; (3) Is the place or region noted for the particular goods in question?... 124 In answering these questions the primary judge said: …The result of such inquiries would likely show, for instance, that consumers would perceive as designating geographic origin the word "Swiss" when applied to watches, the word "Japan" when applied to motor vehicles, the word "Brazil" when applied to coffee beans and, for those with a local interest, the words "Bank of Melbourne" in relation to banking services. On the other hand, I am certain in my own mind that the word "Colorado" when applied to backpacks or other articles, such as shoes, is not used in a geographical sense. The use of the word "Colorado" in connection with the kinds of goods with which we are concerned is an arbitrary use making it inherently distinctive and thus requiring no proof of secondary meaning. In reaching this conclusion, I have rejected the possibility, with one slight exception, that the word "Colorado" can be descriptive of backpacks or shoes. I have referred to the evidence which is to the effect that the word "Colorado" conjures up notions of trekking, ruggedness, fashion, Rocky Mountains and so on. For the most part those ideas are concerned with the image of the brand and are not descriptive of the goods themselves. The slight exception is that the word may incidentally say something about quality (for example that the goods are "rugged" or durable) but because the word is only indirectly informative it is not likely to be perceived by many in a descriptive sense. Thus the attack based on lack of distinctiveness is not made out. 125 The respondent (cross-appellant) submitted that this approach contained error. First, it was submitted that the relevant question about geographic origin was stated in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 at 513-514, where Kitto J said the following: That ultimate question must not be misunderstood. It is not whether the mark will be adapted to distinguish the registered owner's goods if it be registered and other persons consequently find themselves precluded from using it. The question is whether the mark, considered quite apart from the effects of registration, is such that by its use the applicant is likely to attain his object of thereby distinguishing his goods from the goods of others. In Registrar of Trade Marks v. W. & G. Du Cros Ltd [1913] AC 624 at pp 634-635. Lord Parker of Waddington, having remarked upon the difficulty of finding the right criterion by which to determine whether a proposed mark is or is not "adapted to distinguish" the applicant's goods, defined the crucial question practically as I have stated it, and added two sentences which have often been quoted but to which it is well to return for an understanding of the problem in a case such as the present. His Lordship said: "The applicant's chance of success in this respect (i.e. in distinguishing his goods by means of the mark, apart from the effects of registration) must, I think, largely depend upon whether other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connexion with their own goods. It is apparent from the history of trade marks in this country that both the Legislature and the Courts have always shown a natural disinclination to allow any person to obtain by registration under the Trade Marks Act a monopoly in what others may legitimately desire to use." The interests of strangers and of the public are thus bound up with the whole question, as Hamilton L.J. pointed out in the case of R. J. Lea, Ltd. [1913] 1 Ch 446 at p 463; but to say this is not to treat the question as depending upon some vague notion of public policy: it is to insist that the question whether a mark is adapted to distinguish be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives—in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess—will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it. 126 Thus, the respondent submitted that the relevant question was not, as the primary judge stated, whether the word was used by the appellants in a geographical sense, but whether the word has a "signification" which it ordinarily possesses (geographic or not) which other traders may wish to use (honestly) for that signification in relation to similar goods. Thus, it was submitted that if, as his Honour found, "the word "Colorado" conjures up notions of trekking, ruggedness, fashion, Rocky Mountains and so on" (see [36] of the first judgment), other traders may wish to use the word for the signification of such attributes as well as a simple geographic signification. 127 The submissions of the respondent showed that the evidence was replete with recognition by witnesses that the word was used to conjure up an image of adventure, the outdoors, ruggedness, trekking and the like by association with the Rocky Mountains and Colorado. This, it was submitted was not "arbitrary use making it inherently distinctive" as the primary judge found at [35] of his first judgment. Thus, it was submitted, proof of secondary meaning was required, as the Registrar had found. 128 The appellants relied upon and supported the primary judge's approach. In particular, they tended to brush away the importance of the geographical indicator by saying that the State of Colorado was not recognised as a place with any reputation for shoes, clothes, bags or wallets. This approach of the appellants rather ignores the possible relationship between backpacks and mountains and trekking – Colorado backpacks, for instance, is a possible signification of backpacks from that State or backpacks that might conjure the images redolent of that State that his Honour found. I have difficulty in accepting that the word "Colorado" is inherently adapted to distinguish backpacks, or even bags, wallets and purses. It is not a fancy or made up word. It is the use of a name being a State of the United States of America which has well-known mountains and is a rugged holiday area. In my view, the honest trader could well wish to make use of the signification of the word for geographic reasons – especially in relation to backpacks, or to raise a connotation from the geographic attributes of that State. In my view, the primary judge was wrong to conclude that the word was inherently adapted to distinguish. 129 On this basis, the correct next step might be seen to be to examine the position under s 41(6) on the hypothesis that the trade mark is not inherently adapted to distinguish the designated goods or services from those of others: cf Woolworths Ltd v BP plc (No 2) (2006) 154 FCR 97. The respondent, however, accepted in submissions in its approach to the appeal that the word was to some extent inherently adapted to distinguish the designated goods or services and submitted that the relevant enquiry was under s 41(5). It is unnecessary, therefore, to consider the application of s 41(6) and whether it would lead to any different result than would the application of s 41(5). Section 41(5) of the 1995 Act is in the following terms: … (5) If the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons but is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods or services: (a) the Registrar is to consider whether, because of the combined effect of the following: (i) the extent to which the trade mark is inherently adapted to distinguish the designated goods or services; (ii) the use, or intended use, of the trade mark by the applicant; (iii) any other circumstances; the trade mark does or will distinguish the designated goods or services as being those of the applicant; and (b) if the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods or services--the trade mark is taken to be capable of distinguishing the applicant's goods or services from the goods or services of other persons; and (c) if the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods or services--the trade mark is taken not to be capable of distinguishing the applicant's goods or services from the goods or services of other persons. 130 Under s 41(5) it was necessary to examine the extent to which the applicant (CGL, or its predecessors) had used the word "Colorado" to distinguish its goods or services from those of others. In this regard, the respondent relies on the findings of the primary judge at [52]-[55] of the first judgment in dealing with the passing off and s 52 claims. His Honour was looking at the issue from the perspective of 1998, not 2001. The evidence of sales of the respondent after 1998 make it safe to conclude that his Honour's findings about 1998 can be transposed to 2001. The primary judge found: (b) Both the appellants and the respondent had a reputation in the name Colorado. (c) Whilst in the 1980s the two groups had separate fields of activity, in the 1990s their fields of activity overlapped. (d) This concurrent use created the potential for confusion; though this confusion was limited by the separate locations of the stores and the different devices. (e) From the time the Strandbag Group bought the Edgarlodge business, both it and Colorado Group had a strong reputation in the Colorado brand. 131 The appellants first submitted that the respondent's use of "Colorado" as a word or with a device was irrelevant to the enquiry under s 41, and only relevant to an opposition based on s 60 or a rectification application under s 88. 132 If, on the other hand, the respondent's prior use is relevant for the enquiry under s 41(5), then unless these findings by the primary judge are overturned, the clear use of the same mark by both the appellants and the respondent in the same field of goods over some years, enabling the primary judge to say that both had strong reputations in the "brand", would allow the comfortable conclusion that the trade mark use of the word that has taken place does not distinguish the goods or services of the appellant from the goods or services of others (including the respondent). See generally Blount v Registrar of Trade Marks (1998) 83 FCR 50; Canadian Shredded Wheat Co Ltd v Kellogg Co of Canada (1938) 55 RPC 125 at 145; and British Sugar Plc v James Robertson & Sons Ltd [1996] RPC 281. 133 The appellants put that the respondent's use was minor and confined to Queensland and Wagga Wagga. The findings of the primary judge are contrary to this. The notice of contention contains the following at [3]: If the mark Colorado was only to some extent, or not at all, inherently adapted to distinguish the goods for which it was sought to be registered and thus use of the mark before the date of application for registration was necessary to render it distinctive in fact, then the use of the mark actually made by the Cross-Respondents was sufficient for that purpose. 134 Further, the appellants complained that the primary judge, wrongly, at [54] of the first judgment stated that they did not claim that the respondent should be restricted to a particular geographical area for particular kinds of goods. 135 These issues, as well as the questions involved in the respondent's continuous use of its marks for the possible operation of s 124 of the 1995 Act, the way the various goods were sold by the parties as relevant to whether handbags, wallets and purses are "goods of the same description" for infringement purposes, the passing off claim and the claim for contravention of the Trade Practices Act require further examination of the evidence. This is undertaken below for the variety of purposes thrown up by the above issues. 136 Before coming to these factual issues, it is necessary to deal with the appellants' argument that use by the respondent is a circumstance irrelevant to the enquiry under s 41(5) of the 1995 Act. In my view, the use by the respondent of the word "Colorado" is relevant to the inquiry under s 41(5). The "distinguishing" there referred to and required to be found is of the designated goods or services of the applicant from the goods and services of other persons. As Lord Russell of Killowen said in Canadian Shredded Wheat Co v Kellogg Co of Canada (1938)55 RPC 125 at 145, the distinctiveness contemplated is that the goods are distinguished as the goods of a particular person, and no other. The evidence of concurrent use may be relevant for s 60, but it also may mean that the applicant is not able to persuade the Registrar (or the Court) that the mark does or will distinguish the designated goods or services as (to use the concluding words of s 41(5)(a)) "being those of the applicant". 137 Thus, in my view, for the appellants to succeed on distinctiveness they must satisfy the Court (the primary judge not having dealt with the matter) that s 41(5) is satisfied on the evidence. I will return to the question of the Court's power under s 88 in due course. Additional Facts 138 I will not repeat what I have earlier set out as to the conduct of the respective businesses of the appellants, the respondents and their respective predecessors. 139 It is convenient to discuss the events chronologically. The first period is conveniently identified as 1982 up to about 1991/1992. In this period WtS P/L and Mathers Shoes Pty Limited used the word "Colorado" principally in conjunction with a device on backpacks and shoes as described at [47]-[50] above. The backpacks and shoes were sold Australia-wide, though the backpacks sold most successfully in North Queensland. The "Williams the Shoemen" stores sold other bags and items; ladies' dress bags, casual espadrilles and other items which were differently marked, without the "Colorado" mark in any form. 140 The numbers of "Colorado" branded products (principally with word and some device) ordered by the "Williams the Shoemen" stores and "Mathers for Shoes" stores after they began selling "Colorado" branded shoes in 1987 were: (a) 1987: 16,386, it being unclear the division between shoes and backpacks (b) 1988: 32,412, including 600 backpacks (c) 1989: 33,984, including 4,800 backpacks (d) 1990: 33,693, including 2,540 backpacks. 141 The "Williams the Shoemen" and "Mathers for Shoes" stores sold about $8 million in 1990, $10 million in 1991, and $11 million in 1992, worth of "Colorado" branded products, most of which was for the sale of shoes. 142 In 1991, Edgarlodge sold handbags bearing the Indian-head mark, a metal plate bearing the word "Colorado" and a swing tag with the words at [104] above. The appellants were aware of this. It is not possible to say how many of these bags were sold in 1991. Mr Williams said that he recalled seeing a store with signage "Colorado Bag Co" in Sydney in about 1990 or 1991. This may have been 1992 when Edgarlodge opened its Liverpool (NSW) store. 143 "Williams the Shoemen" and "Mathers for Shoes" spent $101,000 in 1991 and $108,000 in 1992 on advertising (not including catalogues) promoting "Colorado" products, mainly shoes. 144 On 26 June 1992, Mr Evans applied to register the business name "Colorado Handbags & Travelgoods" in New South Wales. 145 The "Colorado" theme store opened by Edgarlodge in Liverpool in August 1992 was advertised in the Sydney White Pages telephone directory. 146 Thus, up to 1992, the appellants used the word "Colorado", mainly in conjunction with a device, in respect of shoes and backpacks, around Australia. 147 In 1991, Edgarlodge began using the business name as the name of stores in Queensland and in Liverpool in Sydney, selling handbags and wallets. The goods were sold using a different device to the mountain peak device used by WtS P/L. There is no suggestion in the evidence that the get up of the Edgarlodge stores was similar to the Williams the Shoemen" or "Mathers for Shoes" stores. 148 The second period was from about 1993 when CGL began its "Colorado stores". In July 1993, CGL's "Colorado" stores opened in Doncaster (Victoria), Parramatta and Penrith (New South Wales). The signage of these stores bore the word "Colorado" prominently displayed at the entrance, curved over a mountain peak logo, as follows: 149 In September 1993, CGL opened another such store in Darling Harbour, Sydney with similar signage. 150 These "Colorado" stores were stocked with clothing, footwear and accessories. The mountain peak logo was used consistently on the goods. Mr Beagley said that from July 1993 to 1996 "Colorado" branded bags "would be" marked with the word "Colorado" alone or with a mountain logo. Wallets had the word and the mountain logo. The evidence other than this recollection was that bags were marked with the word alone in 2001. (The debate is not of consequence since it was agreed that Edgarlodge first used the word alone on bags using the swing tag.) From 1993 to 1996 the signage of these stores prominently displayed the word "Colorado". The signage above the entrance was as depicted at [148] above. 151 The sales for the "Colorado" division of CGL (that is the "Colorado" Stores) were: Year Sales 1993 $1,767,000 1994 $4,016,000 1995 $6,624,000 1996 $9,476,000 1997 $17,153,000 1998 $31,107,000 1999 $52,620,000 2000 $88,240,000 2001 $106,049,000 2002 $117,135,000 2003 $128,737,000 Though it is not possible to say precisely how much of these figures related to bags and wallets, it was a very small proportion. 152 The appellants spent the following on marketing and advertising, though it can be accepted that most related to shoes and clothing: Year Amount spent on advertising 1993 $400,000 1994 over $1 million 1995 over $1.5 million 1996 over $1.7 million 1997 about $2 million 1998 over $3.5 million 1999 about $1.8 million 2000 about $2.6 million 2001 about $2.3 million 2002 over $2.5 million 2003 about $2.5 million 153 The "Williams the Shoemen" and "Mathers for shoes" stores sold the following amount of branded product, respectively, mostly shoes: Year Branded product sold 1993 $10,000,000 1994 $27,078,000 1995 $46,774,000 1996 $59,196,000 1997 $64,957,000 1998 $65,140,000 1999 $69,439,000 2000 $75,364,000 2001 $62,705,000 2002 $58,400,000 2003 $61,830,000 154 The "Colorado" Division of CGL sold the following numbers of wallets: Year Number of wallets sold 1994 1,146 1995 1,696 1996 2,046 1997 3,250 1998 1,310 1999 3,665 2000 8,324 2001 9,555 2002 10,189 2003 8,092 155 In May 1995, Edgarlodge opened two further "Colorado Bag Co" stores in Queensland (in Indooroopilly and Toowoomba). 156 By August 1996, there were ten "Colorado" stores run by CGL, six in New South Wales, two in Queensland and two in Victoria. 157 By December 1996 there were eleven "Colorado Bag Co" stores run by Edgarlodge; nine in Queensland and two in New South Wales (at Tweed Heads and Wagga Wagga, the Liverpool store having closed in 1994). Edgarlodge also sold its "Colorado" branded bags and wallets at all its other "Bagstop" and "Travel Bug" stores. 158 In 1996 and 1997 Edgarlodge's sales for "Colorado" branded product (bags and wallets) was $1,383,678, and $1,271,790 respectively. 159 By January 1997, CGL operated 14 "Colorado" stores, seven in New South Wales, four in Queensland, two in Victoria and one in South Australia. 160 By October 1997, Edgarlodge operated 15 "Colorado Bag Co" stores, 13 in Queensland and two in New South Wales (Wagga Wagga and Tweed Heads). It continued to sell its "Colorado" branded bags and wallets through its "Bagstop" and "Travel Bug" stores. 161 By January 1998, CGL operated 19 "Colorado" stores, eight in New South Wales, seven in Queensland, two in Victoria and two in South Australia. 162 In August 1998, the first letters of complaint are sent by the appellants' then lawyers to Mr Evans. 163 On 21 September 1998, the respondent acquired the business assets of Edgarlodge. 164 By the end of 1998 or January 1999, CGL operated 30 "Colorado" stores: eleven in New South Wales, two in the ACT, one in the Northern Territory, eight in Queensland, four in Victoria, three in South Australia and one in Western Australia. 165 CGL's Colorado division sold the following numbers of bags and backpacks having the value of: Year Number of Bags & Value of sales Backpacks 1998 3,316 $115,159 1999 7,130 $245,572 2000 13,817 $362,727 2001 30,524 $737,621 2002 25,111 $540,018 2003 26,111 $586,066 and wallets having a value of:. Year Number of Wallets Value of sales 1998 1,310 $39,036 1999 3,665 $140,178 2000 8,324 $259,167 2001 9,555 $381,506 2002 10,189 $37,630 2003 8,092 $283,339 166 In 1999, the respondent, after liquidating the Edgarlodge stock of "Colorado" bags and wallets designed and placed orders for handbags, wallets, backpacks, travel goods and business products using the "Colorado" mark. At this time, the respondent had over 200 stores across Australia, each of which sold "Colorado" branded bags and wallets. The value of the sales by the respondent in 1999 of "Colorado" bags and wallets was $1,271,790. This was considerably less than the total sales of the "Colorado" division and Williams the Shoemen though in fact CGL's sales of "Colorado" branded bags and wallets as distinct from shoes in 1999 was only $385,750. 167 By January 2000, there were 49 "Colorado" stores operated by CGL; 15 in New South Wales, two in the ACT, one in the Northern Territory, 13 in Queensland, ten in Victoria, three in South Australia, one in Tasmania and four in Western Australia. 168 In 2000, the respondent sold "Colorado" branded bags and wallets at its 192 stores Australia wide, to a value of $1.2 m. This may be compared with sales by CGL's "Colorado" branded bags and wallets of $621,894. The respondent continued to operate Edgarlodge's 15 "Colorado Bag Co" stores until the beginning of 2002, 12 until the beginning of 2003 and nine to the beginning of 2004. 169 By January 2001, CGL operated 64 "Colorado stores" in all Australian States and Territories. 170 In 2001, the respondent sold $2,151,682 worth of "Colorado" branded bags and wallets in its 190 stores Australia-wide and the 15 "Colorado Bag Co" stores. 171 On 16 February 2001, WtS P/L applies for registration of Trade Mark No 866291. 172 By January 2002, there were 77 "Colorado" stores operated by CGL. 173 In 2002, the respondent sold "Colorado" branded bags and wallets through its 185 stores Australia-wide and 12 "Colorado Bag Co" stores, selling $5,261,952 worth of "Colorado" branded goods; compared to $907,648 of sales by CGL of "Colorado" branded bags and wallets. 174 By January 2003, there were 83 "Colorado" stores operated by CGL. 175 In 2003, the respondent continued to sell "Colorado" branded bags and wallets from its 189 stores Australia-wide and from nine (by early 2004) "Colorado Bag Co" stores. In 2003 it sold $9,614,789 of "Colorado" branded bags and wallets. 176 By January 2004, there were 89 "Colorado" stores operated by CGL. 177 In 2004, the respondent continued to sell "Colorado" branded bags and wallets from its 190 stores Australia-wide and now nine "Colorado Bag Co" stores. Conclusions to be drawn from all the facts on distinctiveness 178 In 1991, both WtS P/L and Edgarlodge used the word "Colorado". The predominant use of both was with different logos. Edgarlodge had a trade mark which included the (disclaimed) word "Colorado". The word and marks were employed in relation to goods in different fields (backpacks and shoes as compared to wallets and bags and accessories). Edgarlodge was the first (from 1992) to set up a "Colorado" themed store. 179 In the 1990s, until 1998, WtS P/L and CGL and Edgarlodge actively promoted stores of a "Colorado" kind. Signage with the word, and with the word and logo, was placed on the shops. From 1993, the appellants moved into a wider field of goods, including wallets and handbags, which had been sold from 1991 by Edgarlodge using the word and the word and Indian head device. Thereafter, the appellants expanded their stores throughout Australia, while the stores operated by Edgarlodge were located in Queensland, Sydney (from 1992 to 1994), Tweed Heads (on the border with Queensland) and Wagga Wagga in south central country New South Wales. From 1998, the respondent sold goods (bags and wallets) using the word "Colorado" and the word with the device all over Australia. 180 In all these circumstances, unless one is to put to one side all the use by Edgarlodge and the respondent, it cannot be said that the use by the appellants of the word or the word in conjunction with any device was such that the word, as at 2001, did or would distinguish the goods claimed in the application as being those of the appellants or one of them, and no other. This is so even if one included under "any other circumstances" (for the purposes of s 41(5)(a)(iii)) the use of the word plus device, the shop signage, advertising and use on shoes and clothes. Whilst WtS P/L had first used the word on backpacks in 1982, by 2001 it could not be concluded that the trade mark sought, the word "Colorado", was capable of distinguishing the goods or services of the appellants in respect of bags, backpacks or wallets (including purses). 181 For these reasons, in my view the trade mark does not satisfy the requirements of s 41. Subject to there being power in the Court to do so, I would uphold the cross-appeal on backpacks and order the cancellation of the registration of the trademark in respect of backpacks. I would dismiss the appeal insofar as it complained about the orders of the Court made on 7 July 2006, ordering that the Register be rectified by deleting all references to bags, wallets and purses. False suggestion 182 As to false suggestion, the complete answer to the allegation, in the view of the primary judge, was that s 41(5) was irrelevant. The appellants' submission that the respondent's prior use was irrelevant to the determination of the s 41(5) question would also be a complete answer. My view is, however, that the respondent's use was relevant for s 41(5). Therefore, it is necessary to examine what happened. 183 The primary judge dealt with the issue at [37]-[41] of the first judgment as follows: To deal with the allegation that the trade mark registration was obtained by false suggestion or misrepresentation I need to say a little more about the facts. Following the examination of the application for the registration of the trade mark it appeared to the examiner that there were grounds for rejecting it. On 29 June 2001 the Registrar wrote to Colorado Group advising it of those grounds (by providing it with a copy of the examiner's report) and giving it a reasonable time within which to address those grounds. One issue raised by the examiner was that the trade mark was not distinctive. Relevantly the examiner's report stated: "To be registrable, your trade mark must be capable of distinguishing your goods/services from the similar goods/services of other traders in the market place. Your trade mark is not capable of distinguishing your goods and services because it has insufficient inherent adaptation to distinguish. COLORADO is the name of a state in the USA. Other traders are likely to need to use this name to indicate an obvious or potential connection with their goods and services. However, I may be able to reconsider this matter if you provide evidence of use of your trade mark under sub-section 41(5)." On 8 October 2002 Colorado Group provided the Registrar with additional information in support of its application. After considering the additional information the Registrar accepted the application and, there being no opposition to its registration, the mark was registered with effect from the date of lodgement. The information provided to the Registrar, and upon which the Registrar presumably relied to grant registration, included a statement of Mr Williams made a year earlier. When it provided the additional information Colorado Group was well aware of the activities of Strandbags Group. More importantly, it knew about the activities of Strandbags Group as at February 2001, which was the relevant time for the purpose of considering whether the trade mark was distinctive of Colorado Group's goods. Colorado Group also appreciated that it had to provide some information to the Registrar about the use to which the word "Colorado" had been put by Strandbags Group. Mr Williams' statement dealt with that matter. He said: "My recollection is that the first Colorado Bag Store opened in Sydney in 1990 or 1991. This coincided with the introduction of the new Colorado logo. At the time, the company [Williams the Shoemen] was concerned about its branding of the word 'Colorado' given the opening of the Colorado Bag Co Store. At the time Colorado Bag Co Store started in the market, the public was familiar with 'Colorado' as a brand. The brand had a reputation for quality built by the sale of its upmarket shoes. At this time, the Colorado shoes had a minimum point of sale price of $60 and the $100 range of Colorado shoes was being sold in all stores. The minimum $60 price was implemented to ensure that the Colorado brand was associated with quality." This was much less information about Strandbags Group's activities than was actually known to Colorado Group. Partly for that reason it is said that Mr Williams' statement was misleading, and did in fact mislead the Registrar. The statement is said to have been misleading in the following respects (and here I quote from Strandbags Group's submissions): "(a) at least, as to the 2001 status of the Respondent's uses, and/or (b) very possibly, so as to think that there was some relationship between the trade mark applicant and the Colorado Bag Co." As to (b) it is not being alleged that what was said was untrue (a direct misrepresentation) but, rather, that there was an implied or inferred representation to the effect that all that was known about Colorado Bag Co was being disclosed. Further, this is not a case of omission because an omission (if there be any) must render an actual statement false for it to be a misrepresentation: Arkwright v Newbold (1881) 17 Ch D 301, 309. I propose to proceed on that view. I do not accept that the Registrar would have read Mr Williams' statement as indicating that there was some relationship between Colorado Group and Colorado Bag Co. The last sentence of the first quoted paragraph only makes sense if there were no relationship between the two. The other alleged misrepresentation, however, cannot be dismissed out of hand. If what was said by Mr Williams would naturally lead the Registrar to suppose that Mr Williams had disclosed all that he knew about the activities of Colorado Bag Co he has made a representation to that effect: Lee v Jones (1864) 17 CB (NS) 482, 510. In deciding what the Registrar would suppose, I am required to assume the Registrar is a reasonable person in that position: Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563, 576-577. The view I take is that a reasonable Registrar would likely think that Mr Williams was providing him with information about the situation in 1991 and not as things stood in 2001. The first paragraph is in terms confined to events in 1991 — "The first Colorado Bag Store opened [in] 1990 or 1991" — "At the time" this was a cause for some concern but not a major concern because "at that time" the brand was characteristic of Colorado Group's goods. The reference in the second paragraph to "At the time" and "at that time" likewise points the Registrar to 1990 or 1991. In both paragraphs Mr Williams is making what he no doubt thought was an important point (whether it was or not being irrelevant), namely, that nothing of relevance happened after 1990 or 1991 because the mark had already acquired distinctiveness. I do not accept that Mr Williams' statement would have been understood by the Registrar as referring to "the 2001 status of [Strandbags Group's] uses." This conclusion makes it unnecessary to consider whether the Registrar was in fact misled by any implied misrepresentation. It goes without saying that it would have been near to impossible for this allegation to be made out in the absence of the Registrar, who was not called to give evidence. 184 The respondent submitted that the statement of Mr Williams plainly contained the implicit representation that nothing of relevance happened after 1990 or 1991. Equally plainly, it was submitted, that was not correct. The construction of the letter as limited to the events of 1990 or 1991 did not overcome the difficulty, it was submitted, that the letter led the Registrar to the false impression that there were no facts of relevance after 1991. It can be inferred, it was submitted, that the Registrar acted on this basis. 185 The appellants submitted that there was no duty upon CGL to bring to the attention of the Examiner the use by other traders. They emphasised that there was no request for such information in the report of the examiner. 186 I am troubled by the sparseness of the information contained in Mr Williams' statement. The report of the examiner did only refer to "evidence of use of your trade mark". However, that was in the context of distinguishing goods from other traders. As the primary judge found, "Colorado Group also appreciated that it had to provide some information to the Registrar about the use to which the word 'Colorado' had been put by Strandbags Group". (See [38] of the first judgment.) The provision of the information in the form it was provided gave an impression, or was apt to create the assumption, that the four paragraphs about the Colorado Bag Co, dealing with its activity in the early 1990s, amounted to the relevant information about use by others for the purposes of the enquiry. Plainly it was not. It was, however, no more than an impression. The statement gives no clear information as to how long the activity lasted, and where other stores were opened. The information was incomplete, but I do not think that it clearly conveyed that this was all the information about the use made by others. It was not put that the information was put forward with the intention of creating a false impression. There was no request by the examiner for further information about the use by others. In all the circumstances, not without hesitation, I am not prepared to conclude that the acceptance of the application for registration was on the basis of false evidence or false representation. Infringement 187 The primary judge found no infringement other than in respect of backpacks. In coming to this conclusion his Honour rejected the propositions: (1) that handbags, wallets and purses were goods "of the same description" as backpacks for the purposes of s 120(2) of the 1995 Act; (2) that these goods were "closely related" to the service of bringing together backpacks for the benefit of customers; (3) that the service of bringing together handbags, wallets and purses for the benefit of customers was "closely related" to backpacks; (4) that the service referred to in (3) above was a service of the same description as the service referred to in (2) above. 188 The primary judge's reasons for rejecting the proposition in (1) above were at [24]-[26] of the second judgment: I can dispose of the "same description" inquiry fairly swiftly. Whether goods are "of the same description" is a question of fact. According to the authorities, the three principal factors to be considered are: (1) the nature of the goods, including their origin and characteristics; (2) the uses made of the goods, including their intended purposes; and (3) the trade channels through which the goods are bought and sold. It is not essential that all criteria be met. See Re Jellinek's Application for a Trade Mark (1946) 63 RPC 59; John Crowther & Sons (Milnsbridge) Ltd's Application for a Trade Mark (1948) 65 RPC 369; Reckitt & Colman (Australia) Limited v Boden (1945) 70 CLR 84; McCormick & Co Inc v McCormick (2000) 51 IPR 102. The expression "same description" is not to be construed restrictively and regard is to be paid to the business or commercial context in which the goods in question are bought and sold: Rowntree plc v Rollbits Pty Ltd (1988) 10 IPR 539, 546; Australian Wine Importers' Trade Mark (1889) 6 RPC 311, 318. Goods are not of the same description simply because they can be used for the same purpose, for example for personal adornment: Ritz Hotel Ltd v Charles of the RitzLtd (1988) 15 NSWLR 158, 220; Camiceria Pancaldi and B Srl v Le Cravatte Di Pancaldi Srl (1994) 30 IPR 547. I do not think it can be said that handbags, purses and wallets are of the same description as backpacks. Backpacks, especially those in respect of which Colorado Group or its predecessor applied the mark (being school backpacks), are not put to the same use as handbags, wallets or purses. The nature of the products is, to my mind, quite different. Backpacks are highly functional and directed toward comfort, weight-bearing, support and durability while wallets and purses have a predominant fashion purpose. While perhaps not decisive, a person wishing to buy a backpack would not find a handbag, wallet or purse to be an acceptable substitute or alternative: see San Remo Macaroni Company Pty Ltd v San Remo Gourmet CoffeePty Ltd (2000) 50 IPR 321, 330; Canon Kabushiki Kaisha v Brook (1996) 69 FCR 401, 410-411. In any event, a consumer is not likely to think that these goods originate from the same source. That is, I do not accept that either the trade or the public would regard the goods as similar. I do not treat as relevant, as Colorado Group asserted it was, that both it and Strandbags Group sell these goods from the same stores and to the same sorts of customers. The fact that goods may be found in the same shop or in the same department within a department store is more a symptom of modern marketing methods which "tend to unify widely different types of products in the same retail outlets or distribution networks", than any great similarity in the goods: Continental Connector Corp v Continental Specialities Corp, 492 F.Supp 1088, 1096-1097(1979). In my view, correspondence in the channels of trade is no longer a very helpful line of inquiry in relation to many goods, although there may be exceptions. 189 The primary judge's reasons for rejecting the proposition in (2)-(4) above were at [27] of the second judgment: The final question is whether the service of bringing together handbags, wallets and purses for sale is a service "closely related" to backpacks or whether it is "of the same description" as the service of bringing together backpacks for sale. I think these claims are hopeless. I do not understand how it can be said that the service of bringing handbags, wallets and purses together is "closely related" to backpacks. There is no relationship between the two. In my opinion, speaking generally it is only when retailing services consist of supplying the very goods in respect of which it is said the services are related that the services and goods will be closely related: see Warnaco US Inc v Estee Lauder Cosmetics Ltd (2001) 50 IPR 143, K Mart Corporation v Artline Furnishers Supermarkets Pty Ltd (1991) 23 IPR 149. Put another way, I cannot imagine that the public would expect the same business to supply handbags, wallets and purses as well as backpacks: Winglide Pty Ltd v Corporate Express Inc (1999) 46 IPR 627, 630. For much the same reasons, I reject the submissions that the service of bringing together handbags, wallets and purses for the benefit of customers is a service "of the same description" as the service of bringing together backpacks for sale and that handbags, wallets and purses are goods "closely related" to that service. 190 No complaint was made by the appellants about the principles which the primary judge applied to analyse the questions. It is unnecessary to repeat what his Honour said, set out at [188]-[189] above. Even giving somewhat greater weight to the question of channels of trade, I am unable to identify any error in the primary judge's approach beyond what flows from coming to a different conclusion. To a degree, the conclusion about this is one of impression and judgment and due weight should be given to the primary judge's conclusion: Branir 117 FCR at 437-38 [29]. I certainly agree with the primary judge that wallets and purses are not goods of the same description as backpacks. It might be said, however, that a backpack is a species of general bag. I am less convinced that there is no error in relation to bags or handbags, given the more general purpose of such items for carrying things as a backpack. 191 Given my view on s 41, this conclusion is strictly unnecessary, but I tend to think that bags and handbags (but not wallets and purses) are goods of the same description as backpacks. 192 Subject therefore to the operation of s 120(4) of the 1995 Act, if I am wrong about distinctiveness, I would find infringement not only by the use of the word "Colorado" (other than by use of the prior registered trade mark with the Indian head) on backpacks, but also on bags and handbags. Defences 193 The primary judge dealt with a defence under s 122(1)(f) at [29]-[32] of the second judgment. This was an error. The respondent had abandoned this defence. 194 The respondent did however put forward a defence under s 124 of the 1995 Act. Section 124 is in the following terms: (1) A person does not infringe a registered trade mark by using an unregistered trade mark that is substantially identical with, or deceptively similar to, the registered trade mark in relation to: (a) goods similar to goods (registered goods) in respect of which the trade mark is registered; or (b) services closely related to registered goods; or (c) services similar to services (registered services) in respect of which the trade mark is registered; or (d) goods closely related to registered services; if the person, or the person and the person's predecessor in title, have continuously used in the course of trade the unregistered trade mark in relation to those goods or services from a time before: (e) the date of registration of the registered trade mark; or (f) the registered owner of the registered trade mark, or a predecessor in title, or a person who was a registered user of the trade mark under the repealed Act, first used the trade mark; whichever is earlier. (2) If the unregistered trade mark has continuously been used only in a particular area of Australia, subsection (1) applies only to the use of the trade mark by the person in that area. 195 The primary judge did not deal with s 124. His Honour perhaps did not need to. Given his views on "goods of the same description" for s 120(2) and that he found infringement in respect of backpacks only, the ability of the respondent to prove the matters in s 124(1)(f) was problematical. 196 There was no debate but that the respondent had used the mark substantially identical with or deceptively similar to the word "Colorado" in respect of backpacks, bags and handbags and that these were "similar goods" for s 14 of the 1995 Act and the expression "goods similar to goods in respect of which the trade mark is registered" for s 124(1)(a). 197 There were a number of questions debated in respect of s 124. The first question is whether the respondent and Edgarlodge (which was agreed to be its predecessor in title for s 124(1)), continuously used in the course of trade the unregistered mark (that is substantially identical to or deceptively similar to the registered mark) in relation to those similar goods from the relevant date. 198 The second question concerned the relevant date in s 124(1)(f) and whether the first use of the trade mark by WtS P/L on backpacks in 1982 marks the relevant date for bags and handbags, as well as for backpacks. 199 The third question concerned the effect on s 124(1) of s 124(2) and whether the continuous use has to be shown sufficiently widely over Australia to invoke the operation of s 124(1), even before s 124(2) is engaged. 200 The fourth question was as to the engagement of s 124(2) and the extent of the responsibilities of the parties to the litigation to plead and prove the matters there contained. 201 It is convenient to deal with the second of these questions first, because if the relevant date is 1982, not only for backpacks but also for bags and handbags, the attempted invocation of s 124 fails in limine. The question then is, is the use of s 124(1) excluded in respect of infringement on bags and handbags, when it is agreed that Edgarlodge was the first to use the mark (the word "Colorado" alone) on bags and handbags, but not backpacks? The question did not arise in Mr Ryan's written submissions. In those submissions, he approached the issue on the basis that one looked to s 124(1)(f) in relation to bags and handbags separately or differentially from backpacks. In oral address he refined the argument to take this point. 202 Section 124 uses the definition in s 14. "Similar goods" from s 14 are two kinds of goods – goods that are the same, and goods that are of the same description. Section 124 uses this combined definition to provide a defence to both ss 120(1) and (2). If, as here, the registered proprietor first used the mark on the goods, and the unregistered user first used the mark on other goods which are of the same description (but not sufficiently identical to be considered the same goods covered by the ownership of the mark), and s 124 is otherwise satisfied, one would have thought that there is reason to think that the defence would apply to the infringement by the use of the mark on goods of the same description, but not the same goods. Another construction (and one put by Mr Ryan in oral address) would be that the putative infringer must use the mark on the same goods or goods of the same description before any use of the mark by the registered owner or its predecessor. 203 These two alternatives raise some difficulties. Use by the putative infringer of the mark on the same goods would, one would have thought, enable it to challenge the ownership of the registered proprietor to the mark. Putting that complexity to one side, if "first used" in s 124(1)(f) relates to any first use and if s 124(1) is to be read by reference to similar goods (through s 14) as a composite whole, then any first use by the putative infringer (even on goods that are only of the same description) will protect it in relation to all use after the proprietor's first (and later) use on the goods for which the mark is held. Thus, here, if it be the case that Edgarlodge must show (which it cannot) use before 1982 on goods of the same description, it cannot invoke s 124(1) in this case. This construction, however, would mean that if Edgarlodge could show some use on handbags (being goods not the same as backpacks, but goods of the same description) before 1982, that would protect it from infringement on goods, not only of the same description as backpacks, but also the same goods, backpacks, themselves. 204 I prefer Mr Ryan's considered first impressions in his written submissions. The sensible construction of s 124(1)(f) is to assess the first use of the registered proprietor by reference to the "same goods" and "goods of the same description", they being the separate components of "similar goods" or "goods similar". Thus, if someone has been using the mark before the proprietor on goods (though not the same goods) of the same description as those for which registration is obtained, s 124(1) is available to that person, even if the proprietor was the first to use the mark on the goods themselves for which registration is obtained. 205 I should add that not only are these views obiter, they have been reached in the absence of detailed argument by counsel on the history and context of s 124, including its relationship with other provisions of the 1995 Act. I only express the view such that the approach that I would take is clear should I be wrong on distinctiveness and on the successful fate of the cross-claim. 206 I turn then to the third question. In his written submissions, Mr Ryan submitted: As to defences, section 124 would apply if his Honour was correct in holding that bags, wallets and purses should be removed from the scope of registration of the mark in suit but infringement is nevertheless found on the basis that such goods are goods of the same description as backpacks. However, even then, as the Appellants submitted at trial, s. 124(2) would confine the operation of the defence to Queensland, Tweed Heads and Wagga Wagga. There was an attempt in oral argument to propound a construction of s 124(1) that the effect of s 124(2) was to require proof of continuous use of the mark over all of Australia, and to disengage different uses in different parts of Australia and require them to be looked at individually. I think that is an unreal and overly complicated way of looking at s 124. If there has been use by the parties identified that can be said to be "continuous", that is sufficient unless someone wishes to invoke the limitation on the defence in s 124(2). That deals with the third question. 207 As to the first question, there was no real attempt to argue that there had not been continuous use. There was some evidence of Mr McNabb about the change of stock. His evidence was that by about March 1999, the respondent had sold all of the stock acquired from Edgarlodge of handbags, backpacks, travelgoods and business goods, including satchels. Designing replacements had already begun. These became available in the stores in June 1999. From early 1999 until mid-1999, there was communication between the respondent and manufacturing agents about the new proposed use of the word on handbags and bags and other goods. No detailed analysis of this evidence was undertaken and no assertion was put that there had been any sufficient break in the relevant trade mark use such that the respondent had not satisfied s 124(1). 208 I turn then to the fourth question concerning s 124(2). The defence to the Second Further Amended Statement of Claim at [9] pleaded the use by Edgarlodge and itself from at least 1992 to fall within, so it was pleaded, s 124 of the 1995 Act. There was no fresh reply filed. The earlier reply merely joined issue with the defence. There was no pleading by the applicant of s 124(2). 209 Whether by pleading of s 124(2) or by some sufficient step to raise the issue, it was for the applicant to place reliance on s 124(2). If the hearing had been conducted on the basis that "use" (that is use as a trade mark) had only occurred in a particular area, the parties would then have been in a position to address the issue. There was, it was true, no debate about where the various shops of Edgarlodge were (Queensland, Tweed Heads, Liverpool and Wagga Wagga). There was otherwise no investigation of the width of any "use" beyond the location of those shops. There were also, however, the "Bagstop" and "Travel Bug" stores. The use by the respondent from 1999 was Australia-wide. It was, it seems to me, for the appellants (applicants at the trial) to raise this issue. 210 The appellants submitted that at the trial they raised this geographical limitation, not only for the purposes of s 124(2), but also for the purposes of the scope of injunctive relief. At [54] of his first judgment the primary judge said: For the sake of completeness I should mention that Colorado Group did not in the action pursue a claim that Strandbags Group should be restricted in the use of its "Colorado" mark to a particular geographic area (for example, Queensland) or to particular kinds of goods (say, handbags). There are many cases where a party using a mark has been restrained from extending its use in a way that will encroach upon the established reputation of a competitor either in a particular geographical area or in a particular line of business. I mention this not to suggest that the pursuit of such a claim could have provided the applicants with some relief, but simply to show that the point has not been overlooked. 211 Mr Ryan submitted that he had pursued a claim for a geographical limitation to the orders and to the application of s 124(2). He first pointed to his opening submissions, where he said to the primary judge: Your Honour, what Strandbags did from September 1988 was to liquidate all stock on hand bearing the Colorado mark and then towards the end of the next year in 1998 recommenced use of the Colorado mark on their product, but with this important difference to what had happened previously: Strandbags is a very large organisation with hundreds of stores Australia-wide and what Strandbags did, which Mr Evans hadn't done previously, was then to sell Colorado brand of products Australia-wide and thereby bring itself into direct conflict with my client. As well, from about 2004 up until the time of issue of this application, they substantially increased their volume of sales. Your Honour, the direct result of that has been that consumers buy Colorado products from Strandbags and when they fall apart they send them back to us and we will be calling to give evidence a number of consumers who have had that problem, they've bought something from Strandbags, the zip has broken or whatever it might be and they come complaining to us. He then pointed to his oral address before the primary judge on 22 July 2005: Your Honour, we say that must have been the position when Edgar Lodge [sic] started its trading activities in 1991-1992. As my friend has said this morning, we agree that one must look at the conduct complained of at the time of its commencement. If they are Edgar Lodge's [sic] successor in title, one looks at the conduct complained of at the time Edgar Lodge [sic] engaged in that conduct. But my friend elides over the second relevant date, which is 1999-2000. It's not as if they just took over Edgar Lodge's [sic] business and happily carried on, as Mr Evans was in Queensland and Wagga Wagga. The point, as we have made numerous times before, is that in 1999-2000, Strandbags, being the new purchaser of the business, then started selling Colorado brand bags and wallets all over Australia, at 200 outlets. So even if they had an answer in Queensland and maybe Wagga, on the basis that people in those places had some prior experience of Colorado Bag Co and there weren't confused as to the source of bags bearing the mark Colorado, that could never be said of consumers in Melbourne, for example. So our position is it was passing off in 1991-1992, but even more obviously so in 1999-2000 and thereafter. In his written submissions to the primary judge Mr Ryan said: Consumers are well aware of the brand Colorado by reason, inter alia, of their knowledge of the footwear sold by the Applicants under the mark and, because of that awareness, they think that wallets and bags bearing the mark also come from the Applicants. That must have been the position as well in mid-1991/1992 when Edgarlodge commenced its activities in Queensland, and it must have been the position, a fortiori, in 1999/2000 when the Respondent moved the brand Australia-wide. 212 No pleading of s 124(2) was made. No claim for injunctive relief based on passing off and the Trade Practices Act was made other than general relief undifferentiated by geography in Australia. 213 The issues as to "use" for s 124(2) may, perhaps, be different from the issues that might arise as to reputation based on commercial activity in a particular region. At least in respect of the latter, questions as to travel from people outside the particular areas to those areas, scope of advertising and extent of reputation would arise. These were not investigated. Mr Catterns QC, who appeared at the trial and on the appeal for the respondent, said that they did not arise because they were not an issue and if it had been there may well have been further evidence. I accept that submission. If a geographical limitation on use (for s 124(2)), reputation or deception (for the scope of the injunctive relief) is to be part of the resolution of the controversy, it should be raised by the party relying on it. That is the function of pleadings, particulars and case management. There was no clarity about these issues from the applicant. The case may have been conducted differently. The Court on appeal should not entertain the issue. I refer to what I said in this context in Branir 117 FCR at 439-40 at [38] and especially the second and third considerations there referred to. 214 In my view, if one gets to infringement on bags and handbags under s 120(2), s 124 provides a defence to the respondent. Passing off 215 I do not repeat what I have said above about the geographical reach of an injunction to an area less than that claimed: the whole of Australia. 216 The parties were agreed that the primary judge was in error in directing himself to 1998 and not 1991, when Edgarlodge began using the word "Colorado". I therefore approach the matter on this basis. 217 Before Edgarlodge began using the word and word and device, the use by the appellants had been, principally, of the word with device on shoes and backpacks. Whilst I am prepared to find that a use of the word alone was made in 1982, the evidence was that the overwhelming use was with the devices employed. 218 Edgarlodge used an Indian head device and also the word in combination and the word alone. It used it in respect of bags, wallets and purses. 219 I am not prepared to conclude that this was likely to mislead the public in 1991. There may or may not have been confusion, but there is an inadequate foundation to conclude passing off in 1991. I take comfort in this respect (but draw no further assistance than that) from the failure of the appellants even to challenge the conduct of Edgarlodge until 1998. 220 After Edgarlodge began to sell in the field of handbags, wallets and purses, the appellants dramatically expanded their participation using themed shops. To a degree no doubt some confusion was caused; but if it was caused it can be seen as the development of the appellants' business outside shoes and backpacks and into the field in which Edgarlodge was engaged – themed stores, bags, wallets and purses. 221 To the extent that the submissions of the appellants then sought to complain about 1998, I think that the primary judge's reasoning at [52] and [53] of the first judgment are amply supported by the evidence: Now, coming back to September 1998, the position was this. At that time both Colorado Group and Strandbags Group had a reputation in the name Colorado. I rather think that if one were to go back to the 1980s when Williams the Shoemen's use of the name was confined to backpacks and shoes it and Edgarlodge occupied different fields of trade and it is unlikely, except for those consumers who were careless, that confusion would arise. By the time the companies' fields of activity began to overlap (that is when Colorado Group was opening its Colorado stores and Edgarlodge was operating its Colorado Bag Co stores) there was the potential for confusion. In the early years the different locations in which the parties operated would suggest that any confusion would not be substantial. Moreover, the fact that Colorado Group's combination mark (word and mountain logo) was different from Edgarlodge's combination mark (word with Indian head) would also minimise the possibility of confusion. Whatever be the position in the years leading up to 1998, from the time Strandbags Group purchased the Edgarlodge business both it and Colorado Group had a strong reputation in the Colorado brand. I think this finding must put an end to the passing off claim. In a trade mark case General Electric Co of USA v General Electric Co Ltd [1972] 1 WLR 729, 743, Lord Diplock said: "In cases of honest concurrent user [and Strandbags Group's use is concurrent], neither of the owners of [a common law trade mark] could restrict the other from using it, but as against a usurper who infringed it either owner of the mark could obtain an injunction". In a passing off case when two traders have a reputation in the same or similar names that are concurrently being used "neither of them can be said to be guilty of any misrepresentation. Each represents nothing but the truth, that a particular name or mark is associated with his goods or business": Habib Bank Ltd v Habib Bank AG Zurich [1981] 1 WLR 1265, 1275 per Oliver LJ. If in such circumstances there might be confusion that is just "one of the misfortunes which occur in life", but it is not actionable as a passing off: Marengo v Daily Sketch and Daily Graphic Ltd [1992] FCR 1, 2. 222 I should add that some members of the public were called to prove deception. This evidence is all consistent with the proposition discussed by the primary judge in [53] of his first judgment. Trade Practices Act claims 223 The appellants did not direct submissions to the Trade Practices Act claims different to passing off. Court's power and s 88 224 The Court raised with the parties its authority to act under s 88 of the 1995 Act to order the Register to be rectified if the Court were of the view that the mark was not distinctive for the purposes of s 41. The respondent filed submissions to the effect that the Court has authority under s 88. No issue was taken by the appellants in respect of that approach. The respondent submitted that the proper question before the primary judge (and so before this Court on appeal) is whether the Court is satisfied that the respondent (cross-claimant) had established on the balance of probabilities that the mark was not capable of distinguishing "Colorado's" goods or services from the goods or services of other persons having regard to the matters in s 41(3)-(5). 225 Various cases were referred to by the respondent cross claimant in its submissions: Unilever Australia Limited v Karounos (2001) 113 FCR 322 in particular [31], Unilever Australia Limited v Société des produits Nestle SA [2006] FCA 782, MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 42 IPR 561, TGI Friday's Australia Pty Ltd v TGI Friday's Inc (2000) 48 IPR 513 at [39] and Blount v Registrar of Trade Marks (1998) 40 IPR 498 at 502-509. 226 In TGI Fridays' case the Full Court said the following at [39]: The grounds for rejection of an application therefore include the grounds for rejection of an application therefore include the ground in s 41 dealing with a trademark that is not capable of distinguishing an applicant's services from the services of other persons. Accordingly, lack of distinctiveness is a ground for cancellation under s 88. 227 In the light of these authorities and in the light of the approach of the parties it is unnecessary to deal with the matter beyond stating the position that the Court has held to date that lack of distinctiveness is, as the parties submit, a ground for rectification under s 88 of the 1995 Act. Slip as to belts 228 The parties were agreed that the orders made on 7 July 2006 should not have dealt with belts on the registration. Orders 229 I would order that the parties bring in orders conformable with these reasons. Those orders should deal with the following: 1. the dismissal of the appeal; 2. the allowing the cross appeal; 3. the setting aside the declarations 1 and 2 and orders 3, 4, 5, 8, 11 and 12 of the orders of the primary judge made on 7 July 2006; 4. the amending order 6 of the orders of the primary judge made on 7 July 2006 to delete reference to belts and to add a reference to backpacks; 5. the ordering that the appellants pay the costs of the appeal and of the hearing below. I certify that the preceding one hundred and eighty-six (186) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop. Associate: Dated: 28 November 2007 Counsel for the Appellant: Mr A J Ryan Solicitor for the Appellant: Deacons Counsel for the Respondent: Mr D K Catterns QC with Mr A J Maryniak Solicitor for the Respondent: Johnson, Winter & Slattery Date of Hearing: 5 & 6 March 2007 Date of Judgment: 28 November 2007	39,169
federal_court_of_australia:fca/single/2023/2023fca1317	decision	commonwealth	federal_court_of_australia	text/html	2023-11-02 00:00:00	Ross on behalf of the Cape York United #1 Claim Group v State of Queensland (No 22) (Wik and Wik Way independent parcels determination) [2023] FCA 1317	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2023/2023fca1317	2024-09-13T22:45:23.328557+10:00	FEDERAL COURT OF AUSTRALIA Ross on behalf of the Cape York United #1 Claim Group v State of Queensland (No 22) (Wik and Wik Way independent parcels determination) [2023] FCA 1317 File number: QUD 673 of 2014 Judgment of: MORTIMER CJ Date of judgment: 2 November 2023 Catchwords: NATIVE TITLE – consent determination – nomination of new prescribed body corporate Legislation: Native Title Act 1993 (Cth) ss 56, 61, 66, 67(1), 84D(4), 87A, 94A, 199C, 225 Cases cited: Drury on behalf of the Nanda People v State of Western Australia [2018] FCA 1849 Ross on behalf of the Cape York United #1 Claim Group v State of Queensland (No 2) (Kuuku Ya'u determination) [2021] FCA 1464 Ross on behalf of the Cape York United #1 Claim Group v State of Queensland (No 3) (Uutaalnganu (Night Island) determination) [2021] FCA 1465 Ross on behalf of the Cape York United #1 Claim Group v State of Queensland (No 10) [2022] FCA 1129 Taylor on behalf of the Yamatji Nation Claim v State of Western Australia [2020] FCA 42 Wik Peoples v State of Queensland [2000] FCA 1443 Division: General Division Registry: Queensland National Practice Area: Native Title Number of paragraphs: 41 Date of hearing: 2 November 2023 Counsel for the Applicant: Mr D O'Gorman SC with Mr D M Yarrow Solicitor for the Applicant: Cape York Land Council Aboriginal Corporation Counsel for the First Respondent: Ms E Longbottom KC with Ms A Tarrago Solicitor for the First Respondent: Crown Law Queensland ORDERS QUD 673 of 2014 BETWEEN: MICHAEL ROSS, SILVA BLANCO, JAMES CREEK, JONATHAN KORKAKTAIN, REGINALD WILLIAMS, WAYNE BUTCHER, CLARRY FLINDERS, PHILIP PORT, HS (DECEASED) Applicant AND: STATE OF QUEENSLAND First Respondent COMMONWEALTH OF AUSTRALIA (and others named in the Schedule) Second Respondent order made by: MORTIMER CJ DATE OF ORDER: 2 November 2023 BEING SATISFIED THAT AN ORDER IN THE TERMS SET OUT BELOW IS WITHIN THE POWER OF THE COURT, AND IT APPEARING APPROPRIATE TO THE COURT TO DO SO, PURSUANT TO S 87A OF THE NATIVE TITLE ACT 1993 (CTH) THE COURT NOTES THAT: A. A determination of native title was made in favour of the Wik and Wik Way Peoples on 3 October 2000 (Wik Peoples v Queensland [2000] FCA 1443) (the WWY 2000 Determination) in relation to an area of land and waters along the western coastline of Cape York Peninsula, generally from around Archer Bay, in the north, to Christmas Creek, in the south, including around the township of Aurukun, plus an additional area inland from that coastline including part of Watson River. B. Schedule 1 of the WWY 2000 Determination expressly excluded: (i) the land and waters in around the town of Aurukun; and (ii) the land and waters within the area covered by a corridor 15 metres either side of the centre line of the present alignment of the existing road which connects the town of Aurukun to the Peninsula Developmental Road, (the WWY Identified Parcels). C. The WWY Identified Parcels are wholly surrounded by the WWY 2000 Determination. D. The Native Title Determination Application was filed on 11 December 2014 and includes all undetermined areas (save for some specified types of tenure which were excluded) within the external boundaries of the Cape York Representative Aboriginal/Torres Strait Islander Body Area. E. This Determination relates to those areas identified in recital B(i) above, being the WWY Identified Parcels, which were expressly excluded from the WWY 2000 Determination, and which may be claimed as part of the Native Title Determination Application. In relation to the area described above in recital B(ii), the Native Title Determination Application excludes any area over which there was an existing dedicated public road which wholly extinguished native title rights and interests. F. The Applicant agrees that any areas which fall within the terms of Schedule 3 of this Determination are areas where native title has been wholly extinguished. THE COURT ORDERS THAT: 1. There be a determination of native title in the terms proposed in these orders, despite any actual or arguable defect in the authorisation of the applicant to seek and agree to a consent determination pursuant to s 87A of the Native Title Act 1993 (Cth). BY CONSENT THE COURT ORDERS THAT: 1. There be a determination of native title in the terms set out below (the Determination). 2. Pursuant to s 199C(1A) of the Native Title Act 1993 (Cth), the Registrar is not to remove the Aurukun Township and Access Road Agreement ILUA (QI2001/026) from the Register of Indigenous Land Use Agreements, at least to the extent the ILUA falls within the Determination Area. 3. Each party to the proceedings is to bear its own costs. BY CONSENT THE COURT DETERMINES THAT: DEFINITIONS AND INTERPRETATION 4. In this Determination, unless the contrary intention appears: "Animal" has the meaning given in the Nature Conservation Act 1992 (Qld); "High Water Mark" means the ordinary high-water mark at spring tides; "land" has the same meaning as in the Native Title Act 1993 (Cth); "Laws of the State and the Commonwealth" means the common law and the laws of the State of Queensland and the Commonwealth of Australia, and includes legislation, regulations, statutory instruments, local planning instruments and local laws; "Local Government Area" has the meaning given in the Local Government Act 2009 (Qld); "Native Title Determination Application" means the Cape York United #1 native title claim filed on 11 December 2014 in QUD 673 of 2014; "Natural Resources" means: (a) an Animal, a Plant, or any other non-human life form; and (b) inorganic material; but does not include: (c) Animals that are the private personal property of any person; (d) crops that are the private personal property of another; (e) minerals as defined in the Mineral Resources Act 1989 (Qld); and (f) petroleum as defined in the Petroleum Act 1923 (Qld) and the Petroleum and Gas (Production and Safety) Act 2004 (Qld); "Plant" has the meaning given in the Nature Conservation Act 1992 (Qld); "Register of Indigenous Land Use Agreements" has the same meaning as in the Native Title Act 1993 (Cth); "Reserve" means a reserve dedicated or taken to be a reserve, under Land Act 1994 (Qld); "Spouse" has the meaning given in the Acts Interpretation Act 1954 (Qld); "Water" means: (a) water which flows, whether permanently or intermittently, within a river, creek or stream; (b) any natural collection of water, whether permanent or intermittent; (c) water from an underground water source; and (d) tidal water; and "waters" has the same meaning as in the Native Title Act 1993 (Cth). Other words and expressions used in this Determination have the same meanings as they have in Part 15 of the Native Title Act 1993 (Cth). 5. The determination area is the land and waters described in Schedule 2 and depicted in the map attached to Schedule 4 to the extent those areas are not otherwise excluded by the terms of Schedule 3 (the Determination Area). To the extent of any inconsistency between the written description and the map, the written description prevails. 6. Native title exists in the Determination Area. 7. The native title is held by the persons determined to hold the native title in the surrounding WWY 2000 Determination, being the Wik and Wik Way Peoples (the Native Title Holders). 8. Subject to orders 10, 11 and 12 below, the nature and extent of the native title rights and interests in relation to the land and waters described in Part 1 of Schedule 2 are: (a) other than in relation to Water, the right to possession, occupation, use and enjoyment of the area to the exclusion of all others; and (b) in relation to Water, the non-exclusive right to take the Water of the area for personal, domestic and non-commercial communal purposes. 9. Subject to orders 10, 11 and 12 below, the nature and extent of the native title rights and interests in relation to the land and waters described in Part 2 of Schedule 2 are the non-exclusive rights to: (a) access, be present on, move about on and travel over the area; (b) live and camp on the area and for those purposes to erect shelters and other structures thereon; (c) hunt, fish and gather on the land and waters of the area; (d) take the Natural Resources from the land and waters of the area; (e) take the Water of the area for personal, domestic and non-commercial communal purposes; (f) be buried and to bury Native Title Holders within the area; (g) maintain places of importance and areas of significance to the Native Title Holders under their traditional laws and customs on the area and protect those places and areas from harm; (h) teach on the area the physical and spiritual attributes of the area and the traditional laws and customs of the Native Title Holders to other Native Title Holders or persons otherwise entitled to access the area; (i) hold meetings on the area; (j) conduct ceremonies on the area; (k) light fires on the area for cultural, spiritual or domestic purposes including cooking, but not for the purpose of hunting or clearing vegetation; and (l) be accompanied on to the area by those persons who, though not Native Title Holders, are: (i) Spouses of Native Title Holders; (ii) people who are members of the immediate family of a Spouse of a Native Title Holder; or (iii) people reasonably required by the Native Title Holders under traditional law and custom for the performance of ceremonies or cultural activities on the area. 10. The native title rights and interests are subject to and exercisable in accordance with: (a) the Laws of the State and the Commonwealth; and (b) the traditional laws acknowledged and traditional customs observed by the Native Title Holders. 11. The native title rights and interests referred to in orders 8(b) and 9 do not confer possession, occupation, use or enjoyment to the exclusion of all others. 12. There are no native title rights in or in relation to minerals as defined by the Mineral Resources Act 1989 (Qld) and petroleum as defined by the Petroleum Act 1923 (Qld) and the Petroleum and Gas (Production and Safety) Act 2004 (Qld). 13. The nature and extent of any other interests in relation to the Determination Area (or respective parts thereof) are set out in Schedule 1 (the Other Interests). 14. The relationship between the native title rights and interests described in orders 8 and 9 and the Other Interests described in Schedule 1 is that: (a) the Other Interests continue to have effect, and the rights conferred by or held under the Other Interests may be exercised notwithstanding the existence of the native title rights and interests; (b) to the extent the Other Interests are inconsistent with the continued existence, enjoyment or exercise of the native title rights and interests in relation to the land and waters of the Determination Area, the native title rights and interests continue to exist in their entirety but the native title rights and interests have no effect in relation to the Other Interests to the extent of the inconsistency for so long as the Other Interests exist; and (c) the Other Interests and any activity that is required or permitted by or under, and done in accordance with, the Other Interests, or any activity that is associated with or incidental to such an activity, prevail over the native title rights and interests and any exercise of the native title rights and interests. THE COURT DETERMINES THAT: 15. The native title is not held in trust. 16. The Ngan Aak-Kunch Aboriginal Corporation RNTBC (ICN: 4097), incorporated under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth), is to: (a) be the prescribed body corporate for the purpose of s 57(2) of the Native Title Act 1993 (Cth); and (b) perform the functions mentioned in s 57(3) of the Native Title Act 1993 (Cth) after becoming a registered native title body corporate. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. LIST OF SCHEDULES Schedule 1 – Other Interests in the Determination Area viii Schedule 2 – Description of Determination Area xii Part 1 — Exclusive Areas xii Part 2 — Non-Exclusive Areas xxxiv Schedule 3 – Areas Not Forming Part of the Determination Area xxxv Schedule 4 – Map of Determination Area xxxvii Schedule 1 – Other Interests in the Determination Area The nature and extent of the other interests in relation to the Determination Area are the following as they exist as at the date of the Determination: 1. The rights and interests of the parties under the Aurukun Township and Access Road Agreement (QI2001/026) registered on the Register of Indigenous Land Use Agreements on 18 March 2003. 2. The rights and interests of Telstra Corporation Limited (ACN 051 775 556), Amplitel Pty Ltd as trustee of the Towers Business Operating Trust (ABN 75 357 171 746) and any of their successors in title: (a) as the owner(s) or operator(s) of telecommunications facilities within the Determination Area; (b) created pursuant to the Post and Telegraph Act 1901 (Cth), the Telecommunications Act 1975 (Cth), the Australian Telecommunications Corporation Act 1989 (Cth), the Telecommunications Act 1991 (Cth) and the Telecommunications Act 1997 (Cth), including rights: (i) to inspect land; (ii) to install, occupy and operate telecommunication facilities; and (iii) to alter, remove, replace, maintain, repair and ensure the proper functioning of their telecommunications facilities; (c) for their employees, agents or contractors to access their telecommunication facilities in and in the vicinity of the Determination Area in the performance of their duties; and (d) under any lease, licence, access agreement, permit or easement relating to their telecommunications facilities in the Determination Area, including but not limited to trustee lease number 719487629 (title reference 51030548) over Lot 324 on SP267943. 3. The rights and interests granted or available to RTA Weipa Pty Ltd (ACN 137 266 285) (and any successors in title) under the Comalco Agreement, including, but not limited to, rights and interests in relation to the "bauxite field" (as defined in clause 1 of the Comalco Agreement) and areas adjacent to or in the vicinity or outside of such bauxite field, where: (a) "Comalco Act" means the Commonwealth Aluminium Corporation Pty Limited Agreement Act 1957 (Qld); and (b) "Comalco Agreement" means the agreement in Schedule 1 to the Comalco Act, including as amended in accordance with such Act. 4. The rights and interests of Aurukun Shire Council: (a) under its local government jurisdiction and functions under the Local Government Act 2009 (Qld), under the Stock Route Management Act 2002 (Qld) and under any other legislation, for that part of the Determination Area within the area declared to be its Local Government Area: (b) as the: (i) lessor under any leases which were validly entered into before the date on which these orders are made and whether separately particularised in these orders or not; (ii) grantor of any licences or other rights and interests which were validly granted before the date on which these orders were made and whether separately particularised in these orders or not; (iii) party to an agreement with a third party which relates to land or waters in the Determination Area; and (iv) holder of any estate or any other interest in land, including as trustee of any Reserves, under access agreements and easements that exist in the Determination Area; (c) as the owner and operator of infrastructure, structures, earthworks, access works and any other facilities and other improvements located in the Determination Area validly constructed or established on or before the date on which these orders are made, including but not limited to any: (i) undedicated but constructed roads except for those not operated by the council; (ii) water pipelines and water supply infrastructure; (iii) drainage facilities; (iv) watering point facilities; (v) recreational facilities; (vi) transport facilities; (vii) gravel pits operated by the council; (viii) cemetery and cemetery related facilities; and (ix) community facilities; (d) to enter the land for the purposes described in paragraphs 4(a), (b) and (c) above by its employees, agents or contractors to: (i) exercise any of the rights and interests referred to in this paragraph 4 and paragraph 6 below; (ii) use, operate, inspect, maintain, replace, restore and repair the infrastructure, facilities and other improvements referred to in paragraph 4(c) above; and (iii) undertake operational activities in its capacity as a local government such as feral animal control, erosion control, waste management and fire management. 5. The rights and interests of Ergon Energy Corporation Limited (ACN 087 646 062): (a) as the owner and operator of any "Works" (as that term is defined in the Electricity Act 1994 (Qld)) within the Determination Area; (b) as an electricity entity under the Electricity Act 1994 (Qld), including but not limited to: (i) as the holder of a distribution authority; (ii) to inspect, maintain and manage any Works in the Determination Area; and (iii) in relation to any agreement or consent relating to the Determination Area existing or entered into before the date these orders are made; (c) to enter the Determination Area by its employees, agents or contractors to exercise any of the rights and interests referred to in this clause. 6. The rights and interests of the State of Queensland and Aurukun Shire Council to access, use, operate, maintain and control the dedicated roads in the Determination Area and the rights and interests of the public to use and access the roads. 7. The rights and interests of the State of Queensland or any other person existing by reason of the force and operation of the laws of the State of Queensland, including those existing by reason of the following legislation or any regulation, statutory instrument, declaration, plan, authority, permit, lease or licence made, granted, issued or entered into under that legislation: (a) the Aboriginal Land Act 1991 (Qld); (b) the Fisheries Act 1994 (Qld); (c) the Land Act 1994 (Qld); (d) the Nature Conservation Act 1992 (Qld); (e) the Forestry Act 1959 (Qld); (f) the Water Act 2000 (Qld); (g) the Petroleum Act 1923 (Qld) or Petroleum and Gas (Production and Safety) Act 2004 (Qld); (h) the Mineral Resources Act 1989 (Qld); (i) the Planning Act 2016 (Qld); (j) the Transport Infrastructure Act 1994 (Qld); and (k) the Fire and Emergency Services Act 1990 (Qld) or Ambulance Service Act 1991 (Qld). 8. The rights and interests of members of the public arising under the common law, including but not limited to the following: (a) any subsisting public right to fish; and (b) the public right to navigate. 9. So far as confirmed pursuant to s 212(2) of the Native Title Act 1993 (Cth) and s 18 of the Native Title (Queensland) Act 1993 (Qld) as at the date of this Determination, any existing rights of the public to access and enjoy the following places in the Determination Area: (a) waterways; (b) beds and banks or foreshores of waterways; (c) coastal waters; (d) stock routes; (e) beaches; and (f) areas that were public places at the end of 31 December 1993. 10. Any other rights and interests: (a) held by the State of Queensland or Commonwealth of Australia; or (b) existing by reason of the force and operation of the Laws of the State and the Commonwealth. Schedule 2 – Description of Determination Area The determination area comprises all of the land and waters described by lots on plan, or relevant parts thereof described in the first column of the tables in the Parts immediately below, and depicted in the maps in Schedule 4, to the extent those areas are above the High Water Mark and are not otherwise excluded by the terms of Schedule 3. Part 1 — Exclusive Areas All of the land and waters described in the following table and depicted in dark blue on the Determination map contained in Schedule 4: Area description (at the time of the Determination) Determination Map Sheet Reference Note Lot 36 on SP276438 Sheet 2 * Lot 37 on SP239441 Sheet 2 * Lot 266 on SP267943 Sheets 2, 3, 6, and 10 * Lot 42 on SP288980 Sheets 2, 3, 4, 5, 6, and 9 * Lot 33 on SP276438 Sheet 2 * Lot 32 on SP276438 Sheet 2 * Lot 35 on SP239441 Sheet 2 * Lot 34 on SP276438 Sheet 2 * Lot 900 on SP288978 Sheets 2, 10, 11, and 13 * Lot 34 on SP239441 Sheet 2 * Lot 41 on SP239441 Sheet 2 * Lot 33 on SP239441 Sheet 2 * Lot 293 on SP276451 Sheets 2, 9, 12,13, and 14 * Lot 1 on SP267943 Sheet 3 * Lot 2 on SP267943 Sheet 3 * Lot 3 on SP267943 Sheet 3 * Lot 4 on SP267943 Sheet 3 * Lot 5 on SP267943 Sheet 3 * Lot 6 on SP267943 Sheet 3 * Lot 7 on SP267943 Sheet 3 * Lot 8 on SP267943 Sheet 3 * Lot 9 on SP267943 Sheet 3 * Lot 10 on SP267943 Sheet 3 * Lot 11 on SP267943 Sheet 3 * Lot 12 on SP267943 Sheet 3 * Lot 13 on SP267943 Sheet 3 * Lot 14 on SP267943 Sheet 3 * Lot 15 on SP267943 Sheet 3 * Lot 16 on SP267943 Sheet 3 * Lot 46 on SP239441 Sheet 3 * Lot 17 on SP267943 Sheet 3 * Lot 18 on SP267943 Sheet 3 * Lot 364 on SP287215 Sheet 3 * Lot 363 on SP287215 Sheet 3 * Lot 19 on SP267943 Sheet 3 * Lot 359 on SP276452 Sheet 3 * Lot 358 on SP276452 Sheets 3 and 4 * Lot 360 on SP276452 Sheets 3, 4 and 5 * Lot 20 on SP267943 Sheets 3 and 4 * Lot 361 on SP287215 Sheets 3 and 4 * Lot 21 on SP267943 Sheets 3 and 4 * Lot 22 on SP267943 Sheets 3 and 4 * Lot 362 on SP287215 Sheet 3 * Lot 365 on SP287215 Sheet 3 * Lot 23 on SP267943 Sheets 3 and 4 * Lot 24 on SP267943 Sheets 3 and 4 * Lot 25 on SP267943 Sheets 3 and 4 * Lot 26 on SP267943 Sheet 4 * Lot 27 on SP267943 Sheet 4 * Lot 28 on SP267943 Sheet 4 * Lot 29 on SP267943 Sheet 4 * Lot 30 on SP267943 Sheet 4 * Lot 31 on SP267943 Sheet 4 * Lot 32 on SP267943 Sheet 4 * Lot 33 on SP267943 Sheet 4 * Lot 34 on SP267943 Sheet 4 * Lot 45 on SP239441 Sheet 4 * Lot 357 on SP276452 Sheet 4 * Lot 356 on SP276452 Sheet 4 * Lot 351 on SP288980 Sheets 4 and 5 * Lot 350 on SP288980 Sheets 4 and 5 * An area of road identified and delineated by stations 8-7-6-13-8 on SP288980 formerly part of Lot 38 on SP239441 Sheet 4 * An area of road identified and delineated by stations 2-4-7-2a-14-13-2 on SP276438 Sheet 2 * An area of road identified and delineated by stations 331-332-333-334-335-336-331 on SP267943 Sheet 4 * Lot 37 on SP267943 Sheet 5 * Lot 38 on SP267943 Sheet 5 * Lot 249 on SP267943 Sheets 5 and 8 * Lot 248 on SP267943 Sheet 5 * Lot 36 on SP267943 Sheet 5 * Lot 39 on SP267943 Sheet 5 * Lot 40 on SP267943 Sheet 5 * Lot 221 on SP267943 Sheet 5 * Lot 41 on SP267943 Sheet 5 * Lot 6 on SP266598 Sheet 5 * Lot 43 on SP267943 Sheet 6 * Lot 44 on SP267943 Sheet 6 * Lot 45 on SP267943 Sheet 6 * Lot 46 on SP267943 Sheet 6 * Lot 47 on SP267943 Sheet 6 * Lot 48 on SP267943 Sheet 6 * Lot 49 on SP267943 Sheet 6 * Lot 50 on SP267943 Sheet 6 * Lot 51 on SP267943 Sheet 6 * Lot 52 on SP267943 Sheet 6 * Lot 53 on SP267943 Sheet 6 * Lot 54 on SP267943 Sheet 6 * Lot 55 on SP267943 Sheet 6 * Lot 56 on SP267943 Sheet 6 * Lot 57 on SP267943 Sheet 6 * Lot 58 on SP267943 Sheet 6 and 7 * Lot 63 on SP267943 Sheet 6 and 7 * Lot 64 on SP267943 Sheet 6 * Lot 65 on SP267943 Sheet 6 * Lot 66 on SP267943 Sheet 6 * Lot 67 on SP267943 Sheet 6 * Lot 68 on SP267943 Sheet 6 * Lot 69 on SP267943 Sheet 6 * Lot 70 on SP267943 Sheet 6 * Lot 71 on SP267943 Sheet 6 * Lot 72 on SP267943 Sheet 6 * Lot 73 on SP267943 Sheet 6 * Lot 74 on SP267943 Sheet 6 * Lot 75 on SP267943 Sheet 6 * Lot 76 on SP267943 Sheet 6 and7 * Lot 83 on SP267943 Sheets 6, 7 and 11 * Lot 82 on SP267943 Sheets 6 and 11 * Lot 81 on SP267943 Sheets 6, 10 and 11 * Lot 84 on SP267943 Sheet 6 * Lot 85 on SP267943 Sheet 6 * Lot 86 on SP267943 Sheet 6 * Lot 87 on SP267943 Sheet 6 * Lot 220 on SP267943 Sheet 6 * Lot 88 on SP267943 Sheet 6 * Lot 89 on SP267943 Sheet 6 * Lot 90 on SP267943 Sheet 6 * Lot 91 on SP267943 Sheet 6 * Lot 78 on SP267943 Sheets 7 and 11 * Lot 77 on SP267943 Sheet 7 * Lot 115 on SP267943 Sheet 7 * Lot 116 on SP267943 Sheet 7 * Lot 117 on SP267943 Sheet 7 * Lot 118 on SP267943 Sheet 7 * Lot 119 on SP267943 Sheet 7 * Lot 120 on SP267943 Sheet 7 * Lot 121 on SP267943 Sheet 7 * Lot 122 on SP267943 Sheet 7 * Lot 123 on SP267943 Sheet 7 * Lot 124 on SP267943 Sheet 7 * Lot 9 on SP266597 Sheet 7 * Lot 72 on SP239441 Sheet 7 * Lot 109 on SP267943 Sheet 7 * Lot 110 on SP267943 Sheet 7 * Lot 111 on SP267943 Sheet 7 * Lot 112 on SP267943 Sheet 7 * Lot 113 on SP267943 Sheet 7 * Lot 114 on SP267943 Sheet 7 * Lot 53 on SP239441 Sheets 7 and 8 * Lot 92 on SP267943 Sheet 7 * Lot 93 on SP267943 Sheet 7 * Lot 94 on SP267943 Sheet 7 * Lot 95 on SP267943 Sheet 7 * Lot 96 on SP267943 Sheet 7 * Lot 97 on SP267943 Sheet 7 * Lot 98 on SP267943 Sheets 7 and 12 * Lot 102 on SP267943 Sheets 7 and 12 * Lot 103 on SP267943 Sheet 7 * Lot 104 on SP267943 Sheet 7 * Lot 105 on SP267943 Sheet 7 * Lot 106 on SP267943 Sheet 7 * Lot 107 on SP267943 Sheet 7 * Lot 108 on SP267943 Sheet 7 * Lot 59 on SP267943 Sheet 7 * Lot 60 on SP267943 Sheet 7 * Lot 61 on SP267943 Sheet 7 * Lot 62 on SP267943 Sheet 7 * Lot 281 on SP267943 Sheets 7 and 11 * Lot 280 on SP267943 Sheets 7 and 11 * Lot 262 on SP267943 Sheets 7 and 11 * Lot 261 on SP267943 Sheet 7 * Lot 263 on SP267943 Sheets 7 and 11 * Lot 264 on SP267943 Sheets 7 and 11 * Lot 265 on SP267943 Sheets 7 and 11 * Lot 267 on SP267943 Sheets 7 and 11 * Lot 268 on SP267943 Sheets 7 and 11 * Lot 269 on SP267943 Sheets 7, 11 and 12 * Lot 250 on SP267943 Sheet 8 * Lot 251 on SP267943 Sheet 8 * Lot 252 on SP267943 Sheet 8 * Lot 253 on SP267943 Sheet 8 * Lot 254 on SP267943 Sheet 8 * Lot 255 on SP267943 Sheet 8 * Lot 245 on SP267943 Sheet 8 * Lot 246 on SP267943 Sheet 8 * Lot 258 on SP267943 Sheet 8 * Lot 257 on SP267943 Sheet 8 * Lot 256 on SP267943 Sheet 8 * Lot 22 on SP266607 Sheet 8 * Lot 240 on SP267943 Sheet 8 * Lot 241 on SP267943 Sheet 8 * Lot 242 on SP267943 Sheet 8 * Lot 243 on SP267943 Sheet 8 * Lot 244 on SP267943 Sheet 8 * Lot 353 on SP267943 Sheet 8 * Lot 259 on SP267943 Sheet 8 * Lot 260 on SP267943 Sheet 8 * Lot 5 on SP266598 Sheets 8 and 9 * Lot 216 on SP267943 Sheet 8 * Lot 217 on SP267943 Sheet 8 * Lot 218 on SP267943 Sheet 8 * Lot 219 on SP267943 Sheets 8 and 9 * Lot 65 on SP239441 Sheets 8 and 9 * Lot 135 on SP267943 Sheet 8 * Lot 136 on SP267943 Sheet 8 * Lot 137 on SP267943 Sheet 8 * Lot 138 on SP267943 Sheet 8 * Lot 139 on SP267943 Sheet 8 * Lot 71 on SP239441 Sheet 8 * Lot 9 on SP239435 Sheet 8 * Lot 141 on SP267943 Sheet 8 * Lot 142 on SP267943 Sheet 8 * Lot 143 on SP267943 Sheet 8 * Lot 144 on SP267943 Sheet 8 * Lot 145 on SP267943 Sheet 8 * Lot 146 on SP267943 Sheet 8 * Lot 147 on SP267943 Sheet 8 * Lot 148 on SP267943 Sheet 8 * Lot 149 on SP267943 Sheet 8 * Lot 150 on SP267943 Sheet 8 * Lot 198 on SP267943 Sheets 8 and 9 * Lot 197 on SP267943 Sheets 8 and 9 * Lot 199 on SP267943 Sheets 8 and 9 * Lot 191 on SP267943 Sheets 8 and 9 * Lot 196 on SP267943 Sheet 8 * Lot 192 on SP267943 Sheets 8, 9 and 12 * Lot 195 on SP267943 Sheet 8 * Lot 194 on SP267943 Sheet 8 and 12 * Lot 155 on SP267943 Sheet 8 and 12 * Lot 156 on SP267943 Sheet 8 and 12 * Lot 157 on SP267943 Sheet 8 and 12 * Lot 158 on SP267943 Sheet 8 * Lot 159 on SP267943 Sheet 8 * Lot 151 on SP267943 Sheet 8 * Lot 152 on SP267943 Sheet 8 * Lot 153 on SP267943 Sheet 8 * Lot 154 on SP267943 Sheet 8 * Lot 10 on SP239435 Sheet 8 * Lot 131 on SP267943 Sheet 8 * Lot 11 on SP239435 Sheet 8 * Lot 132 on SP267943 Sheet 8 * Lot 133 on SP267943 Sheet 8 * Lot 134 on SP267943 Sheet 8 * Lot 4 on SP266598 Sheet 9 * Lot 230 on SP267943 Sheet 9 * Lot 231 on SP267943 Sheet 9 * Lot 232 on SP267943 Sheet 9 * Lot 233 on SP267943 Sheet 9 * Lot 234 on SP267943 Sheet 9 * Lot 235 on SP267943 Sheet 9 * Lot 236 on SP267943 Sheet 9 * Lot 237 on SP267943 Sheet 9 * Lot 238 on SP267943 Sheet 9 * Lot 239 on SP267943 Sheet 9 * Lot 324 on SP267943 Sheet 9 * Lot 15 on SP266608 Sheet 9 * Lot 183 on SP267943 Sheet 9 * Lot 184 on SP267943 Sheet 9 * Lot 185 on SP267943 Sheet 9 * Lot 186 on SP267943 Sheet 9 * Lot 187 on SP267943 Sheet 9 * Lot 188 on SP267943 Sheet 9 * Lot 189 on SP267943 Sheet 9 * Lot 190 on SP267943 Sheet 9 * Lot 178 on SP267943 Sheet 9 * Lot 179 on SP267943 Sheet 9 * Lot 180 on SP267943 Sheet 9 * Lot 181 on SP267943 Sheet 9 * Lot 182 on SP267943 Sheet 9 * Lot 200 on SP267943 Sheet 9 * Lot 201 on SP267943 Sheet 9 * Lot 202 on SP267943 Sheet 9 * Lot 203 on SP267943 Sheet 9 * Lot 204 on SP267943 Sheet 9 * Lot 12 on SP239436 Sheet 9 * Lot 13 on SP239436 Sheet 9 * Lot 14 on SP239436 Sheet 9 * Lot 205 on SP267943 Sheet 9 * Lot 206 on SP267943 Sheet 9 * Lot 207 on SP267943 Sheet 9 * Lot 208 on SP267943 Sheet 9 * Lot 209 on SP267943 Sheet 9 * Lot 210 on SP267943 Sheet 9 * Lot 211 on SP267943 Sheet 9 * Lot 212 on SP267943 Sheet 9 * Lot 213 on SP267943 Sheet 9 * Lot 214 on SP267943 Sheet 9 * Lot 215 on SP267943 Sheet 9 * Lot 168 on SP267943 Sheets 9 and 12 * Lot 175 on SP267943 Sheets 9 and 12 * Lot 283 on SP267943 Sheets 9 and 12 * Lot 169 on SP267943 Sheet 9 * Lot 170 on SP267943 Sheet 9 * Lot 171 on SP267943 Sheet 9 * Lot 172 on SP267943 Sheet 9 * Lot 173 on SP267943 Sheet 9 * Lot 174 on SP267943 Sheet 9 * Lot 285 on SP267943 Sheet 9 * Lot 286 on SP267943 Sheet 9 * Lot 287 on SP267943 Sheet 9 * Lot 288 on SP267943 Sheet 9 * Lot 289 on SP267943 Sheet 9 * Lot 290 on SP267943 Sheet 9 * Lot 291 on SP267943 Sheet 9 * Lot 292 on SP267943 Sheet 9 * An area of road identified and delineated by stations 3-6-14-11-12-3 on plan SP276451 formerly part of Lot 42 on SP239441 Sheet 9 * Lot 354 on SP276451 Sheet 9 * Lot 355 on SP276451 Sheet 9 * Lot 284 on SP267943 Sheet 9 * An area of road identified and delineated by stations (5a-5-15-14-5c-5a), (14-15-17-31-9b-10a-34-33-32-30-29-28-27-42-41-39-21-43-46-47-48-49-24-25-16-14), (34-10a-18-19-50-51-52-53-20-21-39-38-36-35-34) on Plan SP288978 Sheets 10 and 11 * Lot 35 on SP276438 Sheet 10 * Lot 901 on SP288978 Sheets 10 and 11 * Lot 902 on SP288978 Sheets 10 and 11 * Lot 298 on SP267943 Sheets 10 and 11 * Lot 297 on SP267943 Sheets 10 and 11 * Lot 294 on SP267943 Sheet 10 * Lot 295 on SP267943 Sheet 10 * Lot 296 on SP267943 Sheet 10 * Lot 79 on SP267943 Sheet 11 * Lot 80 on SP267943 Sheet 11 * Lot 271 on SP267943 Sheets 11 and 12 * Lot 272 on SP267943 Sheets 11 and 12 * Lot 273 on SP267943 Sheet 11 * Lot 274 on SP267943 Sheet 11 * Lot 275 on SP267943 Sheet 11 * Lot 276 on SP267943 Sheet 11 * Lot 277 on SP267943 Sheet 11 * Lot 278 on SP267943 Sheet 11 * Lot 279 on SP267943 Sheet 11 * Lot 78 on SP239441 Sheet 11 * Lot 299 on SP267943 Sheet 11 * Lot 300 on SP267943 Sheet 11 * Lot 301 on SP267943 Sheet 11 * Lot 302 on SP267943 Sheet 11 * Lot 303 on SP267943 Sheet 11 * Lot 304 on SP267943 Sheet 11 * Lot 305 on SP267943 Sheet 11 * Lot 306 on SP267943 Sheet 11 * Lot 307 on SP267943 Sheet 11 * Lot 308 on SP267943 Sheet 11 * Lot 309 on SP267943 Sheet 11 * Lot 310 on SP267943 Sheet 11 * Lot 311 on SP267943 Sheets 11 and 12 * Lot 312 on SP267943 Sheets 11 and 12 * Lot 802 on SP288978 Sheet 11 * Lot 800 on SP288978 Sheet 11 * Lot 1 on SP288978 Sheet 11 * Lot 2 on SP288978 Sheet 11 * Lot 3 on SP288978 Sheet 11 * Lot 4 on SP288978 Sheet 11 * Lot 803 on SP288978 Sheets 11, 12 and 13 * Lot 13 on SP288978 Sheet 11 * Lot 14 on SP288978 Sheet 11 * Lot 15 on SP288978 Sheet 11 * Lot 5 on SP288978 Sheet 11 * Lot 6 on SP288978 Sheet 11 * Lot 7 on SP288978 Sheet 11 * Lot 801 on SP288978 Sheet 11 * Lot 325 on SP267943 Sheets 11 and 12 * Lot 326 on SP267943 Sheet 11 * Lot 327 on SP267943 Sheet 11 * Lot 328 on SP267943 Sheet 11 * Lot 329 on SP267943 Sheet 11 * Lot 330 on SP267943 Sheet 11 * Lot 331 on SP267943 Sheet 11 * Lot 332 on SP267943 Sheet 11 * Lot 333 on SP267943 Sheet 11 * Lot 334 on SP267943 Sheet 11 * Lot 335 on SP267943 Sheet 11 * Lot 336 on SP267943 Sheet 11 * Lot 352 on SP267943 Sheets 11, 12 and 14 * An area of road identified and delineated by stations 311-315-316-317-318-308-309-314-310-311 on SP267943 Sheets 11 and 12 * Lot 340 on SP267943 Sheets 11 and 13 * Lot 341 on SP267943 Sheets 11 and 13 * Lot 342 on SP267943 Sheets 11 and 13 * Lot 343 on SP267943 Sheets 11 and 13 * Lot 344 on SP267943 Sheets 11 and 13 * Lot 345 on SP267943 Sheets 11 and 13 * Lot 346 on SP267943 Sheets 11 and 13 * Lot 347 on SP267943 Sheets 11 and 13 * Lot 348 on SP267943 Sheets 11 and 13 * An area of road identified and delineated by stations 322-325-326-327-328-319-320-329-321-322 on SP267943 Sheets 11 and 13 * Lot 9 on SP288978 Sheet 11 * Lot 10 on SP288978 Sheet 11 * Lot 11 on SP288978 Sheet 11 * Lot 12 on SP288978 Sheet 11 * Lot 193 on SP267943 Sheet 12 * Lot 167 on SP267943 Sheet 12 * Lot 177 on SP267943 Sheet 12 * Lot 176 on SP267943 Sheet 12 * Lot 160 on SP267943 Sheet 12 * Lot 161 on SP267943 Sheet 12 * Lot 162 on SP267943 Sheet 12 * Lot 163 on SP267943 Sheet 12 * Lot 164 on SP267943 Sheet 12 * Lot 165 on SP267943 Sheet 12 * Lot 166 on SP267943 Sheet 12 * Lot 125 on SP267943 Sheet 12 * Lot 126 on SP267943 Sheet 12 * Lot 127 on SP267943 Sheet 12 * Lot 128 on SP267943 Sheet 12 * Lot 129 on SP267943 Sheet 12 * Lot 130 on SP267943 Sheet 12 * Lot 99 on SP267943 Sheet 12 * Lot 100 on SP267943 Sheet 12 * Lot 101 on SP267943 Sheet 12 * Lot 270 on SP267943 Sheet 12 * Lot 314 on SP267943 Sheet 12 * Lot 315 on SP267943 Sheet 12 * Lot 316 on SP267943 Sheet 12 * Lot 317 on SP267943 Sheet 12 * Lot 282 on SP267943 Sheet 12 * Lot 318 on SP267943 Sheets 12 and 14 * An area of road identified and delineated by stations 313-324-323-319-312-313 on SP267943 Sheet 13 * Lot 337 on SP267943 Sheet 13 * Lot 338 on SP267943 Sheet 13 * Lot 339 on SP267943 Sheet 13 * Lot 349 on SP267943 Sheet 13 * Lot 350 on SP267943 Sheet 13 * Lot 319 on SP267943 Sheet 14 * Lot 320 on SP267943 Sheet 14 * Lot 321 on SP267943 Sheet 14 * Lot 322 on SP267943 Sheet 14 * Lot 323 on SP302420 Sheet 14 * Lot 2 on SP302420 Sheet 14 * Lot 8 on SP288978 Sheet 11 * Lot 351 on SP267943 Sheet 13 * * denotes areas to which s 47A of the Native Title Act 1993 (Cth) applies. Part 2 — Non-Exclusive Areas All of the land and waters described in the following table and depicted in light blue on the Determination map contained in Schedule 4: Area description (at the time of the Determination) Determination Map Sheet Reference Lot 70 on SP266598 Sheets 2 and 5 That part of Lot 2 on SP266598 excluding an area of closed road identified and delineated by stations C-D-B-C on SP266598 Sheets 2, 5, 8, and 9 Schedule 3 – Areas Not Forming Part of the Determination Area The following areas of land and waters do not form part of the Determination Area as described in Part 1 of Schedule 2 and Part 2 of Schedule 2: 1. Those land and waters in the Determination Area, or any part thereof, as described in Part 1 of Schedule 2 and Part 2 of Schedule 2: (a) in relation to which one or more Previous Exclusive Possession Acts, within the meaning of s 23B of the Native Title Act 1993 (Cth) was done and was attributable to either the Commonwealth or the State, and to which none of ss 47, 47A or 47B of the Native Title Act 1993 (Cth) applied, as they could not be claimed in accordance with s 61A of the Native Title Act 1993 (Cth). (b) specifically, and to avoid any doubt, the land and waters, or any part thereof, described in paragraph (1)(a) above includes: (i) the Previous Exclusive Possession Acts described in ss 23B(2) and 23B(3) of the Native Title Act 1993 (Cth) to which s 20 of the Native Title (Queensland) Act 1993 (Qld) applies, and to which none of ss 47, 47A or 47B of the Native Title Act 1993 (Cth) applied. (ii) the land and waters on which any public work, as defined in s 253 of the Native Title Act 1993 (Cth), is or was constructed, established or situated, and to which ss 23B(7) and 23C(2) of the Native Title Act 1993 (Cth) and to which s 21 of the Native Title (Queensland) Act 1993 (Qld), applies, together with any adjacent land or waters in accordance with s 251D of the Native Title Act 1993 (Cth). (c) on which, at the time the Native Title Determination Application was made, public works were validly constructed, established or situated after 23 December 1996, where s 24JA of the Native Title Act 1993 (Cth) applies, and which wholly extinguished native title. 2. Those land and waters that were excluded from the Native Title Determination Application on the basis that, at the time of the Native Title Determination Application, they were an area where native title rights and interests had been wholly extinguished, and to which none of ss 47, 47A or 47B of the Native Title Act 1993 (Cth) applied, including, but not limited to: (a) any area where there had been an unqualified grant of estate in fee simple which wholly extinguished native title rights and interests; and (b) any area over which there was an existing dedicated public road which wholly extinguished native title rights and interests, including, but not limited to, the land and waters within the area covered by a corridor 15 metres either side of the centre line of the present alignment of the existing road which connects the town of Aurukun to the Peninsula Developmental Road. 3. That part of Lot 211 on SP241404 formerly subject to Sub Lease A on AP9682 on the basis that at the time the Native Title Determination Application was made it was, or had been, the subject of one or more Previous Exclusive Possession Acts described in ss 23B(2) and 23B(3) of the Native Title Act 1993 (Cth) to which s 20 of the Native Title (Queensland) Act 1993 (Qld) applies, and to which none of ss 47, 47A or 47B applied. 4. The whole of the following areas of land and waters on the basis that at the time the Native Title Determination Application was made, public works, as defined in s 253 of the Native Title Act 1993 (Cth), were constructed, established or situated on those areas and ss 23B(7) and 23C(2) of the Native Title Act 1993 (Cth) and s 21 of the Native Title (Queensland) Act 1993 (Qld) applied, together with any adjacent land or waters in accordance with s 251D of the Native Title Act 1993 (Cth), including but not limited to: (a) that part of Lot 2 on SP266598 subject to an area of closed road identified and delineated by stations C-D-B-C on SP266598; (b) Lot 17 on SP248411; (c) Lot 8 on SP266597; (d) Lot 5 on SP266596; (e) Lot 6 on SP266596; (f) Lot 3 on SP239437; (g) Lot 73 on SP266597 (h) Lot 4 on SP239438; and (i) Lot 247 on SP267943. 5. The whole of the land and waters described as Lot 20 on SP266606 and Lot 7 on SP266597 on the basis that at the time the Native Title Determination Application was made, public works were validly constructed, established or situated after 23 December 1996, where s 24JA of the Native Title Act 1993 (Cth) applied and which wholly extinguished native title. Schedule 4 – Map of Determination Area REASONS FOR JUDGMENT MORTIMER CJ: INTRODUCTION 1 The parties have sought a determination of native title under s 87A of the Native Title Act 1993 (Cth), with associated orders, recognising native title over certain identified parcels of land in favour of the Wik and Wik Way native title group, being the native title holders determined in Wik Peoples v State of Queensland [2000] FCA 1443 (WWY 2000 determination). Those identified parcels are within the external boundary of the area determined in the WWY 2000 determination. This determination, made on the papers, is made on the same day as determinations recognising the native title of the Kuku Warra People, Thaypan People and Possum People. 2 This determination marks a recognition of native title over parcels of land lying within the Cape York United #1 claim area, over which native title could not be recognised at the time of earlier Wik and Wik Way determinations. For case management purposes, the present individual parcels fall within a geographic region that has come to be known as the 'Wood area', because Ray Wood was the anthropologist initially engaged by the Cape York United #1 applicant to prepare connection material about the area. That is why these parcels are subject of separate orders today. 3 For the reasons set out below, the Court is satisfied it is appropriate to make the orders sought, and that it is within the power of the Court to do so. THE MATERIAL BEFORE THE COURT 4 The application for consent determination was supported by a principal set of submissions filed by the applicant on 29 September 2023. The State filed its submissions on 13 October 2023. Each set of submissions was made jointly with respect to each of the determinations falling within the Wood area. The Court has been greatly assisted by the parties' submissions. 5 The applicant relied on a number of affidavits dealing with matters relevant to the determinations. First, an affidavit of Kirstin Donlevy Malyon affirmed 27 September 2023 and filed 29 September 2023 (2023 Malyon affidavit). Second, an affidavit of Parkinson Wirrick affirmed 26 September 2023 and filed 29 September 2023 (2023 Wirrick affidavit). Third, paragraphs [5] to [30] of an affidavit filed earlier in the proceeding of Ms Malyon affirmed 22 October 2021 and filed 27 October 2021 regarding the re-authorisation process undertaken by the applicant in the period from April to September 2021 (2021 Malyon affidavit). The State relied on an affidavit of Kate Evelyn Marchesi affirmed 12 October 2023 and filed 13 October 2023. 6 Ms Malyon is the Principal Legal Officer at the Cape York Land Council, and has had carriage of the Cape York United #1 claim. In the 2023 Malyon affidavit, she deposes to the process undertaken for determining appropriate group and boundary descriptions for each determination, and describes the way in which the s 87A agreement for the Wik and Wik Way native title group was approved, including pre-authorisation and authorisation meetings. She deposes to how the Ngan Aak-Kunch Aboriginal Corporation RNTBC was nominated as the prescribed body corporate (PBC) for the Possum determination. She annexes to her affidavit the notice of nomination for that PBC and its consent to act as the relevant PBC for the determination area. 7 In terms of connection material for the four determinations, including the Wik and Wik Way independent parcels determination, the applicant relied on an expert report of Kate Waters dated 5 March 2018 and filed 6 March 2018 (Waters 2018 report). 8 The applicant submits: The Wik and Wik Way Peoples IP Determination Area is entirely surrounded by the determination of native title made by the Court in Wik #1 [WWY 2000 determination]. The connection of the Wik and Wik Way Peoples Native Title Group to the Wik and Wik Way Peoples IP Determination Area is supported by inferences that arise from the determination in Wik #1. 9 In the WWY 2000 determination at [10], Drummond J was satisfied as to the propriety of making those determinations and orders sought by the parties to that proceeding. 10 I have described the procedural history of the Cape York United #1 claim in the three other determinations made today. It is not necessary to repeat it here. THE AGREED GROUP DESCRIPTION 11 The description of the Wik and Wik Way native title group differs from descriptions of native title groups in other determinations made in the present proceeding, in that no list of apical ancestors is given descent from whom defines membership of the group. Rather, the description of the native title group in the Wik and Wik Way independent parcels determination uses the description "Wik and Wik Way Peoples" which is used in existing Wik and Wik Way determinations, including the WWY 2000 determination. The applicant submits that it is appropriate to use in the present proceeding the same group description for Wik and Wik Way Peoples that has previously been applied by the Court. The applicant also points to the report of Ms Waters, submitting that available evidence shows that this description refers to an identifiable group of people who are mutually aware of who are members of the group. The State does not object to that submission, and I accept it. AUTHORISATION The Wik and Wik Way section 87A agreement 12 As I have explained in the three other determinations made today, for the larger areas of the Cape York United #1 claim, a Boundary Identification Negotiation and Mediation or 'BINM' process was adopted in April 2020 to deal with the reality that distinctly identifiable groups hold interests in that area: see also Ross on behalf of the Cape York United #1 Claim Group v State of Queensland (No 2) (Kuuku Ya'u determination) [2021] FCA 1464 at [18], [25]-[26] and Ross on behalf of the Cape York United #1 Claim Group v State of Queensland (No 3) (Uutaalnganu (Night Island) determination) [2021] FCA 1465 at [19], [23]-[24]. 13 The BINM process did not need to be implemented in relation to the Wik and Wik Way independent parcels determination. As the State explains in its submissions, the Wik and Wik Way independent parcels determination only relates to those areas excluded from the WWY 2000 determination, such that resolution on boundaries was not required and agreement had been reached that the group description would reflect that of the surrounding determination. 14 The Court accepts that explanation is correct. 15 In the 2023 Malyon affidavit, Ms Malyon deposes to the notification of meetings to discuss, and subsequently authorise, the s 87A agreement for the Wik and Wik Way identified parcels determination. The Wik and Wik Way authorisation meeting was conducted on 6 September 2023. At that meeting, the group considered the terms of the Wik and Wik Way s 87A agreement, and directed the applicant to enter into that agreement. The authorisation of the Cape York United #1 applicant 16 The applicant's authority to enter into the Wik and Wik Way s 87A agreement stems from the re-authorisation process undertaken between April and September 2021, in respect of the claim as a whole. Ms Malyon describes this process in the 2021 Malyon affidavit, and the Court described and endorsed it in Kuuku Ya'u determination at [30]-[37] and Uutaalnganu determination at [28]-[35]. In those determinations, I agreed with the State's submission that the weight of authority supports the view that the Native Title Act affords flexibility to shape the content of an ultimate determination of native title, provided there is compliance with s 94A and s 225 of the Act. For that reason, I agreed with the State's submission that the re-authorisation process for the applicant was lawful, and compliant with the Native Title Act. The applicant's submissions also supported this approach, unsurprisingly. No objections were made by any other parties to the determinations. The State has maintained the same position in its submissions on these current determinations. 17 Nevertheless, in Kuuku Ya'u determination at [38]-[50] and Uutaalnganu determination at [36]-[48], I explained why I considered it also appropriate to make orders under s 84D(4) of the Native Title Act to deal with any uncertainty arising from differences between the claim group description in the original Cape York United #1 application and those in the proposed s 87A determinations at a more local level, in light of the change in the way the claim was proceeding and the re-authorisation process. 18 Those orders were made under s 84D(4) out of an abundance of caution and to avoid any doubt about the validity of the s 87A determinations. At [50] in Kuuku Ya'u determination and [48] in Uutaalnganu determination, I said: It is plainly in the interests of the administration of justice to do so, in circumstances where the overall Cape York United #1 claim is gargantuan, and has already consumed seven years' worth of resources, mostly sourced from public funds. Substantial, dedicated and methodical efforts have been made to comply with the requirements of the Native Title Act in each step along the way to these first two determinations. Despite significant factual and legal challenges, the two key parties have navigated a consensual path to the recognition of native title for the Kuuku Ya'u and Uutaalnganu (Night Island) groups. All other respondents have been consulted and given opportunities to participate in the process as it has progressed. They have been included in steps in the complex timetables. All consent to the Kuuku Ya'u and Uutaalnganu (Night Island) determinations. If ever there was a situation in the Court's native title jurisdiction where a favourable exercise of discretion by the Court is appropriate to ensure resolution of a claim to which all parties agree, this is that situation. 19 I adopt those reasons in each of the four determinations now made. In each of the present determinations, the applicant proposed that similar orders be made. The State agreed with that proposal. For the reasons given in the extract above, I continue to consider such orders are appropriate. THE CONNECTION OF THE WIK AND WIK WAY NATIVE TITLE GROUP TO THE DETERMINATION AREA 20 I accept the submissions made on behalf of the applicant and the State that the Court can be satisfied, on the basis of the material filed in the proceeding and on the basis of the WWY 2000 determination, that there is sufficient material on connection to sustain the determination of the Wik and Wik Way independent parcels, under s 87A of the Native Title Act. THE APPLICABLE REQUIREMENTS OF SECTION 87A 21 Section 87A applies to an agreement reached "at any stage" of an existing proceeding for a proposed determination of native title in relation to an area (the determination area) that is "part of, but not all of", the area covered by the native title determination application under s 61 of the Native Title Act. 22 Sub-section 87A(1) requires: (a) the existence of a proceeding in relation to an application for a determination of native title; (b) after the period specified in a notice given under s 66 of the Act, an agreement in writing for a proposed determination of native title in relation to part, but not all, of the application area; (c) all those set out in sub-s 87A(1)(c) who are parties to the proceeding are also parties to the s 87A agreement; and (d) that the terms of the agreement are in writing and signed by, or on behalf of, the requisite parties to the proceeding. 23 Sub-section 87A(2) allows for the parties to file a proposed determination of native title, as they have done on this application. 24 Sub-sections 87A(4) to (6) provide: (4) The Court may make an order in, or consistent with, the terms of the proposed determination of native title without holding a hearing, or if a hearing has started, without completing the hearing, if the Court considers that: (a) an order in, or consistent with, the terms of the proposed determination would be within its power; and (b) it would be appropriate to do so. Note: As the Court's order involves making a determination of native title, the order needs to comply with section 94A (which deals with the requirements of native title determination orders). (5) Without limiting subsection (4), if the Court makes an order under that subsection, the Court may also make an order under this subsection that gives effect to terms of the agreement that involve matters other than native title if the Court considers that: (a) the order would be within its power; and (b) it would be appropriate to do so. (6) The jurisdiction conferred on the Court by this Act extends to making an order under subsection (5). Sub-section 87A(1): pre-requisites 25 As the applicant sets out at [45]-[51] of its submissions, which the State adopts, each of the pre-requisites in s 87A(1) is satisfied. Each s 87A agreement has been signed by the requisite parties to the proceeding, after appropriate notification. 26 On 13 October 2023, the parties indicated to the Court by way of correspondence that they had identified a typographical error in a cross reference in Schedule 1, at [4(d)(i)], of the Wik and Wik Way independent parcels s 87A agreement, and the parties provided the Court, by agreement, with an amended version of the Wik and Wik Way independent parcels s 87A agreement correcting that typographical error. The Court's orders today reflect that correction. Sub-section 87A(4)(a): orders within power 27 For the reasons set out at [52]-[57] of the applicant's submissions, with which the State agrees, I am satisfied the orders sought are within the power of the Court. 28 The Cape York United #1 application is valid and there is no extant determination of native title in relation to the Kuku Warra, Thaypan, Possum, or Wiki and Wik Way identified parcels determination areas. As the State notes, areas over which previous exclusive possession acts have occurred are expressly excluded. There are no other proceedings before the Court relating to native title applications that cover any part of the area the subject of the determinations that would otherwise require orders to be made under s 67(1) of the Act. I am satisfied that the form of the determinations complies with s 94A and s 225 of the Act and, for the reasons that follow, the requirements of s 87A of the Act are otherwise satisfied. Sub-section 87A(4)(b): appropriate to make the orders sought 29 In reasons for a determination in favour of the Nanda People in Western Australia, I set out my approach to the question of "appropriateness" and the Court's function: see Drury on behalf of the Nanda People v State of Western Australia [2018] FCA 1849 at [52]-[56], by reference to earlier authorities. In Taylor on behalf of the Yamatji Nation Claim v State of Western Australia [2020] FCA 42 at [63]-[65], I explained the particular importance of the role of the State in the consent determination process. As I did in the Kuuku Ya'u and Uutaalnganu determinations, I adopt and apply the observations I made in Drury and Taylor here. 30 In relation to the four determinations, I am satisfied all parties have adopted a methodical and careful approach to group description, boundary description and resolution of boundary disputes, connection and tenure, including for the Wik and Wik Way independent parcels determination. The respective group members have had carefully planned opportunities to participate in decision-making about the proposed s 87A agreements, and especially about the boundary and group descriptions. Group members have been well supported to participate, if they chose to do so. These consultations and meetings are the appropriate time for people to come forward and express their views or concerns; if group members have concerns then they need to attend these meetings and participate in discussions at those times. Other active respondents have been consulted and given the opportunity to comment on matters affecting their interests. 31 The Court affords considerable weight to the position taken by the State in supporting the applications for determination of native title, on behalf of all members of its community. I described the importance of the State's role in Ross on behalf of the Cape York United #1 Claim Group v State of Queensland (No 10) [2022] FCA 1129 at [6], [56]. I adhere to those views. The role of the State of Queensland in the detailed step-by-step process in the Cape York United #1 claim has involved considerable human and financial resources, and the Court acknowledges the State's dedication to assisting group members to secure determinations of native title wherever possible. Other respondents to the Cape York United #1 claim have also derived considerable benefit from the tremendous contribution by the State, which has relieved those respondents of a great deal of work. The Court can be confident the State has reached a carefully considered view before agreeing to these determinations. ORDER SOUGHT UNDER S 199C(1A) 32 There is one current indigenous land use agreement (ILUA) in place in relation to parts of the Wik and Wik Way independent parcels determination area. It is an area ILUA. The parties agree it is likely that the Registrar's obligation in s 199C(1) of the Native Title Act is engaged in respect of the ILUA, unless an order is made under s 199C(1A). 33 As the State submits, by sub-s 199C(1)(b) the Registrar's duty to remove an ILUA can apply to area agreements. That sub-section provides: (1) Subject to subsection (1A), the Registrar must remove the details of an agreement from the Register if: … (b) in the case of an agreement under Subdivision C of Division 3 of Part 2—an approved determination of native title is made in relation to any of the area covered by the agreement, and any of the persons who, under the determination, hold native title in relation to the area is not a person who authorised the making of the agreement as mentioned in: (i) if the application relating to the agreement was certified by representative Aboriginal/Torres Strait Islander bodies as mentioned in paragraph 24CG(3)(a)—paragraph 203BE(5)(b); or (ii) if the application relating to the agreement included a statement as mentioned in paragraph 24CG(3)(b) to the effect that certain requirements have been met—that paragraph[.] (Emphasis added.) 34 The parties submit an order pursuant to s 199C(1A) of the Native Title Act should be made, directing the Registrar not to remove the details of the Aurukun Township and Access Road Agreement ILUA (QI2001/026) from the Register of Indigenous Land Use Agreements. The parties contend this order should be made out of an abundance of caution, given the ongoing operational nature of the ILUA, and the potential application of (relevantly) the duty in s 199C(1)(b). The State contends that in the present circumstances the group descriptions of those groups who authorised the ILUA do not reflect, on the face of the ILUA or the register extracts, the group descriptions proposed in the draft s 87A agreements for the relevant groups. This would appear to engage s 199C(1)(b), although there is no authority on the interpretation of this provision. The State adds that it was not privy to any materials regarding the original authorisation of the ILUA, and this is a further basis on which it contends the proposed s 199C(1A) order is appropriate. 35 Section 199C(1A) provides: (1A) If: (a) the Registrar is or will be required to remove the details of an agreement from the Register in a case covered by paragraph (1)(a) or (b); and (b) the persons who, under the approved determination of native title mentioned in that paragraph, hold native title apply to the Federal Court for an order under this subsection; and (c) the Federal Court is satisfied that those persons accept the terms of the agreement, in accordance with the process by which they would authorise the making of such an agreement; the Federal Court may order the Registrar not to remove the details of the agreement from the Register. 36 The State submits that sub-s 199C(1A)(a) is engaged because: (a) the Aurukun Township and Access Road Agreement ILUA covers the township of Aurukun; and (b) while the Aurukun Township and Access Road Agreement ILUA appears, on its face, to have been authorised by the Wik and Wik Way Peoples, given that the WWY 2000 determination and the proposed Wik and Wik Way identified parcels determination do not define the native title holders by reference to apical ancestors, the parties propose to also seek an order in respect of this ILUA out of an abundance of caution. 37 The State further submits that the requirement in s 199C(1A)(b) is met because it is the Wik and Wik Way native title group that seeks the order under s 199C(1A). It submits the requirement in s 199C(1A)(c) is met, because the Wik and Wik Way native title group passed resolutions at the Wik and Wik Way authorisation meeting on 6 September 2023, accepting the terms of the Aurukun Township and Access Road Agreement ILUA and directing the applicant to seek an order pursuant to s 199C(1A) that the ILUA not be removed from the Register. 38 I accept the State's submissions that the provisions in s 199C(1A) can apply to the area ILUA. As I have previously held, s 199C(1A) is intended to allow for the continuity of obligations assumed under, and entitlements conferred by, (relevantly) an area ILUA where the group identified by this Court as the native title holders for that area are prepared to agree to continue to be bound by that ILUA, and where there is sufficient overlap between those native title holders who authorised an ILUA and those who are recognised in a determination. I do not consider it is necessary in the present circumstances of a s 87A agreement for the Court to embark on any detailed consideration of what level of overlap is strictly required, nor to engage with any construction issues that may arise in relation to s 199C(1)(b). Section 199C(1A) is a facultative provision, and should be construed accordingly. 39 Given the resolution passed by the Wik and Wik Way Peoples, I am satisfied it is appropriate for the order sought by the State to be made, out of an abundance of caution. In a complex and novel claim such as the Cape York United #1 proceeding, where the steps to agreement take so long and involve many potential pitfalls, any doubts which can be avoided or accommodated by the making of orders should be resolved by the Court, so that the central objectives of the parties' agreement under s 87A can be achieved. As many justices of this Court have observed, the resolution of claimant applications by consent is a central feature of this legislative scheme. NOMINATION OF A PRESCRIBED BODY CORPORATE 40 A separate PBC has been nominated under s 56 of the Native Title Act for each of the Kuku Warra, Thaypan, Possum and Wik and Wik Way independent parcel determination areas. The Ngan Aak-Kunch Aboriginal Corporation is nominated for the Wik and Wik Way independent parcels determination area. In the 2023 Malyon affidavit, Ms Malyon describes how each PBC was nominated by the native title group concerned, and that each PBC has provided its consent to nomination. In these circumstances, the Court is satisfied that the nomination of each of the PBCs is appropriate. CONCLUSION 41 For the Wik and Wik Way native title group, this determination represents an expansion of the recognition of that group's native title to parcels surrounded by areas already determined in the WWY 2000 determination. It has taken some time to resolve these outstanding parcels, and the Wik and Wik Way Peoples have shown patience and persistence. The Court is pleased to deliver some further certainty to their native title claims today, and thanks all those who have worked towards this outcome. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Chief Justice Mortimer. Associate: Dated: 2 November 2023 SCHEDULE OF PARTIES QUD 673 of 2014 Third Respondent: AURUKUN SHIRE COUNCIL Fourth Respondent: CARPENTARIA SHIRE COUNCIL Fifth Respondent: COOK SHIRE COUNCIL Sixth Respondent: DOUGLAS SHIRE COUNCIL Seventh Respondent: KOWANYAMA ABORIGINAL SHIRE COUNCIL Eighth Respondent: NAPRANUM ABORIGINAL SHIRE COUNCIL Ninth Respondent: PORMPURAAW ABORIGINAL SHIRE COUNCIL Tenth Respondent: WUJAL WUJAL ABORIGINAL SHIRE COUNCIL Eleventh Respondent: ERGON ENERGY CORPORATION LIMITED ACN 087 646 062 Twelfth Respondent: FAR NORTH QUEENSLAND PORTS CORPORATION LIMITED (TRADING AS PORTS NORTH) Thirteenth Respondent: TELSTRA CORPORATION LIMITED Fourteenth Respondent: ALCAN SOUTH PACIFIC Fifteenth Respondent: BRANDT METALS PTY LTD Sixteenth Respondent: LESLIE CARL COLEING Seventeenth Respondent: MATTHEW BYRON COLEING Eighteenth Respondent: STEPHEN LESLIE COLEING Nineteenth Respondent: LANCE JEFFRESS Twentieth Respondent: RTA WEIPA PTY LTD Twenty First Respondent: AUSTRALIAN WILDLIFE CONSERVANCY Twenty Second Respondent: MICHAEL MARIE LOUIS DENIS BREDILLET Twenty Third Respondent: CRAIG ANTHONY CALLAGHAN Twenty Fourth Respondent: BERTIE LYNDON CALLAGHAN Twenty Fifth Respondent: GRAHAM EDWARD ELMES Twenty Eighth Respondent: MARGARET ANNE INNES Twenty Ninth Respondent: COLIN INNES Thirtieth Respondent: KIM KERWIN Thirty First Respondent: WENDY EVA KOZICKA Thirty Second Respondent: CAMERON STUART MACLEAN Thirty Third Respondent: MICHELLE MARGARET MACLEAN Thirty Fourth Respondent: BRETT JOHN MADDEN Thirty Fifth Respondent: RODNEY GLENN RAYMOND Thirty Sixth Respondent: EVAN FRANK RYAN Thirty Seventh Respondent: PAUL BRADLEY RYAN Thirty Eighth Respondent: SUSAN SHEPHARD Thirty Ninth Respondent: SCOTT EVAN RYAN Fortieth Respondent: BARBARA JOAN SHEPHARD Forty First Respondent: NEVILLE JAMES SHEPHARD Forty Second Respondent: THOMAS DONALD SHEPHARD Forty Third Respondent: SILVERBACK PROPERTIES PTY LTD ACN 067 400 088 Forty Fourth Respondent: THE TONY AND LISETTE LEWIS SETTLEMENT PTY LIMITED ACN 003 632 344 Forty Fifth Respondent: MATTHEW TREZISE Forty Sixth Respondent: BOWYER ARCHER RIVER QUARRIES PTY LTD ACN 603 263 369 Forty Seventh Respondent: RAYLEE FRANCES BYRNES Forty Eighth Respondent: VICTOR PATRICK BYRNES Forty Ninth Respondent: GAVIN DEAR Fiftieth Respondent: SCOTT ALEXANDER HARRIS Fifty First Respondent: DEBORAH LOUISE SYMONDS Fifty Second Respondent: MICHAEL JOHN MILLER Fifty Third Respondent: MICHAEL DOUGLAS O'SULLIVAN Fifty Fourth Respondent: PATRICK JOHN O'SULLIVAN Fifty Fifth Respondent: ESTHER RUTH FOOTE Fifty Sixth Respondent: AMPLITEL PTY LTD AS TRUSTEE OF THE TOWERS BUSINESS OPERATING TRUST (ABN 75 357 171 746) Fifty Seventh Respondent: BENJAMIN DARK	18,714
federal_court_of_australia:fca/single/2002/2002fca0116	decision	commonwealth	federal_court_of_australia	text/html	2002-02-08 00:00:00	Haritou v Skourdoumbis [2002] FCA 116	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2002/2002fca0116	2024-09-13T22:45:23.696615+10:00	FEDERAL COURT OF AUSTRALIA Haritou v Skourdoumbis [2002] FCA 116 INDUSTRIAL – trade union – interim relief – enforcement of rules – charges laid against member – natural justice – whether "invincible bias" – whether right to legal representation Workplace Relations Act 1996 (Cth), s 209 Allinson v General Council of Medical Education and Registration [1894] 1 QB 750 -referred to American Cyanamid Co v Ethicon Ltd [1975] AC 396 – referred to Australian Workers' Union v Bowen No. 2 (1948) 77 CLR 601 - followed Cains v Jenkins (1979) 28 ALR 219 - followed Dickason v Edwards (1910) 10 CLR 243 - followed Dodd v Johnston (1999) 91 IR 352 – referred to Enderby Town Football Club Ltd v Football Association Ltd [1971] Ch 591 – referred to Fagan v National Coursing Association of SA Incorporated (1974) 8 SASR 546 – referred to Fraser v Mudge [1975] 3 All ER 78 – referred to Maynard v Osmond [1976] 3 WLR 711 – referred to McLean v The Workers Union [1929] 1 Ch 602 - followed McNab v Auburn Soccer Sports Club Ltd [1975] 1 NSWLR 54 – referred to Patrick Stevedores Operations No. 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1 – referred to Pett v Greyhound Racing Association Ltd No. 2 [1970] 1 QB 46 – referred to R v Visiting Justice at HM Prison, Pentridge; Ex parte Walker [1975] VR 883 – referred to Skourdoumbis v Maher (unreported, Finkelstein J, 16 October 2001) – referred to The King v Board of Appeal; ex parte Kay (1916) 22 CLR 183 - followed MICHAEL HARITOU v LEO SKOURDOUMBIS, JOSEPH PATTI, FRANK VARI and MICHAEL MITTEN V 1200 of 2001 FINKELSTEIN J 8 FEBRUARY 2002 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 1200 of 2001 BETWEEN: MICHAEL HARITOU Applicant AND: LEO SKOURDOUMBIS, JOSEPH PATTI, FRANK VARI and MICHAEL MITTEN Respondents JUDGE: FINKELSTEIN J DATE OF ORDER: 8 FEBRUARY 2002 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The application for interim relief be dismissed. 2. The applicant file and serve any affidavits on which it seeks to rely at trial before 4.15 pm on 22 February 2002. 3. The respondents file and serve any affidavits on which they seek to rely at trial before 4.15 pm on 8 March 2002. 4. The matter be listed for further directions after 8 March 2002. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 1200 of 2001 BETWEEN: MICHAEL HARITOU Applicant AND: LEO SKOURDOUMBIS, JOSEPH PATTI, FRANK VARI and MICHAEL MITTEN Respondents JUDGE: FINKELSTEIN J DATE: 8 FEBRUARY 2002 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 Litigation abounds between factions in the FFTS Union Division, a division of the Construction, Forestry, Mining and Energy Union. The cause of the dispute has not been explained, but an interim inquiry into the affair has been conducted by officers of the union who, in their report, have described the Victorian Division as "dysfunctional" and noted that the division has not had the services of any officer since February 2001. Internal attempts to resolve the dispute have been singularly unsuccessful, and the disputing factions now make increasing use of the court to sort out their differences, or to further their respective interests. This case is one of around sixteen that are currently being pursued in the Federal Court alone. No doubt the union's finances are being diminished by this litigation, with little gain for the ordinary members. 2 The present dispute follows the laying of charges against Mr Haritou, the Divisional Branch Secretary of the FFTS Union Division, Victorian Branch, alleging breaches of rule 14 of the union's rule. The charges allege that Mr Haritou failed to observe the union's rules and was guilty of gross misbehaviour or gross neglect of duty. The particulars of the charges assert that Mr Haritou procured the certification of an industrial agreement between the CFMEU and an employer which was not endorsed by a majority of employees. It is also asserted that a statutory declaration made by Mr Haritou that was lodged with the Australian Industrial Relations Commission when certification was obtained was false in several respects. 3 Mr Haritou was summonsed to appear before the Divisional Branch Executive, constituted by the respondents, who were to hear the charges on 1 November 2001. On the day prior to the hearing an event of some importance occurred. The supreme governing body of the FFTS Union Division is the Divisional Conference. Mr Haritou says that on 31 October 2001 there was an extraordinary meeting of the Divisional Conference at which the following two resolutions were passed: "(a) That the changes [sic] laid by Victorian Divisional Branch member Adam Wallace against Michael Haritou and scheduled for hearing by the Victorian Divisional Branch Executive on Thursday November 1, 2001 be referred to the Divisional Conference to hear and determine the charge laid by Adam Wallace; and (b) That the Victorian Branch Committee of Management and the Divisional Branch Executive refrain from any further action with regards to hearing such charges." 4 The respondents were advised of these resolutions. They were not minded to take any notice of them. They took the view that the meeting at which the resolutions had been passed was not validly convened. More importantly, however, the respondents also assert that whether or not the resolutions were passed, they had no effect because the Divisional Conference does not have the power to hear and determine the charges against Mr Haritou, as that body has not been conferred with the authority to hear any charges against a member other than by way of appeal. 5 Mr Haritou appeared before the Divisional Branch Executive on 1 November 2001. I have the minutes of the meeting, as well as some evidence of what occurred. For present purposes, it is sufficient to note the following. Mr Haritou said that he was entitled to be legally represented at the hearing, and asked the respondents to halt the proceedings until he obtained the services of a lawyer. The respondents resolved that Mr Haritou should not be allowed legal representation. Mr Haritou decided that he would no longer participate in the hearing on this basis, so he left. The hearing of the charges then continued in Mr Haritou's absence. Evidence was taken from a number of witnesses. At the conclusion of the evidence the complainant was asked to leave the room. Mr Patti, the chairperson, advised the committee that, for the purposes of determining whether the charges had been proved, they should only take into account the statements made by the witnesses. The committee then deliberated upon the matter and found Mr Haritou guilty as charged and resolved that he be dismissed from the office of Divisional Branch Secretary and that he be expelled from membership of the FFTS Union Division with immediate effect. 6 Mr Haritou brings this application under s 209 of the Workplace Relations Act 1996 (Cth) seeking directions for the observance of the rules of the union by treating as null and void the resolutions of the Divisional Branch Executive. At present, he asks for interim orders substantially to the same effect as the final relief that is sought. The power to grant interim relief is found in s 209(4). 7 Mr Haritou challenges the validity of the Divisional Branch Executive's resolutions on three grounds, namely (i) That by reason of the resolution of the Divisional Conference, the Divisional Branch Executive ceased to have authority to deal with the charges; (ii) That the respondents who comprised the Divisional Branch Executive for the purposes of the hearing were "invincibly biased" against Mr Haritou and were thus disqualified from hearing the charges; (iii) That by denying Mr Haritou both legal representation and time to prepare for the hearing, and by dealing with the charges in the manner that it did, the Divisional Branch acted unfairly (that is contrary to the rules of natural justice), and thereby its decision is vitiated. 8 Before I turn to the merits of the application, there are some introductory remarks I wish to make. In ordinary civil litigation it is usual to decide whether an interlocutory injunction (or relief along the lines sought here) should be granted by arriving at answers to the following questions; a checklist of sorts. First, has the plaintiff presented a case which is not frivolous or vexatious but which presents a serious case to be tried. Second, will damages provide the plaintiff with an adequate remedy. Third, would the plaintiff's undertaking in damages provide adequate compensation to the defendant, should he or she succeed at trial, for any loss sustained because of the interlocutory injunction. Fourth, where does the balance of convenience lie: see generally American Cyanamid Co v Ethicon Ltd [1975] AC 396; Patrick Stevedores Operations No. 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1. There are some cases which suggest a different approach to the grant of interim relief under s 209(4). On occasion the test has been described in terms of what is the fairest and most convenient arrangement for all parties pending trial: eg Dodd v Johnston (1999) 91 IR 352. For reasons which will become apparent it is not necessary to consider whether an applicant for interim relief under s 209 must clear a lower hurdle, or satisfy a lesser standard, than a plaintiff who seeks an interlocutory injunction in a civil suit. There is much to be said for the view that the considerations that must be taken into account should be the same. But, as I say, that is a matter for another day. 9 The first issue to consider is the effect of the resolutions of the Divisional Conference. Did they deprive the Divisional Branch Executive of authority to hear the case against Mr Haritou? For this purpose I will assume that the meeting of the Divisional Conference was regularly convened and that the resolutions were duly passed. It is to be noted, of course, that these issues are hotly contested, as is every other issue that separates the parties. 10 In Skourdoumbis v Maher (unreported, 16 October 2001), I was required to determine whether the Divisional Conference had jurisdiction to hear charges brought against a member under rule 14 of the union's rules. After an examination of the rules, I reached the conclusion that the body that had power to hear charges against a member was either the Divisional Executive or the Divisional Branch Executive. The Divisional Conference and the Divisional Branch Committee of Management have power to deal with charges, but only in the event of an appeal being brought to one of those bodies. 11 I will not repeat the provisions in the union rules to which I made reference to reach the conclusion that the Divisional Conference could not hear a charge as a first instance tribunal. Nor will I set out my reasons for arriving at that conclusion. Finally, I will not deal with the difficult question as to whether the conclusion reached in Skourdoumbis v Maher, a case in which both the applicant and the first respondent were parties, prevents those parties from re-litigating the issue because of the so-called doctrine of "issue estoppel". It is sufficient for present purposes to deal with the matter in the following way. If the ruling in Skourdoumbis v Maher had been made by another judge then, in accordance with well settled principles, I would be required to follow that ruling unless satisfied that it was "plainly wrong". I think I should apply that principle to my earlier decision, not because it is my own, but because of the underlying principle that is involved, namely that there should be certainty in the law. In passing, I note that my analysis of the relevant rules in Skourdoumbis v Maher, failed to take into account one relevant rule, namely rule 14(11). I have considered whether this omission should lead me to conclude that my earlier decision was indeed "plainly wrong". While acknowledging the difficulty of this kind of self analysis (it is always easier to find fault with others), I do not think that if I had paid regard to rule 14(11), I would have reached a different conclusion. Accordingly, Mr Haritou's contention that the Divisional Branch Executive had its jurisdiction to deal with the charges taken away by the resolutions of the Divisional Conference, does not have sufficient prospects of success to warrant the grant of interim relief. 12 I have considered whether it would be appropriate to disregard the first resolution of the Divisional Conference (that the charges be referred to the Divisional Conference) and determine whether the second resolution (that the Divisional Branch Executive refrain from hearing those charges) was within power and bound the Divisional Branch Executive so that defiance of the resolution would invalidate the proceedings before it. On balance, however, I do not think that it is proper to treat the second resolution as having life independent of the first. The principal object of the Divisional Conference was not to stay the hearing of the charges, but to remit the matter to itself for hearing and determination. If the second resolution is given an independent existence, it would bring about a state of affairs that the Divisional Conference did not intend to bring about. 13 The second complaint is that the respondents were disqualified from hearing the charges against Mr Haritou because of their "invincible bias" against him. This is an appeal to the rules of natural justice. As to this a number of things can be said. The first is that we are not dealing with a statutory tribunal, or a person acting in pursuance of a prerogative power, but with a domestic body acting under rules which have been agreed by its members. The requirements of natural justice for such a body will be different from those that regulate the conduct of statutory tribunals. One reason for the difference is that in the case of a domestic body the members have agreed to abide by a set of rules and the authority of a committee to enforce them. In the nature of things, such a committee may have predilections and prejudices resulting from their association with members. An apprehension of bias could exist for all sorts of reasons. So, if an apprehension of bias was a disqualifying consideration (as it would be in the case of a statutory tribunal), the consensual rules would be largely unworkable: see generally Allinson v General Council of Medical Education and Registration [1894] 1 QB 750. On the other hand, the cases do establish that where a member of a committee is "invincibly biased" against a person the subject of disciplinary proceedings before a domestic body, such as when a person who has promoted the charge and supports it as the prosecutor seeks to take part in the hearing of the charge, that person is disqualified from doing so: Dickason v Edwards (1910) 10 CLR 243. In Australian Workers' Union v Bowen No. 2 (1948) 77 CLR 601 proceedings for relief against the expulsion of the applicants from a trade union arose out of a bitter and protracted power struggle in which the accused members, and the Executive which dealt with them, belonged to opposing factions. The High Court decided (by majority) that while the mere apprehension of bias would not disqualify the committee from hearing the charges against members who came from an opposing faction, if the members were "invincibly biassed against the accused as a result of his participation in the controversy" their decision would be vitiated. 14 Mr Haritou has provided the following particulars of the alleged "invincible bias": (i) The respondents are his political opponents within a small division of the union involved in a protracted internal union dispute; (ii) Mr Vari and Mr Patti are unshakeable supporters of Mr Skourdoumbis; (iii) The charges were not heard nor confirmed by the supreme decision-making body of the union; (iv) The respondents have been parties in various Federal Court proceedings associated with internal union disputation; (v) The disputes and grievances involved personal antagonism between the parties; (vi) The bitterness of the protracted dispute is evidenced by the fact (and it is the fact) that Mr Haritou has been working from the office of the CFMEU, Forestry Division, and not the office of the FFTS Divisional Branch since October 2001. Some of these particulars are supported by the evidence, and some are not. But even assuming that each of the particulars was properly established (by which I mean sufficiently proven for the purposes of an interlocutory application), I think they fall short of establishing the "invincible bias" that is necessary to vitiate the decision of the Divisional Branch Executive. 15 Let me say at once that I do not mean to imply Mr Haritou does not have a case for bias. The groundwork for such a claim has clearly been laid out. What I do mean, however, is that the particulars do not of themselves establish "invincible bias" or, perhaps more accurately, that the respondents would find the charges against Mr Haritou proven regardless of the evidence. To establish such a case Mr Haritou would be required to show much more than a bitter and protracted dispute between political opponents which has manifested itself in battles in court and battles elsewhere. He may be able to do so at trial where there will be a good deal more evidence. 16 Turning to the complaint that Mr Haritou was denied legal representation, I think he is again on weak ground. In the case of a domestic tribunal, the better view seems to be that this aspect of the rules of natural justice will not generally apply. This was the view of Griffith CJ in The King v Board of Appeal; ex parte Kay (1916) 22 CLR 183, 185. In McLean v The Workers Union [1929] 1 Ch 602 Maugham J dealt in passing with this issue in relation to the affairs of trade unions, members' clubs and professional bodies acting in a quasi judicial capacity. In an important passage (at 621) Maugham J said: "A domestic tribunal is in general a tribunal composed of laymen. It has no power to administer an oath and, a circumstance which is perhaps of greater importance, no party has the power to compel the attendance of witnesses. It is not bound by the rules of evidence; it is indeed probably ignorant of them. It may act, and it sometimes must act, on mere hearsay, and in many cases the members present or some of them (like an English jury in ancient days) are themselves both the witnesses and the judges. Before such a tribunal counsel have no right of audience and there are no effective means for testing by cross-examination the truth of the statements that may be made." See also Pett v Greyhound Racing Association Ltd No. 2 [1970] 1 QB 46; Enderby Town Football Club Ltd v Football Association Ltd [1971] Ch 591; Fraser v Mudge [1975] 3 All ER 78; R v Visiting Justice at HM Prison, Pentridge; Ex parte Walker [1975] VR 883; Maynard v Osmond [1976] 3 WLR 711; Fagan v National Coursing Association of SA Incorporated (1974) 8 SASR 546; McNab v Auburn Soccer Sports Club Ltd [1975] 1 NSWLR 54. 17 In Cains v Jenkins (1979) 28 ALR 219 the Federal Court, after referring to some of these cases, acknowledged that in general there is no right to representation before a committee exercising such powers as are here under consideration. But the Full Court did indicate that this was not an absolute rule. There may be cases were the seriousness of the matter, or the complexity of the issues involved, are such that to deny a person legal representation would offend natural justice. Whether or not in this case there are any such special circumstances is an issue that has not been covered in the evidence. Thus, at this stage, Mr Haritou has not demonstrated any basis for challenging the decision that he be denied legal representation. When the facts have been examined more closely at trial, a different view may prevail. 18 I need deal only briefly with the complaint that Mr Haritou was denied time properly to prepare for the hearing of the charges. If that were really the case, Mr Haritou would have explained in what precise respects he had been prejudiced. Put another way, if, for example, Mr Haritou needed time to prepare himself to question the witnesses (I assume he would have been given the opportunity to cross examine) or to locate and proof his own witnesses, he would have said so. That he did not suggests to me that he suffered no prejudice by lack of time. It is worthwhile noting in this regard that Mr Haritou was given the period of notice that was required by the rules. 19 Finally there is the complaint that the hearing was conducted in an unfair manner. I have looked at the minutes of the proceeding before the respondents and have reached the conclusion that there is nothing in the point. 20 The application for interim relief is refused. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. Associate: Dated: 19 February 2002 Counsel for the Applicant: Ms S Jones Solicitor for the Applicant: Gill Kane & Brophy Counsel for the First to Third Respondents: Mr W Friend Solicitor for the First to Third Respondents: Maurice Blackburn Cashman Counsel for the Fourth Respondent: No Appearance Solicitor for the Fourth Respondent: No Appearance Date of Hearing: 5 February 2002 Date of Judgment: 8 February 2002	4,861
federal_court_of_australia:fca/single/1979/1979FCA0162	decision	commonwealth	federal_court_of_australia	application/pdf	1979-12-20 00:00:00	Inquiry into the election in the Australian Postal & Telecommunications Union v Wilson, E.K. [1979] FCA 162	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1979/1979FCA0162.pdf	2024-09-13T22:45:23.936994+10:00	Lp "y + . we pa ba 9) He] "mn s if) Ga bo ta cr (o) = organisation) - election material circulated to members of vnion paid for from union funds - breach of implied rule - whether irregularity within ss.4 and 165 of Conciliation and Arbitration Act 1904 = held not such an irregularity. Ballot papers not distributed to all members due to computer malfunction - held an irregularity within the meaning of the 'Act but, by reason of number of possible votes involved, not one which had or might have affected the result - Conciliation and Arbitration Act 1904, ss.4, 159, 165(1) and (4). IN THe MATTER of an inquiry into en clection in the AUSTRALIAN POSTAL AND 'TELECOMMUNICATIONS UNTON (Applicant - Edward keith WILSON). NiS.W. No. 38 of 1979 SHEPPARD, J. Sydney 20th December, 1979 + / loom m ee) o = [Ti : GR me im sare F Ye 2307 a ! B38 AF ANZ 95 ° Fi fee] INDUSTRIAL DIVISION IN THE FEDERAL COURT OF AUSTRALIA No. 38 of 1979 NEW SOUTH WALES DISTRICT REGISTRY DATE OF ORDER: 20 December, WHERE MADE: Sydney IN THE MATTER of the Conciliation and Arbitration Act, 1904 AND IN THE MATTER of an inquiry into an election in the Austre JUDGE MAKING ORDER: Sheppard, J. THE COURT ORDERS THAT: The application be dismissed, ae et eth ta al Ne RE Ma MR et IN THE FEDERAL COURT OF AUSTRALIA ) INDUSTRIAL DIVISION . No. 38 of 1979 NEW SOUTH WALES DISTRICT REGISTRY IN THE MATTER of the Conciliation and Arbitration Act, 1904 AND JN THE MATTER of an inquiry into an election in tne Austrslian Postal 20 December, 1979 SHEPPARD, J. JUDGMENT This is an application by Edward Keith Wilson pursuant tc s.15° of the Conciliation and Arbitration Act 1904. The applicant is a member of the Australian Postal and Tele- communications Union ("the A.P.T.U." or "the union"), An election for a number of offices in the union began on 3 September 1979 and concluded on 2 October 1979. It was conducted pursuant to s.170 of the Act by an officer of the Australian Electoral Office in Sydney. The irregularities claimed to have been present were stated in the application as follows: 1. Use of the organization's property and resources by the general secretary-treasurer so as to support, promote or defeat various candidates for office. 2. The unauthorised collection of ballot papers by a cendidate in the election. i. At the hearing the second matter relied upon was abandoned. The first was pressed end in addition it was claimed that a number of persons entitled to vote had been disfranchised because no ballot papers had been sent to them, It is open to the applicant to rely on-that matter, notwithstanding it was not referred to in his application. Once an inquiry is put in train, the court is empowered to examine any breach of the Act or relevant union rules or conduct by officials, perties or individuals, which is disclosed ty the evidence and through which an irregularity within the meaning of the Act may have occurred; Re Elections for Offices in Australasian Meat Industry Employees Union, 5 FLR 260 at p.265, Jutte v. Amalgamated Engineering Union, 10 FLR 195 at p.20ol. The basis for the first matter of complaint is the sending by the general secretary--treasurer of the union, Mr. Slater, on 29 August 1979 of an open letter to some members of the New South Wales branch of the union, The letter was sent on the letterhead of the federal executive of the union. It was printed at a cost of $998.55. It was enclosed in envelopes belonging to the union. With it was also enclosed a union newsletter, about which no complaint is made. The envelopes were addressed by a commercial mailing firm, which aiso placed the letter and the newsletter in the "envelopes, Its charges amounted to $474. Postage amounted to $1,261. Each of the amounts incurred was paid out of union funds. The open letter was headed with the words, "Come Off It, Mr. Hawkins", These were printed in large bold type. The letter began by referring to a circular which had been sent by Mr. Hawkins on 9 August 1979 and was numbered 79/77. Before saying more of the terms of Mr. Slater's open letter, I should say something of Mr. Hawkins circular and of Mr. Hawkins himself. Mr. Hawkins is another member of the union, He holds office as secretary-treasurer of the New South Wales branch of it. That was not an office for which there was an election in September 1979, but Mr. Hawkins was a candidate in that election for the position of branch councillor, Had he been elected, he would not have had to relinquish his position as secretary-treasurer. He would have been entitled to hold both offices. In the result, however, he was not elected branch councillor. For some time there has been antipathy between Mr. Hawkins and Mr. Slater. The most recent evidence of this, prior to the sending of the open letter by Mr. Slater on 29 August 1979, was the circular sent by Mr. Hawkins on 9 August 1979. It was typed on the letterhead of the New South Wales branch of the union and addressed to A.P.T.U. representatives. I gather that those were all the persons holding office in the union, The circular was the subject of a decision of Sweeney J in a matter decided by him on 14 September 1979. The matter was an aplication by a Mr. Kanan pursuant to s.141 of the Act. The respondents to the application were Mr. Hawkins and a Mr. Battese, who was the general president of the New South Wales branch of the union. Sweeney J held that the sending "oD. of the circular was a breach of the rules of the union because there had been a use of union resources, including funds, to produce a circular the terms of which advantaged certain candidates in the election and sought the defeat of their opponents. The basis for saying that what was done amounted to a breach of the rules of the union was that, although there was no express rule against the use of the resources and funds of the union for the support of particular candidates, there was to be implied in the rules a provision to that effect. Reference was made to Short v Wellings, 72 CAR 84 and to the judgment of this court in Lyons v. Deegan (27 June 1978 unreported). His Honour analysed the circular in detail. I do not refer to his analysis, other than to say that in my respectful opinion his conclusion that it was designed to advantage particular candidates in the election and to disadvantage others was unquestionably correct, With that background I can now return to the terms of the open letter in question entitled "Come Off It, Mr. Hawkins! In my opinion it, like Mr. Hawkins circular of 9 August 1979, was elso a document designed to advantage some candidates in the election and disadvantage others. I do not quote from it in detail. It is sufficient to refer to the following paragraphs: "ADVICE TO MR. HAWKINS It is my considered opinion and, I believe, the opinion of officials and rank and file union members throughout Australia also, that the New South Wales Branch is at the lowest ebb ever in the history of the union - even at a 4, "far worse level than when the' New South Wales Branch was controlled by the notorious DLP Industrial Groupers twenty years ago. Yes, Mr. Hawkins, under your leadership the New South Wales Branch is in an awful mess and you and your fellow officials must accept the responsibility for this. COMPLAINTS FROM NEW SOUTH WALES MEMEBERS New South Wales members complain to the Federal Office regularly about a whole range of problems, including the foliowing: Correspondence from Branch members remains unanswered by you or your office « Country members do not get a fair say in the affairs of the New South Wales Branch (e.g. Wagga Wagga sub- Branch) . You are unable to answer the genuine day-to-day enquiries of members satisfactorily - The abuse and smears you level at others who do not go along with your antics e eee eee eee eee eee I think you signed Circular No. 79/77 on 9th August 1979 because you are worried, Mr. Hawkins, about the opposition in your own State and, moreover, opposition from your former friends. eee ene eee eoe eee IT'S UP TO YOU - THE MEMBERS The APTU Federal Office has received a constent flow of complaints from APTU New South Wales members against the New South Wales Branch Office. If there is any 'disruptive election propaganda! being distributed we believe it probably originated in the office of Mr. Hawkins. NOW IT IS UP TO YCU - THE MEMBERS - TO MAKE THE UNION STRONG CNCE AGAIN IN NEW SOUTH WALES. , Ignore Mr. Hawkins' slander sheets." It was the strong submission of counsel for the organizat that the open letter was no more than a reply to an attack on the union itself made by Nr. Hawkins in his circular. Such a reply, if it were designed to protect the union as a whole from an unwarranted attack, would not have been a breach De of any rule express or implied, Holmes v. Riordan 86 CAR 180 at p.197. But in my opinion Mr. Slater's letter went beyond a mere reply to any attack on the union itself. In reaching that conclusion, I have taken into account the whole of its terms and the fact it was despatched on 29 August 1979, just before the commencement of the conduct of the election. Counsel for the organization pressed upon me the point that I had to make allowances for the cut and thrust of union politics. I agree that what to some may seem a counter attack, may, to people engaged in the tough infignting of union affairs, be no more than a reply. Indeed, in the wider sphere of politics itself, there is an increasing and regrettable tendency for questions not to be answered, but rather for the so called reply to consist of a blistering attack on the interrogator himself. All I say about this is that this community is bound by the one set of rules. The actions of people, whether they be politicians, union officials, company directors or the office bearers of a local sporting club, must be looked at objectively and in accordance with ordinary standards. So judged what Mr. Slater wrote in his open letter was designed positively to disadvantage some of the candidates in the election and thus inferentially to advantage others. I should add that the fact that it was enclosed with a newsletter which urged a fair vote, makes no aifference to my conclusion in that regard, The open letter was preduced with money provided from union funds. That is so, at least to the extent of $998, which was the cost of printing it. There may be a question m as to the emounts incurred for mailing and postage, beering in mind that the offending document was despatched with a union newsletter, I do not need to decide that question, although I am inclined to the view that the whole of the expenditure was improperly incurred. It follows that there was an irregularity. The send- ing of the circular was a breach of an implied provision of the union rules. But it is necessary to determine whether the irregularity was an irregularity within the meaning of the Act. Unless it was, the jurisdiction vested in this court by ¢.165 of the Act does net arise. The expression "irregularity" is defined in s.4 of the Act as follows: " tTIrregularity', in relation to an election or ballot, includes a breach of the rules of an organization or of a branch of an orgenization, and any act, omission or other means whereby the full and free recording cof votes by ali persons entitled to record votes, and by no other persons, or a correct ascertainment or declaration of the results of the voting is, or is attempted to be, prevented or hindered." The definition, by reason of the use of the word "include: may not be an exhaustive one, but it is difficult to think of any other type of irregularity that would not be within the definition. The words "any act, omission or other means" are very wide, notwithstanding they are qualified by the words that follow them. No submission was made based on the fact that the definition was an inclusive one and I put that matter aside. There is then the question of whether the words commencing with the word "whereby" qualify not only the words "any act, omission or other means", but also the earlier worés "a breach of the rules of an organization or of a branch of an organization". In my opinion, the better view is that the words commencing with the word "whereby" do qualify the reference to a breach of rules, as well as the words "any act, omission or other means", In reaching that conclusion, I have taken into account the presence of the comma after the words "branch of an organization". But the irregularity which is being defined is an irregularity "in relation to an election or ballot". It seems unlikely that the legislature would have intended that any breach of the rules of an organization whatsoever would have been sufficient to warrant the court exercising jurisdiction under s.165. The position may have been different if the definition had defined an irregularity as a breach of a rule in relation to the holding of an election or ballot, but that is not the way it reads. It follows that for a breach of the rules of the organization to be an irregularity for the purposes of s.165, the breach must have been one which prevented or hindered the full and free recording of votes by all persons entitled to record votes and by no other persons. The balance of the words cf the definition can have no relevance, In my was not the sending of election material such as that which was sent, but the sending of it at the cost and expense of the union itself. I turn to the second ground. The evidence of Mr. Johnston, who conducted the election, establishes that the fact that some members of the union did not receive ballot papers was due to a malfunction of the computer used by a firm engaged by the electoral office to prepare addresses to be affixed to the envelopes containing some of the ballot papers. What happened was that in some cases the computer transposed on to the envelope the address of the person whose name followed next on the roll, rather than che correct address. According to Mr. Johnston's evidence, which I accept, this happened in 40 cases. There was evidence from 25 persons, some of whom were cross-examined, that they did not receive ballot papers but nine of them were amongst the 40 affected by the computer malfunction. The possible number of electors affectec was, therefore, 56, Without going into detail, I am not satis- fied that each of the six who were cross-examined took adequate steps to notify changes of address, nor am I satisfied that each of the 56 persons, if he.or she had received a ballot paper, would have voted. In round terins, 6,000 persons out cf a total electorate of 15,000 cast votes. in my opinion the computer malfunction was an irregularity within the meaning of s.165. I am not persuaded by the evidence there was any cther irregularity. Even if 10. there were, no more than about 50 votes in all could possibly be involved. Section 165(4) of the Act, so far as it is relevant provides that: "The Court shall not declare an election, or any step taken in or in connexion with an electicn, to be void, or declare that a person was not elected, wiless the Court is of opinion that, having regard to the irregularity found, and any circumstances giving rise to a likeli-~ hoed that similar irregvlarities may have occurred or may occur, the result of the election may have been affected, or may be affected, by irregularities." In my opinion, there is no evidence of circumstances giving rise to a likelihood that similar irregularities may have occurred. The question then is whether I should be of opinion that the result of the election may have been affected by the computer malfunction. In a few cases the vote was very close; otherwise the margin between candidates was very wide. Having reflected on the matter, I have decided that the evidence is not such as to persuade me to form the opinion that the result of the election might have been affected by the irregularity. I would add that that would remain my view if the number of voters who did not receive ballot papers was of the order of 50 rather than 40. In those circumstances the second ground relied upon also fails with the result that the application is dismissed, My conclusion makes it unnecessary to consider to what extent there would have had to be further elections if my view had been otherwise. In the submission of the applicant i. there would heave had to be elections for all offices. In the submission of the other parties only that of branch councillor should have been regarded as affected. As I say, I express no view on that matter. HIS HONCUR: Do you wish the exhibits returned? MR. HART: I would seek an order for the return of the exhibits, your Honour. HIS HONOUR: The exhibits may be returned. Is there any other matter? MR. SOLOMON: The applicant would ask for a certificate under s.168(2) of the Act. Mr. Wilson acted reasonably. , HIS HONOUR: Tne difficulty, I feel, is that the whole matter has to be viewed and one has to take into account the sending of the circuler of 9 August to which that of 29 August was a riposte. Does anybody else wish to say anything about this application? MR. HART: Your Honour, I am not in a position where I have any instructions on this point and I would seek to have the matter reserved if it is pursued by Mr. Solomon so that it can be debated at a future time, HIS HONOUR: I think that is reasonable, really. MR. SOLOMON: If your Honour pleases. HIS HONOUR: Is it convenient if the matter stands over vnvil February? MR. HART: Yes, from my point of view. 12. MR. SOLOMON: Yes, your Honour, cuite satisfactory. HIS HONOUR: The application for a certificate under s.168(2) MR. of the Act is stood over to a date to be fixed and notified by my associate in February. HODGKINSON: In respect of that application, would your Honour give leave to any other party at that time to make a similar application under the Act? HIS HONOUR: Yes, I will give that leave. MR. HODGKINSON: Thank you, your Honour. HIS HONOUR: Is there any other matter? If not, I will adjourn, AT 12.28 P.M. THE MATTER WAS ADJOURNED INDEFINITELY	4,458
federal_court_of_australia:fca/single/2018/2018fca0582	decision	commonwealth	federal_court_of_australia	text/html	2018-04-27 00:00:00	Roadshow Films Pty Limited v Telstra Corporation Limited [2018] FCA 582	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2018/2018fca0582	2024-09-13T22:45:24.813884+10:00	FEDERAL COURT OF AUSTRALIA Roadshow Films Pty Limited v Telstra Corporation Limited [2018] FCA 582 File number: NSD 1925 of 2017 Judge: NICHOLAS J Date of judgment: 27 April 2018 Catchwords: Copyright – application for "site blocking" orders under s 115A of the Copyright Act 1968 (Cth) – online locations from which files used to facilitate operation of online streaming service may be downloaded – whether requirements of s 115A satisfied – whether orders should be made Legislation: Copyright Act 1968 (Cth) s 115A Cases cited: Roadshow Films Pty Ltd v Telstra Corporation Ltd (2016) 248 FCR 178 Date of hearing: 13 April 2018 Registry: New South Wales Division: General Division National Practice Area: Intellectual Property Sub-area: Copyright and Industrial Designs Category: Catchwords Number of paragraphs: 27 Counsel for the Applicants: Mr J Cooke Solicitor for the Applicants: Baker & McKenzie Counsel for the Respondents: The Respondents filed submitting appearances ORDERS NSD 1925 of 2017 BETWEEN: ROADSHOW FILMS PTY LIMITED (ACN 100 746 870) First Applicant (and others named in the Schedule) AND: TELSTRA CORPORATION LIMITED (ACN 051 775 556) First Respondent (and others named in the Schedule) JUDGE: NICHOLAS J DATE OF ORDER: 27 April 2018 In these orders, the following terms have the following meanings: (a) Domain Name means a name formed by the rules and procedures of the Domain Name System (DNS) and includes subdomains. (b) DNS Blocking means a system by which any user of a Respondent's service who attempts to use a DNS resolver that is operated by or on behalf of that Respondent to access a Target Online Location is prevented from receiving a DNS response other than a redirection as referred to in Order 5. (c) IP Address means an Internet Protocol Address. (d) Optus means the fourth to thirteenth respondents. (e) Target Online Locations means the online locations as referred to in Schedule 2 and that are or were accessible: (i) at the URLs listed in Schedule 2 to this Order (together, the Target URLs); (ii) at the IP Addresses listed in Schedule 2 to this Order (together, the Target IP Addresses); and (iii) at the Domain Names listed in Schedule 2 to this Order (together, the Target Domain Names). (f) Telstra means the first to third respondents. (g) TPG means the thirty-second to the forty-ninth respondents. (h) URL means a Uniform Resource Locator. (i) Vocus means the fourteenth to thirty-first respondents. THE COURT ORDERS THAT: 1. The requirement under s 115A(4) of the Copyright Act 1968 (Cth) that the Applicants give notice of their application to the persons who operate the Target Online Locations be dispensed with in so far as any such notice has not already been given. 2. Each Respondent must, within 15 business days of service of these Orders, take reasonable steps to disable access to the Target Online Locations. 3. Order 2 is taken to have been complied with by a Respondent if that Respondent implements any one or more of the following steps: (a) DNS Blocking in respect of the Target Domain Names; (b) IP Address blocking or re-routing in respect of the Target IP Addresses; (c) URL blocking in respect of the Target URLs and the Target Domain Names; or (d) any alternative technical means for disabling access to the Target Online Location as agreed in writing between the Applicants and a Respondent. 4. If a Respondent in complying with Order 2 does not implement one of the steps referred to in Order 3, that Respondent must, within 15 business days of service of these Orders, notify the Applicants of the step or steps it has implemented. 5. Each Respondent must redirect any communication by a user of its service seeking access to the Target Online Locations in Schedule 2, which have been disabled pursuant to Order 2, to a webpage established, maintained and hosted by either: (a) the Applicants, or their nominee, pursuant to Order 6; or (b) that Respondent or its nominee. The Applicants' obligations pursuant to Order 6 and 7 only arise if a Respondent notifies the Applicants that the Respondent will redirect a communication pursuant to Order 5(a) and for so long as at least one Respondent redirects communications to that webpage. 6. The Applicants, or their nominee, must establish, maintain and host a webpage to which users of a Respondent's service are to be redirected pursuant to Order 5, which website shall state that access to the online location has been disabled because this Court has determined that it infringes or facilitates the infringement of copyright. 7. Within 5 business days of these Orders, the Applicants will notify each of the Respondents in writing of the URL of the webpage established, maintained and hosted under Order 6 and, if the webpage ceases to operate for any reason, will notify each of the Respondents in writing of a different URL that complies with Order 6. 8. If, in complying with Order 5, a Respondent redirects any communication by a user of its service to a webpage established, maintained and hosted by it, that Respondent or its nominee must ensure that the webpage states that access to that online location has been disabled because this Court has determined that it infringes or facilitates the infringement of copyright. 9. In the event that any of the Applicants has a good faith belief that: (a) any Target URL, Target IP Address or Target Domain Name which is subject to these Orders has permanently ceased to enable or facilitate access to a Target Online Location; or (b) any Target URL, Target IP Address or Target Domain Name has permanently ceased to have the primary purpose of infringing or facilitating the infringement of copyright, a representative of the Applicants must, within 15 business days of any of the Applicants forming such a good faith belief, notify each Respondent of that fact in writing, in which case the Respondents shall no longer be required to take steps pursuant to Order 2 to disable access to the relevant Target URL, Target IP Address or Target Domain Name that is the subject of the notice. 10. A Respondent will not be in breach of Order 2 if it temporarily declines or temporarily ceases to take the steps ordered in Order 2 (either in whole or in part) upon forming the view, on reasonable grounds, that suspension is necessary to: (a) maintain the integrity of its network or systems or functioning of its blocking system; (b) upgrade, troubleshoot or maintain its blocking system; (c) avert or respond to an imminent security threat to its networks or systems; or (d) ensure the reliable operation of its ability to block access to online locations associated with criminal content if it reasonably considers that such operation is likely to be impaired, or otherwise to comply with its statutory obligations including under section 313(3) of the Telecommunications Act 1997 (Cth), provided that: (a) unless precluded by law, it notifies the Applicants or their legal representative(s) of such suspension, including the reasons and the expected duration of such suspension, by 5.00 pm on the next business day; and (b) such suspension lasts no longer than is reasonably necessary and, in any case, no longer than 3 business days or such period as the Applicants may agree in writing or the Court may allow. 11. The owner or operator of any of the Target Online Locations and the owner or operator of any website who claims to be affected by these Orders may apply on 3 days' written notice, including notice to all parties, to vary or discharge these Orders, with any such application to: (a) set out the orders sought by the owner or operator of the Target Online Locations or affected website; and (b) be supported by evidence as to: (i) the status of the owner or operator of the Target Online Locations or affected website; and (ii) the basis upon which the variation or discharge is sought. 12. The parties have liberty to apply on 3 days' written notice, including, without limitation, for the purpose of any application: (a) for further orders to give effect to the terms of these Orders; (b) for further orders in the event of any material change of circumstances including, without limitation, in respect of the consequences for the parties and effectiveness of the technical methods under Order 2; and/or (c) for orders relating to other means of accessing the Target Online Locations not already covered by these Orders. 13. If a Target Online Location is at any time during the operation of these Orders provided from a different Domain Name, IP Address or URL: (a) the Applicants may file and serve: (i) an affidavit which: (A) identifies the different Domain Name, IP Address or URL; and (B) states that, in the good faith belief of the deponent, the website operated from the different Domain Name, IP Address or URL is a new location outside Australia for the Target Online Location the subject of these Orders and brief reasons; and (ii) proposed short minutes of order to the effect that: (A) the definition of Target Online Locations in these orders is amended to include the different Domain Name, IP Address or URL; and (B) the time period in Order 2 of these Orders starts to run in relation to the different Domain Name, IP Address or URL upon service in accordance with Order 17(d) of the Orders as made. 14. These Orders are to operate for a period of 3 years from the date of these Orders. 15. Six months prior to the expiry of these Orders: (a) the Applicants may file and serve: (i) an affidavit which states that, in the good faith belief of the deponent, the Target Online Locations continue to have the primary purpose of infringing or facilitating the infringement of copyright; and (ii) short minutes of order extending the operation of these Orders for a further 3 year period; and (b) the process contained in Order 17 shall apply. 16. The affidavit referred to in Orders 13 and 15 is to be given by a deponent duly authorised to give evidence on behalf of the Applicants and may be given by their solicitor. 17. If an affidavit and short minutes of order are filed and served in accordance with Orders 13 or 15: (a) within 7 business days, the Respondents must notify the Applicants and the Court if they object to the Orders being made in accordance with the short minutes of order served by the Applicants; (b) if any Respondent gives notice of any objection, or the Court otherwise thinks fit, the proceeding will be relisted for further directions; (c) if no Respondent gives notice of any objection and the Court does not otherwise require the proceeding to be relisted, then the Court may make orders in terms of the short minutes of order served by the Applicants without any further hearing; and (d) the Applicants must serve on the Respondents any such orders made. 18. The Applicants pay Telstra's, Optus', Vocus' and TPG's compliance costs calculated at the rate of $50 per Domain Name the subject of DNS Blocking undertaking for the purposes of complying with Order 2. 19. There be no order as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT NICHOLAS J: 1 Before me is an application for orders under s 115A of the Copyright Act 1968 (Cth) ("the Act") requiring each of the respondents to take reasonable steps to disable access to various online locations. The second to eighth applicants are the owners of copyright in various cinematograph films. The first applicant is an exclusive licensee of one of those films. 2 The applicants were also applicants in Roadshow Films Pty Ltd v Telstra Corporation Ltd (2016) 248 FCR 178 ("Roadshow"). Most of the respondents were also respondents in Roadshow. 3 There are 49 respondents in all, each of which is a carriage service provider, and a member of the Telstra, Optus, Vocus (formerly M2) or TGP groups. The respondents have not sought to be heard in the proceeding and submitting appearances have been filed on their behalf. The orders sought by the applicants are to the same effect as those made in Roadshow except that they target different online locations. 4 The affidavit evidence relied upon by the applicants consists of the following affidavits: Rodney McKemmish sworn 22 December 2017; Rodney McKemmish sworn 9 April 2018; Andrew Stewart sworn 1 February 2018; Andrew Stewart sworn 10 April 2018; Andrew Stewart sworn 12 April 2018; Nicholas Kraegen affirmed 1 February 2018; and Nicholas Kraegen affirmed 10 April 2018. 5 The uniform resource locator ("URL"), the domain name and the internet protocol address ("IP address") for each of the online locations in respect of which orders are sought are identified in the Amended Originating Application and will be identified in the schedule to the orders made. With one exception, those online locations are not websites but specific locations from which various files may be downloaded by certain applications that operate on the Android operating system. The only exception is the website at http://hdsubs.com ("the HD Subs website"). All of these online locations are referred to in the Amended Originating Application as the "target online locations" and this is how I shall describe them in these reasons. There are 16 target online locations. 6 The country of registration for the majority of the IP addresses of the target online locations is the Netherlands. The countries of registration for the other target online locations include France, and the United States of America. None of the target online locations appear to be situated in Australia. 7 Mr Stewart and Mr Kraegen are solicitors with Baker & McKenzie who act for the applicants. Mr Stewart's evidence identifies certain cinematograph films in which copyright is owned by one of the applicants. I do not propose to list the cinematograph films referred to in Mr Stewart's evidence but they are all commercially released motion pictures and pre-recorded television programs some of which are very well known. Mr Kraegen's affidavits refer to the efforts made by the applicants' solicitors to notify the persons who operate the target online locations of the application. 8 Mr McKemmish is a forensic computer expert who has produced reports detailing the functionality provided by the target online locations, how they support the operation of various applications, how those applications facilitate the infringement of the applicants' copyright in the relevant films and the role the target online locations play in providing online access to those and other cinematograph films by the use of certain set-top boxes. 9 There are three particular applications with which this proceeding is concerned: the HD Subs+ App; the Upgraded HD Subs+ App; and the Press Play Extra App. 10 I shall refer to these collectively as the "HD Subs+ Apps". According to Mr McKemmish, each of the HD Subs+ Apps are different versions of each other, incorporating the same underlying technology and functionality. Mr McKemmish's investigations showed that the Upgraded HD Subs+ App and the Press Play Extra App are updated versions of the HD Subs+ App with the same functionality except that, by the time he came to use these apps, the catalogue content had changed. The most significant difference seems to be that the 10 films and 2 television programs referred to in Mr Stewart's affidavit sworn 1 February 2018 had been removed from the catalogue content of the HD Subs+ Apps. However, a number of other films had been added the copyright in which was also owned by one of the applicants. These additional films are referred to in Mr Stewart's affidavit sworn 10 April 2018. 11 The HD Subs+ App comes pre-installed on what is known as the X-96 Smart TV Box ("X-96"). The X-96 is a compact electronic device that connects to a TV or video screen and is connected to the internet via either a cable or a wireless connection. It is in essence a mini computer that can run various apps, a web browser and music and video streaming services. It operates on the Android operating system. The X-96 can be controlled by either connecting a keyboard and mouse to the box or by using a remote control unit supplied with it. 12 The HD Subs+ App can also be downloaded from the HD Subs website and installed on other Android devices. It will then automatically upgrade to either the Upgraded HD Subs+ App or the Press Play Extra App. 13 When using the HD Subs+ Apps to stream either TV or video content, a person is required to be registered and have a valid activation code. To obtain this code the user can go to the HD Subs website and purchase a subscription. Once a credit card payment has been made, the activation code is sent to the user by email from the email address [email protected]. Once in possession of the activation code, the user follows the prompts, enters the activation code, and is then able to stream content. 14 Once the user's account is active, the user can select movies or TV shows to stream from a catalogue of content. The movie content available for streaming is organised into various categories including "latest", "recommended", "sports", "premier league", "TV serial" and "films". The latter are organised into categories based on year of release. The user can also stream and watch various TV channels including BBC 1, BBC 2, BBC Lifestyle HD, Disney, Disney Junior, EPL Xtra 1, 2 and 3, Fox HD and Nat Geo Wild HD. None of the apps can be used to stream these TV channels or movie content without the user first obtaining an activation code. Evidence from Mr Stewart indicates that the movie content and the TV channel content has been streamed without the consent of the copyright owners. 15 The HD Subs+ Apps communicate via the internet with servers located outside Australia ("Facilitating Servers") the IP addresses for which are obtained by the HD Subs+ App. 16 The Facilitating Servers perform a number of functions including: (a) authenticating users; (b) providing electronic program guide ("EPG") information; (c) providing software updates; (d) content management that allow retrieval of the IP addresses of the relevant content server that hosts the movie or TV broadcast selected by the user. 17 Content management is provided by content management servers. After connecting to the content management servers, the HD Subs+ App connects to one or more content servers and requests the specific video or TV broadcast. The requested movie or TV broadcast is then streamed from the content servers to the user's device where it is viewed on the TV or monitor to which it is connected. All of the target online locations play a part in facilitating the delivery of the content to the user's device. Mr McKemmish says that the HD Subs+ Apps use a combination of Domain Name Service queries and HTTP communications to interact with the various Facilitating Servers. These deliver files that include information required by the HD Subs+ Apps to stream the requested content. 18 The description in paragraphs [12] to [17] was correct up until 12 January 2018. However, by the time of the hearing it was no longer possible to view streamed content using any of the HD Subs+ Apps even though content selected by Mr McKemmish was still being streamed to his X-96. Why this was so is not clear. Mr McKemmish's evidence, which I accept, indicated that the system is most likely in a state of transition pending another upgrade. The fact that the target online locations may not presently be facilitating the infringement of the applicants' copyright is a relevant consideration but not one that will necessarily result in the dismissal of the application: see Roadshow at [50]-[54]. 19 Section 115A(1) and (2) of the Act provide: (1) The Federal Court of Australia may, on application by the owner of a copyright, grant an injunction referred to in subsection (2) if the Court is satisfied that: (a) a carriage service provider provides access to an online location outside Australia; and (b) the online location infringes, or facilitates an infringement of, the copyright; and (c) the primary purpose of the online location is to infringe, or to facilitate the infringement of, copyright (whether or not in Australia). (2) The injunction is to require the carriage service provider to take reasonable steps to disable access to the online location. 20 The specific requirements of s 115A(1) of the Act were considered in Roadshow at [35]-[49]. As explained at [46]-[49]: [46] […] To the extent s 115A(1)(b) refers to an online location that "infringes copyright" it may be understood as referring to acts comprised within the copyright as defined, in the case of cinematograph films, in s 86 of the Act. Thus, an online location will infringe copyright in a cinematograph film in the sense described in s 115A(1)(b) if the online location performs any of the acts referred to in s 86 without the licence of the copyright owner. These include the act of making available online, or electronically transmitting, a copy of the film. It necessarily follows that s 115A(1) permits the grant of an injunction in circumstances where it is impossible to say who is responsible for operating the online location or determining the content of any material made available online at the online location. [47] Even if the online location does not itself infringe copyright, the requirements of s 115A(1)(b) may be satisfied if the online location "facilitates" an infringement of copyright. The language used is deliberately broad. The word "facilitate" means "to make easier or less difficult; help forward (an action or process etc)": Macquarie Dictionary (6th ed, 2013) at p 525. In determining whether an online location facilitates the infringement of copyright, the Court will seek to identify a species of infringing act and ask whether the online location facilitates that act by making its performance easier or less difficult. An online location may both infringe and facilitate the infringement of copyright by making an electronic copy of a work or other subject matter available online for transmission to users. But it may also facilitate the infringement of copyright merely by making it easier for users to ascertain the existence or whereabouts of other online locations that themselves infringe or facilitate the infringement of copyright. [48] The requirement that the online location have as its primary purpose copyright infringement or the facilitation of copyright infringement provides an important check on the operation of s 115A. Thus, the fact that a particular website makes some unlicensed copyright material available online or is routinely used by some users to infringe copyright does not establish that the primary purpose of the website is to infringe or facilitate the infringement of copyright. […] [49] The purpose of the online location may be ascertained by a consideration of the use that is or may be made of it. If the Court is satisfied that the principal activity for which the online location is used or designed to be used is copyright infringement or the facilitation of copyright infringement, then it will be open to conclude that the primary purpose of the online location is to infringe, or to facilitate the infringement of, copyright. 21 The target online locations contribute functionality to a subscription based online service ("the HD Subs service") that facilitates the electronic transmission of films and television broadcasts in which copyright subsists, without the licence of the copyright owners. The target online locations facilitate such infringements by providing updates, authenticating users or providing EPG information for the HD Subs service. This appears to be their sole function. In the case of the HD Subs website, it provides the HD Subs+ Apps, processes payments, and provides activation codes that enable a user to access the HD Subs service. Again, this would appear to be its sole function. 22 Based on the evidence before me, I am satisfied that: the respondents have provided access to the target online locations each of which is located outside Australia; each of the target online locations have facilitated the infringement of the applicants' copyright; and the primary purpose of each of the target online locations is to facilitate the infringement of copyright. I am satisfied that the power to make orders under s 115A in respect of the target online locations is enlivened. 23 In my view the applicants have taken reasonable steps to notify the operators of the target online locations of this application and it is appropriate to make an order dispensing with the requirement to give notice in accordance with s 115A(4)(b) to the extent that such notice has not already been given. 24 On the question of the discretion to make orders under s 115A, it is apparent from the evidence that the target online locations have facilitated the infringement of copyright in cinematograph films and television broadcasts on a widespread scale. This facilitation of the infringement of the copyright is flagrant and demonstrates a disregard by the operators of the service for the rights of copyright owners. 25 The evidence indicates that the making of orders under s 115A in respect of the target online locations will not have any impact on the use of the X-96 boxes except with respect to the streaming of copyright material using the HD Subs+ Apps. 26 I consider this is an appropriate case in which to make the orders under s 115A sought by the applicants. 27 Orders accordingly. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholas. Associate: Dated: 27 April 2018 SCHEDULE OF PARTIES NSD 1925 of 2017 Applicants Second Applicant: VILLAGE ROADSHOW FILMS (BVI) LTD Third Applicant: DISNEY ENTERPRISES, INC Fourth Applicant: TWENTIETH CENTURY FOX FILM CORPORATION Fifth Applicant: PARAMOUNT PICTURES CORPORATION Sixth Applicant: INC COLUMBIA PICTURES INDUSTRIES Seventh Applicant: UNIVERSAL CITY STUDIOS LLC Eighth Applicant: WARNER BROS. ENTERTAINMENT INC Respondents Second Respondent: PACNET INTERNET (A) PTY LTD ACN 085 213 690 Third Respondent: PACNET SERVICES (A) PTY LTD ACN 056 783 852 Fourth Respondent: OPTUS MOBILE PTY LIMITED (ACN 054 365 696) Fifth Respondent: OPTUS NETWORKS PTY LIMITED (008 570 330) Sixth Respondent: OPTUS ADSL PTY LIMITED (ACN 138 676 356) Seventh Respondent: OPTUS SATELLITE PTY LIMITED (ACN 091 790 313) Eighth Respondent: UECOMM OPERATIONS PTY LIMITED (ACN 093 504 100) Ninth Respondent: VIVIDWIRELESS PTY LIMITED (ACN 137 696 461) Tenth Respondent: OPTUS INTERNET PTY LIMITED (ACN 083 164 532) Eleventh Respondent: VIRGIN MOBILE (AUSTRALIA) PTY LIMITED (ACN 092 726 442) Twelfth Respondent: ALPHAWEST SERVICES PTY LTD (ACN 009 196 347) Thirteenth Respondent: OPTUS WHOLESALE PTY LIMITED (ACN 092 227 551) Fourteenth Respondent: M2 WHOLESALE PTY LTD ABN 99 119 220 843 Fifteenth Respondent: M2 WHOLESALE SERVICES PTY LTD ACN 119 220 843 Sixteenth Respondent: M2 COMMANDER PTY LTD ACN 136 950 082 Seventeenth Respondent: PRIMUS NETWORK (AUSTRALIA) PTY LTD ACN 109 142 216 Eighteenth Respondent: PRIMUS TELECOMMUNICATIONS PTY LIMITED ACN 071 191 396 Nineteenth Respondent: PRIMUS TELECOMMUNICATIONS (AUSTRALIA) PTY LTD (ACN 061 754 943) Twentieth Respondent: DODO SERVICES PTY LTD ACN 158 289 331 Twenty First Respondent: ENGIN PTY LTD ACN 080 250 371 Twenty Second Respondent: EFTEL CORPORATE PTY LTD ACN 154 634 054 Twenty Third Respondent: EFTEL RETAIL PTY LTD ACN 092 667 126 Twenty Fourth Respondent: EFTEL WHOLESALE PTY LTD ACN 123 409 058 Twenty Fifth Respondent: CLUBTELCO PTY LTD ACN 144 488 620 Twenty Sixth Respondent: WHOLESALE COMMUNICATIONS GROUP PTY LTD ACN 109 626 011 Twenty Seventh Respondent: 2TALK PTY LTD ACN 161 656 499 Twenty Eighth Respondent: VOCUS PTY LTD (ACN 127 842 853) Twenty Ninth Respondent: AMCOM IP TEL PTY LTD Thirtieth Respondent: AMNET BROADBAND PTY LTD ACN 092 472 350 Thirty First Respondent: NEXTGEN NETWORKS PTY LTD (ACN 094 147 403) Thirty Second Respondent: TPG INTERNET PTY LIMITED (ACN 068 383 737) Thirty Third Respondent: TPG NETWORK PTY LTD ACN 003 064 328 Thirty Fourth Respondent: FTTB WHOLESALE PTY LTD ACN 087 533 328 Thirty Fifth Respondent: CHARIOT PTY LTD ACN 088 377 860 Thirty Sixth Respondent: SOUL PATTISON TELECOMMUNICATIONS PTY LTD ACN 001 726 192 Thirty Seventh Respondent: SPT TELECOMMUNICATIONS PTY LIMITED ACN 099 173 770 Thirty Eighth Respondent: SPTCOM PTY LIMITED ACN 111 578 897 Thirty Ninth Respondent: SOUL COMMUNICATIONS LIMITED (ACN. 085 089 970) Fortieth Respondent: PIPE NETWORKS PTY LTD (ACN 099 104 122) Forty First Respondent: INTRAPOWER TERRESTRIAL PTY LTD ACN 081 193 259 Forty Second Respondent: IINET LIMITED ACN 068 628 937 Forty Third Respondent: INTERNODE PTY LTD ABN 82 052 008 581 Forty Fourth Respondent: TRANSACT CAPITAL COMMUNICATIONS PTY LTD ACN 093 966 888 Forty Fifth Respondent: TRANSACT VICTORIA COMMUNICATIONS PTY LTD ACN 063 024 475 Forty Sixth Respondent: WESTNET PLY LTD ACN 086 416 908 Forty Seventh Respondent: ADAM INTERNET PTY LIMITED ACN 055 495 853 Forty Eighth Respondent: AAPT LIMITED (ACN 052 082 416) Forty Ninth Respondent: REQUEST BROADBAND PTY LTD ACN 091 530 586	6,751
federal_court_of_australia:fca/single/2018/2018fca1193	decision	commonwealth	federal_court_of_australia	text/html	2018-08-13 00:00:00	Warren v Repatriation Commission [2018] FCA 1193	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2018/2018fca1193	2024-09-13T22:45:26.007783+10:00	FEDERAL COURT OF AUSTRALIA Warren v Repatriation Commission [2018] FCA 1193 Appeal from: McKinley and Repatriation Commissioner (Veterans' entitlements) [2017] AATA 872 File number: VID 771 of 2017 Judge: TRACEY J Date of judgment: 13 August 2018 Catchwords: DEFENCE AND WAR – appeal on questions of law from a decision of the Administrative Appeals Tribunal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) – where the Tribunal affirmed a decision of the Veterans' Review Board which in turn had affirmed a decision of a delegate of the Repatriation Commission to refuse to grant the applicant a pension – where the parties agreed that the Tribunal had erred and that the Tribunal's decision should be set aside – where the Tribunal had also found that it lacked jurisdiction to deal with the applicant's claims made under s 70 of the Veterans' Entitlements Act 1986 (Cth) on the basis that the Veterans' Review Board had not dealt with this claim – where that claim had been before the delegate of the Commission – whether the Tribunal had erred in its determination that it lacked jurisdiction – whether the scope of remittal to the Tribunal should be confined Legislation: Administrative Appeals Tribunal Act 1975 (Cth) ss 43(2), 43(2B), 44(5) Veterans' Entitlements Act 1986 (Cth) ss 70(1), 70(5)(d)(i), 70(5)(d)(ii) Cases cited: Davenport v Repatriation Commission (1995) 39 ALD 560; [1995] FCA 930 McKinley and Repatriation Commission (Veterans' entitlements) [2017] AATA 872 Repatriation Commission v Stafford (1995) 56 FCR 132; [1995] FCA 537 Stafford v Repatriation Commission (1995) 56 FCR 121; [1995] FCA 44 Warren v Repatriation Commission (2015) 238 FCR 124; [2015] FCAFC 159 Date of hearing: 15 March 2018 Date of last submissions: 16 March 2018 Registry: Victoria Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 50 Counsel for the Applicant: Ms FAL Ryan Solicitor for the Applicant: De Marchi and Associates Counsel for the Respondent: Ms C Dowsett Solicitor for the Respondent: Australian Government Solicitor ORDERS VID 771 of 2017 BETWEEN: JENNIFER WARREN Applicant AND: REPATRIATION COMMISSION Respondent JUDGE: TRACEY J DATE OF ORDER: 13 AUGUST 2018 THE COURT ORDERS BY CONSENT THAT: 1. The appeal be allowed in part: (a) Questions of Law 3 and 4 in the Amended Notice of Appeal dated 18 August 2017 ("the Notice of Appeal") be answered in the affirmative; and (b) paragraph 1 of the decision of the Administrative Appeals Tribunal ("the Tribunal") dated 15 June 2017 be set aside. 2. Questions of Law 1 and 2 in the Notice of Appeal be dismissed without determination of their merits. 3. The respondent pay the applicant's costs (as agreed or taxed) relating to the appeal allowed in part (Questions of Law 3 and 4) up to and inclusive of 1 December 2017. THE COURT NOTES THAT: 4. The reviewable errors, made by the Tribunal and identified by the parties, are summarised in the parties' attached statement in support of the consent orders. THE COURT ORDERS THAT: 5. Paragraph 2 of the decision of the Tribunal dated 15 June 2017 be set aside. 6. The matter be remitted to the Tribunal to be heard and decided again in accordance with law with the hearing of further evidence as required. 7. The respondent pay the applicant's costs (as agreed or taxed) relating to the appeal to the extent that it dealt with the jurisdiction of the Tribunal. THE COURT DECLARES THAT: 8. The Tribunal has jurisdiction to review the decision of the Veterans' Review Board including the issues of entitlements raised by the applicant before the Repatriation Commission and not considered by the Veterans' Review Board. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. STATEMENT IN SUPPORT OF THE CONSENT ORDERS 1. This statement is prepared in support of the draft consent orders ("the proposed orders"), attached to this statement, to outline the matters the parties say justify the making of the proposed orders. 2. The decision sought to be reviewed is a decision of the Administrative Appeals Tribunal ("the Tribunal") dated 15 June 2017, in which the Tribunal: 2.1. affirmed a decision to reject the applicant's claim to have her psychological conditions accepted as "war caused" for the purposes of the Veterans Entitlements Act 1986 (Cth) ("the VE Act"); and 2.2. held that it did not have jurisdiction to consider the applicant's claims made under s 70 of the VE Act, that her psychological conditions were "defence caused" for the purposes of the VE Act. Grounds of appeal 3. Relevantly to the consent orders, the applicant's Amended Notice of Appeal ("the Notice of Appeal") alleged that the Tribunal had: 3.1 failed correctly to apply the standard of proof in s 120(1) of the VE Act (Question 3, supported by Ground 3); and 3.2 denied the applicant procedural fairness by failing to consider hypotheses advanced by the applicant (Question 4, supported by Ground 4) and fairly raised on the material. Error Standard of proof 4. The substantive issue before the Tribunal was whether the applicant's generalised anxiety disorder and alcohol abuse disorder were "war caused". Pursuant to s 120(1) of the VE Act, the Tribunal was required to find that the applicant's claimed diseases were war-caused "unless it is satisfied, beyond reasonable doubt, that there is no sufficient ground for making that determination". The Tribunal found at [168] that the applicant's evidence was incomplete, contradictory and unreliable, and at [172], concluded that it was satisfied beyond reasonable doubt that there is no sufficient ground for accepting the raised facts as the evidence on which they are based is so unreliable that their existence is unsubstantiated. 5. At [169] and [170] of its reasons for decision, the Tribunal referred to Bushell v Repatriation Commission (1992) 175 CLR 408 and Meehan v Repatriation Commission (2003) FCA 1371; [2003] FCA 1371, authorities regarding how the unreliability of the material before the Tribunal may be factored into the determination to be made under s 120(1) of the VE Act. In Bushell, Mason CJ, Deane and McHugh JJ held (at 416): The Commission will be satisfied beyond reasonable doubt "that there is no sufficient ground for making [the] determination" if it is satisfied beyond reasonable doubt that it cannot accept the raised facts or so many of them as are necessary to support the hypothesis. Thus, if the Commission is satisfied beyond reasonable doubt that it cannot accept the raised facts because of the unreliability of the material which is claimed to support them or because of the superior reliability of other parts of the material before the Commission or because the raised facts depend on inferences which the Commission is satisfied cannot be drawn, the Commission will be satisfied that there is no sufficient ground for making the determination. … 6. The language used by the Tribunal in [153], [159] and [164] of its reasons for decision indicates that the Tribunal was looking for evidence that could satisfy it beyond reasonable doubt that the generalised anxiety disorder and alcohol abuse disorder were war-caused. That is, the Tribunal reversed the test. Adopting the language from Bushell, the Tribunal did not say that it was satisfied beyond reasonable doubt that it could not accept the raised facts regarding each of the incidents relied upon by the applicant because of the unreliability of the evidence. Rather, it said that, because of the unreliability of the evidence, it was not satisfied beyond a reasonable doubt that the generalised anxiety disorder and/or alcohol use disorder were caused by those incidents. Hypothesis advanced by the applicant 7. Combining the Applicant's Statement of Facts and Contentions dated 13 June 2016 and the closing submissions made by Mr De Marchi on behalf of the applicant, the particular hypotheses were put forward on behalf of the applicant in relation to the "war-caused" diseases were: Service in East Timor Dili Airport incident generalised anxiety disorder OR aggravation of generalised anxiety disorder AND alcohol use disorder Service in East Timor Dili Hospital incident generalised anxiety disorder OR aggravation of generalised anxiety disorder AND alcohol use disorder Service in East Timor Balibo Incident generalised anxiety disorder OR aggravation of generalised anxiety disorder AND alcohol use disorder Service in East Timor living or working in a hostile environment generalised anxiety disorder OR aggravation of generalised anxiety disorder Service in East Timor ongoing disharmony with work colleagues generalised anxiety disorder OR aggravation of generalised anxiety disorder Service in East Timor war-caused generalised anxiety disorder Alcohol use disorder 8. In summarising Mr De Marchi's submissions, the Tribunal at [102] and [103] of its reasons for decision, in the context of discussing the category of stressors into which the events fell, described the stressors in the following manner: ... the presence of soldiers at the Dili Airport on her arrival; her experiences while walking through the corridors of the Dili Hospital; her duties riding armed guard on a truck between Oili and Balibo; the requirement that she conduct patrols around the base; her knowledge of the existence of pipe-bombs; and her perception that the commanding officer did not want her as his assistant/linguist ... … [her] perception that there were armed opposition soldiers at Balibo ... 9. At [105] of its reasons for decision the Tribunal referred to Mr De Marchi's submission that the applicant suffered a pre-existing anxiety disorder that had been aggravated by her service in East Timor, referring to the "living or working in a hostile or lifethreatening environment" factor in Statement of Principles 102 of 2014. See also [107]. 10. The Tribunal (at [143]-[144]) identified the Dili Airport Incident, the Balibo incident, the Dili Hospital incident and her participation in perimeter controls as factors connecting the applicant's service to the claimed diseases. 11. The Tribunal then turned to s 120(1) of the VE Act, and considered the evidence relating to each of those incidents (at [145] to [166]) of its reasons for decision). Subject to the error in its application of the standard of proof in s 120(1), the Tribunal thereby considered hypotheses relying upon each of those incidents. The Tribunal did not comply with its duty to consider the particular hypothesis (or hypotheses) put forward by the applicant: Hill v Repatriation Commission (2005) 218 ALR 251 at 269 [2005] FCAFC 23 at [96] (Wilcox, French and Weinberg JJ). 12. The Tribunal: 12.1 did not address the hypothesis based upon the applicant's relationship with her commanding officer; 12.2 restricted its consideration of the hypothesis relying upon "living or working in a hostile or life-threatening environment" factor to the perimeter patrols. The hypothesis advanced was put on a broader basis (fear of "pipe bombs"/improvised explosive devices, being socially isolated and unable to maintain friendships and family relationships); and 12.3 did not address the hypothesis that the applicant's alcohol use disorder was connected to her operational service via her generalised anxiety disorder. Hypotheses fairly raised on the material 13. Further, the Tribunal failed to address the hypotheses fairly raised on the material before the Tribunal connecting the anxiety disorder and/or alcohol use disorder the applicant experienced as a result of her operational service in East Timor to her later suicide attempts in 2004-2005. This failure denied the applicant procedural fairness and constituted a constructive failure to exercise jurisdiction: see W396/01 v Minister for Immigration and Multicultural Affairs (2002) 68 ALD 69 at 80-81; [2002] FCAFC 103 at [37]-[39] (Black CJ, Wilcox and Moore JJ). Balance of appeal 14. The applicant does not press Questions of Law 1 and 2. On that basis, the parties agree that Questions of Law 1 and 2 in the Notice of Appeal be dismissed without determination of their merits. 15. The remaining Questions of Law (Questions 5 to 8) concern the Tribunal's decision that it did not have jurisdiction to consider the applicant's claims, made under s 70 of the VE Act, that her psychological conditions were "defence caused" for the purposes of the VE Act. The parties seek procedural orders in respect of those Questions. REASONS FOR JUDGMENT TRACEY J: 1 This is an appeal from a decision of the Administrative Appeals Tribunal ("the Tribunal") to affirm a decision of the Veterans' Review Board ("the VRB") which had, in turn, affirmed a decision of the Repatriation Commission ("the Commission") which had refused a claim by the applicant, Ms Jennifer Warren, for a pension for incapacity under the Veterans' Entitlements Act 1986 (Cth) ("the Act"): see McKinley and Repatriation Commission (Veterans' entitlements) [2017] AATA 872. 2 The Tribunal also found that it did not have jurisdiction to hear Ms Warren's claim to the extent that it was made in reliance on s 70 of the Act. 3 The original application was made by Ms Warren in 2012 and led to a series of adverse findings by a delegate of the Commission, the VRB and the Tribunal. The decision of the Tribunal, presently under consideration, was made following a successful appeal to this Court: see Warren v Repatriation Commission (2015) 238 FCR 124; [2015] FCAFC 159 (Collier, Jessup and Mortimer JJ). 4 I interpolate at this point that, over the long history of this litigation, Ms Warren has changed her surname on a number of occasions. It will be convenient, however, to refer to her, in these reasons, by her present surname. 5 Ms Warren's Amended Notice of Appeal dated 18 August 2017 raised what were said to be questions of law relating to the application of s 120(1) of the Act and to the Tribunal's decision that it did not have jurisdiction to hear her claims under s 70 of the Act. There was a further complaint that the Tribunal had failed in its statutory duty to give adequate reasons for its decision: see s 43(2) and (2B) of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act"). 6 The parties were agreed that the Tribunal's decision was affected by legal error. In dealing with s 120 it had erred in its application of the standard of proof, failed to address two relevant hypotheses and had restricted its consideration errantly in relation to another. A summary of reasons outlining the error, agreed by the parties, is contained in the statement attached to the orders of the Court. 7 The remaining issue related to the Tribunal's finding that it did not have jurisdiction to hear what it referred to (at [117]) as "the expanded claims under s 70 of the Act, relating to eligible but non-operational defence service." This issue continued to be pressed in the Further Amended Notice of Appeal dated 7 December 2017. 8 Section 70(1) of the Act relevantly provides that: 70 Eligibility for pension under this Part (1) Where: ... (b) a member of the Forces or member of a Peacekeeping Force is incapacitated from a defence-caused injury or a defence-caused disease; the Commonwealth is, subject to this Act, liable to pay: ... (d) in the case of the incapacity of the member—pension by way of compensation to the member; in accordance with this Act. 9 Section 70(5)(d)(i) and (ii) relevantly provides: (5) For the purposes of this Act, … an injury suffered by such a member shall be taken to be a defence-caused injury or a disease contracted by such a member shall be taken to be a defence-caused disease if: ... (d) the injury or disease from which the member … is incapacitated: (i) was suffered or contracted during any defence service or peacekeeping service of the member, but did not arise out of that service; or (ii) was suffered or contracted before the commencement of the period, or the last period, of defence service or peacekeeping service of the member, but not during such a period of service; and, in the opinion of the Commission, the injury or disease was contributed to in a material degree by, or was aggravated by, any defence service or peacekeeping service rendered by the member, being service rendered after the member suffered that injury or contracted that disease; or ... 10 The Tribunal's reasons for concluding that it lacked jurisdiction to deal with the s 70 claim are set out at [112]-[124]: 112. As previously stated, the Tribunal was first advised of Ms McKinley intention to pursue several claims under s 70 of the Act in mid-December 2016. An amended Statement of Facts, Issues and Contentions was lodged by Ms McKinley on 3 February 2017 and addressed Ms McKinley's eligible defence service, said to be part of her claim lodged on 22 May 2012. 113. The Tribunal acknowledges that the delegate of the Commission considered both the operational service and defence service in reaching their determination of 3 December 2012; wherein the delegate determined that none of Ms McKinley's conditions arose from her service, be it operational or defence. At review by the VRB, the Board limited its consideration to the operational service. Ms McKinley's advocate, Mr Meurer, had advised that only the operational service claim was being pursued. In its decision of 30 May 2013 the VRB specifically referred to this limitation placed by the advocate. 114. The Administrative Appeals Tribunal is limited to review of the decisions of a primary decision-maker as provided by the relevant legislation and is empowered to stand in the shoes of the decision-maker in relation to the decision under review. 115. Section 43(1) of the AAT Act states: Tribunal's decision on review (1) For the purpose of reviewing a decision, the Tribunal may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision and shall make a decision in writing: (a) affirming the decision under review; (b) varying the decision under review; or (c) setting aside the decision under review and: (i) making a decision in substitution for the decision so set aside; or (ii) remitting the matter for reconsideration in accordance with any directions or recommendations of the Tribunal. 116. The Tribunal, while not bound by the applicant's grounds for review (Drake v Minister, Department of Immigration and Ethnic Affairs (1979) 2 ALD 60), does not have greater powers than the original decision-maker. 117. Before proceeding to its consideration of the applicant's operational service claim, the Tribunal considers it must address the jurisdictional question. Having done so, it finds that it does not have jurisdiction to hear the expanded claims under s 70 of the Act, relating to eligible but non-operational defence service. 118. The applicant had advanced the expanded claims to cover the following: (a) developed or suffered a clinical worsening of anxiety disorder as a result of the defence service; and (b) attempted suicide as result of her defence service; and (c) developed a depressive disorder as a result of her defence service; and (d) may have experienced a clinical worsening of pre-existing anxiety disorder following her service in East Timor. None of these new claims or hypotheses underlying them had been considered by the VRB. 119. The Veterans' Entitlement Act under s 175(1) vests the Tribunal with jurisdiction over matters which have been subject to a decision by the Commission and reviewed by the VRB in most instances. The Act provides in s 175(1A)–(5) for Commission decisions that may be determined directly by the AAT. These relate essentially to assessment matters i.e. rate of pension, the amount of pension, allowances and benefits. The requirement for internal review of a primary decision-maker's decision extends to all areas of the Tribunal's jurisdiction. 120. Mr De Marchi, in his application to the Tribunal to proceed under s 70, has relied on the decision in Stafford. The Tribunal in Re Stafford and Repatriation Commission [1993] AATA 9053 had commented that the Act provides: 40 ... a comprehensive statutory framework for review of Commission decisions by the VRB, at first instance and, in turn, by the Tribunal. The consideration by the Tribunal of particular issues of entitlement expressly not before the VRB would have the effect of circumventing a chain in the review process. Such a development is clearly contrary to the purpose and intent of the legislation. The Full Federal Court in Repatriation Commission v Stafford (1995) implicitly upheld this reasoning and determined that the VRB had not completed its task of reviewing Mr Stafford's claim and remitted the matter to the Board to be heard in accordance with the law. 121. Mr De Marchi also relied on the Full Federal Court's decision in Grant v Repatriation Commission (1999) 57 ALD 1 where the Court said: ... the tribunal is required to determine the substantive issues raised by the material and evidence advanced before it and, in doing so, it is obliged not to limit its determination to the "case" articulated by an applicant if the evidence and material which it accepts, or does not reject, raises a case on a basis not articulated by the applicant: ... This Tribunal does not perceive the finding in Grant to address the Tribunal's jurisdiction. In Grant the question before the court related to whether the applicant satisfied the alone test of s 24 of the Act. This decision would now be decided differently in light of the more recent decisions of the Federal Court in Richmond v Repatriation Commission and Summers v Repatriation Commission. 122. Ms Dowsett relied on the decisions in Lees and Davenport which clearly relate to the question of jurisdiction. 123. In Davenport, Lee J confirmed that only an unambiguous withdrawal of a medical condition potentially the subject of an application for review would relieve the VRB of the obligation imposed on it by s 139(2). It was also held that such an election requires the electing party to be cognisant of the rights to be forgone by the act of election. As a result, the VRB had not performed the function required of it by the Act, and the matter was remitted to the VRB for rehearing, the decision having been set aside. 124. The Tribunal therefore does not have jurisdiction to hear the s 70 claims or new hypotheses dependent on the s 70 claim. 11 It is to be noted that the statement at the end of [120] that the Full Federal Court in Stafford had remitted the matter to the VRB is incorrect. It did not. The primary judge had remitted the further hearing of the matter to the Tribunal: see Stafford v Repatriation Commission (1995) 56 FCR 121 at 131; [1995] FCA 44 at 24. On appeal the Full Court expressly upheld this order: see Repatriation Commission v Stafford (1995) 56 FCR 132 at 143-144; [1995] FCA 537 at 32-33 (Jenkinson, Ryan and Lee JJ). 12 There was a further non-operational claim considered by the delegate. Earlier in its reasons (at [8]) the Tribunal had said that Ms Warren had made a new claim relating to events during her defence service at the Queenscliff Army Base in 2004. The Tribunal said that the "new application raised the question of the Tribunal's jurisdiction to hear such a claim." This Queenscliff claim, arising out of her defence service, was not new. It had been made before the delegate and should have been considered by the VRB. 13 The reason that these s 70 claims were not considered by the VRB appears in [21] of the VRB's reasons where it was said: It was noted at the onset [sic] that the veteran was only relying on a connection between her psychiatric conditions and her operational service in East Timor. Therefore, the Board did not consider any possible connection between the conditions and her defence service. 14 This assumption was based, it appears, on a written statement by Ms Warren's advocate before the VRB. That statement referred only to operational service matters. It also appears to be based on the response given by the advocate at the VRB hearing where, having been asked whether there was anything he wished to add to or comment about in relation to the written submission, he responded confining himself only to operational service matters. 15 The delegate's decision had related to both eligible defence service and operational service. Her appeal to the VRB was not confined to operational service. She wrote that she wished to appeal the delegate's decision "in relation to my claim for PTSD and Alcohol Abuse." 16 Her appeal to the Tribunal was from the decision of the VRB dated 30 May 2013. 17 The Tribunal appears to have misunderstood the decision of this Court in Stafford and failed to apply the election test posed in Davenport v Repatriation Commission (1995) 39 ALD 560; [1995] FCA 930. 18 The first instance decision in Stafford v Repatriation Commission (1995) 56 FCR 121; [1995] FCA 44 was made by Northrop J. His Honour held (at 129) that: … there was but one claim and the one decision of the delegate was to refuse the claim. The application to the Veterans' Review Board was for review of one decision, namely the "rejection of claim for disability pension". The Review Board should have reviewed the one decision. It did not do so. It reviewed part only of that decision but in adopting that course, it is impermissible for the Commission to claim now that the Tribunal has no jurisdiction to review the decision of the delegate of the Repatriation Commission because the Review Board had not reviewed part of the matters forming the basis of the decision of the Commission. It would be a strange result if a veteran could be deprived of a right of review by the Tribunal where the Review Board failed to consider parts of the decision being reviewed by it but nevertheless affirmed the decision of the Commission. A veteran should not be compelled to recommence the process seeking a pension in order to have the matter proceed from the Commission, to the Review Board and to the Tribunal. 19 As already noted his Honour ordered the matter be remitted to the Tribunal for further consideration according to law. This would not have occurred had the Court not considered that the Tribunal had jurisdiction to deal with the matters which the VRB should have, but did not, consider. In these circumstances it is difficult to understand how the Tribunal, in the present matter, could have come to the view (at [120]) that the Full Court had implicitly upheld what the former Tribunal had determined in 1993. 20 If the Tribunal lacked jurisdiction to affirm, vary, substitute or set aside and remit the decision under s 43 of the AAT Act to the VRB to complete its task, some fresh proceeding would have to have been commenced (perhaps mandamus against the VRB) requiring the VRB to complete the task. Alternatively the veteran could, possibly, have made a new application to the Commission. The imposition of the latter requirement was rejected by Northrop J in Stafford (at 129). Such courses would be inappropriate and unnecessary in the present case and would only serve to further delay the resolution of Ms Warren's claims. 21 Northrop J's decision was upheld on appeal to a Full Court: see Repatriation Commission v Stafford (1995) 56 FCR 132; [1995] FCA 537 (Jenkinson, Ryan and Lee JJ). 22 In my view the Tribunal had jurisdiction to deal with the s 70 claims which had been raised before the delegate but not considered by the VRB. No basis has been established for distinguishing Stafford. 23 In Davenport, as the Tribunal records at [123], Lee J held that the VRB was required to consider all medical conditions covered by the application to it unless the claim had unambiguously been withdrawn. This was because of the requirement in s 139(2) of the Act that "in reviewing a decision of the commission, [the VRB is] to satisfy itself with respect to, or to determine, as the case requires all matters relevant to the review." 24 The statements made by Ms Warren's advocate to the VRB (recorded above at [12] and [13]) were, to some extent ambiguous. They may have been understood by the VRB as indicating that Ms Warren was no longer pursuing the s 70 claims which she had raised before the delegate. The representative's statements did not, however, amount to an unambiguous withdrawal of those claims which remain undetermined by the VRB. So much was conceded by the Commission in submissions to this Court. The claims should be considered and dealt with by the Tribunal. 25 The orders proposed by the parties should be made. It should be further ordered and declared that the Tribunal has jurisdiction to deal with all outstanding issues raised by Ms Warren's original claim to the Commission, whether or not they had been considered by the VRB. 26 In finding that the orders proposed by the parties should be made I note one caveat. During the hearing counsel for Ms Warren contended that the terms of proposed order 1(c) should be different from those which had been previously agreed (in which agreement counsel was not involved). The extant form of the agreed orders was: The questions of whether the Applicant's generalised anxiety disorder and/or alcohol use disorder are war-caused for the purposes of the Veterans' Entitlements Act 1986 (Cth) be remitted to the Administrative Appeals Tribunal to be heard and decided again with the hearing of further evidence as required. 27 During the hearing I asked that her preferred form of words be provided to chambers after the hearing. An amended form of words was subsequently provided to chambers on 16 March 2018. The new proposed form was as follows: The question of whether the applicant's psychological conditions are war-caused for the purposes of the Veterans' Entitlements Act 1986 (Cth) be remitted to the Administrative Appeals Tribunal to be heard and decided again with the hearing of further evidence as required. 28 In support of this amendment counsel for Ms Warren contended that the order should not be confined because there was material before the Commission, the VRB and Tribunal relating to a diagnosis of post-traumatic stress disorder ("PTSD"). She referred to [65], [70] and [100] of the Tribunal's reasons which referred to a hypothesis that Ms Warren's PTSD, which was diagnosed in 1997 and which arose from a motorcycle accident, had not resolved by 1999. These paragraphs provide: 65. Dr Burges Watson, who saw Ms McKinley on 13 October 2000, also diagnosed PTSD and depression in June 1997 and when seen again in September of 2000 he regarded her as having suffered from PTSD for 12 to 18 months and still had residual symptoms. In the course of the history he took, Ms McKinley made no reference to her recent service in East Timor or to her alcohol intake. … 70. In his second report dated 22 November 2006, Dr Strauss confirmed that he did not accept that she had suffered a severe psychosocial stressor during her time in East Timor but had subsequently developed major depression, an obsessive compulsive disorder and substance abuse relating to her personal circumstances and not to her military service. His second report was in response to having received the reports from the Austin Hospital regarding Ms McKinley. The Austin Unit had made a diagnosis of PTSD attributed to her Army experience. He also reviewed Dr Debenham's report, noting that there was no reference in this report to any incidents that might have caused PTSD although reference was made to the motorcycle accident. … 100. Based on these authorities, Ms Dowsett submitted that it was open to this Tribunal to remit the claim regarding the various conditions said to be defence-caused to the VRB for consideration. This also applied to the new claims raised at the hearing in relation to attempted suicide and the alternative hypothesis that Ms McKinley's PTSD diagnosed in 1997 and arising from a non-service related motorcycle accident had not resolved by October 1999 and that her experiences in East Timor had resulted in an aggravation of the anxiety symptoms that are a feature of PTSD (given that PTSD is classified by DSM-V as being an anxiety disorder). 29 Counsel also contended that, in light of the Commission's concession that Question of Law 4, supported by Ground 4, be answered in the affirmative, the remittal should not be confined to two specific psychiatric diagnoses. The particulars subjoined to Ground 4 in the Amended Notice of Appeal detailed hypotheses fairly raised on the evidence that concerned a wider range of psychological injuries or diseases, including the applicant's suicide attempts (particular 4(a)(iii)) and post-traumatic stress disorder (particulars 4(a)(iv) and (v)). Restricting the remittal, she said, to generalised anxiety disorder and alcohol use disorder would be to deny Ms Warren consideration of hypotheses raised by the material which the Tribunal failed to consider. 30 Further, she said, Ms Warren had made a claim for compensation for psychiatric injury. Upon remittal the Tribunal must determine, as at the date of hearing, from what, if any, psychiatric injury or disease she suffers and whether such injury or disease is caused by service. Narrowing the remittal to two specific diagnoses denies Mr Warren review of the decision to reject her compensation claim for psychiatric injury. 31 The Commission did not consent to an order being made in the terms proposed. It noted that, by instructing her solicitor to sign the proposed consent orders dated 28 November 2017, Ms Warren had made a choice as to the course of action she wished to adopt in this proceeding. That choice involved: consenting to the dismissal of Question of Law 1, which included at subparagraph (a) a question regarding the existence of post-traumatic stress disorder; and agreeing that, insofar as any psychiatric or psychological disability was concerned, confining the terms of the remittal to the questions of whether her generalised anxiety disorder and/or alcohol use disorder was war-caused. 32 The Commission submitted that Ms Warren took the benefit of that choice through the confined nature of the hearing on 15 March 2018. She should not now be permitted to resile from her choice and seek remittal in broader terms than previously agreed. 33 In considering the terms of the order it is useful to consider the terms of Ms Warren's initial application to the Commission. As mentioned this application was made in 2012. In the form which she filled out she was asked about the type of application she was making. She ticked a box which stated "Claim for Disability Pension for disabilities that have not yet been accepted as service related". She indicated that the new disabilities that she was now claiming were war or defence caused were: (1) PTSD (with signs and symptoms of depression, panic attacks, nightmares and flashbacks); and (2) alcohol abuse (with signs and symptoms of drinking every day, binge drinking on weekends and blackout periods involving loss of memory). Details of her medical treatment were provided, including treatment for two suicide attempts in 2005 and anxiety from 2005 to the time of the application. She claimed that these disabilities affected her ability to seek employment. 34 The reasons for decision of the delegate of the Commission dated 3 December 2012 noted that she had "lodged a claim for 'PTSD' and 'Alcohol Abuse'." It then recorded that the delegate was "satisfied that the appropriate medical diagnoses for the claimed conditions are: [g]eneralised anxiety disorder; and alcohol dependence." The delegate's reasons concluded that, having considered all of the relevant evidence, he was satisfied beyond reasonable doubt that neither her generalised anxiety disorder nor her alcohol dependence were related to her operational or eligible service. 35 As already mentioned Ms Warren's application to the VRB for review of the delegate's decision stated that she wished to "appeal the decision made on 3rd December 2012 in relation to my claim for PTSD and Alcohol Abuse". 36 In its reasons for decision dated 30 May 2013 at [1] the VRB stated that Ms Warren had applied for review of a Commission decision "which refused a claim for medical treatment and pension for incapacity from generalised anxiety disorder and alcohol dependence on the ground that the conditions were not war caused". It may be observed that the terms of her claim to the Commission were broader than that summarised by the VRB. The VRB at [31] found that it was "reasonably satisfied that the veteran is not suffering from a war-related post traumatic stress disorder". At [33] it found that it preferred the medical evidence which supported diagnoses of generalised anxiety disorder and alcohol dependence and found that she suffered from those conditions. At [40] the VRB affirmed the decision under review. 37 Ms Warren's application to the Tribunal for review of the VRB's decision stated that she sought review of the "[d]ecision of Veterans' Review Board (Melbourne) dated 30 May 2013." 38 Following her application the series of events detailed above at [3] occurred. Following remittal by the Full Court to the Tribunal the decision presently under review was made. At [125] and [134] of the Tribunal's reasons it stated: 125. The parties have agreed that the correct psychiatric disorders as diagnosed are generalised anxiety disorder and an alcohol abuse disorder. The earlier 1997 diagnosis of PTSD following a motorcycle accident is accepted as the actual event was clearly life- threatening and thus meets the required definition of a Category 1A stressor to found such a diagnosis. The diagnosis of PTSD was made by Dr Stern in June 1997, some three months after the motorcycle accident and was confirmed by Dr Burges Watson in October 2000. Dr Burges Watson found the PTSD in remission except for a few residual symptoms. This particular disorder relating to the motorcycle accident is not service related. … 134. The Tribunal, having accepted the diagnosis of a generalised anxiety disorder and an alcohol abuse disorder, must now consider whether these conditions were caused by Ms McKinley's operational service in East Timor for a period of four and a half months in 1999-2000. The Tribunal must do so in accordance with the four-step process enunciated by the Full Court of the Federal Court in the Deledio decision. 39 Question of Law 1 in Ms Warren's Amended Notice of Appeal was: 1. Whether the Tribunal misconceived and/or misunderstood its task when determining the question of diagnoses in accordance with s 120(4) of the Veterans Entitlements Act 1985 (Cth) (VE Act) by failing to: (a) examine the collection of symptoms complained of by the applicant in order to determine whether, according to the standard of reasonable satisfaction set by s 120(4), she suffered from posttraumatic stress disorder; and/or (b) determine in accordance with s 120(4) whether it was reasonably satisfied that the applicant had attempted suicide on one or more occasion[s], and if so, whether the applicant's suicide attempts were "attempted suicide" as defined in the Statements of Principles concerning Suicide and Attempted Suicide (numbers 65 and 66 of 2016). 40 In the consent orders filed with the Court the parties sought an order that "Questions of Law 1 and 2 in the [Amended] Notice of Appeal be dismissed without determination of their merits". The Commission relied on this agreement to claim that Ms Warren should not have the benefit of the more fulsome remittal to the Tribunal which she now sought. 41 The Commission also relied on her agreement, in those same orders, that the terms of the remittal be confined to the questions of whether her generalised anxiety disorder and/or alcohol use disorder was war-caused. 42 Ms Warren, for her part, argued that the Commission's concession that Question of Law 4, supported by Ground 4, should be answered in the affirmative, meant that the remittal should not be confined to two specific psychiatric diagnoses. Question of Law 4, as it appears in the Amended Notice of Appeal, provides: 4. Did the Tribunal deny the applicant procedural farness and/or constructively fail to exercise jurisdiction by failing to consider hypotheses advanced by the applicant and/or fairly raised by the evidence? 43 Ground 4 in the Amended Notice of Appeal provides: 4 The Tribunal denied the applicant procedural fairness and/or constructively failed to exercise jurisdiction when it failed to consider hypotheses advanced by the applicant and/or fairly raised by the evidence. (a) The Tribunal failed to consider the following hypotheses that were advanced by the applicant and/or fairly raised by the evidence: i. A hypothesis that the applicant's anxiety disorder was contributed to by her living and working in a hostile or life-threatening environment (as defined in the statement of principles for anxiety disorder no. 102 of 2014) in East Timor for a cumulative period of at least four weeks within the five years before the clinical onset or clinical worsening of the anxiety disorder. ii. A hypothesis that the applicant's anxiety disorder was contributed to by experiencing a category 2 stressor within the one year before the clinical onset or clinical worsening of the anxiety disorder, namely: I. being socially isolated and unable to maintain friendships or family relationships during her operational service in East Timor due to physical location, language barriers, disability or medical or psychiatric illness; II. having concerns in the work environment during her operational service in East Timor including on-going disharmony with fellow work colleagues perceived lack of social support within the work environment and perceived lack of control over tasks performed. iii. A hypothesis that the applicant's suicide attempts in 2004-2005 were contributed to by her experiencing a category 2 stressor during her operational service in East Timor within the five years before the suicide attempts, namely: I. being socially isolated and unable to maintain friendships or family relationships during her operational service in East Timor due to physical location, language barriers, disability or medical or psychiatric illness; II. having concerns in the work environment during her operational service in East Timor including on-going disharmony with fellow work colleagues, perceived lack of social support within the work environment and perceived lack of control over tasks performed. iv. A hypothesis that the applicant's posttraumatic stress disorder was contributed to by her living and working in a hostile or life-threatening environment (as defined in the statement of principles for posttraumatic stress disorder no. 82 of 2014) in East Timor for a cumulative period of at least four weeks before the clinical onset or the clinical worsening of the posttraumatic stress disorder. v. Hypotheses connecting the applicant's posttraumatic stress disorder and attempted suicides to her operational service in East Timor on the basis that she experienced a life-threatening event during that service and/or viewed critically injured casualties as an eye witness. 44 As can be seen, Ground 4 details the range of hypotheses on which Ms Warren relied. These hypotheses involve her claimed post-traumatic stress disorder and suicide attempts. 45 The Commission agreed that the Tribunal had erred. The solicitors for both parties signed a minute of proposed consent orders, on 28 November 2017, which sought an order that Question of Law 4 be answered in the affirmative. 46 The scope of the Commission's agreement in relation to the Tribunal's error is evident from the terms of the agreed Statement in Support of Consent Orders which accompanied those proposed orders and which was signed by the solicitors for both parties on 30 November 2017. That statement is annexed to the orders made in this proceeding. While this statement refers to hypotheses involving generalised anxiety disorder, alcohol abuse disorder and suicide attempts, it does not refer to post-traumatic stress disorder. 47 In this proceeding the orders I have made set aside paragraphs 1 and 2 of the Tribunal's decision. Those paragraphs provide: 1. The Tribunal affirms the decision under review. 2. The Tribunal does not have jurisdiction to hear the claim under section 70 of the Veterans' Entitlements Act 1986. 48 As noted the order setting aside paragraph 1 is made with the parties' consent. 49 Having set aside the Tribunal's decision it is appropriate that an order for remittal to the Tribunal also be made: see s 44(5) of the AAT Act. 50 The Tribunal's role upon remittal will be to exercise its powers afresh. It will consider all of the material before it. It will not be bound by the findings made in its earlier decision (including in relation to Ms Warren's diagnoses). Nor, of course, will it be bound by the diagnoses earlier determined by the VRB. Its task will be to consider all of the material before it, including the medical evidence, and to make a decision as to Ms Warren's claims in relation to the war-caused and defence-caused injuries or diseases from which she says she suffers. It is, therefore, appropriate that the order remitting the matter to the Tribunal not be confined in its terms. I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey. Associate: Dated: 13 August 2018	9,840
federal_court_of_australia:fca/single/2012/2012fca0105	decision	commonwealth	federal_court_of_australia	text/html	2012-02-17 00:00:00	Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 11) [2012] FCA 105	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2012/2012fca0105	2024-09-13T22:45:26.436533+10:00	FEDERAL COURT OF AUSTRALIA Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 11) [2012] FCA 105 Citation: Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 11) [2012] FCA 105 Parties: PHARM-A-CARE LABORATORIES PTY LTD (ACN 003 468 219) v COMMONWEALTH OF AUSTRALIA AND ORS File number: NSD 1991 of 2008 Judge: FLICK J Date of judgment: 17 February 2012 Catchwords: REPRESENTATIVE PROCEEDING – approval sought for payment of fees Legislation: Federal Court of Australia Act 1976 (Cth) s 33V Cases cited: Australian Competition and Consumer Commission v Chats House Investments Pty Limited (1996) 71 FCR 250, cited Lopez v Star World Enterprises Pty Ltd [1999] ATPR 41-678, cited Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 6) [2011] FCA 277, referred to Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 9) [2011] FCA 1111, cited Vernon v Village Life Ltd [2009] FCA 516, referred to Williams v FAI Home Security Pty Ltd [2000] FCA 1925, 180 ALR 459, cited Date of hearing: 14 February 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 23 Counsel for the Applicant: Mr A Cheshire Solicitor for the Applicant: McLachlan Thorpe Partners Counsel for the Respondents: The Respondents did not appear IN THE FEDERAL COURT OF AUSTRALIA NSW DISTRICT REGISTRY GENERAL DIVISION NSD 1991 of 2008 BETWEEN: PHARM-A-CARE LABORATORIES PTY LTD (ACN 003 468 219) Applicant AND: COMMONWEALTH OF AUSTRALIA First Respondent TERRY SLATER Second Respondent RITA MACLACHLAN Third Respondent PIO CESARIN Fourth Respondent ROBERT TRIBE Fifth Respondent NOEL FRASER Sixth Respondent JUDGE: FLICK J DATE OF ORDER: 17 February 2012 WHERE MADE: SYDNEY THE COURT: 1. Approves the payment of $1,162,684.01 as forming part of the "Administration Costs" for the purposes of clause 10.1.2 of the Settlement Distribution Scheme. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NSW DISTRICT REGISTRY GENERAL DIVISION NSD 1991 of 2008 BETWEEN: PHARM-A-CARE LABORATORIES PTY LTD (ACN 003 468 219) Applicant AND: COMMONWEALTH OF AUSTRALIA First Respondent TERRY SLATER Second Respondent RITA MACLACHLAN Third Respondent PIO CESARIN Fourth Respondent ROBERT TRIBE Fifth Respondent NOEL FRASER Sixth Respondent JUDGE: FLICK J DATE: 17 February 2012 PLACE: SYDNEY REASONS FOR JUDGMENT 1 On 25 March 2011 reasons for decision were given approving a settlement in this proceeding: Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 6) [2011] FCA 277. Orders giving effect to those reasons were made on 14 April 2011 and entered on 11 May 2011. 2 A number of other judgments have since been delivered. 3 Now before the Court is an Amended Interlocutory Application dated 13 February 2012 seeking approval for the payment of $1,162,684.01 as forming part of the "Administration Costs" for the purposes of clause 10.1.2 of the Settlement Distribution Scheme. 4 The approach to be taken when considering an application of the present kind has previously been set forth in Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 9) [2011] FCA 1111. That is the approach again taken in the present Amended Interlocutory Application. 5 A further matter which has arisen, and which should be separately considered, is the filing in this Court on 6 February 2012 of a Submission by a group member (Australian Naturopathics Pty Ltd). The Claim for Payment 6 The sum of $1,162,684.01 is the sum of the following individual claims: McLachlan Thorpe Partners $253,162.33 KordaMentha Invoices $896,046.68 Joseph Mazzeo Lawyers $13,475.00 $1,162,684.01 The role played by each of these entities has previously been set forth: Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 9) [2011] FCA 1111. 7 The sum of $253,162.33 is in turn comprised of three invoices, being invoices dated: 19 October 2011 $96,076.60 8 December 2011 $22,480.60 31 January 2012 $134,605.13 $253,162.33 The evidence also addresses the manner in which each of these invoices has been rendered, separately identifying professional fees, disbursements and GST. The invoice for $96,076.60 is thus elsewhere separately identified as being comprised of: Professional fees $56,362.50 Disbursements $31,016.16 GST $8,697.94 $96,076.60 By way of further example, each of the invoices totalling the sum of $96,076.60 was also exhibited to an affidavit. Disbursements in the amount claimed included fees payable to both Senior and Junior Counsel. The hourly rates charged by McLachlan Thorpe Partners and by both Senior and Junior Counsel are also set forth. 8 The sum of $896,046.68 is in turn comprised of four invoices, being invoices dated: 10 October 2011 $231,421.85 4 November 2011 $162,157.05 13 December 2011 $279,558.95 1 February 2012 $222,908.83 $896,046.68 9 Both Mr Thorpe and Mr Mazzeo have reviewed each of the invoices. Mr Mazzeo formed the opinion that the fees which have been rendered have been properly charged and that no items of costs or disbursements have been incurred unnecessarily or inappropriately. Mr Thorpe took the view that the rates were fair and reasonable and represented good value for money for group members. 10 The basis upon which the invoices have been rendered has also been separately considered by the Court. 11 It is considered that approval should be given for the payment of $1,162,684.01 as "Administration Costs". Australian Naturopathics 12 On 6 February 2012, a group member filed in this Court a document titled "Submission by Australian Naturopathics Pty Ltd". That document was detailed and comprised in total some 16 pages. The introduction to the Submission stated (in part and without alteration): AN wishes to advise the Court and apologize for AN's inability of being represented in Court when this Submission is presented and respectfully applies for the Submission to be read and considered despite absence of full representation. It concluded as follows: In conclusion, AN is of the opinion that it has provided sufficient evidence to allow it to be upheld that the approach to the Review process was incorrect and inappropriate and that this has severely prejudiced AN's rights which should have been supported and guaranteed by the Scheme Administrator under the written provisions of the Commonwealth Class Action Distribution Scheme. We respectfully seek the Court's assessment of this matter and a decision on how this can now be best rectified to guarantee Australian Naturopathics Pty Ltd the full and right entitlement under the provisions of the Distribution Scheme. The submission included a letter to Mr Thorpe from Mr Marevich. 13 In very summary form, it would appear that Australian Naturopathics made a claim for payment pursuant to the Settlement Distribution Scheme. That claim was for a loss said to be $3,525,873. Pursuant to the Scheme the additional claim was assessed in the sum of $110,881. Following reassessment the additional claim was assessed at $137,352. Following a third and final reassessment the additional claim was assessed at $346,317. That still left a claimed shortfall in excess of $3 million. 14 Correspondence with McLachlan Thorpe addressed the claim being made by Australian Naturopathics and the shortfall between the amount claimed and the amount as assessed. Part of that exchange of correspondence included the following "Email Transmission" dated 17 January 2012 from McLachlan Thorpe Partners to Mr Bruno Marevich, being the person identified in the Submission as "Director and representative in this matter": We advise that in accordance with clause 7.1 of the Settlement Distribution Scheme, the Review Expert is to conduct and determine Reviews and it is not the role of the Administrator to comment upon the Review Determination. The Review Determination is final. It is therefore not open to the Administrator to enter into dialogue with you as to the issues you raise in your email. As we have previously advised, if you are dissatisfied with the process provided for by the Scheme, you are able to raise your objections with the Court. Should you wish to make your own arrangements to appear before the Court, we advise that the next occasion on which the Administrator is before the Court on an application in relation to other Scheme matters is 14 February 2012. Please let us know whether you intend to appear before the Court, so that in the event there are any changes to the hearing date, we can keep you informed. 15 When the Amended Interlocutory Application was called on for hearing on 14 February 2012, there was no appearance on behalf of Australian Naturopathics. Nor was there any appearance when the matter was called outside the Court. Given the introduction to the Submission filed on 6 February 2012, the absence of attendance was perhaps not surprising. 16 The power of the Court to make any order or direction addressing the concerns of Australian Naturopathics was only briefly addressed during the course of the hearing on 14 February 2012. Reference was then made to clause 7 of the Settlement Distribution Scheme (being the process of review provided for in the Scheme) and to clause 13.1 (being the ability of the Administrator to refer to the Court "any issues arising in relation to the Settlement Distribution Scheme"). 17 The dissatisfaction raised by Australian Naturopathics has not been referred to the Court by the Administrator pursuant to Clause 13. The ability of a group member to have an issue that may arise in relation to the Scheme brought before the Court was briefly canvassed with Counsel for the Administrator on 14 February 2012. Whether a group member could or could not raise any such issue with the Court was not resolved. 18 The role of the Court when approving a settlement pursuant to s 33V of the Federal Court of Australia Act 1976 (Cth) is to consider whether a settlement or compromise is "… fair and reasonable, having regard to the claims made on behalf of the group members who will be bound by the settlement" (Williams v FAI Home Security Pty Ltd [2000] FCA 1925 at [19], 180 ALR 459 at 465 per Goldberg J) and "… not just in the interests of the applicant and the respondent" (Australian Competition and Consumer Commission v Chats House Investments Pty Limited (1996) 71 FCR 250 at 258 per Branson J). See also: Vernon v Village Life Ltd [2009] FCA 516 at [44] to [45] per Jacobson J. The task of the Court when granting approval, it has also been acknowledged, is "… an onerous one especially where the application is not opposed": Lopez v Star World Enterprises Pty Ltd [1999] ATPR 41-678 at 42,670. 19 In such circumstances, it would be surprising if the ability of this Court to protect the interests of group members ceased when it grants approval to a settlement pursuant to s 33V. It would be equally surprising if the ability of this Court subsequent to approval being given pursuant to s 33V is confined to merely supervising the distribution of settlement monies in accordance with that approval and not to address unexpected unfairness arising from the approved distribution scheme. Perhaps something may turn upon whether any unfairness arises pursuant to the terms in which a distribution scheme has been approved or pursuant to disagreement as to the facts upon which distribution is to take place. But no concluded view on any of these issues need presently be expressed. 20 If Australian Naturopathics wish to make an application to the Court for some form of order, the manner in which that application is to be made and the form of order then sought can be addressed if and when it is made. 21 The Submission as filed has alerted the Court – and the Administrator of the Scheme – to the prospect that an application may be made. It remains a matter for Australian Naturopathics to further pursue the Submission it has filed, if it so wishes. If an application is to be made by Australian Naturopathics it should be made prior to the monies being distributed. Approval for the distribution of monies may be sought as early as next month. 22 A copy of this judgment should be served upon Mr Marevich. Given the role played by the Administrator, it is not necessary to make a formal order to that effect. Conclusion 23 Approval should be given in the terms sought in the Amended Interlocutory Application. The Court: 1. Approves the payment of $1,162,684.01 as forming part of the "Administration Costs" for the purposes of clause 10.1.2 of the Settlement Distribution Scheme. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. Associate: Dated: 17 February 2012	3,132
federal_court_of_australia:fca/single/2006/2006fca1819	decision	commonwealth	federal_court_of_australia	text/html	2006-12-22 00:00:00	Wen Bi Dai v Minister for Immigration & Multicultural & Indigenous Affairs [2006] FCA 1819	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2006/2006fca1819	2024-09-13T22:45:26.977911+10:00	FEDERAL COURT OF AUSTRALIA Wen Bi Dai v Minister for Immigration & Multicultural & Indigenous Affairs [2006] FCA 1819 MIGRATION – cancellation of student visa under s 116 of the Migration Act 1958 (Cth) – Condition 8202 – s 505 of the Act provides for regulations for applicants for, not holders of, a visa – power to make regulations under s 504 and s 41(1) of the Act – whether Condition 8202 ultra vires – Condition 8202 does not delegate to educational course providers the power to specify a visa condition – Condition 8202 not invalid for impermissible delegation – representations made in notice issued pursuant to s 20 of the Education Services for Overseas Students Act 2000 (Cth) – alleged procedural unfairness – defects in a notice under s 20 of the Students Act are not material to the Tribunal decision under review – application dismissed Migration Act 1958 (Cth) ss 41(1), 137J, 137K, 137L, 116, 504, 505 Education Services for Overseas Students Act 2000 (Cth) s 20 Cheng v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 1028 followed Conroy v Shire of Springvale and Noble Park (1959) VR 737 cited Ellis v Dubowski (1921) 3 KB 621 cited Humayun v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 149 FCR 558 at [30] cited Minister for Immigration and Multicultural and Indigenous Affairs v Ahmed (2005) 143 FCR 314 cited Minister for Immigration and Multicultural Affairs; ex parte Lam (2003) 214 CLR 1 cited Minister for Immigration and Multicultural and Indigenous Affairs v Zhou (2006) 125 FCR 115 applied Morsed v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 88 ALD 90 considered Racecourse Co-operative Sugar Association Ltd v Attorney-General of the State of Queensland (1979) 142 CLR 460 cited Turner v Owen (1990) 26 FCR 366 cited Twinn v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 147 FCR 490 cited Uddin v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 149 FCR 1 cited Zubair v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 139 FCR 344 cited Pearce D and Argument S, Delegated Legislation in Australia (3rd ed, Butterworths, 2005) WEN BI DAI v MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS AND MIGRATION REVIEW TRIBUNAL NSD 2216 OF 2005 BENNETT J 22 december 2006 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2216 OF 2005 BETWEEN: WEN BI DAI Applicant AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS First Respondent MIGRATION REVIEW TRIBUNAL Second Respondent JUDGE: BENNETT J DATE OF ORDER: 22 december 2006 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The Migration Review Tribunal be joined as a second respondent. 2. The application to file a third further amended application be refused. 3. The application is dismissed. 4. The applicant is to pay the first respondent's costs, save for costs thrown away in relation to the vacation of the hearing of 6 March 2006. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2216 OF 2005 BETWEEN: WEN BI DAI Applicant AND: MINISTER FOR IMMIGRATION AND MULTICULTURAL AND INDIGENOUS AFFAIRS First Respondent MIGRATION REVIEW TRIBUNAL Second Respondent JUDGE: BENNETT J DATE: 22 December 2006 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The applicant held a student (Temporary) (Class TU) (Subclass 572) visa. Condition 8202 applied to that visa, being relevantly a requirement related to satisfactory academic results (Item 8202(3)(b) in Sch 8 of the Migration Regulations 1994 (Cth) ('the Regulations')). 2 The applicant received a notice ('the Notice') under s 20 of the Education Services for Overseas Students Act 2000 (Cth) ('the Students Act'), following receipt by the Department of notification from her education provider that she had breached a condition of her student visa. The particulars given by the Notice were '[s]tudent dismissed 24 May 2004 due to unsatisfactory academic performance'. 3 It is not suggested that the breach had not occurred. The applicant did, however, have extenuating and exceptional circumstances on which she sought to rely to explain the breach. 4 The Notice stated that she must report personally to a compliance officer at a named office of the Department. She did so. 5 Subsequently, the Department issued a written notice of intention to cancel her visa pursuant to s 119 of the Migration Act 1958 (Cth) ('the Act'). A Delegate of the Minister found that the applicant had not complied with Condition 8202 because of unsatisfactory academic performance and cancelled the visa pursuant to s 116 of the Act. Section 116 of the Act relevantly provides that the Minister may cancel a visa if its holder has not complied with a condition of the visa (s 116(1)(b)). If such a condition has not been complied with and there exists prescribed circumstances (s 116(3)), the Minister must cancel the visa. One such prescribed circumstance is that the holder of a Student (Temporary) (Class TU) visa has not complied with Condition 8202 (reg 2.43(2)(b)(ii) of the Regulations). 6 The applicant sought review of that decision by the Migration Review Tribunal. The Tribunal accepted the reasons given by the applicant for her difficulties in achieving satisfactory results due to her personal situation at the time, which included a termination of pregnancy. The Tribunal accepted the difficulties she said arose from the marking system of the College at which she was then studying. However, having found that a breach of Condition 8202 had occurred and in the absence of any discretion to act otherwise, the Tribunal affirmed the decision to cancel the visa. 7 There is no dispute in this application that the marking system at the College required a high standard to pass or that the applicant's personal situation during the relevant term of study resulted in difficulties for her in studying. Although the applicant has returned to China, she cannot return to Australia for 3 years and will have the visa cancellation "on her record" if this application is unsuccessful. 8 By a further amended application filed in the Federal Magistrates Court under s 39B of the Judiciary Act 1903 (Cth), the applicant sought a declaration that Condition 8202(3)(b) of Sch 8 of the Regulations is invalid and a writ of certiorari to quash the Tribunal decision. This application to review the Tribunal's decision was referred to this Court by Emmett FM. A second further amended application was filed in this Court. The matter was then adjourned pending the anticipated judgment of the Full Court in Minister for Immigration and Multicultural and Indigenous Affairs v Zhou (2006) 125 FCR 115, which concerned one of the issues raised by the applicant in these proceedings. 9 Put shortly, the grounds of the second further amended application are based on the alleged invalidity of condition 8202(3)(b) and a denial of procedural fairness to the applicant. It is not in dispute that, if Condition 8202 is valid and there was no failure to accord procedural fairness, this application must fail. 10 In order to understand the alleged denial of procedural fairness, it is necessary to consider s 20 of the Students Act. Section 20(1) provides that a registered provider of overseas student courses must send the student a written notice if he or she has breached a student visa condition relating to attendance or satisfactory academic performance. That notice must state, inter alia, that the student is required to attend in person before an officer of the Department to explain the breach and set out the effects of s 137J and s 137K of the Act (s 20(4)(b) and (d) of the Students Act). 11 Section 137J of the Act provides for automatic cancellation of a visa if a notice issued pursuant to s 20(1) of the Students Act is not complied with. A student whose visa is cancelled under that section may, however, apply in writing to the Minister for the cancellation to be revoked (s 137K of the Act). In dealing with an application under s 137K, the Minister may revoke the visa cancellation if the breach of visa condition was due to exceptional circumstances (s 137L(1)(b)). 12 The applicant criticises the form and substance of the Notice. Further, the applicant complains that, by complying with the Notice, she was unable to apply for revocation of the automatic cancellation of the visa on the grounds of her exceptional circumstances (s 137L(1)(b)). A further proposed amended application 13 The hearing of the second further amended application took place on 11 September 2006. I reserved my decision. On 26 October 2006, the applicant sought leave to file a third further amended application. By the proposed amendment the applicant sought writs of certiorari directed to the Delegate (in addition to the Tribunal) and orders quashing both the Tribunal and Delegate decisions. 14 There is no basis for permitting the latest amendment and leave to amend should be refused. Apart from the general discretionary factors that would apply to an application to amend after the conclusion of the hearing, the applicant elected to seek merits review in the Tribunal of the Delegate's decision. The fact that such a review cured, in a legal sense, any defect in the hearing before the Delegate attributable to a denial of natural justice is now settled (Zubair v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 139 FCR 344; Uddin v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 149 FCR 1 (special leave to appeal refused); Humayun v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 149 FCR 558 at [30]; Cheng v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 1028 at [67]). There is no reason to permit the applicant to amend to seek orders against the Delegate. 15 I will proceed to consider the second further amended application and the two issues that arise: · the validity of Condition 8202; and · whether the applicant was afforded natural justice by the Tribunal. The validity of Condition 8202 16 Condition 8202 is Item 8202 in Sch 8 to the Regulations and provides: '(1) The holder (other than the holder of a Subclass 560 (Student) visa who is an Aus AID student or the holder of a Subclass 576 (AusAID or Defence Sector) visa) must meet the requirements of subclauses (2) and (3). (2) A holder meets the requirements of this subclause if: (a) the holder is enrolled in a registered course; or (b) in the case of the holder of a Subclass 560 or 571 (Schools Sector) visa who is a secondary exchange student – the holder is enrolled in a full-time course of study or training. (3) A holder meets the requirements of this subclause if: (a) in the case of a holder whose education provider keeps attendance records – the Minister is satisfied that the holder attends for at least 80% of the contact hours scheduled: (i) for a course than runs for less than a semester – for the course; or (ii) for a course that runs for at least a semester – for each term and semester of the course; and (b) in any case – the holder achieves an academic result that is certified by the education provider to be at least satisfactory: (i) for a course that runs for less than a semester – for the course; or (ii) for a course that runs for at least a semester – for each term or semester (whichever is shorter) of the course. (4) In the case of the holder of a Subclass 560 visa who is an Aus AID student or the holder of a Subclass 576 (AusAID or Defence Sector) visa – the holder is enrolled in a full-time course of study or training.' 17 Relevantly, Condition 8202 provides that a visa holder meets the requirements of the student visa if that student is enrolled in (8202(2)), attends (8202(3)(a)) and achieves an academic result that is at least satisfactory (8202(3)(b)) for a registered course. The academic result is to be certified and therefore assessed as "at least satisfactory" by the education provider. Those words give the education provider a measure of discretion (Hamayun at [19]). 18 The applicant submits that: · To the extent that Condition 8202(3)(b) provides that the Minister is to have regard to and take as correct the certificate by the education provider as to satisfactory academic result, it is an impermissible delegation of legislative power. · Section 505 of the Act provides for regulations which may provide that the Minister may, to paraphrase, "get" the education provider to make an assessment of satisfactory academic result and have regard to that assessment and take it as correct, but only when deciding whether an applicant for a visa satisfies Condition 8202. This, it is said, does not extend to the holder of an existing visa. Section 505 of the Act 19 Section 505 provides: 'To avoid doubt, regulations for the purpose of prescribing a criterion for visas of a class may provide that the Minister, when required to decide whether an applicant for a visa of the class satisfies the criterion: (a) is to get a specified person or organisation, or a person or organisation in a specified class, to: (i) give an opinion on a specified matter; or (ii) make an assessment of a specified matter; or (iii) make a finding about a specified matter; or (iv) make a decision about a specified matter; and (b) is: (i) to have regard to that opinion, assessment, finding or decision in; or (ii) to take that opinion, assessment, finding or decision to be correct for the purposes of; deciding whether the applicant satisfies the criterion.' 20 The following issues arises: · Does s 505 provide for regulations for the purpose of prescribing criteria for the holders of visas? · Does the inclusion of s 505 indicate a legislative intent to limit the regulation making power to prescribe criteria for holders of visas? · Does the Act permit the making of regulations providing for Condition 8202? Does s 505 provide for regulations for the purpose of prescribing criteria for the holders of visas? 21 The applicant concedes that s 505 is an appropriate delegation of power to make regulations for the purpose of prescribing a criterion for the relevant visa. Mr Gormly appears for the applicant. That delegation, he submits, extends only to the purpose of deciding whether an applicant satisfies the particular criterion. He relies on the Explanatory Memorandum to the Migration Laws Amendment Bill (No 2) 1992 at [33]) that states, with reference to the introduction of s 182, the predecessor to s 505, the section allows for regulations to be made with respect to the matters to which the Minister may have regard 'when deciding whether an applicant satisfies a particular criterion'. The Explanatory Memorandum also states that the section 'puts beyond doubt the validity of such regulations made before the commencement of [the proposed s 182]'. 22 I accept that s 505 refers to the Minister's decision whether an applicant for a visa satisfies the criterion and not whether an existing visa holder satisfies the criterion. That is, s 505 is a regulation making power concerned with the time when the Minister is considering the grant of a visa, not the cancellation of a visa. Accordingly it does not apply to the regulation providing for Condition 8202. Does the inclusion of s 505 indicate a legislative intent to limit the regulation making power to prescribe criteria for holders of visas? 23 Section 504 of the Act provides for regulations 'prescribing all matters which by this Act are required or permitted to be prescribed or which are necessary or convenient to be prescribed for carrying out or giving effect to this Act'. Mr Johnson, who appears for the Minister, draws attention to the introductory words of s 505: 'To avoid doubt' and submits that there is no indication in s 505 of a limitation on the power set out in s 504. It follows from his submission that s 505, which particularises the content of regulations with respect to criteria for applicants for a visa, provides an indication that the legislature intended to provide for regulations of that nature. 24 Mr Gormly, who appears for the applicant, submits that the fact that there is a specific provision in s 505 for the power to make those regulations means that the regulation making power of s 504 does not extend to the subject matter of criteria for holders of visas. He submits that, as s 505 provides specifically for regulations for the purpose of imposing criteria on visa applicants, there must be specific provision for criteria on holders of visas. That is, that s 505 recognises that the general regulation making power of s 504 does not extend to the imposing of such criteria. He relies on the introductory words "to avoid doubt" to support the need for specific provision of delegation of opinion or assessment or finding about a specified matter for the purposes of conditions. 25 The words of s 505 mean what they say. To avoid doubt, there is specific provision for the Minister to delegate the matters set out in s 505. Those are matters of fact to which the Minister is to have regard or to take to be correct in deciding whether an applicant for a visa satisfies the criterion. That does not derogate from the power that exists by reason of s 504. Section 505 can be viewed as providing specifically for a "sub-set" of regulations permitted by s 504. Does the Act permit the making of regulations providing for Condition 8202? 26 Section 504 of the Act provides for the making of regulations, generally described, which are necessary or convenient for carrying out or giving effect to the Act. Section 41(1) provides that the regulations may provide that visas, or visas of a specified class, are subject to specified conditions. Condition 8202 is such a specified condition. 27 The Minister submits that it is a state of fact whether the student passed or failed or achieved satisfactory results and there is nothing in the Act that reserves to the Governor-General or to the Minister the task of deciding if an academic result is at least satisfactory. The applicant submits that this is not a delegation of a determination of fact but an exercise of delegated legislative power in the unfettered specification of the criteria that constitute satisfactory academic results. The discretion, Mr Gormly says, is in the hands of the education provider and not in the Minister. 28 Mr Gormly relies upon what he describes as '[t]he mandatory and automatic effect of the Act's cancellation provisions' to submit that the terms of Condition 8202(3)(b) amount to an abdication of the Governor-General's power under ss 41 and 504 of the Act to make regulations "specifying conditions". He submits that, by the education provider determining and applying its own academic standards, there has been an impermissible abdication to the education provider. That, he contends, is supported by the role of the education provider in initiating the automatic cancellation of the visa under s 137J of the Act in its obligation to issue notices under s 20 of the Students Act where there is a breach of Condition 8202. 29 Mr Gormly also points to what can be characterised as: · the consequent lack of discretion available to any decision maker, except the education provider; · the lack of any specified or objective criteria or guidance for the education provider's assessment of what is "satisfactory" and the judgment and discretion required of the education provider; and · the "final say" which the legislative regime effectively affords to the education provider on the question of whether a visa must be cancelled. 30 There is no dispute that delegated authority must be exercised in accordance with the power creating it. Section 41(1) of the Act provides that regulations may provide that a visa is subject to conditions. It makes general and unrestricted provision for regulations providing for visas being subject to conditions. It follows that the Act provides for the power to make regulations to impose conditions on, and prescribe criteria for, visas or visas of a specified class. 31 Section 504 of the Act provides that the Governor-General may make regulations not inconsistent with the Act. That includes, without limitation as to its generality, a specific power to make regulations: 'making provision for matters that, under the Education Services for Overseas Students Act 2000, are required or permitted to be prescribed in regulations made under this Act'. (s 504(1)(1)) 32 The applicant submits that, by reason of s 41 of the Act, the specification of visa conditions can only be done by the making of regulations and that there is no legislative intent that this power be delegated from the Governor-General to another person. Mr Gormly accepted, however, that if s 505 applied to holders of visas, the Act would make it clear that the Minister is entitled to have the assessment done by another body. His submission is that without specific provision in the Act, there has been an invalid sub-delegation of power. 33 The applicant's submission is that Condition 8202(3)(b), which provides for the requirement that the visa holder achieves an academic result that is certified by the education provider to be at least satisfactory, is ultra vires the Act as an impermissible sub-delegation to an "education provider' of the legislative power to specify visa conditions given by ss 504 and 41(1) of the Act. 34 Mr Gormly relies upon the conclusion by French J in Turner v Owen (1990) 26 FCR 366 that delegating to the Minister the power to prohibit goods, which in his opinion 'are of a dangerous character and a menace to the community' constituted an unlawful delegation because those words 'are not indicative of a factual criterion or class description limited by any intelligible boundary' and were legislative in character (at 389). French J concluded that the regulations in that case impermissibly asked the Minister to prohibit, rather than the Governor-General. 35 Mr Gormly argues that academic standards can never be fully objectified such that their application is a matter of mere administration. He points out that different institutions prescribe different rules and standards. The certification, he submits, is not merely administrative; it is not purely routine and non-discretionary. Mr Gormly submits that the education provider, by reason of its certification of an academic result "to be at least satisfactory" for the purposes of Condition 8202 and its issue of a s 20 notice under the Students Act, impermissibly performs a "migration function" without regard to the objects of the Act. Condition 8202(3)(b) is, he submits, ultra vires (cf Ellis v Dubowski (1921) 3 KB 621 at 625). It makes the education provider the decision maker on the terms of the visa condition and on a breach of that condition, resulting in automatic cancellation. Mr Gormly submits that the result is an invalid sub-delegation (Conroy v Shire of Springvale and Noble Park (1959) VR 737). Consideration 36 Mr Gormly's submissions assume that the education provider specifies the conditions or makes the decision upon a lack of certification. That is not the case. Condition 8202 does not delegate to the education provider the specification of visa conditions. Condition 8202 imposes a consequence in relation to the visa in the event that a certificate does not exist. The relevant visa condition is specified in Condition 8202. That criterion requires a certification of satisfactory academic results. The certification exists or it does not. That is a question of fact. 37 Here, the delegation is not of the decision to decide whether a visa holder satisfies the criterion. Section 41 provides that the regulations may provide that visas are subject to specified conditions. Condition 8202 is such a condition specified in the Regulations. The Minister decides whether to grant a visa, subject to satisfaction that the criteria are satisfied (s 65). The Minister decides whether a visa holder satisfies the specified condition (s 116(1) of the Act, reg 2.43(2)(b)(ii) of the Regulations). Further, as a matter of reality, an academic result that, for a specified course, is "at least satisfactory" is limited 'by an intelligible boundary' and is not legislative in character (cf Turner at [389]). 38 Section 505, which refers specifically to such matters for visa applicants, does not delegate the whole of power to decide whether an applicant for a visa satisfies the relevant criterion. The section provides for the making of regulations under which the Minister, when required to decide whether an applicant for a visa satisfies a specified criterion, may obtain the opinion, assessment, finding or decision of a specified person or organisation and have regard to it and to take it to be correct. 39 The sub-delegation in s 505 is not of a legislative but of an administrative character. It is not the delegation of a wide field of operation but, rather, a narrow question of fact. 40 A sub-delegation under s 504 is of the same character. The Act does not reserve any of the delegated functions in Condition 8202 to the Governor-General. The Governor-General has exercised the power conferred by the Act to make regulations, within the limits laid down by the Act (Twinn v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 147 FCR 490 at [22]). The authorisation given by s 504 encompasses the making of regulations by the Governor-General to allow administrative functions to be undertaken by the Minister for the purposes of the regulations (Twinn at [23]). For the purposes of deciding whether an applicant for a visa satisfies the condition for a visa, the regulations may make provision for the Minister to have consideration of the matters enunciated in s 505 of the Act. The fact that this was particularised in s 505, "to avoid doubt", indicates a statutory acknowledgment that the power to make regulations in respect of those matters already existed by reason of s 504 and s 41(1) of the Act. 41 Once the Minister is satisfied that the condition has not been met, there is a mandatory cancellation by reason of s 116(3) but that does not convert the sub-delegation into an effective abdication of powers (see generally Pearce D and Argument S, Delegated Legislation in Australia (3rd ed, Butterworths, 2005) Ch 23). 42 On its proper construction, the Act permits the opinion or assessment of the education provider to be provided for in the regulations, to be provided to the Minister and had regard to and be considered correct in the decision making of the Minister (see discussion in Racecourse Co-operative Sugar Association Ltd v Attorney-General of the State of Queensland (1979) 142 CLR 460 at 481 per Gibbs J). 43 The fact that the scheme of the Act results in an absence of discretion in the cancellation of a visa where the Minister has decided that the requirements of Condition 8202 has not been satisfied under s 116 does not determine that there has been a delegation of the power to specify visa conditions to the education provider. It does not convert the specification by the Governor-General of conditions pursuant to s 41 into an impermissible delegation of the specification of the visa condition. Natural justice The applicant's contentions 44 Mr Gormly emphasises the misleading nature of the Notice. Specifically, he contends that the Notice implies that there exists a discretion on the part of the Department, so that an explanation for the breach will be taken into account. It does not, he observes, inform the applicant that her visa will be cancelled if a breach of condition did occur and she attends to "explain" that breach in response to the Notice. The applicant was thereby deprived of the opportunity of not responding to the Notice, awaiting the automatic cancellation of her visa and then applying to the Minister under s 137K of the Act, where exceptional circumstances can be taken into consideration (s 137L(1)(b)). This represents the alleged practical unfairness of the denial of natural justice. 45 According to the Regulations then in force, the reality was that, if the student attended to explain the breach, it was an admission that the breach occurred and there was no discretion for the Minister to do other than cancel the visa (cf reg 2.43(2)(b)(ii)(B) of the Regulations, now in force). The best position for a student who had exceptional circumstances beyond his or her control was not to attend but rather to make an application to the Minister under s 137K and s 137L of the Act for revocation of the cancellation on the basis that the breach was due to exceptional circumstances. The Notice does not inform the student of this potential course of action. 46 Mr Gormly places considerable reliance on Morsed v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 88 ALD 90 at [22]–[24] where the Full Court observed that a s 20 notice in relevantly indistinguishable terms was, for this reason, misleading. 47 Mr Gormly acknowledges that the Act provides, by s 357A, for its procedures to be an exhaustive statement of the natural justice hearing rule before the Tribunal. He contends that as the Notice was not a notice served under the Act but under the Students Act and, as that notice did not apply to the substantive right considered by the Tribunal and its validity was not part of the hearing before the Tribunal, that section does not apply. 48 Further, in Mr Gormly's submission, Minister for Immigration and Multicultural and Indigenous Affairs v Ahmed (2005) 143 FCR 314, Zubair, and Uddin have no application because the Tribunal in this case could not cure the denial of procedural fairness occasioned by the Notice. The Notice was not part of the hearing before the Tribunal. To the extent that existing authority of this Court suggests otherwise, Mr Gormly seeks to distinguish this case which, he says, raises matters not considered by the Full Court in Zhou and Zubair or by Siopis J in Cheng. 49 The Tribunal referred in its decision to the Notice. However, the Tribunal decision was based on the failure to comply with Condition 8202. The Tribunal referred to the applicant's explanation for the breach of that condition but noted that it had no discretion, by reason of s 116(3) of the Act and reg 2.43(2)(b) of the Regulations, to do other than affirm the decision to cancel the applicant's visa. The respondent's contentions 50 Mr Johnson makes six points in his submissions as to the alleged denial of procedural fairness: 1. The Court is reviewing the decision of the Tribunal, which has no role to play in the processes of s 20 of the Students Act. 2. It is now settled by Zhou and Cheng that there is no legal interaction between the processes of s 20 of the Students Act and a cancellation under s 116 of the Act. 3. It is not contended that the Notice did not comply with s 20 of the Students Act. In any event, Morsed does not say that there is a breach of procedural fairness by the Tribunal where a notice issued pursuant to s 20 of the Students Act is misleading. 4. Even if it were misleading, the Notice did not affect the power of the Delegate to effect a visa cancellation under s 116 (Humayun at [30]). Further, the Tribunal conducted a merits review and any defects in the decision of the Delegate were cured by that review (Zubair; Cheng at [67]). 5. The question whether there could be a cure for any deficiency in the Notice that gave rise to a denial of natural justice could not affect the operation of s 116 of the Act. Such a denial could not result in jurisdictional error on the part of the Tribunal. 6. No denial of natural justice or breach of statutory requirements can be established on the part of the Tribunal. Consideration 51 I agree, with respect, with the observations of the Full Court in Morsed at [21] that the Notice does not inform the recipient that, where the breach was due to exceptional circumstances beyond her control, the only way that a holder of a student visa who has breached Condition 8202 can avoid having their visa cancelled is not to comply with the Notice. The Notice is misleading for the reasons given in Morsed at [22]–[25]. 52 Mr Gormly adopts the characterisation of the defects in the s 20 notice in Morsed and relies upon the denial of procedural fairness resulting from that notice with its attendant effect on the opportunity for the applicant to rely on exceptional circumstances to avoid cancellation of her visa. He refers to Minister for Immigration and Multicultural Affairs; ex parte Lam (2003) 214 CLR 1 at [34] and submits that, because of the consequences of compliance with the Notice, the contents of the Notice cannot be quarantined from the procedural fairness requirements of a cancellation under s 116(3) of the Act. The failure to accord procedural unfairness cannot, he says, be cured by merits review by the Tribunal because of the lack of discretion on the part of the Delegate and the Tribunal. 53 In Zhou, the applicant's visa was cancelled under s 116 of the Act on the grounds that she had breached Condition 8202 of her visa. The Full Court considered whether alleged defects in a s 20 notice under the Students Act are material to the resolution of an appeal from a decision of the Tribunal to affirm a cancellation decision under s 116 of the Act. The Full Court determined that, even where the s 20 notice and the response to it give rise to the delivery of the notice of intention to cancel the visa under s 119 of the Act (at [41] and [43]), there is no implied limitation on the operation of s 116 (at [42]) and no 'legal interaction' between the s 20 notice under the Students Act and the exercise of power in s 116 of the Act. Invalidity of the s 20 notice can have no invalidating effect on the s 119 procedure (at [40]). 54 In Cheng, Siopis J addressed submissions that the Tribunal fell into jurisdictional error in failing to consider whether the Delegate had denied the applicant procedural fairness by reason of an allegedly misleading s 20 notice. As here, the alleged denial of procedural fairness was relevantly based on the failure of the applicant's expectation of being able to raise matters relating to her medical and personal circumstances as a means of preventing the cancellation of her visa, when there was an alternative course available where those circumstances could be raised as grounds for reinstating her visa (at [69]). His Honour applied Zhou and observed at [65] that '[i]t does not avail the applicant to impugn the procedural fairness of a process which is legally unrelated to the process which led to the impugned decision, namely, the cancellation of the visa under s 116 of the Act'. The processes are, as pointed out by his Honour at [72], 'legally separate'. 55 That conclusion follows from Zhou. 56 The decision under review in this case is that of the Tribunal. It is not suggested that the Tribunal failed to accord procedural fairness in its own procedures. Questions of procedural fairness must be considered by reference to the Tribunal's decision to affirm the Delegate's decision made under s 116 of the Act (Cheng at [74]). 57 The Minister submits that, as the hearing before the Tribunal is a merits review, the Tribunal can, in a legal sense, "cure" any defects leading to the decision of the Delegate under review (Zubair; Ahmed; Uddin; Hamayun). Mr Gormly submits, however, that the Tribunal cannot cure any defects in the Notice because it formed no part of the Tribunal's review of the decision to cancel made under s 116. He submits that this was not considered in Cheng and that this inability on the part of the Tribunal to cure the denial of procedural fairness invalidates the Tribunal decision. 58 This submission cannot be correct and ignores the reasoning in Zhou and Cheng. The Full Court in Zhou stated comprehensively at [39] that alleged defects in a s 20 notice are not material to an appeal from a decision of the Tribunal to affirm a cancellation decision under s 116 of the Act. Siopis J in Cheng specifically considered and rejected a submission that the Tribunal fell into jurisdictional error by failing to consider an alleged denial of procedural fairness on the part of the Delegate by reason of a s 20 notice being misleading. The s 20 notice has no role in the Tribunal decision. It is irrelevant to the Tribunal's review of the Minister's decision to cancel the visa under s 116, a decision with a different statutory basis. Once it is irrelevant and the question for this Court is jurisdictional error on the part of the Tribunal, the applicant cannot succeed on the basis of a denial of natural justice concerning the Notice. Conclusion 59 Condition 8202(3)(b), as set out in Item 8202 of Sch 8 of the Regulations, is not ultra vires by reason of it impermissibly delegating the task of the specification of a visa condition to the educational course provider. 60 Consistent with the decision in Zhou and Cheng, no jurisdictional error has been established on the part of the Tribunal in its review of the Minister's decision to cancel the applicant's visa pursuant to s 116 of the Act. 61 It follows that the application should be dismissed with costs. I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. Associate: Dated: 22 December 2006 Counsel for the Applicant: J Gormly Solicitor for the Applicant: Raymond Lee and Co Counsel for the First Respondent: G T Johnson Solicitor for the First Respondent: DLA Phillips Fox Date of Hearing: 11 September 2006 and 26 October 2006 Date of Final Submissions 30 October 2006 Date of Judgment: 22 December 2006	8,396
federal_court_of_australia:fca/full/2011/2011fcafc0067	decision	commonwealth	federal_court_of_australia	text/html	2011-05-17 00:00:00	Shop Distributive and Allied Employees' Association v Woolworths SA Pty Ltd [2011] FCAFC 67	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2011/2011fcafc0067	2024-09-13T22:45:27.817522+10:00	FEDERAL COURT OF AUSTRALIA Shop Distributive and Allied Employees' Association v Woolworths SA Pty Ltd [2011] FCAFC 67 Citation: Shop Distributive and Allied Employees' Association v Woolworths SA Pty Ltd [2011] FCAFC 67 Appeal from: Shop Distributive and Allied Employees' Association v Woolworths Ltd [2011] FCA 25 Parties: SHOP DISTRIBUTIVE AND ALLIED EMPLOYEES' ASSOCIATION v WOOLWORTHS SA PTY LTD File number: SAD 26 of 2011 Judges: MARSHALL, TRACEY AND FLICK JJ Date of judgment: 17 May 2011 Catchwords: INDUSTRIAL LAW – appeal from single judge of the Federal Court – application for a declaration that the respondent breached an industrial instrument – interpretation of public holiday clause in industrial instrument – whether employee entitled to public holiday rates for work performed on Anzac Day where employee was paid public holiday rates the following day as a substitute Legislation: Holidays Act 1910 (SA) s 3A Cases cited: Anzac Day Holiday Test Case (2004) 134 IR 270 Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2006) 156 FCR 1 Short v FW Hercus Pty Ltd (1993) 40 FCR 511 City of Wanneroo v Holmes (1989) 30 IR 362 Date of hearing: 17 May 2011 Place: Adelaide Division: FAIR WORK DIVISION Category: Catchwords Number of paragraphs: 19 Counsel for the Appellant: Mr T Stanley QC Solicitor for the Appellant: Donald Blairs Counsel for the Respondent: Mr G Hatcher SC with Mr A Neal Solicitor for the Respondent: Henry Davis York Lawyers IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY FAIR WORK DIVISION SAD 26 of 2011 ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: SHOP DISTRIBUTIVE AND ALLIED EMPLOYEES' ASSOCIATION Appellant AND: WOOLWORTHS SA PTY LTD Respondent JUDGES: MARSHALL, TRACEY AND FLICK JJ DATE OF ORDER: 17 MAY 2011 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: 1. The appeal is dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY FAIR WORK DIVISION SAD 26 of 2011 ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: SHOP DISTRIBUTIVE AND ALLIED EMPLOYEES' ASSOCIATION Appellant AND: WOOLWORTHS SA PTY LTD Respondent JUDGES: MARSHALL, TRACEY AND FLICK JJ DATE: 17 MAY 2011 PLACE: ADELAIDE REASONS FOR JUDGMENT the court 1 The appellant, Shop Distributive and Allied Employees' Association ("SDA") is an organisation of employees registered pursuant to the Fair Work (Registered Organisations) Act 2009 (Cth). The respondent is a major employer in the retail sector in South Australia and elsewhere. SDA appeals from a judgment of a single judge of the Court dismissing its application for a declaration that the respondent breached cl 48 of the Woolworths (SA, NT and Broken Hill) Certified Agreement 2006 ("the Agreement"). 2 Clause 48 of the Agreement concerns public holidays. It sets out the days, or substitute days, on which public holidays are to be observed and provides for payment to employees at specified penalty rates for work performed on such days. 3 The question for determination before the primary judge, and now on appeal, was whether the respondent was bound to pay its employee, Ms Clifford, at public holiday rates for work performed on Anzac Day 2010 in circumstances where she received public holiday rates for work performed on 26 April 2010 and the Sunday rate for work performed on 25 April 2010. 4 Under the Agreement an employee who is required to work on a public holiday, and does perform work, must be paid at the rate of double time and a half with a minimum engagement of four hours. 5 In South Australia, Anzac Day (April 25) amongst other days set out in cl 48.5.1 of the Agreement is a listed public holiday. Immediately prior to setting out the list of public holidays in cl 48.5.1, the Agreement in cl 48.5 provides: Public Holidays are the days (or substitute days) on which the following holidays are observed: 6 Clause 48.5.4 is headed "Additional Holidays" and provides: Any other day which is declared to be a public holiday pursuant to the Holidays Act, 1910 shall be a public holiday for the purposes of this clause. 7 Clause 48.6 provides for "holidays in lieu" when certain public holidays, but not Anzac Day, fall on a weekend day. 8 Clause 48.10 refers to a situation where a full time employee who normally works on weekends as part of ordinary time and where a public holiday falls on a weekend day. In those circumstances, if an employee is required to work on the public holiday, that person is entitled to a substitute day off. But, if the employee works both the public holiday and the substitute day, the employee will only be paid the normal rate for the actual public holiday. That is, the employee does not receive public holiday rates for both days. 9 At all material times s 3A of the Holidays Act 1910 (SA) ("Holidays Act") provided that: Anzac Day In addition to the days mentioned in Schedule 2, 25 April will be a public holiday and bank holiday but when that day falls on a Sunday, that day and the following Monday will be public holidays and bank holidays. 10 It is important to note, at this stage, that the Holidays Act does not govern what are public holidays under the Agreement. The Agreement does that itself. Anzac Day is a public holiday by virtue of cl 48.5.1 and so it was on Sunday 25 April 2010. Monday 26 April 2010 was a public holiday by virtue of cl 48.5.4 of the Agreement. 11 The intention of the Agreement when providing for a public holiday on 26 April 2010 was to allow employees who would not ordinarily be required to work on Sunday 25 April 2010 to have the benefit of a public holiday on 26 April 2010 which otherwise would have been denied to them. It could not have been the intention of the parties to the Agreement to allow employees who were expected to perform their ordinary duties on Sunday 25 April 2010 to have that day as a public holiday as well as the following day, Monday 26 April 2010. "Double dipping" in respect of public holidays in that way would not have been within the reasonable expectation of the parties to the Agreement or the arbitral body which certified it. The treatment of both 25 and 26 April 2010 as public holidays for a person who worked on both days as part of that person's ordinary duties would mean, in effect, that such a person received two Anzac Day holidays. Such an absurd result would not have been in the reasonable contemplation of the parties to the Agreement. 12 The above analysis is supported by the extract from the Anzac Day Holiday Test Case (2004) 134 IR 270 in the Australian Industrial Relations Commission recorded at paragraph [31] of the judgment of the primary judge, especially the final paragraph of the extract which eschewed the concept of "double counting". 13 SDA contends that a literal interpretation provides that both 25 and 26 April 2010 were public holidays. So much cannot be denied. A person who did not ordinarily work on 25 April 2010 was entitled to a public holiday on 26 April 2010, if that person ordinarily worked on that later day. A person who ordinarily worked on 25 April 2010 but not 26 April 2010 was entitled to a public holiday on 25 April 2010. That is why both days were public holidays. To that extent a literal interpretation is one that is consistent with the intention of the makers of the Agreement. However, a literal interpretation that is at odds with the intention of the makers of the Agreement is one where a person who ordinarily worked both days gets public holiday rates for both, in effect two Anzac Days. 14 Support for the position that the industrial context and the intention or purpose of the makers of an industrial instrument should be paramount notwithstanding the strict wording of the document is found in the judgments of members of the High Court in Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241. 15 In Amcor, Gleeson CJ and Mc Hugh J stressed at paragraph [2] that: (t)he resolution of the issue turns upon the language of the particular agreement, understood in the light of its industrial context and purpose, and the nature of the particular reorganisation. (Emphasis added.) See also at paragraph [13], where their Honours referred to: …the industrial purpose of the agreement, and the commercial and legislative context in which it applies. 16 Further, the purposive approach to the construction of industrial instruments was persuasively illustrated by Kirby J in Amcor at paragraph [96] where his Honour said: The nature of the document, the manner of its expression, the context in which it operated and the industrial purpose it served combine to suggest that the construction to be given to cl 55.1.1 should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the Agreement. Approaching the interpretation of the clause in that way accords with the proper way, adopted by this Court, of interpreting industrial instruments and especially certified agreements. I agree with the following passage in the reasons of Madgwick J in Kucks v CSR Ltd, where his Honour observed: It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand. (Original emphasis.) See also per Gummow, Hayne and Heydon JJ at [30]. 17 The approach of the High Court in Amcor is consistent with the modern approach to interpretation of commercial agreements where context and surrounding circumstances will be taken into account "even if the words at issue are not ambiguous, or susceptible of more than one meaning"; see Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2006) 156 FCR 1 at paragraph [46], per Weinberg J and see also at paragraph [251] where Lander J said: It is now clear and settled law that the meaning of commercial contracts and documents is to be determined objectively. To determine the objective intention of the parties regard must be had, of course, to the words in the document themselves, but regard should also be had to all of the surrounding circumstances which were known to the contracting parties at the time the document was created including the underlying purpose and object of the commercial transaction: Pacific Carriers per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ at [22]. 18 What is true of commercial contracts and their construction is also true of the construction of industrial agreements where regard must be had to the industrial context and the purpose of the provisions in question. In that regard, see also Short v FW Hercus Pty Ltd (1993) 40 FCR 511, especially at 518 to 520 per Burchett J, and City of Wanneroo v Holmes (1989) 30 IR 362 at 378 per French J. The issue currently in contest between the parties may fairly be resolved by asking the following question: given the purpose of public holiday provisions and the purpose of creating additional public holidays, could it be reasonably intended by industrial parties to an industrial instrument that a person would be entitled to the benefit of a public holiday for Anzac Day and on the very next day the provision of another public holiday for Anzac Day? The answer is obvious and must be no. 19 Accordingly, the primary judge was correct to dismiss the SDA's application for a declaration of entitlement for Ms Clifford to a public holiday rates for work performed on 25 April 2010 in addition to her payment, at public holiday rates, for work performed on 26 April 2010. The appeal must be dismissed. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Marshall, Tracey and Flick. Associate: Dated: 17 May 2011	2,980
federal_court_of_australia:fca/single/2018/2018fca0160	decision	commonwealth	federal_court_of_australia	text/html	2018-02-26 00:00:00	SZNZP v Minister for Immigration and Border Protection (No 2) [2018] FCA 160	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2018/2018fca0160	2024-09-13T22:45:29.196807+10:00	FEDERAL COURT OF AUSTRALIA SZNZP v Minister for Immigration and Border Protection (No 2) [2018] FCA 160 Appeal from: SZNZP v Minister for Immigration [2017] FCCA 2193 File number: NSD 1719 of 2017 Judge: DOWSETT J Date of judgment: 26 February 2018 Catchwords: MIGRATION – appeal from the Federal Circuit Court of Australia – where there was an application for a medical treatment (subclass 602) visa – where the application was invalid due to the appellant having previously held a visa subject to condition 8503 – appeal dismissed Legislation: Migration Act 1958 (Cth) ss 41(2)(a), 41(2A), 46(1A), 47 Migration Regulations 1994 (Cth) reg 2.05(4) Cases cited: Thongpraphai v Minister for Immigration and Multicultural Affairs [2000] FCA 1590 Date of hearing: 13 February 2018 Registry: New South Wales Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 15 Counsel for the Appellant: The Appellant appeared in person with the assistance of an interpreter Solicitor for the Respondent: Ms E Cheesman of Clayton Utz ORDERS NSD 1719 of 2017 BETWEEN: SZNZP Appellant AND: MINISTER FOR IMMIGRATION AND BORDER PROTECTION Respondent JUDGE: DOWSETT J DATE OF ORDER: 26 FEBRUARY 2018 THE COURT ORDERS THAT: 1. the appeal be dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT DOWSETT J: introduction 1 The appellant is a citizen of Egypt. He arrived in Australia on 11 December 2008. At that time he held a tourist (subclass 676) visa (granted on 26 November 2008), which visa was subject to visa condition 8503 as follows: The holder will not, after entering Australia, be entitled to be granted a substantive visa, other than a protection visa, while the holder remains in Australia. 2 On 9 December 2016, the appellant applied for a medical treatment (subclass 602) visa. On 23 December 2016 the respondent's delegate (the "delegate") determined that the application was invalid and therefore could not be considered. That decision was based upon s 46(1A) of the Migration Act 1958 (Cth) ("the Act") which provides: Subject to subsection (2), an application for a visa is invalid if: (a) the applicant is in the migration zone; and (b) since last entering Australia, the applicant has held a visa subject to a condition described in paragraph 41(2)(a); and (c) the Minister has not waived that condition under subsection 41(2A); and (d) the application is for a visa of a kind that, under that condition, the applicant is not or was not entitled to be granted. Statutory context 3 Section 47 provides: (1) The Minister is to consider a valid application for a visa. (2) The requirement to consider an application for a visa continues until: (a) the application is withdrawn; or (b) the Minister grants or refuses to grant the visa; or (c) the further consideration is prevented by section 39 (limiting number of visas) or 84 (suspension of consideration). (3) To avoid doubt, the Minister is not to consider an application that is not a valid application. (4) To avoid doubt, a decision by the Minister that an application is not valid and cannot be considered is not a decision to refuse to grant the visa. 4 Sections 41(2)(a) and 41(2A) provide: (2) Without limiting subsection (1), the regulations may provide that a visa, or visas of a specified class, are subject to: (a) a condition that, despite anything else in this Act, the holder of the visa will not, after entering Australia, be entitled to be granted a substantive visa (other than a protection visa, or a temporary visa of a specified kind) while he or she remains in Australia; or ... (2A) The Minister may, in prescribed circumstances, by writing, waive a condition of a kind described in paragraph (2)(a) to which a particular visa is subject under regulations made for the purposes of that paragraph or under subsection (3). 5 Regulation 2.05(4) of the Migration Regulations 1994 (Cth) contains the prescribed circumstances for the purposes of s 41(2A) of the Act. The regulation provides: (1) For subsection 41(2A) of the Act, the circumstances in which the Minister may waive a condition of a kind described in paragraph 41(2)(a) of the Act are that: (a) since the person was granted the visa that was subject to the condition, compelling and compassionate circumstances have developed: (i) over which the person had no control; and (ii) that resulted in a major change to the person's circumstances; and … (c) if the person asks the Minister to waive the condition, the request is in writing. The Circuit Court JUDGE's decision 6 On 12 January 2017, the appellant applied to the Federal Circuit Court for judicial review of the delegate's decision. 7 The grounds of application were as follows: 1. The Department failed to accept my application as valid, contrary to the decision made on 23 December 2016, as I have submitted an application for a medical treatment visa supported by medical evidence, as well as compelling circumstances. 2. The Department gave me a bridging visa E valid until 13 January 2017 with the condition "present valid passport". I asked the Honourable Court to accept my review as I need medical treatment and condition 8503 should be waived to allow me to lodge the appropriate application, which I did, and which, according to the Department's decision, was treated as invalid. 8 Clearly enough, neither ground addressed the validity of the application, save for the suggestion that condition 8503 should be waived, a matter not raised before the delegate. The Circuit Court Judge noted at [17] that the appellant: ... has never suggested that he had ever expressly made a request of the Minister in writing to waive cond.8503, nor is there any evidence otherwise that he has done so, let alone evidence establishing that the Minster had waived cond.8503. 9 Concerning the two grounds, the Circuit Court Judge said at [19]-[22]: Ground 1 19. Ground 1 appears to argue with the Delegate's view of the relevant statutory provisions and their effect upon his Medical visa application and seeks to invoke "compelling circumstances", which would only have been relevant under reg.2.05(4)(c) had a request for a waiver of cond.8503 been made by the Applicant. 20. In my view, for the reasons given above, the Delegate was correct to find that the Applicant's Medical treatment application was invalid and Ground 1 does not establish jurisdictional error. Ground 2 21. This Ground appears to invite the Court to engage in a merits review of the Medical visa application and for the Court itself to actually waive cond.8503. 22. This is not a course available to the Court and Ground 2 also fails to establish jurisdictional error. 10 In summary, the Circuit Court concluded that the appellant had failed to establish that the respondent's decision under review involved legal error or otherwise demonstrated jurisdictional error. this appeal 11 The notice of appeal identifies the following grounds: 1. The Department considered my application for medical treatment visa as invalid because of the condition 8503. 2. The Department failed to inform me that my visa has condition 8503 and failed to waive the condition or at least ask me to apply to waive it before making a decision that my application is invalid. In this case I was deprived of natural justice. 12 Ground 1 does no more than repeat the delegate's decision. Clearly, in the absence of any application for a waiver, there was no basis for doubting the correctness of the decision. I have held that ground 2 may not be pursued on the basis that it substantially addresses matters not raised at first instance. It is true that the appellant had, in his review grounds, asked that condition 8503 be waived, but as he had not sought such waiver before the delegate, it could hardly be said that the delegate's decision was infected by jurisdictional error by virtue of the failure to waive the condition. Hence, on appeal, the appellant sought to assert a duty upon the delegate (or the "Department") to advise as to the existence of the condition and as to the possibility of waiver. Such argument would, in any event, have necessarily failed. Pursuant to s 41(2A) the Minister may waive a condition described in s 41(2)(a). Condition 8503 falls within the operation of s 41(2) and s 41(2A). However the power to waive arises only in the prescribed circumstances set out in reg 2.05(4). Although the appellant has asserted compelling and compassionate circumstances, there is no relevant evidence. Further, there has been no written application for waiver. 13 Finally, I note that in Thongpraphai v Minister for Immigration and Multicultural Affairs [2000] FCA 1590 at [13], O'Loughlin J effectively rejected the submission that there may have been any such duty upon the basis that there was simply no demonstrated basis for finding such a duty. I agree. 14 As to the appellant's assertion that he was deprived of natural justice, no such assertion was made at first instance. Its precise basis is unclear, but I take it to mean only that as a result of his not being told about the possibility of waiver, he was deprived of a right to make such an application, and to be heard concerning such application. However that submission necessarily depends upon there being an obligation on the delegate to tell him about that possibility. I have found no basis for any such obligation. 15 The appeal must be dismissed. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. Associate: Dated: 26 February 2018	2,300
federal_court_of_australia:fca/single/1999/1999fca0520	decision	commonwealth	federal_court_of_australia	text/html	1999-04-27 00:00:00	Bin Tahal v Comcare [1999] FCA 520	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1999/1999fca0520	2024-09-13T22:45:30.006904+10:00	FEDERAL COURT OF AUSTRALIA Bin Tahal v Comcare [1999] FCA 520 HASSAN BIN TAHAL V COMCARE QG 137 OF 1998 SPENDER J 27 APRIL 1999 BRISBANE IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY QG 137 OF 1998 On appeal from the Administrative Appeals Tribunal constituted by Senior Member Beddoe BETWEEN: HASSAN BIN TAHAL Applicant AND: COMCARE Respondent JUDGE: SPENDER J DATE OF ORDER: 27 APRIL 1999 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The notice of motion filed 1 February 1999 to extend time in which to file and serve a notice of appeal is allowed. 2. The applicant in the principal proceedings pay the costs of the notice of motion of 1 February 1999, those costs to be taxed if not agreed. 3. The applicant in the principal proceedings pay the costs of the directions hearing of 5 February 1999, to be taxed if not agreed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY QG 137 OF 1998 BETWEEN: HASSAN BIN TAHAL Applicant AND: COMCARE Respondent On appeal from the Administrative Appeals Tribunal constituted by Senior Member Beddoe JUDGE: SPENDER J DATE: 27 APRIL 1999 PLACE: BRISBANE REASONS FOR JUDGMENT 1 By notice of motion filed 1 February 1999, the applicant, Hassan Bin Tahal, "…applies for an extension of time in which to file and serve a Notice of Appeal from the decision or determination of the administrative appeals tribunal…given on 12 June 1998 at Brisbane whereby the tribunal decided or determined to affirm a determination of the Respondent [Comcare] made on 13 February 1996 that the Respondent was not liable to pay compensation to the Applicant pursuant to the Safety, Rehabilitation and Compensation Act 1988". The notice of motion acknowledges an extension of time is required because a notice of appeal was not filed within the time specified in the Act. 2 It is also sought to rely on a notice of appeal which is headed "AMENDED NOTICE OF APPEAL" and which is exhibited as WJR1 to the affidavit of Mr William James Royds, the solicitor for Mr Bin Tahal, filed 27 January 1999. 3 In relation to the application for an extension of time within which to appeal, the position was summarised by Wilcox J in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 348-349. As his Honour noted "Section 11 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) does not set out any criteria by reference to which the court's decision to extend time for an application for review under s 5 is to be exercised". His Honour then set out his well known summary of relevant considerations. 4 In this case, the decision was given in Brisbane on 12 June 1998, and the evidence suggests that copies of the decision were sent on that day to Mr Bin Tahal and to his then solicitors. The former solicitors for the applicant wrote to Comcare on 10 July 1998. The letter said: "We have received instructions from our client to appeal the decision handed down by the Administrative Appeals Tribunal in this matter on 12 June 1998. Due to our client's impecunious circumstances, it is necessary for him to obtain a grant of Legal Aid before filing the Notice of Appeal. We are awaiting the outcome of the application to Legal Aid in this regard and anticipate that the Notice of Appeal will be filed immediately upon Legal Aid being approved." 5 As it turned out, legal aid was not granted to Mr Bin Tahal to prosecute his appeal, and a notice of appeal was not filed until the day following Mr Bin Tahal's initial consultation with his present solicitors. However, the letter of 10 July makes it plain that this is a case where the applicant, by non-curial means, has made the decision-maker aware that he contests the finality of the decision made by the Administrative Appeals Tribunal. This is not a case where the decision-maker has been lulled into any belief that the matter had been finally concluded by the decision of the Administrative Appeals Tribunal on 12 June 1998. 6 It is fairly acknowledged by Mr Bickford, counsel for Comcare on the present application, that there is no particular prejudice to Comcare involved in the present application. The contentions on behalf of Comcare really come down to asserting that there has not been an acceptable explanation for the delay and that it has not been demonstrated that there are such merits in the proposed appeal that an extension of time should be granted. 7 As to the first contention, it seems to me that the delay that did occur, notwithstanding the letter of 10 July, is attributable in part to the anticipation or hope that Legal Aid would be approved for the appeal, Mr Bin Tahal believing he had sound prospects of obtaining Legal Aid, and also, when that was unsuccessful, the insistence by Mr Bin Tahal's former solicitors on being put in funds before they would lodge a notice of appeal. When Mr Bin Tahal was unable to comply with requirements of his former solicitors, he promptly sought the assistance of his present solicitors, who then initiated these proceedings by filing the first notice of appeal. 8 I think in the circumstances the explanation offered is understandable, and it is fair and equitable in the circumstances, subject to the question of merits, to extend the time for compliance, particularly in the absence of any specific prejudice to Comcare. 9 In relation to the question of the merits of the application, it is clear that, even in the amended notice of appeal, the precision of the questions of law and the grounds of the appeal leave a lot to be desired. However, I am of the view that there is at least an arguable case that, even on the findings by the Administrative Appeals Tribunal, there has been a misinterpretation of the definition of "disease" in s 4 of the Safety Rehabilitation and Compensation Act (1988). 10 While it is not encompassed by the present amended notice of appeal, there seems to me to be a real question as to whether the Tribunal has discharged its obligation to indicate why it found as it did. In particular, it seems to have been accepted that there is an anxiety condition from which Mr Bin Tahal suffered or continues to suffer. This condition was said by the Tribunal to result from "his dissatisfaction with the terms and conditions of his employment" and was "not contributed to in a material degree by his employment with the Commonwealth". 11 It is arguable that this finding is inconsistent with the finding that the development of a high level of dissatisfaction with the workplace had as one of its components "a reasonable dissatisfaction with the disciplinary procedures conducted over an extended period by his employer, without regard to procedural fairness", and also that the dissatisfaction had developed as a consequence of "quite serious cultural conflicts because of the required duties of a Census Officer and the cultural mores of applicant's people in the Torres Strait…". 12 It is not desirable that I go further into the question of the merits, but it seems to me that it is at least arguable that there is an error of law affecting the decision of the Tribunal. In those circumstances it is fair and equitable to extend the time within which Mr Bin Tahal might prosecute his appeal from that decision. 13 There are two other aspects. One concerns costs of a directions hearing reserved on 5 February 1999. It seems that there was at least a misunderstanding on the part of the solicitors for Mr Bin Tahal, which had the consequence that he was not represented by telephone link on that occasion. I don't think that that failure to appear is attributable in any way to fault on the part of any Court officer or to any fault on the part of Comcare. In those circumstances, it seems to me that I ought order that the applicant pay the respondent's costs of the directions hearing of 5 February this year, to be taxed if not agreed. 14 As to the costs of the motion seeking an extension of time within which to appeal, Wilcox J observed in Hunter Valley Development Pty Ltd v Cohen (supra) at 353: "In the normal course an applicant for extension of time under s 11 should pay the costs incurred by the respondent in relation to the application. This is the general provision of the Federal Court Rules 1979 in relation to an application for an extension of time under the rules: see O 62, r 23 and L Grollo Darwin Management Pty Ltd v Victor Plaster Products Pty Ltd (1978) 33 FLR 170 at 178-179 relating to the corresponding provision of the High Court Rules. I see no reason to distinguish between a case of an application for extension of time limited by the rules and a case, such as the present, in which the applicant seeks an extension of the time limited by an Act." 15 Those considerations indicate that I should order that the applicant in the principal proceedings pay the costs of this notice of motion for an extension of time within which to appeal, those costs to be taxed if not agreed. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender. Associate: Dated: 27 April 1999 Solicitor for the Applicant: Thompson & Royds Counsel for the Respondent: Mr P Bickford Solicitor for the Respondent: Phillips Fox Date of Hearing: 27 April 1999 Date of Judgment: 27 April 1999	2,144
federal_court_of_australia:fca/single/2004/2004fca1474	decision	commonwealth	federal_court_of_australia	text/html	2004-11-16 00:00:00	Lawton v Bidgerdii Aboriginal & Torres Strait Islanders Corporation Community Health Service Central Queensland Region [2004] FCA 1474	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2004/2004fca1474	2024-09-13T22:45:30.156534+10:00	FEDERAL COURT OF AUSTRALIA Lawton v Bidgerdii Aboriginal & Torres Strait Islanders Corporation Community Health Service Central Queensland Region [2004] FCA 1474 ASSOCIATIONS AND CLUBS – membership – association rules as to membership – whether the committee of the association has the power to reject applications for membership Statutes Aboriginal Councils and Associations Act 1976 (Cth) Cases Baker v The Liberal Party of Australia (SA Division) (1997) 68 SASR 366 Dist Millar v Houghton Table Tennis and Sports Club Inc (2003) 225 LSJS 241 Dist Nurses Memorial Centre of South Australia Incorporated v Beaumont (1987) 44 SASR 454 Foll Woodford v Smith [1970] 1 WLR 806 Cons MARGARET MAY LAWTON v BIDGERDII ABORIGINAL AND TORRES STRAIT ISLANDERS CORPORATION COMMUNITY HEALTH SERVICE CENTRAL QUEENSLAND REGION Q56 OF 2004 KIEFEL J BRISBANE 16 NOVEMBER 2004 IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY Q56 OF 2004 BETWEEN: MARGARET MAY LAWTON APPLICANT AND: BIDGERDII ABORIGINAL AND TORRES STRAIT ISLANDERS CORPORATION COMMUNITY HEALTH SERVICE CENTRAL QUEENSLAND REGION RESPONDENT JUDGE: KIEFEL J DATE OF ORDER: 16 NOVEMBER 2004 WHERE MADE: BRISBANE THE COURT DECLARES THAT: 1. With respect to applications made prior to 4 April 2003 the Committee of the respondent did not have the power to reject as a member any person who was eligible in accordance with Rule 8.(1) and (2), who paid the annual fee as required by subrule (2) and who was not the subject of a prior resolution of expulsion. THE COURT ORDERS THAT: 2. The respondent pay the applicant's costs of the application. 3. Liberty to apply for further orders. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY Q56 OF 2004 BETWEEN: MARGARET MAY LAWTON APPLICANT AND: BIDGERDII ABORIGINAL AND TORRES STRAIT ISLANDERS CORPORATION COMMUNITY HEALTH SERVICE CENTRAL QUEENSLAND REGION RESPONDENT JUDGE: KIEFEL J DATE: 16 NOVEMBER 2004 PLACE: BRISBANE REASONS FOR JUDGMENT 1 These proceedings are brought by the applicant as the representative of a group the members of which are identified as: 'A group of identified Aboriginal and Torres Strait Islander persons who applied for membership in Bidgerdii Aboriginal and Torres Strait Islanders Corporation Community Health Services Central Queensland Region ("Bidgerdii") a corporation incorporated under the Aboriginal Councils and Associations Act 1976and as amended prior to 7 March 2003 and who are entitled to membership in the said Bidgerdii having complied with the constitution of the said Bidgerdii as existed prior to 7 March 2003.' 2 The respondent ('Bidgerdii') accepts, for the purpose of these proceedings, that a determination in the applicant's favour will apply to the other persons who applied for membership in Bidgerdii, and who are referred to in the affidavit material. 3 Bidgerdii is a community health association incorporated on 8 December 1994 under the legislation referred to in the application. The Rules of Bidgerdii at the time of the applications for membership in question included the following: '8.( 1) Membership of the Association shall be open to adult Aboriginal and Torres Strait Islander persons normally and permanently resident in: Rockhampton and the Central Queensland Region. 8.(2) The members of the Association shall be those Aboriginal and Torres Strait Islander persons who qualify for membership and who apply to the Committee and who pay an annual membership fee as prescribed by the Governing Committee of the Association. A register of members shall be kept by the Public Officer. 8.(3) All financial members shall be entitled to attend, speak and vote at general meetings of the Association and be eligible for appointment as members of the Committee or Office Bearers. 8.(4) A member shall cease to be a member: (a) if that member shall die; (b) if that member shall by notice in writing resign from membership; (c) if that member shall by a resolution passed by a majority of not less than three-quarters (3/4) of the members present at a general meeting, be expelled from the Association on the ground that a charge of conduct detrimental to the Association has been proved; (d) if the annual membership fee is not paid by 1st December of each year; or (e) if that member changes their address and fails to notify the organisation within three (3) months of that change . …'. 4 Pursuant to rule 14 the Public Officer of Bidgerdii was obliged to keep a register showing the name and address of each member and the date upon which they joined the Association. 5 The applicant, Ms Lawton, applied on 7 February 2003. On 12 February 2003 five further applications for membership of Bidgerdii were made. They included those of Ms Bray, Ms Tull, Ms Tabua and Ms Donald. On or before 14 February 2003 eighteen other applications were made. 6 It was alleged by the four persons mentioned above that they received a letter from Bidgerdii advising that their membership had been approved. In each case they said that they had mislaid the letter. Objection was taken to this evidence and in my view it is inadmissible. The allegation of acceptance is not made in the statement of claim and leave was not sought to amend to plead it. 7 By a letter dated 14 February 2003 the applicant had returned to her the membership fees 'for the 18 persons whose membership applications you delivered in bulk quantity on 18th February 2003'. Other persons who applied for membership were notified in July and August 2003 that: 'Given the large number of applications received in bulk quantity at this time, together with talk of an impending take over, the Governing Committee have decidednot to accept any Membership Applications lodged between 18th February 2003 (date majority of applications received) to 7th March 2003 (date of Special General Meeting of members called to discuss the issue of membership).' 8 Their membership fees were returned. Neither the applicant nor the other persons were admitted to membership of Bidgerdii. 9 On 4 April 2003 amendments to the rules of Bidgerdii were approved by the Delegate of the Registrar appointed under the Aboriginal Councils and Associations Act 1976 (Cth). Rule 8.(2) is now in these terms: '8.(2) The members of the Association shall be those Aboriginal and Torres Strait Islander persons who qualify for membership, who apply in writing to the Committee and whom the Committee decides to admit to membership. An annual membership fee as prescribed by the Governing Committee shall be paid each year. The Committee will issue membership forms to those persons approved by the Governing Committee to apply for membership. The Governing Committee may seek more information from applicants to assist members of the Committee in considering applications for membership. The Governing Committee's decision is final.' 10 The applicant's case is that the rules, and in particular rule 8, does not give the Committee of Bidgerdii power to reject applications for membership if persons fulfil the description required and attend to payment of any necessary fees. It is not suggested by the respondent that those requirements were not met by those who applied for membership. 11 The respondent submits that there must be a discretion to refuse because the objects of Bidgerdii have to be upheld. No particular object was however said to be in question in relation to these applications. Rule 7 provided: 7. The Association shall, subject to the provisions of the Act, have power to do all such lawful things as may seem to the Committee necessary to carry out the objects of the Association.' 12 The Committee is the Governing Committee, the members of which are elected, as referred to in rule 9. Rule 9.(13) provided: 'The Committee shall manage and control the affairs of the Association in accordance with these Rules and with the Act and for that purpose may exercise the powers of the Association as if they had been expressly conferred on the Committee by a General Meeting of the Association.' 13 The objects of the Association were stated to be as follows: '6. The principal objects for which the Association is established are: A. To identify and address the Health Issues of the Aboriginal and Torres Strait Islander people by providing counselling and rehabilitation services for those affected by substance abuse. B. Counselling and Guidance to Aboriginal and Torres Strait Islander people relocating from their indigenous surroundings to the city or specifically to Rockhampton to permanently reside. C. Counselling and Guidance to Aboriginal and Torres Strait Islander people newly discharged from Prison re: counselling against re-offending against substance abuse. D. Counselling and guidance to Aboriginal and Torres Strait Islander people providing direct and immediate relief as a result of misfortune, suffering, and destitution. E. To provide training, education and awareness to such Health issues. F. To monitor and evaluate Government Policy implications relating to areas of Aboriginal and Torres Strait Islanders Health. G. To undertake such activities to promote the physical, emotional, cultural and spiritual well being of the Aboriginal and Torres Strait Islander people. H. To promote counselling engendering mutual respect and understanding between Aboriginal and other Australians. I. To acquire, establish, maintain and control social and cultural development centres, and other projects as will further the social education, cultural and artistic welfare of Aboriginal and Torres Strait Islanders people. J. To promote, where appropriate, an awareness and understanding among Aboriginal and Torres Strait Islander people of their basic human and civil rights and responsibilities.' 14 It is not apparent how these objects would be cut across by the membership of persons who fulfil the requirements of rule 8.(1) and (2). The objects are to assist all such persons with respect to health related issues. There is no further, more limited, class identified in the rules. They contain no ground for exclusion from membership. 15 The respondent submitted that the Committee must have a right to prevent persons who might be likely to obstruct it in the pursuit of Bidgerdii's objectives. How the Committee was to be able to discern this was not gone into. The rules do not permit the Committee to form such an opinion and act upon it in connexion with membership in my view. They do however make provision for the expulsion of a member. 16 Rule 8.(4) makes provision for the circumstances in which membership shall cease. Paragraph (c) of the subrule provides for the expulsion of a member on the resolution of members at a general meeting 'on the ground that a charge of conduct detrimental to the Association has been proved'. This would suggest that it was not likely to have been intended that membership be refused in anticipation of proof of the charge. The respondent however submits that if there were no discretion to refuse membership an expelled person who applied for membership again would have to be accepted. I do not think that follows. Expulsion from the Association implies an inability to continue to be a member which could not be overcome by a fresh application, unless the resolution were rescinded. 17 The respondent relied upon the decision in Baker v The Liberal Party of Australia (SA Division) (1997) 68 SASR 366 where the plaintiff's application for membership was rejected. It was submitted for the plaintiff in that case that, on applying for membership and paying the necessary fee, a contract came into existence between her and the party, a contention which was rejected by Bollen J. His Honour found that the defendant acted in accordance with its Constitution in rejecting the application. The Constitution provided that membership commenced one month after receipt of an application unless the State Executive, acting upon the recommendation of a branch or of its own motion, declined to admit a person, which it could do without giving any reason. The State Executive did reject the plaintiff's application and that rejection was upheld. A similar power was provided to the Committee of a Club in Millar v Houghton Table Tennis and Sports Club Inc (2003) 225 LSJS 241. There the process was one of seeking 'acceptance by the Committee' which could refuse or reject membership. 18 The Bidgerdii rules contain no such provisions. That is no doubt the reason why the amendments which became effective in April 2003 were sought. In particular the mere fact of a person having to apply to the Committee of Bidgerdii does not provide the Committee with wider powers of refusal or rejection than are marked out by rule 8.(1) and (2). The method of application is simply the procedure to be followed. 19 In Woodford v Smith [1970] 1 WLR 806 the rules of a ratepayers' association provided that 'Any person who agrees with the objects of the association shall be eligible for membership' for an annual subscription. Megarry J held that the rules showed no power in the Committee to reject or suspend an application for membership unless the application was not in accordance with the rules. His Honour's observations (at 813-814) as to the operation of the rules are pertinent to some of the submissions made by the respondent here: '… I do not think that such a power can fairly be read as giving the committee a discretionary power to control the membership of the association by any process of election or by postponing the membership of those seeking to join the association. No doubt the committee might refuse to recognise as a member a person who claimed membership yet nevertheless lacked the necessary qualification, as, for instance, someone who openly proclaimed that he disagreed with the objects of the association, or was obviously not in a fit state to agree with anything. Mr. Hames [counsel for the defendants] forcefully attacked the concept of automatic membership as producing grotesque consequences. What, he asked, if a membership form was received from an infant, or from someone with the name Adolf Hitler? To this attack, it seems to be, there is more than one answer. First, the rules manifestly fail to achieve the summit of perfection, and may indeed work unsatisfactorily in some cases; but nobody would suggest that rules are not rules unless they work perfectly. Nor do I think that the prospect of imperfections in extreme cases is a sufficient reason for saying that the rules must be construed differently for all cases by inserting requirements which are not there. Secondly, I see no reason why some infants should not become members. An infant of 17 years might well be fully qualified for membership, whereas in the case of an infant of 5, the committee might properly refuse to recognise him as a member on the ground that he could not be said in any real sense to be in agreement with the objects of the association. As for Adolf Hitler, I see no reason why a gentleman should be disqualified from membership merely because he bears this, or, indeed, any other name. If, however, the committee had reason to believe that no application had in fact been made by anyone of this name, and that the completed membership form was no more than a sorry form of jest, then they would be justified in refusing to include Adolf Hitler among the list of members, on the ground that the membership form had not been completed in respect of any person who truly agreed with the objects of the association. A power in the committee to refuse to recognise as a member someone who has not complied with the rules as to membership seems to me very different from a power to refuse to recognise as members those against whom no suggestion has been made that they do not comply with the rules.' 20 The present rules are closer to the type considered in Woodford v Smith. There seems no reason to doubt that rules may constitute an offer to all persons who qualify under the eligibility rule to become members: Nurses Memorial Centre of South Australia Incorporated v Beaumont (1987) 44 SASR 454 at 467-468. In my view that is the effect of rule 8. It is not possible to read into it a discretion in the Committee to reject a person's application. 21 The approach taken by the first declaration sought, to 'deem' those who applied for membership to be members is not correct. I think it is preferable to cast the declaration in terms of the Committee's powers, or the lack of them. It follows that the Committee were wrong to refuse the applicant's and the other applications, but I do not think it will be necessary to order them to consider the applications as required by the rules, properly construed, nor to register those persons who are eligible. I will however grant liberty to apply. There will be a declaration that with respect to applications made prior to 4 April 2003 the Committee of the respondent did not have power to reject as a member any person who was eligible in accordance with Rule 8.(1) and (2), who paid the annual fee as required by subrule (2) and who was not the subject of a prior resolution of expulsion. 22 The respondent should pay the applicant's costs of the application. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel. Associate: Dated: 16 November 2004 Counsel for the Applicant: Mr A Vasta QC Solicitor for the Applicant: Queensland Aboriginal and Torres Strait Islanders Legal Services Secretariat Limited Counsel for the Respondent: Mr MJ Taylor Solicitor for the Respondent: Patrick Murphy Solicitor Date of Hearing: 19 August 2004 Date of Judgment: 16 November 2004	3,843
federal_court_of_australia:fca/single/2024/2024fca0762	decision	commonwealth	federal_court_of_australia	text/html	2024-07-04 00:00:00	Australian Securities and Investments Commission v PayPal Australia Pty Limited [2024] FCA 762	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2024/2024fca0762	2024-09-13T22:45:30.260117+10:00	FEDERAL COURT OF AUSTRALIA Australian Securities and Investments Commission v PayPal Australia Pty Limited [2024] FCA 762 File number: NSD 971 of 2023 Judgment of: MOSHINSKY J Date of judgment: 4 July 2024 Catchwords: CORPORATIONS – unfair contract terms – where the respondent included a term to the effect that the user of its services had 60 days to notify the respondent in writing of any fee error and that, if the user did not notify the respondent within that time, the respondent would have no obligation to correct the error – where ASIC commenced a proceeding contending that the term was an unfair term within the meaning of the relevant provision, and void in standard form contracts with small businesses – where the respondent made admissions and the parties jointly proposed that the Court make declarations and an injunction – held: declarations and orders made substantially in the terms proposed by the parties Legislation: Australian Securities and Investments Commission Act 2001 (Cth), ss 5, 12BAA, 12BF, 12BG, 12BH, 12BK, 12GD, 12GNB, 12GNC, 12GND Banking Act 1959 (Cth), s 9 Competition and Consumer Act 2010 (Cth), Sch 2, Australian Consumer Law, s 23 Corporations Act 2001 (Cth), ss 9, 762C, 913B Federal Court of Australia Act 1976 (Cth), s 21 Payment Systems (Regulation) Act 1998 (Cth), s 9 Cases cited: Australian Competition and Consumer Commission v Chrisco Hampers Australia Ltd [2015] FCA 1204; 239 FCR 33 Australian Competition and Consumer Commission v CLA Trading Pty Ltd [2016] FCA 377; (2016) ATPR ¶42–517 Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 1405 Australian Competition and Consumer Commission v Employsure Pty Ltd [2020] FCA 1409 Australian Competition and Consumer Commission v JJ Richards & Sons Pty Ltd [2017] FCA 1224 Australian Competition and Consumer Commission v Smart Corporation Pty Ltd (No 3) [2021] FCA 347; 153 ACSR 347 Australian Securities and Investments Commission v Bank of Queensland [2021] FCA 957; 155 ACSR 468 Australian Securities and Investments Commission v Bendigo and Adelaide Bank Limited [2020] FCA 716 Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 Forster v Jododex Australia Pty Ltd [1972] HCA 61; 127 CLR 421 Karpik v Carnival plc [2023] HCA 39; 98 ALJR 45 Paciocco v Australia and New Zealand Banking Group Ltd [2015] FCAFC 50; 236 FCR 199 Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 76 Date of hearing: 4 July 2024 Counsel for the Plaintiff: Mr R Hollo SC with Ms G Westgarth Solicitor for the Plaintiff: Australian Securities and Investments Commission Counsel for the Defendant: Mr D Thomas SC with Ms E Bathurst Solicitors for the Defendant: Herbert Smith Freehills ORDERS NSD 971 of 2023 BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Plaintiff AND: PAYPAL AUSTRALIA PTY LIMITED Defendant order made by: MOSHINSKY J DATE OF ORDER: 4 JULY 2024 THE COURT NOTES THAT: These declarations and orders adopt the following defined terms: (i) A reference to the Fee Error Term is a reference to the term set out in Schedule 1 to these orders. (ii) A reference to the Individual Contracts is a reference to each contract identified as such in Schedule 2 to these orders. (iii) Relevant Period means from 21 September 2021 to 7 November 2023; (iv) A reference to the Small Business Contracts is a reference to each contract in force during the Relevant Period: a. between the defendant (PayPal) and any Non-Party Consumer (as defined in s 12BA of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) as in force in the Relevant Period); b. in respect of a business account held with PayPal by that Non-Party Consumer (as defined in s 12BA of the ASIC Act as in force in the Relevant Period); c. which meets the definition of a small business contract in s 12BF(4) of the ASIC Act; and d. consisting of: i. the PayPal User Agreement (User Agreement) published by PayPal on its website (including policies and applicable agreements incorporated into that User Agreement by reference); ii. a Combined Financial Services Guide and Product Disclosure Statement (PDS) published by PayPal on its website; and iii. an online registration form completed by that Non-Party Consumer. BY CONSENT, THE COURT DECLARES THAT: 1. Pursuant to s 12GND of the ASIC Act, the Fee Error Term in each of the Small Business Contracts (including the Individual Contracts) is an unfair term within the meaning of s 12BG(1) of the ASIC Act. 2. Pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth) and s 12GNB of the ASIC Act, the Fee Error Term in each of the Small Business Contracts (including the Individual Contracts) is void ab initio by operation of s 12BF(1) of the ASIC Act. AND, BY CONSENT, THE COURT ORDERS THAT: 3. Pursuant to s 12GD of the ASIC Act, PayPal, whether by itself, its servant or agents or otherwise is restrained from applying or relying upon or enforcing the Fee Error Term in each of the Small Business Contracts (including the Individual Contracts). Costs 4. PayPal pay the plaintiff's costs of the proceeding in an amount to be agreed or assessed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MOSHINSKY J: Introduction 1 This is a proceeding brought by the Australian Securities and Investments Commission (ASIC) against PayPal Australia Pty Limited (PayPal) relating to the unfair terms provisions of the Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act). 2 Specifically, by this proceeding, ASIC alleges that a term that was included in the contracts between PayPal and small businesses in the period 21 September 2021 to 7 November 2023 (the Relevant Period) was an unfair term and void (in standard form contracts with small businesses) under the relevant provisions of the ASIC Act. The relevant term is referred to in the materials (and will be referred to in these reasons) as the Fee Error Term. It provided as follows: Your responsibility to notify PayPal of pricing or fee errors Once you have access to any account statement(s) or other account activity information made available to you by PayPal with respect to your business account(s), you will have 60 days to notify PayPal in writing of any errors or discrepancies with respect to the pricing or other fees applied by PayPal. If you do not notify PayPal within such timeframe, you accept such information as accurate, and PayPal shall have no obligation to make any corrections, unless otherwise required by applicable law. For the purposes of this provision, such pricing or fee errors or discrepancies are different than unauthorised transactions and other electronic transfer errors which are each subject to different notification timeframes as set forth herein. 3 Approximately 600,000 contracts between PayPal and small businesses had this term. 4 ASIC's allegations in this proceeding were set out in its concise statement. PayPal responded to these allegations in its concise response, which included denials of key allegations. 5 Subsequently, PayPal admitted that the Fee Error Term was an unfair term and void (in standard form contracts with small businesses) under the relevant provisions of the ASIC Act. 6 The parties prepared a Statement of Agreed Facts and Admissions. This was subsequently amended in a minor respect. I will refer to the Amended Statement of Agreed Facts and Admissions as the SOAF in these reasons. A copy of the SOAF is annexed to these reasons. 7 The parties jointly propose to the Court that it make certain declarations and orders. In essence, what is proposed is that the Court make declarations that the Fee Error Term in each of the relevant contracts was an "unfair term" within the meaning of s 12BG(1) of the ASIC Act and consequently void ab initio (in standard form contracts with small businesses) by operation of s 12BF(1) of the ASIC Act. Further, it is jointly proposed that the Court make an order restraining PayPal from applying or relying upon or enforcing the Fee Error Term in each of the relevant contracts. It is also agreed that there should be an order that PayPal pay ASIC's costs of the proceeding. 8 For the reasons that follow, I consider there to be a proper basis to make declarations and orders largely to the effect of those proposed by the parties. In these reasons, I will draw substantially on the joint submissions prepared by the parties in support of the declarations and orders that they seek. Background facts 9 I accept the factual matters set out in the SOAF and make findings to that effect. The following is a summary of the key facts. 10 At all material times PayPal was authorised under s 9(3) of the Banking Act 1959 (Cth) to carry on banking business in Australia confined to providing purchased payment facilities within the meaning of s 9(1) of the Payment Systems (Regulation) Act 1998 (Cth): SOAF [6]. PayPal was also licensed as an Australian Financial Services Licensee pursuant to s 913B of the Corporations Act 2001 (Cth) and was authorised to deal in non-cash payment products to retail and wholesale customers. 11 Under these authorisations PayPal provided online payment services by which consumer and commercial customers were able to send and receive payments online using linked credit cards, debit cards and bank accounts. Customers could store a balance in their PayPal account, withdraw that balance to their linked bank account, or transfer that balance to a different PayPal account within the PayPal network. For the provision of some of these services PayPal charged a fee. 12 During the Relevant Period, PayPal issued financial products described as Business Accounts. Persons who acquired Business Accounts from PayPal were called Users: SOAF [7]. 13 The terms governing a User's Business Account were set out in a contract between PayPal and the User (Business Account Contracts) consisting of, relevantly: (a) the PayPal User Agreement (User Agreement) published by PayPal on its website (including policies and applicable agreements incorporated into that User Agreement by reference); (b) a Combined Financial Services Guide and Product Disclosure Statement (PDS) published by PayPal on its website; and (c) an online registration form completed by the User. 14 Each of the Business Account Contracts was a financial product by reason of s 12BAA(1)(c) of the ASIC Act: SOAF [9]. This was because they were an arrangement (and therefore a "facility") through which a person made non-cash payments: s 12BAA(1)(c) of the ASIC Act; ss 9 and 762C of the Corporations Act 2001 (Cth) read with s 5(2) of the ASIC Act (as to the meaning of "facility"). 15 As at 30 June 2023, there were approximately 608,375 Business Account Contracts on foot between PayPal and Business Account Users: SOAF [10]. 16 Some of the Business Account Contracts (Small Business Contracts) were both: (a) standard form contracts within the meaning of s 12BF(1)(b) of the ASIC Act; and (b) small business contracts within the meaning of s 12BF(4) of the ASIC Act: SOAF [11]. 17 The Users who were party to the Small Business Contracts are referred to in these reasons as Small Businesses. As at 30 June 2023, there were approximately 606,930 Small Business Contracts on foot between PayPal and Small Businesses: SOAF [12]. 18 For the purpose of the proceedings, and in the originating process, ASIC identified 10 Small Businesses which were parties to Small Business Contracts. These are referred to in these reasons as the Individual Contracts. The Individual Contracts are listed in Annexure B to the SOAF. 19 During the Relevant Period, the Small Business Contracts (including the Individual Contracts) contained the Fee Error Term in both the User Agreement (under the heading "Your responsibility to notify PayPal of pricing or fee errors") and the PDS (at clause 18.25 in the version of the PDS dated 21 September 2021, and clause 18.26 in subsequent versions). 20 Under each Small Business Contract: (a) a Small Business was obliged to pay various fees to PayPal in stipulated circumstances: see SOAF [15(a)] and clauses 16.2, 16.6, 16.8, 17.1, 18 and 19 of the PDS and the passages of the User Agreement referred to at items 7, 8, 9, 10, 11, 12, 13, 14, 15 and 16 of Annexure A to the SOAF; (b) PayPal was entitled to deduct such fees from the Small Business's Business Account (including from amounts credited to the Small Business's Business Account): see SOAF [15(b)] and clauses 16.2, 16.6, 16.8, 17.1, 18 and 19 of the PDS and the passages of the User Agreement referred to at items 7, 8, 9, 10, 11, 12, 13, 14, 15 and 16 of Annexure A to the SOAF; and (c) each Small Business had the right to receive an account statement showing the activity on their Business Account: see SOAF [15(c)] and the passage of the User Agreement at item 17 of Annexure A to the SOAF. 21 The standard pricing and fees (referred to together as "fees" in these reasons) applicable to a Small Business's Business Account from time to time were mainly set out at clause 18 of the PDS under the heading "Fees and Charges". Other references to fees were contained in clauses 16.2, 16.6, 19 and 22 of the PDS; and parts of the User Agreement including the passages referred to at items 7-16 of Annexure A to the SOAF: SOAF [16]. 22 The applicable fees varied depending upon the circumstances of each transaction; for example, whether the transaction was a domestic transaction or cross-border transaction, the payment type, the total transaction amount, whether micropayment pricing applied, whether the transaction involved a currency conversion, or was a chargeback, was sent to multiple recipients or was a refund and whether the User was withdrawing a balance to a linked debit card or bank account: SOAF [17]. 23 For various types of fees set out in clause 18 of the PDS, the account statements and other account activity information accessible by a User did not describe the fee or the manner in which it was calculated in a way that was readily reconcilable with how the fee was described in clause 18 of the PDS: SOAF [19]. 24 On 8 November 2023, PayPal removed the Fee Error Term from the PDS and User Agreement. On the same date, PayPal published on its website, on pages titled "Policy Updates" and "Past Policy Updates" (Policy Updates Pages) the fact that PayPal had removed the Fee Error Term from the PDS and User Agreement. 25 On 12 March 2024, PayPal amended the Policy Updates Pages of its website and stated: (a) "That clause should be treated as though it had never formed part of the PayPal User Agreement" in respect of the Fee Error Term in the User Agreement; and (b) "That clause should be treated as though it had never formed part of the CFSGPDS [Combined Financial Services Guide and Product Disclosure Statement]" in respect of the Fee Error Term in the PDS: SOAF [27] to [28]. 26 PayPal has co-operated with ASIC in its investigation and in resolving this proceeding: SOAF [29] to [30]. Applicable principles Unfair contract terms 27 The parties submit, and I accept, that the purpose of the unfair contract terms provisions of the ASIC Act is to protect consumers and small businesses from the misuse of standard form contracts in the supply of financial products and services. The underlying policy of unfair contract term legislation respects true freedom of contract and seeks to prevent the abuse of standard form contracts which, by definition, will not have been individually negotiated: Australian Competition and Consumer Commission v CLA Trading Pty Ltd [2016] FCA 377; (2016) ATPR ¶42–517 (CLA Trading) at [54(a)] per Gilmour J. 28 Section 12BG(1) of the ASIC Act provides that a term of a small business contract is unfair if each of the following elements is established in relation to the term: (a) it would cause a significant imbalance in the parties' rights and obligations arising under the contract; (b) it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and (c) it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on. It has been observed that the assessment of "unfairness" is to be carried out with a close attendance to the statutory provisions and is of a lower moral and ethical standard than unconscionability: Paciocco v Australia and New Zealand Banking Group Ltd [2015] FCAFC 50; 236 FCR 199 at [363]-[364] per Allsop CJ, Besanko and Middleton JJ agreeing. 29 As to the first criterion, the requirement of "significant imbalance" directs attention to the substantive unfairness of the contract. A significant imbalance arises if a term is so weighted in one party's favour as to tilt the parties' rights and obligations under the contract significantly in its favour, with "significant" in this context meaning "significant in magnitude", or "sufficiently large to be important", "being a meaning not too distant from substantial": CLA Trading at [54(d) and (e)]; Australian Competition and Consumer Commission v Smart Corporation Pty Ltd (No 3) [2021] FCA 347; 153 ACSR 347 (Smart Corp) at [65] per Jackson J. 30 In order to assess whether an impugned term gives rise to a significant imbalance in the parties' rights and obligations arising under the contract, it is necessary to have regard to the contract as a whole: s 12BG(2)(c). In this regard, it is useful to assess the impact of an impugned term on the parties' rights and obligations by comparing the effect of the contract with the term and the effect it would have without it: CLA Trading at [54(c)]; Smart Corp at [65(c)]. 31 Relevant matters in assessing whether there is a significant imbalance between the parties include: (a) whether the party advantaged by the term is better placed to manage or mitigate the risk imposed by the term than the small business or customer: Australian Competition and Consumer Commission v JJ Richards & Sons Pty Ltd [2017] FCA 1224 (JJ Richards) at [56(c) and (g)]; Australian Securities and Investments Commission v Bendigo and Adelaide Bank Limited [2020] FCA 716 (Bendigo Bank) at [24(3)] per Gleeson J; (b) whether any burden that the contract imposes on the small business or consumer is matched by a corresponding right for the benefit of the small business or consumer or a corresponding duty on the supplier: Smart Corp at [66], citing Australian Competition and Consumer Commission v Chrisco Hampers Australia Ltd [2015] FCA 1204; 239 FCR 33 (Chrisco) at [53]-[58] per Edelman J; and (c) whether a party can "opt-out" of an unfair term: Chrisco at [52]; Bendigo Bank at [24(1)]. 32 As to the second criterion, s 12BG(4) of the ASIC Act provides a presumption that a term is not reasonably necessary to protect the legitimate interests of the party who would be advantaged by it unless that party proves otherwise. That is, it is for the party advantaged by an impugned term to rebut the presumption in s 12BG(4) and prove that the impugned term was reasonably necessary to protect its legitimate interests: Bendigo Bank at [25]-[26]. In this proceeding, ASIC relies on the presumption in support of its allegation that the Fee Error Term was not reasonably necessary to protect PayPal's legitimate interests and PayPal does not seek to displace it: SOAF [22]. 33 The third criterion will be established if the application of or reliance on the impugned term "will be disadvantageous to the consumer in some way": Smart Corp at [68]. There is no requirement that the detriment be significant: Karpik v Carnival plc [2023] HCA 39; 98 ALJR 45 (Karpik) at [31], [57]. The detriment may be monetary or non-monetary. There is no requirement that any detriment has been caused; a claimant does not need proof of actual detriment or that a term has been enforced: Karpik at [31], [57]. All that is required is that detriment would be caused if the term were to be applied or relied on. As noted in the Explanatory Memorandum to the Trade Practices Amendment (Australian Consumer Law) Bill (No. 1) 2009 (Cth) at [2.40]: [A] term does not need to be enforced in order to be unfair, although the possibility of such enforcement may impact on the decisions made by the party that would be disadvantaged by the term's practical effect, to that party's detriment. 34 In determining whether a term of a contract is unfair, the Court may take into account such matters as it considers relevant, but it must take into account the extent to which the term is transparent and the contract as a whole: s 12BG(2) of the ASIC Act. A term is transparent if it is expressed in reasonably plain language; legible; presented clearly; and readily available to any party affected by the term: s 12BG(3) of the ASIC Act. Lack of transparency is not an independent element of unfairness as defined in s 12BG(1). Rather, the ASIC Act requires the Court to consider transparency when determining whether a term of a contract is an unfair term under s 12BG(1) of the ASIC Act. Further, if a term is not transparent, that does not mean it is unfair and if a term is transparent, that does not mean that it is not unfair: Chrisco at [43(5)]; Bendigo Bank at [31]. The High Court in Karpik at [32] observed the following in respect of s 23 of the Australian Consumer Law, being Sch 2 to the Competition and Consumer Act 2010 (Cth): The requirement to consider the transparency of an impugned term is relevant to, and may affect, the analysis of the extent to which the term is unfair as assessed against each of the elements in s 24(1)(a) to (c). That is, the inquiry as to transparency is not an independent and separate inquiry from whether a term is unfair pursuant to s 24(1). The greater the imbalance or detriment inherent in the term, the greater the need for the term to be expressed and presented clearly; and conversely, where a term has been readily available to an affected party, and is clearly presented and plainly expressed, the imbalance and detriment it creates may need to be of a greater magnitude. 35 Section 12BH(1) of the ASIC Act sets out a non-exhaustive list of examples of the kinds of terms that may be unfair. 36 For unfair terms to be void under s 12BF(1) of the ASIC Act, the contract must be a standard form contract. Under s 12BK(1) of the ASIC Act, if a party alleges that a contract is a standard form contract, it is presumed to be a standard form contract unless another party to the proceeding proves otherwise. In this proceeding, the parties have agreed that the Small Business Contracts, including the Individual Contracts, are standard form contracts within the meaning of s 12BF(1)(b) of the ASIC Act and are small business contracts within the meaning of s 12BF(4) of the ASIC Act: SOAF [11]. Declarations 37 The Court has two possible sources of statutory power to make the declaration that the Fee Error Term in the Small Business Contracts and Individual Contracts was an unfair term within the meaning of s 12BG(1) of the ASIC Act. 38 First, s 12GND(2)(b), read with s 12GND(3), empowers the Court to declare that a term of a small business contract, that is a standard form contract and a financial product, is unfair on the application of ASIC. The parties submit that the requirements under s 12GND(2) have been made out: see in particular SOAF [9], [11], [13], [21]-[23] and [26]. 39 Second, the Court has a wide discretionary power to make declarations under s 21 of the Federal Court of Australia Act 1976 (Cth). Although s 12GND(2) specifically provides for making declarations in respect of unfair terms in small business contracts, s 12GND(5) makes clear that s 12GND(2) does not limit any other power of the Court to make declarations: Bendigo Bank at [85]. 40 In relation to the proposed declaration that the Fee Error Term is void, the Court has two possible sources of statutory power to make a declaration to that effect. 41 First, the Court has the power to make the declaration pursuant to its wide power under s 21 of the Federal Court of Australia Act. 42 Second, s 12GNB of the ASIC Act provides an alternative source of power for the Court to make the declaration that the Fee Error Term is void ab initio. In short, s 12GNB(1) empowers the Court to make such orders as it thinks appropriate if certain conditions are met, and s 12GNC provides, without limitation, the kinds of orders that may be made under s 12GNB(1). Such orders include, expressly, an order declaring any part of a contract to have been void ab initio: s 12GNC(a)(ii). 43 The parties submit, and I accept, that the criteria set out in s 12GNB are satisfied. 44 Under the general law, it is well established that before making a declaration, three requirements should be satisfied: (a) the question must be a real and not a hypothetical or theoretical one; (b) the applicant must have a real interest in raising it; and (c) there must be a proper contradictor: Forster v Jododex Australia Pty Ltd [1972] HCA 61; 127 CLR 421 at 437-438; Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 1405 (Coles) at [76] per Gordon J. Orders by consent 45 The principles applicable to the making of orders by consent are well established and were summarised by Gordon J in Coles at [70]-[73] as follows: (a) there is a well-recognised public interest in the settlement of cases under (by analogy) the ASIC Act; (b) the orders proposed must not be contrary to the public interest and at least consistent with it; (c) the Court must be satisfied that it has the power to make the orders and that the orders are appropriate. Parties cannot by consent confer power to make orders that the Court otherwise lacks the power to make; (d) once the Court is satisfied it has the power to make the orders and that they are appropriate, it should exercise a degree of restraint when scrutinising the proposed settlement terms, particularly where both parties are legally represented and able to understand and evaluate the desirability of the settlement; and (e) in deciding whether the orders conform with legal principle, the Court is entitled to treat the consent of the defendant as an admission of all facts necessary or appropriate to granting the relief sought against it. See also Bendigo Bank at [101] and Australian Securities and Investments Commission v Bank of Queensland [2021] FCA 957; 155 ACSR 468 at [87]-[88] per Banks-Smith J. 46 The public interest in parties resolving civil penalty proceedings brought by regulators such as ASIC was reaffirmed by the High Court in Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 at [57] where French CJ, Kiefel, Bell, Nettle and Gordon JJ said: ... in civil proceedings there is generally very considerable scope for the parties to agree on the facts and upon consequences. There is also very considerable scope for them to agree upon the appropriate remedy and for the court to be persuaded that it is an appropriate remedy. 47 At [58], their Honours said: Subject to the court being sufficiently persuaded of the accuracy of the parties' agreement as to facts and consequences, and that the penalty which the parties propose is an appropriate remedy in the circumstances thus revealed, it is consistent with principle and, for the reasons identified in Allied Mills, highly desirable in practice for the court to accept the parties' proposal and therefore impose the proposed penalty. (Citation omitted.) 48 While their Honours were considering in that case the parties' proposal to impose an agreed pecuniary penalty, those observations are equally apt to a case such as the present where the parties have agreed to declaratory and injunctive relief. Application of the principles to the facts of this case Whether the Fee Error Term is an unfair term 49 The parties submit, and I accept, that the Fee Error Term is an unfair term when contained in the Small Business Contracts, including the Individual Contracts. PayPal has made admissions that the Fee Error Term in each of the Small Business Contracts (including the Individual Contracts) was an unfair term within the meaning of s 12BG(1) of the ASIC Act and void by operation of s 12BF(1) of the ASIC Act: SOAF [26]. 50 The Fee Error Term permitted PayPal to retain any fees or charges that PayPal erroneously charged unless the account holder notified PayPal in writing of any errors or discrepancies concerning the fees charged within 60 days of the fee appearing on the account holder's account statement or account activity information: SOAF [1] and [21(a)]. 51 I note that there is no allegation in this case that PayPal has in fact retained any fees or charges erroneously charged. PayPal is not aware of any instance where it has caused a consumer to suffer loss or damage by relying on the Fee Error Term and ASIC's investigation has not uncovered any instance of PayPal having done so: SOAF [25]. Significant imbalance 52 The Fee Error Term caused a significant imbalance in the parties' rights and obligations arising under each Small Business Contract having regard to the following matters. 53 First, the effect of the Fee Error Term is that it permitted PayPal to retain fees or charges which it had erroneously deducted from the Small Business's Business Account (that is, where that deduction was not authorised under the Small Business Contract) unless the account holder notified PayPal in writing within the prescribed period: SOAF [21(a)]. In so doing, the Fee Error Term: (a) permitted PayPal to retain fees which it had overcharged by reason of its own error and had otherwise not bargained for; and (b) limited the rights of Small Businesses to claim a correction of, or claim compensation for, amounts which had been overcharged to their accounts. 54 Second, the Fee Error Term imposed a de facto obligation on the Small Business to examine account statements and other account activity information to identify whether PayPal had overcharged and/or wrongly charged fees: SOAF [21(b)]. It did so in circumstances where the account holder otherwise owed no such obligation to PayPal (SOAF [20]), and it may be inferred that PayPal possessed the requisite information to confirm whether the fee or charge was correctly charged and calculated. 55 Third, PayPal, as the party to the contract advantaged by the term, was better placed and able than the Small Business to identify if fees or charges had been overcharged and/or wrongly charged, in circumstances where PayPal had charged the fees or charges: SOAF [21(c)]. 56 In this regard, while: (a) Small Businesses were able to view their account activity information and view and download their account statements by: (i) logging onto PayPal's business portal (via the PayPal AU website); (ii) contacting PayPal to obtain an electronic copy of their account activity information and/or account statements; or (iii) accessing account activity information through PayPal's secure file transfer protocol service (SFTP), where PayPal business account holders could create a SFTP server user account that would allow the account holder to download reports from PayPal's live environment: SOAF [18]; and (b) the standard fees and charges were set out in the Small Business Contracts, principally in clause 18 of the PDS, the account statements and other account activity information accessible by the Small Business did not describe various types of fees or the manner in which they were calculated in a way that was readily reconcilable with how the fee was described in clause 18 of the PDS: SOAF at [19]. Further, absent request, the Small Business Contract did not oblige PayPal to provide the Small Business with such information in the account statements and other account activity information accessible by the Small Business: [SOAF [21(e)]. 57 In those circumstances, it may be inferred that the Small Businesses would have encountered difficulties in determining what fees had been charged and how they were calculated from the face of the account statements and other account activity information. 58 Unlike PayPal, Small Businesses were not placed in a position where they were able to manage the risk of incorrect charging or overcharging. Each Small Business only had 60 days to notify PayPal in writing of any erroneous deduction of fees or charges, in circumstances where (as noted above) the account statements and other account activity information accessible by the Small Business did not describe various types of fees or the manner in which they were calculated in a way that was readily reconcilable with how the fee was described in clause 18 of the PDS. 59 Fourth, the burden that the Fee Error Term imposed on the Small Business was not matched by a corresponding right for the benefit of the Small Business or a corresponding duty on PayPal. The Small Business Contracts did not contain any cognate term which prevented the Small Business from being charged fees or charges which PayPal had undercharged or neglected to charge, unless PayPal rectified the error within 60 days: [SOAF 21(d)]. That is, there was no corresponding right of the Small Business to retain the benefit of PayPal undercharging or failing to charge fees or charges, if PayPal did not detect the error and notify the customer within 60 days. Legitimate interest 60 As referred to above, the presumption in s 12BG(4) of the ASIC Act (that the Fee Error Term is not reasonably necessary in order to protect the legitimate interests of PayPal) is engaged in the present case and PayPal does not seek to rebut the presumption: SOAF [22]. I therefore find that the Fee Error Term was not reasonably necessary to protect the legitimate interests of PayPal. Detriment 61 The Fee Error Term would have caused detriment to Small Businesses if PayPal had relied on the Fee Error Term because, if the Small Business failed to notify PayPal in writing of any wrongly charged or overcharged fees within 60 days, the Fee Error Term permitted PayPal to retain any such fees: SOAF [21(a)] and [23]. In this scenario, the Small Business would have lost the benefit of the amount which had been wrongly (through no fault of its own) charged to its account. 62 In addition, if Small Businesses wished to ensure they were not wrongly charged or overcharged fees by PayPal then Small Businesses were obliged to examine account statements and other account activity information to identify whether PayPal had overcharged and/or wrongly charged fees, and notify PayPal of any errors within 60 days, in circumstances where it may be inferred that it was difficult for Small Businesses to determine if fees had been charged correctly because: (a) the applicable fees varied depending on the circumstances of each transaction: SOAF [17]; (b) the Small Business Contracts did not oblige PayPal, absent request, to provide the Small Business with account statements or other account activity information which described the fee charged or the manner in which it was calculated in a way that was readily reconcilable with how the fee was described in clause 18 of the PDS: SOAF [21(e)]; and (c) for various types of fees set out in clause 18 of the PDS, the account statements and other account activity information accessible by the Small Business did not describe the fee or the manner in which it was calculated in a way that was readily reconcilable with how the fee was described in clause 18 of the PDS: SOAF [19]. 63 I note that PayPal is not aware of any instance where it has caused a consumer to suffer loss or damage by relying on the Fee Error Term. Further, ASIC's investigation has not uncovered any instance of PayPal having done so: SOAF [25]. However, there is no requirement that there be proof of detriment actually caused – rather all that is required is that detriment would be caused if the term were to be applied or relied on. Transparency 64 The parties are agreed that the Fee Error Term that appeared in the User Agreement and the PDS was legible, was in the same font size as the rest of the document, and had a heading in bold, but was not otherwise drawn to the attention of the Small Business upon entering into a Small Business Contract: SOAF [24]. 65 The parties have not reached an agreed position on the question whether the Fee Error Term is "transparent" for the purposes of the provisions. The parties submitted it was not necessary for the Court to reach a conclusion on this issue. In the course of the hearing, I raised with the parties whether it may be incumbent on the Court to reach a position on this question, given that the terms of the legislation (s 12BG(2)) require the Court to have regard to the extent to which the term is transparent. The parties each provided references to some cases and documents in the Court Book relevant to this issue. 66 In my view, it is necessary for the Court to form a view on the extent to which the term is transparent, given the terms of s 12BG(2). A definition of transparency is provided in s 12BG(3) of the ASIC Act. Relevant authorities include JJ Richards at [60] and Australian Competition and Consumer Commission v Employsure Pty Ltd [2020] FCA 1409 at [465] (overturned on appeal, but not on this point). In the present case, having regard to the nature of the term and the length and complexity of the documents, and the fact that the term was not highlighted or otherwise drawn to the attention of the User, I consider that it was, to some extent, lacking in transparency. Section 12BH(1) examples and the contract as a whole 67 The Fee Error Term falls within the list of examples set out in s 12BH(1) of the ASIC Act of terms that may be unfair. Specifically, if applied, the Fee Error Term would: (a) permit PayPal (but not the Small Business) to avoid or limit its performance of the contract (specifically, its correct charging of fees) (s 12BH(1)(a)); (b) limit the right of the Small Business to sue PayPal to recover fees that were wrongly charged (s 12BH(1)(k)). 68 Finally, when regard is had to the Small Business Contracts as a whole, there is nothing otherwise within their terms which mitigates the unfairness of the Fee Error Term within the meaning of s 12BG(1) of the ASIC Act. Conclusion 69 In light of the above, I am satisfied that the Fee Error Term of the Small Business Contracts is an unfair term within the meaning of s 12BG(1) of the ASIC Act and therefore void by reason of s 12BF(1) of the ASIC Act. Declarations 70 The parties seek the following declarations: NOTING THAT: These declarations and orders adopt the following defined terms: (i) A reference to the Fee Error Term is a reference to the term set out in Schedule 1 to these Orders. (ii) A reference to the Individual Contracts is a reference to each contract identified as such in Schedule 2 to these Orders. (iii) Relevant Period means from 21 September 2021 to 7 November 2023; (iv) A reference to the Small Business Contracts is a reference to each contract in force during the Relevant Period: a. between the defendant (PayPal) and any Non-Party Consumer (as defined in s 12BA the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) as in force in the Relevant Period); b. in respect of a business account held with the defendant (PayPal) by that Non-Party Consumer (as defined in s 12BA of the ASIC Act as in force in the Relevant Period); c. which meets the definition of a small business contract in s 12BF(4) of the ASIC Act; and d. consisting of: i. the PayPal User Agreement (User Agreement) published by PayPal on its website (including policies and applicable agreements incorporated into that User Agreement by reference); ii. a Combined Financial Services Guide and Product Disclosure Statement (PDS) published by PayPal on its website; and iii. an online registration form completed by that Non-Party Consumer. BY CONSENT, THE COURT DECLARES THAT: Individual Contracts 1. Pursuant to s 12GND of the ASIC Act, the Fee Error Term in each of the Individual Contracts (as identified in Schedule 2) is an unfair term within the meaning of s 12BG(1) of the ASIC Act. 2. Pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) and s 12GNB of the ASIC Act, the Fee Error Term in each of the Individual Contracts (as identified in Schedule 2) is void ab initio by operation of s 12BF(1) of the ASIC Act and otherwise each of the Individual Contracts (as identified in Schedule 2) continues to bind the parties to it. Small Business Contracts 3. Pursuant to s 12GND of the ASIC Act, the Fee Error Term in each of the Small Business Contracts is an unfair term within the meaning of s 12BG(1) of the ASIC Act. 4. Pursuant to s 21 of the FCA Act and s 12GNB of the ASIC Act, the Fee Error Term in each of the Small Business Contracts is void ab initio by operation of s 12BF(1) of the ASIC Act and otherwise each of the Small Business Contracts continues to bind the parties to it. 71 In my view, the general law requirements for the making of declarations (set out above) are satisfied in the present case. Further, subject to two matters, I consider it appropriate to make the declarations. 72 The first matter is that I do not consider it appropriate to make a declaration as to the balance of the contracts continuing to bind the parties to them. In my view, in circumstances where there is no real controversy about the balance of the contracts, it is not appropriate to refer to the balance of the contracts in the order. However, for the sake of completeness and clarity, I note the following matters in these reasons. Section 12BF(2) of the ASIC Act provides: The contract continues to bind the parties if it is capable of operating without the unfair term. There is nothing in the material to which I have been taken to suggest that the Small Business Contracts are not capable of operating without the unfair term. 73 The second matter is that, as a matter of form, I consider it preferable to combine the declarations dealing with the Individual Contracts and the Small Business Contracts, such that there would be two declarations as follows: 1. Pursuant to s 12GND of the ASIC Act, the Fee Error Term in each of the Small Business Contracts (including the Individual Contracts) is an unfair term within the meaning of s 12BG(1) of the ASIC Act. 2. Pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth) and s 12GNB of the ASIC Act, the Fee Error Term in each of the Small Business Contracts (including the Individual Contracts) is void ab initio by operation of s 12BF(1) of the ASIC Act. Injunctions 74 The parties seek injunctions as follows: Individual Contracts 5. Pursuant to s 12GD of the ASIC Act, or alternatively s 23 of the FCA Act, PayPal, whether by itself, its servant or agents or otherwise is restrained from applying or relying upon or enforcing the Fee Error Term in each of the Individual Contracts (as identified in Schedule 2). Small Business Contracts 6. Pursuant to s 12GD of the ASIC Act, or alternatively s 23 of the FCA Act, PayPal, whether by itself, its servant or agents or otherwise is restrained from applying or relying upon or enforcing the Fee Error Term in each of the Small Business Contracts. 75 I am satisfied that there is power to make the injunction under s 12GD. I consider it appropriate to make an injunction order substantially as sought. Again, as a matter of form, I propose to deal in one order with both the Individual Contracts and the Small Business Contracts. The form of the injunction will therefore be: Pursuant to s 12GD of the ASIC Act, PayPal, whether by itself, its servant or agents or otherwise is restrained from applying or relying upon or enforcing the Fee Error Term in each of the Small Business Contracts (including the Individual Contracts). Costs 76 I also consider it appropriate to make the costs order proposed by the parties. I certify that the preceding seventy-six (76) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Moshinsky. Associate: Dated: 12 July 2024	10,031
federal_court_of_australia:fca/single/2019/2019fca1647	decision	commonwealth	federal_court_of_australia	text/html	2019-10-09 00:00:00	Patrick Stevedores Holdings Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2019] FCA 1647	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2019/2019fca1647	2024-09-13T22:45:30.308560+10:00	FEDERAL COURT OF AUSTRALIA Patrick Stevedores Holdings Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2019] FCA 1647 File number: NSD 620 of 2018 Judge: FLICK J Date of judgment: 9 October 2019 Catchwords: INDUSTRIAL LAW – statement of agreed facts – agreement as to form of declaratory relief and penalties – principles to be applied – whether agreed penalties within permissible range Legislation: Fair Work Act 2009 (Cth) ss 19, 417, 421, 546 Petroleum Retail Marketing Sites Act 1980 (Cth) s 10 Workplace Relations Act 1996 (Cth) Cases cited: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113, (2017) 254 FCR 68 Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The BKH Contractors Case) (No 2) [2018] FCA 1563 Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8, (2008) 165 FCR 560 Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46, (2015) 258 CLR 482 Communications, Electrical, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Laing (1998) 89 FCR 17 DP World Sydney Ltd v Maritime Union of Australia (No 2) [2014] FCA 596, (2014) 318 ALR 22 Fair Work Ombudsman v Maritime Union of Australia [2012] FCA 1232 Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd (No 4) [2017] FCA 580 Kelly v Fitzpatrick [2007] FCA 1080, (2007) 166 IR 14 Markarian v The Queen [2005] HCA 25, (2005) 215 ALR 213 Ministry for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72, (2004) ATPR 41-993 NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union [2008] FCAFC 170, (2008) 171 FCR 357 Qantas Airways Ltd v Transport Workers' Union of Australia [2011] FCA 470, (2011) 280 ALR 503 Registered Organisations Commission v Mijatov [2018] FCA 939 Date of hearing: 3 & 12 June 2019 Registry: New South Wales Division: Fair Work Division National Practice Area: Employment & Industrial Relations Category: Catchwords Number of paragraphs: 39 Counsel for the Applicant: Mr Y Shariff Solicitor for the Applicant: Seyfarth Shaw Australia Counsel for the Respondents: Mr R Reitano Solicitor for the Respondents: Slater & Gordon Lawyers ORDERS NSD 620 of 2018 BETWEEN: PATRICK STEVEDORES HOLDINGS PTY LTD Applicant AND: CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION First Respondent PAUL MCALEER Second Respondent JUDGE: FLICK J DATE OF ORDER: 9 OCTOBER 2019 THE COURT DECLARES THAT: 1. The First Respondent contravened s 417(1) of the Fair Work Act 2009 (Cth) by organising industrial action taken by employees of Patrick Stevedores Holdings Pty Ltd at Port Botany NSW in the form of a refusal to perform work on the day, evening and night shifts of 14 April 2018, and on the night shift ending on 16 April 2018, prior to the nominal expiry date of the Patrick Terminals Enterprise Agreement 2016. 2. The Second Respondent contravened s 417(1) of the Fair Work Act 2009 (Cth) by organising industrial action taken by employees of Patrick Stevedores Holdings Pty Ltd at Port Botany NSW in the form of a refusal to perform work on the day, evening and night shifts of 14 April 2018, and on the night shift ending on 16 April 2018, prior to the nominal expiry date of the Patrick Terminals Enterprise Agreement 2016. THE COURT ORDERS THAT: 3. A pecuniary penalty of $30,000 is imposed on the First Respondent pursuant to s 546 of the Fair Work Act 2009 (Cth) in respect of the contravention referred to in the Declaration in paragraph 1 above. 4. A pecuniary penalty of $6,000 is imposed on the Second Respondent pursuant to s 546 of the Fair Work Act 2009 (Cth) in respect of the contravention referred to in the Declaration in paragraph 2 above. 5. The above penalties are to be paid to the Applicant in accordance with s 546(3) of the Fair Work Act 2009 (Cth) within 30 days of the date of this order. 6. The primary proceeding is otherwise dismissed. 7. The Cross-claim is dismissed. 8. There is no order as to costs in respect of either the primary proceeding or the Cross-claim. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT FLICK J: 1 The Applicant in the present proceeding, Patrick Stevedores Holdings Pty Ltd ("Patrick Stevedores"), commenced the proceeding in April 2018 by filing in this Court an Originating Application, together with a Statement of Claim. 2 The Respondents to the proceeding are the Construction, Forestry, Mining, Maritime and Energy Union (the "CFMMEU") and Mr Paul McAleer. Mr McAleer is and was at all material times the Branch Secretary of the Sydney Branch of the CFMMEU's Maritime Union of Australia Division. 3 An Amended Statement of Claim was filed in June 2018. Defences were also filed in June 2018. A Reply was filed in July 2018. 4 Patrick Stevedores is part of a corporate group that conducts a business of operating container stevedoring, including at a terminal at Port Botany in Sydney (the "Terminal"). The subject-matter of the proceeding concerns a stoppage of work on 14, 15 and 16 April 2018. In summary, Patrick Stevedores originally contended that the CFMMEU and Mr McAleer contravened ss 417(1) and 421(1) of the Fair Work Act 2009 (Cth) (the "Fair Work Act"). 5 In very summary form, the Respondents by their Defences: denied having organised industrial action within the meaning s 19(1)(b) of the Fair Work Act, namely the Respondents denied having organised "a ban, limitation or restriction on the performance of work by an employee…". Further, the Respondents contended, in their Outline of Submissions, that the stoppage of work was not "industrial action" within the meaning of s 19 of the Fair Work Act because the action was excluded from that definition by reason of it either: being "based on a reasonable concern of the employee about an imminent risk to his or her health or safety" within the meaning of s 19(2)(c)(i) of the Fair Work Act; or being authorised (or agreed to) by Patrick Stevedores by reason of cl 4.10 of Pt B, Sch 4 of the Patrick Terminals Enterprise Agreement 2016 (the "Enterprise Agreement"). The Respondents, in their Outline of Submissions, also contended there was no refusal to work as the "employees were available to perform other work". 6 A Cross-claim was also filed in June 2018 by the CFMMEU seeking (inter alia) an order that Patrick Stevedores pay the salary not paid to the employees (named in the Schedule to the Cross-claim) during that period of time when work was not carried out on 14, 15 and 16 April 2018. 7 The hearing of those allegations was listed for a two week period commencing on 3 June 2019. On the afternoon of 2 June 2019, however, the Court was advised that the parties had resolved the question of liability. Accordingly, timetabling orders were made, including vacating the remaining hearing dates save for one day on 12 June 2019. A Further Amended Statement of Claim, filed on 3 June 2019, abandoned the allegation as to a contravention of s 421 of the Fair Work Act. The Respondents then filed Amended Defences on 5 June 2019. A Statement of Agreed Facts was filed on 7 June 2019. The First and Second Respondents have each admitted one contravention of s 417 of the Fair Work Act. 8 The only issue left to be resolved by the Court at the hearing on 12 June 2019 concerned the penalties to be imposed. The parties each filed a separate Outline of Submissions on Penalty. THE FAIR WORK ACT 9 Part 3-3 of the Fair Work Act is directed at "Industrial action". Within that Part, Div 2 identifies that which is characterised as "Protected industrial action". 10 Division 3, within Pt 3-3, provides that there is to be "No industrial action before nominal expiry date of [an] enterprise agreement". Within Div 3 is s 417, which provides, in part, as follows: Industrial action must not be organised or engaged in before nominal expiry date of enterprise agreement etc. No industrial action (1) A person referred to in subsection (2) must not organise or engage in industrial action from the day on which: (a) an enterprise agreement is approved by the FWC until its nominal expiry date has passed; or (b) a workplace determination comes into operation until its nominal expiry date has passed; whether or not the industrial action relates to a matter dealt with in the agreement or determination. … (note omitted) 11 "Industrial action" is defined in s 19 of the Fair Work Act, in relevant part, as follows: Meaning of industrial action (1) Industrial action means action of any of the following kinds: (a) …; (b) a ban, limitation or restriction on the performance of work by an employee or on the acceptance of or offering for work by an employee; (c) a failure or refusal by employees to attend for work or a failure or refusal to perform any work at all by employees who attend for work; (d) ... (2) However, industrial action does not include the following: … (c) action by an employee if: (i) the action was based on a reasonable concern of the employee about an imminent risk to his or her health or safety; and (ii) the employee did not unreasonably fail to comply with a direction of his or her employer to perform other available work, whether at the same or another workplace, that was safe and appropriate for the employee to perform. … 12 When referring to the definition of industrial action in the now-repealed Workplace Relations Act 1996 (Cth), French J in Communications, Electrical, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Laing (1998) 89 FCR 17 at 30-31 observed: While par (a) of the definition relates to the "performance of work", par (b) is more broadly expressed. It refers to "a ban, limitation or restriction on the performance of work, or on the acceptance of or offering for work". The central meaning of the term "ban" in the industrial, as in its ordinary usage, is to "prohibit or interdict": the Macquarie Dictionary. Communication between persons or an organisation and persons is essential to a "ban". And while the notion of "limitation" or "restriction" may have a meaning related to manner of actual performance of work, that meaning is picked up in par (a) of the definition. Under par (b) it extends to the communication of a limitation or restriction. Communication picked up under pars (b) and (c) must no doubt purport to be at least hortatory, if not authoritative and binding, upon the person or persons to whom they are directed. See also: Qantas Airways Ltd v Transport Workers' Union of Australia [2011] FCA 470 at [317], (2011) 280 ALR 503 at 566 per Moore J. The background facts 13 If reference is made to the affidavit evidence that was filed in anticipation of the hearing as to liability, it emerges that the operations at the Terminal included the use of various equipment, including "quay cranes" and "Reach Stackers". 14 Quay cranes, also called "portainers" or "ship to shore" cranes, are used to extend out over ships which berth at the Terminal and to load and unload shipping containers. The "Reach Stackers" are used to move shipping containers on and off trains. 15 The resolution of breakdowns and maintenance at the Terminal, according to the Engineering and Maintenance Manager at the Terminal (Mr Maurice Hayes), involves Patrick Stevedores: employing Technical Specialists whose role is to initially diagnose faults, deploy Operations Support Crews and to assist with the resolution of faults with which the Operation Support Crews cannot deal; employing Reliability Engineers who have specialist knowledge of various aspects of the machinery used at the Terminal; and engaging contractors to perform various functions on site. At all relevant time the Operations Support Crew functions were contracted to Kalmar Equipment (Australia) Pty Ltd ("Kalmar"). 16 Although this summary is extracted from affidavits not read in this proceeding, none of this description is controversial. 17 As set forth in the Statement of Agreed Facts, in April 2018 Kalmar was engaged in enterprise bargaining with its employees who worked at the Terminal. Its employees were represented by the CFMMEU. 18 The CFMMEU notified Kalmar that the Kalmar employees would be engaging in protected stoppage of work for 24 hours commencing at 5.30am on 14 April 2018. This stoppage of work by the Kalmar employees represented by the CFMMEU occurred as notified. Further, on 15 April 2018, there were no electrical tradesmen provided by Kalmar to work the night shift. 19 Having received the CFMMEU notice, Kalmar made arrangements to supply maintenance coverage, consisting of alternative labour, to perform maintenance for the 24 hours commencing at 5.30am on 14 April 2018. In the early hours of 16 April 2018, Kalmar also provided replacement electrical tradesmen after none had been provided for the 15 April 2018 night shift. 20 Despite these arrangements being put in place, whenever these replacement maintenance employees were employees other than the usual Kalmar employees, the employees of Patrick Stevedores refused to perform work on the quay cranes. This occurred during the 24 hours on both 14 and 15 April 2018 and again on the night shift commencing on 15 April 2018 and ending on 16 April 2018. The admissions made – three issues no longer in need of resolution 21 The admissions made by the Respondents, albeit belatedly and at the very start of the hearing, as to liability removed the necessity for the Court to resolve a series of legal and factual complexities arising out of the background facts. 22 Without attempting to be exhaustive, the issues no longer in need of resolution include the following. 23 First, one issue was whether the action taken by the Respondents fell within cl 4.10 of Pt B, Sch 4 of the Enterprise Agreement. That clause provided as follows: Maintenance employees will be available at all times to ensure safety support. Without adequate maintenance coverage including a qualified breakdown crew, no work will be performed in the Terminal. 24 Second, a further issue no longer in need of resolution was whether an email sent by Mr McAleer on 13 April 2018 to Mr Bruce Guy, the Terminal Manager at the Port Botany Terminal (and also sent to a number of other persons) constituted the organising of "industrial action" within the meaning of the definition in s 19(1)(b) of the Fair Work Act. That email provided as follows (without alteration): Bruce, The email below appears to fly in the face of the facts related by Kalmar today at the Fair Work Commission hearing in Melbourne. Kalmar have indicated they have two relocated tech specialists from interstate who cannot perform any maintenance functions grade 1-6 as set out in the Enterprise Agreement, as well as six contractors, three each on two twelve hour shifts, who are not qualified to the minimum standard as set out in the Kalmar Agreement. As you can imagine, this is an unacceptable safety risk to Patrick employees who are entitled to the following in addition to other clauses in the EA including 1.3 of Part B and various clauses related to safety throughout the document and legislation: Clause 4.10. of Part B states that: Maintenance employees will be available at all times to ensure safety support. Without adequate maintenance coverage including a qualified breakdown crew, no work will be performed in the Terminal. Not having available a maintenance breakdown crew that are minimally skilled to support the Terminal workers is a change to an accepted practice as well as fundamentally unsafe and therefore employees will not be performing work in the Terminal tomorrow commencing 5:30am for 24 hours or until such time as maintenance workers supporting the Terminal are qualified to the minimum requirement as set out in the Kalmar Agreement. The Branch is willing to discuss the matter at a time convenient to the Parties, we look forward to you adhering to Clause 1.3 of Part B of the current Enterprise Agreement. 1.3. Where a dispute arises in the workplace as a consequence of the Company directing employees to work different to accepted practice/s or a suspected breach of the Enterprise Agreement, work shall continue as existed prior to the dispute arising for a period of 72 hours, and a discussion has taken place between the MUA Branch Secretary and General Manager of Terminal Operations or their nominated representatives. Where the company proceed with directing employee/s to carry out work contrary to the terms of this Agreement or accepted practice, work shall continue as existed prior to the dispute arising until the matter has been determined through the Dispute Resolution Procedure. It is the intention of the Parties that clause 1.3 will not apply where there has been genuine consultation under the consultation and change clause. Paul Mr McAleer (it may be noted) maintained in his affidavit affirmed 21 September 2018 that the email was "not a direction not to work, but a reflection of the views expressed to me by employees that there was inadequate maintenance coverage, a breach of the Enterprise Agreement and a change to accepted practice, and the consequence required by the Agreement in that situation that no work is to be performed until the issue is resolved". 25 Third, a further issue no longer in need of resolution was whether the concerns as to safety being voiced by the Respondents fell within s 19(2)(c) of the Fair Work Act. 26 These concerns were potentially not to be easily resolved. PENALTIES – GENERAL PRINCIPLES & AGREEMENT 27 The source of statutory power to impose a penalty is to be found in s 546 of the Fair Work Act. That section provides, in relevant part, as follows: Pecuniary penalty orders (1) The Federal Court, the Federal Circuit Court or an eligible State or Territory court may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision. Determining amount of pecuniary penalty (2) The pecuniary penalty must not be more than: (a) if the person is an individual—the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2); or (b) if the person is a body corporate—5 times the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2). … (note omitted) In the present case, the maximum penalty that may be imposed upon an individual for a contravention of s 417 is $12,600; in the case of a body corporate, the maximum penalty is $63,000. 28 Although there is agreement between the parties as to the general principles to be applied in the present case, three matters should be briefly addressed. 29 First, a primary purpose in imposing penalties is deterrence: Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46 at [55], (2015) 258 CLR 482 at 506 per French CJ, Kiefel, Bell, Nettle and Gordon JJ ("Director, Fair Work Building Industry Inspectorate"). See also: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113 at [98] to [99], (2017) 254 FCR 68 at 88 per Dowsett, Greenwood and Wigney JJ. 30 Second, the process of quantifying an appropriate penalty is not an "exact science" but rather a process of "instinctive synthesis": Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at [27] to [28], [55] and [78]; (2008) 165 FCR 560 at 567 to 568 per Gray J, 572 and 577 per Graham J. It nevertheless remains a process guided by a consideration of a number of well-accepted factors. In Kelly v Fitzpatrick [2007] FCA 1080 at [14], (2007) 166 IR 14 at 18 to 19, Tracey J was called upon to quantify penalties for admitted contraventions of the Transport Workers Award 1998 and in doing so adopted the following as a "non-exhaustive range of considerations" to be taken into account: the nature and extent of the conduct which led to the breaches; the circumstances in which that conduct took place; the nature and extent of any loss or damage sustained as a result of the breaches; whether there had been similar previous conduct by the respondent; whether the breaches were properly distinct or arose out of the one course of conduct; the size of the business enterprise involved; 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; whether the party committing the breach had cooperated with the enforcement authorities; the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and the need for specific and general deterrence. These factors have since been cited in other decisions of this Court: e.g., Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union [2008] FCAFC 170 at [57] to [58], (2008) 171 FCR 357 at 374 to 376 per Branson and Lander JJ; Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd (No 4) [2017] FCA 580 at [47] to [48] per Gilmour J; Registered Organisations Commission v Mijatov [2018] FCA 939 at [45] per Bromwich J. 31 Third, in circumstances where the parties have reached agreement as to the facts and further reached agreement as to the appropriate quantum of penalty, this Court can act upon that agreement if it is "appropriate" to do so: Ministry for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 at [51], (2004) ATPR 41-993 ("Mobil Oil"). Branson, Sackville and Gyles JJ were there considering this issue by reason of an admitted contravention by Mobil of s 10 of the Petroleum Retail Marketing Sites Act 1980 (Cth). Their Honours referred to the earlier decision of the Full Court of this Court in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 ("NW Frozen Foods") and continued: [51] The following propositions emerge from the reasoning in NW Frozen Foods: (i) It is the responsibility of the Court to determine the appropriate penalty to be imposed under s 76 of the [Trade Practices] Act in respect of a contravention of the [Trade Practices] Act. (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. The same approach has been adopted when considering the imposition of penalties to be imposed under the Fair Work Act: DP World Sydney Ltd v Maritime Union of Australia (No 2) [2014] FCA 596 at [20] to [22], (2014) 318 ALR 22 at 27 to 29 per Flick J. 32 As recognised by Gageler J in Director, Fair Work Building Industry Inspectorate [2015] HCA 46 at [68], (2015) 258 CLR at 511 the "the principles applicable to agreed penalty submissions in a civil penalty proceeding remain those articulated in NW Frozen Foods … and Mobil Oil…". The penalties as agreed 33 The penalties that have been agreed in the present case are $30,000 for the CFMMEU and $6,000 for Mr McAleer. 34 Those penalties, it should be noted at the outset, are in the middle of the range of penalties that could potentially be imposed. The maximum penalty is a "yardstick" against which the process of quantification is generally to proceed: cf. Markarian v The Queen [2005] HCA 25 at [30] to [31], (2005) 215 ALR 213 at 222 per Gleeson CJ, Gummow, Hayne and Callinan JJ. See also: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The BKH Contractors Case) (No 2) [2018] FCA 1563 at [19] per Flick J. 35 In considering whether it is "appropriate" to fix the penalties in the agreed amounts and in considering whether those penalties are within the "permissible range", it is not necessary to give as much attention to each of the factors summarised by Tracey J in Kelly v Fitzpatrick as would otherwise be warranted in the absence of agreement. But the task of forming a view as to whether agreed amounts are "appropriate" and within the "permissible range" is not at large. It remains a task informed by consideration of those factors, albeit a task not warranting a detailed application of each of those factors to the facts. It is sufficient to make an assessment founded upon a more generally expressed overview – albeit after a careful consideration of the materials available. 36 As expressed by French CJ, Kiefel, Bell, Nettle and Gordon JJ in Director, Fair Work Building Industry Inspectorate [2015] HCA 46, (2015) 258 CLR at 498: [31] … Contrary … to the supposed danger of the court being perceived as a "rubber stamp" for agreed penalty submissions, NW Frozen Foods required the court always to form its own view about the appropriate range of penalties. Finally, there would be little advantage in limiting parties to an agreed range as opposed to an agreed figure. A better way of reinforcing the court's responsibility to determine an appropriate penalty was for the court to scrutinise the material presented to it carefully and satisfy itself that it was sufficient to determine whether the agreed penalty was appropriate. [32] By way of explication, the Full Court added five observations, in substance as follows: (1) As noted in Allied Mills and NW Frozen Foods, the rationale for giving weight to a joint submission on penalty rests on the saving in resources for the regulator and the court, the likelihood that a negotiated resolution will include measures designed to promote competition and the ability of the regulator to use the savings to increase the likelihood of other contraveners being detected and brought before the courts. (2) NW Frozen Foods does not mean that a court must commence its reasoning with the penalty proposed by the parties and then limit itself to a consideration of whether the penalty proposed is within the range of permissible penalties. That is one option, but another is to begin with an independent assessment of the appropriate range of penalties and then compare it with the proposed penalty. … (footnotes omitted) Their Honours went on to further conclude in relevant part (at 507 to 508): [58] ... There is, however, no reason in principle or practice why civil penalty proceedings should be treated as an exception. Subject to the court being sufficiently persuaded of the accuracy of the parties' agreement as to facts and consequences, and that the penalty which the parties propose is an appropriate remedy in the circumstances thus revealed, it is consistent with principle and ... highly desirable in practice for the court to accept the parties' proposal and therefore impose the proposed penalty ... [59] ... Once it is understood that civil penalties are not retributive, but like most other civil remedies essentially deterrent or compensatory and therefore protective, there is nothing odd or exceptionable about a court approving an agreed settlement of a civil proceeding which involves the public interest; provided of course that the court is persuaded that the settlement is appropriate. 37 In the present case, the manner in which consideration has been given to the agreed position of the parties is to start with an independent assessment that the penalties proposed would be within what would otherwise be considered as a "permissible range", albeit an assessment very much informed by "instinctive synthesis". That initial assessment has thereafter been reconsidered – or separately "tested" – by reference to a broad review of the factors summarised by Tracey J in Kelly v Fitzpatrick with a view to determining whether the agreed penalties are "appropriate". Approached in that manner, it has been concluded that the agreed penalties should be imposed when consideration is given to (in particular) the following factors: the prior contraventions by the former Maritime Union of Australia, being contraventions in 2010 and 2012 and the prior contraventions by the CFMMEU in 2015 and 2017 in respect to activities at container terminals; the prior contraventions of s 417 by Mr McAleer in 2012 and 2017 and the fact that he occupies a senior position within the Sydney Branch of the CFMMEU; the fact that the unlawful industrial action in the present case was deliberate, insofar as the conduct was itself a conscious decision to cease work; the absence of contrition; and the need for the quantum of the penalties imposed to act as both a general and specific deterrence and not to be regarded as merely the "cost of doing business" (cf. Director, Fair Work Building Industry Inspectorate [2015] HCA 46 at [110], (2015) 258 CLR at 523 to 524 per Keane J; Fair Work Ombudsman v Maritime Union of Australia [2012] FCA 1232 at [35] per Barker J). The fact that: the agreement between the parties came only shortly before the commencement of the proceeding, assumes a more neutral relevance – the contraventions being alleged were, over time, narrowed by the Applicant and (in particular) involved the abandonment in the Further Amended Statement of Claim of the previously alleged contravention of s 421 of the Fair Work Act. Uninformed by the agreement between the parties, penalties greater than those agreed may have been imposed. But no conclusion can be reached that the penalties as agreed are not "appropriate". CONCLUSIONS 38 The penalties as agreed between the parties should be imposed. 39 Effect should also be given to the form of declaratory relief as jointly proposed by the parties. THE COURT DECLARES THAT: 1. The First Respondent contravened s 417(1) of the Fair Work Act 2009 (Cth) by organising industrial action taken by employees of Patrick Stevedores Holdings Pty Ltd at Port Botany NSW in the form of a refusal to perform work on the day, evening and night shifts of 14 April 2018, and on the night shift ending on 16 April 2018, prior to the nominal expiry date of the Patrick Terminals Enterprise Agreement 2016. 2. The Second Respondent contravened s 417(1) of the Fair Work Act 2009 (Cth) by organising industrial action taken by employees of Patrick Stevedores Holdings Pty Ltd at Port Botany NSW in the form of a refusal to perform work on the day, evening and night shifts of 14 April 2018, and on the night shift ending on 16 April 2018, prior to the nominal expiry date of the Patrick Terminals Enterprise Agreement 2016. THE COURT ORDERS THAT: 3. A pecuniary penalty of $30,000 is imposed on the First Respondent pursuant to s 546 of the Fair Work Act 2009 (Cth) in respect of the contravention referred to in the Declaration in paragraph 1 above. 4. A pecuniary penalty of $6,000 is imposed on the Second Respondent pursuant to s 546 of the Fair Work Act 2009 (Cth) in respect of the contravention referred to in the Declaration in paragraph 2 above. 5. The above penalties are to be paid to the Applicant in accordance with s 546(3) of the Fair Work Act 2009 (Cth) within 30 days of the date of this order. 6. The primary proceeding is otherwise dismissed. 7. The Cross-claim is dismissed. 8. There is no order as to costs in respect of either the primary proceeding or the Cross-claim. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. Associate: Dated: 9 October 2019	7,693
federal_court_of_australia:fca/single/2008/2008fca0729	decision	commonwealth	federal_court_of_australia	text/html	2008-05-21 00:00:00	MZXTE v Minister for Immigration & Citizenship [2008] FCA 729	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2008/2008fca0729	2024-09-13T22:45:30.467908+10:00	FEDERAL COURT OF AUSTRALIA MZXTE v Minister for Immigration & Citizenship [2008] FCA 729 MZXTE v MINISTER FOR IMMIGRATION AND CITIZENSHIP VID 129 of 2008 SUNDBERG J 21 MAY 2008 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 129 of 2008 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: MZXTE Applicant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP Respondent JUDGE: SUNDBERG J DATE OF ORDER: 21 MAY 2008 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The application for leave to appeal be dismissed. 2. The applicant pay the respondent's costs of the application fixed at $3922. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 129 of 2008 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: MZXTE Applicant AND: MINISTER FOR IMMIGRATION AND CITIZENSHIP Respondent JUDGE: SUNDBERG J DATE: 21 MAY 2008 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 The matter before me purports to be an appeal against orders of a Federal Magistrate made on 11 February 2008 dismissing the applicant's application to that Court. 2 The applicant is a citizen of India who arrived in Australia on 4 July 2004. On 21 September 2006 he lodged an application for a protection visa with the Department of Immigration and Citizenship. A delegate of the Minister refused the application. The appellant did not seek a review by the Refugee Review Tribunal ("Tribunal"). 3 The applicant sought judicial review in the Federal Magistrates Court of Australia. In what appear to be pro forma grounds, he claimed that the Tribunal exceeded its jurisdiction or failed to exercise its jurisdiction, denied him natural justice and procedural fairness, and was biased. He also claimed that the Tribunal failed to check the authenticity of his oral evidence, and failed to give him the opportunity to comment on the evidence. 4 As I have said, the applicant did not seek a review before the Tribunal. Rather he sought to have the Magistrate review the delegate's decision. 5 The Federal Magistrate dismissed the application for non appearance pursuant to rule 13.03A(c) of the Federal Magistrates Court Rules 2001. 6 The purported notice of appeal filed in this Court challenges the orders of the Federal Magistrate on what again appear to be pro forma grounds ‑ essentially that the Magistrate erred in failing to find jurisdictional error. The applicant seeks orders that the Tribunal re-consider his claim. As stated above, the matter has never been before the Tribunal. 7 The respondent has filed a Notice of Motion objecting to the competency of the "appeal" on the ground that the Magistrate's decision is interlocutory and no leave to appeal has been granted. 8 The respondent has also filed an Outline of Submissions. 9 Both documents were sent to the applicant's pre 15 April 2008 address. That was because the respondent was not informed of the change of address, though the Court was. 10 Because the applicant is unrepresented, the course I propose to adopt is to treat him as seeking leave to appeal, and to refuse that application on the ground that if leave were granted the appeal would have no prospect of success. The applicant did not appear before the Magistrate. He has not offered any explanation for this. Furthermore, if he had appeared and made submissions to the Magistrate, his Honour would have had no choice but to dismiss the "appeal" for want of jurisdiction. The Federal Magistrates Court has no jurisdiction to hear appeals from the Minister's delegate – the primary decision‑maker. 11 I note that an appeal is not the appropriate course for the applicant to have adopted. The proper course was to apply to the Magistrate for an order setting aside the Magistrate's order. 12 As is apparent from what I have said, I have taken the course I adopted in MZWIK v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCA 185 (see also MZWXC v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCA 172 at [9] and MZXME v Minister for Immigration & Citizenship [2007] FCA 767), and instead of requiring the applicant to take the proper course, have considered whether there is sufficient merit in his case to justify the grant of leave to appeal. Plainly there is not. 13 In the light of what I have said above about the applicant's non‑receipt of the notice of motion and outline, I need not deal with the motion. 14 Leave to appeal is refused, and the applicant must pay the respondent's costs. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg. Associate: Dated: 21 May 2008 Applicant appeared in person. Counsel for the Respondent: A Dinelli Solicitors for the Respondent: Clayton Utz Date of Hearing: 21 May 2008 Date of Judgment: 21 May 2008	1,221
federal_court_of_australia:fca/single/2008/2008fca0506	decision	commonwealth	federal_court_of_australia	text/html	2008-04-16 00:00:00	Manolakis v Senior Registrar of the High Court of Australia [2008] FCA 506	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2008/2008fca0506	2024-09-13T22:45:30.537737+10:00	FEDERAL COURT OF AUSTRALIA Manolakis v Senior Registrar of the High Court of Australia [2008] FCA 506 ANASTASIOS MANOLAKIS v SENIOR REGISTRAR OF THE HIGH COURT OF AUSTRALIA & OTHERS SAD 17 of 2008 MANSFIELD J 16 APRIL 2008 ADELAIDE IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY SAD 17 of 2008 BETWEEN: ANASTASIOS MANOLAKIS Applicant AND: SENIOR REGISTRAR OF THE HIGH COURT OF AUSTRALIA & OTHERS Respondents JUDGE: MANSFIELD J DATE OF ORDER: 16 APRIL 2008 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: 1. The application be dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY SAD 17 of 2008 BETWEEN: ANASTASIOS MANOLAKIS Applicant AND: SENIOR REGISTRAR OF THE HIGH COURT OF AUSTRALIA & OTHERS Respondents JUDGE: MANSFIELD J DATE: 16 APRIL 2008 PLACE: ADELAIDE REASONS FOR JUDGMENT 1 This application was instituted on 20 February 2008. It is in essence in the same terms as an application made to the Court on 19 February 2008 which the Registrar, pursuant to the direction of a Judge of the Court, did not accept on the basis that it was scandalous and appeared on its face to be an abuse of the process of the Court: see O 46 r 7A of the Federal Court Rules. As it appeared likely that the applicant would simply persist in re-presenting his proceeding, I directed that it be accepted by the Registry, but that it not be served pending the first directions hearing. 2 On 6 March 2008, at the first directions hearing, I explained to the applicant that the proceedings were incompetent in a number of respects. I pointed out the need for the application to be amended to ensure that it made allegations which attracted the jurisdiction of the Court, and that it was supported by a statement of claim in view of the allegations which were made (see O 4 r 6(1A) of the Rules), and that the statement of claim properly specify the material facts upon which the allegations were made and confine those material facts to those relating to the named respondents. I had earlier, in another matter in which I have also given judgment this morning (Manolakis v Carter [2008] FCA 505) explained at considerable length to the applicant those matters in an endeavour to ensure that he presented to the Court in as competent and comprehensive a way as appropriate, and as he could on the information available to him, his claims in a form which might be sustainable. He acknowledged at the directions hearing on 6 March 2008 that he had earlier received those explanations, and would endeavour to address them by filing an amended application and a statement of claim. 3 He was accordingly given leave to do so. The matter was stood over for further directions to 16 April 2008 to consider what, if any, further directions or orders should be made. The applicant explained on 6 March 2008 that his proceeding in part concerned an application for special leave to appeal to the High Court from a decision of the Court of Criminal Appeal of the Supreme Court of South Australia. He presented transcript of the Court of Criminal Appeal hearing (SCCRM-07-157 (four volumes)) and an index to that material (SCCRM-07-0235 (one volume)) which I indicated I would endeavour to peruse to see whether it might enable his complaints to be more focused. He then immediately asked for those documents to be released to him for copying before being returned to the Court. They have not been returned to the Court and I have not therefore perused them. The applicant did not attend the directions hearing on 16 April 2008. 4 The applicant has not filed an amended application, or any statement of claim, or any further affidavits in support of his application. 5 In my view, the application should be dismissed and I so order. I do so because, in my view, the application as expressed has no real prospect of success (s 31A of the Federal Court of Australia Act 1975 (Cth)) and O 20 r 1 of the Federal Court Rules, and because the application is not supported by a statement of claim as required by O 4 r 6(1A) of the Rules in light of the allegations, and because even if the affidavit filed by the applicant in support of the application is regarded as a pleading or as being in substitution for a pleading, it does not meet the requirements of O 11 because it contains material which is frivolous and vexatious, because it does not set out material facts upon which the primary claims for relief could possibly be established, and because in significant respects it makes general allegations which at least on the material asserted are not within the jurisdiction of the Court. So extensive are the defects that it is appropriate to refer only briefly to them. 6 There are a number of allegations made of criminal conduct on the part of individuals. There is nothing to found the jurisdiction of the Court to entertain such a complaint, assuming that it is possible for the applicant to assert criminal conduct on the part of any person without himself asserting loss suffered as a result of that criminal conduct. He does not do so. That includes the allegation of fraud committed against the South Australian Health Department. He does not in that respect, or generally in relation to the allegations of criminal conduct, identify the basis, if any, upon which he suffered as a result of that conduct. In any event, the conduct is alleged against a number of persons only a few of whom are named respondents. The other persons are not named respondents. In addition, although there is a general allegation of criminal conduct in a number of respects, it is not particularised or specified by assertions of material facts in any way which is comprehensible and from which any of the named respondents, or indeed to any of the named alleged offenders who are not respondents, could understand what it is alleged that they have engaged in, where and when and in relation to whom. Those allegations, in the circumstances, are scandalous and quite inappropriately made. 7 In relation to the claims against officers of the High Court of Australia, no foundation for this Court to exercise jurisdiction in respect of those persons is identified. The allegation again concerns other named and unnamed respondents, as well as officers of the High Court, for failing somehow to receive and entertain an application for special leave to appeal to the High Court. It appears from material apparently erroneously presented in the other proceedings in which I have today given judgment that an application for special leave to appeal to the High Court of Australia from a decision or decisions (it is unclear which) of the Court of Criminal Appeal of the Supreme Court of South Australia was, by direction of a Justice of the High Court of Australia, not received pursuant to r 6.07 of the High Court Rules. However, the nature of those applications, any ruling specified by the direction of that Justice, or the details of the application, are not set out. No such decision is reviewable by this Court, and I suspect the officers of the High Court simply gave effect to it. However, the allegations are really too general to know what is really being alleged. 8 In my view, the proceeding is an abuse of process. It is foredoomed to fail and should be dismissed: Walton v Gardiner (1993) 177 CLR 278. That is particularly so where such serious allegations are made against officers of the Court or other public officials or public officers not supported by particulars or adequate facts from which the allegation is made: Nolan v Administrative Appeals Tribunal (1997) 47 ALD 689. 9 I so order. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. Associate: Dated: 16 April 2008 Counsel for the Applicant: The applicant did not appear Date of Hearing: 16 April 2008 Date of Judgment: 16 April 2008	1,808
federal_court_of_australia:fca/single/1999/1999fca1867	decision	commonwealth	federal_court_of_australia	text/html	1999-11-29 00:00:00	Yap v Granich & Associates [1999] FCA 1867	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1999/1999fca1867	2024-09-13T22:45:32.503454+10:00	FEDERAL COURT OF AUSTRALIA Yap v Granich & Associates [1999] FCA 1867 BANKRUPTCY – appeal against dismissal of motion for review and annulment of sequestration order – judgment debt based on costs order in unsuccessful proceedings against former solicitors – whether cause to go behind judgment. Bankruptcy Act 1966 (Cth), s 153B Wren v Mahony (1972) 126 CLR 212 referred to YAP v GRANICH & ASSOCIATES W 81 of 1999 SPENDER, WHITLAM & CARR JJ 29 NOVEMBER 1999 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W 81 OF 1999 On appeal from a Judge of the Federal Court of Australia BETWEEN: YAP CHENG SEE Appellant AND: GRANICH & ASSOCIATES Respondent JUDGE: SPENDER, WHITLAM & CARR JJ DATE OF ORDER: 29 NOVEMBER 1999 WHERE MADE: PERTH THE COURT ORDERS THAT: The appeal is dismissed with costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W 81 OF 1999 On appeal from a Judge of the Federal Court of Australia BETWEEN: YAP CHENG SEE Appellant AND: GRANICH & ASSOCIATES Respondent JUDGE: SPENDER, WHITLAM & CARR JJ DATE: 29 NOVEMBER 1999 PLACE: PERTH REASONS FOR JUDGMENT SPENDER J: 1 I agree with the reasons for judgment of Carr J. Mrs Yap, at the conclusion of her extensive written submissions, said: "In the light of the evidence [to which very extensive reference had been made] the sequestration order ought to have been made. The bankruptcy should be annulled." 2 A court of bankruptcy will be astute to see that behind a judgment which founds a creditor's petition there is "in truth and reality" a debt owing by the debtor to the petitioner. Of the court's discretion to accept a creditor's judgment as proof of the debt relied on to found the creditor's petition, Barwick CJ said, in the well-known case of Wren v Mahony (1972) 126 CLR 212 at 224: "The Court's discretion in my opinion, is a discretion to accept the judgment as satisfactory proof of that debt. That discretion is not well exercised where substantial reasons are given for questioning whether behind that judgment there was in truth and reality a debt due to the petitioner." 3 Windeyer and Owen JJ agreed with the judgment of Barwick CJ. 4 Having regard to the curial history of the order of Commissioner Martin QC made by the District Court of Western Australia on 7 May 1996, which has been outlined by Carr J, in my opinion it is quite impossible to conclude that French J was in error in the conclusion that he reached. 5 This is not a case in which it can be said that the sequestration order ought not to have been made. On the material before the Registrar and on the material now before us, it ought to have been made. 6 I also agree that the appeal should be dismissed. WHITLAM J: 7 I agree with the judgment of Carr J and also with the additional observations of the senior presiding judge. CARR J: Introduction 8 This is an appeal from a decision of a judge of this Court who, on 30 July 1999, dismissed the appellant's motion to review a sequestration order, made against her estate on 10 December 1998, and to annul her bankruptcy. Factual Background 9 The following factual background is taken largely from the reasons of the learned trial judge: 10 On 15 March 1989 a company named P. Vivante & Co Pty Ltd sued the appellant in the District Court of Western Australia for the recovery of a debt of $39,034.17, said to have been owing pursuant to a deed of acknowledgment of debt. The appellant failed to enter an appearance and, on 10 April 1989, a default judgment was obtained against her. A writ of fi fa was issued on 26 April 1989 and some of the appellant's property was seized. The appellant approached Messrs Melsom Robson & Co, Chartered Accountants for help, and the processes of Part X of the Bankruptcy Act 1966 (Cth) were invoked on her behalf. The Part X proceedings were later abandoned. 11 In February 1992 a bailiff called and left his card at the appellant's front door informing her that her house would be sold to satisfy the District Court default judgment. 12 On 10 April 1992, three years after the default judgment had been obtained against her, the appellant made an application, in person, to have the default judgment set aside. 13 On 29 May 1992 the appellant's application to set aside the default judgment was dismissed on the basis of her non-appearance at court. A further application to have the default judgment set aside was made by her on the same day. The application was heard before Registrar Kingsley on 23 June 1992. The default judgment was set aside and the appellant was granted leave to defend the action. However, leave was conditioned upon the appellant being required to pay $39,000 into court by 7 July 1992, failing which the plaintiff would again be able to enter default judgment against her. 14 The appellant failed to comply with the condition imposed by Registrar Kingsley, but sought to appeal against Registrar Kingsley's order. On 3, 10 and 21 August 1992 Judge Viol heard the appellant's application for leave to appeal out of time against Registrar Kingsley's order. 15 By then the appellant had engaged the respondent, Messrs Granich & Associates, barristers and solicitors, to act on her behalf. Judge Viol observed that the application for leave to appeal was made broadly on two grounds: 1. That the appellant was unrepresented at the time the proceedings originally took place and that, had she been represented, a different order might have been made; 2. That there was fresh evidence available suggesting an overpayment by her to P Vivante & Co Pty Ltd, and therefore that the sum originally claimed was not owing and that it would be unfair in the circumstances for the condition imposed by Registrar Kingsley to continue to exist. 16 Judge Viol, however, dismissed the application, concluding that there was no sufficient basis for leave to be granted to the appellant to file and serve a notice of appeal out of time against the orders and, in particular, the condition imposed by Registrar Kingsley. 17 In an ex tempore judgment on 10 June 1993 the Full Court of the Supreme Court of Western Australia refused an application on behalf of the appellant for leave to appeal against the decision of Judge Viol. 18 Subsequently, the appellant instituted proceedings against the respondent alleging that the firm had been negligent in representing her. 19 On 7 May 1996 Commissioner K Martin QC in the District Court heard the appellant's action against the respondent. The appellant had identified five grievances against the respondent. However, she abandoned two of the grounds during the hearing. The remaining complaints against the respondent were that: · The circumstances surrounding her contention that the deed of acknowledgment of debt was not to be treated as valid or binding upon her, had not been adequately dealt with in the three affidavits prepared on her behalf by the respondent; · Mr Smallbone, the solicitor in the respondent's firm who represented her, had not used his professional skills to explain adequately her reasons for the time lapse between the obtaining of a default judgment against her on 10 April 1989 and her application precisely three years later to set it aside; · The circumstances surrounding the appellant's abandonment of the proposed Part X Bankruptcy Act arrangements, in early 1990, had not been satisfactorily explained. 20 The following passage is taken from the reasons of the trial judge at first instance in this matter: "Commissioner Martin referred to the background circumstances particularly the substantial period of delay in seeking to set aside the default judgment, the fact that she was seeking to resile from the clear terms of the deed acknowledging her indebtedness and that she was seeking to resile from an express acknowledgment in her statement of affairs in the Part X proceedings of the existence of a debt to P. Vivante for $33,000. On the basis of those circumstances, Commissioner Martin concluded that Mrs Yap's defences, accepting that they were arguable, would be regarded by a court with knowledge of the circumstances as "weak and shadowy". She faced "an almost insurmountable task … in persuading a court that a routine protective condition imposed by way of security by Registrar Kingsley in the exercise of his discretion should be removed". Commissioner Martin concluded, having heard what she now said about those matters and given the fact that no amount of explanation in her affidavits could have persuaded a court that her defences were anything other than shadowy, that it was appropriate to remove the protective condition." In a finding strongly adverse to the appellant's credibility Commissioner Martin said: "In summary, I do not regard Mrs Yap's evidence as reliable, where it is not corroborated independently." 21 The Commissioner referred to the circumstances "as a set of circumstances which cried out for the imposition of the security condition imposed by Registrar Kingsley against Mrs Yap …". He accepted Mr Smallbone's statement in evidence: "I always acted on your instructions. That's the way I did things and I believe I did the best I could. It was very difficult to deal with at times. Your instructions were very, very confused…". 22 Having regard to this background, Commissioner Martin found that the three remaining complaints or grievances of Mrs Yap against Mr Smallbone and Granich & Associates were all "completely without merit". The matters raised were not causative of any loss to Mrs Yap and it was inevitable that the prudent security condition imposed by Registrar Kingsley would remain in place. 23 Commissioner Martin gave an ex tempore judgment dismissing the appellant's action for professional negligence against the respondent, with costs. 24 On 17 May 1996 the appellant filed an appeal to the Full Court of the Supreme Court of Western Australia against the decision of Commissioner Martin. The respondent filed a motion to strike out the appeal. On 16 April 1997 the Full Court of the Supreme Court adjourned that motion and directed the appellant to apply to the Master for leave to amend the grounds of appeal. 25 On 2 May 1997 the application to amend the notice of appeal in terms of the minute submitted was dismissed by Master Bredmeyer on the basis that the minute of substituted notice of appeal was "wholly defective". The application was adjourned to 12 May 1997. On 12 May 1997 the appellant did not attend court and no new document was before the court. Her application was dismissed. On 23 May 1997 the matter came on again before Master Bredmeyer. However, the notice was still considered to be defective. He dismissed the appellant's application to amend the notice of appeal and did not give her leave to bring in another minute. 26 On 21 July 1997 the appellant's appeal against the decision of Commissioner Martin to the Full Court of the Supreme Court was dismissed for want of prosecution and because there were no grounds of appeal which complied with the Rules. 27 On 11 October 1997 the respondent caused a bankruptcy notice to be served on the appellant. The notice required payment of $33,184.11. The debt comprised taxed costs of $29,790.45 which the appellant had been ordered to pay to the respondent upon the dismissal of her claim by Commissioner Martin on 7 May 1996, and post-judgment interest of $3,393.66. The costs had been taxed on 12 August 1996. 28 On 17 October 1997 the appellant filed an application to set aside the bankruptcy notice on the basis that she had a counterclaim based upon the negligence of the respondent. On 1 December 1997 the District Registrar of the Federal Court dismissed that application. The appellant did not seek review of or appeal from that order. 29 On 1 May 1998 the respondent filed a creditor's petition seeking sequestration of the appellant's estate. The act of bankruptcy relied upon was non-compliance with the bankruptcy notice served on 11 October 1997. 30 On 13 May 1998 the appellant filed a notice of intention to oppose the petition based on a pending application for special leave to appeal to the High Court of Australia in relation to her unsuccessful professional negligence action against the respondent. She also alleged: "Deliberate concealment of facts relating to the debtor's cause of action to conceal the petitioner's breach of duty to the debtor pursuant to the petitioner's retainer/contract to the debtor." 31 The High Court dismissed the appellant's application for special leave to appeal on 22 October 1998, stating amongst other things that her application was "entirely devoid of merit". 32 Between the filing of the notice of intention to oppose the petition and 10 December 1998, the hearing of the petition was adjourned five times and the appellant filed six affidavits. On 10 December 1998 the Registrar made a sequestration order against the appellant's estate. 33 The matter came before the trial judge as a result of a motion filed by the appellant on 16 December 1998 seeking an order that the judgment of the Registrar be set aside, the sequestration order be annulled, and that the respondent pay damages and costs. 34 The motion to review and set aside the sequestration order was dismissed by French J on 30 July 1999. The appellant filed this appeal on 18 August 1999. Statutory Framework 35 The power to annul a sequestration order is found in s 153B of the Bankruptcy Act which provides: "153B. If the Court is satisfied that a sequestration order ought not to have been made or, in the case of a debtor's petition, that the petition ought not to have been presented or ought not to have been accepted by the Official Receiver, the Court may make an order annulling the bankruptcy." The Decision at First Instance 36 The trial judge said that the core question was whether the Court could go behind the judgment debt upon which the bankruptcy notice and the creditor's petition were based. 37 His Honour said that the affidavit filed by the appellant (sworn on 11 May 1998) in opposition to the creditor's petition, focussed on the conduct of the respondent in the application before Judge Viol in the District Court for leave to appeal out of time against the order made by Registrar Kingsley. In that affidavit the appellant asserted the negligence of the respondent in various respects. The appellant also went into the background of dealings between Akibilt Pty Ltd (a company of which the appellant was a director) and P. Vivante & Co Pty Ltd, including alleged loans made to the latter company or to a Mr Vivante. The appellant repeatedly asserted that the action brought against her by P Vivante & Co Pty Ltd was "void" and referred to the alleged invalidity and unenforceability of the deed of acknowledgment of debt. 38 The trial judge found that the issues raised by the appellant of the alleged negligence of the respondent and the underlying issues of the dealings with Vivante had been canvassed by Commissioner Martin in his reasons for judgment in the unsuccessful action brought by the appellant against the respondent. His Honour said that in her affidavit the appellant had sought to re-agitate before the District Registrar, issues which had been decided adversely to her in those proceedings and the question of her liability to P Vivante & Co Pty Ltd. 39 His Honour said that these issues were further agitated in her affidavit dated 2 November 1998 in opposition to the creditor's petition, which endeavoured to assert that the judgment adverse to her in the proceedings against the respondent had been obtained by fraud. In that affidavit the appellant canvassed the issues between herself and P Vivante & Co Pty Ltd and, in particular, loans allegedly made to Mr P Vivante or his company. She asserted that counsel for the respondent had deliberately concealed facts involving the respondent's breach of duty and had deliberately misrepresented a concession by the respondent that one cheque for $4,170 had been left out of the schedule to her affidavit prepared by the respondent in the earlier proceedings, when in fact seven cheques amounting to $62,490 had been left out. She accused counsel for the respondent of having "deliberately and artfully misrepresented the facts". She accused Mr Smallbone of deliberately lying in the proceedings in connection with a decision she had taken to abort the Part X proceedings. At the end of her affidavit the appellant said: "I have shown that Mr Smallbone lied, Mr Vivante lied and Mr Ainslie QC deliberately misrepresented facts to concealed (sic) the J Creditor's breach of duty to me/my cause of action. Therefore, the Judgment it obtained on 7.5.96 was obtained by fraud" The trial judge held that: "The assertion that the judgment was obtained by fraud is, in truth, an assertion that the judgment was obtained on perjured evidence and misleading statements by counsel. The allegations are, on the face of it, highly implausible. The fact is her own credibility was found wanting by the Commissioner. The remedy for the asserted injustice was by way of appeal and her pursuit and the outcome of the appeal process has already been outlined. It is not now open to Mrs Yap to use these proceedings to endeavour to impugn the judgment upon which the judgment debt is based. It is to be noted also that in this case no question arises about the existence of any antecedent debt to found the judgment. The debt arose directly out of the order of the Commissioner in the District Court that Mrs Yap pay the legal costs of her unsuccessful action against Granich & Associates. Where a judgment has followed a full investigation at trial in which both parties participated, the Court will not reopen the matter unless a prima facie case of fraud or collusion or miscarriage of justice is made out – see Miles v The Shelf Companyof Australia (unrep, Fed Court, Sundberg J, VG7674 of 1997) [sic]. In a case in which the relevant judgment flows from a trial before another court and the appeal process has been exhausted, it is a rare case in which the Court will go behind the judgment. The position is not quite as restrictive in the case of a default judgment. In my opinion this is not a case in which it can be said that the sequestration order ought not to have been made. On the materials before the Registrar and before me it ought to have been made. All the conditions necessary for the making of the order had been satisfied at the time that it was made and whether Mrs Yap's motion is taken to be relying upon O 77 or s 153B or both, the motion will be dismissed" Grounds of Appeal 40 The notice of appeal filed by the appellant in these proceedings outlines two grounds upon which she asks this Court to set aside the decision of French J. They were expressed in the following terms: "There was uncontroverted evidence that Mr Smallbone of Respondent has recklessly misrepresented facts knowingly at the hearing held before Judge Viol on 10 August 1992 that caused His Honour to dismiss the Applicant's application which facilitated the plaintiff's fraud in D.C Action 1536/89 that resulted in the loss of the Applicant (defendant)'s home, worth more than $400,000 sold for $142,000 at sham bailiff's auction held on 5.11.93 pursuant to Writ of Fi Fa 215/93 pursuant to D.C Action 1536/89 whilst the plaintiff and Mr Vivante still owe the Applicant and her company Akibilt Pty Ltd ("Akibilt") the sum of $60,650 since 9.9.88. There was uncontroverted evidence that Mr Smallbone of Respondent has deliberately omitted seven Akibilt's cheques paid to the plaintiff amounting to $62,490 in the Schedule "CSY-1" of the Applicant's Aff:sw:7.7.92 in D.C Action 1536/89 that caused: (a) Mr Vivante to lie at the Trial of D.C Action 6202/93 held in May 1996 before Commissioner Martin in respect of repayments made by him and the plaintiff toward reduction of Akibilt's loans to them to be termed as "Loans to C.S.Yap" (b) The Respondent's Counsel, Mr Ainslie Q.C to knowingly conceal the fact by artfully conceded the Respondent has omitted one cheque for $4,170 in the Schedule "CSY-1" of the Applicant's Aff:sw:7.7.92 to deceive the Trial Judge in order to procure a Judgment in the Respondent's favour." My Reasoning 41 I have read the very lengthy submissions filed by the appellant. I have also listened to her oral submissions this afternoon. Nothing in those submissions or in the appeal book leads me to think that the learned primary judge erred in the manner contended by the appellant or at all. 42 In my respectful view, his Honour applied the correct principles of law to the facts of this matter. The District Registrar, in turn, had done the same. The appellant's grounds of appeal disclose no appellable error. It must be remembered that the judgment debt upon which the bankruptcy notice was founded, (non-compliance with which in turn founded the petition), was a judgment for costs. That judgment is the relevant debt. The appellant appealed against that judgment to the Full Court of the Supreme Court of Western Australia. That appeal, as I have mentioned, was dismissed. As I have also mentioned, when the High Court of Australia dismissed the appellant's application for special leave to appeal from the judgment of the Full Court of the Supreme Court of Western Australia, it described her application as being "entirely devoid of merit". The learned primary judge was quite right to refuse to go behind the judgment. I would dismiss the appeal. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment of the Court. Associate: Dated: 11 January 2000 Ms C S Yap appeared in person: Counsel for the Respondent: Mr B S Dodd Solicitor for the Respondent: Messrs Mallesons Stephen Jaques Date of Hearing: 29 November 1999 Date of Judgment: 29 November 1999	4,873
federal_court_of_australia:fca/single/2001/2001fca0787	decision	commonwealth	federal_court_of_australia	text/html	2001-06-27 00:00:00	New England Biolabs Inc v Commissioner of Patents [2001] FCA 787	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2001/2001fca0787	2024-09-13T22:45:32.656651+10:00	FEDERAL COURT OF AUSTRALIA New England Biolabs Inc v Commissioner of Patents [2001] FCA 787 ADMINISTRATIVE LAW – patent application – claims in relation to a purified thermostable DNA polymerase – appeal from decision of a delegate of the Commissioner of Patents – application pursuant to s 104 Patent Act 1990 – where legislative scheme leaves process of allowing amendments to Regulations – where distinction is drawn between grant of leave to amend and allowance of amendment – where patent applicant sought leave to amend patent application – where opponent alleged inequitable conduct on part of patent applicant – whether amendments allowable under legislative scheme – whether Commissioner of Patents has discretion to refuse to grant leave to amend – whether all steps of amendment process were satisfied – whether failure to satisfy all steps is fatal to amendment application Administrative Decisions (Judicial Review) Act 1977 s 3 Judiciary Act 1903 s 39B Patents Act 1990 (Cth) Chapter 10 Patents Regulations 1991 Chapter 10 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 NEW ENGLAND BIOLABS INC v COMMISSIONER OF PATENTS & ANOR V910 of 2000 EMMETT J 27 JUNE 2001 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY V910 OF 2000 BETWEEN: NEW ENGLAND BIOLABS, INC APPLICANT AND: COMMISSIONER OF PATENTS FIRST RESPONDENT F. HOFFMANN-LA ROCHE AG SECOND RESPONDENT JUDGE: EMMETT J DATE OF ORDER: 27 JUNE 2001 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The proceeding be listed on 27 July 2001 for the purpose of making orders. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY V910 OF 2000 BETWEEN: NEW ENGLAND BIOLABS, INC APPLICANT AND: COMMISSIONER OF PATENTS FIRST RESPONDENT F. HOFFMANN-LA ROCHE AG SECOND RESPONDENT JUDGE: EMMETT J DATE: 27 JUNE 2001 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This proceeding arises out of a request by the second respondent, F. Hoffmann-La Roche AG ("Roche"), to the first respondent, the Commissioner of Patents ("the Commissioner"), for leave to amend the complete specification of Australian Patent Application No. 632857 ("the Patent Application"). On 20 October 2000, a delegate of the Commissioner purported to grant Roche "leave" to amend. The applicant in the present proceeding, New England Biolabs, Inc ("NEB"), seeks to impugn the Commissioner's decision to grant leave. NEB relies on the Administrative Decisions (Judicial Review) Act 1977 ("the AD (JR) Act") and s 39B of the Judiciary Act 1903. BACKGROUNd 2 Roche is the assignee of the Patent Application. On 14 January 1993 the acceptance of the Patent Application was advertised and on 14 April 1993 NEB filed a notice of opposition to the grant of any patent pursuant to the Patent Application. On 12 November 1997, a delegate of the Commissioner made a decision upholding NEB's opposition in relation to certain claims in the complete specification but rejecting the opposition in relation to the balance of the claims. The delegate allowed Roche a period of 60 days to propose amendments to overcome problems identified in the claims that were successfully opposed. Roche did not propose any amendments during that period. 3 Rather, Roche filed notice of appeal to the Federal Court, under s 60 of the Patents Act 1990 ("the 1990 Act"), from the delegate's decision in so far as the delegate upheld the opposition. NEB was a respondent to that appeal. NEB also filed notice of appeal from the decision in so far as the delegate rejected the opposition. Both appeals came on for hearing before me on 10 April 2000. After several days, the hearing of the appeals was adjourned. On 5 May 2000, NEB filed a notice of discontinuance of its appeal and a notice of withdrawal of its appearance in Roche's appeal pursuant to leave granted by me on 1 May 2000. That leave was granted after counsel for NEB gave an undertaking to apply to the Court for revocation within three days after the grant of any patent pursuant to the Patent Application. NEB subsequently served draft particulars of the grounds of invalidity upon which it would rely in any such revocation proceeding. The draft grounds of invalidity include a claim that the Patent Application, if granted, will be liable to revocation under s 138(3)(d) of the 1990 Act because any patent granted would have been obtained on a false suggestion or representation. 4 In the course of the hearing of the appeals, Roche foreshadowed the possibility of an application to the Court for an order that the complete specification of the Patent Application be amended. On 10 May 2000, I directed Roche to file and serve on NEB and the Commissioner particulars of any amendments that Roche proposed and on 17 May 2000, Roche filed a statement of proposed amendments. On 5 June 2000, I granted leave to Roche to file a notice of motion seeking orders that the Patent Application be amended, pursuant to s 160(a) of the 1990 Act, in accordance with the statement of proposed amendments. Section 160(e) empowers the Court, on hearing an appeal from a decision of the Commissioner, to make any order that in all the circumstances it thinks fit. 5 However, I expressed reservations as to the jurisdiction of the Court under s 160, on the hearing of an appeal under s 60, to authorise amendments to a patent application (see [2000] FCA 1845). Accordingly, on 19 June 2000, Roche informed NEB and the Commissioner that it did not wish to pursue any application to the Court for leave to amend but proposed to apply to the Commissioner for leave to amend pursuant to s 104 of the 1990 Act in accordance with the Patents Regulations 1991 ("the Regulations"). On 4 October 2000, I made an order that NEB be rejoined as a party to Roche's appeal for the limited purpose only of opposing any application for an order under Regulation 6.2. Section 61 provides that the Commissioner must grant a standard patent if, in spite of opposition, the Commissioner's decision, or the decision on appeal, is that a standard patent should be granted. Under s 61(2), a standard patent must be granted within the prescribed period. Regulation 6.2 prescribes the period within which a standard patent must be granted pursuant to s 61. Under r 6.2(1), the prescribed period is from three months after publication of the notice of acceptance, to six months after that publication or such later day as, in the case of the proceedings before Court, the Court directs. the statutory scheme 6 In order to deal with the application, it is desirable to say something about the relevant parts of the 1990 Act and the Regulations. 7 Chapter 10 of the 1990 Act deals with amendments. The drafting of Chapter 10 leaves considerable detail to be dealt with by Regulations, in the way that I shall describe shortly. Part 2 of Chapter 10 is concerned with amendments of patent requests, specifications and other filed documents in various circumstances. It specifies several ways in which amendments may be made as follows: · Section 104 deals with amendments by the Commissioner pursuant to a request made by an applicant for a patent or by a patentee. · Section 105 empowers the Court to direct amendment in the course of any relevant proceedings in relation to a patent. Relevant proceedings are defined in Schedule 1 to the 1990 Act as proceedings for infringement or revocation or in which the validity of a patent is in dispute. · Sections 106, 107 and 108 empower the Commissioner to direct the filing of a statement of proposed amendments for the purpose of removing grounds of invalidity. Section 106 applies where the patent has been granted, s 107 applies where a complete patent application has been made and s 108 applies where a patentee of a petty patent has applied for an extension of the term of the petty patent. In each case, the Commissioner must be satisfied that grounds of invalidity or objection to grant could be removed by appropriate amendments. 8 Chapter 10 of the Regulations specifies and prescribes the details that are left by s 104 to the Regulations. The Regulations draw a distinction between the grant by the Commissioner of leave to amend, on the one hand, and the allowance of an amendment, on the other. They treat the granting of leave to amend by the Commissioner as a juridical act distinct from and anterior to that of the allowance of an amendment by the Commissioner. The present proceeding is concerned only with the act of granting leave to amend under the Regulations, as distinct from the act of allowing an amendment under s 104. 9 Section 104 does not itself draw that distinction as such, although the terminology found in s 104 includes both "leave to amend" and "allowance of amendment". Thus, ss 104(1) and (2) refer to a request for leave to amend and ss 104(3), (4), (5) and (6) then refer to the allowing or allowance of an amendment. 10 Section 104(1) provides that an applicant for a patent may, in accordance with the Regulations, ask the Commissioner for leave to amend a complete specification for any purpose. Under s 104(2), when an applicant asks for leave to amend a complete specification, the Commissioner must consider and deal with the request in accordance with the Regulations. 11 Under s 104(3) the Commissioner may allow an amendment subject to conditions. Under s 104(4) any person may, in accordance with the Regulations, oppose allowing an amendment. Section 104(5) prohibits the Commissioner from allowing an amendment that is not allowable under s 102. Section 104(6) provides that on the allowance of an amendment, the amendment is to be taken to have been made. Section 104(7) then allows an appeal to the Federal Court against the decision of the Commissioner allowing, or refusing to allow, a requested amendment. 12 Thus, s 104 does not expressly speak in terms the Commissioner granting leave to amend, but only in terms of the Commissioner allowing an amendment. The distinction in s 104 between asking for leave to amend and allowing an amendment appears to me to be no more than a recognition of the two aspects of the process involved, looked at from the point of view of an applicant, on the one hand, and the Commissioner, on the other. That is to say, amendment is effected pursuant to s 104 by an applicant asking for leave to amend and the Commissioner allowing the amendment. The section does not contemplate the grant of leave to amend as a juridical act distinct from and anterior to the allowance of an amendment. 13 The Regulations, however, adopt a different scheme. They identify five separate stages in the procedure to effect an amendment pursuant to s 104 as follows: STAGE 1: THE MAKING OF THE REQUEST 14 The first stage, under r 10.1, consists of the filing by an applicant of a request for leave to amend in the approved form, together with a statement of the proposed amendments. Upon receipt of a request for leave to amend, the Commissioner may require the applicant to file a statement of the reasons for the request being made and any evidence in support of the request as provided in r 10.1(3). STAGE 2: the making of a report by the commissioner 15 The second stage, under r 10.2, consists of consideration by the Commissioner of the proposed amendments and reporting by the Commissioner on three matters: · whether the request for leave to amend and the proposed amendments comply with r 10.1 and Schedule 3 (that is, whether they have been made in the appropriate form and have complied with former requirements); · whether any proposed amendment is not allowable under s 102; · whether the proposed amendments are not allowable under r 10.3 or, if made, would not otherwise be allowable under the Act or the Regulations. The Regulations do not enumerate the considerations that must be taken into account by the Commissioner in determining whether the proposed amendments if made "would not otherwise be allowable under the Act or these Regulations". I have set out in Appendix 1 to these reasons a table, prepared by counsel for the Commissioner, indicating the provisions of the 1990 Act and the Regulations that might result in an amendment not being allowable. 16 As part of the reporting process, under r 10.2(6)(a), the Commissioner must provide a copy of the request for leave to amend and a statement of the proposed amendments to any person who has opposed the grant of the patent under s 59. The opponent is entitled to file comments on the request and statement – r 10.2(7). The applicant may contest the report in writing – r 10.2(3). STAGE 3: THE DETERMINATION BY THE COMMISSIONER OF THE REQUEST BY EITHER REFUSING LEAVE PURSUANT TO REGULATION 10.4 OR GRANTING LEAVE PURSUANT TO REGULATION 10.5 17 The Commissioner must refuse to grant leave to amend if, inter alia, she reasonably believes that a proposed amendment is not allowable. The Regulations expressly refer to certain considerations that are not to prompt refusal. Under r 10.4, the Commissioner must refuse the request for leave to amend if she reasonably believes that a proposed amendment is not allowable other than for the reasons mentioned in r 10.3(4). That regulation provides that the Commissioner is not to allow an amendment if she has not yet provided an opportunity to be heard to a person to whom the Commissioner has given a copy of the request for leave to amend and a statement of the proposed amendments in the context of a patent application in relation to a micro-organism. The Regulations do not enumerate the considerations that might ground a reasonable belief that a proposed amendment is not allowable. 18 Under r 10.5(1) the Commissioner must grant leave to amend if the report made under r 10.2(1) is not an adverse report. STAGE 4: The opposition process, which is provided for if the Commissioner determines to grant leave to amend. 19 If the Commissioner determines to grant leave, a notice of the grant of leave must be published in the official journal and an opposition process commences. This stage is expressly regulated by Chapter 5 of the Regulations, which governs oppositions, including oppositions under s 104(4). Regulation 5.3(4), contained in Chapter 5, provides that a person must not oppose the allowance of a proposed amendment of a complete specification, except on the grounds that the amendment is not allowable under s 102 of the Act. stage 5: The determination to allow or refuse amendments following opposition. 20 The Commissioner must determine whether to allow or refuse the amendments. Regulation 10.4 obliges the Commissioner to refuse the request for leave to amend where the Commissioner believes that a proposed amendment is not allowable. However, under r 10.5(1) the Commissioner must grant leave to amend a complete specification if the report on the proposed amendments under r 10.2 "is not an adverse report". Regulation 10.5(2) then provides that if the Commissioner grants leave to amend she must publish a notice of that fact, where: (a) the patent request and complete specification to which the leave to amend relates have been accepted under s 49 or s 50; and (b) the proposed amendments are in respect of the complete specification. Regulation 10.5(3) authorises any person to oppose allowance of an amendment if a notice is published under r 10.5(2). 21 Regulation 10.6 deals with the time "for allowance of amendments". Thus if the Commissioner grants leave to amend and r 10.5(2) does not apply, the Commissioner must allow the proposed amendment immediately. If r 10.5(2) applies to a proposed amendment, no person opposes the allowance of the proposed amendment and the Commissioner is satisfied that no relevant proceedings are pending, the Commissioner must allow the proposed amendment at the end of time for bringing in opposition proceedings. Finally, if r 10.5(2) applies, a person opposes the allowance of the proposed amendment, the opposition is decided against the opponent and the Commissioner is satisfied that no relevant proceedings are pending, the Commissioner must allow the proposed amendment immediately after the opposition is fully determined. 22 Under s 104(3), the Commissioner may impose conditions on the allowance of an amendment. Section 104(7) provides for an appeal to the Federal Court from an allowance decision of the Commissioner. There is no provision for an appeal from a decision granting leave to amend or a reporting decision. 23 Thus, the Regulations clearly draw a distinction between the granting of leave to amend on the one hand and the allowing of an amendment on the other hand. The two steps occur at different times. A patent applicant may ask for leave to amend and the Commissioner must either allow the amendment or not allow the amendment. However, before deciding whether to allow an amendment, any person who wants it must be given the opportunity of opposing the allowance of the amendment. In so far as the Regulations contemplate an anterior grant of leave to amend before opposition proceedings are commenced, they must be taken to be doing no more than specifying the procedure that leads to any person being afforded the opportunity to oppose the amendment. That procedure, however, permits the Commissioner to refuse leave to amend whether or not the amendment is opposed. 24 The Regulations specify a process for working out either the allowance or non allowance of an amendment, following a request for leave to amend. The grant of leave to amend contemplated by Regulation 10.5 is not the response to the request for leave to amend pursuant to s 104(1). Section 104(2) requires the Commissioner to deal with the request for leave to amend in accordance with the Regulations. The ultimate allowance of amendments is dealt with by Regulation 10.6, which specifies the time when the Commissioner must allow an amendment if it is to be allowed. However, that point is never reached if Regulation 10.4 applies and the Commissioner is obliged to refuse a request for leave to amend. THE DECISION UNDER REVIEW 25 On 19 June 2000, Roche lodged with the Commissioner a request for leave to amend the complete specification of the Patent Application. Attached to the request was a statement of proposed amendments. The proposed amendments were substantially identical to those proposed in the statement of 17 May 2000 (see paragraph [4] above). On 20 June 2000, pursuant to r 10.2(6), the Commissioner's delegate informed NEB of Roche's request and invited comments on the proposed amendments within two months from that date. 26 On 21 August 2000, NEB delivered to the Commissioner's delegate detailed comments on the proposed amendments, concluding that the Commissioner should not exercise her discretion to grant Roche leave to amend as requested. In the comments, NEB asserted that Roche, in order to advance its central assertion that the Patent Application related to a patentable invention, had made a number of representations that Roche knew to be false and misleading. NEB asserted that such "inequitable conduct" was such as to disentitle Roche to the favourable exercise of the Commissioner's discretion to grant leave to amend as requested. NEB contended that to grant leave to amend in the face of such "inequitable conduct", would be "to reward deliberate deception and mock the manifest intention"of the 1990 Act. 27 On 18 September 2000, the Commissioner's delegate wrote to NEB saying that he had "decided to grant the applicants leave to amend their patent". The delegate said that, in so deciding, NEB's comments of 21 August 2000 had been taken into account. However, the delegate said that NEB's comments went "to the equity of allowing the amendments" and that such equity was not within the administrative power of the Commissioner. He said that NEB's comments were beyond the scope of s 102 of the 1990 Act and, therefore, could not be used as the basis of adverse report. The delegate concluded by saying that, as there was no adverse report, the Commissioner must allow Roche leave to amend. 28 On 19 September 2000, the Commissioner's delegate wrote to Roche enclosing a copy of the comments filed by NEB and the delegate's response to those comments. Roche was invited to respond with any comments of its own within one month from 19 September 2000. The delegate said that, while he considered that no lawful ground of objection applies to the request to amend, further consideration of the request would be deferred until Roche responded to NEB's comments or did not respond within the time given. 29 Apparently there was no response from Roche and on 25 October 2000, the Commissioner's office wrote to Roche advising Roche that the Commissioner's delegate considered that: · Roche's request for leave to amend "is as prescribed"; and · leave had been granted in accordance with r 10.5 to amend the complete specification of the Patent Application. On 27 October 2000, the delegate also wrote to NEB saying that Roche had made no response to NEB's comments and that on 20 October 2000 the Commissioner's delegate had granted leave to amend. Both letters indicated that the proposed amendments would be advertised on 9 November 2000. THIS PROCEEDING 30 By its application, NEB asks the Court to review: · the decision of the Commissioner made on or about 20 October 2000 reporting that the amendments filed with Roche's request for leave to amend on 20 June 2000 were allowable under the 1990 Act ("the first decision"); · the decision of the Commissioner made on 20 October 2000 that Roche be granted leave to amend the Patent Application ("the second decision"); · the conduct of the Commissioner engaged in for the purpose of making the second decision. 31 The proceeding was commenced by application filed by NEB on 22 November 2000. In the first instance, NEB relied on grounds related to the failure by the Commissioner's delegate to have regard to what it characterised as the "inequitable conduct" of Roche. During the course of final addresses, after the evidence was complete, I raised the question of whether a report had been prepared that satisfied the requirements of r 10.2(1). The hearing was adjourned to enable the parties to consider that question. As a consequence, an internal document ("the Document") of the Commissioner was tendered and admitted into evidence. A copy of the Document is set out in Appendix 2. At the same time NEB was granted leave to file an amended application. The parties then made further submissions on the new issues. 32 The grounds of the application, as amended, may be summarised as follows: (a) The making of the first decision was an improper exercise of the power conferred by the 1990 Act and the Regulations in that · in making that decision the Commissioner's delegate failed to take a relevant consideration into account, namely, Roche's inequitable conduct. · the exercise of the power by the Commissioner's delegate in making the first decision was so unreasonable that no reasonable person could have so exercised the power, in that it was legally perverse for the delegate, charged with a general duty of protecting the public interest on behalf of the Commissioner, to refuse to consider a factor of such great importance as fraud or inequitable conduct. · in making the first decision the delegate exercised the discretionary powers so conferred in accordance with a rule or policy without regard to the merits of the particular case, as he adhered to a rule that amendments should only be rejected as not allowable if they contravened the provisions of s 102 of the 1990 Act without regard to the merits of the request. (b) The making of the first decision involved an error of law as the delegate misconstrued the requirements of the exercise of the power in that he erroneously considered that Roche's inequitable conduct was an issue that: (i) lay exclusively within the power of a court to determine, and (ii) did not fall to be considered within the scope of the administrative power of the Commissioner. (c) The conduct engaged in by the Commissioner's delegate for the purpose of making the second decision was conduct that rendered the making of that decision an improper exercise of that power in that: · the conduct involved failing to take a relevant consideration into account, namely, Roche's inequitable conduct. · the conduct rendered the exercise of the power so unreasonable that no reasonable person could have so exercised the power, in that it was legally perverse for the delegate, charged with a general duty of protecting the public interest on behalf of the Commissioner, to refuse to consider a factor of such great importance as fraud or inequitable conduct. · the delegate exercised the discretionary power so conferred in accordance with a rule or policy without regard to the merits of the particular case, as he adhered to a rule that amendments should only be rejected as not allowable if they contravened the provisions of s 102 of the 1990 Act without regard to the merits of the request. (d) The conduct engaged in by the Commissioner's delegate for the purpose of making the second decision was conduct which involved an error of law, as the delegate misconstrued the requirements for the exercise of the power conferred in that he erroneously considered that Roche's inequitable conduct was an issue that: (i) lay exclusively within the power of a court to determine, and (ii) did not fall to be considered within the scope of the administrative power of the Commissioner. (e) The second decision was not authorised by the 1990 Act or the Regulations, as the condition precedent for the authorisation of a decision to grant leave to amend was not satisfied, in that there was no valid report on the proposed amendments as was required and upon which a valid exercise of the power conferred by the 1990 Act depended, as the first decision, reporting that the proposed amendments were allowable, did not constitute a valid report. (f) The second decision involved an error of law in that the delegate erroneously considered that the power to grant leave to amend a complete specification can be exercised in circumstances in which: (i) there is no adverse report that the proposed amendments are not allowable, whereas that power can only be exercised in circumstances in which there is a report that is not adverse; (ii) the report required for an exercise of power is not the final report, whereas the report must be a final report which takes into account any comments of an opponent filed and must take into account any matters raised by the applicant for a patent upon the applicant's receipt of such report. 33 The amended application claims the following relief: "(a) A declaration that there was no valid report prepared which satisfied the requirements of regulation 10.2(1) upon which the delegate could rely in granting Roche leave to amend pursuant to regulation 10.5(1)(a). (b) A declaration that the decision of the Commissioner made on 20 October 2000 granting Roche leave to amend Australian Patent Application No. 632857 was null and void and of no effect. (c) In the alternative to (a) and/or (b), an order quashing or setting aside the first and second decisions. (d) A declaration that, in making a decision, pursuant to s.104 of the Patents Act 1990 and r 10.2(1) of the Regulations, reporting on whether proposed amendments are not allowable under regulation 10.3 or, if made, would not otherwise be allowable under the Patents Act 1990 or the Regulations the Commissioner is obliged to take into account as a relevant consideration the allegation, if made, that an applicant for a Patent has engaged in inequitable conduct. (e) A declaration that, in making a decision, pursuant to s.104 of the Patents Act 1990 and regulation 10.5(1) of the Regulations, whether to grant leave to amend the Commissioner is obliged to ensure that the report on the proposed amendments under regulation 10.2(1), upon which an exercise of the power conferred by regulation 10.5(1) depends, has taken into account as a relevant consideration the allegation, if made, that an applicant for a Patent has engaged in inequitable conduct. (f) In the alternative to (d) and/or (e), a declaration that regulation 10.2(1) and regulation 10.5(1)(a) of the Patents Regulations 1991 (Cth) are invalid. (g) An order by way of mandamus, directing the Commissioner to determine according to law Roche's request for leave to amend Australian Patent Application No.632857 made on 20 June 2000. (h) Such further or other declarations or relief as to the Court may seem appropriate. (i) Costs." JURISDICTION 34 NEB relies on three alternative and concurrent sources of jurisdiction to support the proceeding as follows: · the AD(JR) Act on the basis that the decisions impugned are decisions under an enactment; · section 39B(1) of the Judiciary Act, on the basis that a writ of mandamus is sought against the Commissioner as an officer of the Commonwealth; · section 39B(1A) of the Judiciary Act, on the basis that the proceeding involves a matter arising under a law made by the Commonwealth Parliament, namely, the 1990 Act. 35 Under the AD(JR) Act, a reviewable decision is one for which provision is made by or under an enactment. In the present case, there has been no decision under s 104 such as would attract the AD(JR) Act. The question is whether there has yet been a decision under the Regulations. 36 Generally, but not always, a reviewable decision will be a decision that is final or operative and determinative, at least in a practical sense, of the issue of fact falling for consideration. A conclusion reached as a step along the way in the course of reasoning leading to an ultimate decision would not ordinarily amount to a reviewable decision, unless the statute provides the making of a finding or ruling on that point so that the decision, though an intermediate decision, might accurately be described as a decision under an enactment – Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 337. 37 The Commissioner's report pursuant to r 10.2(1) is an intermediate step in a decision-making process. It is a step that the Regulations specifically require the Commissioner to take. It is a step required before granting leave to amend. That is, in turn, a step required prior to the allowance of an amendment. Under s 3(3) of the AD(JR) Act, where provision is made by an enactment for the making of a report or recommendation before a decision is made in the exercise of the power under that enactment or under another law, the making of such a report or recommendation is itself deemed to be the making of a decision for the purposes of the AD(JR) Act. The making of a report under r 10.2(1), therefore, may be a reviewable decision. 38 If there is a reviewable decision, there is no alternative adequate avenue of redress for NEB if there is any substance in its complaints. The Regulations limit the ground of opposition to amendments to those mentioned in s 102. Thus, the conduct of Roche prior to the time of its request for leave to amend could not be raised in opposition proceedings. A fortiori, any appeal to the Federal Court under s 104(7) would not permit a consideration of that conduct. 39 Section 104 contemplates that : · asking the Commissioner for leave to amend, · opposing the allowance of an amendment, and · considering and dealing with the request for leave to amend, must be in accordance with the Regulations. The decision that the Commissioner makes is to allow or refuse to allow the amendments. In so far as the Regulations merely specify he procedure contemplated by s 104, the grant or refusal of leave is not a decision that can be characterised as final or operative and determinative. It is no more than a step in the process of making a decision whether or not to allow the amendment. 40 Nevertheless, assuming their validity, rr 10.4 and 10.5 require, in effect, that the Commissioner must either refuse a request for leave to amend or grant leave to amend. Doing either may possibly be characterised as a decision under an enactment, namely, the Regulations. Further, as I have said, assuming the validity of the Regulations, the making of the report required by r 10.2(1) may be deemed to be the making of a decision for the purposes of the AD(JR) Act by the operation of s 3(3) of that Act. Having regard to the conclusion I have reached concerning the substantive matters, it is not necessary to decide. STANDING 41 Roche disputes NEB's standing to bring proceedings on the basis that NEB is not a person whose interests are adversely affected by the relevant decisions and that, accordingly, NEB has no standing under s 37B of the Judiciary Act and is not a person aggrieved by the decisions within the meaning of the AD(JR) Act. Roche's contention is based on the fact that NEB discontinued its appeal and withdrew its appearance in Roche's appeal – see paragraph [3] above. 42 NEB bases its standing on the circumstances that it filed notice of opposition in respect of the Patent Application and prosecuted that opposition to the stage of decision by the Commissioner's delegate. It also relies on the fact that it has undertaken to commence revocation proceedings if a patent is granted. It withdrew its involvement in the appeals only after I determined that the appeal process would not involve a full consideration on the merits of the validity of any prospective patent. 43 Section 104(4) provides that: "(4) The Minister or any other person may, subject to and in accordance with the regulations, oppose allowing an amendment." Regulations 10.2(6) and (7) relevantly provide: "(6) If: (a) the grant of a standard patent is opposed under section 59 of the [1990] Act …and the applicant or patentee has requested leave to amend the patent request or complete specification concerned, the Commissioner must: (c) give a copy of the request for leave to amend and the statement of proposed amendments to the opponent …; and (d) invite that opponent … to comment on the request and statement. (7) The opponent … may file comments within 21 days … of being given the copy of the request for leave to amend and the statement under paragraph (6)(c)." 44 There is no definition of the term "opponent" in Chapter 10 of the Regulations. However, the term is defined for the purposes of Chapter 5 of the Regulations. Chapter 5 applies to an opposition under s 104(4). The definition in Chapter 5 is as follows: "opponent means a person who has filed a notice of opposition." While the definition is not expressed to apply in Chapter 10, I consider that the term opponent should be understood as having the same meaning as in Chapter 5. 45 If the grant of leave to amend as contemplated by the Regulations is a decision, an opponent would clearly have standing to challenge that decision. Roche contends, however, that NEB is no longer an opponent within the meaning of Regulation 10.2(6). Roche contends that the expression "is opposed" in Regulation 10.2(6)(a) should be construed as "is being opposed". NEB's opposition to the Patent Application has been determined by the Commissioner. NEB has withdrawn its appeal from that decision and has withdrawn its appearance in Roche's appeal. Accordingly, so it is said, NEB is no longer an opponent who is entitled to be given a copy of the request for leave to amend and be invited to comment. 46 The function of comments pursuant to r. 10.2(7) is limited. There is no express requirement for the Commissioner to take them into account. However, it is clearly implicit in the scheme of the Regulations that the Commissioner should have regard to an opponent's comments before deciding whether to grant leave or to refuse to grant leave. Even if the Commissioner's function is not to exercise a discretion, the comments could assist the Commissioner in making a determination as to whether there are grounds for refusing to grant leave. 47 I consider that NEB is a person interested in the questions raised in the proceeding. NEB has at all times maintained its objection to any grant pursuant to the Patent Application. It is a person who had filed notice of opposition. It has not ceased to be a person who filed notice of opposition. It may be that the consequence of such a literal interpretation of r 10.2(6) is that where an application for leave to amend is made after grant, a person who had filed notice of opposition, possibly many years before, would still be entitled to be given a copy of this request and to be invited to comment. Such a consequence is consistent with the scheme of the Regulations. A person who opposed a grant of a patent does not necessarily cease to have any interest in the matter simply because the patent has been granted. I am satisfied that NEB has standing to bring this proceeding. does the commissioner have a discretion? 48 The grounds advanced by NEB for impugning whatever decision has been made by the Commissioner at this stage are that the Commissioner's delegate: (a) inflexibly applied a rule or policy without regard to the merits of the case; (b) failed to take into account relevant considerations, being considerations as to Roche's conduct; (c) made the decision unreasonably in that it was legally perverse to refuse to consider factors of such great importance as Roche's conduct; (d) committed an error of law in misconstruing the requirements for proper exercise of the power in so far as he erroneously considered that Roche's conduct did not fall to be considered within the scope of the Commissioner's administrative (non discretionary) power. NEB contends that the Commissioner's power in making a report under r 10.2(1) and granting leave to amend under r 10.5(1) is discretionary and is to be exercised in accordance with the common law principles governing the exercise of discretion. That requires attending to the merits of each individual case and taking into account all relevant considerations. In particular, NEB says that, in considering whether to grant leave, the Commissioner is bound, or is at least entitled, to have regard to inequitable conduct of an applicant up to the stage of the request for leave to amend. 49 The Commissioner, on the other hand, takes the position that there is nothing in the Act or the Regulations that imports a discretion on the part of the Commissioner to consider matters other than those specifically referred to in the 1990 Act and the Regulations. Those provisions specify those types of amendments that are allowable and those that are not. Once a report under s 10.2(1) has been made, which is not adverse, the Commissioner must grant leave to amend. If there is no opposition, or if there is and the opposition is determined in favour of the applicant for amendment, then the Commissioner must allow the amendments. 50 The only grounds mentioned in the Regulations for not allowing an amendment are that: · the proposed amendments are not allowable under s 102, unless the amendment is for the purpose of correcting a clerical error or an obvious mistake made in, or in relation to, a complete specification; · the proposed amendments are not allowable under Regulation 10.3; · the proposed amendments would not otherwise be allowable under the Act or the Regulations. NEB does not contend that any of those grounds arises in the present case. 51 Section 102(1) provides that an amendment of a complete specification is not allowable if, as a result of the amendment, the specification would claim matter not in substance disclosed in the specification as filed. Section 102(2) provides that an amendment of a complete specification is not allowable after acceptance if, as a result of the amendment, a claim of the specification would not in substance fall within the scope of the claims of the specification before amendment or the specification would not comply with s 40. However, under s 102(3), s 102 does not apply to an amendment for the purpose of correcting a clerical error or an obvious mistake made in, or in relation to, a complete specification. 52 A request for leave can be made for any purpose – see s 104(1). Two purposes are specified in s 104(1)(a) and (b). However, the section makes clear that the enumerated purposes are not exhaustive and that an amendment can be made for any other purpose. There is no reason to conclude that the Commissioner has any discretion to refuse leave to amend or not to allow an amendment by reason of the purpose. Rather, the contrary is likely, since s 104(1) renders an applicant or patentee's purpose irrelevant. 53 Regulation 10.1(3) empowers the Commissioner to require an applicant to file a statement of the reasons for the request being made and any evidence in support of the request. However, in my view, the presence of r 10.1(3) does not signify that the Commissioner has any discretion to refuse to grant leave to amend if a report made under r 10.2 is not adverse. Regulation 10.1(3) is related to s 104(5), which prohibits the Commissioner from allowing an amendment that is not allowable under s 102. 54 Regulation 10.1(3) authorises the Commissioner to ascertain whether a request is being made for the purpose of correcting a clerical error or an obvious mistake. If the Commissioner is satisfied that there has been a clerical error or an obvious mistake, the prohibition in s 104(5) does not apply and an amendment may be allowed, even though the result of the amendment would be that the specification will claim matter not in substance disclosed in the specification as filed. The presence of Regulation 10.1(3) is, therefore, not an indication that any discretion resides in the Commissioner to refuse a request for leave to amend. 55 An application under s 104 may be made by an applicant for a patent, prior to grant, or by a patentee after grant. The process contemplated by s 104 and Part 10 of the Regulations is the same in each circumstances. However, that of itself does not suggest that a discretion is attendant upon the Commissioner's power in either circumstance. 56 Section 104(7) provides for an appeal to this Court against a decision of the Commissioner allowing, or refusing to allow certain requested amendments. As indicated above (see paragraph [19]), r 5.3(4) provides that a person may not oppose the amendment of a complete specification except on the ground that the amendment is not allowable under s 102. When s 104(1) is read in the context of s 104(5) and r 5.3(4), such a right of appeal must be taken to be limited to the grounds set out in s 102. As I have already observed, s 104 provides the mechanism for review of the Commissioner's decisions allowing or disallowing amendments. It would be curious if the statutory regime excluded review on the Commissioner's decisions allowing amendments on other grounds. This points to a legislative intent that the Commissioner should not have a discretion to allow or disallow amendments. 57 Section 105 empowers the Court to direct an amendment in the context of relevant proceedings. The Court's power is discretionary except to the extent that, under s 105(4), the Court may not direct an amendment that is not allowable under s 102. On the other hand, the Court must exercise that discretion judicially. In so doing, the Court exercises the judicial power of the Commonwealth and must do so subject to all of the safeguards that apply in relation to the exercise of that power. 58 The position of the Commissioner, as an administrative officer, is in stark contrast. The detailed nature of the regulatory scheme provided for in Chapter 10 of the Regulations indicates an absence of a general discretion such as would permit account to be taken of the conduct of an applicant prior to the making of the request for leave to amend. The process contemplated by the Regulations prior to publishing notice of the grant of leave under r 10.5(2) is not appropriate for an enquiry of the nature suggested by NEB. The Commissioner, or her delegate, is required to make a determination in opposition proceedings, whether under s 60 or under s 104. However, the Commissioner, as an administrative officer, is ill equipped to conduct what could be a wide ranging enquiry involving assessment of credit in order to determine whether conduct of an applicant prior to making a request for leave to amend should in some way disentitle the applicant to leave. 59 Under s 216(1) of the 1990 Act, the Commissioner must not exercise any discretionary power adversely to any person applying for the exercise of that power without first giving that person a reasonable opportunity to be heard. The opportunity afforded by r 10.2(3) to contest in writing would hardly be a reasonable opportunity to be heard. If NEB's contentions were correct, s 216 would apply. That could well entail a much more complicated and extensive enquiry than would be involved at the opposition stage. There is simply no warrant for giving the Regulations such a construction in the light of the presence s 216. The reference in r 10.2(3) to permitting an applicant to contest a report in writing is clearly not intended to be a reference to being given the opportunity to be heard. The Regulations, therefore, do not contemplate that the making of a report involves the exercise of a discretionary power. 60 Regulation 10.2(1)(c) requires the Commissioner to report on whether the proposed amendments would not otherwise be allowable under the Act or the Regulations. The clear intention of r 10.2(1)(c) is to require the Commissioner to embark on the purely administrative task of checking whether there is any provision in the 1990 Act or the Regulations that would impede the proposed amendment. If the Commissioner reports that there is, the applicant for leave must be given the opportunity to contest the report. 61 There is no provision of the 1990 Act or the Regulations that indicates that prior conduct of an applicant for leave to amend would render the amendment not allowable. In particular, for example, there is no provision equivalent to ss 138(3)(d) or (e) of the 1990 Act in relation to the allowability of an amendment. Section 138(3)(d) provides that the Court may revoke a patent on the ground that the patent was obtained by fraud, false suggestion or misrepresentation. Section 138(3)(e) provides that the Court may also revoke a patent on the ground that an amendment of the patent request or the complete specification was made or obtained by fraud, false suggestion or misrepresentation. 62 If the Regulations contemplated that the Commissioner had a discretion not to allow an amendment by reason of the prior conduct of the applicant, one would expect that the Commissioner would be required to report on that conduct so that the applicant for leave could contest the report pursuant to r 10.2(3). However, there is no requirement for any report on any matter except a matter that would have the effect that the proposed amendments are not allowable under the Act or the Regulations. 63 The procedure in r 10.2 gives the applicant a right to contest the report in writing. There is no restriction or limitation as to the grounds upon which an applicant or patentee can contest the report. However, a report is not required to advert to, for example, inequitable conduct on the part of a patent applicant. Thus, if the applicant is correct in its assertion that the Commissioner retains a discretion to refuse leave to amend on the grounds of inequitable conduct, it would be possible for the Commissioner to refuse to exercise her discretion, without adverting to the existence of inequitable conduct. In that situation, NEB would have no means of knowing the reason for the Commissioner's decision. 64 Regulation 10.2(6) provides that if the grant of a standard patent is opposed under s 59 and the applicant has requested leave to amend the complete specification, the Commissioner must give a copy of the request for leave to amend and the statement of proposed amendments to the opponent and invite the opponent to comment on the request and statement. Such a process is not expressly contemplated by s 104. Section 104(2) requires that the Commissioner must consider and deal with the request in accordance with the Regulations. In so far as r 10.2(6) affords the Commissioner a means of obtaining comments prior to advertising the proposed amendments, the provision must be considered as specifying the manner in which the Commissioner must consider and deal with the request for leave to amend. 65 Regulation 10.2 requires that the Commissioner report on whether certain negatives are applicable, namely: · the request and statement of proposed amendments do not comply with the formal requirements of r 10.1; · any proposed amendment is not allowable under s 102; · the proposed amendments are not allowable under r 10.3; · the proposed amendments are not otherwise allowable under the Act or the Regulations. If the Commissioner reports that the negatives do apply, the report is characterised as an adverse report and, accordingly, r 10.5(1) would not be applicable. 66 Regulations 10.4 and 10.5 must be presumed to cover the field in their effect, although they do not do so in their language. If the Commissioner reports that any of the negatives applies, the Commissioner must make an adverse report. Thus an adverse report signifies that the Commissioner reasonably believes that the proposed amendment is not allowable. As a result, r 10.4(a) must be read as meaning that the report is an adverse report. If r 10.4 is not so read, circumstances could arise that do not fall within either r 10.4 or r 10.5. Theoretically, it would be possible that a report be adverse, but the Commissioner, notwithstanding that fact, not believe that the proposed amendment is not allowable. There is nothing in the 1990 Act or the Regulations to suggest that is intended. 67 All of the considerations outlined above lead to the conclusion that the Commissioner's delegate did not misconceive his function. The Commissioner had no discretion to refuse to grant leave to amend on the basis of the conduct of Roche prior to requesting such leave. The Commissioner had no discretion to decline to allow the amendments requested on the basis of the conduct of Roche prior to making its request for leave to amend. Accordingly, the relevant grounds of review are not made out and declarations (d) and (e) sought by NEB should be refused. THE STATUS OF THE FIRST AND SECOND DECISIONS 68 Regulation 10.2(1) sets out expressly the matters on which the Commissioner must report. NEB contends that the Commissioner has failed to comply with that regulation and that, accordingly, the Commissioner could not validly grant leave to amend under r 10.5(1)(a). The Commissioner could only grant leave after there had been a valid report that was not "an adverse report" pursuant to r 10.2(1). NEB asserts, therefore, that the purported grant of leave was null and void. 69 In the first instance, counsel for the Commissioner contended that the letter of 25 October 2000, referred to in paragraph [29] above, constituted the report made pursuant to r 10.2(1). Counsel for Roche supported that contention. However, following the admission into evidence of the Document (see paragraph [31] above), the Commissioner now contends that completion of that document satisfied the requirements of r 10.2(1). 70 The printed part of the Document includes a statement to the effect that the proposed amendments are allowable under the Act and the Regulations. Accordingly, the printed form of the Document is apt only where the Commissioner or her delegate so concludes. If a different conclusion were reached by the Commissioner or her delegate, the printed form could not be used without amendment. 71 Some of the blank spaces in the Document have been completed as indicated in Appendix 2. Thus, in the section headed "Allowable Amendments", reference is made to specification and drawings "filed on 19.06.00". The examining delegate of the Commissioner has signed the form, which has been dated "19/10/00". 72 The next two sections of the Document are intended to relate to the stages of granting leave and allowing amendment respectively. The first section has been completed by indicating that there is no mortgagee or exclusive licensee. That section has been signed by the acceptance delegate of the Commissioner and dated "20/10/00". The section dealing with allowance of amendment has not been completed except to the extent of indicating that there is no mortgagee or exclusive licensee. The section at the foot of the Document has been partly completed by referring to the date on which the request was to be advertised and the date on which Roche was advised of that date. 73 Regulation 10.2(1) is mandatory in its terms. It provides as follows: "For the purposes of subsection 104(2) of the Act…, the Commissioner must report on whether: (a) the request for leave to amend and the statement of proposed amendments do not comply with regulation 10.1… and Schedule 3; and (b) any proposed amendment of a complete specification is not allowable under section 102 of the Act…; and (c) the proposed amendments are not allowable under regulation 10.3… or, if made, would not otherwise be allowable under the Act or these Regulations." 74 It is difficult to see how the Document as completed could satisfy the requirement that the Commissioner must report on whether: · documents do not comply, · any proposed amendment of a complete specification is not allowable under s 102, · the proposed amendments are not allowable under regulation 10.3 or would not otherwise be allowable. Those matters are simply not adverted to in the Document. The Document is not expressed to be a report. It contains no reference to r 10.2(1). It does not say anything about the three matters that are identified in paragraphs (a), (b) and (c) of r 10.2(1). 75 The use of the word "whether" and the negative in each of the three paragraphs is curious. It would have been possible for the regulation to require the Commissioner to report on: · whether or not the documents comply with r 10.1, · whether or not any proposed amendment is allowable under s 102, · whether or not the proposed amendments are allowable under r 10.3 and are otherwise allowable under the Act and the Regulations. If the Regulations were so structured, there would be no doubt that the Commissioner would be required to express a view about each of those matters. 76 The structure of regulation 10.2(1) might suggest, therefore, that the Commissioner is only required to report if any one of the three requirements is not satisfied. Such a construction may have been open if paragraphs (a), (b) and (c) were separated by the word "or". However, there are several matters that suggest against such a construction. First, paragraphs (a), (b) and (c) are separated by the word "and". I consider that that indicates a positive requirement that the Commissioner report on the three matters, irrespective of whether the report is favourable or unfavourable. 77 Further, the Commissioner must give a copy of each report to the applicant or patentee, as required by r 10.2(2). That indicates that there must be a document capable of being characterised as a "report". In addition, r 10.5(1)(a) assumes that there will be a report under r 10.2(1) in any event. That regulation provides that the Commissioner must grant leave to amend a patent request, complete specification or other filed document: "(a) if the report on the proposed amendments under subregulation 10.2(1) is not an adverse report." (my emphasis) 78 I do not consider that the completion of the Document satisfied the requirement of r 10.2(1), namely, that the Commissioner report whether any of the matters is applicable. Accordingly, there has been a failure to comply with the requirements of r 10.2(1). 79 Even if completion of the Document could constitute reporting by the Commissioner, there has been a failure to comply with the requirements of r 10.2(2) that the Commissioner give a copy of the report to Roche. Roche, of course, makes no complaint about any such failure. Any failure to give a copy to Roche could be waived and would not lead to invalidity. However, the failure to report as required by r 10.2(1) may be in a different category. 80 An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid. Whether it is invalid will depend upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with a condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition – Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 paragraph [91]. 81 NEB suggests that the purpose of reporting is three-fold as follows: (a) to provide a foundation for the exercise of the power to grant leave to amend; (b) to record, for the decision-maker who decides whether or not to grant leave to amend, the basis upon which the decision may be made; (c) to record, for the benefit of the public, that consideration has been given to the separate criteria expressly referred to in the Regulations. 82 NEB argues that the language of r 10.5(1)(a), and the scheme of Chapter 10 generally, confirm that a report is an essential preliminary or a minimum pre-condition to the grant of leave. However, while the language of the Regulations clearly requires that a report be brought into existence, it does not necessarily follow that the creation of a document that satisfies that requirement is an essential preliminary or a pre-condition to the grant of leave. That is the very question in issue. 83 No doubt a report would function as a record of the decision-maker who decides whether or not to grant leave. However, the essence of the requirement to report in r 10.2(1) is to convey whether there is any impediment to allowing the proposed amendments. A record such as the Document is capable of recording the conclusion reached by the Commissioner or her delegate that there is no impediment to the allowing of the amendments proposed by Roche. 84 There is no requirement that any report be made available for the public. There is no requirement that an opponent be furnished with a copy of a report. So long as the Commissioner or her delegate adverts to the relevant questions and is satisfied that the amendments are allowable, there is no public interest in having a report of the nature described in r 10.2(1). 85 Having regard to the conclusion that I have reached concerning the nature of the function performed by the Commissioner in granting leave, as a purely administrative step, I do not consider that any prejudice would flow to any person by reason of the absence of a report that satisfies the requirements of r 10.1(2). To the extent that the grant of leave is justiciable, the only question is whether the Commissioner is satisfied that the amendments are allowable. 86 As I have said (see paragraph [23] above), the regime introduced by the Regulations, in so far as it draws a distinction between the granting of leave to amend and the allowance of an amendment, is not one contemplated by the 1990 Act. It is a distinction introduced simply as a matter of administrative convenience. On the other hand, the language of r 10.2(1) is mandatory. However, it does not follow that the failure to comply with that procedural requirement leads to any invalidity of the decision to grant leave. 87 The Document evidences the fact that the Commissioner's delegate considered Roche's request for leave to amend and was satisfied that the proposed amendments are allowable under the Act and the Regulations. This suggests that, if the delegate had reported as required by r 10.2(1), he would have reported that: · the request for leave to amend and the statement of proposed amendments comply with r 10.1; · the proposed amendment is allowable under s 102; · the proposed amendments are allowable under r 10.3 and are otherwise allowable under the Act and the Regulations. If the delegate were not satisfied as to those matters, he could not have made the notation in the Document signifying that the amendments are allowable. 88 In the circumstances, I do not consider that the failure to comply with the requirements of r 10.2(1) leads to the invalidity of any decision made under r 10.5 to grant leave to amend the complete specification. CONCLUSION 89 I consider that, having regard to the conclusions that I have reached, the application should be dismissed with costs. However, I will first give the parties the opportunity of considering my conclusion. If there is any question as to the appropriate orders, I will give the parties the opportunity to make further submissions. I certify that the preceding eighty-nine (89) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate: Dated: 27 June 2001 Counsel for the Applicant: Mr B Caine with Ms P Tate Solicitor for the Applicant: Blake Dawson Waldron Counsel for the First Respondent: Ms A Bowne Solicitor for the First Respondent: Australian Government Solicitor Counsel for the Second Respondent: Dr A Bennett with Mr S Burley Solicitor for the Second Respondent: Sprusons Solicitors Date of Hearing: 8 & 10 May 2001. Final submissions received 12 June 2001. Date of Judgment: 27 June 2001 APPENDIX 1 1. Regulation 10.2(1)(c) of the Patents Regulations 1991 ("the Regulations") states: "the proposed amendments are not allowable under regulation 10.3 ("amendments not allowable") or, if made, would not otherwise be allowable under the Act or these Regulations." 2. Some examples of sections of the Patents Act 1991 ("the Act") or Regulations that may affect amendments and may need to be considered by the delegate in examining amendments made under s.104 of the Act are set out below. The sections that the delegate considers will depend on the nature of the amendments sought and the timing of the application to amend. Act/ Description Of Provision Application/example: Regulation s.15 Section 15 states that a patent may only be granted to the categories of persons identified, including persons who are entitled to have the patent assigned to them or who derive title to the invention from the inventor or another person identified in the section. If a patent request is amended to change the identity of the applicant, it will be necessary to ensure that the new applicant falls into one of those categories. s.24 Section 24 states that certain information must be disregarded in determining whether an invention is novel or involves an inventive step. An opponent may seek to amend its notice of grounds of objection to the grant of a patent to include such information. s.43 Section 43(1) states that each claim of a specification must have a priority date. Section 43(2) states that the priority date of a claim is the date of filing of a specification, or date determined under the Regulations. If an amendment has the effect of amending the priority date relied on in an application, it will be necessary to consider whether that may affect the claims of novelty, inventive step, etc. s.59 Section 59 sets out the only grounds for opposition to the grant of a patent. If a statement of grounds of opposition is amended, the amendment should not include any grounds other than those set out in s. 59. The amendment of a statement is also subject to the requirements reg 5.9. s.71 Section 71 sets out the requirements for an application to extend the term of a patent. An amendment to an extension of the term of the patent needs to be considered to determine whether it complies with the requirements set out in s.71. s.81 Section 81 sets out the requirements that need to be satisfied for a patent of addition. Amendments to a patent of addition need to be considered carefully to examine whether the requirements of ss.81(1) are satisfied. s.95 Section 95 sets out the requirements for a patent request relating to a Convention application. Any amendment to such a patent request would have to comply with this section. s.103 Section 103(1) provides that where a person is registered as the mortgagee or exclusive licensee of a patent, an amendment of the complete specification is not allowable unless the mortgagee or licensee has consented in writing to the amendment. Section 103(2) sets out various action that can be taken if a mortgagee or licensee unreasonably refuses consent. s.112 A complete specification relating to a patent must not be amended, except under s.105, while relevant proceedings in relation to the patent are pending. s.223 Section 223(2) requires that applications for extensions of time be made in accordance with the Regulations. Reg 3.20(6) The applicant must filed a copy of the specification relating to the patent referred to in paragraph 47(1)(b) of the Act that is (a) certified by the official head of the Patent Office of the prescribed foreign country by which the patent was granted; and (b) otherwise verified to the reasonable satisfaction of the Commissioner before acceptance, unless the applicant makes a request under s.47(2) of the Act. Any amendments to the certification need to follow the same procedure set out in the Regulations. Reg 5.3A/5.9 These Regulations deal with the form of amending a notice of opposition, or amendment of statement of opponent. While s.104 allows a party to amend "any other filed document", the scope of the ability to amend would be restricted by the Regulations. For instance, an applicant would be prevented by Regulation 5.3A and 5.9 from amending any documents filed by the opponent. Reg.8.6(2) Requires specification to be certified by the Patent office of the Convention Country in which basic application is made must be filed within period from the day in which the application is made to immediately before acceptance. Any amendments to the certification need to follow the same procedure set out in the Regulations. Reg. 22.13 Sets out requirements for declarations. Any amendments to a declaration need to follow the same procedure set out in the Regulations. IPAustralia Patents Act 1990 Patents – Trademarks Designs (S.104 – 'Voluntary') Consideration of a Request to Amend a Patent Request, Complete Specification or other Filed Document SIDE B For an application after acceptance or a sealed patent 632857 Serial No. For applications before acceptance – please use SIDE A 14 / 1 / 93 Patent request and complete specification accepted I have considered the request for leave to amend the patent request and/or the complete specification and/or the other document(s) indicated below in the manner prescribed in the Regulations. The proposed amendments indicated below are allowable under the Act and Regulations. 2 filed 19.06.00 Allowable Amendments (Please indicate the date of the amendment no. (or nos.)) 1 filed 19.06.00 Specification – No. Drawings – No. Patent Request – No. Other Filed Document(s) No. [Signature] (specify) 19 / 10 / 00 20 / 10 / 00 [Signature] 0 9 6 PERP Examining Delegate of Commissioner of Patents Date 0 9 6 YES Is there a mortgagee or exclusive licensee (s.103). If has consent been given? (s.103) YES NO YES NO Note: If the application is in OPPOSITION, leave to amend must NOT be granted prior to the expiration of the period allowable for the opponent to comment on the amendment(s). Yes/No / / 9 / 11 / 00 PERP Acceptance Delegate of Commissioner of Patents Date YES Is there a mortgagee or exclusive licensee (s.103). If has consent been given? (s.103) Yes/No Note: Amendments must NOT be allowed (1) prior to the expiration of the 3 month period from date of advertisement, (2) when under opposition, or (3) if refused in a decision on the opposition. No opposition to above advertised amendments I allow the amendment(s) specified above. PERP Acceptance Delegate of Commissioner of Patents Date Patent Administration [Initials] 25/10/00 Request advertised Advised / / Allowance Advertised Advised / / Documents Alterations Altered checked Amendment Officer Date	15,009
federal_court_of_australia:fca/single/2019/2019fca1861	decision	commonwealth	federal_court_of_australia	text/html	2019-05-08 00:00:00	Luxtown Pty Ltd (Administrators Appointed), in the matter of Luxtown Pty Ltd (Administrators Appointed) [2019] FCA 1861	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2019/2019fca1861	2024-09-13T22:45:33.278901+10:00	FEDERAL COURT OF AUSTRALIA Luxtown Pty Ltd (Administrators Appointed), in the matter of Luxtown Pty Ltd (Administrators Appointed) [2019] FCA 1861 File number: NSD 612 of 2019 Judge: MARKOVIC J Date of judgment: 8 May 2019 Date of publication of reasons: 14 November 2019 Legislation: Corporations Act 2001 (Cth) ss 442C, 443B(2)(a), (3); 447A, Sch 2 s 90-15 Cases cited: GDK Projects Pty Ltd, in the matter of Umberto Pty Ltd (in liq) v Umberto Pty Ltd (in liq) [2018] FCA 541 Walley, in the matter of Poles & Underground Pty Ltd (Administrators Appointed) [2017] FCA 486 Date of hearing: 26 April 2019 8 May 2019 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: No Catchwords Number of paragraphs: 40 Solicitor for the Plaintiffs: Mr J Hynes Solicitor for the Plaintiffs: K&L Gates Counsel for Electrolux, Mitsubishi and BSH: Mr D Turk of Turks Legal ORDERS NSD 612 of 2019 IN THE MATTER OF LUXTOWN PTY LTD (ADMINISTRATORS APPOINTED) ACN 002 114 105 BETWEEN: MARK ROBINSON, RIAD TAYEH AND ANTONY RESNICK IN THEIR CAPACITIES AS JOINT AND SEVERAL ADMINISTRATORS OF LUXTOWN PTY LTD (ADMINISTRATORS APPOINTED) ACN 002 114 105 IN ITS OWN CAPACITY AND AS TRUSTEE OF THE TRUSTS LISTED IN THE SCHEDULE First Plaintiffs LUXTOWN PTY LTD (ADMINISTRATORS APPOINTED) ACN 002 114 105 Second Plaintiff JUDGE: MARKOVIC J DATE OF ORDER: 26 APRIL 2019 THE COURT ORDERS THAT: 1. The first plaintiff (Administrators) has leave pursuant to s 442C(2)(c) of the Corporations Act 2001 (Cth) (Act) to dispose of such property of Luxtown Pty Ltd (Administrators Appointed) ACN 002 114 105 (Company) that is subject to a security interest under the Personal Property Securities Act 2009 (Cth). 2. In relation to any proceeds realised from the sale of the property pursuant to Order 1 (Proceeds), the Proceeds are to be deposited into a separate controlled monies account operated by the Administrators and which may only be accessed by the Administrators for the purpose of: (a) the payment of the Administrators' reasonable costs and expenses incurred in the care, protection, preservation and/or realisation of the property referred to in Order 1 which includes the Administrators' costs of this proceeding, the identification of potential security interests and the identification and sale of property as may be subject to such potential security interests (Administrators' Fees); (b) paying the sum of $43,000 into a separate account of the Administrators (to be held until further order of the Court) for the purpose of meeting any claim that might be made by any of the Landlords; (c) the distribution of the balance of the Proceeds to the entitled parties, which may only occur: (i) after payment of the Administrators' Fees; (ii) after such time that the Administrators and the secured creditors of the Company have reached agreement as between them as to the distribution of the balance of the Proceeds; or (iii) absent such agreement being reached between the Administrators and the secured creditors of the Company by 29 June 2019, as directed by the Court. 3. Pursuant to s 447A of the Act, Pt 5.3 of the Act is to operate in relation to the Company as if, notwithstanding: (a) section 442C(7) of the Act; and (b) the payment of the Administrators Fees from the Proceeds, the rights of the secured creditors of the Company between one another including in relation to the balance of the Proceeds are preserved as if the property was not disposed of pursuant to Order 1. 4. Pursuant to s 57 of the Federal Court of Australia Act 1976 (Cth) (FCA Act), the Administrators be appointed as court-appointed receivers of the trust property owned by the Company as trustee for the 2nds World Online Trust with all the powers under s 420 of the Act as if the reference to a "corporation" in that section were a reference to the Company as trustee for the 2nds World Online Trust. 5. Pursuant to s 57 of the FCA Act, the Administrators be appointed as court-appointed receivers of the trust property owned by the Company as trustee for the P.R. & K.M.Hammerman Family Trust with all the powers under s 420 of the Act as if the reference to a "corporation" in that section were a reference to the Company as trustee for the P.R. & K.M.Hammerman Family Trust. 6. Save in relation to any proceeds (in respect of which the Administrators' entitlements as to costs and expenses are set out in Order 2), any other costs, disbursements and expenses incurred by the Administrators as receivers of the trust property referred to in Orders 4 and 5 shall be paid in priority from the property of the relevant trust. 7. The plaintiffs to serve a copy of these Orders on the secured creditors of the Company (as set out at p 11 of Ex MJR-1), the Landlords and the directors of the Company by way of email to the addresses notified to the Administrators by those creditors and persons with service to be effected by 5.00 pm on Monday, 29 April 2019. 8. The plaintiffs and any person affected by these Orders, including any of the Landlords, any secured creditor, or beneficiary of any trust (the subject of Orders 4 and 5) has liberty to restore on 24 hours' notice. 9. The proceeding be listed for case management hearing before Markovic J on 8 May 2019 at 9.30 am. For the purpose of these Orders, Landlords mean: 10. Fairmer Pty Ltd, being the lessor in respect of the premises located at 321 Parramatta Road, Auburn NSW 2144 11. Addsil Pty Ltd, being the lessor in respect of the premises located at 158-160 Adderley Street West, Auburn NSW 2144 12. Boncone Pty Ltd, being the lessor in respect of the premises located at 5 Koonya Circuit, Caringbah NSW 2229 13. KJ & JA O'Rafferty Pty Ltd, being the lessor in respect of the premises located at 7 Koonya Circuit, Caringbah NSW 2229 14. Mr Tony Draper, being the lessor in respect of the premises located at 6 Victoria Avenue, Castle Hill NSW 2151 15. Clusterduck Pty Ltd, being the lessor in respect of the premises located at 233-237 Military Road, Cremorne NSW 2090 16. Andan Pty Ltd, being the lessor in respect of the premises located at 241 Mulgoa Road, Penrith NSW 2750 Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. ORDERS NSD 612 of 2019 IN THE MATTER OF LUXTOWN PTY LTD (ADMINISTRATORS APPOINTED) ACN 002 114 105 BETWEEN: MARK ROBINSON, RIAD TAYEH AND ANTONY RESNICK IN THEIR CAPACITIES AS JOINT AND SEVERAL ADMINISTRATORS OF LUXTOWN PTY LTD (ADMINISTRATORS APPOINTED) ACN 002 114 105 IN ITS OWN CAPACITY AND AS TRUSTEE OF THE TRUSTS LISTED IN THE SCHEDULE First Plaintiffs LUXTOWN PTY LTD (ADMINISTRATORS APPOINTED) ACN 002 114 105 Second Plaintiff JUDGE: MARKOVIC J DATE OF ORDER: 8 MAY 2019 THE COURT ORDERS THAT: 1. Order 1 of the Court's Orders made on 26 April 2019 (26 April Orders) is vacated. 2. The first plaintiff (Administrators) has leave nunc pro tunc pursuant to s 442C(2)(c) of the Corporations Act 2001 (Cth) (Act) to dispose of such property of Luxtown Pty Ltd (Administrators Appointed) ACN 002 114 105 (Company) that is subject to a security interest under the Personal Property Securities Act 2009 (Cth) whether that property is held by the Company in its own right or as trustee of any of the trusts listed in the schedule to these Orders. 3. In relation to any proceeds realised from the sale of the property pursuant to Order 2 (Proceeds), the Proceeds are to be dealt with in accordance with Order 2 of the 26 April Orders. 4. Pursuant to s 90-15 of the Insolvency Practice Schedule, the Administrators would be justified in: (a) disposing of the property of the Company under Order 2; (b) disposing of the property of the Company in their capacity as administrators of the Company; and (c) dealing with the Proceeds in accordance with Order 3. 5. The plaintiffs are to serve a copy of these Orders on the secured creditors of the Company (as set out at p 11 of Ex MJR-1), the Landlords (as defined in the 26 April Orders) and the Directors of the Company by way of email to the addresses notified to the Administrators by those creditors and persons with service to be effected by 5.00 pm on 9 May 2019. 6. The proceeding be listed for case management hearing on 18 July 2019 at 9.30 am before the Commercial and Corporations Duty Judge or a docket Judge to be allocated by the National Operations Registrar. THE COURT NOTES THAT: 7. The plaintiffs intend to retire from their appointment as receivers of the trust property owned by the Company as trustee for the P.R & K.M Hammerman Family Trust and as trustee for the 2nds World Online Trust. The solicitors for the plaintiffs will provide draft orders to be made in Chambers to give effect to that retirement. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MARKOVIC J: 1 This proceeding first came before me on 24 April 2019 in my capacity as Commercial and Corporations Duty Judge. Relevantly, the first plaintiffs are Mark Robinson, Riad Tayeh and Antony Resnick in their capacity as joint and several administrators (Administrators) of Luxtown Pty Ltd (administrators appointed) (Luxtown). The proceeding came back before me on further occasions. Relevantly: (1) on 24 April 2019 I made orders pursuant to s 447A of the Corporations Act 2001 (Cth) (Act) in relation to subss 443B(2)(a) and (3) of the Act, in respect of Luxtown, the effect of which was to extend the period during which the Administrators would not be liable for rent and other amounts for property used by Luxtown; (2) on 26 April 2019 (26 April Orders) I made a number of orders including orders pursuant to ss 442C and 447A of the Act and orders pursuant to s 57 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) appointing the Administrators as receivers of the trust property owned by Luxtown as trustee for each of the 2nds World Online Trust (2nds World Trust) and the P.R. & K.M.Hammerman Family Trust (Hammerman Trust); (3) on 8 May 2019 I made orders varying the April Orders by vacating the order that had been made pursuant to s 442C(2)(c) of the Act and making a further order pursuant to that section to operate nunc pro tunc and made further orders including an order pursuant to s 90-15 of the Insolvency Practice Schedule, being Sch 2 to the Act (IPS); and (4) on 10 May 2019 I made orders retiring the court-appointed receivers of the trust property owned by Luxtown as trustee for the 2nds World Trust and for the Hammerman Trust. 2 These are my reasons for making Orders 1, 2 and 3 on 26 April 2019 as varied by Orders 1, 2 and 3 made on 8 May 2019 and for making Order 4 on 8 May 2019. 3 As noted above, orders were made retiring the court-appointed receivers shortly after their appointment when the Administrators had, with the assistance of a director of Luxtown, identified the terms of the relevant trust deeds and ascertained the current terms of the trust deeds for each of the 2nds World Trust and the Hammerman Trust and that the relevant deeds did not contain an ipso facto clause which would terminate Luxtown's appointment as trustee upon appointment of a voluntary administrator. background 4 Luxtown operated a business known as "Seconds World" which sold electrical goods from five different leased locations across Sydney. The business also leased a warehouse in Auburn. The Administrators were appointed to Luxtown on 15 April 2019. 5 In the period following their appointment to 24 April 2019 the Administrators undertook a number of tasks including general administrative tasks such as holding discussions with Luxtown's directors, securing the books and records of Luxtown and reviewing those records; complying with their statutory obligations; liaising with Luxtown's employees and its creditors; arranging for the businesses and assets of Luxtown to be advertised for sale; and conducting preliminary investigations as required by s 438A of the Act. 6 Based on their investigations, the Administrators had identified that as at 24 April 2019 Luxtown appeared to owe creditors approximately $7m. Stock 7 As at the date of the Administrators' appointment Luxtown's books and records indicated that Luxtown held stock with an at cost value of approximately $2m. Based on a stocktake undertaken following the Administrators' appointment, there were approximately 10,000 items of stock primarily consisting of different kinds of electrical goods of different brands. 8 A search of the Personal Property Securities Register (PPS Register) conducted on 28 March 2019 showed that there were 213 security interests registered against the ACN of Luxtown and three securities registered against the ABN of Luxtown, including 126 Purchase Money Security Interests (PMSI) against the ACN of Luxtown and two PMSIs against the ABN of Luxtown, in favour of a total of 47 secured parties. 9 Based on a search of Luxtown's books and records undertaken at the request of Mr Robinson, one of the Administrators, Mr Robinson identified 32 secured parties who appeared to have amounts owing to them, for whom it was possible that Luxtown was holding unsold stock and who had PMSI registrations in their favour (Potential PMSI Holders). 10 On 16 April 2019 Mr Robinson sent two emails to the Potential PMSI Holders in which he invited them to: (1) confirm whether Luxtown had any debt owing to them and whether they asserted any security interest over Luxtown's assets; and (2) attend Luxtown's premises and identify any stock in which they claimed a security interest. 11 On 18 April 2019 Mr Robinson was contacted by Hugh Evans of Moneytech Finance Pty Ltd (Moneytech), which according to Mr Robinson held several PPS registrations against Luxtown. Mr Evans' email included: We hereby instruct that NO stock should be released back to vendors/suppliers (as we have paid for a significant portion of that stock) and that stock is subject to our PPSR registrations. Please refer attached invoices related to our PMSI interests. In the absence of identification from others, it is safe to assume that all stock branded as per the invoices/statements is ours as we have paid the suppliers(s) in full. 12 Following Mr Evans' email, Mr Robinson notified the Potential PMSI Holders of Moneytech's position and informed them that, in light of that, he would not be in a position to allow property to be collected by parties asserting PMSIs. 13 On 23 April 2019 Mr Robinson met with a representative of Samsung. In that meeting Mr Robinson was informed that Samsung was owed approximately $1m by Luxtown and that Samsung had identified stock of approximately $35,000 at cost to which it believed its PMSIs attached. 14 Also on 23 April 2019 Mr Robinson met with Mark Cameron from Moneytech. During that meeting Mr Robinson was informed that Luxtown owed Moneytech approximately $500,000 and that Moneytech had no objection to the Administrators selling the stock in which they claimed an interest provided that its claim was converted into a claim against the proceeds of sale of the stock. 15 As at 24 April 2019: (1) Mr Robinson had not yet received responses from many of the Potential PMSI Holders and was of the opinion that there may be further instances of competing claims to stock beyond those already known to him; (2) 15 Potential PMSI Holders had attended Luxtown's premises to attempt to identify stock that may be subject to their asserted PMSIs; (3) only three to four of the Potential PMSI Holders had confirmed that they were no longer creditors of Luxtown; and (4) critically, with the exception of Samsung, none of the secured creditors had provided Mr Robinson with a list of stock in which they claimed a security interest which included the unique serial number identifiers of those stock items. Rather, the claims of other secured parties referred to stock by brand and model number. In light of that Mr Robinson believed that it would be extremely difficult, if not impossible, to determine whether there were multiple claims over the same stock. 16 Mr Robinson had intended to move the stock to a central location for processing of PMSIs and secured claims against it, provided that the secured parties agreed to bear the costs of that exercise. However, upon making the relevant inquiries not all secured parties responded or agreed to the proposal. According to Mr Robinson the Administrators had no funding available to them to move the stock and, in the absence of consent from all interested secured parties, it would not be possible for them to identify stock owned outright by Luxtown which they may be entitled to sell for the benefit of Luxtown's creditors generally. 17 Between 26 April 2019 and 7 May 2019 the Administrators had further communications with three further suppliers of stock and/or Potential PMSI Holders and a further conversation with Mr Cameron from Moneytech. Leased premises 18 On 18 April 2019 Mr Robinson wrote to the landlords of the six premises leased by Luxtown (Landlords). In that correspondence Mr Robinson sought an extension of time for which the Administrators would not be personally liable to pay rent pursuant to s 443B of the Act until 3 May 2019. A summary of the correspondence that was sent and responses received compiled by Mr Robinson appears below: 19 Between 26 April and 7 May 2019 there was further communication with a number of the Landlords. Relevantly, on 3 May 2019 the Administrators gave up possession of the Auburn warehouse. 20 The Administrators did not hold sufficient cash or other readily realisable assets in the name of Luxtown to fund the rent payable under the leases to the Landlords. Mr Robinson's evidence was that if the Court was not minded to extend the time available to the Administrators to disclaim leases without incurring personal liability under s 443B of the Act, they would have no option but to disclaim the leases. This would likely result in the Landlords exercising a lien over any stock located at the various premises and an increase in the amounts owing to the creditors of Luxtown, such as suppliers and holders of security interests. Mr Robinson also noted that potential priority disputes in relation to abandoned stock would cause inconvenience and cost to suppliers and secured parties. Potential sale of stock and other assets of Luxtown 21 On 17 April 2019 the Administrators caused the business of Luxtown to be advertised for sale in the Australian Financial Review. 22 Based on the responses received as at 24 April 2019 Mr Robinson believed that: (1) there was a prospect of the Administrators being in a position to sell Luxtown's stock in one line to an interested party or otherwise in piecemeal fashion on a break-up basis; (2) there was a prospect of finding a purchaser to take an assignment of some of the leases, which if achieved would result in a possible realisation of the value of any fixtures in the leased premises and a possibility that the Landlords may have lower creditor claims against Luxtown upon disclaimer of the leases; and (3) there was a prospect of selling certain other assets of Luxtown such as intellectual property. 23 Mr Robinson's preliminary view was that the interests of Luxtown's creditors would benefit from a sale of Luxtown's stock in a single line as that would minimise holding, transport and storage costs for the stock, including rent payable to the Landlords. It was also Mr Robinson's preliminary view that the Administrators would be in a position to complete a sale of Luxtown's stock in one line by 3 May 2019 unless that stock became inaccessible to the Administrators because it was retained in leased premises to which they had lost their right of access. 24 On 2 May 2019 the Administrators accepted an offer from Harvey Norman to acquire certain assets of Luxtown. As part of the arrangements with Harvey Norman a non-refundable sum was paid to the Administrators without any obligation for it to be deducted from the ultimate sale price. The Administrators notified the Landlords of their intention to pay rent on a daily basis for their occupation of the premises from 4 May 2019. Administrators' proposal in relation to sale proceeds from sale of stock 25 In the event that the Court was minded to authorise the Administrators to sell Luxtown's stock, Mr Robinson proposed that the following should occur in relation to the sale proceeds: (1) the Administrators' costs and disbursements of this proceeding be paid out of the sale proceeds; (2) the Administrators' costs and disbursements, including legal fees and stocktake costs, in dealing with and selling the stock the subject of security interests be paid out of the sale proceeds in an amount agreed between the secured parties and the Administrators or approved by the Court; (3) any amounts which the Court sees fit to order are paid out of the proceeds of sale to the Landlords; and (4) the balance of the sale proceeds be held by the Administrators in a controlled monies account pending agreement between the secured parties and the Administrators or determination by the Court as to respective entitlements to those sale proceeds of those parties having an interest in the stock or its proceeds. consideration Sale of Luxtown's stock 26 As was apparent from the evidence before me there was a contest between the secured creditors as to their interests in the stock and it was not clear to the Administrators, based on the PPS Register, whose interest attached to which item of stock. Accordingly, the Administrators sought an order pursuant to s 442C(2)(c) of the Act to sell the entirety of the stock and create a fund in order that the parties' respective interests could subsequently be determined. 27 Section 442C of the Act relevantly provides: (1) The administrator of a company under administration or of a deed of company arrangement must not dispose of: (a) property of the company that is subject to a security interest; or (b) property (other than PPSA retention of title property) that is used or occupied by, or is in the possession of, the company but of which someone else is the owner or lessor. (2) Subsection (1) does not prevent a disposal: (a) in the ordinary course of the company's business; or (b) with the written consent of the secured party, owner or lessor, as the case may be; or (c) with the leave of the Court. (3) The Court may only give leave under paragraph (2)(c) if satisfied that arrangements have been made to protect adequately the interests of the secured party, owner or lessor, as the case may be. … (7) If: (a) a company is under administration or is subject to a deed of company arrangement; and (b) property of the company is subject to a security interest; and (c) the administrator disposes of the property; the disposal extinguishes the security interest. (Notes omitted.) 28 Based on the evidence before me I was satisfied that the order sought by the Administrators pursuant to s 442C(2)(c) of the Act should be made. That was so for the following reasons: (1) it appeared from the state of the PPS Register that a substantial quantity of Luxtown's stock was encumbered; (2) the Administrators and, indeed, the secured creditors were unable to identify the stock to which particular secured creditors' interests attached; (3) the Administrators had advertised the business for sale in one line or otherwise in a piecemeal fashion. Mr Robinson was of the opinion that Luxtown's creditors would benefit from a sale of the stock of Luxtown in a single line and, if sold, the balance of the sale proceeds, after payment of various costs associated with their sale, would be held in a controlled monies account pending agreement between the secured parties and the Administrators or determination by the Court as to their respective entitlements; (4) those proposed arrangements for the preservation of the proceeds of sale provided adequate protection for the secured parties' interests; and (5) to proceed to sell the stock in the absence of such an order may have exposed the Administrators to a claim for damages for having disposed of property contrary to s 442C of the Act: see THC Holding Pty Ltd v CMA Recycling Pty Ltd (Administrators Appointed) (2014) 101 ACSR 202; [2014] NSWSC 1136. 29 I note two further matters. First, the order initially made on 26 April 2019 pursuant to s 442C(2)(c) of the Act was subsequently vacated on 8 May 2019 and a new order made which operated nunc pro tunc pursuant to that section. That was because the order when first made did not refer to the different capacities in which Luxtown might hold the stock. The order made on 26 April 2019 permitted the Administrators to dispose of the relevant property while the subsequent order made on 8 May 2019 permitted the Administrators to dispose of the relevant property whether held by Luxtown in its own right or in its capacity as trustee of any of the identified trusts. 30 Secondly, consequential orders were sought in relation to the payment of costs of this proceeding and of the sale process, including preserving a fund for payment to Landlords if a valid substantiated claim was made, from the proceeds of sale and in relation to the way in which the net proceeds of sale were to be held pending the resolution of the competing claims to those proceeds. I was satisfied that the orders sought were appropriate in the circumstances and should be made. Order under s 447A of the Act 31 Section 447A of the Act relevantly provides: (1) The Court may make such order as it thinks appropriate about how this Part is to operate in relation to a particular company. … (3) An order may be made subject to conditions. (4) An order may be made on the application of: (a) the company; or (b) a creditor of the company; or (c) in the case of a company under administration—the administrator of the company; or (d) in the case of a company that has executed a deed of company arrangement—the deed's administrator; or (e) ASIC; or (f) any other interested person. 32 The power conferred by s 447A is broad. 33 The Administrators sought an order under s 447A in relation to the operation of s 442C(7) of the Act (see [27] above) to preserve the rights of security holders despite the sale of the stock. In that regard, the Administrators submitted that the order was sought to avoid any doubt and to give effect to the Administrators' proposal that the respective positions and rights of the creditors as against one another are preserved pending the determination of each secured creditor's interest in the property. The Administrators said that was so because most, if not all, of the PMSI holder registrations referred to proceeds and would therefore remain secured for the purpose of s 32 of the Personal Property Securities Act 2009 (Cth), notwithstanding a sale of the underlying property. 34 Having regard to the Administrators' submissions and the evidence before me, I was satisfied that the order sought by the Administrators pursuant to s 447A of the Act should be made. Order under s 90-15 of the IPS 35 On 8 May 2019 the Administrators also sought an order pursuant to s 90-15 of the IPS that they would be justified in disposing of Luxtown's stock and dealing with the proceeds of that sale in accordance with their proposal. The Administrators sought that order because their decision related to encumbered stock, there had been some pushback from secured creditors about the proposal to sell and they were selling in their capacity as administrators. They submitted that, while they were satisfied with their decision to sell the stock and the steps they had taken to notify secured creditors of their proposal and satisfy themselves that they could sell in their capacity as administrators, the decision was not entirely uncontroversial. 36 Section 90-15(1) of the IPS empowers the court to make such orders as it thinks fit in relation to the external administration of a company. Section 90-15(4) sets out a non-exhaustive list of the matters which the court may take into account in exercising the discretion under s 90-15(1). 37 In GDK Projects Pty Ltd, in the matter of Umberto Pty Ltd (in liq) v Umberto Pty Ltd (in liq) [2018] FCA 541 at [33] Farrell J said the following about the operation of s 90-15(1): The power to make orders conferred by s 90-15(1) contains no equivalent of s 511(2) which permitted the Court to accede to an application "if satisfied that … the exercise of power will be just and beneficial". The power is, in its terms, unconstrained. Section 90-15(4) lists some matters the Court is entitled to take into account but that list is expressed to be "[w]ithout limiting the matters which the Court may take into account when making orders". In Walley, in the matter of Poles & Underground Pty Ltd (Administrators Appointed) [2017] FCA 486, Gleeson J observed at [41] that the question of whether to exercise the power under s 90-15 of Sch 2 can be answered by reference to principles that applied to the exercise of the discretion under the provisions previously contained in ss 479(3) and 511. I agree that those cases can be a useful guide. Despite the breadth of the power conferred by s 90-15(1), it is difficult to envisage circumstances where the power would be exercised if the Court could not be satisfied that it would be just and unless the applicant had demonstrated sufficient utility to the external administration. 38 In Walley, in the matter of Poles & Underground Pty Ltd (Administrators Appointed) [2017] FCA 486 at [35]-[36], in considering a submission that the Court's supervisory powers under the then newly introduced s 90-15 of the IPS were as broad or broader than under previous provisions including s 479(3), Gleeson J observed that: 35 In Re Ansett Australia Ltd and Korda [2002] FCA 90; 115 FCR 409, concerning s 479(3), Goldberg J explained at [44]: When liquidators and administrators seek directions from the Court in relation to any decision they have made, or propose to make, or in relation to any conduct they have undertaken, or propose to undertake, they are not seeking to determine rights and liabilities arising out of particular transactions, but are rather seeking protection against claims that they have acted unreasonably or inappropriately or in breach of their duty in making the decision or undertaking the conduct. They can obtain that protection if they make full and fair disclosure of all relevant facts and circumstances to the Court. In Re G B Nathan & Co Pty Ltd (1991) 24 NSWLR 674, McLelland J said at 679-680: The historical antecedents of s 479(3) …, the terms of that subsection and the provisions of s 479 as a whole combine to lead to the conclusion that the only proper subject of a liquidator's application for directions is the manner in which the liquidator should act in carrying out his functions as such, and that the only binding effect of, or arising from, a direction given in pursuance of such an application (other than rendering the liquidator liable to appropriate sanctions if a direction in mandatory or prohibitrary form is disobeyed) is that the liquidator, if he has made full and fair disclosure to the court of the material facts, will be protected from liability for any alleged breach of duty as liquidator to a creditor or contributory or to the company in respect of anything done by him in accordance with the direction. ... Modern Australian authority confirms the view that s 479(3) 'does not enable the court to make binding orders in the nature of judgments' and that the function of a liquidator's application for directions 'is to give him advice as to his proper course of action in the liquidation; it is not to determine the rights and liabilities arising from the company's transactions before the liquidation': [cases cited omitted]. 36 At [65], Goldberg J concluded: [T]he prevailing principle adopted by the courts, when asked by liquidators and administrators to give directions, is to refrain from doing so where the direction sought relates to the making and implementation of a business or commercial decision, either committed specifically to the liquidator or administrator or well within his or her discretion, in circumstances where there is no particular legal issue raised for consideration or attack on the propriety or reasonableness of the decision in respect of which the directions are sought. There must be something more than the making of a business or commercial decision before a court will give directions in relation to, or approving of, the decision. It may be a legal issue of substance or procedure, it may be an issue of power, propriety or reasonableness, but some issue of this nature is required to be raised. It is insufficient to attract an order giving directions that the liquidator or administrator has a feeling of apprehension or unease about the business decision made and wants reassurance. There must be some issue which arises in relation to the decision. A court should not give its imprimatur to a business decision simply to alleviate a liquidator's or administrator's unease. There must be an issue calling for the exercise of legal judgment. 39 The Administrators submitted that they were seeking protection from claims that they had acted unreasonably or inappropriately in the circumstances, that the evidence shows that the decision to sell the stock was not unreasonable or inappropriate and that the Administrators did not seek to protect a commercial decision but sought protection from a claim of impropriety on their part. I accepted those submissions and was satisfied that I could make the order sought. conclusion 40 For those reasons I made the orders referred to at [2] above on 26 April 2019 and 8 May 2019. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Markovic. Associate: Dated: 14 November 2019 SCHEDULE NSD 612 of 2019 1 2nds World Penrith Trust ABN 83 083 750 132 2 2nds World Auburn Trust ABN 18 902 495 787 3 2nds World Online Trust ABN 28 499 430 658 4 2nds World Caringbah Trust ABN 62 710 376 637 5 Appliance Solutions Direct Family Trust ABN 89 470 390 196 6 Savvy Appliances Family Trust ABN 64 950 077 894 7 2nds World Castle Hill Trust ABN 73 132 635 471 8 Bargain Appliances Online Trust ABN 19 943 691 502 9 P.R & K.M.Hammerman Family Trust ABN 39 832 104 571	8,015
federal_court_of_australia:fca/single/2018/2018fca0571	decision	commonwealth	federal_court_of_australia	text/html	2018-04-26 00:00:00	Australian Competition and Consumer Commission v Telstra Corporation Limited [2018] FCA 571	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2018/2018fca0571	2024-09-13T22:45:33.560771+10:00	FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Telstra Corporation Limited [2018] FCA 571 File number: VID 317 of 2018 Judge: MOSHINSKY J Date of judgment: 26 April 2018 Catchwords: CONSUMER LAW – financial services – false or misleading representations – where the respondent (Telstra) provided a service called the Premium Direct Billing Service (PDB service) to domestic and business customers as a default setting on Telstra mobile services (ie, customers were not required to opt-in) – where the PDB service enabled customers to purchase subscriptions to digital content supplied by third parties and have the charges billed to their Telstra account – where the operation of the PDB service led to a significant number of customers unintentionally purchasing and being billed for PDB content subscriptions without their knowledge or consent – where parties prepared an agreed statement of facts and jointly proposed declarations and orders that Telstra pay pecuniary penalties totalling $10 million – whether the PDB service was a "financial product" – whether, in providing the PDB service, Telstra was providing a "financial service" – whether proposed orders appropriate – proposed orders made Legislation: Australian Securities and Investments Commission Act 2001 (Cth), ss 12BAA, 12BAB, 12DB, 12GBA Competition and Consumer Act 2010 (Cth), ss 76, 87B, 131A Crimes Act 1914 (Cth), s 4AA Australian Securities and Investments Commission Regulations 2001 (Cth), reg 2B Cases cited: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 271 IR 321; [2017] FCAFC 113 Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 1405 Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd (2015) 327 ALR 540 Australian Competition and Consumer Commission v Hillside (Australia New Media) Pty Ltd trading as Bet365 (No 2) [2016] FCA 698 Australian Competition and Consumer Commission v Reckitt Benckiser (Aust) Pty Ltd (2016) 340 ALR 25 Australian Competition and Consumer Commission v Telstra Corporation Limited [2004] FCA 987 Australian Securities and Investments Commission v GE Capital Finance Australia, in the matter of GE Capital Finance Australia [2014] FCA 701 Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 Re HIH Insurance Ltd (in prov liq) and HIH Casualty and General Insurance Ltd (in prov liq); Australian Securities and Investments Commission v Adler (2002) 42 ACSR 80 Trade Practices Commission v Allied Mills Industries Pty Ltd (No 5) (1981) 60 FLR 38; 37 ALR 256 Trade Practices Commission v CSR Limited [1991] ATPR 41-076; [1990] FCA 762 Date of hearing: 24 April 2018 Registry: Victoria Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 90 Counsel for the Applicants: Mr L Armstrong QC with Ms C Dermody Solicitor for the Applicants: Australian Government Solicitor Counsel for the Respondent: Mr M O'Bryan QC Solicitor for the Respondent: King & Wood Mallesons ORDERS VID 317 of 2018 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION First Applicant SCOTT PETER GREGSON Second Applicant AND: TELSTRA CORPORATION LIMITED (ABN 33 051 775 556) Respondent JUDGE: MOSHINSKY J DATE OF ORDER: 26 APRIL 2018 THE COURT NOTES: the commitments given by the respondent (Telstra) as set out in paragraphs 91 and 92 of the Statement of Agreed Facts and Admissions. THE COURT DECLARES THAT: 1. The service called the Premium Direct Billing Service (PDB service) supplied by the Respondent (Telstra) since about July 2013 to consumers acquiring mobile services for personal or domestic use (Domestic customers) and small business and corporate customers (Business customers) (together, customers), which enabled customers to purchase subscriptions to digital content (PDB content subscriptions) supplied by third parties (Aggregators or Content Providers) and have the charges for those PDB content subscriptions billed to their Telstra account, was a financial service within the meaning of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act). 2. Telstra, between early 2015 and 7 June 2016, by applying charges for PDB content subscriptions to the accounts of customers who had unintentionally purchased PDB content subscriptions without their knowledge or consent and so had not agreed to acquire the subscriptions (Non-consenting Customers): (a) in trade or commerce represented to Non-consenting Customers that they had agreed to acquire the PDB content subscriptions when in fact the subscriptions had occurred without those customers' knowledge or consent, and so those customers had not agreed to acquire those subscriptions; and (b) thereby, in connection with the supply of the PDB service, made a false or misleading representation that Non-consenting Customers had agreed to acquire services in contravention of s 12DB(1)(b) of the ASIC Act. 3. Telstra, between about July 2013 and 4 December 2017: (a) represented to customers that barring access to PDB services from a customer's mobile device would result in the customer no longer being charged for PDB content subscriptions after the date the barring was activated, when in fact: (i) barring access to PDB services on a customer's mobile device would only result in the customer not being charged for new PDB content subscriptions through the PDB service after the date on which barring was activated; and (ii) the customer could continue to be charged for any PDB content subscriptions to which the customer subscribed prior to the date the barring was activated; and (b) thereby, in trade or commerce in connection with the supply of the PDB service, made a false representation as to the benefits, uses or performance characteristics of the PDB service in contravention of s 12DB(1)(e) of the ASIC Act. 4. Telstra, between about July 2013 and 31 May 2016: (a) represented that customers who requested barring of the PDB service would be able to unsubscribe from PDB content subscriptions by texting the word "STOP" in reply to the confirmation SMS that Aggregators send to subscribed customers, when in fact customers who had barred Premium SMS services were unable to unsubscribe from PDB content subscriptions as a result of sending such a text message; and (b) thereby in trade or commerce, in connection with the supply of the PDB service, made a false representation to customers as to the benefits, uses or performance characteristics of the PDB service in contravention of s 12DB(1)(e) of the ASIC Act. 5. Telstra, between about July 2013 and August 2016, in circumstances where customers were acquiring a new mobile service and the mobile number associated with that service had been deactivated for a period prior to such acquisition: (a) impliedly represented that customers acquiring a new mobile service and number would only be charged for PDB content subscriptions incurred by that customer, when in fact some customers who acquired a mobile number formerly allocated to a different customer were charged for PDB content subscriptions associated with the previous customer's deactivated mobile service; and (b) thereby in trade or commerce, in connection with the supply of the PDB service, made a false representation to customers as to the benefits, uses or performance characteristics of the PDB service in contravention of s 12DB(1)(e) of the ASIC Act. THE COURT ORDERS THAT: 6. Telstra pay to the Commonwealth of Australia, within 14 days of the making of this Order, the following amounts by way of pecuniary penalties: (a) in respect of the contraventions declared in paragraph 2, a pecuniary penalty of $7,000,000; (b) in respect of the contraventions declared in paragraph 3, a pecuniary penalty of $1,000,000; (c) in respect of the contraventions declared in paragraph 4, a pecuniary penalty of $1,000,000; (d) in respect of the contraventions declared in paragraph 5, a pecuniary penalty of $1,000,000. 7. Telstra pay the costs of the ACCC of and incidental to these proceedings, to be taxed if not agreed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MOSHINSKY J: Introduction 1 The respondent (Telstra) is a publicly listed company. Telstra supplies retail telephone and data services for mobile phones and tablet computers (mobile services). It is Australia's largest supplier of mobile services. 2 In or about June 2013, Telstra introduced, for domestic and business customers, a service called the Premium Direct Billing Service (the PDB service). This service enabled customers to purchase third party digital content on a subscription or one-off purchase basis from a third party, and have the charges for that content billed on their Telstra account. Third party digital content purchased via the PDB service (PDB content) included "premium" content services (such as news websites) and downloadable applications (such as games or ringtones) and other content (such as "voting" in television programs). 3 Content purchased via the PDB service was created by providers (Content Providers) who did not have a direct relationship with Telstra. Rather, their digital content offerings were compiled and marketed by five third-party providers (Aggregators) who had contractual arrangements with Telstra to make the content available for purchase by Telstra customers. 4 During the period July 2013 to date (the relevant period), Telstra did not adequately inform its customers that: (a) the PDB service was a default setting on Telstra mobile services – that is, customers were not required to opt-in to the PDB service on their mobile service prior to purchasing third party digital content; and (b) consequently, if they were to purchase content on their mobile devices, even unintentionally, they would be billed directly by Telstra via the PDB service. 5 Of those customers charged for PDB content, a significant number complained that they had incurred charges without their knowledge or consent. This occurred in circumstances where Telstra did not require its customers to complete any form of identity verification before purchasing PDB content and having PDB content charges billed to their account. For example, customers were not required to sign in to an account, provide a password, send a text message or provide payment details in order to purchase content. 6 The first applicant (the ACCC) and the second applicant, who is an officer of the ACCC and also a delegate for relevant purposes of the Australian Securities and Investments Commission, commenced this proceeding against Telstra, alleging that Telstra had made false or misleading representations in relation to financial services, in contravention of s 12DB of the Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act). This proceeding is brought under the consumer protection provisions of the ASIC Act, rather than those of the Competition and Consumer Act 2010 (Cth), on the basis that the alleged conduct was engaged in in relation to financial services: see s 131A of the Competition and Consumer Act. 7 In their originating application, the applicants seek: (a) declarations that: the PDB service was a financial service within the meaning of the ASIC Act; and Telstra contravened s 12DB of the Act by making certain representations in connection with the supply of the PDB service; and (b) orders that Telstra pay: pecuniary penalties to the Commonwealth of Australia in respect of the contraventions; and the ACCC's costs of the proceeding. 8 Telstra has admitted that: the PDB service was a financial service; it made the alleged representations; those representations were false or misleading; and it thereby contravened s 12DB of the ASIC Act. The applicants and Telstra have reached agreement on a statement of agreed facts and admissions (SOAF), a copy of which is annexed to these reasons. It is convenient to note at this point that, by the SOAF, Telstra admits (among other things) that: (a) Telstra was aware from early 2015 that the operation of the PDB service had led to a significant number of its customers unintentionally purchasing PDB content subscriptions without their knowledge or consent and so had not agreed to acquire the subscription (Non-consenting Customers). (b) In these circumstances, by applying charges to those customers' accounts in respect of their purported subscriptions prior to 7 June 2016, Telstra made false or misleading representations in connection with the supply or possible supply of a financial service within the meaning of the ASIC Act to each of the Non-consenting Customers that they had agreed to acquire those subscriptions (when they had not), in contravention of s 12DB(1)(b) of the ASIC Act. 9 As recorded in the SOAF, Telstra estimates that it has provided refunds of at least $5 million to customers in relation to charges for PDB content, some of which has been recovered from Aggregators. 10 As set out in [91] of the SOAF, in the course of resolving the ACCC's investigation, Telstra committed to and has ceased offering the PDB service entirely, with effect from 3 March 2018. 11 Further, as set out in [92] of the SOAF, Telstra has committed to undertake a series of steps designed to provide refunds to affected customers as described in that paragraph. 12 The parties have reached agreement on proposed declarations and proposed orders (as to both penalties and costs). The proposed declarations and orders are set out in a document headed "Orders" (the Minutes of Proposed Orders) that is annexed to an affidavit of Robert Owbridge, a solicitor employed by the Australian Government Solicitor, the solicitors acting for the applicants, dated 25 March 2018. The Minutes of Proposed Orders include a statement that the Court notes the commitments given by Telstra as set out in [91] and [92] of the SOAF. 13 The proposed declarations are as follows: 1. The service called the Premium Direct Billing Service (PDB service) supplied by the Respondent (Telstra) since about July 2013 to consumers acquiring mobile services for personal or domestic use (Domestic customers) and small business and corporate customers (Business customers) (together, customers), which enabled customers to purchase subscriptions to digital content (PDB content subscriptions) supplied by third parties (Aggregators or Content Providers) and have the charges for those PDB content subscriptions billed to their Telstra account, was a financial service within the meaning of the Australian Securities and Investments Commission Act [2001] (Cth) (ASIC Act). 2. Telstra, between early 2015 and 7 June 2016, by applying charges for PDB content subscriptions to the accounts of customers who had unintentionally purchased PDB content subscriptions without their knowledge or consent and so had not agreed to acquire the subscriptions (Non-consenting Customers): (a) in trade or commerce represented to Non-consenting Customers that they had agreed to acquire the PDB content subscriptions when in fact the subscriptions had occurred without those customers' knowledge or consent, and so those customers had not agreed to acquire those subscriptions; and (b) thereby, in connection with the supply of the PDB service, made a false or misleading representation that Non-consenting Customers had agreed to acquire services in contravention of s 12DB(1)(b) of the ASIC Act. 3. Telstra, between about July 2013 and 4 December 2017: (a) represented to customers that barring access to PDB services from a customer's mobile device would result in the customer no longer being charged for PDB content subscriptions after the date the barring was activated (the Barring representation), when in fact: (i) barring access to PDB services on a customer's mobile device would only result in the customer not being charged for new PDB content subscriptions through the PDB service after the date on which barring was activated; and (ii) the customer could continue to be charged for any PDB content subscriptions to which the customer subscribed prior to the date the barring was activated; and (b) thereby, in trade or commerce in connection with the supply of the PDB service, made a false representation as to the benefits, uses or performance characteristics of the PDB service in contravention of s 12DB(1)(e) of the ASIC Act. 4. Telstra, between about July 2013 and 31 May 2016: (a) represented that customers who requested barring of the PDB service would be able to unsubscribe from PDB content subscriptions by texting the word "STOP" in reply to the confirmation SMS that Aggregators send to subscribed customers (the Unsubscribe representation), when in fact customers who had barred Premium SMS services were unable to unsubscribe from PDB content subscriptions as a result of sending such a text message; and (b) thereby in trade or commerce, in connection with the supply of the PDB service, made a false representation to customers as to the benefits, uses or performance characteristics of the PDB service in contravention of s 12DB(1)(e) of the ASIC Act. 5. Telstra, between about July 2013 and August 2016, in circumstances where customers were acquiring a new mobile service and the mobile number associated with that service had been deactivated for a period prior to such acquisition: (a) impliedly represented that customers acquiring a new mobile service and number would only be charged for PDB content subscriptions incurred by that customer (the Carry Over representation), when in fact some customers who acquired a mobile number formerly allocated to a different customer were charged for PDB content subscriptions associated with the previous customer's deactivated mobile service; and (b) thereby in trade or commerce, in connection with the supply of the PDB service, made a false representation to customers as to the benefits, uses or performance characteristics of the PDB service in contravention of s 12DB(1)(e) of the ASIC Act. 14 The proposed orders as to pecuniary penalties and costs are as follows: 6. Telstra pay to the Commonwealth of Australia, within 14 days of the making of this Order, the following amounts by way of pecuniary penalties: (a) in respect of the contraventions declared in paragraph 2, a pecuniary penalty of $7,000,000; (b) in respect of the contraventions declared in paragraph 3, a pecuniary penalty of $1,000,000; (c) in respect of the contraventions declared in paragraph 4, a pecuniary penalty of $1,000,000; (d) in respect of the contraventions declared in paragraph 5, a pecuniary penalty of $1,000,000. 7. Telstra pay the costs of the ACCC of and incidental to these proceedings, to be taxed if not agreed. 15 The evidence before the Court at the hearing comprised the affidavit of Mr Owbridge, referred to above, which annexed the Minutes of Proposed Orders, the SOAF and joint written submissions of the parties. 16 At the hearing, the parties made oral submissions in support of the proposed declarations and orders. There was no issue between the parties as to the applicable principles or as to the application of those principles to the facts of this case. 17 For the reasons that follow, I consider there to be a proper basis for making the proposed declarations. I also consider the proposed penalties, totalling $10 million, to be appropriate penalties and will make orders to this effect. The conduct is, to my mind, at the serious end of the spectrum of contraventions of the false or misleading representation provisions of the ASIC Act. The proposed penalties reflect the seriousness of the offending and should operate as a deterrent against such conduct being engaged in by Telstra or other companies in the future. I will also make the proposed order that Telstra pay the ACCC's costs of the proceeding. Applicable principles – making of orders by agreement and declarations 18 The applicable principles as regards the making of orders by agreement and as regards declarations were summarised by Gordon J in Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 1405 at [70]-[79] as follows: 2.3.1 Orders sought by agreement … 70 The applicable principles are well established. First, there is a well-recognised public interest in the settlement of cases under the [Competition and Consumer Act]: NW Frozen Foods Pty Ltd v Australian Competition & Consumer Commission (1996) 71 FCR 285 at 291. Second, the orders proposed by agreement of the parties must be not contrary to the public interest and at least consistent with it: Australian Competition & Consumer Commission v Real Estate Institute of Western Australia Inc (1999) 161 ALR 79 at [18]. 71 Third, when deciding whether to make orders that are consented to by the parties, the Court must be satisfied that it has the power to make the orders proposed and that the orders are appropriate: Real Estate Institute at [17] and [20] and Australian Competition & Consumer Commission v Virgin Mobile Australia Pty Ltd (No 2) [2002] FCA 1548 at [1]. Parties cannot by consent confer power to make orders that the Court otherwise lacks the power to make: Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150 at 163. 72 Fourth, once the Court is satisfied that orders are within power and appropriate, it should exercise a degree of restraint when scrutinising the proposed settlement terms, particularly where both parties are legally represented and able to understand and evaluate the desirability of the settlement: Australian Competition & Consumer Commission v Woolworths (South Australia) Pty Ltd (Trading as Mac's Liquor) [2003] FCA 530 at [21]; Australian Competition & Consumer Commission v Target Australia Pty Ltd [2001] FCA 1326 at [24]; Real Estate Institute at [20]-[21]; Australian Competition & Consumer Commission v Econovite Pty Ltd [2003] FCA 964 at [11] and [22] and Australian Competition & Consumer Commission v The Construction, Forestry, Mining and Energy Union [2007] FCA 1370 at [4]. 73 Finally, in deciding whether agreed orders conform with legal principle, the Court is entitled to treat the consent of Coles as an admission of all facts necessary or appropriate to the granting of the relief sought against it: Thomson Australian Holdings at 164. 2.3.2 Declarations 74 The Court has a wide discretionary power to make declarations under s 21 of the Federal Court Act: Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 437-8; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581-2 and Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (No 2) (1993) 41 FCR 89 at 99. 75 Where a declaration is sought with the consent of the parties, the Court's discretion is not supplanted, but nor will the Court refuse to give effect to terms of settlement by refusing to make orders where they are within the Court's jurisdiction and are otherwise unobjectionable: see, for example, Econovite at [11]. 76 However, before making declarations, three requirements should be satisfied: (1) The question must be a real and not a hypothetical or theoretical one; (2) The applicant must have a real interest in raising it; and (3) There must be a proper contradictor: Forster v Jododex at 437-8. 77 In this proceeding, these requirements are satisfied. The proposed declarations relate to conduct that contravenes the ACL and the matters in issue have been identified and particularised by the parties with precision: Australian Competition & Consumer Commission v MSY Technology Pty Ltd (2012) 201 FCR 378 at [35]. The proposed declarations contain sufficient indication of how and why the relevant conduct is a contravention of the ACL: BMW Australia Ltd v Australian Competition & Consumer Commission [2004] FCAFC 167 at [35]. 78 It is in the public interest for the ACCC to seek to have the declarations made and for the declarations to be made (see the factors outlined in ACCC v CFMEU at [6]). There is a significant legal controversy in this case which is being resolved. The ACCC, as a public regulator under the ACL, has a genuine interest in seeking the declaratory relief and Coles is a proper contradictor because it has contravened the ACL and is the subject of the declarations. Coles has an interest in opposing the making of them: MSY Technology at [30]. No less importantly, the declarations sought are appropriate because they serve to record the Court's disapproval of the contravening conduct, vindicate the ACCC's claim that Coles contravened the ACL, assist the ACCC to carry out the duties conferred upon it by the Act (including the ACL) in relation to other similar conduct, inform the public of the harm arising from Coles' contravening conduct and deter other corporations from contravening the ACL. 79 Finally, the facts and admissions in Annexure 1 provide a sufficient factual foundation for the making of the declarations: s 191 of the Evidence Act; Australian Competition & Consumer Commission v Dataline.Net.Au Pty Ltd (2006) 236 ALR 665 at [57]-[59] endorsed by the Full Court in Australian Competition & Consumer Commission v Dataline.Net.Au Pty Ltd (2007) 161 FCR 513 at [92]; Hadgkiss v Aldin (No 2) [2007] FCA 2069 at [21]–[22]; Secretary, Department of Health & Ageing v Pagasa Australia Pty Ltd [2008] FCA 1545 at [77]-[79] and Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543. Applicable principles – pecuniary penalties 19 The contraventions alleged in the present case are against s 12DB of the ASIC Act. Section 12DB (which deals with false or misleading representations) is contained in Pt 2, Div 2, Subdiv D of the ASIC Act. Division 2 deals with unconscionable conduct and consumer protection in relation to financial services. Subdivision D deals with consumer protection. 20 Pecuniary penalties for the alleged contraventions are dealt with in s 12GBA. Section 12GBA(1) relevantly provides that, if the Court is satisfied that a person has contravened s 12DB, the Court may order the person to pay to the Commonwealth such pecuniary penalty, in respect of each act or omission by the person to which the section applies, as the Court determines to be appropriate. 21 Section 12GBA(2) provides that, in determining the appropriate pecuniary penalty, the Court must have regard to all relevant matters including: (a) the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission; (b) the circumstances in which the act or omission took place; and (c) whether the person has previously been found by the Court in proceedings under Subdiv G (of Pt 2, Div 2) to have engaged in any similar conduct. These factors are substantially the same as those referred to in s 76(1) of the Competition and Consumer Act (formerly the Trade Practices Act 1974 (Cth)) save for the reference to proceedings under Subdiv G. Hence, the authorities dealing with that provision are of assistance in applying s 12GBA of the ASIC Act. 22 For each contravention of s 12DB, the maximum penalty payable by a body corporate under s 12GBA(3) is 10,000 penalty units. Over the relevant period, the value of a penalty unit has been: (a) between 1 July 2013 and 30 July 2015, $170; (b) between 31 July 2015 and 30 June 2017, $180; and (c) since 1 July 2017 and presently, $210: Crimes Act 1914 (Cth), s 4AA. Therefore, the maximum penalty for a contravention of s 12DB during the relevant period has ranged from $1.7 million to $2.1 million. A contravention of s 12DB occurs each time the relevant false or misleading representation is made to a person. In the present case, it is common ground that there were at least tens of thousands of contraventions (see further below). 23 The principles applicable to the discretion to impose pecuniary penalties have been discussed in many cases. In the context of misleading or deceptive conduct in relation to financial services, the principles were discussed by Jacobson J in Australian Securities and Investments Commission v GE Capital Finance Australia, in the matter of GE Capital Finance Australia [2014] FCA 701 at [69]-[78], citing Trade Practices Commission v CSR Limited [1991] ATPR 41-076; [1990] FCA 762 and Re HIH Insurance Ltd (in prov liq) and HIH Casualty and General Insurance Ltd (in prov liq); Australian Securities and Investments Commission v Adler (2002) 42 ACSR 80 at [125]-[126]. See also Australian Competition and Consumer Commission v Hillside (Australia New Media) Pty Ltd trading as Bet365 (No 2) [2016] FCA 698 at [21]-[25] per Beach J. 24 In Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 (FWBII), the High Court held that, in the context of civil penalty provisions, it was open to the Court to receive submissions, including joint submissions, as to an appropriate penalty. French CJ, Kiefel, Bell, Nettle and Gordon JJ (with whom Keane J agreed) stated at [46] that there is "an important public policy involved in promoting predictability of outcome in civil penalty proceedings" and that "the practice of receiving and, if appropriate, accepting agreed penalty submissions increases the predictability of outcome for regulators and wrongdoers". Their Honours stated that, as was recognised in Trade Practices Commission v Allied Mills Industries Pty Ltd (No 5) (1981) 60 FLR 38; 37 ALR 256 and determined in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285, "such predictability of outcome encourages corporations to acknowledge contraventions, which, in turn, assists in avoiding lengthy and complex litigation and thus tends to free the courts to deal with other matters and to free investigating officers to turn to other areas of investigation that await their attention". 25 Their Honours stated, at [57], that in civil proceedings there is generally very considerable scope for the parties to agree on the facts and their consequences, and that there "is also very considerable scope for them to agree upon the appropriate remedy and for the court to be persuaded that it is an appropriate remedy". In relation to civil penalty proceedings, their Honours stated at [58]: Subject to the court being sufficiently persuaded of the accuracy of the parties' agreement as to facts and consequences, and that the penalty which the parties propose is an appropriate remedy in the circumstances thus revealed, it is consistent with principle and, for the reasons identified in Allied Mills, highly desirable in practice for the court to accept the parties' proposal and therefore impose the proposed penalty. (Footnote omitted.) 26 Their Honours in FWBII also made observations, at [60]-[61], regarding submissions by a regulator in such a context. 27 It follows from the above that the questions to be determined in the present case include: first, whether the Court is sufficiently persuaded of the accuracy of the parties' agreement as to facts and consequences; and secondly, whether the penalty that the parties propose is an appropriate remedy in the circumstances thus revealed. 28 In FWBII, French CJ, Kiefel, Bell, Nettle and Gordon JJ explained the purpose of a civil penalty as follows at [55]: … whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd, is primarily if not wholly protective in promoting the public interest in compliance: "Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act] … The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act." (Footnotes omitted.) Application of principles in the present case Whether, in providing the PDB service, Telstra was providing a financial service 29 A threshold issue is whether, in providing the PDB service, Telstra was providing a "financial service" within the meaning of the ASIC Act. As noted above, it is upon this basis that the proceeding has been brought under the consumer protection provisions of the ASIC Act rather than those of the Competition and Consumer Act. 30 The relevant factual background to the issue is as follows. 31 As referred to above, the PDB service enabled customers to purchase third party digital content on a subscription or one-off purchase basis from a third party, and have the charges for that content billed on their Telstra account. Third party digital content purchased via the PDB service (referred to in these reasons as "PDB content") included "premium" content services, downloadable applications and other content. Content purchased via the PDB service was created by Content Providers, who did not have a direct relationship with Telstra. Rather, their digital content offerings were compiled and marketed by five third-party Aggregators, who had contractual arrangements with Telstra to make the content available for purchase by Telstra customers. 32 The way in which the PDB service was intended by Telstra to operate is described in [22] of the SOAF: 22 During the relevant period, consistent with Telstra's arrangements with Aggregators, the process for Telstra customers to subscribe to PDB content and the process for the PDB service was intended by Telstra to operate in the following way: a. a Telstra customer, while using apps or websites on their device, encounters an advertisement for third party digital content; b. if the customer clicks on the advertisement, the customer is taken to a different web-based address associated with a Content Provider (third party website); c. on the third party website the customer is presented with a "buy now" or "subscribe" (or similar) button (subscription trigger) in respect of which: i. prior to 7 June 2016, purchasing PDB content required a single click on a "subscribe" or "buy now" (or similar) button; ii. since 7 June 2016, purchasing PDB content required two steps (doubleclick process): a customer first clicks a "confirmation" button indicating that they agree to the terms and conditions of the service and accept that costs will be charged to their mobile account, and then a second click of a "subscribe" or "buy now" (or similar) button; and iii. since 4 December 2017, new PDB subscriptions were no longer available and customers could only purchase PDB content on a one-off basis; d. if the third party website is operated by or associated with an Aggregator then, when the customer clicks a subscription trigger on the website, the Aggregator sends the request from the customer to a different web address, which request is picked up by Telstra's mobile network; e. if that web address is operated by an Aggregator and the customer is a Telstra mobile customer, then Telstra transmits either the customer's mobile device number (for example a mobile phone number) or unique identifier to the Aggregator; f. the Aggregator then sends a Charge Notice to Telstra recording that the customer has purchased content via the PDB service. Telstra sends a response to the Aggregator recording whether the Charge Notice was successful or failed; g. after the customer clicks the subscription trigger, the customer was sent SMS messages by the Aggregator, which included: i. since 21 July 2014, a notification SMS message to be sent to all subscribed customers once every calendar month (notification SMS) and a notification SMS message when the customer incurred $30 of charges and each time the customer incurred an additional $30 of charges in that month (expenditure SMS); ii. since March 2015, an additional subscription confirmation SMS message to be sent to all newly subscribed customers after the customer had signed up for the subscription (confirmation SMS), which confirmation SMS informed the customer about the recurring subscription, the charges to their mobile account, the ability to opt-out by sending a STOP message to a number and contact details for the Aggregator's helpline; and iii. since January 2016, an additional subscription reminder SMS message to be sent to all newly subscribed customers within 24 hours of the confirmation SMS being sent (reminder SMS); and h. for post-paid customers, the purchase is charged to their Telstra account, while for pre-paid customers the purchase is deducted from their prepaid credit. 33 It is convenient to refer to the definition of "financial product" before turning to the definition of "financial service". "Financial product" is defined in s 12BAA of the ASIC Act. Section 12BAA(1)(c) provides that (subject to certain exceptions that are not applicable in the present case), for the purposes of Pt 2, Div 2, a "financial product" includes a facility through which, or through the acquisition of which, a person makes non-cash payments. The expression "non-cash payments" is the subject of elaboration in s 12BAA(6). This provides that, for the purposes of the section, a person makes non-cash payments if they make payments, or cause payments to be made, otherwise than by the physical delivery of Australian currency in the form of notes and/or coins. On the basis of the facts set out above, and these definitions, I accept that, at least in the case of pre-paid customers, the PDB service was a "financial product". In the case of pre-paid customers, the PDB service was a facility through which those customers made non-cash payments for PDB content. 34 Section 12BAA(7) of the ASIC Act provides that (subject to certain exceptions that are not applicable here) certain things are "financial products" for the purposes of Pt 2, Div 2. The list of things includes, in paragraph (k), a credit facility within the meaning of the regulations. 35 The expression "credit facility" is defined for present purposes in reg 2B of the Australian Securities and Investments Commission Regulations 2001 (Cth). This relevantly provides that the following is a "credit facility": the provision of credit (for any period; with or without prior agreement between the credit provider and the debtor; and whether or not both credit and debit facilities are available). The expression "credit" is defined in reg 2B(3) as meaning a contract, arrangement or understanding: (a) under which: payment of a debt owed by one person to another person is deferred; or one person incurs a deferred debt to another person; and (b) including (among other things) credit provided for the purchase of goods or services. 36 On the basis of the facts set out above, and these definitions, I accept that, in the case of post-paid customers, the PDB service was a "credit facility" within the meaning of the regulations and thus a "financial product". For such customers, a deferred debt was incurred to another person and credit was provided for the purchase of goods or services. Thus, in respect of both pre-paid customers and post-paid customers, the PDB service was a financial product. 37 The next question is whether, in providing the PDB service, Telstra was providing a "financial service" within the meaning of the ASIC Act. Section 12BAB(1) provides that for the purposes of Pt 2, Div 2, and subject to an exception that is not applicable, a person provides a "financial service" if they (among other things) deal in a financial product. The concept of dealing in a financial product is defined in s 12BAB(7), which relevantly provides that the following conduct constitutes dealing in a financial product: issuing a financial product. I accept that Telstra was issuing the PDB service, which is a financial product. On this basis, I am satisfied that, in providing the PDB service, Telstra was providing a financial service. 38 I will therefore make the first declaration proposed by the parties. In circumstances where the issue is one of some complexity, and provides the basis for the application of the consumer protection provisions of the ASIC Act rather than those of the Competition and Consumer Act, it is appropriate for this conclusion to be reflected in a declaration. The contraventions of s 12DB 39 The applicants allege that Telstra contravened, and Telstra accepts that it contravened, s 12DB(1)(b) and (e) of the ASIC Act. Section 12DB(1) of the ASIC Act relevantly provides as follows: A person must not, in trade or commerce, in connection with the supply or possible supply of financial services, or in connection with the promotion by any means of the supply or use of financial services: (b) make a false or misleading representation that a particular person has agreed to acquire services; or … (e) make a false or misleading representation that services have sponsorship, approval, performance characteristics, uses or benefits; … 40 On the basis of the facts and admissions set out in the SOAF, I am satisfied that Telstra did contravene s 12DB(1)(b) and (e) as alleged by the applicant and agreed to by Telstra. I explain, briefly, why I have reached this conclusion. Proposed declaration 2 41 The first allegation (which is the subject of proposed declaration 2) is that Telstra, between early 2015 and 7 June 2016, by applying charges for PDB content subscriptions to the accounts of customers who had unintentionally purchased PDB content subscriptions without their knowledge or consent and so had not agreed to acquire the subscriptions (referred to in the proposed declaration as "Non-consenting Customers"): (a) in trade or commerce represented to Non-consenting Customers that they had agreed to acquire the PDB content subscriptions when in fact the subscriptions had occurred without the customer's knowledge or consent, and so those customers had not agreed to acquire those subscriptions; and (b) thereby, in connection with the supply of the PDB service, made a false or misleading representation that Non-consenting Customers had agreed to acquire services in contravention of s 12DB(1)(b) of the ASIC Act. 42 The PDB service has been described above. 43 During the relevant period, Telstra did not adequately inform its customers that: (a) the PDB service was a default setting on Telstra mobile services – that is, customers were not required to opt-in to the PDB service on their mobile service prior to purchasing third party digital content; and (b) consequently, if they were to purchase content on their mobile devices, even unintentionally, they would be billed directly by Telstra via the PDB service (SOAF, 11]). 44 As set out in [14]-[15] and [93] of the SOAF, (a) Telstra was aware from early 2015 that the operation of the PDB service had led to a significant number of its customers unintentionally purchasing PDB content subscriptions without their knowledge or consent and so had not agreed to acquire the subscription. (b) By applying charges in respect of purported subscriptions to the accounts of customers, in circumstances where the purported subscription had occurred without the customer's knowledge or consent and so the customer had not agreed to acquire the subscription, Telstra made false or misleading representations to those customers that they had agreed to acquire PDB content subscriptions when they had not. 45 The parties have not been able to identify the number of affected customers with any precision. However, Telstra admits that there are at least tens of thousands and possibly up to or in excess of 100,000 of such customers (SOAF, [26]). 46 The SOAF does not describe in detail how it was that many customers unintentionally purchased PDB content. At the hearing, senior counsel for the applicants provided the following description: So far as the statement of agreed facts, at least, has been able to confirm, customers would always need to click a subscription trigger. So to that extent there was required some step from a customer, but it was possible to hit that subscription trigger by accident, or inadvertently, or it appears that customers, in various ways, were able to subscribe without appreciating that they had done so and in circumstances where, down the track, very large numbers of them would then notice the charges and complain to Telstra that they did not understand where the charges come from, they did not recall purchasing or intend to purchase the content for which they were being charged, and hence the very large volumes of complaints that Telstra was receiving from its customers directed at complaining that they were being charged for things they had not wanted to purchase. Senior counsel for Telstra did not indicate any disagreement with this description. 47 I note that the alleged false or misleading representations are said to have been made by Telstra applying charges for PDB content to the accounts of the relevant customers. It is perhaps a little unusual for a representation to take this form. However, I accept that, in the circumstances of the present case, the application of the charges constituted the making of the alleged representations. Further, as senior counsel for Telstra submitted at the hearing, the form of the alleged representation emerges from the terms of s 12DB(1)(b). 48 On the basis of the facts and matters referred to above, and the SOAF generally, I am satisfied that Telstra contravened s 12DB(1)(b) as set out in proposed declaration 2. It is therefore appropriate to make that declaration. Proposed declaration 3 49 The second allegation (which is the subject of proposed declaration 3) is that Telstra, between about July 2013 and 4 December 2017: (a) represented to customers that barring access to PDB services from a customer's mobile device would result in the customer no longer being charged for PDB content subscriptions after the date the barring was activated, when in fact: (i) barring access to PDB services on a customer's mobile device would only result in the customer not being charged for new PDB content subscriptions through the PDB service after the date on which barring was activated; and (ii) the customer could continue to be charged for any PDB content subscriptions to which the customer subscribed prior to the date the barring was activated; and (b) thereby, in trade or commerce in connection with the supply of the PDB service, made a false representation as to the benefits, uses or performance characteristics of the PDB service in contravention of s 12DB(1)(e) of the ASIC Act. 50 The factual basis for this allegation is set out, in particular, at [68]-[69] of the SOAF. 51 On the basis of those facts and matters, and the SOAF generally, I am satisfied that Telstra contravened s 12DB(1)(e) as set out in proposed declaration 3. It is therefore appropriate to make that declaration. Proposed declaration 4 52 The third allegation (which is the subject of proposed declaration 4) is that Telstra, between about July 2013 and 31 May 2016: (a) represented that customers who requested barring of the PDB service would be able to unsubscribe from PDB content subscriptions by texting the word "STOP" in reply to the confirmation SMS that Aggregators send to subscribed customers, when in fact customers who had barred Premium SMS services were unable to unsubscribe from PDB content subscriptions as a result of sending such a text message; and (b) thereby in trade or commerce, in connection with the supply of the PDB service, made a false representation to customers as to the benefits, uses or performance characteristics of the PDB service in contravention of s 12DB(1)(e) of the ASIC Act. 53 The factual basis for this allegation is set out, in particular, at [70]-[72] of the SOAF. 54 On the basis of those facts and matters, I am satisfied that Telstra contravened s 12DB(1)(e) as alleged. It is therefore appropriate to make the proposed declaration. Proposed declaration 5 55 The fourth allegation (which is the subject of proposed declaration 5) is that Telstra, between about July 2013 and August 2016, in circumstances where customers were acquiring a new mobile service and the mobile number associated with that service had been deactivated for a period prior to such acquisition: (a) impliedly represented that customers acquiring a new mobile service and number would only be charged for PDB content subscriptions incurred by that customer, when in fact some customers who acquired a mobile number formerly allocated to a different customer were charged for PDB content subscriptions associated with the previous customer's deactivated mobile service; and (b) thereby in trade or commerce, in connection with the supply of the PDB service, made a false representation to customers as to the benefits, uses or performance characteristics of the PDB service in contravention of s 12DB(1)(e) of the ASIC Act. 56 The factual basis for this allegation is set out, in particular, at [73]-[77] of the SOAF. 57 On the basis of those facts and matters, and the SOAF generally, I am satisfied that Telstra contravened s 12DB(1)(e) as set out in proposed declaration 5. It is therefore appropriate to make that declaration. 58 It is convenient to refer at this point to the number of customers affected by the conduct that is the subject of proposed declarations 3, 4 and 5. Telstra is currently unable to determine with precision the number of customers affected by these issues, but admits that it is likely to be in the thousands and may be in excess of 10,000 (SOAF, [78]). Pecuniary penalties 59 The parties propose the following pecuniary penalties: (a) in respect of the contraventions declared in paragraph 2, a pecuniary penalty of $7,000,000; (b) in respect of the contraventions declared in paragraph 3, a pecuniary penalty of $1,000,000; (c) in respect of the contraventions declared in paragraph 4, a pecuniary penalty of $1,000,000; (d) in respect of the contraventions declared in paragraph 5, a pecuniary penalty of $1,000,000. 60 I consider each of these pecuniary penalties to be an appropriate penalty. My reasons are as follows. In the discussion that follows, I refer to the mandatory considerations referred to in the legislation and the factors identified by French J in Trade Practices Commission v CSR Limited [1991] ATPR 41-076; [1990] FCA 762. Maximum penalty 61 The maximum penalty for each contravention has been referred to at [22] above. 62 The precise number of each type of contravention admitted by Telstra in this proceeding is unknown, but the maximum penalty available for the contraventions that are the subject of proposed declaration 2 is potentially in the hundreds of millions of dollars and, for the other declarations of contravention, at least tens of millions of dollars. In cases such as the present, involving agreement between the parties as to a very large number of contraventions, it is not helpful to seek to make a finding as to the precise number of contraventions, or to calculate a maximum aggregate penalty by reference to such a number: see Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 271 IR 321; [2017] FCAFC 113 at [143]-[145], citing Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd (2015) 327 ALR 540 at [18], [82] and Australian Competition and Consumer Commission v Reckitt Benckiser (Aust) Pty Ltd (2016) 340 ALR 25 at [139]-[145]. The nature and extent of the contravening conduct and the circumstances in which it took place 63 The operation of the PDB service led to a significant number of Telstra customers unintentionally purchasing and being billed for PDB content subscriptions without their knowledge or consent (termed "Non-consenting Customers") (SOAF, [93]). By applying charges for PDB content subscriptions to the accounts of Non-consenting Customers, Telstra made false or misleading representations to those customers that they had agreed to acquire those subscriptions, when they had not (SOAF, [15], [93]). Telstra has admitted that these contraventions took place between early 2015 and at least June 2016 (SOAF, [93]). 64 Telstra was aware that customers were at risk of unintentional purchases and that customers were being charged for services they had not intended to acquire. 65 Telstra did not adequately inform its customers that: (a) the PDB service was a default setting on Telstra mobile services – that is, customers were not required to opt-in to the PDB service on their mobile service prior to purchasing third party digital content; and (b) consequently, if they were to unintentionally purchase content via the PDB service on their mobile devices without their knowledge or consent, they would be billed by Telstra (SOAF, [11]). 66 The level of complaints of Non-consenting Customers demonstrates the magnitude of the impact of Telstra's contraventions and the level to which those customers were incurring PDB charges for subscriptions they had not agreed to acquire (SOAF, [24], [26], [38], [42], [46], [57]). For example, in October 2015, Telstra recorded having received approximately 20,000 calls about third party content and in May 2016, approximately 36,000 calls. A significant proportion of these calls related to the PDB service. 67 In a small survey conducted in June 2015 by Telstra of 30 customers recorded as having subscriptions to PDB content services provided by one particular Aggregator, 80 per cent responded that they were not aware that they had subscribed to a PDB content subscription (SOAF, [37]). All customers who were unaware of the charges opted out when informed of their subscription (SOAF, [37]). Over the relevant period, approximately 2.8 million mobile device numbers had charges applied to them in relation to the PDB content (SOAF, [25]). 68 While Telstra took the steps set out in the SOAF to address some of the issues raised by customers who found out they were being charged for subscriptions they had not intentionally acquired, it did not take sufficient steps to ensure its customers had been alerted to the risk of being charged for PDB content subscriptions without their knowledge or consent (SOAF, [56]) or to stop making misrepresentations to them that they had agreed to acquire the services. Telstra neither suspended its offering of the PDB service entirely, nor applied the identity verification safeguards that it applied to other products (SOAF, [14]). 69 Telstra also, until at least August 2016, had a policy of directing all customer complaints about the PDB service in the first instance to the Aggregators or Content Providers (SOAF, [48]). This policy was in place despite Telstra being aware that, while these entities had Australian local numbers to call, their head offices were in many cases located overseas and that the procedures employed by Aggregators and Content Providers for handling customer complaints were frequently time-consuming, difficult to navigate and frustrating for customers (SOAF, [48]). 70 In May 2015, Telstra suspended one Content Provider, which was responsible for a large proportion of Telecommunications Industry Ombudsman (TIO) complaints referred to Telstra about PDB content. At that stage, Telstra was billing 25,000 customers for content allegedly acquired from that Content Provider (SOAF, [35]). Telstra ultimately notified customers subscribed to the services of that Content Provider, advising them of the charges, their subscription and how to opt out and required the relevant Aggregator to implement a 100 per cent customer refund policy on disputed content charges (SOAF, [36]). 71 In 2016, Telstra also "permanently" suspended another Content Provider, suspended a further seven Content Providers and arranged for customers of four of those providers to be unsubscribed and refunded (SOAF, [87]). 72 The three remaining categories of contraventions arose from Telstra's operation of its own systems and its failure to correct the shortcomings of these systems. The contraventions covered by each of proposed declarations 3, 4 and 5 took place over a period of at least three years. 73 Whereas the Non-consenting Customers contraventions affected at least tens of thousands of Telstra customers, and possibly on Telstra's estimate as many as 100,000 customers, the other three representations likely collectively affected some thousands of customers and possibly in excess of 10,000. The latter were, accordingly, much less significant in terms of the number of customers affected. The amount of loss or harm that the contraventions caused 74 Under the PDB service to October 2017: (a) Telstra customers have paid approximately $202 million (excluding GST) in charges; (b) Telstra has applied charges in relation to at least 2,772,005 individual mobile device numbers (more than one of which could belong to a single customer); and (c) Telstra has generated approximately $61.7 million in net revenue (SOAF, [25]), as under Telstra's arrangements with Aggregators, Telstra was paid a fee of approximately 30 per cent of the PDB content charge levied on its customers. 75 Telstra cannot identify with precision what proportion of the approximately $202 million that Telstra has charged to its customers' accounts through the PDB Service to October 2017 was affected by one or more representations. However, given the time period over which the contraventions occurred and the significant number of customers impacted by those contraventions, it is likely that the actual harm caused has been significant. 76 To date, Telstra estimates that it has provided refunds of at least $5 million to customers in relation to charges for PDB content, some of which it has recovered from Aggregators (SOAF, [90]). Telstra has also directed Aggregators to refund at least 28,000 Telstra customers to the value of at least $400,000 in relation to PDB content charges (SOAF, [90]). The size of the contravening entity and its financial position 77 Telstra is a substantial corporation. It is Australia's largest supplier of mobile services with over 17 million mobile services supplied to customers (SOAF, [6]). Its earnings in the 2016 financial year, before interest, tax, depreciation and amortisation were approximately $10.5 billion (SOAF, [6]). Whether the conduct was systematic or deliberate 78 Telstra designed the PDB service and made the decisions to implement it in the ways set out in the SOAF. In particular, Telstra's design and implementation of the PDB service enabled customers to acquire PDB content without providing any verification of their identity or other confirmation of purchase (for example, the sending of a text message or providing a PIN number) and for content charges associated with the PDB content to be applied to the customer's account. 79 Telstra received a significant number of complaints about the PDB service directly through its own call centre and indirectly through the TIO (SOAF, [30]). From early 2015 to at least June 2016, Telstra was aware from these complaints and also through a number of internal studies that the operation of the PDB service had led to a significant number of its customers unintentionally purchasing PDB content subscriptions without their knowledge or consent, and so had not agreed to acquire the subscription (SOAF, [14]). 80 Telstra's conduct towards its customers was deliberate in the sense that it was aware from complaints and its own internal analysis that its customers might be billed for a subscription service they had not intended to, or agreed to, acquire (SOAF, [58]) and did not take sufficient steps to prevent this from happening. Telstra took some steps to address the risks of customers being billed for subscriptions that they had not agreed to acquire, however these were ineffective in preventing a significant number of customers from being charged for PDB content subscriptions that they had not agreed to acquire (SOAF, [56]). The conduct of Telstra and its attendant risks, as well as the remediation steps taken and the inadequacy of those steps, were broadly known within Telstra, including at senior levels (SOAF, [58]). 81 The three categories of contraventions the subject of proposed declarations 3, 4 and 5 arose from operational errors and system failures that, while they obviously should have been identified and avoided, were inadvertent in origin. Whether the contravention arose out of the conduct of senior management or at a lower level 82 The issues with the PDB service and the significant number of complaints to Telstra and the TIO concerning the service were reported to senior levels of management within Telstra. The decision not to either terminate the PDB service entirely before now, or to adopt further or more effective means to prevent the extent to which customers were being charged for subscriptions they had not agreed to acquire, were taken by senior management. Whether the company has a corporate culture conducive to compliance with the relevant provisions 83 Telstra took a number of steps over the years to address some concerns with the PDB service. However, these steps were inadequate and the fact that the steps were inadequate was broadly known within Telstra, including at senior levels (SOAF, [58]). Telstra did not take the necessary steps to ensure customers were not misled. Nor did it stop offering the PDB service while problems with the service remained unresolved. Telstra has previously been involved in the consumer protection issues noted below. Co-operation 84 Telstra has afforded the ACCC a very high level of co-operation in these proceedings, and throughout the investigation. It has admitted that its conduct contravened s 12DB(1)(b) and (e) of the ASIC Act (SOAF, [93]-[95]). Telstra's co-operation has saved the ACCC and the Court the cost and burden of litigating what would otherwise have likely involved a lengthy and expensive case. I accept the parties' submission that Telstra is entitled to a substantial co-operation discount. Similar conduct in the past 85 On 7 November 2017, Telstra gave the ACCC an undertaking under s 87B of the Competition and Consumer Act in relation to Telstra's representations about speeds available to consumers on its broadband plans supplied over the National Broadband Network, which were likely to contravene ss 18, 29(1)(b) and 29(1)(g) of the Australian Consumer Law (being Sch 2 to the Competition and Consumer Act). 86 In October 2017, Telstra agreed to refund its annual AFL Live Pass app subscriber customers after it had failed to disclose to them that the live AFL match services it would be offering on tablet computers were to be reduced to a smaller screen size, and so would no longer be full-screen on tablets. 87 In 2004, this Court made orders declaring that Telstra had contravened ss 52 and 53(e) of the Trade Practices Act in connection with $0 mobile phone advertising: see Australian Competition and Consumer Commission v Telstra Corporation Limited [2004] FCA 987. Other matters relevant to penalty 88 In the course of resolving the ACCC's investigation, Telstra committed to and has ceased offering its PDB service, with effect from 3 March 2018, and has committed to identify, communicate and offer the refunds as identified in the SOAF (SOAF, [91]-[92]). Summary 89 In summary, in my view, the conduct is at the serious end of the spectrum of contraventions of the false or misleading representation provisions of the ASIC Act. The proposed penalties reflect the seriousness of the offending and should operate as a deterrent against such conduct being engaged in by Telstra or other companies in the future. Accordingly, I will make orders for pecuniary penalties in the amounts proposed by the parties. Conclusion 90 For the above reasons, I will make declarations and orders substantially in the form proposed by the parties. I certify that the preceding ninety (90) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moshinsky. Associate: Dated: 26 April 2018 APPENDIX STATEMENT OF AGREED FACTS AND ADMISSIONS 1. This Statement of Agreed Facts and Admissions is made jointly by the first applicant (the Australian Competition and Consumer Commission (ACCC)), the second applicant and the respondent (Telstra) for the purposes of section 191 of the Evidence Act 1995 (Cth). AGREED FACTS Parties 2 The ACCC is the statutory authority responsible for enforcing the Competition and Consumer Act 2010 (Cth) (CCA). 3 Under section 102 of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act), the Australian Securities and Investments Commission has relevantly delegated all of the functions and powers conferred on it under Division 2 of Part 2 of the ASIC Act (other than section 12GLC and Subdivisions GB and GC of Division 2 of Part 2) to the second applicant, the Executive General Manager, Enforcement Division of the ACCC, to the extent that those powers and functions may be necessary for, or reasonably incidental to, the commencement and conduct of any proceedings in relation to matters involving financial products and services provided as part of, or in connection with, the supply or possible supply of telecommunications services. 4 Telstra is a publicly listed company incorporated in Australia. Telstra supplies retail telephony and data services for mobile phones and tablets (mobile services). 5 Telstra admits that by reason of the facts set out below it has contravened sections 12DB(1)(b) and (e) of the ASIC Act as set out at [93] to [95] below. Mobile services offered by Telstra 6 Telstra is Australia's largest supplier of mobile services. In financial year 2016 it supplied customers with around 17.2 million mobile services and generated earnings before interest, tax, depreciation and amortisation of about $10.5 billion. 7 Since at least July 2013 to date (the relevant period), Telstra has, in trade or commerce, offered mobile services to consumers for personal or domestic use (Domestic customers) and small business and corporate customers (Business customers) (together customers). Telstra charges for the mobile services either as: a. pre-paid services, where customers purchase credit in advance, and the purchased credit is used to pay for mobile services as the services are used: or b. post-paid services, where customers are billed (generally monthly) in arrears (although some charges, for example access fees, may be charged in advance). 8 From time to time during the relevant period, the mobile services offered by Telstra have enabled customers to access online software and services (digital content), including in the following ways (noting that these proceedings only concern the Premium Direct Billing service described in paragraph [8(d)]): a. for Business customers – via the "Telstra Apps Marketplace," a web-based portal that enables Business customers to purchase third party digital content. In order to access this content through this portal, the Business customer must create an account with a password and email address. Those customers can apply to have purchases billed to their Telstra mobile account, which requires them to be signed in and to provide their business address and Australian Business Number for each purchase, otherwise they must pay for each purchase via their credit card; b. for Domestic and Business customers – via the web to third party "applications" or "app" stores, such as Apple's App Store or Google's "Google Play" (together app stores) that enable customers to purchase third party digital content. In order to access content through these means, customers must create accounts directly with the app store and, until about early 2017, any purchases were billed by the app store directly to the customers' credit cards. Since early 2017, customers can apply to have purchases via Google Play billed to their Telstra mobile account, which requires customers to select the option to "Bill my Telstra account", enter their Telstra phone number and enter their Google Play password, before confirming each purchase; c. for Domestic and Business customers – Premium SMS service that enables customers to purchase third party digital content, for example daily horoscope or other notifications, or for "voting" in television programs. Access to Premium SMS content requires a "double opt-in": a customer initiates the first request by sending an SMS to a number starting with a 19xxx prefix; then the customer receives a "subscription request" text, and must respond affirmatively (second request) for subscription to take effect; and d. for Domestic and Business customers – Premium Direct Billing service (PDB service) [Footnote: Also sometimes referred to as Telstra's "Direct Carrier Billing" service] that enables customers to purchase third party digital content on a subscription or one-off purchase basis from a third party, and have the charges for that content billed on their Telstra account. Third party digital content purchased via the PDB service (known as PDB content) includes "premium" content services (such as news websites) and downloadable applications (such as games or ringtones) and other content (such as "voting" in television programs) not obtained from the Telstra Apps Marketplace or an app store. The way in which Telstra intended customers to access the PDB service throughout the relevant period is set out in paragraph [22]. Content purchased via the PDB service is created by Content Providers who do not have a direct relationship with Telstra. Rather, their digital content offerings are compiled and marketed by five third-party providers (Aggregators) who have contractual arrangements with Telstra to make the content available for purchase by Telstra customers. These proceedings – outline 9 In or about June 2013, Telstra introduced its PDB service. 10 These proceedings involve false and misleading representations made by Telstra in the course of operating its PDB service. 11 During the relevant period, Telstra did not adequately inform its customers that: a. the PDB service was a default setting on Telstra mobile services – that is, customers were not required to opt-in to (i.e. request Telstra to set up) the PDB service on their mobile service prior to purchasing third party digital content; and b. consequently, if they were to purchase content on their mobile devices, even unintentionally, they would be billed directly by Telstra via the PDB service. 12 Telstra applied charges to a customer's Telstra mobile account through the PDB service. 13 Up to October 2017, Telstra earned approximately $61.7 million net revenue from the PDB service. 14 As a result of complaints received from Telstra's customers in relation to the PDB service and through a number of internal studies, Telstra was aware from early 2015 to at least June 2016 that the operation of the PDB service had led to a significant number of its customers unintentionally purchasing and being billed for PDB content subscriptions without their knowledge or consent and so had not agreed to acquire the subscription. Despite this awareness, Telstra failed to implement the identity verification safeguards for the PDB service it employed in relation to other services offered or enabled by Telstra as outlined in [8(a) to (c)] above. 15 In these circumstances, by applying charges to customers' accounts who had unintentionally purchased PDB content subscriptions without knowledge or consent and so had not agreed to acquire the subscription prior to June 2016, Telstra made false or misleading representations to those customers that they had agreed to acquire PDB content subscriptions when they had not. 16 For those customers who sought to query PDB service charges or have them stopped or refunded, many were directed by Telstra to raise their dispute with the Content Provider or Aggregator, where many then encountered significant difficulties in both cancelling the subscription and obtaining a refund in respect of the unauthorised charges. 17 Telstra accepts that it has contravened the law, both in respect of the false or misleading representations set out at paragraph [15] above and in respect of the particular representations set out in further detail at paragraphs [68 to 78] below. It has voluntarily made the frank and full admissions that appear in this document. It has cooperated with the ACCC throughout its investigation and made senior staff available to assist with those inquiries and to meet with the ACCC to resolve issues cooperatively. 18 Telstra has also ceased offering the PDB service entirely with effect from 3 March 2018, and has committed to undertake an extensive communication and refund program in respect of identified customers who may have been affected by Telstra's admitted contraventions. Further details are set out in paragraph [92] below. PDB service 19 Since about June 2013, Telstra had contracts with Aggregators in relation to the PDB service by which customers could purchase PDB content on their mobile device and be charged for that content on their Telstra account, and Aggregators would be paid for PDB content by Telstra. 20. Telstra sets its customers' mobile devices to the PDB service as a default setting. 21 The PDB service is, for post-paid customers, a credit facility within the meaning of s.12BAA(7)(k) of the ASIC Act, and for pre-paid customers, a facility through which they make non-cash payments within the meaning of s 12BAA(1)(c) and (6) of the ASIC Act. The PDB service is accordingly a "financial product" within the meaning of the ASIC Act. Telstra, by creating and operating the PDB service, issues or provides a service in relation to a financial product, within the meaning of s.12BAB(1)(b) or (g) respectively of the ASIC Act, and accordingly supplies to its customers a "financial service" within the meaning of the ASIC Act. 22 During the relevant period, consistent with Telstra's arrangements with Aggregators, the process for Telstra customers to subscribe to PDB content and the process for the PDB service was intended by Telstra to operate in the following way: a. a Telstra customer, while using apps or websites on their device, encounters an advertisement for third party digital content; b. if the customer clicks on the advertisement, the customer is taken to a different web-based address associated with a Content Provider (third party website); c. on the third party website the customer is presented with a "buy now" or "subscribe" (or similar) button (subscription trigger) in respect of which: i. prior to 7 June 2016, purchasing PDB content required a single click on a "subscribe" or "buy now" (or similar) button; ii. since 7 June 2016, purchasing PDB content required two steps (doubleclick process): a customer first clicks a "confirmation" button indicating that they agree to the terms and conditions of the service and accept that costs will be charged to their mobile account, and then a second click of a "subscribe" or "buy now" (or similar) button; and iii. since 4 December 2017, new PDB subscriptions were no longer available and customers could only purchase PDB content on a one-off basis; d. if the third party website is operated by or associated with an Aggregator then, when the customer clicks a subscription trigger on the website, the Aggregator sends the request from the customer to a different web address, which request is picked up by Telstra's mobile network; e. if that web address is operated by an Aggregator and the customer is a Telstra mobile customer, then Telstra transmits either the customer's mobile device number (for example a mobile phone number) or unique identifier to the Aggregator; f. the Aggregator then sends a Charge Notice to Telstra recording that the customer has purchased content via the PDB service. Telstra sends a response to the Aggregator recording whether the Charge Notice was successful or failed; g. after the customer clicks the subscription trigger, the customer was sent SMS messages by the Aggregator, which included: i. since 21 July 2014, a notification SMS message to be sent to all subscribed customers once every calendar month (notification SMS) and a notification SMS message when the customer incurred $30 of charges and each time the customer incurred an additional $30 of charges in that month (expenditure SMS); ii. since March 2015, an additional subscription confirmation SMS message to be sent to all newly subscribed customers after the customer had signed up for the subscription (confirmation SMS), which confirmation SMS informed the customer about the recurring subscription, the charges to their mobile account, the ability to opt-out by sending a STOP message to a number and contact details for the Aggregator's helpline; and iii. since January 2016, an additional subscription reminder SMS message to be sent to all newly subscribed customers within 24 hours of the confirmation SMS being sent (reminder SMS); and h. for post-paid customers, the purchase is charged to their Telstra account, while for pre-paid customers the purchase is deducted from their prepaid credit. 23 During the relevant period, under Telstra's arrangements with Aggregators, Telstra pays the Aggregator, within 30 days of the end of each calendar month, the total of the amount charged by the Aggregator to the customer for the supply of digital content during that month, less various adjustments. Telstra retains a monthly merchant service fee for Telstra providing the PDB service, which is usually around 30% of the charges to the customer. 24 Between January 2015 and June 2016, Telstra received a large number of calls from customers disputing the billing for third party digital content. For example, as at October 2015, Telstra recorded having received approximately 20,000 calls about third party content that month and in May 2016, approximately 36,000 calls. A significant proportion of these calls related to PDB content services. While it is not possible to determine the precise number of calls from customers disputing charges billed through the PDB service, over the relevant period it would be in the order of tens of thousands and possibly up to or in excess of 100,000. PDB charges incurred by Telstra customers 25 Under the PDB service, in the period to October 2017: a. Telstra customers have paid approximately $202 million (excluding GST) in charges; b. Telstra has applied charges in relation to at least 2,772,005 individual mobile device numbers (more than one of which could belong to a single customer); and c. Telstra has generated approximately $61.7 million in net revenue. 26 Of those customers charged for PDB content, a significant number complained that they had incurred charges without their knowledge or consent. Telstra, by applying subscription charges to accounts where customers had unintentionally purchased PDB content subscriptions without their knowledge or consent and so had not agreed to acquire the subscription, made false and misleading representations to those customers that they had agreed to acquire those services when they had not. The Parties are not able to identify the number of affected customers with any precision. However, Telstra admits that there are at least tens of thousands and possibly up to or in excess of 100,000 of such customers. Information provided to customers about the PDB service 27 Until at least June 2015, Telstra did not provide any information to its customers before or at the time of signing up for a Telstra mobile service about: a. the fact that its customers could acquire PDB content without providing any form of identity verification; b. how to unsubscribe from PDB content subscriptions; or c. how to bar the PDB service given it was a default setting. 28 In the period from June to September 2015: a. information about PDB content subscriptions was published on Telstra's website under the title "Take Control of Your Device"; b. references to third party charges were included in Telstra Welcome packs; and c. email communications describing purchasing premium content were sent to new mobile post-paid customers. 29 Customers were not adequately informed by Telstra that the PDB service was set as a default on their accounts. Customers who were aware of the PDB service and wanted to bar it could do so by either calling Telstra or filling in an online form available on Telstra's website. Telstra's awareness of digital content billing issues 30 Throughout the relevant period Telstra received a significant number of complaints directly through its own call centre and indirectly through the Telecommunications Industry Ombudsman (TIO) about PDB content billing issues, PDB content subscriptions and PDB content charges (PDB complaints). Largely in response to PDB complaints, Telstra made a number of changes to its PDB service, set out in further detail below. Complaints and changes to the billing system 31 In March 2015, Telstra noted in an internal communication that the "overwhelming TIO complaint [in relation to PDB and Premium SMS content services] by customers ... is along the lines of 'I discovered 3rd party charging on my bill that I didn't authorise or subscribe to'". By about May 2015, Telstra identified key causes of complaints in relation to PDB and Premium SMS content services, including that: a. "customers don't remember subscribing" to PDB and Premium SMS content; b. it is "unclear how to unsubscribe" from PDB and Premium SMS content; c. customers "cannot get through to third parties"; and d. if they do contact third parties, customers cannot obtain a refund. 32 At that time, Telstra's own analysis of TIO complaints data showed "that market growth of the newer service, Premium Direct Billing [PDB], largely contributed to the increase in TIO complaints for mobile premium services." 33 At around the same time, Telstra introduced a Premium Mobile Services Complaints Task Force (Task Force) to investigate and analyse the rise in TIO complaints in relation to the PDB and Premium SMS content services. 34 By May 2015, Telstra recorded that it had experienced a significant rise in the number of PDB complaints referred to Telstra from the TIO, which averaged 47 complaints per month from March to May that year. In June 2015, Telstra identified the "root cause" of complaints as customers "opting in" to PDB content subscriptions inadvertently or without a full understanding of the billing implications. 35 Also in May 2015, Telstra suspended the Content Provider "KKO Store" for new subscriptions, which represented a large proportion of TIO PDB complaints referred to Telstra. At that time, KKO had 25,000 unique subscribers who were Telstra customers and gross revenue attributable to Telstra customers of $1.8 million. 36 In June 2015, Telstra sent SMS messages to 6,590 Telstra customers with existing KKO Store subscriptions reminding them of the service costs, where to obtain assistance and how to opt out. Telstra also required the Aggregator of KKO Store to implement a 100% customer refund policy on disputed content charges. 37 In June 2015, as part of the work of the Task Force, Telstra conducted a small survey of consumers recorded as having been subscribed to PDB content services provided by one particular Aggregator. Of the 30 respondents to the survey: a. 80% were not aware that they had subscribed; b. 97% did not know how much they would be charged; c. 77% were never going to use the service; and d. all customers who were unaware of the charges, when informed of their subscription, chose to opt out. This suggested to Telstra that customers were poorly, if at all, informed about the PDB content subscriptions to which they were recorded as having been subscribed. 38 In June 2015, as a response to the number of TIO complaints referred to Telstra relating to PDB and Premium SMS content services, a new escalation process for complaints handling was launched by Telstra that applied to customers who had been first referred to the Aggregator or Content Provider and then complained a second time to Telstra. In these situations, Telstra assigned a dedicated escalation case manager to work with the Aggregator with the aim of resolving the enquiry within three days. However, by March 2016, there was a backlog of over 1,000 customer PDB complaints where Telstra had not called back the customer. By 15 April 2016, Telstra's Billing Incident Management System commenced dealing with each of these 'Escalated complaints' by Telstra providing refunds to affected customers. During the period from 18 June 2015 to 9 August 2016 (when a dedicated cell of customer service representatives to deal with PDB complaints was launched – see paragraph [49]), Telstra received approximately 29,889 PDB complaints which were classified as 'Escalated complaints'. 39 Also in June 2015, the TIO informed Telstra that it had received a number of complaints indicating that there may be a systemic issue relating to Telstra's handling of consumer complaints about disputed third party charges. In particular, the TIO focused on Telstra's practice of referring complaints to third parties in the first instance. 40 In July 2015, Telstra responded to the TIO acknowledging that "qualitative customer research and feedback from our customer support channels" showed that customers had: a. "limited awareness that consent given online for third party subscription content is legitimate without the need to add further personal information to complete this subscription; b. limited awareness that these services browsed and accessed on a mobile phone, are indeed premium third party content and charged at a premium price to their mobile bill; c. limited understanding of the confirmation text messages. These messages are misunderstood and often considered spam, resulting in them often being ignored; and d. limited understanding of how to cancel the ongoing charges incurred from subscription purchases." 41 From March 2015 to September 2015, Telstra experienced a decrease of 40% in referred TIO PDB complaints, yet continued to receive a significant number of complaints directly from customers. 42 Despite the drop in TIO complaints, as at October 2015 and as noted in paragraph [24] above, Telstra's call centre was receiving approximately 20,000 calls per month "from customers disputing third party content billing" charges, a significant proportion of which were PDB complaints. 43 In January 2016, in addition to the requirements at [22g(iii)], Telstra required the removal of the word 'Freemsg' in the Aggregator SMS's, as it became aware that many customers were mistaking SMS messages from Aggregators as spam. 44 In February and March 2016, examples of TIO PDB complaints referred to Telstra included: a. "I received a SMS from Mobidol on my mobile but I did not reply to it as I had not subscribed to anything. I was charged for it. I called Telstra and they referred me to the provider." b. "I noticed Third party charges of $41.40 on my bill. I contacted Telstra and was referred to the third party. I do not believe that I authorised a third party to debit my Telstra account. I contacted the third party, sent them the bills as requested and they agreed only to refund $6. 90." c. "I was charged for third party charges. We have never subscribed to anything. We have two young children and at worse one of them may have accidently (sic) triggered the charge. I called Telstra and Mobidol and was promised that service will be cancelled and refund but that did not happen." 45 In March 2016, Telstra suspended the addition of new PDB content services available for purchase until key issues with current products and experiences were addressed. Telstra continued to charge customers for new and existing subscriptions and one-off purchases in relation to existing PDB content services for at least 30 Content Providers and 5 Aggregators. 46 In May 2016, as noted in paragraph [24] above, Telstra received approximately 36,000 calls that month and 250 complaints to the TIO. A significant proportion of these were PDB complaints. 47 In around June 2016, Telstra introduced a requirement for Aggregators to include a Terms and Conditions "tickbox" in the sign-up process used to sign up customers to PDB content subscriptions, as referred to in paragraph [22(c)] above. The introduction of this requirement was followed by a decrease in TIO PDB complaints referred to Telstra from 115 in May 2016 to 65 in June 2016. 48 Until at least August 2016, Telstra had a policy in relation to PDB complaints of directing all customer complaints in the first instance to Aggregators or Content Providers and assisting any customers in barring the service where specifically requested. This policy was in place despite Telstra being aware that while these entities had Australian local numbers to call, their head offices were in many cases located overseas and that Aggregators' and Content Providers' procedures for handling customer complaints were frequently time-consuming, difficult to navigate and frustrating for customers. 49 In August 2016, Telstra launched a 'dedicated cell' of customer service representatives to handle and seek to resolve PDB complaints made directly to Telstra on the first call. However, as recently as 10 July 2017 there have been instances on Telstra's Crowd Support forum of Telstra continuing to refer complainants to Aggregators. 50 On 15 September 2016, the TIO notified Telstra that it had closed its 2015/16 investigation into Telstra's handling of PDB complaints, referring in its email to: a. a number of the improvements and safeguards referred to in Telstra's response to the TIO's questions posed as part of the investigation; and b. an outstanding concern about the itemisation of charges on customers' bills. 51 In addition to TIO complaints referred to Telstra, during the relevant period Telstra has received significant volumes of complaints directly from its customers in relation to charges billed for PDB content subscriptions that they did not agree to acquire. 52 In June 2017, results from a survey commissioned by the Australian Communications Consumer Action Network (ACCAN) showed that 12 per cent of respondents, being customers of Telstra, Optus, and Vodafone, had experienced unexpected third party charges (which might be charges billed under the PDB service, Premium SMS service or some other method of acquiring digital content such as those referred to in paragraph [8] above) on their mobile phone bills in the prior six months. Approximately 50% of the survey respondents were Telstra customers. ACCAN's survey found that: a. over three quarters (77 per cent) of survey respondents who had received a confirmation SMS regarding an unexpected charge attempted to prevent the charge from being processed by replying "STOP" to that SMS, and of those, 71% still had the charge added to their bill; b. over a third (36 per cent) of unexpected charges incurred by those survey respondents were for $10 or more; c. 55% of participants who had experienced an unexpected charge, had done so while having little to no active or intended involvement with the third party. 53 From at least June 2015 to date, there has been widespread media attention about third party digital content billing and industry practices. Media reports noted that customers were regularly reporting they had incurred charges inadvertently, and were experiencing serious difficulties obtaining refunds. 54 Between early 2015 and late 2016, in the course of considering complaints received, and through a number of internal studies, Telstra was aware that a significant number of its customers: a. had little or no awareness of subscribing to third party content; b. were not aware of third party content charges appearing on their accounts; c. denied purchasing the third party content which was incurring charges; d. were unaware that third party content purchases could be effected without the need to add further personal information; and e. did not know how to opt-out of the PDB service. 55 In addition Telstra was aware that many of its customers may not be aware of charges for content billed through the PDB service appearing on their accounts. This was because: a. pre-paid customers do not automatically receive a monthly bill; b. post-paid customers paying by direct debit have charges automatically deducted from their nominated accounts; c. customers' accounts can print to numerous pages; and d. even those customers who did review their accounts will have often found it difficult to determine the identity of the third party on their bill. 56 Despite the complaints received, internal studies and media reports referred to above, and the concerns raised within these reports, the steps taken by Telstra to address the risks of customers being billed for subscriptions that they had not agreed to acquire were ineffective in preventing customers from being charged for PDB content subscriptions without their knowledge or consent. 57 Between September 2014 and May 2016, the ACCC received on average 44 complaints per month about PDB content charges. Despite the changes made by Telstra in June 2016, the ACCC continued to receive on average 43 complaints per month about PDB content charges between June 2016 and September 2017. In addition, while PDB complaints to Telstra decreased for a period of time following the June 2016 changes, complaints directly to Telstra have continued to be received in significant numbers. Further, PDB complaints to the TIO also decreased following the June 2016 changes to 28 in November 2016, but then increased to 125 in May 2017, decreased to 25 in September 2017 and increased again to 60 in October 2017. 58 Telstra's conduct towards its customers was deliberate in the sense that it was aware from complaints and internal analysis that its customers might be billed for a subscription service they had not intended to, or agreed to, acquire. The conduct of Telstra and its attendant risks, as well as the remediation steps taken and the inadequacy of those steps, were broadly known within Telstra, including at senior levels. Safeguards Sign-up process 59 Unlike the procedures for Premium SMS, the Telstra Apps Marketplace and app stores, Telstra did not require its customers to complete any form of identity verification before purchasing PDB content and having PDB content charges billed to their account. For example, customers were not required to sign in to an account, provide a password, affirmatively send a text message or provide payment details in order to purchase content. 60 PDB content charges were billed as either one-off charges or, more often, subscription charges. Subscription charges were billed on a recurring basis, usually weekly. A commonly reported subscription charge in customer complaints was for $9.90 per week. 61 PDB subscription charges continued to be charged until the customer was able to unsubscribe from the service. Barriers to unsubscribing from the service were: a. customers' lack of awareness of charges; b. customers' lack of awareness as to how to unsubscribe; and c. Telstra's policy of referring customer complaints, including requests for refunds, to Aggregators and Content Providers despite knowledge of the poor complaints handling practices of many of the third parties. 62 Until about January 2016, under Telstra's Carrier Billing Code of Conduct Policy (Conduct Policy), Telstra required Aggregators to include at least one "click" by the customer on a subscription trigger, being a hyperlink appearing on a webpage "pricing notification screen" associated with an Aggregator or Content Provider which included the words "buy now" or "subscribe now". 63 From about January 2016, in addition to the requirements at [22], under its Conduct Policy Telstra required Aggregators to include two webpage screens, being a "merchant advertising screen" and the pricing notification screen. Telstra required that a subscription process included at least one click by the customer on a subscription trigger on the pricing notification screen which included the words "Pay", "Pay now", "Purchase", "Subscribe" or "Buy". 64 From about June 2016, in addition to the requirements at [22] and [63], Telstra required Aggregators to include the extra step of its customers clicking on a terms and conditions "tickbox" on the pricing notification screen (the double-click process referred to in paragraph [22(c)] above) when purchasing PDB content subscriptions. 65 Between 4 December 2017 and 2 March 2018, new PDB content subscriptions were no longer available and customers could only purchase PDB content on a one-off basis. In order to acquire PDB content as a one-off purchase, customers were only required to click on the "buy now" (or similar) button once. Additional process deficiencies 66 During the relevant period, Telstra became aware that some of its customers were charged multiple times for the same PDB content, and that Telstra was being provided with multiple Charge Notices for the same content service on consecutive days. Telstra subsequently arranged for those customers to receive refunds. 67 Telstra was also aware that family members such as children were at risk of inadvertently subscribing to PDB content on the family member's phone. In Telstra's response to an information request from the TIO, Telstra noted that: "Customer consent may have been provided by a family member of the account holder of the phone. For example, in app advertising, particularly with games – consent is given by the person using the phone, such as children playing on their parent's phone". Customers who requested PDB barring 68 Throughout the relevant period until 4 December 2017, Telstra has, by its terms relating to its PDB service in its Our Customer Terms, represented to customers that barring the PDB service would prevent further charges being applied to their accounts. However, Telstra was aware that barring the PDB service would not unsubscribe a customer from an existing subscription. Telstra did not notify customers of this fact but has agreed to refund all impacted customers. 69 In July 2015, Telstra provided training to its front of house staff in which it was confirmed to those staff that barring would not cancel charges under existing services and that customers would first have to unsubscribe before applying barring, and that customers who sought to apply barring to the PDB service should be informed of this fact. Telstra admits the training in July 2015 was ineffective in preventing a significant number of its customers from continuing to be billed by Telstra in circumstances where those customers had attempted to unsubscribe from an existing subscription by barring the PDB service. Customers unable to unsubscribe who had barred Premium SMS services 70 In order to unsubscribe from a PDB subscription, customers were required to either call the relevant Aggregator's or Content Provider's call centre or to SMS 'STOP' in reply to the confirmation SMS that Aggregators send to subscribed customers. However, prior to 31 May 2016, if a customer had barred Premium SMS services then that customer could not send the 'STOP' SMS to unsubscribe from the PDB subscription. 71 Despite Telstra being aware of this issue from at least May 2015, Telstra did not notify the affected customers and continued to apply charges to these customers' accounts. 72 In May 2016, Telstra implemented a change to its system that enabled customers who had barred Premium SMS to unsubscribe from a PDB subscription using a 'STOP' SMS. Telstra did not notify all customers who had previously barred Premium SMS of this change and had PDB content charges applied to their mobile accounts of this change, but has agreed to offer refunds to all impacted customers. New customers charged for old customers' subscriptions 73 When a customer acquires a mobile phone service from Telstra, they are sometimes allocated a number used by a previous Telstra customer, which number had been in "quarantine" for a number of months. In certain circumstances the previous user of the phone number had a PDB subscription. 74 Until at least 26 August 2016, some customers who acquired a previously quarantined (i.e. deactivated) Telstra mobile number incurred charges from the previous owner of the Telstra number, where the previous owner had been subscribed to PDB content. This was made possible by Telstra, until at least August 2016, not preventing Aggregators from continuing to send Charge Notices for each Telstra mobile number, including when the number had been deactivated and ported to a new customer. 75 Despite being aware of this, by allocating the mobile number in the circumstances described above, Telstra impliedly represented to those customers that they would not be billed for PDB subscription charges carried over from the previously deactivated mobile service, when in fact those customers were billed for those carried over PDB subscription charges. 76 On about 26 August 2016, Telstra implemented a process change to address this issue by limiting the number of unsuccessful Charge Notices which could be submitted to Telstra to a maximum of four for each service within a 14 day period, after which the Aggregator must take steps to unsubscribe that subscription service. Content subscriptions associated with deactivated mobile services would therefore be unsubscribed, as the Charge Notices sent in respect of those deactivated services would have been unsuccessful. Telstra does not know and until recently did not check whether customers continued to incur charges that they had not consented to due to a PDB subscription by a previous owner of a mobile device number. 77 During the relevant period, Telstra identified and refunded some customers that were affected by this issue. However, despite Telstra's knowledge of this issue from at least August 2016, Telstra was not able to identify or refund all such customers. Telstra is in the process of identifying all customers affected by this issue and has agreed to refund those not previously refunded. 78 Telstra is currently unable to determine with precision the number of customers affected by the issues identified in paragraphs [68] to [77], but admits that it is likely to be in the thousands and may be in excess of 10,000. Monitoring and enforcement of safeguards Monitoring by Telstra 79 Since at least January 2014, Telstra has required Aggregators to submit screenshots of the subscription process for each new PDB content service to Telstra for approval. Telstra reviews these screenshots for compliance with its requirements for Aggregators in place under the Conduct Policy at the time. 80 Telstra did not assess whether each subscription process submitted by an Aggregator complied with all of Telstra's requirements, including the requirement under the Conduct Policy for Aggregators to comply with the Mobile Premium Services (MPS) Industry Code, which requires subscription processes to include the double opt-in SMS procedure outlined at [8c)]. Monitoring by WMC Global Pty Ltd 81 From about September 2014, Telstra engaged an external third party, WMC Global Pty Ltd (WMC), to audit and enforce compliance by Aggregators of Telstra's safeguards in relation to the purchase of PDB content. The process used by WMC to audit and enforce the relevant safeguards was developed and supervised by Telstra. 82 Under the process set up and supervised by Telstra, WMC was not technically able to monitor or audit whether each Telstra customer had clicked on a subscription trigger before Telstra provided a customer's mobile device number (e.g. mobile phone number) or unique identifier to Aggregators or Content Providers (under the process outlined at [22]). 83 WMC monitored compliance with the standards set by Telstra in their Telstra Carrier Billing Standards (Audit Standards) which included some but not all of Telstra's requirements under the Conduct Policy. The Audit Standards did not include the requirement under the Conduct Policy for a subscription trigger to include the words "buy now" or "subscribe now". This meant subscription processes could be approved by WMC which included other words than "buy now" or "subscribe now". 84 WMC's monitoring process involved using a mobile device to locate advertisements for PDB content and then reviewing subscription processes for compliance with the Audit Standards. This process did not include monitoring advertisements featured in applications, on which advertisements for PDB content commonly appear. 85 The monitoring of PDB subscription processes occurred on a significantly smaller scale than the monitoring of Premium SMS services. In May-July 2016 there were 350 audits of PDB subscription processes compared to 2,227 of Premium SMS. Enforcement of safeguards 86 Between October 2014 and July 2016, WMC identified over 1,750 infringements of Telstra's standards for Aggregators and Content Providers, with a monthly average of 35 per cent of all PDB audits failing to pass these standards during this period. 87 Since July 2014, despite the level of infringements at [86] and the significant volume of complaints referred to above, Telstra did not terminate its contractual arrangements with any of the five Aggregators. Telstra "permanently suspended" one PDB content service expressly for non-compliance with Telstra's requirements. Telstra also suspended a further seven PDB content services in June and July 2016 until at least March 2017, arranged for customers of at least four of those PDB content services to be unsubscribed, and Telstra refunded 3,492 customers to the value of approximately $428,956.00. MPS Industry Code 88 Telstra was at all material times a signatory to industry codes within the meaning of the CCA, including the MPS Industry Code. The MPS Industry Code is not directly applicable to the PDB service but established a norm of conduct in respect of disclosure by mobile service providers to customers. 89 Unlike the process Telstra has in place in relation to Premium SMS services and the other services identified at [8], at no time in the relevant period did Telstra require independent verification from its customers that they had authorised Telstra to apply charges for the acquisition of third party digital content to their Telstra account. REFUNDS 90 During the relevant period, Telstra estimates that it has provided refunds of at least $5 million to customers in relation to charges for PDB content, some of which has been recovered by Telstra from Aggregators. Telstra has also directed Aggregators to refund at least 28,000 Telstra customers to the value of at least $400,000 in relation to PDB content charges. CESSATION OF PDB SERVICE 91 In the course of resolving the ACCC's investigation, Telstra committed to and has ceased offering the PDB service entirely with effect from 3 March 2018. FUTURE CONDUCT 92 Telstra has committed to: a. by no later than 10 weeks from the date of the making of the final orders in these proceedings (Orders), identify customers in the following groups: i. customers to whom Telstra identifies as having made the Barring Representation, the Unsubscribe Representation and the Carry Over Representation (as defined in [paragraph [94]] below); ii. customers Telstra identifies as having made a complaint to the TIO prior to the date of commencement of these proceedings in relation to PDB content charges for subscriptions signed up to prior to 4 December 2017; and iii. customers Telstra identifies as having complained directly to Telstra prior to the date of commencement of these proceedings in relation to PDB content charges for subscriptions signed up to prior to 4 December 2017; and b. communicate with and offer to refund (which communication and offer will only be made to customers who Telstra has contact details for, identifies as having not already received refunds for such charges from Telstra or some other party and will only need to be made once if a customer is identified under more than one of paragraphs [92(a)(i), (ii) and (iii)] above): i. in the case of the customers referred to in paragraph [92(a)(i)] above, the PDB content subscription charges incurred in connection with and impacted by the Barring Representation, Unsubscribe Representation and/or the Carry Over Representation; and ii. in the case of the customers referred to in paragraph [92](a)(ii) and (iii)] above, the PDB content subscription charges that are the subject of the customer's complaint; and c. for a period of 12 months from the date of the making of the Orders, deal directly with future complaints (including in relation to past periods) in relation to PDB content charges for subscriptions and seek to resolve those complaints in good faith, including providing refunds for PDB content subscription charges where it is apparent that the customer had unintentionally purchased and been billed for PDB content subscriptions without their knowledge or consent and so did not agree to acquire the subscription; and d. inform the ACCC in writing, within 4 months of the making of the Orders, and quarterly thereafter for one year, of: i. the steps taken to identify the customers in accordance with paragraph [92(a)] above; ii. for each of the categories of customers specified in paragraph [92(a)] above – the number of customers identified; iii. in relation to paragraph [92(b)] above – the number of customers contacted, the number of customers refunded, the number of customers (if any) refused refunds and the amount of money that has been refunded; and iv. for each of the customers who complain to Telstra under paragraph [92(c)] above – the number of such customers, the number of customers refunded, the number of customers (if any) refused refunds and the amount of money that has been refunded. ADMISSIONS 93 As a result of complaints received from Telstra's customers and through a number of internal studies in relation to the PDB service, Telstra was aware from early 2015 to at least June 2016 that the operation of the PDB service had led to a significant number of its customers unintentionally purchasing and being billed for PDB content subscriptions without their knowledge or consent and so had not agreed to acquire the subscription (Non-consenting Customers). In these circumstances, by applying charges to those customers' accounts in respect of their purported subscriptions prior to 7 June 2016, when in fact that purported subscription had occurred without the customers' knowledge or consent and so the customer had not agreed to acquire the subscription, Telstra thereby made false and misleading representations in connection with the supply or possible supply of a "financial product" or a "financial service" within the meaning of the ASIC Act to each of the Non-consenting Customers that they had agreed to acquire those subscriptions when they had not, in contravention of section 12DB(1)(b) of the ASIC Act. 94 Telstra further admits that: a. in relation to customers who requested barring of their PDB service prior to 4 December 2017, Telstra represented to each of those customers that they would no longer be charged for their existing PDB subscriptions on and from the date that barring was activated, when in fact that barring only applied to new PDB subscriptions from that date (Barring Representation); b. in relation to customers who had requested barring of their Premium SMS services prior to 31 May 2016, Telstra represented to each of those customers that they would be able to unsubscribe from PDB subscriptions by sending "STOP" to the applicable number, when in fact their Premium SMS barring prevented them from doing so (Unsubscribe Representation); c. in relation to customers who acquired a new mobile service from Telstra prior to August 2016 and whose mobile number was deactivated for a period prior to them acquiring their service, Telstra impliedly represented to each of those customers that they would not be billed for PDB subscription charges carried over from the previously deactivated mobile service, when in fact some customers were billed for those carried over PDB subscription charges (Carry Over Representation). 95 By making the Barring Representation, the Unsubscribe Representation and the Carry Over Representation, Telstra admits that it made false or misleading representations that the PDB service had performance characteristics, uses or benefits, in contravention of s.12DB(1)(e) of the ASIC Act.	24,318
federal_court_of_australia:fca/single/1997/1997fca0054	decision	commonwealth	federal_court_of_australia	text/html	1997-02-13 00:00:00	Travel Compensation Fund v Travel Guide Pty Ltd (in liq) & Ors [1997] FCA 54	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/1997/1997fca0054	2024-09-13T22:45:35.247736+10:00	CATCHWORDS By-Laws & Regulations - Travel Agents Regulation 1987 - whether repeal of cl 20 affected rights acquired or obligations incurred before the date of repeal, or any proceeding or remedy in respect of any such right - Interpretation Act (NSW) s 30 - Travel Agents Regulation 1995 - whether cl 20 validly establishes a compensation scheme under the Travel Agents Act 1986 (NSW) - whether a scheme prescribed under s 57(2)(a) of the Act is required by s 57(2)(b) to be prescribed by reference to a schedule comprising a copy of the trust deed by which the scheme is established - whether lack of certainty in language used and serious consequences of alternate holding indicate the directory rather than mandatory nature of s 57(2)(b) Evidence - Proof - extent to which reasonable inference may be drawn in relation to "act or omission" of Travel Agent under s 40(3) of Travel Agents Act 1986 (NSW) Travel Agents Act 1986 (NSW) subs 40(3), subs 40(4), subs 40(5), subs 57(1), subs 57(2)(a), subs 57(2)(b), subs 57(2)(c) and subs 52(3)(1) Interpretation Act 1987 (NSW) subs 30(1) Travel Agents Regulation 1987 cl 20, cl 15.1, cl 15.2 Travel Agents Regulation 1995 cl 20, cl 15.1, cl 15.2 Travel Compensation Fund v Dunn FCA 2 December 1992 unreported Yrttiaho v Public Curator (Qld) (1971) 125 CLR 228 R v Secretary of State for Social Services, ex parte Association of Metropolitan Authorities [1986] 1 WLR 1 Bugg v DPP [1993] QB 473) Victoria v The Commonwealth (1975) 134 CLR 81 Clayton v Heffron (1960) 105 CLR 214 Australian Broadcasting Corporation v Redmore Pty Ltd (1987) 11 NSWLR 621 Scurr v Brisbane City Council (1973) 133 CLR 242 State of New South Wales v Macquarie Bank Ltd (1992) 30 NSWLR 307 TRAVEL COMPENSATION FUND v TRAVEL GUIDE PTY LIMITED (IN LIQUIDATION) AND ORS No. NG 686 of 1995 CORAM: Lehane J PLACE: Sydney DATE: 13 February 1997 IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) GENERAL DIVISION ) No. NG 686 of 1995 BETWEEN: TRAVEL COMPENSATION FUND Applicant AND: TRAVEL GUIDE PTY LIMITED (IN LIQUIDATION) First Respondent JOHN KEITH KNIGHT Second Respondent MATTHEW HOWDEN Third Respondent AIR AUSTRALIA WORLDWIDE MARKETING PTY LIMITED (IN LIQUIDATION) Sixth Respondent CORAM: Lehane J PLACE: Sydney DATE: 13 February 1997 MINUTE OF ORDERS THE COURT ORDERS: 1. The applicant within seven days from the delivery of these reasons for judgment file and serve on the first, third and sixth respondents short minutes giving effect to the conclusions contained in the judgment. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) GENERAL DIVISION ) No. NG 585 of 1995 BETWEEN: TRAVEL COMPENSATION FUND Applicant AND: TRAVEL GUIDE PTY LIMITED (IN LIQUIDATION) First Respondent JOHN KEITH KNIGHT Second Respondent MATTHEW HOWDEN Third Respondent AIR AUSTRALIA WORLDWIDE MARKETING PTY LIMITED (IN LIQUIDATION) Sixth Respondent CORAM: Lehane J PLACE: Sydney DATE: 13 February 1997 REASONS FOR JUDGMENT LEHANE J: The applicant, which asserts that it is the body of trustees of the compensation scheme established under the Travel Agents Act 1986 (NSW), claims that it is entitled, under subs 40(4) of the Act, to recover from the first, third and sixth respondents sums which the applicant says it has paid to claimants under the scheme. The first and sixth respondents are companies, both of which are in liquidation: an order that each be wound up was made by the Court on 19 August 1994; the applicant obtained leave to proceed against each of them but neither lodged a defence and each appeared simply to submit to such orders as the Court might make. The third respondent has throughout the relevant period been a director of each of the first and sixth respondents. By leave of the Court, he filed a defence on 31 January 1997 and, though he led no evidence, he was represented by a solicitor, Mr Mura, at the trial. Claims against other respondents have been discontinued, as have cross claims made by the second respondent. Thus, the substantial contest at the trial was between the applicant and the third respondent. I shall return to the matters in issue between those parties; first, I think it is helpful to describe the legislative context in which the applicant's claims arise. Legislative Context The Act is the New South Wales legislative part of a cooperative and, I was told, substantially uniform legislative scheme for the regulation of the travel agency business in New South Wales, Victoria, South Australia and Western Australia. The Act provides for the licensing of persons carrying on business as travel agents; it provides for the supervision of travel agents and for disciplinary proceedings against them; it regulates in various ways the conduct of travel agency business; and, of particular relevance to these proceedings, it contemplates the establishment of a compensation scheme. The Act does not itself establish a compensation scheme. Instead, it provides for the establishment of such a scheme by regulation. Section 57 provides, in subss (1) and (2), as follows: 57. (1) The Governor may make regulations, not inconsistent with this Act, for or with respect to any matter that by this Act is required or permitted to be prescribed, or that is necessary or convenient to be prescribed, for carrying out or giving effect to this Act. (2) The regulations may: (a) prescribe a scheme for compensating persons who suffer a pecuniary loss by reason of an act or omission by a person who carries on, or carried on, business as a travel agent; (b) prescribe the scheme by reference to a schedule comprising a copy of the trust deed by which the scheme is established; and (c) from time to time amend that schedule to incorporate amendments of the trust deed of which the Commissioner is notified by the compensation scheme trustees. The trustees of a scheme thus established are defined by subs (3)(1) as the "compensation scheme trustees", and s 52 provides that the compensation scheme trustees may sue and be sued in the name of "Travel Compensation Fund" and that, in any action brought by them, it shall be presumed, unless the contrary is proved, that any condition precedent to the bringing of the action, imposed on them by the compensation scheme, has been complied with. Subsections (3), (4) and (5) of s 40 are of particular importance. They provide: (3) Where a payment is made to a claimant under the compensation scheme by reason of an act or omission by a person carrying on business as a travel agent, the compensation scheme trustees are subrogated to the rights of the claimant in relation to the act or omission. (4) Where the rights conferred by subsection (3) on the compensation scheme trustees are exercisable against a body corporate, those rights are enforceable jointly against the body corporate and the persons who were its directors at the time of the act or omission and severally against the body corporate and each of those directors. (5) Where it is proved that an act or omission by a body corporate occurred without the knowledge or consent of a director of the body corporate, rights are not enforceable as provided by subsection (4) against the director in relation to the act or omission. Thus if, as a result of an act or omission of a person carrying on business as a travel agent, a third party (the claimant) has rights against that person and the compensation scheme trustees, "by reason of" the act or omission, make a payment to the claimant then the compensation scheme trustees are subrogated to those rights. Clearly, that means that in those circumstances the compensation scheme trustees stand in the shoes of the claimant: it is the claimant's rights, no more and no less, of which the subsection gives them the benefit. The assumption then appears to be (perhaps oddly, given the use of the word "subrogated", it is not spelt out) that the compensation scheme trustees may in their own name proceed to sue the travel agent to enforce the right which they are given; and although the claimant may have no rights against directors of the travel agent, if it is a corporation, subs (4) enables the compensation scheme to "enforce" the claimants' rights against the corporate travel agent jointly and severally against the agent and those who were its directors at the relevant time, other than a director who makes out the defence for which subs (5) provides. To provide that A is subrogated to B's rights against C, where B has no concurrent claim against D, and that A may "enforce" jointly and severally against C and D the "right" which it thus gets by subrogation, is perhaps a somewhat elliptical way of imposing (for the benefit of A) a coordinate liability on D in respect of B's claim against C: a liability to which, but for the statutory "subrogation", D would not be subject (and which D still does not owe to B). That, however, appears clearly enough to be the intention of the provision, and it is the effect attributed to it by Wilcox J in Travel Compensation Fund v Dunn FCA 2 December 1992 unreported. I think I should proceed on the basis that that is the way in which subs (4) operates: no argument to the contrary was put to me. A regulation, the Travel Agents Regulation 1987 (the 1987 Regulation), took effect on and from 2 February 1987. Clause 20 of the 1987 Regulation prescribed, under s 57(2), a compensation scheme: the scheme was to be that contained in a trust deed a copy of which was set out in Schedule 2 to the 1987 Regulation. The 1987 Regulation was repealed by the Travel Agents Regulation 1995 (the 1995 Regulation) which commenced on 1 September 1995. Clause 20 of the 1995 Regulation obviously was intended to continue the existing scheme in operation. But, rather than following the form of its predecessor, it expressed that intention as follows: 20. (1) For the purposes of section 57(2)(a) of the Act, the compensation scheme for compensating persons who suffer a pecuniary loss by reason of an act or omission by a person who carries on, or carried on, business as a travel agent is the compensation scheme established by the trust deed made on 12 December 1986 by Deirdre Mary Grusovin, Peter Cornelis Spyker, Christopher John Sumner and Keith James Wilson, as amended from time to time. (2) A copy of the trust deed may be obtained from the Commissioner. The regulation did not, in the words of para 57(2)(b) of the Act, "prescribe the scheme by reference to a schedule comprising a copy of the trust deed by which the scheme is established"; instead, it told the reader from whom a copy might be obtained. The deed establishing the compensation scheme, scheduled to the 1987 Regulation (which is the deed referred to in cl 20 of the 1995 Regulation), has been amended several times, including once during the period to which these proceedings relate. Its substance, however, did not change in any way which is material to the outcome of these proceedings. The deed is common to each of the participating States: that is, it is prescribed not just for the purpose of the New South Wales legislation but also for that of Victoria, South Australia and Western Australia. Clause 15 provides for the payment of compensation. Until 15 May 1995 its first two subclauses provided as follows: 15.1 Subject to this Deed, the Trustees shall pay compensation out of the Fund to a beneficiary - (a) who is a client; and (b) who has suffered or may suffer pecuniary loss arising directly from a failure to account for money or other valuable consideration by a participant - where - (c) the failure to account arises from an act or omission by the participant or an employee or agent of the participant; and (d) the client is not protected against the loss by a policy of insurance. 15.2 The Trustees may in their absolute discretion pay compensation to a beneficiary to whom they are not required to pay compensation by virtue of clause 15.1. On 15 May 1995 subcl 15.2 was amended. The effect of the amendment was twofold. First, it was made clear that compensation under subcl 15.1 might (in the trustees' discretion) extend to consequential loss; and, secondly, the category of those to whom compensation might, as a matter of discretion, be paid was extended, beyond the class of beneficiaries as defined, to "a person to whom they are not required to pay compensation under clause 15.1". Thus, at all relevant times the trustees had an obligation to pay compensation where the requirements of subcl 15.1 were met. Except for the use of certain defined terms, those requirements speak for themselves. A defined term of particular significance is "participant": that means, in broad terms, a travel agent licensed under one of the State Acts which meets, in addition, certain eligibility requirements prescribed by the Deed. From 15 May 1995 the class of cases in which, under sub cl 15.2, the trustees might in their discretion pay compensation was very broad; before the May 1995 amendment, it was limited by reference to the term "beneficiary", defined relevantly as a ... person who entrusts money or other valuable consideration to another person (or an employee or agent to the other person) in the course of the other person's carrying on business as a travel agent in a State if either: (i) that other person; or (ii) any third or subsequent person who carries on business as a travel agent in a State and who, in turn, received directly or indirectly through an employee or agent of the third or subsequent person all or any part of that money or consideration, other than as a principal, fails to account for the relevant money or consideration, whether due to an act or to an omission of that person (or an employee or agent of that person) [sic]. Thus, before the amendment, the discretion to pay compensation under sub cl 15.2 was limited by reference to a requirement that the claim arise from the "entrusting" of consideration to a person carrying on business as a travel agent where there had been a failure to account (apparently) due to an act or omission of the travel agent or its employee or agent. Particularly, however, it may be noted that at all relevant times compensation might be paid under subcl 15.2 despite the fact that the agent concerned was not a participant (as the sixth respondent was not) and even if the claim was covered by insurance (as some of the claims relating to the first and sixth respondents may have been). The invalidity argument Before turning to the question whether the applicant has otherwise made out its claims against the first, third and sixth respondents, it is convenient to consider a contention of the third respondent that cl 20 of the 1995 Regulation does not validly establish a compensation scheme under the Act so that there is now no such scheme in existence; and so that those who claim to be the trustees of such a scheme are not compensation scheme trustees for the purposes of the Act and have no title, under s 52 of the Act, to sue in the name of the "Travel Compensation Fund". The basis of the contention is stated in para 2A of the third respondent's defence: the third respondent ... says the scheme is not the scheme prescribed under section 57 of the Travel Agents Act 1986 (NSW) ("the Act"). Sections 20(1) and (2) of the Travel Agents Regulation 1995 ("the Regulation") which commenced on 1 September 1995 purports to prescribe a compensation scheme for the purposes of Section 57(2)(a) of the Act. Section 57(2)(b) of the Act requires that any regulations which prescribe a scheme do so by reference to a schedule comprising a copy of the trust deed by which the scheme is established. Sections 20(1) and (2) of the Regulation fail to prescribe the scheme by reference to a schedule comprising a copy of the trust deed by which the scheme is established. The essence of the argument is that the 1987 Regulation, which prescribed a compensation scheme, was repealed with effect from 1 September 1995. Clause 20 of the 1995 Regulation purported to prescribe the same scheme; but it failed to do so effectively because it did not obey what was said to be the statutory requirement, in s 57, that the scheme be prescribed by reference to a schedule comprising a copy of the trust deed by which the scheme was established. Consequently, from 1 September 1995 there was no compensation scheme and the trustees of the deed referred to in the 1995 Regulation had no right of subrogation under s 40 or, on 5 September 1995 (when they commenced these proceedings) or subsequently, a right to sue under s 52. To that contention the applicant made two answers. First, as all matters giving rise to the right claimed by the applicant arose before 1 September 1995, its claim was properly to be regarded as based on the 1987 Regulation: thus its repeal did not affect the rights which the applicant had acquired, the obligations which the respondents had incurred or any legal proceeding or remedy in respect of any such right or obligation: Interpretation Act 1987 (NSW) subs 30(1). Secondly, the applicant argued that para 57(2)(b) of the Act was to be regarded as directory only, so that the failure to prescribe the scheme by reference to a deed set out in a schedule did not render the regulation invalid. In my view both the applicant's arguments should be accepted. (a) Interpretation Act, s 30 Subsection 30(1) of the Interpretation Act provides: (1) The amendment or repeal of an Act or statutory rule does not: (a) revive anything not in force or existing at the time at which the amendment or repeal takes effect, or (b) affect the previous operation of the Act or statutory rule or anything duly suffered, done or commenced under the Act or statutory rule, or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under the Act or statutory rule, or (d) affect any penalty incurred in respect of any offence arising under the Act or statutory rule, or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability or penalty, and any such penalty may be imposed and enforced, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, as if the Act or statutory rule had not been amended or repealed. Clearly, for most purposes at least, if there is now a "compensation scheme" for the purposes of subs 3(1) of the Act, it is not that which was prescribed by the 1987 Regulation; nor, for most purposes, are the "compensation scheme trustees" those administering a scheme prescribed by the repealed regulation. Thus, if cl 20 of the 1995 Regulation were invalid, there would, for most purposes, simply be no continuing compensation scheme as defined in the Act. It would not follow, however, that the trusts of the deed would, on that assumption, have failed as from 1 September 1995: it was not suggested that the deed did not validly constitute the trust which it purported to establish; if the trust ceased to be the compensation scheme for the purpose of the Act, there is no reason to suppose that it could not continue on the terms set out in the deed. I can see nothing in the deed as prescribed by the 1987 Regulation to suggest that it could not continue to operate; and though there is provision for the termination of the trust in certain circumstances, those circumstances do not include its ceasing to be the compensation scheme under the Act. If it were not that compensation scheme, of course, its trustees would not have, subject to the effect of s 30 of the Interpretation Act, the rights or powers which the Act gives to the compensation scheme trustees. But, since the trust would continue in existence and to be capable of administration, there would be no impediment to the continuing exercise by the trustees of any statutory rights or remedies which, by virtue of s 30, they retained. The evidence is that all the claims with which these proceedings are concerned were made and paid by the trustees before 1 September 1995. On the assumption that the payments were made under the scheme (prescribed by the 1987 Regulation) by reason of an act or omission in relation to which the claimants had rights, those rights had arisen and the trustees had, before 1 September 1995, become "subrogated" to them; on the same assumption, the trustees thus had, before 1 September 1995, rights which were enforceable jointly against the travel agent concerned and those who were its directors at the time of the relevant acts or omissions. The relevant rights, therefore, had been acquired under subs 40(3) and legal proceedings and remedies were available, under subs 40(4), in respect of them before the repeal of the 1987 Regulation; thus the repeal did not affect the rights (or the correlative obligations) and the proceedings might be instituted and remedies enforced as if the 1987 Regulation had not been repealed; I can see no reason to doubt that the rights and proceedings unaffected by the repeal include suit in the name of "Travel Compensation Fund" under s 52 of the Act. The effect of provisions such as a s 30 of the Interpretation Act was considered by the High Court in Yrttiaho v Public Curator (Qld) (1971) 125 CLR 228. The judgment of Gibbs J (with whom Windeyer and Walsh JJ agreed) at 245 indicates plainly the distinction between that case and one such as the present and shows, in my view, equally plainly that this is a case where the Interpretation Act preserves the right (under s 52 of the Act) to commence proceedings in respect of an accrued substantive right (under subss 40(3) and (4)). (b) Validity of 1995 Regulation On the question of the validity of the 1995 Regulation the starting point must, I think, be a consideration of the way in which subs 57(2) of the Act is expressed. It was put to me by Mr Mura that the use of the word "and" at the end of para (b) indicates, as a matter of grammar, that the three paragraphs of the subsection, but particularly paras (a) and (b), are to be read cumulatively. Often - perhaps usually - that will be the effect of the use of the word "and" in that way. However, a number of particular matters may be noticed. One is that the three paragraphs obviously cannot be read as cumulative in the sense that if the regulations do one of the three things indicated they must necessarily do all three. That is so, if for no other reason, because para (c) deals with amendments and is applicable, of course, only if amendments in fact are made. Another aspect of para (c) may be mentioned. It empowers the Governor to make regulations which amend a schedule (in which a form of deed is set out) to incorporate amendments to the deed of which the Commissioner is notified; but there appears to be no actual requirement to notify and the assumption is, and it is borne out by the amendment provisions in cl 30 of the trust deed, that amendment (i.e. effective amendment) precedes notification. That is to say, the deed, if set out in a schedule to a regulation, may be amended without notification and without the necessity of making a regulation under para (c). The other matter to be noted, in relation to paras (a) and (b), is that they are expressed as separate powers, though notionally linked by the word "and". If it had been intended to provide that a scheme might be prescribed only by reference to a schedule, it would have been easy enough so to provide within para (a) itself: the separation of the two paragraphs might be taken to suggest that the means provided by para (b) was one, but not the exclusive, way in which a scheme might be prescribed. Simply as a matter of language, I do not think that, although para (b) may be read as imposing a requirement which must be observed when a scheme is prescribed under para (a), that is its only possible construction. No attention was directed in argument to that aspect of the construction of the section. Instead, the applicant argued that para (b) was to be regarded as directory rather than mandatory, so that a failure to comply strictly with the particular manner prescribed for publication of the scheme should not be regarded as invalidating the 1995 Regulation. It is, I think, clear enough that that distinction is relevant in the context of conditions required to be met, and procedures required to be followed, in the making of delegated legislation. Although perhaps the English cases (e.g. R v Secretary of State for Social Services, ex parte Association of Metropolitan Authorities [1986] 1 WLR 1, Bugg v DPP [1993] QB 473) should be regarded with caution, since the issue seems generally to arise there in the context of judicial review, the decision of the High Court in Victoria v The Commonwealth (1975) 134 CLR 81 proceeds on the footing that the distinction is relevant to the requirements to be met under s 57 of the Constitution in order that a law may be passed by a joint sitting of the Senate and the House of Representatives: see at 155-162 per Gibbs J; 178-180 per Stephen J and 182, 183 per Mason J; see also Clayton v Heffron (1960) 105 CLR 214, especially at 247 per Dixon CJ, McTiernan, Taylor and Windeyer JJ. If the distinction was relevant to those cases there can, I think, be no reason to suppose that - possibly a fortiori - it not applicable here. Assuming a preferred interpretation which requires prescription of a scheme by reference to a deed in a schedule, and by no other means, the question is whether, as a matter of construction, the statute was intended to have the effect of avoiding a regulation by which the terms of the scheme were published in some other way. The existence of the intention is to be ascertained by reference to the language of the section, its subject matter and objects and the consequences of holding void a regulation purportedly made otherwise than in strict compliance with the requirement: see Australian Broadcasting Corporation v Redmore Pty Ltd (1987) 11 NSWLR 621 at 634 per McHugh JA. The language of the statute is, as I have shown, by no means crystal clear; it is relevant, I think, to the present inquiry that it is not a necessary construction of para (b) that it imposes an exclusive requirement. The purpose or object generally of subs 57(2) is, of course, to enable a scheme to be prescribed which will offer protection to members of the public dealing with travel agents who fail to account for money paid to them: quite plainly that in turn is a central element of the regulatory scheme which the Act establishes. A subsidiary object of paras (b) and (c) is, no doubt, to enable members of the public to inform themselves of the current terms of scheme. However, if that object may be substantially achieved by means falling short of precise compliance with paragraph (b), the result if such means are adopted is not necessarily invalidity if there is what may be regarded as substantial compliance: Scurr v Brisbane City Council (1973) 133 CLR 242 at 255, 256. The consequence of holding the 1995 Regulation invalid would be that there was in existence no compensation scheme as referred to in the Act: an essential element in the legislative framework would be lacking. Although the invalidity of the 1995 Regulation would not entail the failure of the trust, it would deprive the compensation scheme trustees of the rights and powers which they are intended to have under the Act. One comment should be added in relation to the subsidiary object of paras (b) and (c), though it is implicit in what I have already said. The paragraphs do not provide a regime which will ensure that members of the public are precisely informed of the current terms of the scheme: substantial amendments to the deed as originally scheduled may be made and will be effective even if further regulations are not made amending the schedule. That, I think, may be treated as an indication of an intention that substantial compliance, by way of making the deed available by other means, may be regarded as sufficient to save the 1995 Regulations from invalidity. The matters to which I have referred - particularly the lack of certainty in the language used, the fact that the means of publication provided will not, strictly, ensure that the public is informed as to the terms of the deed current at any time and the consequences of invalidity (particularly given the cooperative nature of the legislative scheme) - persuade me that this is not a case where strict compliance with para 57(2)(b) is to be regarded as essential to the validity of a regulation under subs (2), and that cl 20 of the 1995 Regulation (which provides a method of publication which may be regarded as substantial compliance) is valid. If, on the material before me, I had been inclined to favour a different result, no doubt it would have been appropriate to relist the matter so as to give the State of New South Wales the opportunity to present argument in support of the 1995 Regulation: State of New South Wales v Macquarie Bank Ltd (1992) 30 NSWLR 307 at 312. Given the conclusion to which I have come, however, that step is not required. Other issues The result of my conclusions about the effect of the repeal of the 1987 Regulation and the validity of the 1995 Regulation is that the trustees of the deed of 12 December 1986, as it has been amended, are the compensation scheme trustees under the Act and may sue in the name of the Travel Compensation Fund. In circumstances where subs 40(3) of the Act applies, they have rights of subrogation under that subsection and rights of enforcement under subs (4). The essential allegations in relation to the first respondent, in the applicant's amended statement of claim, are as follows. It was incorporated in New South Wales, it carried on business as a travel agent and was a participant in the compensation scheme and it was ordered to be wound up, the winding up commencing on 19 August 1994. It is then alleged that claimants paid the first respondent sums of money for the future provision of travel services and that the first respondent failed to provide the services or (as in the circumstances it was obliged) to repay or account for the moneys received. Thus, it is claimed, the first respondent is indebted to the claimants or liable to account to them in respect of the amounts paid. Each claimant is alleged to have claimed against the applicant in respect of the first respondent's failure and the applicant to have made payments to the claimants; it is said that each of the payments made by the applicant is a payment made to the claimant under the scheme by reason of an act or omission of the first respondent carrying on business of a travel agent and that consequently the applicant has the rights of subrogation arising under subs 40(3). It is then said that by a deed of release each claimant has assigned to the applicant all its relevant rights against the first respondent and its directors (that is a matter which does not affect the third respondent as there is no material before the Court which suggests that any claimant had rights against him, and it need not be pursued). It is claimed that the third respondent was a director of the first respondent and that accordingly the applicant's rights of subrogation under subs 40(4) are enforceable by the applicant jointly and severally against the first and third respondents by virtue of subs 40(4). Similar allegations are made in relation to the sixth respondent, and the third respondent as a director of the sixth respondent, except that it is not claimed that the sixth respondent was a participant in the scheme: it is said, however, that it carried on business as a travel agent in New South Wales. The third respondent by his defence denies some of the applicant's allegations: he denies the claimed application to wind up the first respondent and the order winding it up with effect from 19 August 1994 (but the evidence sufficiently establishes, in my view, that the winding up order was made with effect from that date); he denies an allegation that at the time when payments were made to the first respondent for the future provision of travel services there were reasonable grounds to expect that the first respondent would not be able to account for each prepayment at the proper time (a matter which was not canvassed during the trial and which requires no further consideration); he denies that the alleged payments by the applicant to the claimants were payments made under the scheme by reason of an act or omission of a person carrying on business as a travel agent and therefore the existence of any rights of subrogation and of enforcement under s 40. There are similar denials in relation to the sixth respondent; in addition, the third respondent denies that the sixth respondent carried on business in New South Wales as a travel agent (he also denies that the sixth respondent is a company incorporated in New South Wales on 12 December 1989, and the denial seems to be correct: the evidence indicates that the sixth respondent was incorporated in Victoria, but nothing, I think, turns on that). The remaining factual allegations in the applicant's amended statement of claim are not admitted. As I have mentioned, the third respondent led no evidence. The evidence on behalf of the applicant comprised affidavits of Alexandra Mary Radkevitch, a claims assessor for the applicant, and Carlo Claudio Brattoni, the applicant's Chief Executive Officer. There are annexed to Ms Radkevitch's affidavit Australian Securities Commission searches in relation to both the first and sixth respondents and a summary of claims made to the applicant in respect of the first and sixth respondents and payments made by the applicant to the claimants. There is also annexed a copy of the applicant's standard form of claim for compensation. To Mr Brattoni's affidavit there are exhibited copies of the compensation scheme trust deed, as in force during the relevant period, copies of minutes of the applicant's management committee recording resolutions relating to claims in respect of the first and sixth respondent and a list of cheques, and copies of cheque requisitions, relating to payments made to the various claimants. Additionally, the affidavit evidence describes the procedure adopted by the applicant in dealing with claims, and in particular the claims relating to the first and sixth respondent. Ms Radkevitch identifies schedules to the statement of claim originally filed by the applicant as listing the claimants, the dates on which each claimant made relevant payments to the first or sixth respondent and the date and amount of each payment made by the applicant to each claimant. Additionally, there are in evidence the applicant's files on the claims relating to the first and sixth respondents. Four files relating to the first respondent were separately tendered and I was taken to them in detail; I was also taken in detail to one of the files relating to the sixth respondent, which was separately marked for identification. The applicant argued that, on that evidence, it had made out its claims against the first, third and sixth respondents; the third respondent argued that no claim had been made out against him. A number of things were, in my view, particularly in the absence of any evidence to the contrary, clearly established by the evidence; they were not seriously disputed. Thus, the evidence enables me to find that the first respondent was incorporated, carried on business in New South Wales as a travel agent, was a participant in the Compensation Scheme and was wound up by order of the Court with effect from 19 August 1994. Equally, I find that the sixth respondent was incorporated (though in Victoria), carried on a business associated with that of the first respondent and was wound up by order of the Court as from 19 August 1994. I find also that the third respondent was at all relevant times (at least until the winding‑up orders were made) a director of the first respondent and of the sixth respondent. Similarly, I find that the applicant made the payments listed in the first and second schedule and the statement of claim filed on 5 September 1995, totalling $499,641, on claims relating to the first and sixth respondents; and that those claims were in respect of payments made by the claimants to either the first or sixth respondent on the dates listed in those schedules. I find that each amount so paid by a claimant was for travel or arrangements (e.g. hotel accommodation) associated with travel. Those findings, however, are insufficient, by themselves, to enable the applicant to succeed. Among other things (to which I shall return), they do not attribute particular payments to the first and sixth respondents respectively and they do not, in relation to the sixth respondent, satisfy the requirement of subs 40(3) that it was a "person carrying on business as a travel agent". The issue about apportionment arises, to a large extent, from the use by the first and sixth respondents, at various times, of similar names. The evidence indicates that the sixth respondent was formerly known as Pan Pacific Airlines Marketing Pty Ltd and, before that, as Pan Pacific Airlines Pty Ltd. One of the files to which I was specifically referred in relation to the first respondent related to travel bookings made by Maria Crimi. Correspondence addressed to Ms Crimi is on notepaper headed "Pan Pacific Airlines" and one of the letters thanks Ms Crimi "for choosing to use the Pan Pacific Airline special travel offer". However, at the foot of the notepaper one reads "Travel Guide Pty Ltd ... trading as Pan Pacific Airlines". I think I am on safe ground in inferring that "Pan Pacific Airlines", as well as being at one time part of the name of the sixth respondent, was also a trading name of the first respondent; and it appears clearly enough that it is in that sense that it is used in the correspondence with Ms Crimi, that it was through the first respondent (not the sixth) that Ms Crimi made her bookings and that when Ms Crimi in her claim form asserted that her arrangements were with the sixth respondent, rather than the first, she was simply mistaken. I was informed by counsel for the applicant, and Mr Mura did not demur, that all the files which are now in evidence were discovered and produced for inspection many months ago; Mr Mura did not, however, draw my attention to matter in any other file which might be taken to indicate a mistake in attribution, by the applicant, of claims as between the first and sixth respondents. In those circumstances it is open to me to find, and I do, that where the applicant's deponents say that a particular payment was made to the first respondent, rather than the sixth, that was indeed so. As for the other matter, whether the sixth respondent carried on business as a travel agent, I was taken specifically to a file relating to a booking by a Ms Susan Jane Stevenson. Her claim was said to relate to a payment to the sixth respondent. On that file there is correspondence to Ms Stevenson on paper headed "Travel Guide" (not, incidentally "Travel Guide Pty Ltd"). There is no company name at the foot of that letterhead, merely an address. However, Ms Stevenson received, for a payment she made for "Fiji deal" a receipt signed on behalf of "Air Australia Worldwide Marketing Pty Ltd [i.e., the sixth respondent], level 2, 56 Berry Street, North Sydney, NSW 2060". Plainly what that indicates is that the sixth respondent received from Ms Stevenson a sum of money for, possibly among other things, return air fares to Fiji ("tickets", no doubt, within the meaning of subs 4(1) of the Act). The inference is clearly available that at that time the sixth respondent carried on, or at least (which is sufficient: see subs 4(1) of the Act) held itself out as carrying on, business as a travel agent. Again, it was not suggested to me that I might find in any other file material suggesting a different conclusion; and in circumstances where the third respondent, a director of the company, has chosen not to give evidence in my view I should, and I do, draw the inference. Even so, however, the applicant is entitled to the relief which it seeks only if the claimants had rights against the first or sixth respondent and if the payments by the applicant were made "under the compensation scheme by reason of an act or omission" by the first or sixth respondent, as the case may be. It is convenient to deal first with the element of "act or omission". Except, perhaps, in the case of a payment authorised by sub cl 15.2 of the trust deed as amended on 15 May 1995, a payment under the deed is required or authorised only in circumstances where a person carrying on business as a travel agent fails to account for money or other consideration entrusted to it in the course of carrying on that business; and the failure to account must arise from an act or omission by the person carrying on the business or an employee or agent of that person. Similarly, subs 40(3) of the Act confers rights of subrogation only in a case where a payment is made under the compensation scheme "by reason of an act or omission by a person carrying on business as a travel agent". The mere failure to account is not, or at least is not necessarily, the relevant "act or omission": the terms of the deed assume that the act or omission is independent of, and precedes, the failure. In Travel Compensation Fund v Dunn supra, Wilcox J held, accordingly, that directors were not necessarily excused from liability because they had ceased to hold office at the time when the failure to account occurred. His Honour held, in the circumstances of that case, that the relevant act or omission, which led to the failure to account, was an omission to pay funds received from clients into a trust account which the travel agent had established (though apparently having no legal obligation to do so). That omission occurred at a time when the directors still held office so that, subject to any defence available under subs (5), rights arising under subs (3) could be enforced against them under subs (4). Mr Mura submitted that in this case, if a failure to account were assumed for the purposes of the argument, no preceding act or omission was established by the evidence, or indeed sufficiently pleaded, so that no statutory right of subrogation arose. The evidence sufficiently establishes that the payments to the first and sixth respondent, giving rise to the claims paid by the applicant, were received during a relatively short period in 1994. Most of them were received in June and July of that year; relatively a few were received during May and a very small number earlier - the earliest in February. Travel arrangements in respect of which claims were paid by the applicant were not made (some, it seems, were for Travel on dates after the commencement of the winding up) and the relevant funds were not repaid by the first and sixth respondents to the claimants. A provisional liquidator of each of the corporate respondents was appointed on 22 July 1994 and each was wound up with effect from 19 August 1994. Thus, over a relatively brief period a large number of individual payments was received amounting in total to almost $500,000; a short time later a provisional liquidator of each company was appointed, shortly followed by a winding up order; and neither company in liquidation has seen fit to file a defence in these proceedings or take any part in the trial. In the circumstances I have no difficulty in holding, on the applicant's evidence, that in the case of each payment for which the applicant paid a claim there was a failure to account. Mr Mura argued, however, that so far as the evidence went such a failure could equally have been due to intervention by the applicant and the appointment of a provisional liquidator (perhaps in circumstances where "trading out" would have been possible) as to any act or omission of either the first or the sixth respondent. He argued that it was necessary, in each case, for the applicant to allege and prove a particular act or omission by the travel agent, or its employee or agent, leading to the failure to account. Apart from failure to provide the travel services paid for or to repay or account for the money paid, the amended statement of claim makes two relevant allegations in relation to the two corporate respondents. Those relating to the first respondent are as follows (the allegations relating to the sixth respondent are in the same terms): 23. Further or in the alternative the first respondent failed to ensure, on or before the time at which payments were made to the first respondent by or on behalf of the claimants for the future provision of travel services, that the first respondent would be able to meet its obligations to provide those travel services. 24. Further or in the alternative, when payments were made to the first respondent by or on behalf of claimants for the future provision of travel services, there were reasonable grounds to expect that the first respondent would not be able to account for each prepayment at the time it was obliged to pay over the moneys to ensure each claimant received the benefit of the travel services the purpose for which (sic) the payment was made to the first respondent. I do not think that paragraph 24 (which, as I have said, the third respondent denies) is of any particular assistance to a claim under the Act and I need not discuss it further. Paragraph 23, however, alleges an omission, albeit in general terms: it is asserted that on or before the time at which payments were made for travel services the first respondent failed to ensure that it would be able to provide them. Mr Mura's contention was that the effect of Dunn is that an act or omission must be specified with much greater particularity. I do not think, however, that the judgment in Dunn says that and I do not see why, as a matter of principle or of construction, it should be held to be required. Certainly it is possible to conceive of circumstances consistent with the evidence in which it might be held that there was no relevant act or omission of the first or sixth respondent: an example I suggested in the course of argument was a case where all the agent's money, sufficient to enable it to meet its commitments, is in an account with a bank which unexpectedly fails. But to say (truly) that the applicant must establish the essential elements of its claim is not to say that the applicant is required by evidence to eliminate bank failures, earthquakes or other remotely possible, but highly unlikely, explanations of what has occurred. In the absence of any evidence on behalf of the third (or any other) respondent, it is open to me, and proper, to infer that the actual explanation is what experience teaches to be the probable one: that is that at the time the money was received by the first and sixth respondents they were in a parlous financial situation and that they did not - for example, but only for example, by establishing a trust account for receipt of the money - take steps which would ensure that obligations to provide travel services could be met or, at least, that money received could be refunded. The failure to take such steps is the omission to be attributed to the first and sixth respondents, leading to their failure to account. That finding is sufficient, all other essential elements of the claim being established, to make good a claim to subrogation under s 40(3) of the Act. The third respondent was a director at the time of receipt of all the payments and remained in office until the companies went into liquidation. Though it probably does not matter, on the evidence (and see Corporations Law s 471A) he appears to remain in office to the present day. He was in any event in office throughout the period in which the relevant omission occurred that is, the period from the first of the payments listed in the schedules to the statement of claim to, probably, the date on which the provisional liquidator was appointed or, possibly, the making of the winding up order (it does not matter which is correct). There can, I think, be no doubt in the circumstances that each claimant had rights against the first or sixth respondent, as the case may be, resulting from its receipt and acceptance of money on terms that it was to be applied for the purchase of particular travel arrangements and in circumstances where the respondent concerned did not, or could not, either provide the travel arrangements or refund the money. I see no reason to doubt, on the applicant's evidence and in the absence of evidence to the contrary, that in each case the amount claimable against the respondent concerned is the amount paid to it. Conclusion It follows that the applicant succeeds in its claim to subrogation under subs 40(3) of the Act and to entitlement to enforce the rights to which it is subrogated jointly and severally, in the case of payments made to the first respondent, against the first and third respondents and, in the case of payments made to the sixth respondent, jointly and severally against the sixth and third respondents. The amount of the claims paid in respect of the first respondent is $472,445; the amount of the claims paid in respect of the sixth respondent is $27,196. Accordingly there will be judgment against the first respondent $472,445, against the sixth respondent for $27,196 and against the third respondent for $499,641. The applicant seeks interest under s 51A of the Federal Court of Australia Act 1976; Mr Mura did not address the question, and I will of course hear him on it if he wishes, but at present I can see no reason why the applicant should not have interest on the principal amount of each judgment, calculated in the ordinary way. The applicant is also, of course, entitled to its costs of the proceedings against each of the first, sixth and third respondents. The costs of the hearing, from the time at which legal representatives of the other respondents were excused from further attendance, should be the responsibility of the third respondent. I direct the applicant within seven days from the delivery of these reasons for judgment to file and serve on the first, third and sixth respondents short minutes giving effect to those conclusions. The parties may approach my associate to make arrangements for setting the matter down in order to deal with any matter, as to the orders, in dispute and for the making of final orders. I certify that this and the preceding 28 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lehane. Associate: Dated: 13 February 1997 Heard: 3 February 1997 Place: Sydney Decision: 13 February 1997 Appearances:Mr T S Hale and Mr I Mescher of counsel instructed by Minter Ellison appeared for the applicant. Mr E L Mura of Hillman Mura & Consultants appeared for the third respondent. Ms A Pearsall of Parlish Patience appeared for the first and sixth respondents. Ms M F Grigg of Toomey Pegg & Drevikovsky appeared for the second respondent.	11,121
federal_court_of_australia:fca/single/2001/2001fca0033	decision	commonwealth	federal_court_of_australia	text/html	2001-02-02 00:00:00	National Starch & Chemical Company v Commissioner of Patents [2001] FCA 33	https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2001/2001fca0033	2024-09-13T22:45:39.201501+10:00	FEDERAL COURT OF AUSTRALIA National Starch & Chemical Company v Commissioner of Patents [2001] FCA 33 PATENTS – review of decision of delegate of Commissioner of Patents – opposition proceedings – refusal of application for an extension of time for filing evidence – whether improper exercise of power – whether failure to take relevant considerations into account – whether delegate required explanation for delay in filing evidence as precondition to granting extension of time – whether failure to give proper, genuine and realistic consideration to public interest in determining serious opposition on its merits – whether failure to give proper, genuine and realistic consideration to nature and significance of evidence for which extension of time sought – whether error of law – whether delegate applied test of determining whether opposition would be rendered untenable if extension of time was not allowed. Administrative Decisions (Judicial Review) Act 1977 (Cth): ss 18, 40, 59 Patents Act 1990 (Cth): ss 40(2), 40(3) Patents Regulations 1991 (Cth): rr 5.8, 5.10(2), 5.10(5)(c) Ferocem Pty Ltd v Commissioner of Patents (1994) 49 FCR 205 considered A Goninan & Co Ltd v Commissioner of Patents (1997) 75 FCR 2000 applied Hindi v Minister for Immigration and Ethnic Affairs (1988) 20 FCR 1 referred to Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 referred to Northern NSW FM Pty Ltd v Australian Broadcasting Tribunal (1990) 26 FCR 39 applied F Hoffman‑La Roche AG v New England Biolabs Inc (2000) 99 FCR 56 referred to NATIONAL STARCH AND CHEMICAL COMPANY v COMMISSIONER OF PATENTS & ORS V 415 of 2000 GOLDBERG J 2 FEBRUARY 2001 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 415 of 2000 BETWEEN: NATIONAL STARCH AND CHEMICAL COMPANY Applicant AND: COMMISSIONER OF PATENTS First Respondent THE UNIVERSITY OF NEW SOUTH WALES BURNS PHILP AND COMPANY LIMITED BURNS PHILP RESEARCH AND DEVELOPMENT PTY LTD COMMONWEALTH SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANISATION ARNOTT'S BISCUITS LTD GIST-BROCADES AUSTRALIA PTY LIMITED GOODMAN FIELDER INGREDIENTS LIMITED Second Respondents JUDGE: GOLDBERG J DATE OF ORDER: 2 FEBRUARY 2001 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The decision of the first respondent given by his delegate, Dr S D Barker on 19 May 2000 refusing the application made by the applicant for an extension of time for serving a copy of the evidence in support of the opposition to the grant of Patent No 705095 in the name of the second respondents is set aside. 2. The applicant's application for an extension of time for serving a copy of such evidence is remitted to the Commissioner for further consideration and determination according to law by a different delegate. 3. The second respondents pay the applicant's costs of the application. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 415 of 2000 BETWEEN: NATIONAL STARCH AND CHEMICAL COMPANY Applicant AND: COMMISSIONER OF PATENTS First Respondent THE UNIVERSITY OF NEW SOUTH WALES BURNS PHILP AND COMPANY LIMITED BURNS PHILP RESEARCH AND DEVELOPMENT PTY LTD COMMONWEALTH SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANISATION ARNOTT'S BISCUITS LTD GIST-BROCADES AUSTRALIA PTY LIMITED GOODMAN FIELDER INGREDIENTS LIMITED Second Respondents JUDGE: GOLDBERG J DATE: 2 FEBRUARY 2001 PLACE: MELBOURNE REASONS FOR JUDGMENT Introduction 1 The applicant ("National Starch") applies for an order of review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) of a decision of a delegate of the Commissioner of Patents, the first respondent ("the delegate"), made on 19 May 2000 ("the decision"). The delegate refused the application by National Starch under reg 5.10(2) of the Patent Regulations 1991 (Cth) ("the Regulations") for an extension of time within which to file evidence in support of its opposition to the grant of a patent for which the seven second respondents ("the respondents") had applied. 2 The patent (Australian Patent No 705905) relates to the enhancement of microbial colonisation of the gastrointestinal tract. The invention is more fully described in the abstract as: "Probiotic composition comprising one or more probiotic microorganisms, a carrier which will function to transport the one or more probiotic microorganisms to the large bowel or other regions of the gastrointestinal tract of an animal, the carrier comprising a modified or unmodified resistant starch or mixtures thereof, which carrier acts as a growth or maintenance medium for microorganisms in the large bowel or other regions of the gastrointestinal tract, and an oligosaccharide. Method of increasing the number of probiotic or resident microorganisms in the gastrointestinal tract of an animal comprising providing to the animal the probiotic composition." Background 3 The relevant chronology commences with the respondents' patent application which was lodged on 20 March 1997 and advertised as accepted on 13 May 1999. National Starch filed a notice of opposition on 13 August 1999 and a copy of the statement of grounds and particulars on 15 November 1999. Accordingly National Starch was required, pursuant to reg 5.8(1)(a), to serve the evidence in support of its opposition within three months of 15 November 1999. On 20 January 2000 the Patent Office, at the request of the respondents, directed National Starch to provide further and better particulars in respect of the opposition. 4 On 15 February 2000 National Starch filed three applications: an application for a stay of proceedings for six months because the parties were negotiating with a view to settling the opposition, which was not granted; an application for a one month extension to 15 March 2000 to file evidence in support of the opposition, which was granted; an application to amend the statement of grounds and particulars, which was granted. 5 On 15 March 2000 National Starch served part of its evidence in support, which consisted of journal articles on which it intended to rely as part of the prior art, and some library declarations concerning publication dates. Also on 15 March 2000, National Starch lodged a further application for a three month extension of time to 15 June 2000 within which to file its evidence. The grounds of the application were: · difficulties in contacting, and obtaining the views of an expert witness; · difficulties in identifying libraries from which to obtain publication dates for various references; · the parties were conducting negotiations with a view to settlement of the opposition. The respondents opposed the application and a hearing was held on 9 May 2000. On 19 May 2000 the delegate refused the extension sought but allowed seven days for the serving of any evidence immediately to hand. National Starch filed some journal articles and further library declarations in the time allowed. 6 National Starch claims that had the extension of three months been granted, it would have filed evidence of two experts in the relevant field of microbiology and evidence as to publication dates of journal articles in support of its grounds of opposition of lack of novelty and lack of inventive step. The grounds of opposition 7 National Starch's grounds of opposition are that: · the invention is not a manner of manufacture. · the invention is not novel. · the invention does not involve an inventive step. · the complete specification does not comply with ss 40(2) or (3) of the Patents Act 1990 (Cth) ("the Act"). Relevant legislation 8 Chapter 5 of the Regulations sets out the procedure and time limits governing opposition proceedings. The time for serving evidence in support of an opposition is three months from the date of serving the statement of grounds and particulars: reg 5.8. Any party may apply to the Commissioner, by way of application in the appropriate form, to extend this and other time limits pursuant to reg 5.10(2). 9 Regulation 5.10(2) provides: "The Commissioner may: (a) on the application of a party in the approved form; and (b) on such reasonable terms (if any) as the Commissioner specifies; extend the time within which the party may take a step prescribed in this Chapter, not being a step that is taken under regulation 5.3 or paragraph 5.4(1)(a)." Regulation 5.10(5) relevantly provides: "The Commissioner must not give a direction under subregulation (1) or grant an application under subregulation (2) or (4) unless the Commissioner: (a) … (b) … (c) in either case (i) … (ii) is reasonably satisfied that…an extension of time…is appropriate in all the circumstances." The decision of the delegate 10 The delegate identified the relevant regulations and set out the principles that govern extensions of time to serve evidence which are found in Ferocem Pty Ltd v Commissioner of Patents (1994) 49 FCR 205 and A Goninan & Co Ltd v Commissioner of Patents (1997) 75 FCR 200. The delegate noted that reg 5.10 conferred a broad discretion which cannot be reduced to imperative compliance with particular requirements, that the reasons why the evidence was not served in time was a relevant consideration but a satisfactory explanation was not a mandatory requirement, and that the public interest in determining a serious opposition on its merits was a relevant consideration which involved forming a view as to the nature of the evidence sought to be adduced and its significance. The delegate also accepted that the interests of the applicant for the extension was a relevant consideration as was any disadvantage to the other parties of delays in determining the opposition and the effect of delays on the efficient and orderly administration of the Patents Office. 11 The delegate then set out National Starch's reasons for, and evidence in relation to, the application for the extension of time which, broadly stated, related to difficulties in obtaining expert evidence and relevant library declarations as to dates of publication, and to the fact that National Starch informed its patent attorneys that it was negotiating with Goodman Fielder Ingredients Limited, one of the second respondents. The delegate concluded that there was no explanation why National Starch had taken until 22 December 1999 to give instructions to its patent attorneys to engage experts, or why the evidence of the then unidentified overseas expert was not available. The delegate found that although there had been negotiations between the parties, the evidence failed to satisfy him that, there were negotiations for the resolution of the opposition, and, overall, there had not been an adequate explanation for the delay. 12 On the issue of the nature and significance of the evidence, the delegate reasoned: "The nature of the evidence that is still to be served makes it preferable (although not essential) for that evidence to be included. The significance of the evidence cannot be determined as there is no material before me on this point. I conclude that the nature and significance of the evidence interest is neutral in relation to the extension of time." The delegate accepted that the interests of National Starch supported the grant of the extension of time, but found that any further extension of time was contrary to the interests of the second respondents as the patent applicant. The delegate said that the effect of the delay on the efficient and orderly administration of the Patent Office lay against allowing the extension. 13 The delegate then turned to what he called "Other considerations" and reiterated that there had been a significant and undue delay by National Starch in instructing its patent attorneys to engage an expert, which had not been explained. The delegate balanced the various considerations to which he had referred and concluded: "On balance, the extension is supported by the interests of National Starch. All other considerations are either against allowing the extension or neutral on the issue. I am not satisfied that an appropriate case has been made out." He therefore allowed a seven day extension of time to enable National Starch to serve any evidence immediately to hand, but otherwise refused the application. The applicant's submissions 14 National Starch submitted that the effect of the decision was that it would be precluded from relying on any expert evidence to support its allegation that the invention is neither novel nor involves an inventive step. It relied on ss 5(1)(e) and (f) of the Administrative Decisions (Judicial Review) Act contending that the decision involved: · an improper exercise of power in that the delegate failed to take relevant considerations into account by failing to give proper, genuine and realistic consideration to relevant matters and exercised his discretionary power in accordance with a rule or policy without regard to the merits of the case; · an error of law in that the delegate applied the wrong test by refusing the extension on the basis that the opposition would not be rendered untenable if an extension was not allowed. 15 National Starch submitted that: · the delegate required an explanation for the delay as a precondition to granting the extension of time sought, and treated what he saw as an inadequate explanation for the delay as a paramount consideration which foreclosed proper consideration of other relevant factors; · it was not open to the delegate to find that there was no adequate explanation for the delay; · the delegate ignored the nature and significance of the evidence for which the extension of time was sought and erred in concluding that there was no material before him on the issue with the result that he failed to give proper, genuine and realistic consideration to the issue of the nature and significance of the evidence; · the delegate applied the wrong test, namely would the opposition be untenable if the extension of time to file the evidence was not granted; · it would suffer prejudice unless the decision of the delegate was set aside and it was allowed to file further evidence. The respondents' submissions 16 The respondents submitted that the delegate understood and identified the relevant factors he had to take into account and that he gave them genuine and realistic consideration. They submitted that he had not applied the wrong test and had summarised properly the correct principles to apply. It was contended that National Starch had not placed before the delegate sufficient material to enable him to form a view of the nature and significance of the evidence proposed to be served. Reasoning 17 National Starch relied on two affidavits by its patent attorney which dealt with the history of the application and exhibited relevant documents such as the patent application and the decision of the delegate. They also raised the issue of the prejudice National Starch will suffer in maintaining its grounds of opposition as a result of the decision and exhibited declarations of two expert witnesses dated 15 and 22 June 2000 upon which National Starch wishes to rely in the opposition proceeding. The respondents objected to the admissibility of the two declarations and the evidence as to prejudice on the grounds that the declarations were not before the delegate, and that prejudice was not relevant to a claim that an administrative decision‑maker had made a reviewable error. National Starch propounded the two declarations and the evidence as to prejudice not to support the grounds for judicial review but to support a claim for the exercise of discretion in favour of the grant of relief pursuant to s 16 of the Administrative Decisions (Judicial Review) Act if reviewable error was otherwise established. The respondents accepted that as the grant of relief in judicial review proceedings is discretionary, prejudice to National Starch would be relevant if reviewable error was found, but the respondents specifically disavowed any submission that if I found reviewable error I should, as an exercise of discretion, not grant National Starch the relief sought. 18 I do not, therefore, regard National Starch's evidence of the two declarations and prejudice as relevant or admissible in relation to any of the grounds of review raised. Although the respondents are making no submissions as to the manner in which I should exercise the discretion to grant relief found in s 16 of the Administrative Decisions (Judicial Review) Act, it is a matter for the Court to consider whether that discretion should be exercised in any particular way. Accordingly, I consider the declarations and evidence as to prejudice relevant and admissible in relation to the exercise of that discretion. 19 The principles applicable to the power to extend time pursuant to reg 5.10(2) have been given detailed consideration in Ferocem Pty Ltd v Commissioner of Patents (supra) and A Goninan & Co Ltd v Commissioner of Patents (supra). In Ferocem Pty Ltd v Commissioner of Patents (supra) Burchett J said at 208: "Regulation 5.10 lays down a perfectly general requirement – that the Commissioner be 'reasonably satisfied that … an extension of time … is appropriate in all the circumstances'. The idea that such a broad discretion can validly be reduced by a decision‑maker to an insistence upon 'imperative' compliance with particular requirements has repeatedly been rejected by the courts." Burchett J was rejecting the approach to reg 5.10(2), taken by the delegate of the Commissioner of Patents in an application for an extension of time to file evidence in an opposition proceeding, that there had to be a proper explanation of the facts and circumstances surrounding the delay in filing the evidence, and without such a proper explanation a case had not been made out justifying an extension of time. 20 Burchett J continued at 209: "The determination of an application for an extension of time under reg 5.10(2) involves a balancing exercise, in which competing considerations must be taken into account. There are the interests of the persons directly concerned in the application and opposition in question. There are also public interests, which are not necessarily all ranged on the same side. They include the expeditious disposal of matters in the Patents Office, and questions of costs, of efficiency, and of insistence upon the professional standards being maintained by those who deal with the office. But they also include, as Kitto J pointed out in Kaiser Aluminium & Chemical Corporation v Reynolds Metal Co (1969) 120 CLR 136 at 143, 'the public interest that a serious opposition by a person entitled in fact to oppose the grant of a patent should be dealt with on the merits, rather than that it should be shut out in consequence of a failure in procedure, lamentable though the failure may be.'" 21 In A Goninan & Co Ltd v Commissioner of Patents (supra) the delegate of the Commissioner of Patents had pursuant to reg 5.10(2) refused an application for an extension of time to file evidence in support of an opposition to a grant of patent. It was submitted that the delegate had failed to take proper account of the public interest, and had failed to give effect to what was said to be the Commissioner's duty to deal with a proper opposition on its merits. Sackville J adopted the principle that an administrative decision‑maker was required to give proper genuine and realistic consideration to the merits of the case before the decision‑maker. Sackville J followed the judgment of Sheppard J in Hindi v Minister for Immigration and Ethnic Affairs (1988) 20 FCR 1 at 13 in which Sheppard J adopted the observations in Brelin v Minister for Immigration and Ethnic Affairs (unreported, Wilcox J, 14 May 1987) and Khan v Minister for Immigration and Ethnic Affairs (unreported, Gummow J, 11 December 1987), briefly noted at 14 ALD 291. However, Sackville J bore in mind the principles stated in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272: "… the reasons of an administrative decision‑maker are meant to inform and not to be scrutinised upon over‑zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed. In the present context, any court reviewing a decision upon refugee status must beware of turning a review of the reasons of the decision‑maker upon the proper principles into a reconsideration of the merits of the decision." Sackville J, adopting the observations of Mason J in Minister for Aboriginal Affairs v Peko‑Wallsend Ltd (1986) 162 CLR 24 at 41, said at 211: "… in general it is for the decision‑maker and not the court to determine the appropriate weight to be given to the various matters which are to be taken into account in the exercise of a statutory power." 22 Sackville J concluded that the delegate had not given proper, genuine and realistic consideration to the public interest in opposition proceedings being determined on their merits, although the delegate in his reasons made statements to the effect that he had taken into account the public interest in opposition proceedings being determined on their merits. Sackville J recognised that a decision‑maker must do more than simply assert that he or she has taken such a matter into account. His Honour said at 212: "However, as Hindi shows, the assertion by a decision‑maker that he or she has taken a factor into account does not necessarily determine whether proper, genuine and realistic consideration has been given to that factor." In Hindi Sheppard J at 13 adopted the observation of Gummow J in Khan at 12: "The assertion by a decision‑maker that he has acted in this fashion will not necessarily conclude the matter; the question will remain whether the merits have been given consideration in any real sense …" 23 Sackville J continued at 213: "In order for the Commissioner or his delegate to give proper, genuine and realistic consideration to the aspect of the public interest I have identified, it is necessary to consider the nature of the evidence the opponent seeks to adduce and the significance of that evidence for the opposition proceedings. I do not mean to suggest that evidence has to be scrutinised in the same way as would occur at a hearing on the merits. But unless the delegate forms a view as to the issues addressed by the proposed evidence, and whether that evidence is likely to be important in the opposition proceedings, it is difficult to see how proper consideration can be given to the public interest in having such proceedings being determined on their merits." 24 I do not consider that the delegate required an explanation for National Starch's delay in filing its evidence as a precondition to granting the extension of time sought, nor do I consider that the delegate treated what he regarded as an inadequate explanation for the delay as a paramount consideration which foreclosed proper consideration of other relevant factors. National Starch submitted that what the delegate did, in substance, was to reduce a broad discretion to an insistence upon an imperative compliance with the requirement that there be an adequate explanation for the delay. If the delegate had adopted this approach or reasoning he would have offended the principles analysed by Burchett J in Ferocem Pty Ltd v Commissioner of Patents (supra). It is true that the delegate considered the issue of delay in two discrete parts of his reasons under two headings, namely "Explanation of the delay" and "Other considerations". There is no inconsistency between the reasoning in these two passages and in neither of the passages does the delegate require that there be an adequate explanation for the delay as a precondition to the grant of the extension of time sought. In the first passage in which delay is considered, the delegate reached the conclusion that "overall, there has not been an adequate explanation of the delay". It was open to the delegate so to find, and National Starch recognised, correctly, that it could not invite the Court to consider whether that was an incorrect finding. 25 I am prepared to accept that there may have been duplication in the delegate's reasons. National Starch submitted that a delay only becomes undue, or an explanation for a delay only becomes inadequate, if there has been a period of time for which there is no proper justification. It was submitted that the delegate had considered the cluster of issues relating to delay as two separate considerations and thereby insisted upon an adequate explanation as an imperative requirement. I reject this submission. To accept it would be to impinge upon the proposition that I should not scrutinise the delegate's reasons over‑zealously and seek to extract an inadequacy from duplicated reasons: see Minister for Immigration and Ethnic Affairs v Wu Shan Liang (supra) at 272. The duplication of part of the reasoning in relation to the delay issue does not mean that the delegate has insisted upon an adequate explanation for the delay as an imperative requirement. 26 The delegate recognised and acknowledged in his reasons that the discretion conferred by reg 5.10(2) "cannot be reduced to imperative compliance with particular requirements" and that "the reasons why the evidence was not served in time are a relevant consideration, but a satisfactory explanation is not a mandatory requirement". Not only did the delegate understand these principles, he took them into account, and on a fair reading of the whole of his reasons he observed these principles. 27 There is no merit in the submission that it was not open for the delegate to find that there was no adequate explanation for the delay. National Starch contended that its patent attorney had given uncontradicted and uncontested evidence in the statutory declaration placed before the delegate that she had received letters from National Starch as to the existence of negotiations. It was submitted that there was no other evidence to the contrary and that, accordingly, on the evidence before the delegate, it was not open to him to conclude that he was not satisfied that there were negotiations. The delegate referred to the patent attorney's evidence, noted that the respondents' patent attorney had contended, albeit in submissions other than in evidence, that there were no negotiations but had accepted that there had been "some type of discussions between Goodman Fielder and National Starch". However, the delegate was uncertain whether these discussions could be characterised as negotiations for the resolution of the present opposition. His conclusion was that "the balance of the evidence fails to satisfy me that there were negotiations for the resolution of the opposition". It was open to the delegate to make this finding. Although National Starch's patent attorney's evidence on this issue was uncontested, that evidence simply referred to negotiations between National Starch and Goodman Fielder. The evidence did not go so far as to characterise the nature of the negotiations as negotiations for settlement of the opposition. The delegate was not obliged to infer that this was the nature of the negotiations, and it was for the delegate to determine on the whole of the evidence whether he was satisfied that there were negotiations for the resolution for the opposition. He was not satisfied, and it is not for this Court to review the merits of that finding. 28 I do not consider that the delegate applied a test of determining whether the opposition would be rendered untenable if the extension of time was not allowed for the filing of evidence. Although he agreed with the observation of the hearing officer in Kimberly‑Clark Worldwide Inc v Carter Holt Harvey Tissue Australia Pty Ltd [1999] APO 83 that: "An opposition without evidence‑in‑support is one which, in practical terms, is rendered untenable.", he did so in response to a submission by National Starch's patent attorney. The delegate noted that the case before him was different as some evidence in support of the opposition had already been filed, which included copies of documents referred to in the statement of grounds of particulars and evidence of publication dates. It was for that reason the delegate said that the opposition would not be rendered untenable if an extension was not allowed. However, the delegate, on a fair reading of the whole of his reasons, did not apply this test in reaching his conclusions. He reached his conclusion that an extension was not justified by taking into account and balancing relevant matters. 29 I turn to the issue whether the delegate failed to give proper, genuine and realistic consideration to the issue of the nature and the significance of the evidence for which the extension of time was sought. In this context it is important to note that the invention claimed is in the field of biochemistry in which technical considerations arise and technical terms which require explanation are used. National Starch carries the burden of proof in the opposition and expert evidence is relevant to its grounds of opposition. The delegate had before him the patent specification, National Starch's statement of grounds of opposition and particulars relating to each ground (since amended). The delegate accepted that: "… the evidence of experts in relation to documents is normally of assistance in deciding whether the documents anticipate the claimed invention." 30 Although the delegate recognised that the public interest in determining a serious opposition on its merits was a relevant consideration to take into account, and in order to do this it was necessary to form a view as to the nature and significance of the evidence sought to be adduced in the opposition proceeding, I do not consider that delegate gave proper, genuine and realistic consideration to this aspect of the public interest. Although the delegate said that "the nature of the evidence that is still to be served makes it preferable (although not essential) for that evidence to be included", he did not relate the nature of that evidence to the grounds of opposition. The delegate found: "The significance of the evidence cannot be determined as there is no material before me on this point." In fact there was material before the delegate on this point, namely the patent specification, the grounds of opposition and the evidence which had been filed on 15 March 2000. 31 The material before the delegate also included: · the technical nature of the invention which was apparent on the face of the specification; · the technical nature of the documents which were referred to in the statement of grounds of opposition; · the statement of grounds of opposition and the particulars relating to each ground; · the role and importance of experts in an opposition proceeding which was recognised by the delegate in his reasons; · the statement by the patent attorney in her submission before the delegate that the evidence comprised proof of publication and expert's views on the opposition, including novelty, obviousness and other validity issues. 32 The respondents submitted that National Starch had not provided any evidence as to which of the grounds of opposition were to be the subject of expert evidence and what the evidence might be. However, there was the material, to which I have already referred, which provided a basis on which the delegate could relate the material to the various grounds of opposition. The delegate did not consider the significance of the evidence, regarding it as neutral in relation to the extension of time, although he was required, consistently with the reasoning in A Goninan & Co Ltd v Commissioner of Patents (supra), to do so. 33 The respondents submitted that in the passage of the delegate's reasoning where he said that the significance of the evidence could not be determined as there was no material before him on the point, the delegate was addressing the relevant consideration of the significance of the evidence, and that his conclusion was to be characterised as an error of fact, rather than an error of law, which was not reviewable. It was said that the error of fact was that there was material before the delegate from which he could make a determination of the significance of the evidence. I do not consider this is a correct characterisation of the error into which the delegate fell. If there was material before the delegate from which findings could be made as to the significance of the evidence, it was incumbent upon the delegate to address that issue in the context of that material. By failing to consider the significance of the evidence in respect of which the extension of time was sought in the context of the patent specification, the grounds of opposition and the particulars of the grounds and the material which had already been filed, the delegate failed to give proper, genuine and realistic consideration to the significance of that evidence, which had a flow on consequence in relation to the consideration of the public interest in determining a serious opposition on its merits. To that extent the delegate failed to take into account a relevant consideration. 34 National Starch submitted that the delegate failed to consider that if it could not file further evidence, it might be precluded from relying upon any expert evidence if the opposition went on appeal to the Federal Court. It was submitted that this restriction followed from the reasoning of Emmett J in F Hoffman‑La Roche AG v New England Biolabs Inc (2000) 99 FCR 56. His Honour had observed (at 64) that s 160 of the Act, which empowers the Court, on an appeal against a decision or direction of the Commissioner, to admit further evidence, suggested that it was within the power of the Court to constrain further evidence, and indicated that the Court may exercise a discretion as to the extent to which further evidence would be admitted beyond that which was before the Commissioner. This decision, delivered twelve days before the hearing before the delegate, was not drawn to his attention. It was put that the delegate should have considered the consequences of this decision in the context of the public interest in having an opposition determined on its merits as if it was not so determined in the Patent Office, it was unlikely to be determined on its merits in the Federal Court. 35 Having regard to the conclusion I have reached, it is not necessary to consider whether Emmett J's observations should have been taken into account by the delegate. This issue was not raised before the delegate and even if it had been, it would have required the delegate to speculate as to the issues which might arise on an appeal, which was not part of the task committed to him. He was only required to have regard to the public interest in having an opposition determined on the merits at the opposition stage. 36 I conclude, therefore, that the decision of the delegate should be set aside and the matter remitted to the Commissioner of Patents for further consideration and determination according to law. I cannot see any basis upon which I should exercise the discretion committed to me pursuant to s 16(1) of the Administrative Decisions (Judicial Review) Act adversely to National Starch. No basis was submitted by the respondents. Consistently with the principles set out in Northern NSW FM Pty Ltd v Australian Broadcasting Tribunal (1990) 26 FCR 39 at 42, the matter should be remitted to be heard and determined by a different delegate. 37 The Commissioner did not seek to make any submissions and abided any order of the Court, save as to costs. National Starch does not seek costs against the Commissioner, but does seek costs against the second respondents. The second respondents should pay National Starch's costs of the application. I certify that the preceding thirty‑seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg. Associate: Dated: 2 February 2001 Counsel for the Applicant: Ms P M Tate Solicitor for the Applicant: Callinan Lawrie Lawyers Counsel for the Second Respondents: Mr J E Griffiths Solicitor for the Second Respondents: Blake Dawson Waldron Date of Hearing: 27 October 2000 Date of Judgment: 2 February 2001	7,434

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